source: Caselaw Access Project

license: Public Domain

text:
    O. L. Chester and Capron Bank of Capron, Defendants in Error, v. Fred D. Cornwell et al., Plaintiffs in Error.
    Gen. No. 8,749.

      Opinion filed July 6, 1934.
    Rehearing denied August 23, 1934.
    Andrews & Essington, for plaintiffs in error.
    William L. Pierce, James M. Huff and Robert F. Marshall, for defendants in error.
   Mr. Presiding Justice Wolfe

delivered the opinion of the court.

The complainants, now defendants in error, filed a bill in the circuit court of Boone county, Illinois, to foreclose a trust deed securing various notes aggregating $10,000. The bill was filed in said court on June 11, 1930, and made returnable to the September Term of said court of the same year. The bill is in the usual form for foreclosing a mortgage. The makers of the notes and owners of the land were made parties defendant to the bill.

One paragraph of this bill is as follows:

‘ ‘ That complainants show upon information and belief that Martin Dunbar, Svend Nordvig, E. E. Lichtenberg and Daniel McIntyre, Co-partners, doing business as Lichtenberg & McIntyre, Capron Bank of Capron, Illinois, Hixon and Brittingham Lumber Company, John Setterquist, Hiram Reser and the Prudential Insurance Company of America, have or claim to have some interest in the said mortgaged premises, or some part thereof, as purchaser, mortgagee, judgment creditors or otherwise, which interest, if any, has accrued subsequent to the lien of the said trust deed of the complainants and are all and each subject thereto.”

The above-named parties were all made defendants to said bill and filed answers to the same. Each of the several answers of the plaintiffs in error sets up claims for liens for having furnished materials and labor for improvements upon the real estate described in the bill of complaint. They allege they have a first and superior lien upon the mortgaged premises and that they are each entitled to be paid the amount of their respective claims from the proceeds of the sale of the property. The answers of each of the defendants in said foreclosure proceeding are in the usual forms of answers to bills in chancery. Some of the answers deny that the complainants are entitled to the relief or any part thereof in their bill and pray that the bill be dismissed-with reasonable costs, etc. Eeplications were filed by the complainants to all of the answers of the defendants. Thereafter the case was referred to the master in chancery who was to take proof and report his findings and conclusions both of the law and of the facts. The complainants and the defendants presented evidence before the said master, and the master made his report to the court. The master reported that the claims for mechanics ’ liens as set forth in the answers of the various defendants were first and superior to the lien of the mortgage being foreclosed, and should be paid before the mortgage debt from the funds of the foreclosure sale. To this report the complainants filed objections which were overruled. The objections to the master’s report were permitted to stand as exceptions to the said report in the circuit court. A hearing before the chancellor was had, the exceptions were argued, and overruled. A decree was ordered to be prepared in accordance with the findings of the chancellor.

The decree had been prepared by the plaintiffs in error and presented to the trial court for signature, but had not been signed. On August 26, 1932, on motion of the complainants, the case was redocketed and re-referred to the master in chancery to take further proofs in regard to the value of the lands and the improvements made by the plaintiffs in error. On January 23,1933, the same being the first day of the January Term, 1933, of the said court in which this case was then pending, the complainants appeared by their solicitors and moved the court to vacate the order referring the case to the master in chancery, and to dismiss the bill of complaint at their cost, without prejudice. This motion was granted. The order was then entered and the case dismissed. On the 24th day of April, 1933, the said date being the first day of the April Term of said court, the plaintiffs in error, by their solicitors, filed motions, verified by affidavits of their attorneys, to strike from the record of the court the order made on the 23rd day of January, 1933, dismissing the bill of complaint at the cost of the complainants without prejudice. The court heard the arguments on the motion of the plaintiffs in error to set aside and vacate the order of dismissal and to reinstate the case, and took the same under advisement until the 11th of August, 1933. At this time he overruled and denied the motion of the plaintiffs in error to reinstate the case. From this ruling of the court the defendants below have brought the case to this court for review.

The only question presented to this court is whether a person who has filed a bill to foreclose a mortgage or a trust deed in the nature of a mortgage and persons having claims for mechanics’ liens against said premises are made parties defendants in said bill, and said defendants file their answers to said bill but do not file cross-bills, may the complainant dismiss his bill at his own cost and without prejudice at any time before a decree is actually entered and filed. Plaintiffs in error strenuously insist that by filing their answers to the bill of complaint, the court had full right and authority to adjudicate their claims in the foreclosure proceedings and that it was not necessary or proper for them to file cross-bills to fully protect their rights. The defendants partially concede this to be the law, but insist that it does not prevent the complainants from dismissing their bill at any time they see fit to do so, but if the case had proceeded to a final hearing and a decree had been signed and entered, then the rights of the parties would be fixed and they could not dismiss their bill without the consent of the defendants.

Section 11 of the Mechanics’ Liens Act, Cahill’s St. ch. 82, K11, in regard to parties to a suit, provides among other things, as follows: “All persons who may have any legal or equitable claim to the whole or any part of the premises upon which a lien may be attempted to be enforced under the provisions thereof, or who are interested in the subject matter of the suit, shall be included. Any such persons may, on application to the court wherein the suit is pending, be made or become parties at any time before the final judgment. No action or suit under the provisions of this act shall be voluntarily dismissed by the party bringing the same without due notice to all parties before the court, and leave of court upon good cause shown and upon terms named by the court.” The plaintiffs in error contend that this statute gives all of them the right to have their rights adjudicated simply by filing an answer to the bill of complaint to foreclose the mortgage, and that after their answers were filed the complainant could not dismiss his bill without the consent of all of the defendants.

Love on Mechanics’ Liens, a recognized authority on liens, in discussing section 11, formerly section 9 of the Mechanics’ Liens Act, refers to a great many of the Illinois decisions relative to liens. On page 175 of his book he says: ‘ ‘ The above cases really merely hold, that a mechanic’s lien claimant who is a defendant in a mortgage foreclosure suit may have the affirmative relief of having his lien enforced even though he file only an answer. But if the mechanic’s lien claimant have nothing but an answer on file, whether it be called an answer or an answer in the nature of an intervening petition, or simply an intervening petition, may not the complainant mortgagee dismiss the bill of complaint and by that dismissal put the lien claimant out of court? It is true that section 9 (now section 11) of the Act expressly says that after answers in the nature of intervening petitions have been filed by other lien claimants the bill shall not thereafter be dismissed without the consent of such intervening lien claimants. But that section, by its terms, applies only to suits to enforce mechanics’ liens and does not apply to suits to foreclose trust deeds or mortgages, and as to the latter is it not still true that in the absence of a cross-bill the complainant may dismiss his suit no matter what kind of an answer some defendant has filed? The latest case involving this general right of the original complainant in á suit in equity to dismiss his suit in the absence of a cross-bill is Schaller v. Huse, 330 Ill. 345, at page 349, a partition suit, in which the court cited with approval the following language from the opinion in the case of Purdy v. Henslee, supra: ‘What defenses may be interposed and what relief obtained under an answer, without a cross-bill, is wholly irrelevant for it is the filing of a cross-bill, — not this or that kind of an answer, — which under the statute will take from the complainant the right to dismiss his bill before decree rendered, and this alone.’ ”

The plaintiffs in error have cited many cases upon which they rely to maintain their contention that the court erred in dismissing this bill. An examination of these cases discloses that none of them involves the point that is raised in this case. Some of these cases are for an accounting, some suits on a bill of inter-pleader, some are suits between mechanic lien claimants, and some where a cross-bill has been filed. The courts have uniformly held that in such circumstances the complainant could not dismiss his bill without the consent of the defendant. Plaintiffs in error insist, however, in this case that their answer should be treated as a cross-bill in this proceeding. In the trial court they were treated as answers to the complainants’ bill and replications were filed to each of them. In the early case of McConnell v. Hodson, 2 Gilm. 640, the court in discussing the difference between an answer and a cross-bill used the following language: “A defendant in a suit in chancery cannot make his answer a cross-bill and under it obtain any specific decree in his favor. In this way he cannot obtain affirmative relief, even although the parties may elect to consider the answer a cross-bill. This is contrary to the established practice- of the Courts of Chancery, both in England and in this country. If in this, or any other similar proceeding, the parties in interest desire the interposition of a Court of Equity in their behalf, they must file their bill and therein state specifically their causes of complaint.” This case has been followed and cited in the case of Purdy v. Henslee, 97 Ill. 389, in Schaller v. Huse, 330 Ill. 345, and many other Illinois decisions. It will be observed that section 11 of the Mechanics ’ Liens Act, Cahill’s St. ch. 82, U 11, refers specifically to a party filing a petition or a bill of complaint to establish a mechanic’s lien. When the contest is between the mechanic’s lien claimant, the original bill or petition may not be dismissed by the complainant. We know of no rule of law that would prohibit the claimant in a mortgage foreclosure proceeding, where there is no cross-bill on file, from dismissing his bill of complaint at any time prior to the time a decree in said proceeding is actually signed and filed. While this may seem a hardship in this case to the lien claimants, they could have fully protected their rights by filing a cross-bill in the original proceedings and thus prevented the complainants from dismissing their bill.

We find no reversible error in the case and the order of the court dismissing the bill of complaint is hereby-affirmed.

Affirmed.


author: Mr. Presiding Justice Wolfe

text:
    Andy Bollin, Petitioner, v. Galesburg Horse and Mule Company, Respondent.
    Gen. No. 8,785.
    Opinion filed July 6, 1934.

      Leo P. Baird and James D. Baird, for petitioner.
    Burrel Barash, for respondent; Louis Gtard, of counsel.
   Mr. Presiding Justice Wolfe

delivered the opinion of the court.

In this case the plaintiff was granted, during vacation by one of the judges of this court, leave to appeal from an order of the trial judge granting the defendant’s motion for a new trial. The case is now submitted on the petition for leave to appeal and the answer thereto together with the briefs of the parties filed with the petition and the answer. A transcript of the record, including a stenographic copy of the evidence, has been filed in this court, and the question presented is whether the trial judge erred in granting the defendant a new trial.

On January 24, 1930, the plaintiff brought an action of assumpsit against the defendant and he filed the common counts only. The defendant filed the general issue. The order of the trial judge granting a new trial was entered on January 3, 1934. It is the contention of the plaintiff that the defendant is liable in damages to the plaintiff under the count for money had and received by the defendant to and for the use of the plaintiff. The action was brought against the defendant, a corporation, and C. Gr. Beckley, but before the issues were joined the plaintiff dismissed as to Beckley. A jury trial resulted in a verdict for the plaintiff for $1,500. The transaction which is the basis of the .plaintiff’s claim took place in 1926. At that time, it is conceded Beckley was a director of the defendant company; The defendant was engaged in the business of selling horses for commission and it held weekly sales at auction. The plaintiff and Beckley are the only witnesses who testified as to the material facts in issue. The reasons 'of the trial judge for granting the new trial are stated in the record. If= the defendant is entitled to a new trial for any reason stated by the trial judge, the order of the trial judge must be affirmed.

The plaintiff, a farmer living near the Town of Niota which is about 75 miles from Galesburg where the defendant had its place of business, testified that in the month of April, 1926, he called the defendant over the telephone and that he had a conversation with Beckley. The plaintiff and Beckley for some years before that time had been- buying and selling horses. The plaintiff’s purpose in calling Beckley was to inform him that a team of horses'which he had received from Beckley was not satisfactory and that he wanted a bigger team. The team of horses mentioned in this conversation over the telephone is not involved in this action.

Confining our attention to the testimony of the plaintiff, it appears from the record as follows: In the telephone conversation, Beckley requested the plaintiff to pasture a carload of horses for 10 days for $100. On May 27, 1926, Beckley arrived in Niota with a carload of horses and he informed the plaintiff that the horses were in the stockyards at Niota. The plaintiff went to the stockyards and picked out a grey team in place of the team which had proved unsatisfactory to him. At the stockyards the plaintiff and Beckley made arrangements whereby the plaintiff was to pasture the horses for 10 days for $100 and that Beckley was to get the horses at the end of the 10 days. After the horses had been driven about two blocks from the yards, Beckley told the plaintiff that he had drawn on him for the price of the horses. The plaintiff replied to this statement of Beckley, “It is a hell of a way of doing.” Beckley replied that the Galesburg Horse and Mule Company (the defendant) was short of money; that the company would take the horses back in 10 days and that the plaintiff would get the $100 for pasturing the horses.

On the day the horses arrived in Niota, Beckley handed to the plaintiff a statement of account which is headed, “Galesburg, Illinois, May 27, 1926, Andy Bolin, Nauvoo, Illinois, in account with Galesburg Horse and Mule Company.” The items on this statement purport to show the number of horses shipped, the sex of the horse, the prices thereof, the expenses of bedding the car and the freight due. The statement shows-a total of $2,562.10. This was the amount of the sight draft drawn by Beckley on the plaintiff. The draft was drawn in favor of the defendant and it secured the collection of the draft through its bank in Galesburg. The amount needed to pay the draft had been placed in a bank at Nauvoo by the plaintiff on June 1, 1926, which was a few days after the horses arrived at Niota.

It also appears from the evidence that the horses were taken from the stockyards by the plaintiff and Beckley and that they were placed in the pasture of the plaintiff where they remained until August 23, 1926. On that date Beckley came and got the horses and shipped them to Galesburg. One of the horses had died while in the pasture and a team was substituted for the team which the plaintiff had asked to return because unsatisfactory to him.

It further appears from the plaintiff’s testimony that after he had kept possession of the horses for 10 days he had a conversation over the telephone with Beckley and told him that the 10 days were up and that he should come and get the horses. Beckley replied by stating that the market was unfavorable and asked the plaintiff to keep the horses a few days longer. About two weeks after this conversation, the plaintiff again called Beckley on the telephone and he promised to come and look at the horses. Beckley came to the farm of the plaintiff and looked at the horses. At that time some of the horses were sick with sore throats and some of them had the distemper. After looking at the horses and telling the plaintiff to get a doctor to treat the horses, Beckley left. The plaintiff called Beckley several times before the horses were taken away by Beckley on August 23,1926.

It also appears from the evidence that on the day the horses were taken away by Beckley he gave to the plaintiff a piece of paper on which Beckley had written figures and notes. This paper was prepared by Beckley evidently to show a balance struck of the accounts between the plaintiff and Beckley. In this statement the plaintiff was charged for the price of the 17 horses, including handling and freight, the sum of $2,569.60; plaintiff was also charged for and received credit for horses not herein involved. He was allowed a credit of $25 to pay the doctor for treating the sick horses. The statement contained a charge against Beckley of $275 for pasture and feed for the horses for the time the horses were in.the possession of the plaintiff. The statement had the following notation on the back: “Draft for $1,600 through First National Bank, Gales-burg Horse and Mule Company.” The amount of $1,600 was deducted from the charges against the plaintiff, leaving a balance due from Beckley to the plaintiff, according to the statement, the full amount of $2,825.10. The amount pf the draft, $1,600, was deducted from this balance, leaving Beckley owing the plaintiff $1,225.10.

The plaintiff testified: “At the time this statement was given to me by Mr. Beckley, Mr. Beckley said he owed me the full amount. He said, ? don’t draw on me for ovey $1600. ’ He instructed me about the sight draft-of'$1600,■ he said, ‘don’t dráw over that, in a few days the 'Horse and Mule Company will send the money right back to you.’ He instructed me to draw on the Horse and Mule Company of Galesburg, Illinois, the defendant in this case. The item of $1600 I testified about Mr. Beckley told me to draw on the Galesburg Horse.- and Mule Company for, and I said, ‘why not all of it,’ and he said, ‘I will pay it back to you in a few days, as soon as the horses are sold.’ ”

The record shows that after the horses Were returned to Galesburg, Beckley left his demand note at the First Trust and Savings Bank at Nauvoo, dated August 30, 1926, payable to the order of the plaintiff for $950. Thereafter, a payment of $100 was made by Beckley to the plaintiff. Two payments of interest on the note were made to the plaintiff while the note was in the bank. This note has not been paid by Beckley. The plaintiff testified that the note was given in reference to the shipment of the horses. No demand was made by the plaintiff on the defendant before the suit was brought.

Beckley testified as follows: That the defendant company was engaged in the business of selling horses on commission and that it did not handle its own horses; that he was engaged in the business of buying and selling horses for himself; that he had an account with the defendant; that he was acting in the transaction now in question with the plaintiff on his own behalf; that the defendant or any of its officers, did not authorize him to sell horses to the plaintiff; that the horses which he shipped to the plaintiff on May 26, 1926, he had bought for the plaintiff; that on a night before an auction of horses held by the defendant, he called the plaintiff on the telephone and told him that he could buy a load of horses worth the money and that the plaintiff said if Beckley thought he could buy them to do so and ship the horses to him; that he bought the 17 horses at an auction held by the defendant and shipped them to the plaintiff; that the horses were not the property of the defendant; that he (Beckley) owed the defendant for the horses and that the money from the draft drawn on the plaintiff was received by the defendant in payment of the horses as he did not pay for them at the auction and they had been charged to his account. He denied he had a conversation with the plaintiff about pasturing the horses.

Beckley further testified that about two weeks after the transaction about the horses, he had a conversation with the plaintiff and that the plaintiff stated that he wanted to sell the horses back to him; that he looked at the horses and offered to buy such of them which were not sick; that about two weeks later the plaintiff called him and told him that the horses were getting sick; that he then went to the pasture of the plaintiff and told him to take care of the horses and he would buy them back as soon as they were well again; that he bought 10 of the horses from the plaintiff; that he paid the draft for $1,600 out of his own funds; that he also paid the plaintiff $250 which was his own money; and that he gave to him his note for $950; that the draft he drew on the plaintiff to the defendant, went to pay for the 17 horses he bought of the defendant.

In rebuttal the plaintiff denied that he told Beckley to buy a carload of horses or that Beckley came to his place and offered to buy the horses from him; that Beckley did not buy 10 horses from him; that he never knew that Beckley had left the $950 note at the bank until some time after it was left there, and that he never asked him to leave the note at the bank.

Among the reasons stated in the record why the trial judge granted the motion for a new trial are the following: The plaintiff in this case did not show a right to recover against the Galesburg Horse and Mule Company by a preponderance of the evidence. The court should have instructed the jury at the close of plaintiff’s case to find for the defendant. Where the trial judge grants the defendant a new trial on the ground that the plaintiff has not proved his case by the weight or preponderance of the evidence, and the plaintiff and the defendant are the only witnesses testifying to the material facts on the issues in the case, and their testimony is in conflict on or about such facts, this court will not reverse the order granting a new trial unless it clearly appears from the evidence in the case that the trial judge has manifestly abused his discretion in setting aside the verdict and granting the new trial. We find no physical facts in the evidence contradicting the testimony of either the plaintiff or the defendant. We do not find anything in the evidence, or in the record, justifying this court in overriding the discretion of the trial judge granting the defendant a new trial. The trial judge, having seen the witnesses and having heard them testify, is in a far better position to judge the weight of their testimony than this court. (Bean v. Coffee, 169 Ark. 1052, 277 S. W. 522; Johnson v. Domer, 76 Wash. 677, 136 Pac. 1169; McWilliams v. Missouri Pacific Ry. Co., 172 Mo. App. 318, 157 S. W. 1001; Bilsky v. Braley, 246 Mass. 480, 141 N. E. 284; Garwood v. Corbett, 38 Mont. 364, 99 Pac. 958; Bauer v. Montague Mailing Machine Co., 148 N. Y. S. 990; Young v. Thornley, — R. I. —, 166 Atl. 690.)

It is no answer to the position we have taken as announced above to urge that the action of assumpsit reliance being placed on the common count for money had and received by the defendant, to and for the use of the plaintiff, is in its nature an equitable suit or proceeding; that therefore the plaintiff need not prove privity between the defendant and the one from whom he received the money, thus obviating proof that Beckley was the agent of the defendant. If it be granted that in this case the plaintiff did not have to prove that Beckley was acting as the agent of the defendant, still there must be proof in the evidence from which the trial judge could say that he is convinced by the evidence, accepting the testimony of the plaintiff as being true and giving him the benefit of. all legitimate inferences which might be reasonably drawn from the evidence, that the defendant has received or retains money under such circumstances, and which in fact, in justice and good conscience he should pay over to the plaintiff. This the evidence in this case does not show. In our opinion the trial judge would have been (fully) justified in directing a verdict for the defendant at the close of all of the evidence in the case. Under this situation the order granting a new trial must be affirmed.

The order of the circuit court of Knox county in granting a new trial is hereby affirmed, and the cause is hereby remanded to said court for a new trial.

Affirmed.


author: Mr. Justice Huffman

text:
    The People of the State of Illinois ex rel. Oscar Nelson, Auditor of Public Accounts of the State of Illinois, v. State Bank of Victoria. George Essex, Receiver of Victoria State Bank, Plaintiff in Error, v. C. V. Nelson, Trustee of Mary Ryan Estate, Defendant in Error.
    Gen. No. 8,784.

      Opinion filed July 6, 1934.
    L. Fred O’Brien and Burrel Barash, for plaintiff in error.
    Nelson, Neagle & Gustafson, for defendant in error.
   Mr. Justice Huffman

delivered the opinion of the court.

The defendant in error was cashier of the State Bank of Victoria, Illinois, for the last 20 years of its business existence. Plaintiff in error took charge of said bank on November 12, 1931, as receiver thereof. Defendant in error was trustee for the Mary Ryan trust estate. In October, 1926, while acting as such trustee and while cashier of said bank, he purchased from the bank, from such trust funds, on behalf of said trust estate, a second mortgage which is designated herein as the Hanson mortgage, paying therefor the sum of $4,534.56. On October 2, 1931, the defendant in error while serving in said above capacities made another transaction between the trust estate and the bank, wherein he claims to have sold to the bank the said Hanson mortgage and note at the same price at which he purchased it; and purchased from the bank in said transaction, notes and mortgages identified as follows: Ray and wife, $850; Huber and wife, $750; Heffernan and wife, $110; Horkstrom and wife, $1,000; and Cliff ord. and wife, $1,585; making a total of $4,295; and credited' his trustee account at the bank with..the difference of $239.56, which amount still remains on deposit therein to said account. The five notes and mortgages above mentioned were taken by defendant in error from the files of the bank and placed in other filing boxes maintained by the bank for the use of its customers, where such customers might deposit their private papers for safe-keeping. The. Hanson note and mortgage were placed in the files and among the assets of the bank.

Ten days after this transaction the bank suspended business. Plaintiff in error subsequently became the receiver thereof. He found the above Hanson note and mortgage among the assets of the bank, as well as a third Hanson note and mortgage in the sum of $4,700, which last named mortgage has nothing to do with this case. Said receiver, when going through the customers ’ boxes, found in the box marked with the letters Q. fí. S., the five notes and mortgages that are in controversy herein, and which are claimed to have been purchased from the bank by defendant in error as trustee of the Mary Ryan trust estate, by the exchange therefor of the aforesaid Hanson second mortgage. Defendant in error objected to the receiver going through these customers’ boxes and demanded possession of the five notes and mortgages. The receiver, upon becoming fully advised and informed regarding the transaction, refused to deliver up same to defendant in error, as trustee.

Following all this and after the receiver and the trustee had had various conversations about the above transaction, the receiver filed his answer in a foreclosure proceeding, wherein the first mortgage was being foreclosed on the Hanson land, upon which the second and third mortgages were held by the receiver. In addition to filing his answer on behalf of the bank as the receiver thereof, he filed his cross-bill in said proceeding, setting up his title and ownership of both the second and third Hanson mortgages, as receiver of said bank, by virtue of the bank’s ownership thereof at the time of its closing; and in that proceeding, the court by its decree determined the rights of the parties and decreed plaintiff in error, as receiver of said bank, to be the owner of the second Hanson mortgage, which is involved herein, and the third Hanson mortgage, with the notes accompanying same.

Following the above proceedings, the receiver brought his petition to the June Term, 1933, of the circuit court of Knox county, setting up his claim to the ownership of the five notes and mortgages as above described, and asked that the court hear evidence regarding same and fix the rights, title, and ownership of said notes and mortgages as between himself and said trustee. The defendant in error answered the said petition and filed his cross petition, claiming the ownership of said securities to be in the trust fund of the Mary Ryan trust estate, and that he was entitled to the possession thereof, as trustee of said estate. The court found the equities to be with the cross petitioner, defendant in error herein, as trustee of the Mary Ryan trust estate, and ordered that plaintiff in error should deliver to defendant in error the aforesaid notes and mortgages. The plaintiff in error has prosecuted this writ of error from the order and decree of the trial court.

The question of the ownership of the Hanson note and mortgage had previously been judicially determined by a final decree of a court of competent jurisdiction, at the instance of plaintiff in error. That was a conclusive and final adjudication of an issue of fact, and is now operative and binding upon the receiver. He could not recognize the exchange as made, and pursuant thereto proceed to establish title and ownership in himself to the Hanson note and mortgage, in a proceeding where that question wTas necessary of determination, and also be heard to claim ownership of the notes and mortgages taken in exchange therefor. After such judgment on the merits, the receiver cannot again canvass the same question in another action.

The receiver’s ownership of the Hanson note and mortgage arose as a result of one transaction, wherein the trustee exchanged same for the five mortgages and notes now in controversy. The receiver was in full possession of the facts regarding this exchange. He had his election of remedies with respect to determining the ownership of the Hanson note and mortgage, on the one hand, and these notes and mortgages now in controversy, on the other. He elected to establish title to the Hanson note and mortgage, and cannot now be heard to dispute it. Freeman on Judgments, vol. 1, page 932, par. 429. The receiver could not be the legal owner of the Hanson note and mortgage, without title; and with title, he cannot be said to be without ownership. He could not be the owner of both sets of mortgages and notes, because it is undisputed that the Hanson note and mortgage was the property of the Mary Byan trust, and the five mortgages and notes exchanged therefor, the property of the bank, at the time of such exchange. Therefore, neither the bank nor the receiver could have been the owner of both sets of mortgages and notes. One cannot well be said to own both that given and that taken, in a trade.

Plaintiff in error, with full possession of all the facts, electing to establish title to the Hanson note and mortgage, must be deemed in equity to have recognized the exchange, and he is now foreclosed from claiming title to the mortgages and notes involved herein.

Begardless of any alleged irregularity connected with the original transaction, . wherein the defendant in error exchanged the Hanson note and mortgage for those now claimed by the Mary Byan trust, the plaintiff in error is precluded by his own conduct from disputing ownership of the Hanson note and mortgage. There is nothing unjust or inequitable in this doctrine; on the contrary, the rule is a beneficial one without which the laws of a civilized world could not be satisfactorily administered.

The order and decree of the circuit court is affirmed.

Order and decree affirmed.


text:
    The People of the State of Illinois ex rel. Oscar Nelson, Auditor of Public Accounts of the State of Illinois, v. Peoples Trust and Savings Bank of Streator. Willis E. Gochanour, Appellee, v. J. Weston Essington, Receiver of Peoples Trust and Savings Bank of Streator, Appellant.
    Gen. No. 8,788.

      Opinion filed July 6, 1934.
    Geo. V. B. Weeks, for appellant.
    Arthur H. Shat, for appellee.
   Mr. Justice Huffman

delivered the opinion of the court.

This appeal is prosecuted by J. Weston Essington, receiver of the Peoples Trust and Savings Bank of Streator, Illinois, from the decree of the circuit court of LaSalle county, entered in favor of appellee herein, ordering appellant, as receiver, to deliver up to appellee certain securities and also one certain promissory note in the principal sum of $3,000. The securities, other than the $3,000 note, were admitted by appellant to belong to appellee, and we are not concerned in this appeal with the disposition as made by the trial court of those securities. The $3,000 note is the item in controversy in this appeal.

The facts out of which the controversy over this note arose are substantially as follows: Lena Glochanour was the wife of appellee Willis E. Glochanour. They resided together at Ransom, Illinois. The wife had borrowed $2,500 at the Peoples Trust and Savings Bank of Streator, Illinois, executing a note for that amount, to which she had signed both her name and that of her husband. With this note she had placed with the bank as collateral security therefor, the $3,000 note in question.

When appellant took charge of this bank as receiver thereof, he found the aforesaid $2,500 note among the assets, together with the $3,000 note which had been pledged by Mrs. Gochanour as above. Appellee filed his petition in the circuit court of LaSalle county, setting up that he was the owner of certain securities and the $3,000 note; that they were in possession of appellant as the receiver of said bank; that they were appellee’s sole and separate property; that appellant had no right, title or interest in or to any of said items; that he had refused to surrender them to appellee upon demand; and prayed that said receiver be ordered and directed to deliver up the items of securities including the $3,000 note to appellee, forthwith.

Appellant urges three reasons for the reversal of this case. First, that Mrs. Gochanour in delivering the $3,000 note to the bank as collateral security, was acting as the agent of appellee; second, that appellant as receiver, is an innocent holder of the $3,000 note even though the bank itself was not such a holder; and third, that the $3,000 note being a negotiable instrument, negotiable by delivery, the bank became holder in due course thereof, and that therefore the receiver is entitled to retain possession of the same as a pledge until the $2,500 note is paid,

Mrs. Gochanour had been married prior to her marriage to appellee. She had two children by the former marriage, Charles Schaefer and George Schaefer.

The $2,500 note was signed by Mrs. Gochanour at the bank in Streator, in the presence of W. H. Jones, who was assistant cashier of said bank and who had occupied that position for 23 years. The note was signed by Mrs. Gochanour in the following manner: “Willis Gochanour, Mrs. Willis Gochanour” and set out therein the $3,000 note pledged as collateral security.

Appellee testified that he knew nothing about the $2,500 note executed by his wife and to which she had signed his name; that the $3,000 note was executed by Christian and Elizabeth Richard; that it belonged to him absolutely and that he kept it in a little metal box in his home with his other valuable papers. He denies that his wife had any authority to draw checks against his account or to sign his name to notes and borrow money thereon. He claims he had no knowledge his wife had extracted the $3,000 note from the metal box at his home where he kept it. He denies that he received any of the $2,500, knew anything about the transaction, or in any way authorized or ratified it. He states that he does not know how the $3,000 note came into the possession of the Peoples Trust and Savings Bank, as it was his own property and kept at home by him in his box.

The wife testified for appellant. She admitted that she had no authority to sign appellee’s name to checks or notes at the bank, and that such checks as she signed were signed without his authority and that she received the money. She further admitted that she signed both her name and her husband’s name to the $2,500 note, and that appellee did not know anything about it; that the transaction occurred without his knowledge and that she received the money.

Lucille Lacey, the daughter of Lena and Willis G-ochanour, testified as a witness for appellee. She was with her mother the day she went to the bank to borrow the $2,500'. She states that her mother talked to Mr. W. H. Jones at the bank, and acquainted him, with her desire to borrow $2,500; that her mother stated to Mr. Jones she only wanted to borrow the money for a very short time and wanted to borrow it for her son, George Schaefer. This witness states that Mr. Jones asked her mother if appellee would sign the note for the money, and that her mother said she did not want appellee to know anything about it, whereupon Jones asked her mother what she had to borrow the money on that she could give as collateral security, to which her mother responded, that she did not have anything. The witness states that Jones then mentioned the $3,000 note and asked if Mrs. Grochanour could put it up as security for the money, to which her mother replied that the note was not hers but that she could easily produce it if he wanted her to. The witness states Jones then said that Mrs. Grochanour would have to sign appellee’s name to the note; and that the note was then signed by her mother as directed by Jones, her mother first signing appellee’s name to the note and then signing her own. The mother did not receive the money at this time as she had not yet produced the security mentioned by Jones. She was advised that she would have to produce the security before she received the money.

The security to be produced was what is commonly referred to by the witnesses as the Bichard note, which we have designated herein as the $3,000 note, it being the note in controversy. This witness knew about the note being kept at home in a box where she says her father kept his papers, and that the note was there at that time. The witness details further conversation had between Jones and her mother with reference to the transaction. She states that this was the'first time she ever knew of her mother signing her father’s name to a note. She states that she knew her mother had drawn checks for small amounts in payment for groceries, and that she had one time drawn a check to this witness for $250, but that the witness’ father had directed them to draw this check for the benefit of said daughter. This witness further states that she knew her mother did not own the $3,000 note.

Lester Gochanour testified for appellee regarding a conversation about this matter that he had with Jones regarding the $3,000 note, wherein he claims Jones said, in substance, that when Mrs. Gochanour borrowed the $2,500 from the bank and put up the $3,000 Richard note as collateral, that he, Jones, then knew the note was the property of appellee, but he did not think that she had “purloined it.”

Mr. W. H. Jones, on behalf of the appellant, claimed that Mrs. Gochanour brought most of the deposits to the bank from time to time, which were placed in the account of appellee; that she wrote checks against his account; that notes had been in that bank wherein appellee and his wife were the signers and that appellee signed his own name. This witness claimed, however, there were two exceptions where appellee did not sign his own name to notes, namely, a note in the sum of $150 (of which appellee denies any knowledge) and the $2,500 note as made by appellee’s wife. He states that appellee was not present when the $2,500 note was executed, that Mrs. Gochanour negotiated the loan and stated she would need it for only a short time. He does not remember whether Mrs. Gochanour stated that she had authority to sign appellee’s name. He states that she delivered the $3,000 note and received $2,500 upon a note executed by her. This $2,500 note was renewed once by Mrs. Gochanour at a time when appellee was not present and there is no evidence that any statement regarding this renewal was sent to appellee. This witness became acquainted with appellee about 1912. Appellee at that time was engaged in farming. Several years prior to this proceeding, appellee had lived in Ransom, where he delivered mail from the depot to the postoffice. He was 69 years of age and not in good health. It appears from the evidence of Mr. Jones that after appellee moved to Ransom, he did not come to Streator so often as he had previously done, and that he usually sent his deposits to the bank by his wife. The witness states that during these years the wife would occasionally sign appellee’s name to checks. He denies that he knew what Mrs. Gochanour did with the $2,500, or that she gave it to George Schaefer, whom he understands to be her son by a former marriage. He does not remember what conversation he had with appellee’s wife in regard to the making of the $2,500 note. He does not remember who was with Mrs. Gochanour at the time. He states that his recollection is that the money was paid in cash. Neither does he remember the conversation about the $3,000 note.

We do not consider appellant’s first objection as to the question of agency between appellee and his wife well taken. The evidence fails to establish agency. The husband denies it. The wife as a witness for appellant admits the want of agency, and Jones as a witness for appellant makes no such showing.

With regard to appellant’s second contention that the receiver takes title to the pledged security as an innocent holder even though the bank was not such a holder, we cannot agree. There was no fraud entering into this transaction in an effort to bolster up the credit or financial standing of the bank, and therefore the rule urged by appellant does not apply in this case, and the receiver takes no better title than the bank had. Hunt v. Green, 271 Ill. App. 228, 234.

The appellant’s third contention that the pledged collateral was negotiable by delivery, and the bank having parted with valuable consideration therefor, that it was entitled to retain possession of the same as a pledge until the $2,500 note was paid, we cannot agree with under the facts in this particular case. Jones was a general agent of the bank for the transaction of its business, and his information concerning this transaction was the information of the bank. First Nat. Bank of Kewanee v. Wine, 255 Ill. App. 578; Hunt v. Green, supra.

A careful examination of this record convinces us that the bank had knowledge that appellee knew nothing about this transaction and that his wife did not Avant him to know anything about it; that the wife did not have any collateral security to pledge, and so stated. A pledgee who has either actual or constructive notice of outstanding rights or equities affecting the pledged property, before he delivers up anything of value in consideration therefor, is not a bona fide holder of the pledged property. 49 C. J. 929. •

Where a negotiable paper is pledged by one not its owner and money is paid out thereon by a pledgee who knows that the pledgor is not the OAvner thereof, the pledgee must give up such paper to the real owner. Perth Amboy Mut. Loan Homestead & Bldg. Ass’n v. Chapman, 178 N. Y. 558. Where one taking negotiable paper, by way of collateral security, has knowledge that the person offering it has no authority to pledge it, his taking of the same as security for a loan, imparts no title as against the real owner. Jones on Collateral Securities, 124.

In this case we 'think the evidence establishes the fact that the bank had knowledge this note belonged to appellee and not to his wife, and the trial court properly held him to be entitled to the possession of the same.

The decree of the trial court is affirmed.

Decree affirmed.


text:
    Barbara Gail Carnahan, a Minor, by Thomas H. Carnahan, her Father and Next Friend, Appellee, v. Public Service Company of Northern Illinois, Appellant.
    Gen. No. 8,795.
    Opinion filed July 6, 1934.
    Gardner, Foote, Morrow & Merrick, for appellant ; Walter M. Fowler, of counsel.
    A. V. Smith and George W. Field, for appellee.
   Mr. Justice Huffman

delivered the opinion of the court.

Appellee instituted this suit by her father as next friend, against appellant, in the circuit court of Lake county. Trial was had before a jury, which resulted in a verdict of $3,000 in favor of appellee. Judgment was entered thereon. Appellant prosecutes this appeal to reverse that judgment.

Appellant discontinued the electric service to the Carnahan residence on January 10, 1930, due to a delinquency in accounts for service rendered in the previous months of October, November, and December. The declaration consisted of one count in which it charged that appellant wilfully and wantonly cut off the service of electric light to the premises in which appellee then lived with her parents. The declaration charged that appellant was engaged in the electric light and power business and was furnishing same to the residence of the father of appellee; and that appellant wilfully and wantonly and without notice, discontinued and cut off the service of electric light to said premises; and that because of such wilful and wanton act of. appellant, it then became necessary for the said father, Thomas H. Carnahan, and the members of his family, to light the premises with candles; and that while the said premises were being so lighted, that appellee, who was a child of three years of age, came in contact with one of said candles, and that her clothing thereby became ignited, and that she was severely burned on and about her person, as a result of the wilful and wanton conduct of appellant.

Appellant objects to the giving of appellee’s instructions. Instruction number one was directed toward the amount of damages. Instruction number four had to do with the forms of verdict. Instructions number two, three and five had to do with the question of negligence on the part of appellant. Instruction number three is as follows: “The court instructs the jury that if you believe from a preponderance of the evidence, that the plaintiff has proved her case as charged herein, then you will find the defendant guilty.” Instruction number two used a similar expression, “if you find from the evidence that defendant was negligent, as charged.” Instruction number five charged that if the jury believed from the preponderance of the evidence that the accident causing the injury to plaintiff was due to want of ordinary care by the defendant, they should then find a verdict for the plaintiff. There is no instruction offered or given by appellee which tells the jury what negligence or wrongful conduct the appellant is charged with in appellee’s declaration, nor did appellee offer any instruction which in any way advised the jury that appellant was charged with wilful and wanton conduct. It is not to be presumed that the pleadings were taken by the jury when they retired to consider their verdict. Bernier v. Illinois Cent. R. Co., 296 Ill. 464, 472; Lerette v. Director General of Railroads, 306 Ill. 348, 355. An instruction which directs a verdict must limit the jury to the negligence or to the wrongful conduct charged against the defendant in the declaration. Herring v. Chicago & Alton R. Co., 299 Ill. 214; Molloy v. Chicago Rapid Transit Co., 335 Ill. 164, 171; Ratner v. Chicago City Ry. Co., 233 Ill. 169.

The declaration in this instance consisted of only one count as aforesaid, and it charged the defendant therein with wilful and wanton conduct, resulting in the injuries sued for. Where an action is based upon specific charges, the plaintiff has the burden of proving such charges as laid. Welch v. New Harper Hotel Co., 196 Ill. App. 94; Ebsery v. Chicago City Ry. Co., 164 Ill. 518.

There is a fundamental difference and distinction between negligence, and wilful and wanton conduct. Nosko v. O’Donnell, 260 Ill. App. 544. A cause of action based upon conduct which is wilful and wanton, differs fundamentally in its nature and legal consequences, from a cause of action based upon negligence. The defenses to the two charges may not be the same. The damages are not governed by the same rule. Negligence does not change its character and become anything else than negligence. Negligence and wilful and wanton conduct are not the same things and are not governed by the same rules of law.

The instructions in this case, given by appellee, not only directed the jury to find the appellant guilty upon proof of plaintiff’s case, without defining the wrongful conduct charged in the declaration; hut they were based upon ordinary negligence, and - did not fit the charge of wilful and wanton conduct as made by appellee against appellant, in her declaration. Appellee’s instruction number five directed the jury that if they believed from a preponderance of the evidence, the accident causing the injury to plaintiff was due to want of ordinary care by defendant, they should then find a verdict for the plaintiff. This not only permitted but directed the jury to determine the defendant’s liability upon the question of ordinary negligence. This was erroneous. The defendant’s liability was not to be measured or tested by the rules governing ordinary negligence. The same rules of law not governing the two actions, the jury was therefore not properly instructed. The question of wilful and wanton conduct was not submitted to the jury by the instructions.

The judgment herein is reversed and the cause remanded.

Reversed and remanded.


author: Mr. Justice Dove

text:
    Standard Oil Company, Appellee, v. Kapschull, Davis Company, Inc. et al. Columbia Casualty Company, Appellant.
    Gen. No. 8,496.
    Opinion filed March 12, 1934.
    Rehearing denied and modified opinion filed August 1, 1934.
    CasSels, Potter & Bentley, for appellant; Ralph F. Potter, George C. Bunge and Raymond W. Hamill, of counsel.
    Barr & Barr, for appellee.
   Mr. Justice Dove

delivered the opinion of the court.

This cause comes to this court upon an appeal from a decree of the circuit court of Will county, awarding appellee a lien in the amount of $1,706.96 upon moneys due from the State of Illinois upon a contract for the construction of section 145 of State Highway Route 176 in Lake and McHenry counties.

Upon the hearing, the parties stipulated that on October 22, 1928, Kapschull, Davis Company entered into a contract with the State of Illinois to construct said section for a consideration of $162,672.91, and at that time Kapschull, Davis Company, with the Columbia Casualty Company, appellant, as surety, gave a bond to the State for the contract price of said improvement ; that on October 30,1928, Kapschull, Davis Company commenced work under said contract and completed it on or about October 30, 1929; that on July 1, 1929, the contractor, Kapschull, Davis Company, entered into an oral contract with Edward J. Peacock, doing business under the name of Peacock Cartage Company, to haul mixed batches of concrete and various other materials from certain points to the place of construction, Peacock to receive therefor a stated price per batch or load; that on August 1, 1929, Peacock entered into a verbal contract with appellee, whereby appellee agreed to furnish to Peacock such quantities of grease, oil and gasoline as Peacock might require in the operation of his trucks and that these commodities were so furnished and that $1,541.57, together with interest thereon, remains due and unpaid appellee therefor. It was further stipulated that proper statutory claims were duly filed by appellee and the only questions presented for determination upon this record are first: whether appellee is entitled to a lien under section 23 of the Liens Act,. Cahill’s St. ch. 82, H 23, upon, the money' due under the contract which was originally entered into by the State of Illinois and Kapschull, Davis Company; second: whether the amount due appellee bears interest; and third: whether appellant, the Columbia Casualty Company, is liable on its bond in this proceeding.

First: Section 23 of chapter 82, Cahill’s Illinois Revised Statutes, If 23, in force at the time of these transactions, provided, among other things, that any person who shall furnish material, apparatus, fixtures, machinery or labor to any contractor having a contract for public improvement for the State, may have a lien on the money, bonds or warrants due or about to become due such contractor under the contract.

Appellant contends that the statute expressly restricts the right to a lien to persons furnishing material directly to the principal contractor and does not include appellee who furnished materials to a subcontractor. On the other hand, it is the contention of appellee that the provisions of the statute are broad enough to include one who furnished lienable materials indirectly to the original contractor by furnishing the same to a subcontractor.

In Alexander Lumber Co. v. Coberg, 356 Ill. 49, our Supreme Court had under consideration the construction of the first paragraph of this same section 23 which provides that any person who shall furnish material, apparatus, fixtures, machinery or labor to any contractor having a contract for public improvement for any county, township, school district, city or municipality in this State shall have a lien on the money, bonds or warrants due or to become due such contractor under such contract. In that case it appeared that contracts for the construction and erection of two school buildings had been entered into by and between the Board of Education of School District No. 46 in Du Page county and John C. Goberg. Subsequently Co-berg sublet a portion thereof to one McDonald and he in turn contracted with the lumber company for certain materials which went into the construction of the buildings and the lumber company sought to enforce a lien for the balance due on its contract. In sustaining the decree of the circuit court, which denied a lien to the lumber company, the Supreme Court said: “By reference to the relevant part of section 23, we find that the legislature has specifically mentioned only three parties: First, the municipality; second, the contractor; and third, the ‘person who shall furnish material, apparatus, fixtures, machinery or labor to any contractor having a contract for public improvement,’ etc. Nowhere does a pertinent part of the section contain any language including material-men, such as were the appellees here, who furnished materials to a subcontractor. The language used by the legislature is plain, specific, and not all-inclusive. Under the authorities cited, and the well known rule that the expression of one thing is the exclusion of all others, this court has no right to read into this section words not found therein.”

In the instant case .the pertinent provisions of section 23 are identical with those provisions of the same section which the court construed in the Alexander Lumber Co. case, supra, and while it is true that appellee furnished lienable materials to Peacock, a subcontractor, with the knowledge and consent of the original contractor and notwithstanding these materials were used and consumed in the making of a public improvement and helped bring it to a satisfactory completion, still the statute says that in order to have a lien therefor, such materials must be furnished to the contractor. Appellee was not, therefore, entitled to a lien and the chancellor erred in not so holding.

The second and third questions may be considered together. The decree of the lower court found that the contractor had assigned to the casualty company all moneys due it from the State under its contract and provided that in the event the sum found due complainant, which included $165.39 interest, was not paid within 30 days, then the Director of the Department of Public Works and Buildings shall pay the same, provided there is a sufficient amount available therefor and that if the money in the hands of the Director of the Department of Public Works and Buildings is insufficient to pay the amount found due complainant, “that the complainant report and make proof to this court the amount of such deficiency, and on the coming in and confirmation of this report, the court shall thereupon adjudge the amount decreed to be paid by the said Kapsehull, Davis Company, Inc. and said Columbia Casualty Company, the court hereby ordering, adjudging and decreeing that the terms of said bond of the said Kapsehull, Davis Company, Inc., and said Columbia Casualty Company include the payment of the lien hereby established, . . . that the complainant report to this court as soon as practicable, the amount of such deficiencies, if any, and the court hereby retains jurisdiction of this cause for the purpose of ascertaining such deficiencies if any, and entering such orders or decrees relative thereto as equity may require. ’ ’

The surety bond was in the sum of $162,672.91, and recited the award of the contract to Kapsehull, Davis Company, Inc., and the execution by it of a written contract with the State of Illinois, acting through the Department of Public Works. The condition of the bond was that the contractor shall hold the People of the State of Illinois and the Department of Public Works and Buildings harmless and shall perform the work according to the terms of the contract and should pay all sums of money due for any labor, material, apparatus, fixtures or machinery furnished to them for the purpose of such construction or improvement.

Appellee insists that Peacock could have maintained a suit upon this bond, that the provisions of the bond are for the benefit of appellee, who furnished material to Peacock, the subcontractor, and that even though no lien exists in favor of appellee, still that portion of the decree above referred to with reference to the liability of appellant, the surety company, should be sustained. In this connection, appellee calls our attention to the case of United States for the use of Hill v. American Surety Co., 200 U. S. 197, 50 L. Ed. 437. In that case it appeared that the beneficial plaintiff had entered into a contract with the Bichard Manufacturing Company to do certain painting provided for in a contract theretofore entered into by the New Jersey Foundry and Machine Company with the United States, this company having sublet a portion of its contract to the said Bichard Manufacturing Company. The condition of the bond sued on was that the New Jersey Foundry and Machine Company would faithfully perform its contract with the United States and make full payments to all persons supplying it labor or materials in the prosecution of the work provided for in the contract. The lower court sustained a demurrer to the petition and the Supreme Court in reversing that judgment, stated that neither the statute under the provisions of which the bond was given, nor the bond itself contained any language limiting the right of recovery to only those who furnished material or labor directly to the contractor, but that all persons supplying the contractor with labor or materials in the prosecution of the work provided for in the contract were protected, that if the contractor sees fit to let the work to a subcontractor who employs labor and buys materials which are used to carry out and fulfil the engagement of the original contract to construct a public building, he is thereby supplied with the materials and labor for the fulfillment of his engagement as effectually as he would have been had he directly hired the labor or bought the materials and that the labor and materials furnished by the beneficial plaintiff were therefore within the obligation of the surety company on the bond. This holding is not authority for the proposition that in this proceeding the lower court, even though a lien be denied appellee, should have determined the rights of appellee upon the bond executed by appellant. The statutory relief sought by appellee cannot be granted because under the construction of the statute as adopted in the Coberg case, supra, one who furnishes supplies to a subcontractor is not entitled to a lien upon the funds in the hands of the state. This relief having been denied appellee, all that was left to be ascertained and adjudicated were legal rights and the lower court erred in not dismissing the bill and leaving appellee to pursue his legal remedies.

Independent of any statute, a personal decree is not authorized in this State where an unsuccessful effort to establish a lien has been made. Turnes v. Brenckle, 249 Ill. 394. In that case the court had under consideration an amendment to section 13 of the Liens Act as it then existed. This amendment, effective July 1, 1903, provided as follows: “And in event that the court shall find, in any proceeding in chancery, that no right to a lien exists, the contractor shall be entitled to recover against the owner as at law, and the court shall render judgment as at law for the amount which the contractor is entitled to, together with costs in the discretion of the court.” Cahill’s St. ch. 82, Ti 13 (Hurd Statutes, 1903, chapter 82, sec. 13). In the course of its opinion the court said that this amendment was manifestly intended to give the court the1 power to enter a personal decree under circumstances where no such power existed before. In holding the amendment unconstitutional because it was special legislation and deprived a defendant of the right to a trial by jury, the court said: “If a statute were passed providing that simple contract creditors of a certain class might file a bill in chancery and procure a personal decree for the amount due, it could hardly be contended that such an act was not unconstitutional both because it only applied to one class of creditors and for the reason that it deprived the debtors of the right to a trial by jury. . . . The right of trial by jury in respect to matters wherein such right existed at the time the constitution was adopted cannot be taken away, directly or indirectly, by transferring the jurisdiction to try purely legal cases to a court of chancery, where, according to the usual practice, juries are not demandable as a matter of right. A party who directly invokes the jurisdiction of equity thereby waives his right to demand a jury, but such action on the part of a plaintiff cannot deprive the defendant of his right to a jury trial.”

It is insisted that a court of equity having obtained jurisdiction in this case will retain it in order to do complete justice between the parties, that appellant submitted itself to the jurisdiction "of the trial court without insisting that appellee had an adequate remedy at law, and therefore that portion of the decree of the lower court fixing the liability of appellant upon its bond should be affirmed.

The answer of appellant, after admitting the execution of the contract and bond and that the contractor had assigned to it all moneys remaining due from the State of Illinois on account of said contract, averred that other claims had been made upon that fund, and that it is interested in seeing that said fund is employed only in the payment of valid lien claims. There are no allegations in the bill which can be said to appeal to the conscience of a court of equity. Appellee sold nothing to the original contractor and had no dealings with it. The original contractor completed his contract with the State. Peacock was a subcontractor and he, in turn, entered into a contract with appellee. There was no privity of contract between appellee and the original contractor and appellee not being entitled to a lien, the decree should have so found and dismissed the bill. Alexander Lumber Co. v. Coberg, 276 Ill. App. 605 (Abst.). Section 23 of the Liens Act, Cahill’s St. ch. 82, f[ 23, gave the original contractor an additional remedy for enforcing obligations which did not previously exist and under the authorities, where no statutory relief is granted or equitable relief warranted, the proceedings must be dismissed leaving complainant to pursue its legal remedies, if any. Turnes v. Brenckle, supra.

Heretofore an opinion was filed reversing and remanding this cause with directions to the circuit court to dismiss the bill. Upon petition by appellee for a rehearing, our attention was called to the fact that our previous opinion only determined that appellee was not entitled to a lien under section 23. We have, therefore, given the other questions our consideration and the original opinion is supplemented as herein indicated and the petition for a rehearing will be denied.

The decree of the circuit court is reversed and this cause is remanded, with directions to enter a decree dismissing the bill for want of equity.

Reversed and remanded with directions.


text:
    Anthony Trust, Sr., Appellee, v. The Chicago Motor Club et al., Appellants.
    Gen. No. 8,762.

      Opinion filed August 1, 1934.
    J. A. Miller, for appellants.
    Wilfred E. Hall, for appellee.
   Mr. Justice Dove

delivered the opinion of the court.

On May 6, 1932, Anthony Trust, Sr., appellee, while riding as a guest in the automobile of his son, Anthony Trust, Jr., was injured in a collision with a car driven by Frank Waggett. Subsequently this suit was instituted against Frank Waggett, The Chicago Motor Club, The Inter-Insurance Exchange of the Chicago Motor Club, Motor Club Service Corporation, Gerald Lyon and three other individual defendants. Before trial, the suit was dismissed as to the three other individual defendants, and proceeded against the defendants named, resulting in a verdict in favor of the plaintiff for $3,500, upon which judgment was rendered and the record has been brought to this court for review by appeal.

The declaration alleges that appellants, at the date of the accident and for some time prior thereto, employed Frank Waggett to solicit automobile club memberships and automobile insurance for them, and that said corporations owned and operated at the time of the accident the automobile then driven by Waggett, who was their agent, servant and employee; that the automobile in which appellee was riding was being driven by his son in a southerly direction just north of the intersection of Jackson street and Jackson court in Waukegan, and that appellee was a guest, and while he was in the exercise of ordinary care for his own safety, the said Waggett operated the car he was driving so carelessly and negligently that a collision occurred, as a result of which appellee was permanently injured.

A plea of the general issue was filed, together with two special pleas in which the appellant corporations alleged that they did not own, operate, possess or control, through their agent, servant or employee, the motor vehicle, mentioned in appellee’s declaration, and further alleged that the said Frank Waggett, at the time of. the accident and prior thereto, was not the agent of the appellant corporations or either of them, or subject to their orders, supervision or direction or engaged in the furtherance of any of their business. To these pleas replications were filed in which it was averred that Waggett was permitted to operate the car as the oficial car of appellants and to hold himself out as their agent, and that therefore the appellant corporations were estopped to deny that Waggett was acting as their servant and agent at the time of the collision. Upon the general issue and upon these replications issue was joined.

The several corporations are the only appellants who appear in this court. It is not argued that the trial court committed reversible error in the admission or rejection of the testimony, or in the giving or refusal to give the general instructions to the jury, but it is earnestly insisted that the evidence disclosed that Waggett was not employed by them and was not their agent, servant or employee at the time of the collision, but that he was an independent contractor and for this reason a peremptory instruction should have been given at the close of all the evidence or that in any event the judgment should be reversed as the verdict is manifestly against the weight of the evidence upon this issue.

The evidence discloses that J. J. Cavanaugh is general manager of the Chicago Motor Club and of the Inter-Insurance Exchange of the Chicago Motor Club and Assistant Secretary' of the Motor Club Service Corporation; that the Motor Club Service Corporation is the attorney in fact for the Inter-Insurance Exchange and sells the policies issued by the Inter-Insurance Exchange; that Waggett is an insurance salesman and has been connected with appellants in this capacity since 1926, at first in Freeport, then Champaign and then at Waukegan. In 1929 Waggett resigned as manager of the Urbana-Champaign branch and was told by Mr. Cavanaugh that if he wished to continue with the organization he should see Mr. Dixon, who was then district or branch manager at Waukegan. From 1924 to October, 1930, Julius Dixon was the Lake county manager, with an office in Waukegan." Waggett saw him and he with four others was employed by Dixon as a salesman to sell memberships in the Chicago Motor Club and insurance in the Inter-Insurance Exchange. Dixon, as manager, was succeeded by Harold Knapp, and he in turn by the defendant below, Gerald Lyon, who was in charge at the time of the occasion in question. Neither Dixon, Knapp or Lyon received any salary, but worked on a commission basis. Waggett and the other salesmen also worked on commission and their business was to sell memberships in the Chicago Motor Club and insurance in the Inter-Insurance Exchange. When a sale was effected, the applications were turned over to the branch manager at his office in Waukegan, who in turn would send them to the club or exchange in Chicago, and he, the branch manager, would receive a check for his commissions upon the business which was sent in from his office and which was written by the men in his employ, the check being drawn either by the Motor Club Service Corporation or by the Motor Club, depending upon whether it was for insurance or membership, and payable to the district manager. From the money so received by the manager from the Chicago office, he paid the long distance calls, the commissions to the other salesmen, and of the balance he retained 66% per cent and Waggett received 33% per cent. It further appeared that the corporations only engage district managers to whom is paid the commission upon all business arising in their respective districts, and with whom all transactions are carried on. The business is written in the name of the district manager and the names of the individual salesmen working under the manager do not appear upon their books. The supplies, such as receipt books, powers of attorney for applications for insurance and insurance manuals are furnished to the district managers upon their requisition. In the summer or fall of 1929, Waggett was the manager of the Urbana-Champaign office and had ‘ ‘ Chicago Motor Club, Official Car Number 49” and the emblem of the Chicago Motor Club painted on the door of the body of his Hudson car. This work was paid for by the Chicago office of the Motor Club.

On the afternoon of May 6, 1932, Waggett had called upon several persons in connection with his work, soliciting memberships and insurance, and had started in this car to the office of the district manager in Waukegan. He noticed the approach of a storm and changed his mind and was on his way home when the collision occurred. At the time of the collision he had with him blank applications for membership, a receipt book and an insurance manual, all furnished by the Motor Club and which he used in connection with his work. Waggett was authorized to make collections and to issue receipts therefor signed ‘ ‘ Chicago Motor Club by Frank Waggett” and just after the accident he gave the son of appellee a card, upon which appears the name 1 ‘ Chicago Motor Club, Waukegan Branch, 111 South Genesee St., Waukegan, Illinois. Frank Waggett, Assistant Manager.”

The general rule is that a party injured by the negligence of another must seek his remedy against the person who caused the injury, since such person is alone liable. To this general rule the case of master and servant is an exception, and the negligence of the servant in the course of his employment and acting within the scope of his authority is, in contemplation of law, the act of the master, but to bring a case within this exception it is necessary to show that the relation of master and servant and not that of employer and independent contractor exists between the person at fault and the one sought to be charged for the result of the wrong, and the relation must exist at the time and in respect to the particular transaction out of which the injury arose. Outside of the scope of his employment the servant is as much a stranger to his master as any third person, and an act ofothe servant not done in the execution of services for which he was engaged cannot be regarded as the act of the master. If the servant steps aside from his master’s business for some purpose wholly disconnected with his employment, the relation of master and servant is suspended. The act of the servant during such interval is not to be charged to his master. Johanson v. Johnston Printing Co., 263 Ill. 236; Harding v. St. Louis Nat. Stock Yards, 242 Ill. 444.

In American Sav. Life Ins. Co. v. Riplinger, 249 Ky. 8, 60 S. W. (2d) 115, it was held that the life insurance company was not liable for an injury to a pedestrian caused by the negligence of one of their soliciting agents employed on a commission basis, while he was driving his wife’s automobile in connection with his work. The court in that case said: “A master within the doctrine of respondeat superior is the one who cannot only order the work, but also how it should be done. The doctrine applies only where the relationship of master and servant exists at the time and in respect to the thing causing the injury and from which it arose and then only when the one sought to be charged has some right in some way to control the conduct of the party having caused the injury.”

In Williams v. National Cash Register Co., 157 Ky. 836, 164 S. W. 112, the court, after discussing a contract of employment between an employee and the company, held that the employee was not an independent contractor, but a servant, and in the course of its opinion said: “The test of the relationship is the right to control. It is not the fact of actual interference with the control but the right to interfere that makes the difference between an independent contractor and a servant or agent. To enlarge the test is whether the employee represents his employer as to the result of the work only, or as to the means as well as the result. If the employee is merely subject to the control or direction of the owner or his agent as to the result to be obtained, he is an independent contractor. If the employee is subject to the control of. the employer as to the means, he is not an independent contractor.”

In Burster v. National Refining Co., 274 Ill. App. 104, it appeared that Mr. Shockey was a salesman for the refining company. He worked for the company in an assigned territory calling upon customers and prospective ones, taking orders, distributing literature and signs and endeavoring to promote the sale of the products of the refining company. In traveling from town to town in the course of his work he used his own automobile and received from the company a salary of $200 per month and in addition $2 per day in consideration of the use of his car. He carried with him in his car a portfolio and advertising literature of the company and on the cover of his spare tire were words advertising the company’s products. In returning to his home from a sales meeting which he had been attending at Peoria at the request of his immediate superior, his car collided with another, resulting in the death of an occupant of the other car. In sustaining the action of the trial court directing a verdict for the refining company, this court said: “We have examined the cases cited by the appellant as tending to show that Shockey was a servant of the National Refining Company at the time of the collision of the automobiles which caused the death of the plaintiff’s intestate. In all or nearly all of the cases cited, the company had retained the authority to direct the means and the manner in which their salesmen should conduct the business. The evidence in this case shows that at the time of the collision, Shockey was driving his own automobile and not at the direction or under the control of the National Refining Company; that to some extent in the performance of his duties he was under the direction and control of the Refining Company, but so far as his actual movements were concerned he was free to go at any time or place in certain designated territory to transact his business; that Shockey in going to and from the salesmen’s meetings at Peoria used Ms own discretion in how he should travel, and that at the time of the collision he was not acting as a servant of the National Refimng Company. ’ ’

Appellee, however, cites and relies upon the case of Shannon v. Nightingale, 321 Ill. 168. The plaintiff in that case was injured by a truck belonging to Rose Loux, wMch was driven by Dale Pratt. At the time the injuries were sustained, Pratt was engaged in hauling gasoline and oil which belonged to Wm. R. Nightingale and John P. Pallissard, partners, doing business as the Eastern Illinois Oil Company. In affirming the judgment wMch the plaintiff recovered in the circuit court against Nightingale and Pallissard and which had been affirmed by this court, the Supreme Court said: “This record presents no question of law for our consideration except that raised by the motion to direct the verdict. The question arising on this motion is whether there is any evidence tending to sustain the plaintiff’s side of the issue. The.plea that Dale Pratt was not the servant of the defendants raised an issue of fact. ... If the contract of the plaintiffs in error with Mrs. Loux had been in writing, the question whether, in performing the work of delivering gasoline and oil for the plaintiffs in error, she was an independent contractor would be determined, as a matter of law, by a construction of the written contract. (Pioneer Construction Co. v. Nansen, 176 Ill. 100.) Since the contract was not in writing but could be shown only by parol evidence, the determination of its terms was necessarily left to the jury, and the question whether by its terms Mrs. Loux was an independent contractor or not was therefore required to be submitted to the jury under proper instructions by the court. (Consolidated Fireworks Co. v. Koehl, 190 Ill. 145.) The facts that the trucks all had the plaintiffs in error’s firm name painted on them, that the drivers collected pay for the plaintiffs in error for the gasoline and oil which they delivered, that they took orders for gasoline and oil to be delivered by plaintiffs in error, that they were under the control and direction of the plaintiffs in error as to when and where they should deliver gasoline and oil, all were circumstances tending to show that the drivers of the trucks were the employees of the plaintiffs in error. There were other circumstances tending to show that they were the employees of Mrs. Loux as an independent contractor. The determination of the question of ultimate fact whether or not Pratt was an employee of the plaintiffs in error involves a conclusion derived from a consideration of all these and other evidentiary facts, in connection with the application of principles of law to a consideration of the evidence. The question thus becomes a mixed question of law and fact, as to which the verdict of the jury and the decision of the Appellate Court are conclusive and not subject to review. (Citing cases.) ” The court then reaffirmed what was said in the case of Densby v. Bartlett, 318 Ill. 616, in which it was stated that the most universal and unfailing test for determining the relation of master and servant is the power of the person for whom the work is done to discharge the servant; that where there is such power, the relation of master and servant exists, that where the person for whom the work is done has not such power, the relation of master and servant does not exist. The opinion then continues: “The application of those principles to the evidence was necessary to the determination of the question whether or not Pratt was the servant of plaintiffs in error, and the determination of that question by the jury, approved by the judgment of the circuit court, which has been affirmed by the Appellate Court, in the absence of error of law, precludes any review of the question by this court.” In the Shannon case it appeared that Pratt, the driver of the truck, was directly under the control of the Eastern Oil Company to do such acts as he was ordered and directed by the members of the firm which constituted the oil company to whom their services were loaned by Mrs. Loux, and in this connection the court said, “Was the servant whose negligence injured the third party performing work for his master within the scope of his employment or was he loaned by his master to do another’s business? In the former case the general employer is liable for his negligence: in the latter he is not.”

In the instant case Waggett was subject to the orders of no one. He solicited when and whom he pleased, confining his efforts to the territorial limits of Lake county. He adopted his own means and methods of calling upon prospective customers. He used his own car or any other means of transportation he wished. No proportion of the expense incurred by him in the operation and maintenance of his car was paid either by the district manager or by appellants. He procured his own automobile license, paid for it and maintained his car at his own expense. He received in return for his efforts a commission upon the business procured. He made reports to the manager of the Waukegan office who alone had the power and authority to discharge him. Appellants did not employ him, had no right to discharge him, nor could they direct or control his work.

Appellee insists, however, that Waggett was in fact the subagent of appellants, having been appointed with their authority by their branch manager and appellants were therefore liable for the tort of Waggett in like manner as for the torts of an agent appointed directly by them. This is no doubt true if the legal relation of master and servant existed between appellants and Waggett, as distinguished from the legal relationship of principal and (so called for want of a better name) independent contractor. Of course a master is liable for the acts of one whom his servant employs to assist in the'performance of the master’s work under the authority given the servant by the master, subject to the. limitation that the acts complained of must be within the scope of the servant’s employment. 39 C. J. 1271. In the instant case, however, the weight of the evidence is that Waggett, under the terms of his contract of employment, was an independent contractor.

Appellee further insists that from the lettering and insignia appearing on the door of Waggett’s sedan, the presumption obtains that the. car he was driving belonged to the Motor Club and therefore appellants are estopped from denying the ownership .of the car or that Waggett was their agent and acting within the scope of his employment. In support of this contention, the cases of Aetna Ins. Co. v. Maguire, 51 Ill. 342, and Harris v. Atlantic-Pacific Stages, Inc., 260 Ill. App. 308, are cited and relied upon. The Aetna Ins. Go. case, supra, was an action in assumpsit brought to recover on a fire insurance policy and the contention was made by the company that Sweet, its agent, who wrote the policy, was acting without authority, and the company was therefore not bound by his acts and declarations. In disposing of that contention, the court stated that where an insurance company appointed an agent for. a particular locality, and such agent issued a policy of insurance upon property outside of such territory and afterward the policy was submitted to the general agent, of the company and no objection was made that the local agent had exceeded his authority, and the taking of the risk .was acquiesced in, the company is estopped from thereafter insisting that the local agent did not have authority to issue the policy. The Harris case, supra, was an action to recover damages alleged to have been sustained by Harris in being ejected from a restaurant used by defendant as a waiting room for its passengers. It was contended by defendant that Monroe Melton, whom it was claimed ordered Harris from the restaurant, was not an employee of the defendant, and that the relation of master and servant did not exist between them. The court held, however, that the conduct of the defendant in permitting signs to be placed on the sidewalk in front of his restaurant, on the post and windows, announcing to the public that his restaurant was the “Atlantic-Pacific Stages” depot, the placing of a ticket office inside, and the arrangement of the chairs for passengers were facts for the consideration of the jury in determining whether the defendant was estopped from denying the appointment and authority of Melton. The principles enunciated by these cases are well known and there is nothing said in either case in conflict with our holding here.

In the instant case it was entirely proper for appellee to show that the car of Waggett bore the insignia and lettering which indicated that it belonged to the Chicago Motor Club. This fact, together with the further facts that Waggett had with him in his car an insurance manual, receipt book, applications for insurance in the Inter-Insurance Exchange and applications for membership in the Chicago Motor Club all furnished by appellants, and also the business card referred to, were all proper for the consideration of the jury as tending to show that Waggett was an employee of appellants. It was also proper for appellants to show that the car was not theirs, but Waggett’s, and all the other facts and circumstances in connection with his duties and character of his employment. An issue made by the pleadings was whether or not Waggett was the servant of appellants or whether he was an independent contractor, but the verdict of the jury, finding these issues for appellee, cannot be sustained simply because appellee made out a prima facie case. The presumption arising from the proof offered by appellee is not a conclusive one, but is disputable. In Osborne v. Osborne, 325 Ill. 229, the court, citing 1 Jones’ Com. on Evidence, 75, said: “As soon as evidence is produced which is contrary to the presumption which arose before the contrary proof was offered, the presumption vanishes entirely. ’ ’ Here the uncontradicted evidence is that Waggett, the driver of the car, and not the party whose insignia and name appeared thereon, was the owner and under the authorities appellants were not estopped from insisting that the true relationship was that of principal and independent contractor. Foster v. Wadsworth-Howland Co., 168 Ill. 514, where it was held that one who contracts with a business house to do all its hauling and delivery work at a specified sum per week, furnishing teams, wagons and drivers, over which he retains full control, is a contractor and not a servant and the business house is not liable for the negligent driving of the wagons, though its name and address are painted thereon.

Appellee also cites the case of Hartley v. Red Ball Transit Co., 344 Ill. 534. In that case the employer undertook to control the details of operating the truck which caused, the injury and the court, following its decision in Shannon v. Nightingale, supra, applied the rule that the. element of control determines whether an agent is a servant or an independent contractor.

From our examination of the authorities not only in our own State but in other jurisdictions, we are clearly of the opinion that the facts as they appear in this record establish that the relationship which existed between appellants and Waggett was that of principal and independent contractor. Meece v. Holland Furnace Co., 269 Ill. App. 164; Burster v. National Refining Co., supra; Pyyny v. Loose-Wiles Biscuit Co., 253 Mass. 574, 149 N. E. 541; Nettleship v. Shipman, 161 Wash. 292, 296 Pac. 1056; McCarthy v. Souther, 83 N. H. 29, 137 Atl. 445; Stockwell v. Morris, — Wyo. —, 22 P. (2d) 189; Aldrich v. Tyler Grocery Co., 206 Ala. 138, 89 So. 289; Dohner v. Winfield Wholesale Grocery Co., 116 Kan. 237, 226 Pac. 767; Howitt v. Hopkins, 219 App. Div. 653, 220 N. Y. S. 462; Gall v. Detroit Journal Co., 191 Mich. 405, 158 N. W. 36.

The judgment of the circuit court is reversed and the cause remanded.

Reversed and remanded.