text:
    Illinois Casualty Company, Appellant, v. John Krol, Individually and Trading as Krol Coal and Supply Company and John Krol, Jr., Appellees.
    Gen. No. 42,674.

      Opinion filed December 19, 1944.
    Released for publication January 4, 1945.
    Hinshaw & Culbertson, of Chicago, for appellant; Oswell G. Treadway, of Chicago, of counsel.
    Paul W. Pretzel, of Chicago, for appellees.
   Mr. Justice Friend

delivered the opinion of the court.

From a stipulation of facts entered into upon the trial, it appears that in May 1941 Hlinois Casualty Company issued a liability insurance policy to the defendant, John Krol, doing business as Krol Coal & Supply Company, covering, among other vehicles, a Ford dump truck used for customer delivery. In July 1941 John Krol, Jr., then a minor aged 17, while driving the truck in the course of his employment by the Krol Company for pay or compensation, without a chauffeur’s license, negligently passed through a stop light at the intersection of Page avenue and 150th street in Harvey, Illinois, and struck a Studebaker automobile which was being driven by Fred Fonts, its owner, and injured Fonts and two passengers in his car, Mildred Mathews and Helen Dangerstedt. Defendant reported the accident to plaintiff , and called upon it to investigate and adjust the claims of the injured parties. August 7,1941, after careful investigation, plaintiff served a notice of nonwaiver on defendant, disclaiming coverage and calling the attention of the assured to the provisions of the policy excluding coverage while the truck was being operated by a person in violation of the law applicable to age or occupation of the driver. However, as a result of its investigation plaintiff was of opinion that it was for the best interests of all parties to adjust and settle the claims, and secured offers of settlement from Fouts, Mathews and Langerstedt. December 5, 1941 plaintiff again served notice upon defendant disclaiming liability on the ground of noncoverage because Krol, Jr., was at the time of the occurrence driving the truck without a chauffeur’s license and under the age necessary to en- , gage in such occupation, and advised defendant that it would seek reimbursement for any sums it might be required to pay under section 16 of the Illinois Truck Act. At the same time it apprised defendant of the sums which the injured parties would accept by way of settlement and notified him that if he did not settle the respective claims within seven days, plaintiff would do so and look to him for reimbursement in full for the sums so paid. Defendant took no action within the time stipulated and thereafter plaintiff paid to Fouts and his two passengers the aggregate sum of $1,210, which was stipulated as reflecting the reason- ' able damages sustained. Plaintiff’s suit against defendant for reimbursement was tried by the court pursuant to a jury waiver, and resulted in findings and judgment for defendant, from which plaintiff appeals.

Plaintiff takes the position that by virtue of section 16 of the Illinois Truck Act (Ill. Rev. Stat. 1943, ch. 95%, par. 253 [Jones Ill. Stats. Ann. 112.143]) the liability policy issued to John Krol was a “compulsory” policy, under which plaintiff became liable to third persons for damages sustained as the result of the unlawful operation of defendant’s truck irrespective of whether defendant complied with the terms and conditions thereof. The forepart of section 16 provides that “No registration number, certificate or permit shall be issued by the Department to any carrier subject to the provisions of this section nor shall any such carrier operate any truck upon the highways of the State unless he shall have on file with the Department and in effect good and sufficient indemnity bonds, insurance policies (or certificates of insurance in lieu thereof) issued by a surety, indemnity or insurance company authorized under the laws of this State to transact such business within this State which shall insure or indemnify said carrier for his liability, in the case of each 'truck operated or to be operated by said carrier, to the amount of not less than (1) in the case of injury or death to persons five thousand dollars ($5,000.00) to any one person and ten thousand dollars ($10,000.00) for’ any one accident; (2) in the case of damage to property other than cargo, five thousand dollars ($5,000.00) for any one accident.” It then concludes with the provision “that upon written application to the Department by any carrier subject to the provisions of this section and finding that the applicant has the financial ability to pay any and all damages, liability for which would otherwise be assumed by an indemnitor under subdivision (a) of this section, the Department may waive the requirements of said subdivision (a).”

The obvious purpose of this section of the statute is to require of a carrier financial responsibility for injury or damage sustained by third persons as a result of the unlawful operation of his trucks. Legislative enactments requiring insurance are comparatively new in this State and although the applicable provisions of the Illinois Truck Act have not been construed by our courts, decisions in other jurisdictions are uniformly to the effect that under similar statutes, the insurance required is for the protection of the public, and policy defenses, such as noncoverage or the violation of the terms and provisions of such a policy, good as against the insured, do not relieve the insurance carrier of liability to third persons, injured in their persons or property, for damages sustained as a result of the insured’s unlawful operation of his trucks. If the insured complies with his contract and keeps within the coverage of the policy, he is of course protected. The question arises whether, under our statute, his violation of the terms and provisions of the policy, as in the case at bar, relieves the insurer of liability to third persons. As we interpret the statute, the question whether or not Krol’s truck was being operated by his son contrary to law as to his age ór occupation, becomes immaterial with respect to the claims of the parties injured as the result of the collision, because the statute, as we read it, was a compulsory statute, enacted for the protection of the public, and therefore plaintiff’s liability is unaffected by the fact that defendant’s conduct at the time of the occurrence excluded him from coverage under the policy.

We think it is a fair construction of the statute to hold that one of the compelling reasons for enacting the Illinois Truck Act was the necessity of more stringent regulations for the protection of the general public in the use of highways; that one of the methods of effecting this purpose, as adopted by the legislature, is to require the operator of trucks to carry a policy of insurance indemnifying him from his liability, as provided in section 16 of the act; that, as urged by plaintiff, such insurance is for the protection of the public, and therefore policy defenses which may be good as against the insured, do not relieve the insurance carrier of its liability to parties injured in their persons or property by reason of the insured’s unlawful operation of its trucks. From all that we can gather, the decisions of other states are uniformly to that effect, and we find in defendant’s briéf no citations to the contrary. Engelson v. Commerce Casualty Co., 149 Misc. 886, 269 N. Y. S. 453; Ott v. American Fidelity & Casualty Co., 161 S. C. 314, 159 S. E. 635; Kipp v. Prudential Casualty & Surety Co. of St. Louis, Mo., 60 S. D. 300, 244 N. W. 346; Employers Ins. Co. of Alabama v. Johnston, 238 Ala. 26, 189 So. 58; Travelers Mut. Casualty Co. of Des Moines, Iowa v. Thornsbury, 276 Ky. 762, 125 S. W. (2d) 229; Central Mut. Ins. Co. v. Tartar, 92 F. (2d) 839; Central Mut. Ins. Co. v. Pippen, 271 Ky. 280, Ill S. W. (2d) 425; Kindel v. State Farm Mut. Auto Ins. Co., 97 F. (2d) 777; Mitchell v. Great Eastern Stages, Inc., 140 Ohio St. 137, 42 N. E. (2d) 771; and Behaney v. Travelers Ins. Co., 121 F. (2d) 838. The foregoing citations involve statutes regulating carriers or vehicles for hire as well as the construction of policies covering trucks and other commercial vehicles issued in accordance with motor vehicle laws or public utility commission requirements.

Defendant seeks to differentiate between section 16 of the Illinois Truck Act and section 42a of the Motor Vehicle Act (Ill. Rev. Stat. 1943, ch. 95½, par. 59 [Jones Ill. Stats. Ann. 85.057]), regulating the posting of surety bonds for vehicles used in transporting passengers. We do not see why it should be necessary to draw any such distinction. Section 42a of the Motor Vehicle Act is not here involved, and is merely another instance where the legislature saw fit by statute to require an insurance policy or some other form of indemnity for the benefit of the traveling public. The purpose of both statutes, in so far as they require policies of insurance, is the same.

Defendant characterizes as untenable plaintiff’s insistence upon the validity of the policy to afford it the right to settle the claims of the injured parties without a court proceeding, while at the same time denying that the policy was in force and effect when the accident occurred, and his counsel says that “plaintiff either must aver and assert that the policy was in full force and effect as far as the assured was concerned and that the plaintiff was entitled to avail itself of the terms and conditions of the policy affecting its rights to investigate, settle or defend or plaintiff must allege that the contract was breached by the actions of the insured in permitting a non-licensed chauffeur to operate the truck”; and depending upon which of these alternative positions plaintiff chose to assume, “it has either to defend the .litigation or abandon it— in either case, allow a court of competent jurisdiction to pass upon the liability of the third person and the negligence of the assured.” If we are correct in our conclusion thát this was a compulsory statute, imposing liability on the insurance company as against third persons, notwithstanding a breach of the policy by defendant, plaintiff could not exculpate itself from liability by claiming a violation of the contract of insurance by defendant, since it would be obliged to defend or settle the claims of the injured persons in any event. If the insurance company abandoned the defense, it would still be liable to the injured persons if section 16 is susceptible of the construction placed upon it; or if plaintiff chose to defend and lost, it would still have to pay any judgment that might have been entered against defendant. The controversy therefore resolves itself into the question whether plaintiff was justified in making a settlement without court proceedings. The policy contains the following provision: “The insured agrees to reimburse the company for any payment made by the company on account of any accident, claim, or suit involving a breach of the terms of this policy and for any payment the company would not have been obligated to make under the provisions of this policy except for the agreement contained in this paragraph.” The stipulated facts admit that Krol’s son was negligent in operating his father’s truck; that the defendant reported the accident and called upon plaintiff to investigate and adjust the claims of the injured parties; that as the result of the investigation made, plaintiff was of the opinion that it was for the best interests of all the parties to adjust and settle the claims, secured offers of settlement from the injured parties, advised defendant of the respective amounts which they would be willing to accept, and notified defendant that if he did not pay the respective sums to the injured parties within a specified time, plaintiff would do so and look to defendant for reimbursement. We see no reason why plaintiff was not within its rights, under the terms of the policy, in following this procedure, instead of waiting until the injured parties brought an action at which the carrier’s liability to pay would have to be judicially determined before any right of reimbursement arose. Since plaintiff was liable in any event under section 16 to reimburse the injured parties, assuming that the accident resulted proximately from defendant’s negligence, and in view of the provisions of the policy that plaintiff should be reimbursed for any payments made “on account of any accident, claim, or suit involving a breach of the terms of this policy,” the only point that could be urged against this procedure would be the unreasonableness of the settlement; and that objection is not available to defendant because it was stipulated ‘ ‘ that the damages sustained, if any, herein, by the plaintiff are in the sum of $1,210, the amount of said settlements,” and the sum for which judgment was entered.

Moreover, the decisions are generally to the effect that where an insurance carrier, although not liable to the insured because of noncoverage or violation of the terms or provisions of the policy by the insured, is neverthless liable to third persons because of statutory requirements, the insurance carrier is entitled to reimbursement from the insured for any payments made to such third persons by reason of its statutory liability. It was so held in American Fidelity & Casualty Co. v. Big Four Taxi Co., 111 W. Va. 462, 163 S. E. 40, wherein plaintiff issued to defendant a policy of insurance containing an indorsement required by statute making the insurance company directly liable to any person sustaining bodily injuries for which the insured was liable. A passenger who was there injured, sued the taxi company and obtained judgment. Plaintiff defended the suit, paid the judgment and then brought action against the taxi company to recover the amount so paid. The driver of the taxi, although a chauffeur, was only 18 years of age, which was a violation of the 21-year age provision fixed by statute. The terms of the policy did not cover a loss when the automobile was driven by “any person under the age-fixed by law for drivers of automobiles.” In holding the plaintiff was entitled to recover, the court said: “The evidence shows that the plaintiff investigated the accident. . . . By virtue of the West Virginia endorsement to the policy, the plaintiff was responsible to the injured passenger if the defendant caused her injury, regardless of the breach of the policy by defendant. . . . But the extent of the liability of the insurer was a question of fact for the jury. Consequently plaintiff had the right to assume the defense of the passenger’s suit, in order to protect the primary liability to be fastened on it by that suit, and the proper exercise of that right cannot he deemed a waiver of the breach of the policy .... As far as the record discloses, this case is therefore a simple one of money paid for the defendant by the plaintiff, for which payment the plaintiff is entitled to reimbursement. ’ ’ In the case at bar there was no need for submitting the measure , of damages to a court or jury, since the parties stipulated to the amount, and as the court said in the foregoing case, there remained only the necessity that plaintiff be reimbursed for money paid out on defendant’s behalf. Similar results were attained in Service Mut. Liability Ins. Co. v. Aronof sky, 308 Mass. 249, 31 N. E. (2d) 837, and Fidelity & Casualty Co. of New York v. Vantaggi, 300 Mich. 528, 2 N. W. (2d) 490.

One of the arguments advanced by defendant against the procedure followed by plaintiff in the case at bar is that it opens the door to fraud, to careless handling and rich settlement, and that every assured would be placed in peril unless the damages are first assessed by a jury. In order to recover, plaintiff was of course obliged to prove that the settlement was fair, that defendant was liable to the claimants, and that the whole transaction was conducted in good faith. Defendant stipulated to facts which assume that all these elements were present in the case at bar, and by waiving his right to trial by jury he submitted the stipulated facts to the consideration of the court. Moreover, it must be assumed that plaintiff’s complaint states a good cause of action; it was never challenged by any appropriate motion or pleading, and in fact defendant’s answer admitted most of the material allegations of the complaint.

As the result of these considerations we think the court erred in entering judgment for defendant. The judgment is therefore reversed, and since the essential facts are all agreed upon and it will serve no useful purpose to remand the cause, judgment will be entered here in favor of plaintiff in the sum of $1,210 and costs.

Judgment reversed and judgment here for plaintiff.

Sullivan, P. J., and Scanlan, J., concur.


source: Caselaw Access Project

author: Mr. Justice Friend

license: Public Domain

text:
    Philip H. Wain, Appellee, v. Jerome Kravitz, Trading as Medway Currency Exchange, Appellant.
    Gen. No. 43,040.
    Opinion filed December 19, 1944.
    Released for publication January 4, 1945.
    Lord, Bissell & Kadyk, of Chicago, for appellant ; Fred E. Inbau, of Chicago, of counsel.
    Berger & Newmark, of Chicago, for appellee.
   Mr. Justice Friend

delivered the opinion of the court.

Plaintiff, as assignee of accounts receivable of the Model Display Corporation, brought suit against defendant, a currency exchange operator, who cashed a $1,038 check payable to the assignor, which was indorsed by the treasurer of the assignor company. Trial by the court without a jury resulted in a fipdi-ng and judgment against defendant in the sum of $1,038 and costs, from which he appeals.

From the essential facts it appears that on April 25, ,1941 plaintiff and the Model Display Corporation entered into an agreement whereby the latter assigned to plaintiff its accounts receivable in consideration of plaintiff’s promise to advance money on account thereof for a 10 per cent commission on the amount advanced. It was agreed that the money to be advanced should be used for labor and materials in the production of orders for the Model Display Corporation’s products. Subsequently on October 10, 1941 the Model Corporation assigned to plaintiff the account of the du Pont Company on an order which that concern had placed with the Model Corporation for the delivery of certain Model displays. Over a period of approximately a year following the agreement plaintiff advanced to the Model Corporation from time to time the aggregate of $13,670.64, $985 of which was advanced on the du Pont order. At the time this suit was instituted the Model Corporation owed plaintiff $1,265.11.

As work was proceeding on the du Pont order late in December 1941 a representative of that company contacted H. F. Paschal, treasurer of the Model Corporation, and requested that an invoice be forwarded to du Pont so that the order could be placed upon its books for 1941. Paschal took a form of invoice to plaintiff, who filled it out and mailed it to du Pont. The invoice was dated December 30, 1941 and contained the following notation: “Make check payable to Philip Wain & Company and mail to: Philip Wain & Company, 38 South Dearborn Street, Chicago, Ill.” Thereafter, early in January 1942, and after plaintiff had informed Paschal that no further moneys would be advanced by him to the Model Corporation, the boiler in the building in which the company was located exploded, ruining the entire du Pont order as it was about to be completed. A few days later a check was received by the Model Corporation from du Pont in the sum of $1,038 payable to the Model Display Corporation. Paschal, as treasurer, testified that upon receipt of the check he had to either return the check to du Pont and close the business or cash the check and use the proceeds for the necessary material and labor involved in the completion of the du Pont order, and he decided to pursue the latter course because he evidently anticipated further orders from du Pont which would enable the Model Corporation to remain in business.

Having decided to cash the check, Paschal took it to defendant’s currency exchange on January 10, 1942. He received in exchange for the du Pont check of $1,038 two money orders, one in the amount of $650 payable to Model Corporation, one for $69 payable to J. Edward Newberger, and the difference of approximately $300 in cash. The fee for cashing the du Pont check was $3. Two days later the $650 currency exchange money order was presented to defendant by the vice president of the Model Corporation, who received in exchange for it a $425 money order payable to the Model Corporation and the difference of $225 in cash. The following day the $425 currency exchange money order was presented to defendant by Paul G-. Allen, vice president of the Model Corporation, who then received the full amount in cash. The $650 money order bears the indorsement “Model Display Corporation, 3945 N. Western Avenue, Chicago, Illinois,” underneath which appears Allen’s signature. The $425 money order bears the same indorsement, also signed by Allen. The evidence discloses that the entire cash proceeds of the $1,038 check and the foregoing money orders were used for the purpose of meeting the pay roll, for rent, gas and light bills, and the purchase of materials to finish the du Pont order and to keep the corporation alive.

It further appears from the evidence that for some time prior to January 1942 the Model Corporation, which was located some two or three blocks from defendant’s place of business, had been using the curreney exchange for banking purposes because the corporation’s account at a local bank had been closed out for the reason that “it was not good enough.” Over a period of several months prior to the cashing of the du Pont check Paschal cashed about 20 or 30 other checks at defendant’s currency exchange, which were made payable to the Model Corporation and which bore Paschal’s signature alone.

Paschal was not only the corporation’s treasurer but also its general manager and “ran the business.” He entered into contracts on behalf of the corporation and in many instances was the only officer who signed on its behalf. In the course of his duties as general manager and treasurer he received and indorsed checks made payable to the Model Corporation upon his signature alone as an officer of the corporation. Some of plaintiff’s own checks payable to the corporation had been indorsed on its behalf by Paschal alone and cashed at the First National Bank of Chicago by him. Plaintiff testified that almost all of the dealings between him and Model Corporation were transacted with Paschal. Defendant testified, without contradiction, that he had no notice whatever of the Model Corporation’s assignment to plaintiff of its accounts receivable.

In support of the judgment, plaintiff at the outset of his brief makes the contention that defendant was “in effect doing a banking business” in connection with the conduct of his currency exchange, in violation of par. 16, ch. 16½, Ill. Rev. Stat. 1943 [Jones Ill. Stats. Ann. 10.17], which makes it a misdemeanor for any natural person, firm or partnership to transact the business of banking, and therefore, his counsel say, he “cannot be allowed to use the law as a defence in his unlawful operation.” Since this question was not brought to the attention of the trial court nor raised in the pleadings, plaintiff is precluded from urging it for the first time on appeal. Albers v. West- berg, 299 Ill. App. 41, 52; Notroma Corp. v. Miller, 292 Ill. App. 612, 618, 619; Bryan v. Pilgrim Nat. Life Ins. Co., 294 Ill. App. 356; Taylor v. Baker, 295 Ill. App. 1. Moreover, there is nothing in the record decribing the functions and operations of a currency exchange or any facts whatsoever which would enable us to determine whether the character of such a business constitutes a violation of the statute. We have only plaintiff’s assertion that “the defendant was . . . doing a banking business in violation of the laws, of the State of Illinois.”

The judgment against defendant was apparently entered upon the theory that the du Pont check had been assigned to plaintiff, and therefore the treasurer of the assignor corporation had no authority to indorse and cash it, and that the defendant who cashed the check is obligated to plaintiff for the value thereof. Asserting that “this whole case hinges on a simple' point of agency,” plaintiff argues that since defendant knew he was dealing with an agent, he assumed the burden of determining the extent of the agent’s authority. Jackson Paper Mfg. Co. v. Commercial Nat. Bank, 199 Ill. 151, and Strawn Farmers’ Elevator Co. v. James E. Bennett & Co., 168 Ill. App. 428, are cited and relied upon to support the contention made. The facts in the Jackson case are entirely different from those in the case at bar. Plaintiff in that proceeding was engaged in the manufacture and sale of paper at Jackson, Michigan, and had employed one Charles A. Jackson to act as superintendent of its mill at Jackson, Michigan. The superintendent had gone to Chicago to solicit orders and make sales of paper for the company. Herz & Son and E. W. Copelin & Co., paper dealers in Chicago, were plaintiff’s customers. Herz was at that time indebted to plaintiff in the sum of some $300 or $400. Jackson called on Herz & Son at its store and settled with it its account with plaintiff, accepting a check for $325.65 payable to the order of the Jackson Paper Manufacturing Company and drawn upon the Commercial National Bank of Chicago. Jackson took the check to Copelin & Co., which had done business with plaintiff and had seen Jackson at plaintiff’s plant acting as superintendent and manager of the mill. Jackson indorsed the check in the name of the firm by “C. A. Jackson, Supt.,” and turned it over to Copelin, who procured the check to be certified by the bank upon which it was drawn and gave Jackson the currency. Copelin then indorsed the check over to the American Exchange National Bank, with which he did business, and deposited it to his credit in that bank. After the check had gone through the Chicago clearing house the amount thereof was charged to the account of Herz & Son. Jackson did not remit the money to the paper company in Michigan and the amount thereof was never received by it. The paper company first learned of the transaction after Jackson’s death by suicide in New Orleans about a month later. It was not there contended that Jackson’s duties involved the handling of currency or the making, indorsing or cashing of negotiable paper on behalf of the corporation; he was superintendent of the plant, whose general duties did not include the negotiation of commercial paper. In commenting on his status the Supreme Court said: “We fail to discover anything in the record in the present case to show, that the power to endorse the check here in controversy was within the general objects and purposes of the authority conferred upon Jackson.” Moreover, the plaintiff corporation in the Jackson case had its place of business in Jackson, Michigan, and the check was cashed by the superintendent, not in Jackson, but in Chicago at a bank which had had no previous dealings with the plaintiff corporation. In the case at bar defendant’s currency exchange was located two or three blocks from the Model Display Corporation and had cashed previous checks indorsed in the same manner. Furthermore, in the Jackson case the proceeds of the check were appropriated by the superintendent for his own use without the corporation’s knowledge or consent, whereas in the case at bar the proceeds of the du Pont check were used entirely for the purposes of the Model Display Corporation.

In the Strawn Farmers’ Elevator Co. case upon which plaintiff also relies, the manager of plaintiff’s grain elevators located in the towns of Strawn and Eisk, Illinois, speculated on the Board of Trade in Chicago in the name of his corporation. In order to make good losses incurred in his speculations he gave the Chicago broker, defendant in that proceeding, several company checks and the company’s promissory note executed by himself as manager, and also consigned to the broker several carloads of corn belonging to the company. When his firm learned of these transactions it discharged him and brought suit in assumpsit against the Chicago broker, against whom a verdict was rendered in favor of plaintiff. The court held that it was apparent from the written contract between plaintiff and its general manager that his authority was limited to the transaction of business connected with the grain elevators in the aforementioned towns and that the grain to be handled was limited to the two elevators in question. The court said: “The contention that Jordan [the manager] was appellee’s general agent is not borne out by the proof. He was not so designated in the contract. He never signed his name as such. He never held himself out to be appellee’s general agent. All his transactions in connection with the elevators and every paper signed by him as manager is entirely consistent with the position of local manager of the elevators. We are of the opinion that the scope of Jordan’s authority was not such as to bind appellee in board of trade transactions.”

It is suggested, however, that the evidence fails to disclose that Paschal was treasurer of the corporation, except upon Ms own statement, wMch would not be competent proof of the agency, and that even if he was treasurer of the corporation, that would not necessarily imply the right on Ms part to cash a corporate check. With respect to the first of these contentions it appears that in plaintiff’s statement of claim he alleged that Paschal was treasurer of the Model Display Corporation. That allegation was admitted in defendant’s answer, and one of plaintiff’s own exhibits bears Paschal’s signature as treasurer. Under the circumstances, it was not incumbent upon defendant to prove Paschal’s official capacity with the corporation; it was alleged and admitted by the pleadings, and proof of the fact was adduced by plaintiff Mmself.

With respect to the second contention it is argued that the right to cash checks, even if it be conceded that Paschal was treasurer of the corporation, cannot be implied from the duties of a treasurer to indorse checks and deposit funds, because, as counsel say, the right to cash checks was not indispensable to Ms duties as treasurer; and it is argued that the burden was on defendant to show Paschal’s power and right to cash the check in question. Upon the record presented Paschal was not only the corporation treasurer but was the general manager who “ran” the business. He entered into contracts on behalf of the corporation, and in many instances he was the only officer who signed on its behalf. As shown in the statement of facts, checks payable to the corporation were, on many occasions, cashed by Paschal alone, and about 30 such checks had been cashed by defendant for Paschal prior to the instant occurrence, and, as a matter of fact, some of plaintiff’s own checks payable to the corporation, had been indorsed on its behalf by Paschal alone and cashed by him at the First National Bank of Chicago. We think the evidence discloses that he had authority to indorse and cash checks for corporate purposes, because by permitting him to carry on the transactions enumerated, the Model Corporation obviously clothed him with such authority and continuously sanctioned that practice.

It is true, of course, that under the assignment of accounts receivable, the Model Corporation was obligated to turn over to plaintiff the du Pont check and other checks received by it, but it is equally true that defendant had no notice whatsoever of the assignment of accounts to plaintiff, and in the absence of such notice he was under no liability to plaintiff for the cashing of the du Pont check, which was a negotiable instrument payable to the assignor and merely one of many checks that had been indorsed and cashed by Paschal in the course of business. It is an established principle of law that in the absence of notice of assignment, a payment to an assignor is valid as against the assignee. Barker v. Barth, 192 Ill. 460; Morris v. Hankel Printing Co., 202 Ill. App. 331; Central Trust Co. of Illinois v. Kendall 202 Ill. App. 294.

Contending that he is in the position of an innocent third party, plaintiff claims that he is unaffected by the fact that the proceeds of the du Pont check were used for the purposes and benefit of the Model Display Corporation. A similar situation arose in American Export Lines, Inc. v. First Nat. Bank of Chicago, 314 Ill. App. 385 (Abst.), wherein the plaintiff, general passenger agents, received a check from the Chicago Motor Club payable to plaintiff, which the agent indorsed and cashed. A portion of the proceeds of the check was used to refund money to one of the plaintiff’s customers whose reservation had been canceled; another portion was transmitted directly to plaintiff; and the remainder was used to pay for necessary and proper expenses of plaintiff’s passenger office, which was in charge of the general passenger agent, who indorsed the check. The general passenger agent had previously received specific instructions from plaintiff to remit directly to plaintiff’s New York office all checks received by him. There was no evidence, however, that defendant knew of such instructions. Despite these instructions, the court held that since plaintiff had received the benefit of the proceeds of the check which was indorsed by its general agent, it would not be permitted to deny his authority. Commenting on the circumstances, the court said: “In an early Illinois case (Shaffner v. Edgerton, 13 Ill. App. 132), it was held that even if an agent had no authority to endorse certain checks, yet if the amount of these was received by plaintiffs they will not be permitted to allege his want of authority. In Hamlins Wizard Oil Co. v. U. S. Express Co., 184 Ill. App. 493, (affirmed in 265 Ill. 156), it was held that where the plaintiff actually got the benefit of certain checks and drafts, the defendant should be credited with them although they were bought with part of stolen proceeds.” Miller v. American Export Lines, Inc., 307 Ill. App. 234, supports this doctrine.

In connection with the foregoing point plaintiff argues that there is no competent evidence that the proceeds of the du Pont check were used for the benefit of the Model Corporation. Paschal testified as to the use he made of the proceeds of the check. No objection was made to his testimony, which was unchallenged and uncontradicted.

For the reasons indicated we think the court erred in entering judgment for plaintiff, and since his counsel apparently concede that there is no dispute as to the essential facts by their admission in plaintiff’s brief that “defendant’s statement of the case and pleadings is substantially correct,” it would serve no useful purpose to remand the cause for a new trial. Therefore, the judgment of the municipal court is reversed and judgment is entered here in favor of defendant for costs.

Judgment reversed and judgment here for defendant.

Sullwah, P. J., and Scahlah, J., concur.


author: Mr. Justice Scanlan

text:
    Ethel M. Maclaskey, Appellant, v. Newell Mecartney and William Kurz, Appellees.
    Gen. No. 42,913.

      Opinion filed December 19, 1944.
    Rehearing denied January 3, 1945. Released for publication January 4, 1945.
    Samuel Barth, of Chicago, for appellant.
    James A. Mahoney, of Chicago, for certain appellee; Newell Mecartney, pro se.

   Mr. Justice Scanlan

delivered the opinion of the court.

Plaintiff sued defendants for damages alleged to have been sustained by her because of certain acts committed by defendants pursuant to a conspiracy to libel her, to ruin her reputation as an individual and as a court reporter, and to deprive her of a livelihood. The case was tried before the court and a jury and at the conclusion of plaintiff’s evidence, upon defendants’ motion, the jury were directed to find a verdict for defendants as to the libel charges. Plaintiff appeals from a judgment entered upon the verdict. Plaintiff also sued defendants for certain sums alleged to be due her for services rendered to them as a court reporter, but there was no appeal taken from the judgment entered as to that claim.

The complaint alleges that on June 24,1940, and for twenty-five years prior thereto plaintiff had been a resident of Chicago and during all of that period she was a law abiding citizen, and maintained and, enjoyed a good reputation for honesty, integrity and respectability, and for being a good, moral woman, and that she had never been charged with, or suspected of, being dis- • honest, or of obtaining money by fraudulent practices, or having committed adultery; that during that period she maintained the reputation of being a competent court reporter and public stenographer and of conducting her business in a legitimate manner; that on said date defendant Mecartney (hereinafter called Mecartney) was indebted to plaintiff in the sum of $522 for services rendered to him by her as a court reporter, and defendant Kurz (hereinafter called Kurz) was indebted to her for a balance of $207.70 for like services rendered to him by plaintiff; that on said date defendants wilfully and wantonly combined and conspired to insult, threaten and intimidate plaintiff and to defame and libel her by making attacks against her character, and to deprive her of a livelihood by circulating the charge that she was incompetent as a court reporter, that she was dishonest and had obtained money .by false pretenses, that she had swindled Kurz out of more than one thousand dollars, and that she was an immoral and licentious person, all for the purpose of intimidating her from instituting suits to enforce collection of said sums due her from defendants; that defendants further conspired that if plaintiff instituted suit against either of them, to make low, base and despicable attacks against her character in the suit, that were irrelevant and immaterial to the issues, and to make false and irrelevant charges that she had swindled Kurz out of a large sum of money, that she was incompetent as a court reporter and was a dissolute and licentious person, all with the intent and purpose to cause her to sustain great mental pain and anguish and to intimidate her from pressing. her claims; that on said date plaintiff retained an attorney to collect her claim against Kurz and that attorney sent a communication to Kurz requesting payment of the amount due her from him, and on July 1,1940, Mecartney, pursuant to the conspiracy, and with the knowledge, aid and approval of Kurz, sent a letter to her attorney which contained, inter alia, the following false statements: “Mrs. Maelaskey had several months'in which to do this work but held me up until the last minute, and then instead of giving it to me, she turned it over to Mr-. Mulks. She then told me that I could either sign a receipt in full to Mr. Mulks or pay her $43.00. I paid her the $43.00; however, I received the record too late to do any good.. The transcript, itself, showed such gross incompetency as to bar Mrs. Maclaskey from ever again reporting any case. As a lawyer imagine a court reporter making up a record reading as follows: ‘Trial had. Judgment for the plaintiff.’ Yet, this is the record that this woman wrote up and made me pay for it, before I could see it, and the worst part about it is that no trial was ever had. Who ever heard of a reporter who was employed to take a case simply reporting that a trial was had, instead of what was said?”; that-plaintiff, on August 5, 1940, through her attorney, instituted suit against Kurz, on her said claim, in the Municipal court of Chicago", which cause is entitled Maclaskey v. Kurz, No. 4109599; that plaintiff filed therein a statement of claim in which she stated that Kurz had. employed her in 1937, and that she then began to render services to him as a court reporter and that there was a - balance due her from him of $207.70; that on August 26, 1940, Meeartney, wilfully, wantonly and maliciously, pursuant to said conspiracy, with the knowledge, aid and approval of Kurz, filed in said cause an affidavit of defense in which it was stated, inter alia, that plaintiff and one Harold O. Mulks had entered into an agreement with Kurz in reference to a matter- in which he was sued, entitled Pfeil v. Kurz, to relieve “this defendant of all costs and expenses and handle the matter for their own personal benefit and profit,” and in which it was also stated: “10: The said Mulks and Maelaskey induced and inveigled the said defendant to invest large sums of money with them and to go out and obtain money from his friends to also invest; that the said defendant paid over to the said Mulks and Maelaskey, as aforesaid, more than $1000.00; and that the said plaintiff, Maelaskey, received the majority of the said amount, and that an accounting between the said Maclaskey and this defendant would show that the said Maelaskey is indebted to the defendant in the sum of more than $1000.00;” that said statements were immaterial to the issues; that no counterclaim was filed and that defendants knew that said statements were irrelevant and immaterial at said time; that in September, 1940, Mecartnev, pursuant to said conspiracy, and with the knowledge and approval of Kurz, filed in said proceeding in the Municipal court a pleading labeled ‘‘Demand to Admit Facts,” containing certain false insinuations and in which a demand was made upon plaintiff to admit the following: “1. That the plaintiff is incompetent as a court reporter. 2. That the plaintiff’s incompetency is shown by the following facts: that on or about June, 1939, the said plaintiff personally appeared as a court reporter in case No. 33989 in the Municipal Court of Evanston, Illinois, to report the proceedings, and that the said plaintiff was ordered to transcribe the same; that instead of transcribing the statements of Court and counsel, the plaintiff merely set forth an improper and false conclusion to the effect that a trial was had, when as a matter of fact there was no trial had at such time and place. 3. That the plaintiff and the said Harold O. Mulks were closely associated together in financial matters. 4. That the said Harold O. Mulks would make agreements with his clients that he would take care of all reporting costs, and then have the plaintiff put in a lot of purported work which in one case amounted to over $500.00; and then the plaintiff would try to collect from the client. 5. That as part of the business arrangements or dealings between the plaintiff and the said Harold O. Mulks were such that the plaintiff would use the necessity of the party desiring a record to attempt to obtain releases of claims against the said Harold 0. Mulks or force the payment of money. 6. That the plaintiff received cash and checks from the defendant on various investments and accounts, which cash and checks the plaintiff placed in a bank under her own name; and that several payments on account of such investments were paid to the defendant by the said plaintiff out of the said bank.” The complaint then alleges that said matters were irrelevant and immaterial to the issues in said cause and were known by defendants at said time to be immaterial; that in February, 1941, Meeartney, pursuant to said conspiracy, and with the knowledge, aid and approval of Kurz, sent, through the United States mail, to the attorney for plaintiff, and also presented to one of the judges of the Municipal court, a pleading labeled, “Interrogatories Propounded to the Plaintiff,” which contained, inter alia, the false insinuation that plaintiff had been guilty of adultery with one Harold 0. Mulks, and also the following: “26. State all relationships you had with the said Mulks during all of the time he was attorney for the defendant herein. 27. When did you first meet the said Mulks ? 28. Did the said Mulks represent you in any fiduciary capacity during the time that you allege that you were performing services for the said defendant herein, if so, in what capacity? 29. Did you handle any funds for the said Mulks during said time? 30. Did you have title to any real estate, during said time, in which the said Mulks was interested; if so, what property was it and in what name was the same held? 31. What bank accounts did you have, during said time, that said Mulks was interested in? 32. Was the said Mulks living in the same household or premises as you were during any part of said time? 33. In whose name was the lease of the premises in which you and said Mulks resided? 34. In whose name was the telephone, gas, and electric light in such premises at such time? 35. What was Mulks’ status in said premises, during said time; that is, was he the landlord, a roomer, a boarder, or both? 36. What financial arrangement was there, if any, between you and the said Mullís concerning payment for the upkeep of such premises including food, rent and public utilities? 37. Did the said Mulks owe you any money during the times mentioned in said statement of claim?”; that said interrogatories were immaterial to the issues and known to be immaterial by defendants at said time; that plaintiff filed in said Municipal court proceeding an affidavit in support of a motion for a summary judgment, and an order was entered directing Kurz to file a counter affidavit thereto, and on May 7, 1941, Meeartney, pursuant to said conspiracy, and with the knowledge, aid and approval of Kurz, filed in said cause a document containing, inter alia, the following false statements: “That in addition to said matter, the said Maclaskey and Mulks, operated a fraud upon this defendant. That the said Maclaskey and Mulks, inveigled this defendant to execute a lease, for the use of said Mulks and Maclaskey, or one of them, and that the said Maclaskey, paid the first month’s rent by a check to the said Kurz, and that said Kurz, issued Ms own check to the landlord;” that all the statements contained in said document were irrelevant and immaterial, and were completely false and untrue and known by defendants to be false and untrue when the same were made, and that all said statements and charges were made for the purpose of making an attack upon the character of plaintiff and to deprive her of a livelihood, and to intimidate her from enforcing her just demands; that by reason of said acts of defendants plaintiff sustained great mental pain, and - suffering and was prevented from engaging in her business of court reporting; that her reputation for being an honest and upright person was greatly harmed and injured, and that many persons had been caused to believe that she was dishonest, incompetent as a court reporter, and an immoral and licentious person, and she had been deprived of a livelihood thereby and had sustained damages to the sum of $25,000. Plaintiff prays that judgment be entered in her favor for $25,000 compensatory damages and $15,000 punitive damages, that it be found that malice was the gist of the action, and that an execution issue against the bodies of defendants.

In defendants’ answer, verified by Meeartney, they deny the allegations relating to the conspiracy charges; they admit the receipt of the letter from Barrett and that Meeartney sent the letter in question to Barrett in reply thereto; they assert that said Mecartney letter was privileged and that any action thereon is barred by the statute of limitations; they admit that plaintiff filed the action in the Municipal court and that they may have filed the pleadings and records in question in said action, “but reserve the right of checking the same;” they claim that all of the pleadings filed in the Municipal court case on behalf of Kurz “are privileged;” and allege that said case is now pending in the Appellate court, First District.

Plaintiff’s replication to defendants’ answer denies that her action as to the letter from Meeartney to Attorney Barrett was barred by the statute of limitations and further denies that the pleadings filed on behalf of Kurz in the Municipal court were privileged.

Upon the trial plaintiff introduced in evidence the letter from Meeartney to plaintiff’s attorney, Barrett; also the pleadings that were filed in the Municipal court proceeding and that are referred to in the instant complaint. A number of witnesses, called by plaintiff, testified that they had known her for many years and that her reputation as a citizen and as a court reporter was excellent. Plaintiff, in her testimony, denied all of the charges, insinuations and intimations that were made in the letter and pleadings of which she makes complaint. Plaintiff called Mecartney as a witness under Section 60 of the Civil Practice Act [Ill. Rev. Stat. 1943, ch. 110, par. 184; Jones Ill. Stats. Ann. 104.060] and he was shown the “Demand ■to Admit Facts” and was asked if he caused it to be served upon plaintiff’s attorney in the Municipal court proceeding, to which he answered, “I don’t remember anything about it.” The witness was then shown the pleading and asked if it bore his signature, to which he answered, “Well, now, it looks like it.” The court then asked the witness, “Is it?” to which the witness answered, “I don’t know, your Honor. It may be.” The witness admitted that he dictated the letter that was sent to Attorney Barrett. He was then asked if Kurz asked him to send the letter, to which he answered, “I would say the letter speaks for itself. I sent it on, but as to any question between Mr. Kurz and myself, I must claim the relationship of attorney and client and that is confidential. I have not been released from that confidence.” The record shows that Kurz then “stood on his privileges.” The witness Meeartney was then asked, “What was your object in asking those questions, propounding those interrogatories [referring to the document labeled, ‘Interrogatories Propounded to the Plaintiff,’ . . . .] ?” Meeartney objected to the question and the court ruled: “I cannot see any basis for a ground of action on those interrogatories. They are merely questions. Even if they were improper, they were not statements of fact. I don’t know how slander or libel can be based on a query. I will sustain the objection.” Shortly thereafter the trial court, upon the motion of Mecartney, excluded the pleading. Meeartney further testified that the judgment plaintiff obtained against Kurz in the Municipal court proceeding was later affirmed by this court.

Newell Meeartney, a practicing lawyer at the Chicago bar for many years, has not seen fit to file a brief in this cause. In a very short brief filed on behalf of Kurz the following appears: “The strongest complaint against William Kurz is that he aided and abetted Newell Mecartney who libeled and slandered Ethel M. Maclashey. . . . Nowhere during the trial was there any evidence or testimony introduced to prove that Newell Mecartney did or did not act within the scope of his authority. This is a question of fact and can only be decided by the facts as presented in the trial. There is nothing in the record of the lower court to show whether or not any acts of Newell Mecartney were or were not within the scope of his authority.” (Italics ours.) The only other point made in the argument in the Kurz brief is that “plaintiff did not prove that any single document offered in evidence was ever published or even filed in the Municipal Court of Chicago.” In making this point counsel for Kurz ignores the pleadings and the evidence. The complaint charges that the pleadings were filed in the Municipal court and that the letter to plaintiff’s attorney was mailed by Mecartney on July 1,1940. Mecartney, in his testimony, admitted writing the letter. Defendants, in their joint answer, did not deny that the pleadings were filed in the Municipal court — indeed, they stated in their answer that they “may have” filed them. The charges in the complaint that were not specifically denied stand admitted. (Sec. 40, Civil Practice Act [Ill. Rev. Stats. 1943, ch. 110, par. 164; Jones Ill. Stats. Ann. 104.040]; Standard, Inc. v. Kirby, 319 Ill. App. 206, 209; Peters v. Peters, 376 Ill. 237, 240.)

Plaintiff’s counsel has filed an able and forceful argument in support of the contention that the trial court erred in directing a verdict for defendants and that the instant judgment should be reversed and the cause remanded for a new trial, but neither defendant has seen fit to answer the material and important points made in plaintiff’s brief.

Plaintiff contends: “I. False and defamatory statements, made in a pleading filed in a judicial proceeding, that are immaterial to the issues, and that are made without an honest belief that they are relevant and material, are not privileged, but actionable. II. In an action for libel based upon false and defamatory' statements made in a pleading or affidavit, that is filed in a judicial proceeding, and that are immaterial and irrelevant to the issues; a prima facie case is made sufficient to warrant the submission of the case to the jury, when it is shown that the statements are irrelevant and immaterial to the issues; and, the question, whether or not the defendant honestly believed that the statements were relevant and material, is not one of law for the court, but one of fact for the jury.” The law stated in point I is well established.

In McLaughlin v. Cowley, 127 Mass. 316, 319, the court states:

“It was stated in the opinion of this court in the recent case of Rice v. Coolidge, 121 Mass. 393, that it seems to be settled by the English authorities that judges, counsel, parties and witnesses are absolutely exempted from liability to an action for defamatory words published in the course of judicial proceedings; and that the same doctrine is generally held in the American courts, with the qualification, as to parties, counsel and witnesses, that their statements made in the course of an action must be pertinent and material to the case. The doctrine thus qualified was set forth by Shaw, O. J., in an elaborate opinion, in Hoar v. Wood, 3 Met. 193. The qualification of the English rule is adopted in order that the protection given to individuals in the interest of an efficient administration of justice may" not be abused as a cloak from beneath which to gratify private malice.”

In Sherwood v. Powell, 61 Minn. 479, the court states (p. 481):

“It seems to be well established in the English courts that counsel, parties, and witnesses are given free rein in pending litigation, and are absolutely exempted from liability to an action for defamatory words spoken or published of a party in the course of legal proceedings. A rule which tolerates and encourages gratuitous, immaterial, and malicious attacks upon a litigant, and excuses and justifies them, simply affords an opportunity for evil-disposed persons to vilify and calumniate, under the guise of an honest effort to secure the proper administration of justice. The doctrine which prevails abroad has not commended itself to the judiciary of this country, and it has been qualified by the American courts so that statements, verbal or written, made in the course of judicial proceedings, must at least be pertinent and material to the case, to be privileged. Hoar v. Wood, 3 Metc. (Mass.) 193. This qualified rule was subsequently approved in Rice v. Coolidge, 121 Mass. 393; McLaughlin v. Cowley, 127 Mass. 316. See, also, White v. Nichols, 3 How. 266; Gilbert v. People, 1 Denio, 41; Hyde v. McCabe, 100 Mo. 412, 13 S. W. 875; Whitney v. Allen, 62 Ill. 472.” (See, also, Burdette v. Argile, 94 Ill. App. 171, 175.) Many other cases to the same effect might be cited.

That plaintiff states the law correctly in point II, see Burdette v. Argile, supra; White v. Carroll, 42 N. Y. 161; Moore v. Manufacturers’ Nat. Bank, of Troy, 123 N. Y. 420.

It is important to note that no counterclaim was filed on behalf of Kurz in the Municipal court proceeding and that plaintiff’s suit involved a simple claim for an unpaid balance of $207.70 alleged to be due her from Kurz on.account of court reporting services rendered by her to him. The pleadings in question in the Municipal court proceeding were filed by an experienced lawyer. In the instant proceeding the joint plea of defendants is that all of the pleadings filed in the Municipal court proceeding were privileged. Defendants did not plead that the charges contained in the pleadings filed in the Municipal court proceeding were relevant of material to the issues in that proceeding, nor did they even plead that they believed them to be relevant and material when they were filed, nor did they offer any evidence to prove that the charges were relevant. If defendants, in good faith, believed that the charges were material and pertinent to the issues, such a defense would be an affirmative one, to be established by evidence. (See Burdette v. Argile, supra, at p. 177.)

As to the letter sent by Meeartney to. Attorney Barrett: The undisputed evidence shows that plaintiff was a competent court stenographer, with long years of practice and experience in her profession. A false statement that a party is incompetent in the business, calling or profession in which he is engaged is actionable even without proof of special damages. (36 C. J. sec. 69, p. 1180.) In passing upon the admissibility of this letter, the trial court did not hold that the letter was not libelous: he held that the statute of limitations barred any claim based upon that letter. The complaint alleges that all of the alleged libelous acts were committed pursuant to a conspiracy formed by defendants. The statute of limitations did not commence to run against any of the alleged libelous acts until the commission of the last overt act done in pursuance of the conspiracy, and, therefore, the trial court, in our judgment, erred in his ruling.

As to the pleading labeled, “Demand to Admit Facts”: In passing upon the competency of this pleading the trial court stated that it was a new procedure; that “They are, in effect, questions stated as such; although they are stated in the form of an affirmative statement, they are limited solely to the case in which they are filed and have no effect elsewhere,” and “I do not see how they differ materially from questions which might be propounded to a witness on the stand, and that brings up a serious question of public policy, if a lawyer should be subjected to the hazard of civil suits because he propounded questions to a witness on the stand which questions implied that the witness might be guilty of a crime or fraudulent conduct or immoral conduct, — it might interfere very seriously with the proper examination of witnesses. . . .” The pleading does not purport to put questions to plaintiff, and we cannot agree with the trial court that the positive statements in the pleading should be treated as in the nature of questions that might be propounded to a witness upon the. stand. The plain purpose of the statements in that pleading was to make direct and serious charges against plaintiff and to demand that she admit the truth of the charges contained in the statements. The trial court also erred in holding that a libel could not be predicated upon statements put in the form of questions. In 33 Am. Jur. 43 (Libel and Slander, Sec. 9), the author states: “A mere insinuation is as actionable as a positive assertion, if the meaning is plain. Thus, it has been held repeatedly that the putting of the words in the form of a question will in no wise reduce the liability of the defendant. ’ ’ “Positive assertion of a charge is not necessary to constitute a writing libelous; they may be made in the form of insinuation, allusion, irony or questions, and the matter will be as defamatory as if asserted in positive and direct terms.” (Wofford v. Meeks, 129 Ala. 349, 357.) “The charge need not be direct or positive. ‘A mere expression of opinion or of a suspicion may be actionable. ... A mere insinuation is as actionable as a positive assertion, if the meaning is plain, and it has been held repeatedly that the putting of the words in the form of a question will in no wise reduce the liability of the defendant.’ 17 Ruling Case Law, 314, 315, Section 55.” (Schoedler v. Gauge & E. Co., 134 Ohio St. 78, 85.) “A man cannot libel another, by the publication of language, the meaning and damaging effect of which is clear to all men, and where the identity of the person meant cannot be doubted, and then escape liability through the use of a question mark. ’ ’ (Spencer v. Minnick, 139 Pac. (Okl.) 130, 132.) In Goodrich v. Davis, 52 Mass. 473, where the alleged libels were in the form of interrogations, the court said (p. 482): “The form is interrogative; but that renders it none the less libelous, if the meaning and purpose of the author be to convey the same idea that would have been communicated by a direct imputation. ’ ’ In Ward v. Merriam, 193 Mass. 135, the alleged slanderous words were (p. 136): “Ward (meaning plaintiff’s husband) has sold half of his wife to Legeyt (meaning Warren Legeyt) hasn’t he?” In holding that a jury would be warranted in finding that the words amounted to a charge of adultery, the court stated (p. 138)“It is of no consequence that the statement was put in the form of a question. Insidious and harmful insinuations may often be conveyed under the cover of an inquiry.” (See, also, 17 R. C. L. 315.)

As to the pleading labeled, “Interrogatories Propounded to the Plaintiff”: The law that we have just cited applies with special force to that pleading and it should not have been excluded upon the theory adopted by the trial court, that a libel could not be predicated upon questions. The trial court was also of the opinion that the “Interrogatories Propounded” were competent as tending to show the interest and the relationship between the parties. The plain purpose of the interrogatories was to insinuate that plaintiff had been guilty of adultery with one Mulks. We cannot imagine how such a fact could be competent in the simple suit filed .by plaintiff against Kurz, especially in view of the fact that no counterclaim was filed. A fortiori, the joint plea of defendants did not allege that the statements made in any of the pleadings filed in the Municipal court proceeding were relevant to the issues in the cause.

As to the charge contained in the affidavit of defense, that “the said Mulks and Maclaskey induced and inveigled the said defendant to invest large sums of money with them and to go out and obtain money from his friends to also invest,” which the trial court held was pertinent and material to the issues and therefore privileged, it seems clear to us, especially in view of the fact that no counterclaim was filed, that evidence to sustain such a charge could not be relevant in the Municipal court proceeding. The statement complained of amounts to this, that Mulks and plaintiff by deceitful methods induced Kurz to invest large sums of money with them and to go out and obtain money from his friends to invest with Mulks and plaintiff.

As the complaint in the instant proceeding charges that all of the alleged libelous acts were committed in pursuance of a conspiracy, the trial court and the jury, in determining the purpose and intent of each of the alleged libels, would have the right to consider all of the alleged libels as well as all of the other facts and circumstances, in evidence, that bear upon the alleged conspiracy. A complaint charging a conspiracy to slander or libel the complainant is not a novel procedure. The slander uttered or the libel written in pursuance of such a conspiracy is aggravated by the fact that it is uttered or written in pursuance of a conspiracy.

The defense interposed by Kurz in this court, that there is no evidence to prove that Mecartney, in writing the letter to Barrett and in filing the pleadings in the Municipal court proceeding, acted within the scope of his authority as the attorney for Kurz, is clearly an afterthought, as no such defense was asserted in the trial court. When the instant complaint was filed, it apprised Kurz that he was charged with being a party to the conspiracy alleged in the complaint, nevertheless, he retained Mecartney to represent him in the instant proceeding. Kurz did not see fit to file a separate answer asserting that the various acts committed by Mecartney were not authorized by him. On the contrary, he permitted Mecartney to file a joint answer that alleged that the letter to Barrett and all the pleadings filed in the' Municipal court proceeding were privileged.

“The law charges parties to a suit with notice of the contents of pleadings filed in their behalf, and presumes that they knew and understood same. Linn v. Clark, 295 Ill. 22; Ranken v. Probey, 120 N. Y. S. 413; Coward v. Clanton, 79 Cal. 23, 21 Pac. 359. They have a right, however, to show that, as a matter of fact, the particular pleading was not authorized by them.” (Smith v. Fidelity Trust Co., 281 Ill. App. 488, 493.)

Neither by pleading nor proof did Kurz attempt to show that the acts of Meeartney were not authorized by him. Throughout the trial the defendants acted in concert in the matter of defense. When plaintiff sought to interrogate Meeartney as to the connection of Kurz with the sending of the letter to Barrett and the filing of the pleadings, Kurz “stood upon his privileges.” We are satisfied that the pleadings and the evidence, together with the legal presumption that he knew of the filing of the pleadings and understood the nature of them, made out a prima facie case that Kurz was a party to the alleged conspiracy.

Holding as we do, that the trial court erred in directing a verdict for defendants, the judgment of the Superior court of Cook county is reversed and the cause is remanded for a new trial.

Judgment reversed, and cause remanded for a new trial.

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


author: Presiding Justice Burke.

text:
    Charlie W. Rieman, Appellee, v. A. G. Rieman, Appellant.
    Gen. No. 43,041.
    opinion filed December 13, 1944;
    rehearing denied January 3, 1945; released for publication January 4, 1945.
    Newell Mecartney, for appellant; Ignatz Spitz, for appellee.
   Opinion by

Presiding Justice Burke.

Not to be published in full.


text:
    Harry L. Hope and Myra D. Hope, Appellees, v. Peter Dolan, Appellant.
    Gen. No. 43,064.
    opinion filed December 13, 1944;
    released for publication January 4, 1945.

      Beckman, Healy, Reid & Hough, for appellant; William W. Curran, of counsel; Wyatt Jacobs and Walter A. Christopher, for appellees.
   Opinion by

Presiding Justice Burke.

Not to be published in full.


author: Justice Kiley.

text:
    Donald W. Little et al., Appellants, v. Joe Gogotz, Appellee.
    Gen. No. 42,708.
    opinion filed December 13, 1944;
    released for publication January 4, 1945.
    Alexander J. Reiff, for appellants; David H. Kraft, of counsel; Wyatt Jacobs and Walter A. Christopher, for appellee.
   Opinion by

Justice Kiley.

Not to be published in full.


text:
    Gustaf Nelson et al., Appellees, v. Village of Winnetka and Minder Construction Company, Appellants.
    Gen. No. 42,710.

      opinion filed December 13, 1944;
    rehearing denied January 3, 1945; released for publication January 4, 1945.
    Dickinson, Sprowl, Norville & James, for certain appellant; Rosen, Francis & Cleveland, for certain other appellant; Earl K. Sehiek, for appellees.
   Opinion by

Justice Kiley.

Not to be published in full.


text:
    Felix Sobczak, Appellant, v. American National Insurance Company and Stella Sobczak, Appellees.
    Gen. No. 42,720.
    opinion filed December 13, 1944;
    released for publication January 4, 1945.
    Marcus Levy, for appellant; Michael M. Obartuch, for certain appellee.
   Opinion by

Justice Kiley.

Not to be published in full.


author: Justice Kilby.

text:
    National Bond and Investment Corporation, Appellant, v. Arthur Grier et al., Appellee.
    Gen. No. 42,741.

      opinion filed December 13, 1944;
    released for publication January 4, 1945. Olson & Hanelin, for appellant; no appearance for appellee.
   Opinion by

Justice Kilby.

Not to be published in full.


text:
    Frances R. Garvy, Appellant, v. A. Cosmos Garvy, Appellee.
    Gen. No. 42,781.
    opinion filed December 13, 1944;
    rehearing denied January 3, 1945; released for publication January 4, 1945.
    George A. Curran, for appellant; W. H. Meyer, of counsel; Benjamin B. Davis and Ode L. Rankin, for appellee.
   Opinion by

Justice Kilby.

Not to be published in full.


text:
    Marie Noonan, Plaintiff Appellee, v. Chicago Motor Coach Company, Defendant Appellee. In re Appeal of Edward C. Steinhauer, Petitioner Appellant.
    Gen. No. 42,835.
    opinion filed December 13, 1944;
    released for publication January 4, 1945.
    Edward C. Steinhauer, for appellant; Joseph Barbera and Seymour H. Cohen, pro se, for appellee.
   Opinion by

Justice Kilby.

Not to be published in full.


text:
    Nicholas Kronenberger, Appellee, v. Coca Cola Bottling Company of Chicago, Inc., Appellant.
    Gen. No. 42,883.

      opinion filed December 13, 1944;
    released for publication January 4, 1945.
    James A. Dooley, for appellant; Barney L. Hollowiek, for appellee.
   Opinion by

Justice Kiley.

Not to be published in full.


author: Justice Lupe.

text:
    Hallie E. McCowan et al., Appellees, v. Don C. McCowan et al., Appellees. Cabot Foundation, Inc., Appellant.
    Gen. No. 42,598.
    opinion filed December 13, 1944;
    released for publication. January 4, 1945.
    Irving Breakstone, for appellant; Eobert L. Prendergast and Philip Bairn, for appellees.
   Opinion by

Justice Lupe.

Not to be published in full.


text:
    Elias Hackner, Appellant, v. Allen Van Wyck et al., Appellees.
    Gen. No. 42,623.
    opinion filed December 13, 1944;
    released for publication January 4, 1945.
    Shulman, Shulman & Abrams, for appellant; Meyer Abrams, of counsel; Andrew J. Dallstream, Mayer, Meyer, Austrian & Platt, Thomas C. Strachan, Jr., George F. Callaghan, Beach, Fathchild & Scofield, Charles C. LeForgee and Daily, Dines, White & Fiedler, for certain appellees; Francis L. Daily and Donovan Y. Erickson, of counsel.
   Opinion by

Justice Lupe.

Not to be published in full.


text:
    Standard Oil Company, Appellee, v. Globe Cartage Company, Inc., Appellant.
    Gen. No. 42,659.

      opinion filed December 13, 1944;
    released for publication January 4, 1945.
    Eugene L. Cohn, for appellant; Gerald H. Crane, for appellee; Louis P. Yangas, of counsel.
   Opinion by

Justice Lupe.

Not to be published in full.


author: Pbesiding Justice Lupe.

text:
    Valeria Kucia, Minor, by Anton Kucia, Her Father and Next Friend, Appellant, v. Harry Rosenfield, Trading as Sterling Material Supply Company, and Sam Jones, Appellees.
    Gen. No. 42,898.
    opinion filed December 13, 1944;
    released for publication January 4, 1945.
    Maurice M. Wasserman and Patrick T. Harrington, ^for appellant; Patrick T. Harrington and Kellam Poster, of counsel; Eckert & Peterson, for appellees; A. E. Peterson and Owen Ball, of counsel.
   Opinion by

Pbesiding Justice Lupe.

Not to be published in full.


author: Presiding Justice Sullivan.

text:
    Barbara Satek, Appellant, v. Rosy Fortuna et al., Appellees.
    Gen. No. 43,091.
    opinion filed December 19, 1944;
    released for publication January 4, 1945.
    Eugene A. Weinberg and Samuel Koenigsberg, for appellant; Julius H. Selinger, for appellees.
   Opinion by

Presiding Justice Sullivan.

Not to be published in full.


text:
    In re Estate of Zygmunt Klockowski, Deceased. Joan Waclawski, Appellant, v. Elenora Klockowski and Antonia Wolczek, Administratrices of Estate of Zygmunt Klockowski, Deceased, Appellees.
    Gen. No. 43,118.
    opinion filed December, 19, 1944;
    released for publication January 4, 1945.
    Roman E. Posanski, for appellant; John P. Loughnane and Chester D. Kern, for appellees.
   Opinion by

Presiding Justice Sullivan.

Not to be published in full.


author: Justice Friend.

text:
    J. Litwin, Appellant, v. Halsey, Stuart & Co., Inc., et al., Defendants. R. P. Matthiessen et al., Appellees.
    Gen. No. 42,432.
    opinion filed December 19, 1944;
    released for publication January 4, 1945.
    Shulman, Shulman & Abrams, for appellant; Meyer Abrams, of counsel; Taylor, Miller, Busch & Boyden, for appellees; John S. Miller, of counsel.
   Opinion by

Justice Friend.

Not to be published in full.


text:
    J. Litwin and C. F. Kuhlow, Appellants, v. Halsey, Stuart & Co., Inc., et al., Appellees.
    Gen. No. 42,923.
    opinion filed December 19, 1944;
    released for publication January 4, 1945.
    Shulman, Shulman & Abrams, for appellants; Meyer Abrams, of counsel; Schuyler & Hennessy, for appellees; Daniel J. Schuyler, George W. Lennon and Jay Stough, of counsel.
   Opinion by

Justice Friend.

Not to be published in full.


text:
    Albert J. Horan, for use of Eddy Stoker Corporation, Appellee, v. Continental Casualty Company, Appellant.
    Gen. No. 43,000.
    opinion filed December 19, 1944;
    released for publication January 4, 1945.
    Landis & Landis, for appellant; Maxwell Landis, of counsel; G. Donald White-house, for appellee.
   Opinion by

Justice Friend.

Not to be published in full.


author: Justice Eribnd.

text:
    People of State of Illinois, Defendant in Error, v. John J. Williams, Plaintiff in Error.
    Gen. No. 43,220.
    opinion filed December 19, 1944;
    released for publication January 4, 1945.
    James M. Burke, for plaintiff in error; Thomas J. Courtney, State’s Attorney, for defendant in error; Edward E. Wilson, John T. Gallagher, Melvin S. Bembe and Joseph A. Pope, Assistant State’s Attorneys, of counsel.
   Opinion by

Justice Eribnd.

Not to be published in full.


author: Justice Scanlan.

text:
    Jaybill Clothes, Inc., Appellant, v. Joseph Harris et al., Appellees.
    Gen. No. 43,168.
    opinion filed December 19, 1944;
    rehearing denied January 3, 1945; released for publication January 4, 1945.
    George B. Cohen, for appellant; Curtis & Polin, for appellees; Al Martin Curtis, of counsel.
   Opinion by

Justice Scanlan.

Not to be published, in full.


text:
    J. J. Schwartz, Appellee, v. Arthur C. Cimaglia, Appellant.
    Gen. No. 43,196.
    opinion filed December 19, 1944;
    rehearing denied January 3, 1945; released for publication January 4, 1945.
    Charles R. Smith, for appellant; Schwartz & Cooper, for appellee; Max 0. Liss, of counsel.
   Opinion by

Justice Scanlan.

Not to be published in full.


text:
    Duane Wanamaker, Appellant, v. William B. McIlvaine, Jr., Executor of Last Will and Testament of William B. McIlvaine, Sr., Deceased, Appellee.
    Gen. No. 43,197.
    opinion filed December 19, 1944;
    released for publication January 4, 1945.
    Walter Hamilton, for appellant; Miller, Gorham, Weseott & Adams, for appellee; Edward R. Adams and Herbert C. De Young, of counsel.
   Opinion by

Justice Scanlan.

Not to be published in fuU.


author: Justice Scandan.

text:
    Claudia Simpson, Appellant, v. City of Chicago, Appellee.
    Gen. No. 43,234.
    opinion filed December 19, 1944;
    released for publication January 4, 1945.
    Harry S. Posner, for appellant; Barnet Ho des, Corporation Counsel, for appellee; J. Herzl Segal and Adam E. Patterson, Assistant Corporation Counsel, of counsel.
   Opinion by

Justice Scandan.

Not to be published in full.


text:
    Sonia Zechman, Appellant, v. Bernard B. Zechman et al., Appellees.
    Gen. No. 43,256.
    opinion filed December 19, 1944;
    rehearing denied January 3, 1945; released for publication January 4, 1945.
    Milton J. Sabath, for appellant; Samuel A. Rinella, for appellees; Harry G. Fins, of counsel.
   Opinion by

Justice Scandan.

Not to be published in full.