text:
    Portia Gage v. William M. Bailey et al.

      Filed at Ottawa November 13, 1886.

    1. Chancery—right of complainant to dismiss his bill—before and after reversal. Where no cross-bill has been filed in a suit in chancery, as a general rule a complainant may dismiss his bill at any time he may desire, before a final decree has been entered in the cause.
    2. But if a decree which has been rendered according to the prayer of the bill, shall, upon error or appeal, be reversed upon the merits, and the cause remanded “for further proceedings not inconsistent with” the opinion filed, the trial court will have nothing to do but to dismiss the bill on the merits; and in such case it will be error to allow the complainant to dismiss his bill.
    Appeal from the Circuit Court of Cook county; the Hon. M. F. Tuley, Judge, presiding.
    Mr. Augustus N. Gage, for the appellant.
    Messrs. Peckhah & Brown, and Mr. John P. Altgeld, for the appellees.
   Mr. Justice Craig

delivered the opinion of the Court:

This was a bill brought by appellees, against appellant, Portia Gage, to set aside a tax deed under which she claims title to the premises in dispute, and to vacate and remove appellant’s title as a cloud upon the title of appellees. Appellant put in an answer to the bill, in which she set up that the various steps required to be taken, by the Revenue law, in order to constitute a valid sale of land for non-payment of taxes, had been complied with and fully observed, and that the title to the property had passed by the tax deed under which she claimed. To the answer a replication was filed, and on the hearing, upon, the pleadings and evidence, a decree was rendered, substantially as prayed for in the bill. The defendant prosecuted an appeal, and at the March term, 1882, of this court, the decree of the circuit court was reversed, and the cause remanded. (See Gage v. Bailey, 102 Ill. 11.) In June, 1883, the order of this court was filed in the circuit court, and on the ninth day of July, 1883, the cause was re-docketed. The complainants, then, under leave of the court, filed an amended bill, in which they alleged that appellant’s, tax title was defective on account of certain errors in the school tax, which formed a part of the taxes for which the premises were sold. No order was taken requiring the defendant to answer the amended bill, and no answer was ever filed. Indeed, no steps seem to have been taken in the cause until March, 1886, when, on motion of appellees, the bill was dismissed at complainants’ costs. On the day this order was entered, the appellant appeared in court, and entered her motion to vacate the order of dismissal. This motion was heard and overruled. The appellant then prayed an appeal, which was granted. This appeal presents but one question, and that is, whether the circuit court erred in allowing the complainants to dismiss their bill.

Where no cross-bill has been filed, as a general rule a complainant may dismiss his bill at any time he may desire, before a final decree has been entered in the cause. But we do not regard this as a ease which will fall within the general rule referred to, or one to be governed by it. When the case was here before, several objections were urged against the validity of the tax sale under which appellant claimed title. These objections were taken up and considered by the court, and each and all were held to be without merit. The opinion of the court, after disposing of the objections to the tax title, ■concluded as follows: “The decree of the circuit court will be reversed, and the cause remanded for further proceedings not inconsistent with this opinion.” The opinion had disposed of the whole case made by the pleadings and the evidence, and when the remanding order should be filed in the circuit court, it would seem that nothing remained for the circuit court to do except to enter an order dismissing the bill. No other order or proceeding would be consistent with •the opinion filed. If the order had been merely reversing and remanding, without any directions, doubtless the court might allow amendments to the pleadings, and might permit the introduction of other evidence. But such was not the character of the order. The opinion, as will appear from an examination of it, had settled every question involved in the case, and when the circuit court was directed to proceed not inconsistent with the opinion, no action could properly be taken except to enter a decree dismissing the complainants’ bill for want of equity. The rule on this subject seems to be well stated in Chickering v. Falles, 29 Ill. 301, as follows : “Where the decree is affirmed in all its parts, the controversy is at an end. In such a case, the circuit court has no power to allow amendments of the pleadings, or to alter or change the decree. It can only proceed to have it enforced according to its terms’ and conditions. Where the decree is reversed, and the cause is remanded with specific directions, the court below has no discretion, but must pursue the mandate of the appellate court.” Here the cause was remanded, with direction to proceed not inconsistent with the opinion, which had settled all questions in the case adverse to the complainants.

In Hook v. Richeson, 115 Ill. 431, the question arose in regard to the construction of a remanding order, where a cause had been remanded for further proceedings in conformity with the opinion, but the opinion contained a statement that the cause might be open to the parties to take further proof, if desired, as to a certain matter named. It was held, that the cause was not open for any other purpose, and the introduction of new matters by amendment and proof was not permissible. Here, no question was left open. Every question involved in the record had been settled and determined by the decision rendered in the cause, and a remanding order was made in order 'that the court might make a final disposition of the case, as indicated in the opinion.

Wadhams v. Gay, 83 Ill. 250, is a case which we regard in point. There, as here, the case was decided on the merits, and-the decree reversed and the cause remanded. There the language of the remanding order is, “for further proceedings in conformity to the opinion. Here the terms of the order are, “for further proceedings not inconsistent with the opinion. ” In the. Waclhams case we held that it was the duty of the circuit court, upon the remanding order being filed, to dismiss the bill for the want of equity. Should not the same rule prevail here ? What difference is there between the two orders ? If the court proceeds not inconsistent with the opinion, it proceeds in conformity, and proceeding in conformity to the opinion is not inconsistent to the opinion. The substance of the one is the same as the other, and we think the case cited is conclusive of the one under consideration. It was, therefore, the duty of the court, after the cause was re-docketed, to look into the opinion, and dismiss the bill for want of equity.

The judgment of the circuit court will be reversed, and the cause remanded, with directions to dismiss the bill for want, of equity.

Judgment reversed.


source: Caselaw Access Project

author: Mr. Justice Sheldon

license: Public Domain

text:
    Clark Hollenback v. Davidson Todd et al.

      Filed at Ottawa November 13, 1886.

    1. Evidence—cross-examination—latitude allowed—as to a party to a transaction alleged to be fraudulent. Where a party to a transaction alleged to be fraudulent as to creditors, testifies in respect thereto, in a suit involving the question of ownership of property, arising out of the transaction, the rule should be liberal in allowing a full examination of such party.
    2. Same—burden of proof—claim of property attached. A party who-intervenes in an action brought by attachment, and claims the property attached, must show that he is the owner of the same. The burden of proof' rests upon such claimant throughout the trial, and not upon the plaintiff in the attachment.
    3. Same—statements and declarations of a third person. On a trial of' the right of property in an attachment suit, in which the claimant’s title was assailed as being fraudulent as to creditors of his vendor, where there was much evidence tending to show that a third person was interested with him in the purchase, it was held improper to exclude from the jury, by an instruction, all the conversations and admissions of such third person, relating to the transaction, although not made in the presence and hearing of the-claimant.
    4. Same—privileged communication—to an attorney. An attorney who-was employed by a failing debtor to draw up an assignment of certain contracts of the debtor, (which assignment was attacked by creditors as fraudulent,) was asked if the assignor said anything at the time with reference to the intent or purpose of making the assignment, and if so, what: Held, that the question was properly disallowed, as calling for a privileged communication made to an attorney.
    5. Bight oe pbopebty—interpleading claimant in attachment. If a party claiming, by interpleader, the property attached, shows a purchase from the defendant in the attachment, it seems to be immaterial whether the purchase was made by the claimant for himself or for his father, as, in either event, the plaintiff in the attachment could not subject the property to his-debt unless it belonged to his debtor.
    Appeal from the Appellate Court for the Second District;— heard in that court on appeal from the Circuit Court of Kendall county; the Hon. C. W. Upton, Judge, presiding.

      Messrs. Fowler Bros., and Mr. A. E. Searles, for the appellant:
    There was error in sustaining the objection to the questions propounded to the witness who drew the assignment. 'The record does not show that the witness was acting as the ■attorney of any body, and certainly not of Budd. Witness did not testify he was acting as an attorney, neither did he •claim the privilege. The burden of proof was on the other side to show the relation of client and attorney. Goeta v. Walcott, 14 Ill. 90; Barum v. Fouts, 15 Ind. 50; Coon v. Swan, 30 Vt. 6; 48 Ill. 281.
    The privilege is that of the client. Scott v. Harris, 113 Ill. 447. See, also, 1 Greenleaf on Evidence, sec. 239; Hatton v. Robinson, 14 Pick. 416; De Wolf v. Strader, 26 Ill. 230; Smith v. Smith, 106 id. 488.
    Great liberality is allowed in examinations as to fraud. Bell v. Devare, 96 Ill. 218.
    The burden of proof was on the claimant to show he was the owner of the corn. Marshall v. Cunningham, 13 Ill. 20.
    Mr. A. J. Hopkins, Mr. N. J. Aldrich, and Mr. F. H. Thatcher, for the appellees :
    The issue in this case was simply the right of property. Bev. Stat. chap. 11, sec. 29.
    The communications of Terrell to the attorney were privileged ; and besides, they being not made in the presence of Budd, could not affect him. Herkelrath v. Stokey, 36 Ill. 47; Hesing v. McCloskey, 37 id. 351; Hatch v. Jordan, 74 id. 414; Ewing v. Runkle, 20 id. 448.
   Mr. Justice Sheldon

delivered the opinion of the Court:

On the 14th day of October, 1881, Clark Hollenback commenced a suit in attachment, against Davidson Todd and Thomas J. Terrell, in the circuit court of Kendall county, and the writ of attachment was levied on between eight and nine thousand bushels of corn, as the property of Todd & Terrell, in the elevator at Millbrook, in said county. Subsequently, Jacob S. Budd filed a plea of interpleader, claiming to be the owner of the property so attached. "Upon this plea issue was joined, and a trial had before a jury, resulting in a verdict in favor of the claimant, Budd. Judgment was rendered upon the verdict, after overruling a motion for a new trial, and the judgment was affirmed by the Appellate Court for the Second District. The plaintiff in the attachment suit, Hollenback, appealed to this court.

The facts shown by the evidence are, that the warehouse, and elevator in which the grain was, belonged to Jacob Budd, the father of appellee, and he had rented the same to Todd & Terrell, in which the latter for some time carried on business, buying and storing grain. Appellant, among others, had stored a quantity of grain with Todd & Terrell, and it had been shipped out by them. Todd & Terrell failed prior to the 1st day of September, 1881, and Jacob Budd procured his son, Jacob S. Budd, (the appellee) to take possession of the warehouse, and to purchase the contracts for grain to 'be delivered that Todd & Terrell had with different farmers, and which, by a written assignment, were assigned by Todd & Terrell to the. appellee, on the 10th of September, 1881, he having taken possession of the warehouse on the first day of said month. Terrell, as did Todd, to some extent, continued in the warehouse, for appellee, on wages, for a while,- as testified to by the latter and Terrell. The corn which was levied on, was corn that appellee had taken partly under the contracts so assigned, and partly that which he had purchased independently, of farmers, and which he had in store. Appellee was a young unmarried man, about twenty-two years of age, and resided with his father, and had been engaged in farming. He had no considerable means of his own. His father loaned' him $500 to begin business with, and the rest of the money to purchase the grain with, prior to the attachment, he obtained from his commission merchants in Chicago. None of the corn called for by the contracts had been paid for by Todd & Terrell.

It is insisted the trial court erred in excluding evidence, and in giving and refusing instructions. There may, strictly, have been some error in the rejection of evidence. The claimant was a witness in his own behalf, and had testified, in chief, that all the property he owned when he went into the warehouse, was a team of horses, two sets of harness and a buggy,—that he had no money. On cross-examination, the question was asked, “Have you now got the personal property you said you had-—-the horses, wagon, and other things?” and the court excluded the question. Another question excluded was, “To what extent did Todd & Terrell get pay for their labor while they worked for you in the warehouse?” We think these questions should have been admitted. The charge was, that the transaction between appellee and Todd & Terrell was one in fraud of creditors, and the rule should be liberal in allowing a full examination of parties to such an alleged fraud, where they appear as witnesses. But we can not say, there was such material error in excluding this evidence as should cause a reversal of the judgment.

George M. Hollenbaclc, an attorney at law, testified that he drew the assignment in question of the contracts between Todd & Terrell and the farmers; that no one was present but Terrell and himself; that his opinion was asked and given. He was inquired of by appellant as to what was said, if anything, at the time, with reference to the purpose and intent of making the assignment, and objection "to the question was sustained and exception taken. We think the evidence was properly excluded, as calling for a privileged communication made to an attorney.

Objection is taken to the giving of this instruction for the claimant:

“2. The court instructs the jury that possession of personal property is prima facie evidence of ownership, and if the jury believe, from the evidence, that Jacob S. Budd bought and paid for the corn in question as the same was brought to the warehouse in Millbrook, and had been in possession of the same from the time he so bought said corn, prior and up to the time it was levied upon by the sheriff under said writ of attachment, then it is incumbent upon the defendants to show, by a preponderance of testimony, that the title was not in the said Jacob S. Budd, and unless he has done so you should find for said Budd as to the ownership of said com. ”

We do not regard this instruction as strictly accurate. It was a matter of contest which one was in possession,—Budd or Todd & Terrell. The burden was upon the claimant, under the-issue in the case, to show that he was the owner of the property, and not upon the plaintiff in the attachment to show that the claimant was not the owner of the property,— and that burden of proof remained upon the claimant throughout. But where there is, upon the facts, such a clear case for the appellee as we find here, we can not regard the error of such an instruction as a fatal one.

The court ruled out, by instruction, all conversations and admissions on the part of Jacob Budd, the father, unless they were authorized or assented to by Jacob S. Budd. There is so much evidence tending to show that Jacob Budd was interested in the property, that we incline to think this ruling should not have been made. But with all these conversations and admissions before the jury, we do not think they could or should have in any way affected the verdict.

This instruction was asked by appellant, and refused:

“9. If the jury find, from the evidence and all the circumstances in evidence in this case, that the real transaction was for the benefit of Jacob Budd, and that he really and in fact was the one interested in such purchase, and was really the owner of the effects and property in question, although the proofs may show that the sale was made to Jacob S. Budd, nominally from Todd & Terrell, then, under the issue in this case, the jury should find a verdict that the property in question is not the property of Jacob S. Budd.”

If the property was not that of Todd & Terrell, then it was not subject to the attachment, and it would' be a matter of indifference to the appellant which one of the two, Jacob Budd or Jacob S. Budd, owned the property. There might be a property in each one sufficient to enable him to assert a claim against a trespasser—a general property in one, and a special property in the other. There was so much of, at least, a special property in appellee, in his having the entire actual control and possession of the property, as between him and his father, and having borrowed money in his own name to purchase it, that, as against a party like the appellant, we think the instruction was properly enough refused.

The judgment of the Appellate Court will be affirmed.

Judgment affirmed.


author: Mr. Justice Scholfield

text:
    Jane Treleaven v. Alexander J. D. Dixon.

      Filed at Ottawa November 13, 1886.

      1. Practice—objecting as to competency of evidence. Where evidence is clearly incompetent, so that nothing can render it admissible, a failure in the record to show a formal objection will not preclude this court from considering whether it is competent, where it is necessary to the relief claimed.
    2. Chancery—consideration of the evidence—that which is incompetent, rejected. In chancery cases, the whole record, including all the evidence offered, is before this court, on appeal or writ of error; and it will be presumed that all the incompetent evidence was rejected, and all the competent evidence was admitted and considered, on the final hearing. If there is competent evidence in the record sufficient to sustain the decree, it will be affirmed, and if not, it will be reversed.

      3. "Witness— competency—husband and wife. A husband or wife can not testify for or against each other, where the adverse party sues or defends as the executor, etc., of any deceased person. So on a bill by a wife to set aside a sale of her land under a deed of trust, where the executor of the deceased creditor is defending, the husband is not a competent witness for the wife.
    4. Same—former decision. The case of Marshall v. Peck et al. 91 111. 187, in so far as it differs from the ruling in Crane v. Crane, 81 111. 165, as to the competency of husband or wife to testify for each other, is overruled. The remark of the court in Powell v. Powell, 114 111. 329, upon the question of fact whether the wife was the agent of her husband, was unnecessary, and is not to be regarded as indicating any rule of law on the question of her competency as a witness.
    Appeal from the Circuit Court of Cook county; the Hon. M. F. Ttjley, Judge, presiding.
    Messrs. Miller, Lewis & Judson, for the appellant:
    The fact that a witness is interested, will not justify rejecting his testimony entirely. Murray v. McLean, 57 Ill. 385; Railroad Co. v. Gretzner, 46 id. 80; Robertson v. Dodge, 28 id. 161; Primmer v. Clabaugh, 78 id. 95; Roberts v. Pierce, 79 id. 378; Marshall v. Peck, 91 id. 187; Otis v. Spencer, 102 id. 628.
    The fact that the husband was a party, does not disqualify him, in equity, provided he has no disqualifying interest in the suit. Dodgson v. Henderson, 113 Ill. 360; Bradshaw v. Coombs, 102 id. 429.
    The real estate in question is the separate property of the complainant. Emmert v. Hays, 89 Ill. 11.
    In the case of Crane v. Crane, 81 Ill. 165, the court seems to have announced a different rule; but the point seems not to have been very fully considered, and all the later cases fully sustain the position that the husband is a competent witness. Marshall v. Peck, 91 Ill. 187; Cordery v. Hughes, 6 Bradw. 401; Funk v. Eggleston, 92 Ill. 515; Pyle v. Oustatt, 92 id. 209; Raum v. Raum, 95 id. 433; Gravel Road Co. v. Madaus, 102 id. 419; Powell v. Powell, 114 id. 329; Primmer
      v. Clabaugh, 78 id. 94; Mueller v. Rebhan, 94 id. 412; Eads v. Thompson, 109 id. 87.
    Mr. James S. Norton, for the appellee:
    The complainant and her husband were incompetent as witnesses. Rev. Stat. chap. 51, sec. 2; Crane v. Crane, 81 Ill. 165; Warrick v. Hull, 102 id. 280; Pyle v. Oustatt, 92 id. 209; Michinson v. Cross, 58 id. 369; Mueller v. Rebhan, 94 id. 147; Gravel Road Co. v. Madaus, 102 id. 417.
    The property is not shown to be the “separate property” of the complainant. Carpenter v. Davis, 72 Ill. 14.
   Mr. Justice Scholfield

delivered the opinion of the Court:

On the 5th day of October, A. D. 1870, Walter Treleaven borrowed '$6000 of Edward Morrell, for which he gave his promissory note, and at the same time, he and his wife, Jane Treleaven, executed a deed of trust on certain of her real estate, to Mahlon D. Ogden, to secure the payment of the promissory note. The note became the property of Charles H. Morrell. It was not paid at maturity, and the trustee sold the property, under the power in the deed, to Alexander J. D. Dixon and Fitz Eugene Dixon, executors and trustees under the last will and testament of Charles H. Morrell, who had died after becoming the owner of the note, and the trustee executed a deed accordingly. This bill was filed by Jane Treleaven, against Alexander J. D. Dixon, sole surviving trustee, Fitz Eugene Dixon having died after the making of the deed, to set aside that sale, on the ground that the time for the payment of the note was extended by a contract made between her husband and Charles H. Morrell, without her consent, after the maturity of the note, whereby the trust deed became, as she contends, released or extinguished as a security.

The fact that there was a contract between complainant’s husband and Morrell, extending the time for the payment of the note, as alleged in the bill, is put in issue by the denial of the defendant in his answer, and the only witness by whom the contract is claimed to have been proved is the husband of the complainant. The only question, therefore, which we deem it necessary to consider, is, ivas the husband a competent witness,—Morrell being dead, and the adverse party defending as his executor.

Counsel for appellant contend, that although the court below decreed dismissing the complainant’s bill, yet that it admitted in evidence Treleaven’s testimony, and that, no cross-error having been assigned in respect of the competency of this evidence, the question is not before us. This is a misapprehension. The objection to Treleaven’s evidence is, clearly, not formal nor technical. If his testimony is inadmissible, the objection could, in no way, have been cured. In chancery cases, the whole record, including all the evidence offered, is before us, and we are required to assume that all the incompetent evidence was rejected, and all the competent evidence was admitted and considered, on the final hearing. If there is competent evidence in the record sufficient to sustain the decree, it must be affirmed; if not, it must be reversed,—and this without regard to whether the chancellor may have been right or wrong in his views as to the competency of the evidence at the hearing. Swift et al. v. Castle, 23 Ill. 209; Tunison v. Chamblin, 88 id. 382; Wille min v. Dunn, 93 id. 520; Jefferson v. Jefferson, 96 id. 556; Ritter v. Schenk et al. 101 id. 387; Smith et al. v. Long, 106 id. 485.

At common law, the husband and wife were not competent witnesses for or against each other in suits between them and other parties; and to what extent they are now competent witnesses in such cases, depends entirely upon the language of the statute. To the extent that it declares, and no farther, they are competent.

The first section of our statute entitled “Evidence and Depositions, ” (1 Starr & Curtis, chap. 51, p. 1070,) removes the common law disqualification to parties' testifying, in these words: “No person shall be disqualified as a witness in any civil action, suit or proceeding, except as hereinafter stated, by reason of his or her interest in the event thereof, as a party or otherwise.” Then the second section shows in what cases the disability is not removed: “No party to any civil action, suit or proceeding, or person directly interested in the event thereof, shall be allowed to testify therein, of his own motion, or in his own behalf, by virtue of the foregoing section, when any adverse party sues or defends as the * * * executor of any deceased person. ” Then comes section 5, declaring under what circumstances husband and wife shall be competent to testify for or against each other: “No husband or wife shall, by virtue of section 1 of this act, be rendered competent to testify for or against each other as to any transaction or conversation occurring during the marriage, whether called as a witness during the existence of the marriage, or after its dissolution, except in cases where the wife would, if unmarried, be plaintiff or defendant, or where the cause of action grows out of a personal wrong or injury done by one to the other, or grows out of the neglect of the husband to furnish the wife with a suitable support, and except in cases where the litigation shall be concerning the separate property of the wife, and suits for divorce, and except, also, in actions upon policies of insurance of property, so far as relates to the amount and value of the property alleged to be injured or • destroyed, or in actions against carriers, so far as relates to the loss of property and the amount and value thereof, or in all matters of business transactions where the transaction was had and conducted by such married woman as the agent of her husband,—in all of which cases the husband and wife may testify for or against each other, in the same manner as other parties may under the provisions of this act. ”

Then how may “other parties testify for or against each other under the provisions of this act?” The word “party,” in the other provisions of the act, is clearly distinguished from the word “person, ” and always means, party to a- suit, or party in interest in the suit. It must then have been intended that it should have the same meaning in this section. Giving it that meaning, other parties can not testify in any civil action, suit or proceeding, of their own motion or in their own behalf, when any adverse party sues or defends as the executor of a deceased person, and therefore husband and wife can not testify for or against each other in "those instances. This is the construction we gaVe to the act in Crane v. Crane, 81 Ill. 165, and that ruling was approved and followed in Warrick et al. v. Hull, 102 Ill. 280. Marshall v. Peck et al. 91 Ill. 187, in which there was, through inadvertence in the haste induced by the pressure of an over-crowded docket, a different ruling, is now expressly overruled, as are also any expressions that may be found elsewhere contrary to the ruling in Crane v. Crane, supra.

In Pigg et al. v. Carroll et al. 89 Ill. 206, where a bill was filed for partition between heirs of a common ancestor, it was held that the statute has no application; that it was intended to protect the estates of deceased persons from the assaults of strangers, and relates to proceedings wherein the decision sought by the party so testifying would tend to reduce or impair the estate, and does not relate to the relative rights of heirs or devisees, as to the distribution of an estate, in proceedings by which the estate itself is in no event to be reduced or impaired; and this was followed in Mueller v. Rebhan, 94 Ill. 142, and it has since been followed in other cases. "But it is quite plain that the principle involved in those cases has no application here. Eads v. Thompson et al. 109 Ill. 87, was not analogous to the present case. The adverse party there did not sue or defend as heir. Nothing that was said in Pyle v. Oustatt, 92 Ill. 209, militates against the present conclusion. On the contrary, the implication from the reasoning there, is in harmony with the views here expressed, for it is there said: “There is, indeed, nothing in the fifth section that will, in any case, have the effect of rendering one competent ivho is incompetent under the first and second sections. ”

In Powell v. Powell et al. 114 Ill. 329, Bridget Powell, the ivife of Daniel, was so clearly incompetent that it was not thought necessary to discuss the question. The remark that the proof failed to show that she was the agent of Daniel, was made in answer to a contention of fact by counsel. It was entirely unnecessary, and is not to be regarded as indicating any rule of law in that regard.

Excluding the evidence of Walter Treleaven, as we must, there is no pretence that there is error in the decree below. The decree is affirmed.

Decree affirmed.


text:
    Edward L. Brewster et al. v. D. F. Van Liew.

      Filed at Ottawa November 13, 1886.

    1. Measure of damages—for breach of contract by broker to hold stocks for his customer. Where a broker purchases stocks for a customer, to be held subject to the order of the latter, and the broker, in disregard of the agreement, and without the consent of the customer, converts the stocks to his own use, the measure of damages in an action for the breach of the contract is, not the amount of money which may have been paid upon the contract by the customer, with interest, but the market value of the stocks. Such a case, in this regard, is to be distinguished from Larrabee v. Badger, 45 Ill. 441.
    2. Same—of the form of action, as affecting the question of damages. Nor does it matter, in respect of the rule of damages in such case, whether the action be for the conversion, or, in form, in assumpsit. In civil actions the law awards to the party injured a just indemnity for the wrong which has been done him, and no more, whether the action be in contract or tort.

      Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Circuit Court of Cook county; the Hon. John G. Rogers, Judge, presiding.
    Mr. Frederic Ullman, for the appellants:
    The true measure of damages in a case where a broker disposes of the stock without authority, is such a sum as would put the customer in the position he would be in had not the wrong been done. Baker v. Drake, 53 N. Y. 211; Markham v. Jandon, 41 id. 235. See, also, Gruman v. Smith, 81 N. Y. 26; Capon v. Thompson, 86 id. 418; Colt v. Owens, 90 id. 368; Work v. Bennett, 70 Pa. St. 484; Sturges v. Keith, 57 Ill. 452; Smith v. Dunlap, 12 id. 184; Cothran v. Ellis, 107 id. 423.
    The case of Larrabee v. Badger, 45 Ill. 440, has no application to a case like this. There, the money of the customer was not invested as directed.
    Mr. A. J. Hopkins, Mr. N. J. Aldrich, Mr. F. H. Thatcher, and Mr. Wallace W. Hickman, for the appellee, reviewed the facts and the evidence at considerable length, to show that this ease is like that of Larrabee v. Badger, 45 Ill. 440, and not governed by the New York cases cited by appellants.
   Mr. Justice Sheldon

delivered the opinion of the Court:

This was an action brought by appellee, to recover from appellants money paid to them on a certain transaction in Denver and Rio Grande Railway Company stock.

On January 10,1884, appellants, stock-brokers in Chicago, bought for appellee one hundred shares of said stock, furnishing a statement thereof, as follows :

“Chicago, January 10, 1884.
“Dr. D. F. Van Liew:
“Dear Sir—We have this day bought, for your account and risk, one hundred Denver, at 24. This account received by telegraph. Names of parties from whom above purchase was made will be given, if desired, as soon as advices are received by mail.
“Respectfully yours,
Edward L. Brewster & Co.”

On the same da;r, appellee mailed to them $1000 in a letter, stating: “I herewith enclose you draft on Chicago for $1000, as per my promise to-day, on your purchase for me of one hundred shares of Denver and Rio Grande stock for 24, as per statement to me. The balance you will please carry for me, at six per cent, until I either pay it or order it sold, and oblige, yours, ” etc.

About the 19th of January, 1884,-appellee paid appellants $500 more, in response to the following call:

“Chicago, Illinois, January 19, 1884.
“ZX F. Van Liew, Aurora, Illinois:
“Dear Sir—Tour account requires additional deposit of $500. Please favor' us with the same.
“Respectfully yours,
Edward L. Brewster & Co.”

On May 6, 1SS4, of his own volition, as appellee says, but as appellants say, on their request, appellee paid them $400 more, making, in all, $1900 paid by him. The market still declining, on June 19, 1884, appellants wrote to appellee, at Aurora, for ■ $500 additional. Receiving no reply, they telegraphed him on the 23d of June, 1884, asking why he did not reply, and then, later in the day, still getting no reply, they telegraphed appellee," “We have put a stop-order on your hundred Denver, at six and one-half. It will be sold at the market when it reaches 'there, unless you remit us before it is sold.” No response was received, and later, on the same day, the limit fixed by the stop-order was reached, and the stock was sold, on the Stock Exchange in New York, for $637.50, the market price of the stock at the time of the sale being six and three-eighths. Appellee, shortly after, demanded that appellants deliver the stock to him, or refund to him the money paid. They refused, and this action was brought.

The parties differed in regard to the arrangement under which the stock was being carried. The claim of appellee was, that appellants were to carry it for him for six per cent interest, until he should pay for the stock or order it to be sold. Appellants claimed that they acted as brokers for appellee in the purchase of the stock, without any special agreement to carry it for him; that they required a margin of ten per cent on the par value of the stock, and that appellee sent them such margin, amounting to $1000, and that the subsequent sums paid and demanded were for additional margins. The jury found a verdict for plaintiff for $2055, on which the circuit court rendered judgment, which was affirmed by the Appellate Court for the First District, and the defendants took this appeal.

Objection is taken to the giving, by the circuit court, of the following instruction for the plaintiff:

“If the jury believe, from the evidence, that the defendants made a contract or agreement with the plaintiff, by which they were to purchase for him one hundred shares of Denver and Bio Grande railroad common stock, for the sum of $2400, on the condition that he should pay, on the day following said purchase, to them, the sum of $1000, and that they would carry the balance of said $2400 for plaintiff, on his paying them six per cent annual interest on such unpaid balance, and would hold said stock for his (plaintiff’s) convenience, and that, in pursuance of said agreement, defendants did, in fact, purchase one hundred shares of said stock for said sum of $2400, and the plaintiff did, in fact, pn the day following said purchase, pay the defendants the sum of $1000, and did, subsequently thereto, pay, by two different payments, the sum of $900 more, making, in all, $1900 on said $2400, and that at the time of the last payment said defendant agreed with plaintiff to hold said stock for him, on the condition above stated, on his paying six per cent interest on all unpaid balance, annually, to suit plaintiff’s convenience, even if said stock went to' zero, and that, without any notice to, or authority, knowledge or consent of, • plaintiff, defendants sold said plaintiff’s stock, and on his tendering to them the balance of said $2400, together with interest on such balances, if the proof shows such tender was made, at the rate of six per cent per annum, declined and refused to deliver to him said stock ; and if you further believe, from the evidence, that plaintiff did tender such balance, with interest, on said stock, as aforesaid, and defendants declined to receive such tender, and declined to deliver to plaintiff said stock, and that thereupon the plaintiff demanded from defendants the money he had advanced them, and that defendants failed and refused to pay it, then, on that state of facts, plaintiff is entitled to recover all moneys advanced by him on said purchase of defendants, together with legal interest thereon, and you should so find by your verdict. ”

The giving of this instruction is supposed to be justified by the case of Larrabee v. Badger, 45 Ill. 441. The state of facts in that case and in the present is quite unlike. The plaintiff had there, on March 17, 1866, intrusted $2000 to the defendant, to purchase for the plaintiff two hundred shares of the stock of the Chicago and Alton Railroad Company. On March 19, 1866, the defendant notified the plaintiff that he had bought for him, for his account and risk, in New York, two hundred shares of the stock, at 89J. On the 4th of April, following, the plaintiff made a demand on the defendant for this stock, and on the refusal of the defendant to deliver it to him, the plaintiff then demanded a return of his money. This the defendant refused, saying he had failed, and had made an assignment, and was unable to comply with the demand, and the action was to recover back the $2000, and interest. The court there say: “Here the plaintiff had advanced $2000 to the defendant, with which the defendant was to buy two hundred shares of stock in the Chicago and Alton railroad for the plaintiff. The proof is, the defendant bought the stock in his own name, and had the same placed to his credit in New York, and that the name of the plaintiff did not appear in the transaction, and that the defendant sold this stock and appropriated the proceeds to his own use, and all without the knowledge or consent of the plaintiff. ” Again: “The facts do not show a contract for the purchase and delivery of stock, but an undertaking on the part of the defendant that he will buy two hundred shares of stock for the plaintiff, -with the plaintiff’s money. This is the whole extent of the contract, and on failure to buy for plaintiff, and by appropriating the money to his own use, justice would seem to demand, on his failure to buy the stock as instructed, the defendant should refund the money, with interest.” And further: “The position this defendant occupies in relation to the plaintiff, most clearly is, not that of a vendor of stock to plaintiff, but as an agent, who has ieceived of the plaintiff $2000 to invest for him in a particular way. By executing the trust, the defendant would have discharged himself from liability; but it was no execution of it to buy and sell the stock in his own name, and for his own use, without authority, and he must now account for the $2000.”

Thus it will be seen that the whole ground upon which that decision proceeded 'was a misappropriation of the money,— that the money had been intrusted to the defendant for one purpose, of benefit to the plaintiff, and the defendant appropriated it for another purpose, for his own sole benefit; and it was held that an action would lie for the money, as for money had and received for the use of the plaintiff. In the present case there was no such misappropriation of money intrusted to the defendants, but the money was applied to the very purpose appellee designed-to have it applied, to-wit, the payment of the purchase price of stock which appellants had purchased for appellee. In the case cited, Larrabee gave Badger the full purchase price of certain shares of stock, Badger to buy them for Larrabee, in Larrabee’s name, which he did not do, but bought them in his own name, and subsequently converted them to his own use, whereas, in the pres-, ent ease but a small portion of the purchase money for the stock was furnished by appellee, the appellants having advanced the residue, and holding the stock, as the situation implied, as security or in pledge for their advances, commissions and interest.

The relation which exists between a broker and his customer in the ease of the holding and carrying of stocks, as here, is declared in the leading case of Markham v. Jandón, 41 N. Y. 235, defining the relative rights and duties of the broker and customer. It is there laid down, that in advancing the money by the broker to complete the purchase of stock, the relation of debtor and creditor is created, and that thereupon the broker becomes a pledgee of the stock for the money advanced in its purchase—that the contract between the parties is, in spirit and effect, if not technically and in form, a contract of pledge. And it was there held, that for selling the pledge without authority, the measure of damages would be the difference between the amount for which the stock was sold, and its highest market value down to the time of trial. This rule of damages was modified in the subsequent case of Baker v. Drake, 53 N. Y. 311. It was there said: “Assuming that the sale -was in violation of the rights of the plaintiff, what was the extent of the injury inflicted upon him ? * * * If, upon becoming informed of the sale, he desired further to prosecute the adventure and take the chances' of a future market, he had the right to disaffirm the sale, and require the defendants to replace the stock. If they failed or refused to do this, his remedy was to do it himself, and charge them with the loss reasonably sustained in doing so. The advance in the market price of the stock, from the time of the sale up to a reasonable time to replace it, after the plaintiff received notice of the sale, would afford a complete indemnity. * * * If the broker has violated his contract, or disposed of the stock without authority, the customer is entitled to recover such damages as would naturally be sustained in restoring himself to the position of which he has been- deprived. He certainly has no right to be placed in a better position than he would be in if the wrong had not been done.” The same rule was held in Gruman v. Smith, 81 N. Y. 26. In Colt v. Owens, 90 N. Y. 368, the defendants purchased and agreed to carry certain shares of stock for the plaintiff, until instructed by him to sell, or for a period of six months. Defendants sold the stock without authority, and notified the plaintiff. In an action by the plaintiff, the testimony showed that for thirty days after the sale the stock could have been purchased in the market for the price at which it was sold, or a less sum, and the court below held that only nominal damages could be recovered, and directed a verdict accordingly. The judgment was affirmed. In Sturges v. Keith, 57 Ill. 452, it was held that in an action for the conversion of personal property, the proper measure of damages is the market value of the property at the time of the conversion, and the court recognized no distinction where the property converted was stocks. In Smith v. Dunlap, 12 111. 184, it was held that the measure of damages in the ease of a breach of contract for the sale of a chattel, is the cash value of the article at the time it should have been delivered, and it was said: “We have no hesitation in holding the rule applicable to contracts for the sale or delivery of personal property, without regard to the circumstance whether the price has been paid or not. If unpaid, the purchaser recovers the difference between' the price he agreed to pay and what the commodity was worth when it should have been delivered; if paid, he is entitled to recover the market value of the article when the delivery ought to have been made, and interest, in the way of compensation for the delay.” He may recover the market value of the article, and not the purchase price paid for the article, contrary to ■what is asserted in the present ease to be the rule, that where one party to a contract refuses to complete it, the other party, being without fault, may sue for and recover back any money paid upon the contract. True, the ease at bar was not an action for the conversion of the stock, but, in, form, was in assumpsit; but, as said in Baker v. Drake, supra, (page 220,) “the rule of damages should not depend upon the form of the action. In civil actions the law awards to the party injured a just indemnity for the wrong which has been done him, and no more, whether the action be in contract or tort; except in those special cases where punitory damages are allowed, the inquiry must always be, what is an adequate indemnity to the party injured, and the answer to that inquiry can not be affected by the form of the action in which he seeks his remedy. Chancellor Kent, in delivering the opinion of the "Court of Errors, (Cortelyon v. Lansing,) though the action was in assumpsit, seeks the rule of damages in the principle applicable to an action for conversion. ” Appellee’s real grievance is, the not carrying the stock until he should pay for it or order it to be sold—that instead of so carrying it, appellants sold it without his authority—that there has been a disposal of the stock without authority—a conversion of it. Suppose the stock had been carried, as appellee claims it should have been, he W'ould then have had his stock wdien he had paid for it, and nothing more. In not having the stock, the loss which he suffers is the value of the stock, and nothing more. All that he justly can be entitled to have is the stock, and he is not, in justice, entitled to be placed in a better position than if he had the stock. The injury sustained is the being deprived of the stock, and the compensation which the law gives for the deprivation of property is the value of the property, and never the price which the owner had paid for the property,—which latter was the rule of recovery laid down in this case.

Remark is made upon the title to the stock not having been taken in the name.of appellee. He could not have expected to have the title until he had paid for the stock. From the nature of the relation between the parties, appellants were holding the stock as security for their advances, and to give them the benefit of an enforcible lien it was necessary that the title should be within their control, in order to enable them to realize on the stock, should there be need to do so. See Horton v. Morgan, 19 N. Y. 170.

We hold the instruction to be erroneous in laying down a wrong rule of the measure of damages.

The judgments of the Appellate and circuit courts will he reversed, and the cause remanded to the circuit court.

Judgment reversed.


author: Mr. Justice Magruder

text:
    Henry H. Gage v. John Williams.

      Filed at Ottawa November 13, 1886.

      1. Behoving cloud upon title—of the possession required in order to avail of the remedy. In order to give a court of equity jurisdiction of a bill to set aside a deed as a cloud upon title, the complainant must show that he is in possession of the land.
    2. The agent of the owner of the title to a lot of land, finding the same unoccupied, and without improvements thereon, except an old fence, with bars down on the ground, so that any one might go upon it, entered, and put up the bars so as to complete the inclosure of the lot, and nailed a board upon a tree thereon, announcing that the premises were for sale, and calling attention to himself, as such agent: Held,, that these acts of the agent constituted possession of the lot, so as to authorize the owner to maintain a bill to remove a cloud from the title.
    3. Same—defective tax title. Where the judgment against a lot for taxes is for too large an amount, a sale thereunder and deed will pass no title, and such deed may be set aside as a cloud upon the title of the owner.

      4. Taxation—:judgment for taxes—computing interest upon penalties. Prior to the act of 1879, amendatory of the Revenue law, in ascertaining for what amount a judgment for delinquent taxes should be rendered, interest was not to be computed upon penalties which might have accrued, but only upon the amount of tax due,
    Appeal from the Superior Court of Cook county; the Hon. Gwynn Garnett, Judge, presiding.
    Mr. Augustus N. Gage, for the appellant:
    A bill to remove a cloud from title will not lie unless the complainant is in possession, or the land is unimproved or unoccupied. Gage v. Abbott, 99 Ill. 366.
    Mr. George A. Dupuy, for the appellee:
    To constitute possession, any act done evincing to the neighborhood that the land is appropriated to individual use, is sufficient. Brooks v. Bruyn, 24 Ill. 380; Morrison v. Kelly, 22 id. 624.
    In Hatch v. Bryan, 39 Ill. 552, it was held that a sale-board and a sidewalk were evidences of possession.
    The tax judgment against the lot, for the non-payment of which it was sold, was for too large a sum. McCree v. Gale, 93 Ill. 127; Trust Co. v. Weber, 96 id. 346.
   Mr. Justice Magruder

delivered the opinion of the Court:

This was a bill, filed by appellee against appellant in the Superior Court of Cook county, to remove a tax deed, held by appellant, as a cloud upon the title of appellee to lot 15 in block 14 in Eavenswood, in Cook county. The Superior Court entered a decree, granting the prayer of the bill, and appellant appeals to this court.

The first question is, whether appellee was in possession of the lot, when he filed his bill. Having alleged, that he is in possession, he must prove that allegation, in order to give a court of chancery jurisdiction. (Gage v. Abbott, 99 Ill. 366.). The proof is conflicting, but, after a careful examination of it, as set out in the record, we think, that the allegation was sufficiently maintained.

The appellee established his ownership of the lot, by showing a regular chain of title from the government to himself. In March 1885, and before the filing of this bill, his agent went to the property, and found it unoccupied. There were no improvements upon it. It was enclosed by a fence, in which there had been made an opening, protected by movable bars. The bars were on the ground, covered by snow, and the property was accessible to whatever person might choose to enter upon it. So far as the fence, which had been there for many years, was located upon the lot in question, it passed with the title to appellee, and was his own property. The agent placed the bars in the opening, so as to complete the enclosure, and nailed a board upon one of the trees on the premises, announcing, that the lot was for sale, and calling the attention of the public to himself, as appellee’s authorized representative. Under all the circumstances of the case, we think, that these acts constituted such possession, as authorized the filing of the bill.

In 1869, the lot had been owned by one Goslee, through whom appellee derives his title. Martin Van Allen, who lived opposite the property, had charge of it for Goslee from 1869 down to the fall or winter, immediately preceding the month of March, in which appellee’s agent, Dupuy, took possession. As Goslee’s representative and tenant, Van Allen used the premises, whenever he needed them, as a pasture for his horses. Some time in 1881, he seems to have taken a lease from appellant, with no apparent intention of deserting Goslee, his landlord, but for the purpose of circumventing one Bowen, who owned lots 5 and 6 in block 14, and claimed to have some right to use lot 15. Taking a lease is not, by itself, an act of possession. If Van Allen ever had possession under such a lease, he certainly abandoned it, because, after the execution of the lease, his son was in possession for as much as a year, using the premises, as a pasture for his own cattle, and claiming to hold under Bowen. The weight of the testimony is in favor of the position, that, when Van Allen did use the lot, such use was in subordination to the rights of Goslee, appellee’s grantor. But, whether this be so or not, the proof tends very conclusively to show, that, for some time prior to March 1885, the possession of lot 15 had been abandoned and that said lot had not been used, as a pasture, or for any other purpose by Van Allen or his son or by any body else, except that one Brown, who lived near, had been in the habit of driving over it, through the opening referred to, to reach his home.

The next question has reference to the validity of the tax deed, sought to be set aside. Counsel for appellant presents no argument in reply to the objections, urged against the tax deed, but rests his case solely upon the position, that complainant did not show himself to be in possession. The Superior Court, in its decree, found the deed to be invalid upon four or five different grounds. Without commenting upon all of them, we will only notice one, which, we think, was sufficient to set the deed aside. The judgment against the lot, for the non-payment of which it was sold at tax sale, on October 3, 1878, was for too large an amount. (McLaughlin v. Thompson, 55 Ill. 249.) It was rendered long before the amendments of 1879 to the Revenue act went into force, to-wit: at the July term 1878 of the county court of Cook county, and embraced forfeited taxes of several preceding years, as well as the taxes for the then current year. In ascertaining the amount, for which such judgment should be rendered, ten per cent interest was computed not only on the amount of tax due, but also upon the penalties, which had accumulated each year. The interest should have been limited to and computed only on the tax. We so held in The People ex rel. v. Gale, 93 Ill. 127.

The decree of the Superior Court is affirmed.

Decree affirmed.


author: Mr. Justice Mulkey

text:
    Andrew Dillman v. John W. Nadlehoffer.

      Filed at Ottawa May 15, 1886.

    1. Rescission of contract—placing party in slain quo. A bill by the purchasers seeking to rescind a contract for the purchase of certain letters patent of the defendant, and all his interest in a prior partnership composed of the two complainants and the defendant, including machinery, tools, and material for the manufacture of barbed wire, and all the debts due and owing the firm, on the ground of fraudulent representations of the vendor as to the value and validity of his patents and what he had been offered for them, is bad, on demurrer, if it does not contain an offer to reconvey the patents, or seek a settlement of the partnership matters, or in any manner to restore the defendant to his former rights. It is not sufficient to allege that the patents are infringements upon others, and worthless, without showing that complainants have ceased to use the patents, or their right to use them has been questioned.
    2. Same —fraudulent representations—what to be so regarded. General statements of a vendor, pending negotiations of sale, as to the value or price of the property proposed to be sold, or as to what he had been offered for it, though false, and made with an intent to deceive, and as an inducement to the sale, affords no ground of action, for the reason it is the purchaser’s folly to rely on them. This rule is founded on the maxims of caveat emptor, and that simple commendation is not binding.
    3. Ordinarily, statements of an indefinite or general character, made by either of the parties pending a negotiation for the sale of property, relating to its cost or value, or offers made for it, and the like, will not, in the absence of special circumstances, afford any ground for rescinding the sale, although false, and made with a fraudulent intent. But where the contracting parties, from any cause, are not on equal terms, and such representations are gross exaggerations, resulting in an unconscionable bargain, a court of equity will relieve the injured party.
    4. The statement of a vendor of letters patent, that the patents were new, useful, etc., made before the sale, as an inducement to buy, while in form is one of fact, is necessarily based, to a large extent, upon mere opinion; and when the vendee is as capable of judging as to the fact as the vendor, the falsity of such representation will afford no ground for avoiding the sale.
    5. Ordinarily, one is not liable for false representations respecting a mere question of law. So a statement by the holder of letters patent, that they are legal and valid letters, if untrue, is not cause for avoiding a sale of the letters, made in reliance on such statement.
    6. Same—■‘whether a purchaser may rely on representations of vendor. If there are facts and circumstances present at the time representations are made by a vendor to induce the purchase, sufficient to .put the purchaser upon his guard, or to cast suspicion on their truthfulness, and he neglects to investigate, he will not be relieved from his contract entered into without the care he should have exercised. So if the vendor represents to the buyer that he has an offer of a much greater price than he asks, the purchaser will have no right to rely on such representation, in the absence of some other artifice to prevent investigation.
    7. Same—the particular case. A, B and 0 formed a partnership for the manufacture and sale of barbed wire, A furnishing as his share of the capital the use of three certain improvements in barbed wire, of which he claimed to be the owner and inventor, and for one of which he had received a patent, and B and 0 the remaining capital. The business was sucessfully carried on for about a year, when A, having received a second patent, refused to carry on the business any lopger, and threatened to sell his patents. A then sold his patents, and all his interest in the partnership effects, for $23,000, to B and C, who continued the business for nearly two years, when they filed a bill to rescind the sale, on the ground of false and fraudulent representations on the part of A. The statements of A relied upon as fraudulent, were, that the letters patent were valid, and the invention therein described and claimed was new and useful, and had hot been in use before, and that he had been offered upward of $25,000 in cash for said two letters patent: Held, that in the light of the circumstances shown in the bill, the representations were not of such a character as to justify a rescission of the contract.
    Appeal from the Appellate Court for the Second District;— heard in that court on appeal from the Circuit Court of Will ,. county; the Hon. Josiah McRobebts, Judge, presiding.
    Messrs. House & Fey, and Mr. James E. Babb, for the appellant :
    False representations of a vendor as to the cost of the property, or its rental, will justify a rescission of the contract of sale, or render the party making it, liable. Ekins v. Tresham, 1 Lev. 102; Bagshaw v. Seymour, 4 C. B. (N. S.) 873; Clark v. Dickson, 6 id. 453; Bedford v. Bagshaw, 4 H. & N. 538; Sanford v. Handy, 23 Wend. 268; Page v. Parker, 43 N. H. 369; Hazard v. Irvin, 18 Pick. 105; Brown
      v. Castles, 11 Cush. 348; Medbury v. Watson, 6 Metc. 246; Leake on Contracts, 355; Van Epps v. Harrison, 5 Hill, 67; McFadden v. Robinson, 35 Ind. 34; McAleer v. Horsey, 35 Md. 439; Somers v. Richards, 46 Vt. 170.
    In an action for a willful or intended tort, the defendant can not reply the negligence of the plaintiff. Sanford v. Railroad Co. 23 N. Y. 346; Beach on Contributory Negligence, sec. 17; Railroad Co. v. Lee, 68 Ill. 580; Railroad Co. v. Donahue, 75 id. 108; Coal Co. v. Taylor, 81 id. 595; Railroad Co. v. Godfrey, 71 id. 508.
    The demurrer admits the allegation of the worthlessness of the patents, and being worthless, no offer to restore or re-assign them was necessary before filing the bill. National Bank v. Peck, 8 Kan. 660; Harlow v. Putnam, 124 Mass. 555; Jenkins v. Abbotts, 54 N. H. 447; Sexton v. Dodge, 47 Barb. 84; Bliss v. Negus, 8 Mass. 46; Cross v. Huntley, 13 Wend. 386; Babcock v. Case, 61 Pa. St. 427.
    That a patent is void for want of novelty, see Hotchkiss v. Greenwood, 11 How. 248; Hicks v. Kelsey, 18 Wall. 670; Heild v. Rice, 104 U. S. 755; Smith v. Nichols, 21 Wall. 112; Atlantic Works v. Brady, 107 U. S. 192; Terhune v. Phillips, 99 id. 592.
    The grant of an interest in or a right under a void patent is not a valid consideration for a promise by the grantee. Harlow v. Putnam, 124 Mass. 555; Fallis v. Griffith, Wright, (Ohio,) 303; Parrott v. Farnsworth, Brayt. (Vt.) 174; Cragin v. Fowler, 34 Vt. 326; Clough v. Patrick, 37 id. 421.
    Mr. G-. D. A. Parks, and Mr. Thomas H. Hutchins, for the appellee:
    The bill does not specify the infringements of the patents complained of. When the facts are within the knowledge of the pleader, and not so numerous or complicated as to require a general and compendious form of statement, he must, in cases where he seeks to aver fraud or failure of consideration, distinctly specify the material facts constituting his cause of action. Smith v. Brittenham, 98 Ill. 189 ; Sims v. Klein, Breese, 303; Primmer v. Patton, 32 Ill. 528; Newall v. Bureau County, 37 id. 253; Black v. McLogan, 15 id. 249; Parks v. Holmes, 22 id. 524; Cole v. Joliet Opera House, 79 id. 97.
    The alleged false statement of the appellee, that he had been offered $25,000 for his patents, does not belong to that description of false representations which are supposed by the courts to have effect upon the mind of the vendee of ordinary prudence. When coming from a third' person acting in collusion with the vendor, the rule is different. Noetling v. Wright, 72 Ill. 390; Mervin v. Arbuckle, 81 id. 501; Schramm v. O’Conner, 98 id. 539; Kenner v. Harding, 85 id. 275; Kerr on Fraud and Mistake, 84.
    As to the general doctrine of representation operating to avoid sales, reference is made to Walker v. Carrington, 74 Ill. 446; Allen v. Hart, 72 id. 104; Fauntleroy v. Wilcox, 80 id. 477; Eames v. Morgan, 37 id. 260; Miller v. Craig, 36 id. 109; Banta v. Palmer, 47 id. 99.
    Where a recital or stipulation in a written agreement is plain, and no mistake is alleged, it can not be contradicted, and virtually annulled by parol. Emery v. Mohler, 69 Ill. 221; Insurance Co. v. Morrison, 62 id. 243; Gibbons v. Bressler, 61 id. 112; Hollida v. Hunt, 70 id. 114; Weaver v. Fries, 85 id. 361.
    The representations alleged were inadmissible in evidence, as being directly repugnant to the tenor of the written contract. Robinson v. Majority, 28 Ill. 427; Packard v. VanCehaick, 58 id. 81; Strahl v. D’Even, 66 id. 79.
    A false affirmation by a vendor, of the legal validity of his title, does not come within the scope of the doctrine of false representations avoiding sales. Where the affirmations of the vendor relate to the value, prospects or title of the thing sold, in the absence of special. circumstances of fraud, the rule of caveat emptor applies. Cox v. Montgomery, 36 Ill. 396; Rogers v. Higgins, 57 id. 244; Allen v. Hart, 72 id. 104.
    The scienter is essential to constitute fraud in representations. Holdom v. Ayer, 110 Ill. 448; Tone v. Wilson, 81 id. 534.
    The bill is fatally defective in not offering to restore to the vendor, as a condition of rescinding the sale. Edmunds v. Meyers, 16 Ill. 207; Dowden v. Wilson, 108 id. 258; Smith v. Brittenham, 98 id. 188; Graff v. Simmons, 58 id. 443; Smith v. Doty, 24 id. 165; Linton v. Potter, 31 id. 107; Vining v. Leeman, 45 id. 249; Buchanan v. Horney, 12 id. 338; Edmunds v. Hildreth, 16 id. 214; Jennings v. Gage, 13 id. 610; Insurance Co. v. Botto, 47 id. 516; Underwood v. West, 52 id. 397.
    These patents might be of some value to appellee, and for that reason should he restored or offered to be restored. Taylor v. Hare, 4 Bos. & Pull. 201; Barrett v. Stanton, 2 Ala. 180; Chance v. Commissioners, 5 Blatchf. 441; Conner v. Henderson, 15 Mass. 319.
    The assignment of an invalid patent is a sufficient consideration for a promissory note, where there is no warranty. Oakley v. Boorman, 21 Wend. 588; Johnson v. Situs, 1 Hill, 606; Gilmore v. Akin, 118 Mass. 94; Walker on Patents, sec. 283.
    Mr. C. A. Hill, also for the appellee.
   Mr. Justice Mulkey

delivered the opinion of the Court:

This is an appeal from a judgment of the Appellate Court for the Second District, affirming an order and decree of the circuit court of Will county, sustaining a demurrer to and dismissing the complainant’s bill for want of equity, in a certain suit therein pending, wherein Andrew Dillman and Edward B. Iinowlton were plaintiffs, and John W. Nadlehoffer was defendant. The bill charges, in substance, that in the fall of 1882 the plaintiffs and defendant entered into co-partnership, under the firm name of John W. Nadlehoffer & Co., for the purpose of carrying on the business of manufacturing and selling barbed fence wire at Joliet, in said county; that defendant contributed, as his share of'the capital in said business, the use of three certain improvements in barbed wire, of which he claimed to be the owner and inventor, and which constituted the chief inducement to the formation of the partnership ; that defendant had already received a patent for one of said improvements, and had applications pending for the other two; that the partnership business thus established was successfully carried on, with defendant' as superintendent of the factory, until the 18th of April, 1883, when defendant refused to carry-on the business any longer, and was threatening to sell his patents, he having in the meantime obtained another on said improvements; that he represented to and assured plaintiffs that he was already offered by others $25,000 for the two patents, and that he should accept the offer if plaintiffs declined to purchase them; that under these circumstances, on the 18th day of April, 1883, defendant, by a written contract, signed and sealed by all the parties, for the consideration of $23,000, sold and transferred to the plaintiffs all his interest in the partnership, its business and effects, including machinery, tools, fixtures, goods, manufactured and not manufactured stock on hand, and all -debts and claims due the firm; that before and at the time of the sale and transfer to plaintiffs, by defendant, of his interest in the partnership, its business and effects, as just stated, as well as before and at the time of the commencement of the partnership itself, the defendant represented to plaintiffs that said improvements were his own invention, and that the ^patents issued thereon were genuine and valid, and that they did not conflict with or infringe upon the patents or inventions of any one, and particularly those controlled by the Washburn & Moen Manufacturing Company and J. L. Ellwood, or their licensees.

The truth of all these representations and statements is positively denied, and it is expressly charged in the bill, they were made with intent to deceive and defraud plaintiffs, and that, confiding in their truth, they were induced to act upon them, to their injury. The object of the bill is to restrain the collection of a balance due defendant on the sale of the patents and his interest in the partnership effects, and to recover back the amount received by him from plaintiffs under said sale and transfer.

While the bill seeks to set aside and rescind the contract of sale of the 18th of April, 1883, which operated not only as a transfer, to plaintiffs, of the patents, but also as a dissolution of the partnership, and as a conveyance to them of defendant’s entire interest in the partnership, as already seen; yet it does not offer to reconvey the patents, nor does it seek an accounting or settlement of the partnership business, or in any manner to restore him to his rights as they existed before and at the time of the dissolution of the partnership, nor is it claimed by the bill that the complainants have ceased to use the patents in conducting their business, or that their right to do so has ever been questioned by any one, although a 3rear and nine months and a half elapsed between the date of the transfer and the filing of the bill. As the complainants do not offer to reconvey the patents, it may be, for aught that appears from the bill, they have sold, in whole or in part, their rights in them to others, and possibly realized therefrom large profits.

We do not think, in the light of all. the facts disclosed by the bill, the simple averment that the patents were infringements upon other patents, and worthless, is a sufficient answer to the defects in the bill here pointed out. But as we do not intend to rest our decision upon the insufficiency of the bill in this respect, it is unnecessary to enter upon a discussion of this phase of the case. We prefer that the conclusion to be reached shall turn upon the main question discussed by counsel in the briefs, namely, whether the representations relied on, in the light of all the circumstances appearing on the face of the bill, are such a fraud as constitutes an actionable injury, cognizable in a court of equity.

The particular statements imputed to the defendant, and mainly relied on as a ground of relief, are but two, and, as expressed in the bill, are as follows : First, “that said letters patent were valid, and the invention therein described and claimed was new, useful, and had not been in use before, ” etc.; and second, that defendant “had then already been'offered upwards of $25,000 in cash for said two letters patent.”

Much of the argument seems to proceed upon the theory that a false representation, made in a given form for a fraudulent purpose, must necessarily be followed by the same legal consequences under all circumstances. Acting upon this idea, appellee collates and presses upon the attention'of the court a certain line of authorities recognizing the rule that general statements of a vendor, pending a negotiation of sale, as to the value or price of the property, or as to what he has been offered for it, though false, and made with an intent to deceive, and as an inducement to the sale, will afford no ground of action, for the reason it is the purchaser’s own folly to rely on such statements. This general rule is founded mainly on two maxims of the law, namely, caveat emptor, and simplex commendatio non obligat. On the other hand, appellant has collected, and presented in a very able and elaborate argument, another line of authorities, where like representations with respect to value or price, made under different circumstances, have been held to vitiate the sale, and entitle the injured party to relief. The latter class of cases establish and illustrate the exceptions and limitations to the general rule announced in the first.

Ordinarily, statements of an indefinite or general character, made by either of the parties pending a negotiation for the sale of property, relating to its cost or value, or offers made for it, and the like, ivill not, in the absence of special circumstances, afford any ground for avoiding the sale, although false, and made'with a fraudulent intent. Cooper v. Lovering, 106 Mass. 77; Mooney v. Miller, id. 102; Hemmer v. Cooper, 8 Allen, 334; Halbrook v. Conner, 60 Me. 578; Jennings v. Broughton, 5 DeG., M. & G. 134; Drysdale v. Mace, id. 107; Ellis v. Andrews et al. 56 N. Y. 83; Noetling v. Wright, 72 Ill. 390; Walker v. Carrington, 74 id. 446; Allen v. Hart, 72 id. 104; Clement v. Boone, 5 Bradw. 109; Fauntleroy v. Wilcox, 80 Ill. 477; Eames v. Morgan, 37 id. 260; Miller v. Craig, 36 id. 109; Banta v. Palmer, 47 id. 99; Kenner v. Harding, 85 id. 264; Bond v. Ramsay, 89 id. 29; Tuck v. Downing, 76 id. 71. Yet it is just as well settled, that where the contracting parties, for any cause, are not on equal terms, and such representations are gross exaggerations, resulting in an unconscionable bargain, equity will not hesitate to interpose in favor of the injured party. Jackson v. Armstrong, 50 Mich. 65; Haggarth v. Wearing, L. B. (12 Eq.) 320.

The case last cited well illustrates the subject under discussion. Miss Haggarth inherited from her brother, James Haggarth, an estate worth about £500. The first intimation she had of the fact was from the defendant, Wearing, who was quite familiar with the estate and its value, while the plaintiff knew nothing whatever about it. Wearing called on her at her own house, and after having informed her of her succession to the estate, he asked what she was going to do ivith it. She replied, “she did not know. ” He then told her there was an understanding between himself and her brother, to the effect that the latter was to make over the land to him, but that he had neglected to do so. She then asked him what the land was worth, to which he replied, “£100,—may be a trifle more or less.” Believing what he said to be true, and having no other knowledge or information on the subject, she told him she would let him have the property for the £100, and some time afterwards conveyed it to him,—or, rather, to his daughter, at his request,—for the £100. On learning the true value of the land, Miss Haggarth filed a bill against Wearing and his daughter to set aside the sale and conveyance, and the court decreed accordingly, holding the representation was fraudulent, notwithstanding it related to the value of the premises, and this decree was affirmed on appeal. We have no doubt of the correctness of the decision in that case. Several important matters entered into the question involved in it, which are worthy of special notice, as they are frequently to be met with in that class of cases. First, the parties were not contracting on equal terms,—that is, the purchaser knew all about the property, and the seller knew nothing about it; second, the vendor’s ignorance on the subject was well known to the purchaser; third, the statement as to the value of the land was made by him in response to a direct question asked him by her on that subject, and he was therefore bound to answer truly, if at all; fourth, the value, as fixed by him, was grossly inadequate.

It will be seen at a glance that the features we have specially noted as having a controlling influence in that case, do not appear at all in this, and hence it can not be regarded as an authority against the view taken by the lower courts in this case. The statement in the present bill, that the patents were new, useful, etc., while in form is one of fact, was necessarily based, to a large extent, upon mere opinion, about which, so far as we can perceive, the appellant was just as able to judge as the appellee. When this representation was renewed, at the time of the sale, the appellant had been manufacturing under the patents near a year, and it is but reasonable to presume that he had learned pretty much all that could be known about them, so far as their usefulness was concerned; and with respect to their legality or validity, that necessarily involved a mere legal opinion, about which one non-professional person could judge as well as another. It is well settled, that ordinarily one is not liable for false representations respecting a mere question of law. (Fish v. Cleland, 33 Ill. 238.) There are some exceptions to this rule, it is true, but this case does not fall within them.

There is another important matter to be specially noted in this connection. In all cases Avhere it is sought to hold one liable for false representations, the question necessarily arises, whether, under all the circumstances, the plaintiff had a right to rely upon them. In determining this question, the representations must be vieAved in the light of all the facts of which the plaintiff had actual notice, and also of such as he might have availed himself by the exercise of ordinary prudence. If, therefore, in thus considering the representations, it appears there were facts and circumstances present at the time they were made, sufficient to put the plaintiff upon his guard, or to cast a suspicion upon their truthfulness, and that he neglected to avail himself of the warning thus given, he would not afterwards be heard to complain, for the reason his own conduct contributed to the injury.

The written contract which is here sought to be set aside contains, among others, the following provision: “The said party of the first part, however, does not warrant the validity of either of said patents, or that they are not infringements of any other patents noAV existing, and the said party of the first part shall not be required to defend any suits boay pending, or hereafter to be instituted, wherein the validity of said patents is called in question.” Here the appellee expressly refused to warrant the validity of the patents, or that they were not infringements upon other patents, showing conclusively, whatever he may have theretofore said to the contrary, that he did not then positively know that the patents were valid, or that they were not infringements upon other patents, and that he Avas not willing to take any risk on either of these questions. Barely, 'this was enough to put appellant upon his guard.. It shows conclusively that the contingency of the patents ultimately proving to be invalid in law, was in the minds of both the contracting parties, and this was expressly provided for in the agreement. In such ease the seller .can not be held liable for a false representation, where nothing appears to show, as is the ease here, that the seller has be'en guilty of any artifice, or other means to prevent the purchaser from examining and judging for himself.

. We are also clearly of opinion, that under the circumstances of this case the appellant was not warranted in relying on the statement that appellee had already been offered $25,000 for the patents. Conceding that such- a representation, under some circumstances, might be a ground for equitable relief,' there are a number of reasons why it can not be so regarded in this case. In the first place, the statement is too general and vague. There is nothing in it to indicate when, where, or by whom it was made, or whether it was by a responsible or irresponsible person. Moreover, the very fact that appellee consented to accept of appellant $23,000, when another, according to the representation, as is claimed, was standing by ready to pay him $25,000, ought to have satisfied atiy reasonable person .that the representation could not be safely relied upon. But the case was still worse than this. The $23,000 was not given and -promised together for the patents alone, but also for appellee’s interest in the partnership and. the entire partnership effects. Under these circumstances, if the appellant placed any reliance upon the representation in question, as he claims he did, it was the sheerest folly to do so, and he has no right to complain.

■ We agree with the lower courts that the bill shows no ground for relief, and that it was therefore properly dismissed.

The judgment will be affirmed!

Judgment affirmed.


author: Mr. Justice Craig

text:
    Trustees of Schools v. Jacob Sheik et al.

      Filed at Ottawa October 5, 1886.

    1. Surety—undertaking strictly construed—technical defects in execution of official bends. The undertaking of a surety should be construed strictly, and he will be bound only in the manner and to the extent set forth in the obligation executed by him; but a surety on an official bond should not be allowed to avoid his undertaking upon a mere technical defect in the execution of the instrument.
    2. Same—bond not signed by the officer—liability of the surety—and, herein, as to the effect of a conditional signing by the surely. Sureties who execute an official bond on the promise of the officer that he will also execute the same before delivery, will be liable on the bond, notwithstanding the officer may fail to sign it before its acceptance and approval.
    3. Where, however, a school treasurer’s bond is signed by the sureties upon condition it shall not be delivered until executed by the treasurer, and the trustees of schools have notice of such condition, or notice of such facts pointing to such a condition as to put a prudent man on inquiry, before they accept the same, and they take the bond without performance of the condition, they will not be innocent holders, and therefore can not enforce the bond against the sureties.
    4. Same—right of surety to recover against the principal who did not sign the instrument. A surety who executes an official bond of another at his request, and upon his promise also to sign the same before delivery, may maintain an action against the officer for any sum he may be compelled to pay as such surety, notwithstanding such officer has never executed the bond.
    5. Contract—whether executed upon a condition. Where an officer, in procuring the signatures of sureties to his bond, promises them that he will sign the same before its delivery, which he fails to do, this will not constitute the execution of a bond upon condition, when the sureties rely upon the promise, and not upon a conditional delivery.
    Appeal from the Appellate Court for the Second District;— heard in that court on appeal from the Circuit Court of Will county'; the Hon. George W. Stipp, Judge, presiding.

      Mr. James Fbake, and Mr. B. W. Ellis, for the appellants :
    When a bond is required, and the form is required by statute, and the bond is voluntary, if the exact statutory form is not followed the bond will still be obligatory. Prichett v. People, 1 Gilm. 525; Fournier v. Faggott, 3 Scam. 347; Ballingall v. Carpenter, 4 id. 506.
    If not good as a statutory bond, it will be binding as a common law obligation. Todd v. Cowell, 14 Ill. 72; Coons v. People, 76 id. 383; Richardson v. People, 85 id. 495; Board of Education v. Fonda, 77 N. Y. 350.
    A bond is none the less obligatory upon those who do sign it, because others wTiose names are written in the body of the bond do not sign it. Burger v. Belsley, 45 Ill. 72; Keys v. Keen, 17 Pa. 330; Haskins v. Lumbard, 16 Me. 142; Scott v. Whipple, 5 Greenlf. 336; Gutter v. Witmore, 10 Mass. 444; Grumm v. School Directors, 41 Pa. 219; Redfield v. Show, 50 Me. 36; Town v. Kellett, 11 Ga. 286; Blume v. Barrows, 2 Ired. L. 338; State v. Lewis, 73 N. C. 138; Ward v. Chum, 18 Gratt. 809; Johnson v. Weatherwax, 9 Kan. 75; Smith v. Peoria County, 59 Ill. 414.
    The surety is none the less bound, because the one whose name was in the body of the bond, but who did not sign, would have been the principal. Loen v. Stocker, 68 Pa. 326; Slate v. Bowman, 10 Ohio, 445; Miller v. Ferris, 10 Upper Canada, 423; Williams v. Marshall, 42 Barb. 524; Herrick v. Johnston, 11 Metc. 34; Adams v. Bean, 12 Mass. 159; Parker v. Bradley, 2 Hill, 584; Wild Cat Bank v. Ball, 45 Ind. 213.
    ■ The name of Reitz in the premises of the bond, was not notice to the obligees that he was to sign it before it should become obligatory. Smith v. Peoria County, 59 Ill. 414.
    Messrs. Hill & Dibell, for the appellees:
    The liability of a surety is to be strictly construed. Stull v. Hance, 62 Ill. 55; Chilton v. People, 66 id. 501; Covington
      v. Smith, 78 id. 250; Trustees v. Otis, 85 id. 181; Cooper v. People, id. 417; Miller v. Stuart, 9 Wheat. 702; Martin v. Thomas, 24 How. 315.
    A bond is incomplete until signed by the principal. Curtis v. Moss, 2 Bob. (La.) 367; Villere v. Brognier, 3 Mart. 349; Fletcher v. Light, 4 Bush, 303; Smith v. Moberly, 1 B. Mon. 266; Hall v. Smith, 14 Bush, 604; Sharp v. United States, 4 Watts, 21; State Bank v. Evans, 3 J. S. Green, (15 N. J.) 155; Deardoff v. Fousman, 24 Ind. 481; Webb v. Baird, 27 id. 368; Dair v. United States, 16 Wall. 5; Wood v. Chum, 18 Gratt. 801; Fletcher v. Baxter, 11 Vt. 447; Johnson v. Kimball Township, 39 Mich. 187; Cawley v. People, 95 Ill. 258; Allen v. Marney, 65 Ind. 398; Ferry v. Burchard, 21 Conn. 602; Bean v. Parker, 17 Mass. 603; Russell v. Anable, 109 id. 72.
   Mr. Justice Craig

delivered the opinion of the Court:

This was an action of debt, brought by the board of school trustees, against appellees, upon the bond of Philip Beitz, a defaulting school treasurer. In the circuit court, the plaintiffs recovered a judgment, but, on appeal, the Appellate Court reversed the judgment, and decided that no action could be maintained on the bond against the sureties, and under this ruling no remanding order was entered. The bond ivas never executed by Philip Beitz, the principal, although his name was inserted in the condition and obligatory part of the" instrument. It was properly executed by appellees, as sureties, and was accepted and approved by the' board of school trustees.

Much reliance seems to be placed, in the argument, upon the finding of facts as incorporated in the judgment of the Appellate Court, it being claimed that the court found that appellees signed the bond upon the condition that it should not be delivered until it had been executed by the principal. ' We do not so understand the finding. The circuit court had found the facts, and recited in the record what that finding was, and this seems to have been adopted and sanctioned by the Appellate Court. Upon an examination of the finding of the circuit court, it will be seen that the court found, from the evidence, that Eeitz promised the sureties that he would sign the bond before it was delivered. This, however, does not constitute the execution of a bond upon condition that it should not be delivered unless executed by the principal. Indeed, the sureties seemed to rely upon the promise of Eeitz, and not upon a conditional delivery, as is apparent from the finding of facts by the circuit court, and from the decided weight of evidence. ■

It is also said that the liability of appellees should be construed strictly. The general rule is, that "the undertaking of a surety is to be construed strictly. He is only bound in the manner and to the extent set forth in the obligation executed by him. (Cooper v. The People, 85 Ill. 417.) But, adhering to this rule to its ultimate limit, are the sureties liable on the obligation which they executed? The statute required this bond to be executed and delivered to the trustees, for the purpose of keeping secure the public funds, and for the purpose of guarding against a public loss. In view of this fact, while we regard it proper to adhere to the rule of law indicated above, still a surety who has incurred an obligation of this, character should not be allowed to escape liability upon a mere technical defect in the obligation he may have executed, which does not go to the substance of his undertaking. Keeping this principle in view, we will examine the principal objections urged against the validity of the bond upon which the action is predicated.

It is claimed that where the name of an intended co-obligor appears upon the face of a bond, who has not executed it, the instrument is imperfect, and not binding. The decisions of the courts of the different States are not harmonious in regard to the binding effect of a bond upon the rights of sureties, where the bond has not been executed by the principal. In Bean v. Barker, 17 Mass. 603, where an action was brought against the sureties on a bail bond which had hot been executed by the principal, the court held that no action could be maintained. It is there said: “We think it essential to a bail bond that the party arrested should be a principal. It is recited that he is, and the instrument is incomplete and void without his signature. ” In a late case, (Russell v. Amiable, 109 Mass. 72,) where the principals in a bond constituted a firm, and the firm name was signed by one of the partners, the court held that the surety was not bound unless it appeared that the partner who signed the firm name had authority from his partner to do so. In Wood v. Washburn, 2 Pick. 24, an administrator’s bond, not executed by the administrator, was held not to be binding on the surety. In Ferry v. Burchard, 21 Conn. 602, a similar question arose, and the court held that a contract of a surety was of such a nature that there could be no obligation on his part unless the principal was also bound. In Brown v. Jetmore, 70 Mo. 228, (a late case, and one, too, quite similar to the one before us,) the sureties on a constable’s bond were held not liable for a default of the constable, upon the sole ground that the bond had not been executed by the principal. There are other cases holding a like view, and there are others which hold that the sureties may be held liable although the principal did not execute the instrument. State of Ohio v. Bowman, 10 Ohio, 445, was an action on a treasurer’s bond. The principal’s name was in the body of the bond, but he did not sign the instrument. The sureties defended on the ground that the principal had not signed it, but the court held that they were bound. Loen, Admr. v. Stocker, 68 Pa. 226, was an action against sureties on a bond of indemnity. The principal’s name had been signed without authority. ' In the decision of the case it was said: “Had the bond not been executed at all by the principal, though his name was mentioned as one of the obligors in the body of the instrument, it is clear that the surety could not avail himself of this fact as a defence. ” Herrick v. Johnson, 11 Metc. 34, Keyser v. Keen, 17 Pa. St. 330, Haskins v. Lambert, 16 Me. 142, Grim v. School Comrs. 51 Pa. 219, Williams v. Marshall, 42 Bar. 524, and Miller v. Ferris, 10 Upper Can. 423, announce a similar rule.

Johnson v. Township of Kimball, 39 Mich. 187, is a case in, its facts quite similar to the one under consideration. There, as here, the suit was against the sureties on the official bond of a defaulting treasurer. The bond was drawn, setting out the names of the-principal and sureties, but it was never executed by the principal. In the decision of the case the court said: “Our statute plainly contemplates.that the treasurer shall himself be a party to his own official bond. And while we are not prepared to hold that a bond knowingly and intentionally given without his concurrent liability will not bind the obligors, we are of the opinion that where he purports to be obligor, and does not sign the bond, there must be positive evidence that the sureties intended to be bound without requiring his signature, before they can be held responsible.” See, also, Hall v. Parker, 39 Mich. 287, where the same doctrine is announced.

We have given the authorities bearing on the question due consideration, and we are not inclined to adopt the view held by the courts, that a bond signed by the sureties without the signature of the principal may not be binding upon those who execute it, as was held in the case cited from Missouri, and other like cases. If the sureties saw proper to bind themselves without the principal executing the bond and becoming bound, we think they might do so, and their undertaking is one that rnay be enforced in the courts by an appropriate action. The fact that the principal obligor in this case failed to sign the bond, was a mere technicality, which ought not to affect the rights of any of the parties concerned. In what way are the sureties injured by the omission of the principal obligor to sign the bond ? IE they are compelled to pay the trustees any sum of money on account of the default of the treasurer, they can recover the amount back from him whether he signed the bond or not. So far, then, as they are concerned, they are in as good a position as if Eeitz, the treasurer, had properly executed the bond. If Eeitz is insolvent, a judgment in favor of the trustees, against him, could be of no benefit to the sureties. If, on the other hand, he is solvent, the sureties can collect from him whatever sum they may be required to pay in consequence of executing the bond. If the bond had been signed by the sureties upon condition that it should not be delivered to the trustees until executed by the treasurer, and if the trustees had received notice of such condition, or notice of such facts pointing to such a condition as might put a prudent person on inquiry, before the bond was approved, then they could not be regarded as innocent holders of the instrument, and entitled to maintain an action upon it. But the sureties, as appears, did not sign the bond on such a condition, but executed the instrument, and relied merely upon the promise of the treasurer that he would, before delivery of the bond, sign it. This was no more than a secret promise made by Eeitz, the treasurer, to those who signed as sureties, which could not be binding upon the trustees. They had no notice of the arrangement existing between the treasurer and the sureties, and they ought not to be affected by it.

In Smith v. Peoria County, 59 Ill. 414, where an action was brought upon an official bond against one of "the sureties, he set up as a defence that he signed the bond on condition that it should also be executed by one Cox, as co-surety, before it should be delivered; that Cox failed to execute the bond ; that, in violation of the agreement, the bond was delivered, without his knowledge or consent. On demurrer to pleas in which this defence was set up, the matters alleged were held not to constitute a valid, defence to the action on the bond, but other pleas in which the same facts were set up, and also that the plaintiff had notice, were held to constitute a valid defence to the action. Under the ruling in the case cited, if the bond in this ease was signed by appellees upon condition that it was not to be delivered until executed by the principal, and the trustees, at the time they accepted and approved the bond, had notice, no action could he maintained on the bond; but, as said before, no such defence was made out.

The judgment of the Appellate Court will be reversed, and ■the cause remanded to that court for further proceedings in conformity to this opinion.

Juclyment reversal.

Mr. Justice Scholeield, dissenting.