text:
      (Superior Court of Cook County. In Chancery.)

    Arthur H. Chetlain, et al. vs. Guiseppe De Grazie, et al.
    (January 7, 1907.)
    1. Trust Deed—Assignee of—Subject to Equities. The assignee of a mortgage or trust deed takes it subject to existing equities between mortgagor and mortgagee. (See note.—Ed.)
    2. Same—Notice to Grantor. The assignee of a mortgage or trust deed in order to protect his rights against secret equities between mortgagor and mortgagee, must give notice to the grantor in such mortgage. (See note.—Ed.)
    3. Same—Payments to Trustee in Trust Deed. Payments made to trustee by the mortgagor before maturity without notice from the holder of the note secured by such trust deed, will be applied as a credit on such note, in a bill to foreclose the trust deed.

      4. Debtor and Creditor—Creating Relation Between Trustee and Mortgagor by Recitals in Receipt for Money. A trustee by accepting payments on account of an indebtedness secured by a trust deed cannot create the relation of debtor and creditor between himself and the mortgagor by recitals in receipts given on account of such indebtedness.
    5.. Notice of Transfer of Note Secured by Trust Deed—Sufficiency of. A general notice from the holder of a note secured by a trust deed to pay a negotiable interest coupon to him is not a sufficient notice that he is also the holder of the principal note.
    G. Masters in Chancery—Successors of—Appointment of Special Commissioner. The court has the power to appoint a special commissioner to complete the unfinished business of a master in chancery where the term of office of such master has expired even though his successor has been appointed.

    Bill to foreclose trust deed. Cross bill to cancel same. Heard on exceptions to master’s report before Judge Willard M. McEwen. Superior court Gen. No: 231,730.
    Statement of facts.
    A bill was filed August 17, 1903, to foreclose a trust deed for $1,200 made by De Grazie September 18, 1899. The defendant answered the bill and filed a cross bill against the complainant to cancel a prior trust deed for the sum of $1,400 made September 22, 1894, and also a prior trust deed for the sum of $200 dated April 29, 1895, and also a trust deed for the sum of $200 dated September 18, 1899, made contemporaneously with the trust deed the complainants sought to foreclose. The cause was referred to Master in Chancery G. Fred Rush to take proofs and report his conclusions both as to the law and the facts to the court. The facts as disclosed by the report showed the following: The defendant De Grazie was an Italian immigrant who could neither read nor write and hardly understood the English language. On September 22, 1894, he applied to one Herman B. Wickersham, a lawyer and real estate and loan agent in the city of Chicago, for a loan of $1,400 and gave as security a trust deed upon certain real estate in Chicago. The trust deed matured five years after date. On April 29, 1895, the defendant De -Grazie applied for a further loan of $200 and gave as security a second trust deed upon the same real estate, maturing three years after date. De Grazie made payments upon these loans from time to time and on September 18, 1899, the $200 note secured by the second trust deed had been paid but the trust deed had not been released. On the latter date De Grazie executed two trust deeds, one for the sum of $1,200 and the other for -the sum of $200 in place of the $1,400 trust deed of September 22, 1894. In 1889 De Grazie had purchased the mortgaged premises from Wickersham and had paid the purchase price thereof in small installments from time to time as he was able to do. These payments weré made prior to 1894. Wickersham was the trustee in each of the trust deeds. After the execution of the two trust deeds in September, 1899, De Grazie made an agreement with Wickersham that he might make payments on his indebtedness in small installments as he was able and as he had done in his previous dealings with Wicker-sham*. De Grazie or some member of his family made payments upon the principal and in addition paid the interest upon both loans as the same matured. The evidence disclosed that De Grazie made the various payments at the office of Wickersham and in each instance received a receipt in the following form:
    “Received of Joe De Grazie $100 on which I agree to pay interest at 7 per cent per annum. Also received $2.00 interest to date.
    “Herman B. Wickersham,”
    The bill was filed to foreclose the trust deed of September 18, 1899, for the sum of $1,200. The evidence disclosed that De Grazie had up to the date of the filing of the bill, paid upon the entire indebtedness of $1,400 the sum of $1,000 and nil the interest accruing up to the time of the filing of the bill. De Grazie had no notice of any kind at the time of the making of the various payments to Wickersham that any person other than Wickersham was the owner or holder of any of the notes secured by the various trust deeds. On September 15, 1902, however, De Grazie received a letter from Frank E. Hayner, the former partner of Wickersham, which letter was as follows:
    “Mr. Guiseppe De Grazie,
    “856 W. Huron St.,
    “Chicago.
    “Dear Sir:
    “Your semi-annual interest on loan of $1,200, such interest amounting to $36, is due and payable at my office on Thursday, the 18th inst., on or before which day call and pay the same.
    “Frank E. Hayner.”
    On September 18, 1902, De Grazie went to the office of Wickersham with the letter received from Hayner, and being unable to read the same showed it to Wickersham. Wickers-ham tore the letter open and threw it into the waste basket .and told De Grazie to pay him (Wickersham). De Grazie thereupon paid him the interest and $200 on account of the principal and received a receipt in the form above described. The evidence disclosed that Wickersham remitted the full .amount of the interest due on September 18, 1902, to the complainant who was the owner of the interest note. In November, 1902, Wiekersham became insolvent, fled the country and became a fugitive from justice. A large number of indictments for embezzlement were thereafter returned against Wiekersham. The complainants showed that the notes secured by the trust deeds were transferred to them shortly after the execution of the trust deeds. It was contended by the complainants that the payments made by De Grazie to Wickersham should not be credited upon the notes secured by the several trust deeds for the reason that the complainants were-the owners of the notes and Wiekersham had no authority to receive any part of the principal of the debt. It was also-contended that the letter sent by Hayner to De Grazie on September 15, 1902, was notice to De Grazie that Wiekersham was not the owner of the notes secured by the trust deeds. The cause came before the court on exceptions to the report of G. Fred Rush, who was appointed a special commissioner-after his term of office as master in chancery had expired. The court held that an assignee of a trust deed or mortgage takes the same subject to existing equities between the-mortgagor and the mortgagee; that the assignee of a mortgage or trust deed, in order to protect his rights against secret equities between mortgagor and mortgagee, must give-notice to the grantor in the mortgage that he is the owner and holder of the note; that in the absence of such notice, payments made to the trustee in the mortgage before maturity, will be applied on the note so secured in a bill to foreclose-the trust deed. It was also held that the notice from Hayner to pay the interest due to him was not a sufficient notice that he was the owner or holder or the agent of the owner or holder-of the principal notes.
    After the proofs before the master had been closed and before he had made up his report, the master’s term of office-expired by its own limitation. The defendants contended that under the statute of Illinois (vol. 2, Starr & Curtis Rev. Stat., chap. 90, sec. 8) the unfinished business of such master-should be completed by his successor in office without an order of court. The court, however, appointed the master before-whom the evidence had been heard, a special commissioner to complete his report.
    The following decree was entered by the court:
    This cause coming on to be heard upon the bill of complaint of the said complainants, Arthur H. Chetlain, successor in trust of the trust deed dated the 18th day of September, 1899, and recorded in the recorder’s office of Cook county, Illinois, on November 3rd, 1899, in book 6,796 of records on page 271 as document number 2,839/30, and Alice A. Havemeyer and the answers of Guiseppe De Grazie, Rocella De Grazie, James Baraglia and Samuel H. Pratt and the joint and several answer-of Frank E. ITayner, successor in trust to the trust deed dated September 22nd, 1894, and recorded in the recorder’s office of Cook county, Illinois, in book 4,571 of records at page 570, Arthur H. Chetlain, successor in trust in the trust deed dated the 18th day of September, 1899, and recorded on the 3rd day of November, 1899, in the recorder’s office of Cook county, Illinois, in book 6,796 of records at page 273 thereof and upon the respective replications of complainants thereto, and also upon the cross-bill of complaint of Guiseppe De-Grazie "and Rocella C. De Grazie, cross complainants, and the cross answers of James Baraglia and Samuel H. Pratt and upon the joint and several answers of Arthur H. Chetlain, successor in trust in the trust deed dated September 18, 1899, and recorded in the recorder’s office of Cook county, Illinois, on book 6,796 at page 271 and Alice A. Havemeyer and the joint and several answers of Frank E. Hayner, successor in trust in the trust deed Sept. 22, 1894, and recorded in the recorder’s office of Cook county, Illinois, in book 4,751 at page 570 thereof, and Arthur H. Chetlain, successor in trust in the trust deed dated Sept. 18, 1899, and recorded in the recorder’s office of Cook county, Illinois, in book 6,796 at page 273 thereof, to the cross-bill of Guiseppe De Grazie and Rocella C. De Grazie, and upon the respective replications of the cross-complainants thereto, and upon the proofs and exhibits herein, and the report of G. Fred Rush, special commissioner of this court, and upon the exceptions of Guiseppe De Grazie and Rocella C. De Grazie to said special commissioner’s report and upon exceptions of Arthur H. Chetlain and Alice A. Havemeyer to said special commissioner’s report, and it appearing that all the parties have filed their respective answers to the bill and cross-bill herein and are properly before the court. 'The court finds that it has jurisdiction of the subject matter •and of the parties hereto, and that the bill of complaint and cross-bill of complaint are at issue.
    The court further finds that the $200 promissory note described in the bill and cross-bill of complaint dated April 29, 1895, secured by trust deed of same date upon lot sixty-four (64) in the resubdivision of block three (3) in Wright and Webster’s subdivision of the northeast quarter (N. E. 1-4) of section twelve (12) township thirty-nine (39) north range thirteen (13) east of the third principal meridian (except the ■east sixty-seven (67) feet of said block) together with all buildings and improvements thereon and to be thereafter placed on, has been paid in full and should be released and •satisfied of record.
    The court further finds that the $1,400 promissory note described in the bill and cross-bill of complaint, dated September 22, 1894, and secured by trust deed upon said premises hereinbefore described has been fully paid and satisfied by the receipt and acceptance of a $1,2Q0.00 note dated September 18, 1899, which was given for and accepted by said complainant in satisfaction of the balance remaining due on said $1,400 note at the time of the delivery of said $1,200 note, should be released and satisfied of record.
    The court further finds that the promissory note for $200 dated September 18, 1889, secured by trust deed upon said premises hereinbefore described and known as the James Ba~ raglia note herein has been paid in full, and that said trust deed should be released and satisfied of record.
    The court further finds that the $1,200 promissory note described in the bill and cross-bill of complaint dated Sept. 18, 1899, held by defendant Samuel H. Pratt, is without any consideration as to complainants and defendants herein, and is a forgery and is null and void.
    The court further finds that the defendant Guiseppe De Grazie and Eoeella C. De Grazie are entitled in equity to a credit of $800 on the $1,200 promissory note described in the bill and cross-bill of complaint held by complainant Alice A. Havemeyer, dated September 18, 1899, and secured by trust deed upon the premises hereinbefore described.
    The court further finds that complainants exceptions to said special commissioner’s report are not well taken and should be overruled.
    The court further finds that the exceptions of Guiseppe De Grazie and Eoeella C. De Grazie to said special commissioner’s-, report are well taken and should be sustained except as to exceptions 3, 6, 12, 13, 15, 20, 21 and 22, and as to those exceptions the same should be overruled.
    The court further finds that the said payments aggregating-$800 on said $1,200 note were payments made to Herman B. Wickersham, the trustee in the various trust deeds hereinbefore described; that said payments were made by the defendant De Grazie or some member of his family to said Wicker-sham without any notice whatsoever from the legal holder and owner of the various notes secured by said trust deeds hereinbefore described, and were rightly and properly made to said Herman B. Wickersham.
    The court further finds that the complainant, Alice A. Havemeyer, the owner and holder of said $1,200 promissory-note dated September 18, 1899, has received the full interest on the principal sum up to September 18, 1902, from said Herman B. Wickersham, the trustee in the various trust deeds hereinbefore described, and that complainant, Alice A. Havemeyer has received as interest on the said promissory note for-$12,000, dated Sept. 18, 1899, the sum of $216 and that said complainant was entitled to receive only the sum of $184.90 as interest for the reason that the principal amount had been reduced from time to time, and that by reason of such excess,, the entire interest on the said note up to the 1st day of January, 1904, has been paid.
    The court further finds that the defendants, Guiseppe De-Grazie and Eoeella O. De Grazie were not in default in the payment of either the principal or interest at the time the-bill was filed in this ease, to-wit: August 17, 1903,

      The court further finds that complainants bill to foreclose said trust deed was prematurely filed, and that none of the material allegations in said bill have been proven, and that said bill is without equity.
    The court further finds that the defendants, De Grazie and Eoeella C. De Grazie are now indebted to the complainants in the sum of $14.00 for insurance placed upon said premises together with seven per cent, interest thereon from the 12th day of November, 1903, to date, in accordance with the provision of said trust deed sought to be foreclosed.
    The court further finds that the defendants De Grazies are indebted to the complainants in the sum of $400 with interest thereon from the 1st day of January, 1904, to the date of this decree at seven per cent, per annum from which amount must be deducted the sum of $78.10 special commissioners’ fees paid in this ease by said defendants DeGrazies and also the sum of $3.00 appearance fees paid in this case by said defendants De Grazies.
    The court further finds all the material allegations in the cross-bill of complaint are true and have been proven; that the equities in this ease are in favor of cross-complainants.
    It is further ordered, adjudged and decreed that the exceptions of Guiseppe De Grazie and Eoeella G. De Grazie to said special commissioner’s report be and they are hereby sustained except as to exceptions 3, 6, 12, 13, 15, 20, 21 and 22 and as to those exceptions each and every of the same is hereby overruled.
    It is further ordered, adjudged and decreed that the complainants’ bill of complaint be and the same is hereby dismissed for want of equity at the costs of complainants herein.
    It is further ordered, adjudged and decreed that complainants’ exceptions to said special commissioner’s report be and the same are hereby overruled.
    It is further ordered, adjudged and decreed that defendants De Grazies are indebted to said complainant, Alice A. Havemeyer in the sum of $400 together with interest thereon from the 1st day of January, 1904, to date of this decree upon a promissory note for $1,200 dated September 18, 1899, secured by a trust deed upon the premises hereinbefore described, and are also indebted to said complainant Alice A. Havemeyer, the sum of $14.00 for insurance together with interest thereon at seven per cent, from the 12th day of November, 1903, to the "date of this decree from which sums must be deducted the sum of $78.10 special commissioner’s fees paid in this case by said defendants De Grazies and also the further sum of $3.00 appearance fees paid in this case by said defendants De Grazies. And that upon said defendants Guiseppe De Grazie and Rocella C. De Grazie or either of them paying- to the said Alice A. Havemeyer said sums after said deductions as aforesaid, that said Arthur H. Chetlain, successor in trust, shall execute and deliver to said Guiseppe De Grazie and Rocella C. De Grazie a good and sufficient release deed of said trust deed dated Sept. 18, 1899, upon said defendants De Grazies paying to said Arthur H. Chetlain, successor in trust, his reasonable fee therefor.
    It is further ordered, adjudged and decreed that said promissory note for $200, dated Sept. 18,1899, has been paid in full, said note is known as the “Baraglia promissory note,” that said Arthur H. Chetlain successor in trust of said trust deed dated Sept. 18, 1899, securing said promissory note of even date for $200, known as the Baraglia promissory note herein shall execute and deliver to said defendants De Grazies, a good and sufficient release deed of said trust deed, dated Sept. 18, 1899, upon said defendants paying to said Arthur H. Chetlain, successor in trust his reasonable fee therefor.
    It is further ordered, adjudged and decreed that said promissory note for $1,400, dated Sept. 22, 1894, has been paid in full and that Frank E. Ilayner, successor in trust in said trust deed dated Sept. 22,1894, securing said promissory note of even date for $1,400, shall execute and deliver to said Guiseppe De Grazie and Rocella C. De Grazie a good and sufficient release deed of said trust deed dated, Sept. 22,1894, upon said defendant paying to said Frank E. Hayner, successor in trust, his reasonable fee therefor.
    It is further ordered, adjudged and decreed that said promissory note for $200, dated April 29, 1895, has been paid in full and that said Arthur H. Chelain, successor in trust, of said trust deed, dated April 29th, 1895, securing said promissory note of even date for the sum of $200, shall execute and deliver forthwith to said Guiseppe De Grazie and Rocella C. De Grazie a good and sufficient release deed of said trust deed, dated April 29th, 1895, upon said defendants paying to said Arthur H. Chetlain, successor in trust, his reasonable fee therefor.
    It is further ordered, adjudged and decree that the promissory note held by defendant Samuel H. Pratt, is without consideration as to the complainants and defendants herein and is a forgery and is null and void.

      ■Frank E. Eayner, solicitor for complainants.

      Carey W. Rhodes, solicitor for De Grazie et al. defendants o and cross-complainants.

      Morris St. P. Thomas> solicitor for Samuel H. Pratt, defendant.

      Donald L. Morrill, solicitor for James Baraglia, defendant.

       But see McLain v. People, 85 Ill. 205.—Ed

   NOTE.

I.

The assignee of a mortgage or a trust deed takes it subject to existing equities between the mortgagor and the mortgagee. McAuliffe v. Reuter, 166 Ill. 491; Buehler v. McCormick, 169, Ill. 269; Olds v. Cummings, 31 Ill. 188; Chicago Title & Trust Co. v. Aff, 183 Ill. 91; Bouton v. Cameron, 205 Ill. 50; S. C. 72 App. 264; Elser v. Williams, 104 Ill. App. 238; Romberg v. McCormick, 194 Ill. 205; Napieralski v. Simon, 198 Ill. 384; Humble v. Curtis, 160 Ill. 193; Thompson v. Shoemaker, 68 Ill. 256; Summer v. Waugh, 56 Ill. 531; Sroelowitz v. Schultz, 86 Ill. App. 341.—Ed.

II.

The assignee of a trust deed or mortgage in order to protect his rights must give notice to the grantor. Napieralski v. Simon, 198 Ill. 384; McAuliffe v. Reuter, 166 Ill. 491; Sheldon v. McNall, 89 Ill. App. 138; Buehler v. McCormick, 169 Ill. 269; Williams v. Pelley, 96 Ill. App. 346; Sroelowitz v. Schultz, 191 Ill. 249; &. C. 86 Ill. App. 341.—Ed.


source: Caselaw Access Project

author: per curiam:

license: Public Domain

text:
      (Supreme Court of Illinois.)

    Robert W. Hyman. vs. James H. McVeigh.
    (January 21, 1878.)
    1. Statute of Limitations—When Cause of Action Accrues. The words “when a cause of action has arisen,” as they occur in the statute of limitations pleaded, mean when jurisdiction exists in the courts of a state to adjudicate between the "parties upon the particular cause of action, or in other words when the plaintiff has the right to sue the defendant in the courts of the state, upon the particular cause of action without re- ' gard to the place of its origin.
    2. Pleas—Statute of Limitation. Pleas of the statute of limitations of a foreign state are not subject to demurrer in not alleging the continued residence of the defendant in the foreign state, it not appearing that any exception is macle by the law of such foreign state as pleaded as against those who depart the state after the ' statute of limitations begins to run. If the statute makes such an exception the proper course is to reply, and not to demur.
    Appeal from the Circuit Court of Cook County.
    For statement of facts see opinion.

      F. H. Kales, solicitor for appellant.

      8. M. Packard, solicitor for appellees.
   Opinion

per curiam:

The sufficiency of the pleas demurred to in this ease is determined, in the main, by our decision in Hyman v. Bayne, 83 Ill. 256. An able and interesting argument has been listened to in the present case, with pleasure, contending for a different construction of the statutes than the one given in that case, but it has failed to satisfy us that we should overlook our former opinion and adopt the views contended for by appellees.

The defense set up by the pleas in respect to the residence of appellant in the state of New York, and the limitation laws of that state, in our opinion, is not essentially different in principle from that set np by the pleas in respect to his residence in Maryland, and the limitation laws of that state.

The words “when a cause of action has arisen,” as they occur in the statute pleaded, should be construed as meaning, when jurisdiction exists in the courts of a state to adjudicate between the parties upon the particular cause of action, if properly invoked—or in other words, when the plaintiff has the right to sue the defendant in the courts of the state upon the particular cause of action without regard to the place where the cause of action had its origin. This was the view taken in Hyman v. Bayne, supra, although not discussed at length in the opinion, and we do not conceive that the question need be discussed now.

In respect to the constitutional objection to the construction we have given the statute, we deem it only necessary to add that the recent case of Chemung Canal Bank v. Lowery, 93 U. S. 72, is in harmony with what we said in that respect, in Hyman v. Bayne, supra.

As to those pleas that do not aver the continued residence of the plaintiff in the particular foreign state it does not appear that any exception is made by the law of the state as pleaded, as against those who depart the state after the statute of limitations begins to run. This the demurrer admits. If the statute makes such exception, appellees instead of demurring should have replied to it.

"We are of the opinion the court below erred in sustaining demurrers to the several pleas of appellant, in the present indicated in Hyman v. Bayne, supra, and herein alluded to, and for this error the judgment is reversed and the cause remanded.

Reversed and remanded.

NOTE.

The above case though unreported is a leading case which has been cited with approval in the following cases: 142 Ill. 449; 157 Ill. 541; 14 Ill. App. 62; 36 Ill. App. 376; 39 Ill. App. 597; 46 Ill. App. 115; 80 Ill. App. 258; 104 Ill. App. 201.—Ed.


author: Holdom, J.: Holdom, J.:

text:
      (Superior Court of Cook County.)

    Illinois Glass Company vs. Chicago Telephone Company.
    (Opinion of May 19, 1905.)
    1. Telephone Companiesi—Duty to Furnish Modern Equipment at Rates Fixed by Ordinance. Where a telephone company accepts an ordinance under which it is permitted to use the streets of the city for the purpose of placing its poles and wires, and it is provided in such ordinance that the company shall not increase the rates then established for telephone service, the company is bound to furnish telephones of modern construction and appliances at the ordinance rate.
    2. Duress —■ Public-Service Corporation — Payment of Excess Charges to—Right to Recover Back. Where a subscriber demands a telephone and he cannot procure the same without yielding to an extortionate demand and signing a contract to pay an excessive rate, and he does so yield, this constitutes duress and the excess may be recovered back in an action for money had and received.
    '3. Duress—Common-Law Doctrine—Growth of. The doctrine of duress at common law was confined originally to duress of the person, but subsequently it was extended to include duress- of goods. Under the modern decisions it includes “moral duress” or duress of business necessities.

      4. Same—What Constitutes—Existence of Alternative or Other Legal Remedy as Bar to Recovery of Money Paid. Where a party for a number of years uses an inferior class of telephone service which is usable to the extent that it is possible to carry on a conversation subject to interruption, contracts for a higher grade of service at a rate in excess of that fixed in a city ordinance, the payment of such excess cannot be considered as involuntary where the party paying was not forced to have the better service and it could have obtained relief by applying for an injunction.
    "5. Duress—Only Exists Where There is no Alternative. Where a party is called upon to submit to an illegal demand and he • has no other alternative but to submit, such payment cannot be considered as voluntary and he may recover back such amount.
    fi. Same—Necessity of Protest. Where a payment is made under duress, and a protest would be unavailing, no protest need be made. But if a protest would be availing to stop the payment of the money, a protest would be necessary.

      (Opinion of August 24, 1906.)
    1. Telephone Companies—Rates fob Telephone Service—Right to Increase on Account of Improved Apparatus. Where a city-grants to a telephone company by ordinance the right to transact its business in the city and. it is provided in such ordinance that the telephone company shall not increase to its present or future subscribers the rates then established for telephone service, such company has no right to thereafter increase its rates even though it furnishes an improved service not known at the time of the adoption of the ordinance.
    2. Same—Duty to Furnish Improvements. Under such ordinance the telephone company cannot be required to adopt improvements in its servide or equipment, but if it does so it is restricted to the rate provided for in its ordinance.
    3. Duress—What Constitutes—Payments Made to Public-Service Corporation in Excess of Legal Rate. The plaintiff for a number of years made payments for an improved telephone service in excess of the rates fixed by ordinance. The plaintiff had previously had in his place of business an inferior type of telephone service at the ordinance rate. Both parties believed at the time of making the contract for such excess payment that the telephone company had the right to demand the excess payment. Nothing was said about the relative rights, of the parties at the time the contract was made. The defendant was first approached by the plaintiff and the matter was: concluded without protest on the part of the plaintiff and without any threat on the part of defendant to disturb the existing telephone service then in operation in plaintiff’s place of business. The evidence did not disclose an immediate necessity for the improved telephone service as the inferior service was usable and practically efficient. Held that such payments were voluntary and could not be recovered back.
    4. Duress Defined. Duress exists when one by the unlawful act of another is induced to make a contract or perform some act under circumstances which deprive him of the exercise of free will.
    5. Same-^Consciousness of Illegality of Demand. To constitute an involuntary payment both parties must have a consciousness that the demand is unlawful at the time of such payment.
    6. Same—Exercise of Free Will. And where plaintiff in making excess payments was under no immediate necessity of doing so and where nothing was said or done which deprived it of the exercise of its free will, the payments will be considered as voluntary.
    7. Same—Successive Payments. Where payments are made successively for nearly five years without any discussion or contention of any sort, and without any protest, or suggestion that the amount was excessive, no recovery can be had.

      8. Same—When Payments Abe Voluntary—Knowledge of Rights. Money voluntarily paid, without protest, and where there is not present the element of duress, cannot be recovered back, where it appears that the parties either knew or were chargeable with knowledge of their rights, and of the unlawful exaction at the time of payment. This is the rule in tax, water and gas cases without exception.
    3. Same—Ignorance of Legal Rights—Alternate Remedy. Where plaintiff mistook his legal rights under an ordinance, and in ignorance of the law affecting the contract, freely, tamely and unprotestingly entered into it, and in faith of it uncomplainingly and voluntarily continued for nearly five years to pay the excessive contract price, a condition which could have been relieved by protest or by the aid of an injunction, no recovery could be had.
    10. Municipal Ordinances—Ignorance of, One of Law. An ordinance granting to a telephone company the right to use the streets of the city,—in which ordinance it is provided that the telephone company shall not increase its established rates for telephone service—has the force of law within the limits of the municipality, and ignorance of the provisions of such ordinance is ignorance of law and not of fact.
    11. Maxims—Ex .¿Equo et Bono. The maxim of ex wquo et tono is one of equity.
    12. Same—Recovery of Money Which Defendant in Equity and Good Conscience Ought not to Retain. A recovery can not be had in an action at law for money paid merely because the defendant ex wquo et tono ought not to retain it. But this maxim may receive an additional exemplification in equity.
    Action of assumpsit. Heard before Judge Jesse Holdom and a jury. Verdict directed for defendant at close of plaintiff’s evidence, Gen. No. 231,203.
    Motion for new trial overruled
    May 19, 1905.
    August 24, 1906.
    Statement of facts.
    The plaintiff, Illinois Glass Company, a corporation, commenced its action in assumpsit against the Chicago Telephone Company, on July 17, 1903, to recover charges for telephone service rendered it by defendant in excess of rates fixed therefor in defendant’s ordinance. The declaration consisted of the common counts. The defendant pleaded the general issue and the five year statute of limitations. A trial was had before the court and a jury, and at the close of plaintiff’s evidence the court, instructed the jury to find the issues for defendant. A motion for a new trial was overruled, and judgment was entered against plaintiff.
    The defendant was organized in 1884 to carry on a telephone business. On January 4, 1889, the city council of the city of Chicago passed “ an ordinance authorizing the Chicago Telephone Company to construct, maintain, and operate a line of telephone wires in the city of Chicago.”
    By section 1 of the ordinance permission and authority were granted defendant to construct, maintain and operate in the public streets and alleys of the city of Chicago, for twenty years, a line or lines of wires, or electrical conductors for the transmission of sound and signals only by means of electricity.
    Section 6 provided: “Said company, during the term for which this ordinance is granted shall not increase to its present or future subscribers the rates for telephone service now established. And provided, also, that with the acceptance hereinafter required, there shall be filed by said company a schedule showing the rates charged by said company for telephone service at the date of the passage of this ordinance within the limits of the city of Chicago. ”
    The schedule of rates provided: “Within the blue lines on the map of Chicago attached hereto and made a part hereof, we charge $125 per annum for telephone instruments connected by wire with our exchange, for the business use of the lessee and his employes alone.”
    The evidence disclosed that the defendant had a complete monopoly in the city of Chicago in the telephone business; that in 1889, the time the ordinance in question was passed, the defendant had but one kind of telephone service, known as a grounded circuit; that in 1893 it introduced a greatly improved service known as a metallic circuit service which to a large extent was free from inductive disturbances to- which the grounded circuit was subject; that the legal charge under the ordinance within the “blue line” district, for a business telephone was $125 per annum; that the defendant charged $175 per annum for its metallic circuit service; that it was the custom of defendant to require every one of its subscribers to sign a contract; that if any person desired a metallic circuit business telephone within the “blue line” district he was obliged to pay $175 per annum therefor; that the plaintiff also leased from the defendant an extension telephone for which it paid at the rate of $50 per annum which was later reduced to $30 per annum; that such extension telephones were not furnished in connection with grounded line instruments; that all payments for telephones were required to be made quarterly in advance. The plaintiff originally had a grounded circuit telephone but experienced considerable trouble in hearing and getting connections; that plaintiff was informed by the defendant that if they wanted better service they would have to get a metallic circuit telephone and would have to pay therefor $225 for such telephone and an extension. The plaintiff for the purpose of getting better service and procuring an extension telephone, signed a contract for the new equipment and paid the excessive rate for five years, and then sued to recover back such excess. A large amount of evidence was introduced to show the unsatisfactory nature of the grounded line service and the superior service rendered by the metallic circuit.
    At the close of the plaintiff’s case the court instructed the ■ jury to find the issues for the defendant. A motion for a new trial was thereafter overruled and judgment rendered on the verdict. Two opinions were rendered, the first upon the motion of the defendant to direct a verdict and the other upon the motion for a new trial.

      Isaac II. Mayer, of Moran, Mayer & Meyer, attorney for plaintiff.

      Charles S. Holt, of Holt, Wheeler & Sidley, attorney for defendant.
   (Opinion rendered May 19, 1905.)

Holdom, J.:

(orally)

I have listened attentively to this very interesting and protracted argument of counsel for both sides in this case with a ■ great deal of interest. It is not a question that is entirely free from doubt, so far as the decisions which we have been over are concerned, and there are cogent reasons in law for the position taken ■ and contended for by the champion of either side in this court.

It is not only a very interesting question, but it is a very important question on principle, on the rights of the parties and'more especially as to the rights of others whose interests underlie this particular case, which, being not measured by the underlying interests would be of no importance and this extended investigation, I am free to say, would not have been indulged by the court.

In judicial history, a ease akin to this, following the same principles, on the equity side of the court, is the Illinois Manufacturers’ Association case against this defendant, reported in 106 Ill. App. 54. I want to say now, before I say anything else, that I feel constrained to hold that wherever the principles enunciated in this case are involved and are applicable here in the case at bar, I am bound. So I may say that in the logical reasoning of the decision of the learned chancellor at nisi prius, Judge Tuley, so far as that opinion is not clearly obiter, I am bound.

I am of the opinion that under the ordinance of the city of 1889, section 6, accepted by the defendant, that they were bound to furnish telephones of modern construction and appliances to the subscribers for $125.00 per annum and they are not under the law, under that ordinance, entitled to charge $175, the contract price agreed upon by the parties in the case at bar.

The motion is to instruct the jury .on the evidence of the plaintiff to find the issues for the defendant, and that is upon the theory that the questions of fact resolve themselves into one of law, namely that the plaintiff is not, under the evidence, with all its legitimate intendents to be drawn from it, entitled to recover. As I have looked upon this case the last few days, and I have not changed my opinion yet, that there lies at the foundation of this case, and it is the pivotal and turning point, the fact of whether or not this evidence establishes the claim of duress, and that aside from any question •of protest. •

Now, as I have said, it is not easy to agree upon legal principles. You gentlemen, sitting in consultation at times with ■other counsel associated with you, sometimes against you, where you are seeking to attain to a legal conclusion on facts, which you are ready to admit in order to obtain a settlement, will agree npon the law bnt will very much disagree on its •application, even to the agreed facts. So, while we haven’t much disagreement about the law, the difficulty is in applying the legal principles to the facts of the case in hand. There are no eases that on the facts are akin to this case at bar. I am free to admit that had this plaintiff gone at the time it did, in 1897, to the telephone company, and then being without a telephone, had said “We want a telephone, we have a right to this telephone, we want the metallic circuit, we want it for $125 a year,” and the company had refused and said “No, we •can’t do that, the service has been improved since the passage of the ordinance; that that wasn’t the service contemplated by the ordinance, we have got the grounded service which we will furnish you, and that was the kind of service contemplated by the ordinance” and then the plaintiff had yielded to the demands so further made by the telephone company and had signed the contract for $175.00 a year, I think I should hold without any sort of hesitation that that was dnress.

Now, the old doctrine of duress whs first to the person, and then to the goods and then there has been interpolated by the more modern decisions, moral duress, which is construed to mean business necessity, and this case, if it falls within either of these definitions, must fall under the latter one of moral ■duress.

Graham is the only witness that testifies in relation to what was said and done at the time of the making of this contract for the metallic circuit service and he did that in consultation with Mr. Levis. They had a telephone which had proven unsatisfactory, sufficient, with trouble, to conduct their telephone business over it. There were these interruptions; Graham seemed to complain more about the “busy” buzz than anything else, but I think that is immaterial. I think this evidence shows that service was growing worse and that they needed the advantage of the development of the science of the telephone and the telephone system and they really needed, for comfort, the metallic circuit service. He was willing, under the instructions of his superior officer in the plaintiff' corporation, to make the bargain he did make. Levis said “Do the best you can, if you have to do it, do it.” I don’t want to be understood as intimating that that is a good contract, because the 106 Ill. App. 54 says it is not, and I agree with it. It is only pertinent to the question of duress. In some of these cases, one of them particularly, it has been stated' that the courts differ in relation to this question of duress, but in order to constitute duress, the parties all agree the payment must be involuntary, and that is the question here. Was there an alternative way out of the difficulty? Were they forced to have the metallic circuit service? Were they at the mercy, as it were, of the telephone company? Was there this moral duress in relation to their business that their necessities-were such that they must have this metallic service and therefore had no time to stop and straighten out the difficulties and demand their rights? In other words, couldn’t they have gone on using the grounded service for just a little bit longer while they applied to the court for an injunction, as was done five years afterwards ? That was done and they could have-done it just as easily in the first place as was done by others five years afterwards. In these eases that hold there was duress are the cases of the gas company, a monopoly, a public-utility corporation; there was no alternative. It must be that gas or no gas. In the water case, the case of the water company of the city of Chicago controlling the water works, that is a monopoly business, water is a necessity and our forefathers got along with very little water, but we need a good deal and socially water is a necessity; therefore in the Northwestern Mutual Life Insurance Company ease, when they took that property under their mortgage and found resting upon it the claim of the city for back water taxes and where the city said “Unless you pay, we will disconnect this water-service,” that was duress. They had no alternative; they must have water; that was a necessity; they could only get it from the city and therefore there was duress and money paid' in that way could be recovered, because it was involuntary.

Where there had been unjust discrimination, in freight or where the freight rates were unreasonable, in these railroad cases, you will find in each one of those eases there was no-alternative; whether paid under protest or not, the fact of duress existed; duress, of a moral character, of business. The goods must go now; the goods must come out of the freight house now, whether perishable or not, made no difference; they must be used in the business of the party, which is a business that can’t stop for a law suit or the slow processes of the court. Therefore in all of those cases there was duress.

In the Yates ease, it was not held to be duress and yet large sums of money were paid, and the supreme court held, voluntarily—under what? A void law. The supreme court had nothing to do with what the rest of the law was; it was-not involved in that case and they had nothing to talk about, and that was the only matter before them—the question whether the insurance company was entitled to recover back, the money which it was admitted was paid under a void law. There was no necessity of paying it in the first instance. They held the payment not being compulsory, there was no-duress and therefore it was a voluntary payment and they could not recover it back.

There is no pretense that anything was ever said between Graham or any other officer of this company to the telephone-company which would indicate that there were any protests, although the way I look at this case, it was not necessary; if if there was duress, I am inclined to concede Mr. Mayer’s contention as to the law at the present day in this state; that if there is duress, and a protest would be unavailing, then no protest need be made. If you had a case where there was duress and where a protest would have been available to correct the difficulty and to stop the payment of the money, then it would be necessary, I take it, that the protest should be made.

Now, those are the facts in this case and they are in a very narrow compass, and we have to look, of course, at the condition of the parties at the time this illegal contract was made. It does not detract from its illegality that it was not made under duress. It is the other principle of law, that whether it was a voluntary or involuntary payment, and there being no duress, can it be recovered back in this common-law case. I can’t see, if I am right, that there is any question here for the jury; that there can be anything said about a doubt as to whether or not there was duress. It is all a question of law and it is one-sided. Of course, there is no dispute here, that is' to say there is no contention only upon the question of what that evidence proves as a matter of law, and so I am inclined to hold that there was no duress shown by this evidence at the time, practiced by this defendant company upon the plaintiff at the time of the execution of the contract in evidence when the plaintiff had a grounded service telephone in his place of business, which he had had for several years and I feel quite positive that the evidence here does show that their grounded service was becoming worse all the time, that is, the interference was greater as time went along and I think the best evidence of that fact is not the evidence of the people who used the wires, but it is the testimony of the general manager of the telephone company to the fact that the metallic telephone service has been increasing as the years have gone by; since the time it became practicable to install this metallic circuit service that the grounded service has decreased so that today it would be one of the hardest things to find in the city of Chicago, unless you knew just where to go, a grounded service ’phone.

Mr. Holt: I only want to interrupt to call your honor’s attention to the fact that the defendant’s evidence on that subject has not been put in.

The Court : I am talking about the evidence that is in and you must remember, Mr. Holt, when you make the motion,, you admit it is all true, and I am only judging from the evidence. I want to say another thing; I am not going to consider myself bound by the conclusion I have come to. While-I shall instruct the jury and so far as the trial of this first case is concerned, it will be practically ended, still it is a question of great moment, as I said before, and I am quite sensible of its importance and it impresses me, and I don’t feel like shifting the duty that I owe to the parties here, to come to a right conclusion and I take it that you will make a motion for a new trial and if you do, I want both of you to prepare briefs so that I may give the case further careful and protracted examination and then after I have examined those briefs, I will hear you orally and I may give you a new trial.

(Opinion rendered August 24,1906.)

Holdom, J.:

This cause is now before the court on a motion for a new trial from a directed verdict. On the motion to direct a verdict three days of oral argument was indulged. On the motion for a new trial 300 printed pages of brief and argument have been suffered, and plaintiff asks and defendant foreshadows a request for further oral argument. In this condition of the record the court feels impelled, at the risk of a possible criticism of such action being arbitrary, to deny both parties the privilege of further discussion.

The Chicago Telephone Company is a public-service corporation engaged in the telephone business. It is an Illinois corporation, and as such derives its rights and powers to transact its business within the city of Chicago in virtue of an ordinance of the common council passed January 4, 1889. This ordinance required defendant to file with the city clerk a schedule of its charges, and provided that such schedule ratesshould not be increased during the time limited in the ordinance, viz.: twenty years. That part of the schedule pertinent here is as follows: “Within the blue lines on the map of Chicago attached hereto and made a part hereof we charge-$125 per annum for telephone instruments connected by wire with our exchange for the business use of the lessee and his ■employes alone.”

Plaintiff is a corporation under a charter granted it pursuant to the Illinois stautes on “Corporations,” and is engaged in the glass business, with its principal office in Chicago within the blue lines of defendant’s schedule last quoted.

At the time of the passage and acceptance of the city ordinance, supra, defendant operated its telephone service in Chicago by what is known as “grounded service lines.” One of •such telephones was installed and in operation in plaintiff’s Chicago office, for which it paid at the schedule rate of $125 per annum. At the time of the original installation of plaintiff’s telephone and the passage of the 1889 ordinance, the grounded service was the only one in common use in Chicago. In the course of time American ingenuity, responding to new demands and necessities, the metallic circuit method was invented. This new device overcame somewhat and minimized .the difficulties encountered in the operation of the grounded lines by leakage of electric current and interference with the transmission of sound over the wires, occasioned by contact with foreign substances, such as gas pipes, electric light poles, -and other inductive disturbances. Plaintiff, having suffered somewhat from an impairment of service over its telephone, and having learned of the improved method of metallic circuit ■service, applied to defendant for its installation in the place of its grounded service. Defendant refused to install the metallic circuit service for plaintiff for a sum less than $175 per .annum. This condition being communicated to plaintiff’s general manager, he said, “If that was the best we could do, to get it by all means,” and-the contract was closed at the rate of $175 per annum. This action is brought to recover the -excess between the ordinance and the contract rate paid by plaintiff for a period of nearly five years.

Upon the trial the basis of the right to recover was grounded on the doctrine of duress. Such duress, it is contended, arises by reason of the inequality of the parties to the contract and .the necessities of the plaintiff; that a metallic circuit service telephone was imperatively needed to conduct and efficiently carry on its business; that defendant, a public utility corporation, was the only one who could furnish what was needed, as it has a practical monopoly of the telephone business in Chicago; that defendant was bound to supply such improved service telephone at the ordinance rate, and that plaintiff is not chargeable with knowledge of the ordinance regulating carges for telephones.

The contract at the $175 rate was entered into without any protest or complaint, other than a naturally expressed desire to procure a lower rate, if possible. Four times each year thereafter payments were made by plaintiff of a quarter of the annual contract charge without protest or complaint.

The evidence clearly establishes that plaintiff’s grounded service telephone was reasonably efficient at and before the time of the change to the metallic circuit. Complaints were made of a buzzing and mumbling in the ’phone, and of difficulty in getting telephone connections, but when interrogated about these matters on cross-examination, the same witness admitted that there was always trouble, more or less, both before and since the metallic circuit was installed. Most of the trouble was with the busy signal—a buzzing of no uncertain sound, recognized readily by all users of telephones— but admits that when connection was once secured the talk was readily understandable.

By the ordinance defendant was obligated to furnish the improved service of metallic circuit at the ordinance rate, $125, and-the exaction of $175 was, as to the excess of $50, unwarranted, and a sum to which in law the defendant was not entitled. Such is the logical deduction from the decisions in Chicago Telephone Co. v. Illinois Manufacturers Association, 106 Ill. App. 54, and People ex rel. v. Chicago Telephone Co., 220 Ill. 238. Neither the questions of duress in the making of contracts at a greater rate than limited by the ordinance, nor the right to sue and recover such excess were involved or decided in these cases. Any expressions in these opinions susceptible to a contrary construction are clearly obiter.

It appears from the opinion in the case of Chicago Tele phone Co. v. Illinois Manufacturers Association, supra, that, defendant attempted to justify its exactions of contracts of the same general character as the one in evidence here, upon the claim that the limitation as to tariff contained in the city ordinance had no application to the subsequently invented improved metallic circuit—a claim effectually disposed of in that case against defendant, and as effectually settled against, defendant in People ex rel. v. Chicago Telephone Co., supra; the first being a bill to reform certain contracts in this particular by making them conform to the ordinance rate in place' of the exacted excess rate; the second, a quo warranto proceeding into which defendant injected the question by a plea in bar, which was held to be obnoxious to a demurrer, the court saying, p. 250: “Under the ordinance the defendant can not be required to adopt improvements in the service or equipment, or to keep up with the general progress in the business, but if it sees fit to adopt improvements and furnish a better grade of telephone.service, it can only have the benefit of the ordinance granting it the right to use the public streets by complying with the terms of the ordinance and not increasing the rates. ’ ’

It is undoubtedly true that both parties, at the time of the making of the contract for the metallic service, were of the opinion that defendant had the right to exact the terms it did for the improved service it thereby contracted to supply. Nothing was said or done at this time by defendant which gives color to the claim that plaintiff acted under duress in executing the contract. The very absence of all discussion upon the relative rights of the parties, the failure to challenge defendant’s right to demand compensation in excess of $125, plainly inhibit any assumption that plaintiff in executing the contract was impelled thereto by duress. All the steps taken leading up to its execution seem to have been voluntary. The defendant in the first, instance was approached in relation to the matter by plaintiff; the negotiation was opened by it. The matter was concluded without protest on the part of plaintiff and without any threat on the part of defendant to disturb the existing telephone service then in operation in plaintiff’s place of business. Nor does the evidence disclose any immediate necessity for the metallic circuit service, the grounded service being in the same working order in which it had been for some time previous. There was no change in plaintiff’s business or the manner of its conduct necessitating an immediate abandonment of the grounded service. It was usable and practically efficient.

A careful examination of the many authorities cited fails to disclose any case held to constitute duress, which when applied to the facts here justifies the application of that doctrine. There are many definitions of what constitutes duress to be found in the books. That by Judge Cooley is in keeping with his high reputation: “Duress exists when one by the unlawful act of another is induced to make a contract or perform some act under circumstances which deprive him of the exercise of free will. ’ ’ Hackley v. Headley, 45 Mich. 569.

There must be present a consciousness of the demand being unlawful. Surely there is nothing in the evidential facts or the disclosures appearing in the cases in 106 Ill. App. and 220 Ill., heretofore cited, from which an inference can be drawn that defendant or its officers had any consciousness of the demand made being unlawful. It is admitted that plaintiff had none, and the trend of the authorities is to the effect that' both parties must have a consciousness of the demand made-being unlawful at the time, in order to constitute an acquiescence in such demand duress. But it is said that the inequality of the parties, the power of defendant, by reason of its; monopoly of the telephone system, to compel a compliance-with its demands, is of itself duress. If plaintiff’s attitude-rested upon legal authority, can it be said there are any facts upon which the law may operate? As before said, there was no immediate demand for the change, or threat to deprive plaintiff of its fairly efficient grounded service telephone. Plaintiff made no claim that the law vested him with a right to metallic circuit service at the existing rate. Nothing was said or done which by the most liberal construction can be held to have even tended to deprive plaintiff of the exercise of its free will. As in Siegel v. Schueck, 67 Ill. App. 296, it was a, case of tame submission, without protest or even complaint.

Following upon the execution of the contract for metallic circuit service and its establishment upon the premises of plaintiff, came the quarterly payments made by plaintiff to defendant without protest of any character or suggestion that defendant was receiving more than its due. No discussion or contention of any sort about these payments. No question ever appears to have been raised by either party during the period of nearly five years, in which were annually paid $50 in excess of the ordinance rate. Is there room for dispute that all these payments were voluntary, with knowledge imputable to plaintiff of its rights and the environing conditions ?

Cincinnati v. Gas Light & Coke Co., 53 Ohio St. 278, is the case of a public-service corporation, in which it was held that although excess payments could not be exacted in the future, yet excess payments voluntarily made in the past could not be recovered back. While the cases are not exactly parallel, the principle involved is the same.. A citizen would have no greater right than the municipality. The city’s need for gas was just as imperative, if not more so, than that of the citizen, and the only source of supply was the defendant gas company. The decision rested on the payments being voluntary.

The trend of the rule established by the decisions in this jurisdiction is that money voluntarily paid, without protest and where there is not present the element of duress, cannot be recovered back, where it appears that the parties either knew or were chargeable with knowledge of their rights and of the unlawful exaction at the time of payment. This is the rule in tax and water and gas cases without exception.

Elston v. Chicago, 40 Ill. 514, was a special assessment, which the court held was without the power of the council to make and was void. Yet the payment, though after judgment, was held to be voluntary, because there was neither precept nor execution through which collection could be enforced. The decision of the court was not grounded—as contended by plaintiff—on the fact that the payor’s property had been greatly benefited by the improvement made. This fact was referred to only incidentally, but not as varying the rule of law, for the court said: “No case can he found where money has been voluntarily paid with a full knowledge of the facts and circumstances under which it was demanded, which holds that it can be recovered back upon the ground that the payment was made under a misapprehension of the legal rights and obligations of the party paying, and it is invariably held that a payment is not to be regarded as compulsory unless made to relieve the person or property from an actual or existing duress imposed upon him by the party to whom the money is paid, and such is the tenor of all the cases cited by appellant. * * * No well-considered case anywhere has proceeded upon different principles.” Conkling v. Springfield, 132 Ill. 420; Preston v. Boston, 12 Pick. 13.

Illegal fees paid to a county clerk, being held to be voluntary payments made without protest, were held not recoverable back in Village of Morgan Park v. Knopf, 199 Ill. 444. The fees sought to be recovered were paid for issuing tax deeds, the parties here were not on an equality, the tax deeds could not be procured elsewhere, and the village was entitled to them as a matter of law, without payment of the exaction held illegal. The court said: “There was no fraud or mistake of fact, and if there was any mistake, it was one of law, the money having been voluntarily paid under such circumstances no action would lie to recover it back. This rule, which is well settled as between individuals, has been extended to municipal corporations under similar circumstances.”

Stover v. Mitchell, 45 Ill. 213, was a case where payment was made in the mistaken belief—of law—that an execution was a lien, when in fact it was not. On suit to recover back payment the court held “that in order to render a payment compulsory such a pressure must be brought to bear upon the person paying as to interfere in some way with the free enjoyment of his rights of person or property. * * * In this case the sale was not advertised * * * and Stover was under no necessity of hasty action, and would have had several weeks in which to sue out an injunction.” So here, plaintiff evidently mistook his legal rights under the ordinance, and in ignorance of the law affecting the contract, freely, tamely and unprotestingly entered into it, and in faith of it uncomplainingly and voluntarily continued for nearly five years to pay the excessive contract price, a condition from which it could have been relieved at any time by protest, which, if unavailing, then by the aid of an injunction and a bill to reform the contract, as was done in Chicago Telephone Co. v. Illinois Manufacturers Association, supra.

Yates v. Royal Insurance Company, 200 Ill. 202, is a case where tfie doctrine of voluntary payment was carried to its extremity. Yates was state superintendent of insurance, and the Royal Insurance Company, a foreign insurance company doing a fire business in Illinois. An Illinois statute of 1899, as a condition precedent to a foreign insurance company’s doing business in this state, required it to pay two per cent, upon the gross amount of premiums collected by it during the previous year. This act being declared unconstitutional, suit was brought against Yates in his official capacity to recover back the money so paid, which Yates admitted he still held to await the result of the litigation. The proof showed that the money was paid under threat by Yates as state superintendent of insurance to exclude and prevent the company from doing business in this state. The right of recovery, however, was denied on the theory that the payment was voluntary, and despite the contention that the money was extorted by the power of the state, which it was futile to combat, and that the parties were not on an equality or equal footing. Here there was lacking a consciousness of illegal demand, because all parties believed at the time the law was valid; that therefore the mistake was one of law and not of fact, and the trial court, holding to the contrary, was reversed.

Numerous other cases might be cited, but these are reasonably sufficient and conclusive on this point. The converse of the proposition is well illustrated by the case of City of Chicago v. Northwestern Mutual Life Ins. Co., 218 Ill. 40. Here the insurance company had acquired title to certain buildings, from which the city threatened to cut off the water supply on a claim against former owners for water furnished the buildings. Water in the buildings was a necessity. It could only be procured from one source, the city. The payment sued to recover back was made on the threat of the city to disconnect the water supply, and under protest. It was held, the claim being no lien upon the property nor an obligation chargeable against the payor, and the city having the power to put in execution its threat, the payment was adjudged to have been made involuntarily under duress and with protest, and recoverable back—essential elements and conditions wholly lacking here.

Upon like legal theories and under similar conditions payments were adjudged to have been made under duress and involuntarily in County of La Salle v. Simmons, 10 Ill. 513, and Bradford v. Chicago, 25 Ill. 411.

It is next contended by plaintiff that the payments sought to be recovered back were made in ignorance of a material fact, which fact is alleged to be the ordinance limiting the tariff on telephones within the blue line district to $125 per annum. This raises the question whether the ordinance of 1889 is a law in the sense that ignorance of it will not excuse.

In Marshall v. Coleman, 187 Ill. 556, it was said: “Ignorance of law which will not excuse, is ignorance of the law of one’s country or state, but the laws of foreign countries or other states are facts.” This may be conceded to be a correct statement of the law. It is also true that the courts do not ordinarily take judicial cognizance of foreign laws or municipal ordinances. But municipal ordinances which are general in their application and define the rights of citizens generally, under certain specified conditions, and when of such a nature that it may be invoked by all citizens desirous of availing of its provisions, then it is a general law, binding on all citizens who by their actions bring themselves within its purview. It is as binding within the municipal limits as the statute of a state is within the bounds of such comim onwealth.

The supreme and appellate courts of this state have expressly held this ordinance to be a law in the two cases first referred to, in which the defendant here was a party, and in which the validity and binding force of the ordinance as a municipal law was before these courts for construction. That the ordinance is not a mere contract or agreement between the city and defendant, but something more, is evident from the fact that in People v. Chicago Telephone Co., 220 Ill. 238, it was held that it applied to annexed territory, immediately upon annexation. It operates upon the public of the municipality generally, whatever its extent, during the term of twenty years to which it is limited. The council derives its powers from the legislature, and where ordinances of a general character are passed within the limitations of such granted power, they are as much laws as they would be if passed by the legislature had such power not been delegated to the council.

Much of the argument in behalf of plaintiff has been directed upon the .theory of the higher duty resting upon defendant as a public utility corporation, in virtue of the restrictions upon its natural right and power to contract or be contracted with under this ordinance—a municipal law as binding and conclusive as any other law-—ignorance of which is ignorance of law and not of fact. No rights can be predicated upon a claim of ignorance of this municipal law.

But it is urged that the schedules of tariff furnished by the defendant in compliance with the ordinance and fled with the city clerk are no part of the ordinance and do not appear in the municipal code. Even so, that fact—if it is a fact—is of no controlling importance and has no bearing on the issues here under the evidential facts, for upon looking at the ordinance itself we find that section 6 provides, among other things (see page 2, plaintiff’s first brief) : “Said company during the term for which this ordinance is granted shall not increase to its pr'esent or future subscribers the rates for telephone service now established.”

Knowledge of this provision of the municipal statute being imputable to plaintiff, and it having a telephone at the time of .-making the contract for the metallic circuit service, it follows as a matter of law that it had knowledge of the rate for which it was entitled to the improved ■ service, and therefore in executing the contract and in payment at the contract rate, it acted voluntarily, from the binding force of which it cannot escape by a plea of ignorance of the ordinance. Consequently testimony tending to prove such ignorance is not material and is inadmissible. It is a complete answer upon any theory as to the effect of the schedules filed, that reference to them would not have furnished any information not found in the very letter of the ordinance.

Capital Gas & Electric Light Co. v. Gaines, 20 Ky. L. Rep. 1464, 49 S. W. 462, arose in Kentucky, which is colloquially known as a “Code State.” It was expressly held as a matter of law in that forum that money paid through mistake of either law or fact may be recovered back. This is contrary to the law in this jurisdiction. The Kentucky court grounded its decision on the following dicta in Ray v. Bank, 13 B. Mon. 510, quoted with approval in Louisville & N. R. Co. v. Hopkins, 87 Ky. 613: “Upon the whole we would remark that whenever by a clear and palpable mistake of law or fact essentially bearing upon and affecting the contract, money has been paid, without cause or consideration, which in law, honor or conscience was not due and payable, and which, in honor or good conscience ought not to be retained, it was and ought to be recovered back.” Many cases cited to like effect are subject to the same criticism.

The quotation from Marshall v. Coleman, 187 Ill. 556, on page 122, plaintiff’s reply brief: “Ignorance of law, which will not excuse, is ignorance of the laws of one’s own country or state,” may consistently be amplified as a correct legal proposition suited to this case by adding “or city.” Such municipal laws being those ordinances which are public as distinguished from private, and of a general character in their operation upon the public within the limits of the municipality, and which may be invoked by all citizens at their will, without discrimination and upon equal terms. Such is the character and scope of the ordinance of January 4, 1889.

Plaintiff also predicates its right of recovery in virtue of the maxim ex aequo et bono. This maxim, in its practical application, is one of equity. The remark of Judge Story in his work on Equity Jurisprudence, see. 965, is forcefully applicable to the facts of this case. “Indeed,” says this jurist, “it is impossible to suppose that, in a country professing to have an enlightened jurisprudence, obligations and trusts in regard to property binding in conscience and duty, and which ex cequo et bono the party ought to perform, should be left without any positive means of securing their due fulfillment, or that they might be violated without rebuke or evaded with impunity.”

Defendant had no right or power to exact more than the ordinance rate, in morals and in law, in honor and in good conscience. Such exaction was unwarranted and in all conscience should be returned. Still many rights are impossible of enforcement by reason of long acquiescence or for a failure to protest at the appropriate time. None of the authorities cited on this contention in behalf of plaintiff, when' weighed with the facts, are of controlling force here.

Moses v. Macferlan, 2 Burrows, 1005, is in some respects a remarkable case. There Maeferlan induced Moses to endorse certain notes, without consideration and with the distinct understanding in writing that he should not be held to the responsibility consequent upon his act of endorsement. In violation of this compact, Maeferlan sued Moses, and in the court of conscience, under a decision of the commissioners, they holding that Moses, admitting his execution of the notes, could not invoke the circumstances of their procurement as a defense to the action, Moses paid the amount claimed into court. On Maeferlan’s taking the money out of court, Moses sued him to recover it back as money had and received to his use, .as money which ex esquo et bono did not belong to Maeferlan. Here was the grossest kind of actual fraud and base deception. No mistake of either law or fact, but an unconscionable swindle, to redress which a court of law gave that ultimate relief which a court of conscience had refused—a remarkable case of legal contradictions. While in many of the cases expressions may ^>e found seemingly in point, when analyzed they are as impotent as legal factors here as Moses v. Macferlan, supra.

The application of equitable principles found in the English cases at common law arise from the fact that by the English judicature act the rule of judicial interpretation is “that when the rules of the common law conflict with those of equity, every court is to give effect to the latter,” and like judicial interpretation at common law at an earlier date rests on the fact that many of the strict rules of the common law were materially modified by the common-law Procedure Acts of 1852-4. Authorities from so-called “Code States,” where the distinctions between common law and' equity causes are abolished, are out of harmony, for that reason, in this forum, where the distinctions of common law and equity are still preserved. It is evident from the Yates and other cases in this state, that the strict rules of the common law controlling this case have in no way been modified either by statute or judicial construction.

It may appear to some an anomalous condition that money which in conscience ought not to be retained cannot be recovered back in an action at law; but it is of common occurrence, in this jurisdiction, that actions may be maintained to enforce rights in the equity branch of the court, where the common-law branch of the court is impotent to afford relief. Notwithstanding relief, in my judgment, cannot be obtained in this form of action, in this and ldndred cases, yet if a court of ■equity acquires jurisdiction in such cases to grant relief, the maxim ex cequo et bono may receive an additional exemplification.

The plaintiff’s motion for a new trial is overruled, with a judgment upon the verdict as directed, and against the plaintiff for costs.

        Illinois Manufacturers’ Association, et al. v. Chicago Telephone Company, 1 Ill. C. C. 119.—Ed.

        City of Chicago v. Northwestern Mutual Life Insurance Co., 218: Ill. 40.—Ed.

        Yates v. Royal Ins. Co., 200 Ill. 202.—Ed.

       The above case is now pending in the appellate court on appeal, but on account of the importance of the case, and the number of similar cases pending it is deemed advisable to publish the above opinions. For note on question of whether excess payments to public service corporations are voluntary see Illinois Mfr’s Ass’n v. Chicago Telephone Co., 1 Ill. C. C. 119, supra.—Ed.


author: Horton, J.:

text:
      (Circuit Court of Cook County. In Chancery.)
    Elgin National Watch Company vs. Max C. Eppenstein, et al.
    (December 21, 1892.)
    1. Corporate Naifes—Right oe One Illinois Corporation to Enjoin the Recording oe a Certificate of Incorporation óe Another Illinois Corporation of a Similar Name. Certain of the defendants procured from the secretary of state a final certificate of incorporation of “The Elgin National Watch Case Company, of Elgin, Illinois,” but before this certificate was recorded in the office of the recorder of deeds of Kane County, Illinois, as required by statute, “The Elgin National Watch Company” and the “Elgin Watch Case Company” obtained a temporary injunction restraining the recording of the certificate of organization of “The Elgin National Watch Case Company, of Elgin, Illinois.” Upon motion of defendants to dissolve the injunction theretofore granted, held that the names were so-similar that confusion would result, and that the defendants, should be enjoined from procuring to be recorded in the recorder’s office the certificate of incorporation of “The Elgin National Watch Case Company of Elgin, Illinois.”
    2. Parties—-Unorganized Corporation. Where the certificate of final organization of a corporation has not been filed in the recorder’s office as required by statute, it is not necessary to-make such corporation a party defendant in a bill to enjoin the recording of the certificate, as by so doing the complainant would admit that it was an existing corporation.
    3. Power of Illinois Corporation to Prevent the Organization of Another Illinois Corporation of a Similar Name. The legislature has by implication provided that an Illinois corporation may, by proper legal proceedings, prevent the organization of any other corporation under the laws of this state, with the same or a similar corporate name, when the consent thereto of such existing corporation has not been obtained.
    4. Trade Names—Protection of. When parties have, by their mode of doing business, and by the quality of their products, and, by selling and delivering to the public articles as valuable as represented, bult up under a chosen name a reputation which is of great value, they should be protected in the use of that name; and the protection of the public in preventing any other persons from assuming a like or similar name is at the same time a protection of the parties.

      5. Tbade Names—Unfair Tbade. The words “Elgin” and “National” and “Watch” are general or geographical words or names that can not he appropriated to the exclusion of others; hut they may he so used when taken together or in connection with certain manufactured articles as to create and establish a special signification, and in the use of those words, or any or either of them, in such connection, and with such special signification, the parties entitled thereto should receive protection from the courts.
    Motion to dissolve injunction. Circuit Court óf Cook County. In chancery. Heard before Judge Oliver H. Horton.
    For statement of facts see opinion.

      W. R. & J. R. Moore & Purcell, and Banning, Banning & Payson, for complainants.

      D. J. Wile, and Bond, Pickard & Adams, for defendants.
   Horton, J.:

These eases are now before the court upon motions to dissolve the injunctions heretofore granted in said causes respectively. One of these injunctions restrains the defendants as follows: “From proceeding to complete the organization of ‘The Elgin National Watch Cáse Company’ of Elgin, Illinois, ’ by recording in the office of the recorder of deeds of Kane county, Illinois, the final certificates of organization thereof heretofore issued by the secretary of state of the state of Illinois; and you, the said Charles A. Miller, recorder of Kane county, Illinois, from receiving, filing or recording said final certificate in your office as such recorder or otherwise; and you, the said Max C. Eppenstein, Sol C. Eppenstein and Thomas W. Duncan from in any manner-using or attempting to use the name ‘The Elgin National Watch Case Company, of Elgin, Illinois, ’ in the business of manufacturing or selling watches, watch cases, jewelry,- or parts thereof or materials therefor, or any other name so nearly resembling the complainant’s corporate name, Elgin National Watch Company, ’ as to be calculated to mislead or deceive, and from in any manner violating, infringing upon Or interfering with the complainant’s corporate name aforesaid.” The other injunction is substantially the same.

It is urged by solicitors for defendants that the action of the secretary of state in granting the final certificate to “The Elgin National Watch Case Company, of Elgin, Illinois,” is final and conclusive. The opinion of the supreme court of this state, cited in support of this position, being the Illinois Watch Case Company v. Pearson, 140 Ill. 423, 31 N. E. 400, as I read it, does not sustain this position.

The final certificate must be filed for record as required by the statute before the corporation is fully organized. “It is a condition precedent to the power of the corporation to proceed to business.” Loverin v. McLaughlin, 46 Ill. App. 373, and eases there cited.

The certificate of incorporation or license issued by the secretary of state to “The Elgin National Watch Case Company, of Elgin, Illinois,” not having been recorded as required by the statute, that company is not a corporation de fare or de facto. As to the questions involved in the cases now before this court, the case of Bushnell v. Consolidated Ice Machine Co., 138 Ill. 67, 4 Am. R. R. & Cor. Rep. 527, 27 N. E. 596, is cited as being in conflict with this view. That case was Eeard before me, and the supreme court in affirming the opinion of this court does not decide as is argued.

It is objected also by solicitors for defendants that “The Elgin National Watch Case Company, of Elgin, Illinois,” is not made a party defendant to this cause, and that such company is a necessary party, and that this court can not entertain jurisdiction to determine as to the validity of its organization or its power to proceed to business in the absence of such company as a party. The complainants could not make that company a party defendant as a corporation, without by so doing admitting, for the purpose of these cases, that it is an existing corporation. People v. Rensselaer & Saratoga R. R. Co., 15 Wendell, 113. That is one of the issues presented for the court to determine.

It is also urged that this court has no jurisdiction of the defendant Charles A. Miller, recorder of Kane county.

A writ of injunction of this court operates throughout the-state; Starr & Curtis’ Statutes (first edition), chap. 37, sec. 68..

And besides the recorder has filed his answer and submitted' himself to the jurisdiction of this court, stating, “That he shall in all respects obey said injunction of this honorable-court, and all other orders and directions which it may make-in the premises respecting this defendant.” The jurisdiction of the court will be maintained. Vermont Farm Machine Co., v. Marble, Commissioner of Patents, 20 Fed. 117.

Of the two bills before the court one is filed by “Elgin National Watch Company,” and the other by “Elgin Watch Case Company.” The name complained of is, “The Elgin. National Watch Case Company, of Elgin, Illinois.”

The place of business and principal office of the two corporation complainants is in Chicago, Cook county, and the principal office and place of business of the proposed corporation is at Elgin, Kane county, Illinois.

On behalf of complainants it is urged that the use of the name, which it is claimed by the defendants they have the right to use, namely, “The Elgin National Watch Case Company, of Elgin, Illinois, ’ ’ will create confusion in business circles and among their customers, and cause great damage to the complainants, and especially the complainant, The Elgin National Watch Company.

These are all Illinois corporation names. It is held by the-supreme court of this state in Illinois Watch Case Company v. Pearson, 140 Ill. 423, 31 N. E. 400, that sections 2 and 50 of the Illinois statute, as to corporations, should be construed together, because, although embraced in different acts, they were passed at the same session of the legislature, etc. Section 2 applies to the original organization of corporations, and section 50 to the changing of names of corporations. In the section first named it is provided that “no license shall be issued to two companies having the same name,” and in section 50, that “no name shall be assumed or adopted by any corporation similar to or liable to be mistaken for the name of any other corporation organized under the laws of this, state, without the consent of such other corporation.” Aside: from and independent of the general rule laid down by the •courts, the legislature has by this statute by implication provided that an Illinois corporation may, by proper legal proceedings, prevent the organization of any other corporation under the laws of this state, with the same or a similar corporate name, when the consent thereto of such existing corporation has not been obtained.

The protection of the public, as well as the rights of corporations or individuals, is to be considered by the court. It is clearly in the interest of the public that no corporation should be authorized, having the same name as a pre-existing corporation, and also that no name should be assumed by a corporation similar to or liable to be mistaken for the name of any •other corporation organized under the laws of this- state.

Putting the word “The” at the commencement of the name and the words “of Elgin, Illinois,” at the conclusion, does not materially tend to prevent confusion. In ordinary use it would be called “Elgin National Watch Case Co.”

A large number of affidavits have been filed in these cases, from which it appears that confusion has arisen in regard to these names. These affidavits also tend to show actual damages to the complainant, The Elgin National Watch Company.

It appears that the defendants are seeking to establish or incorporate “The Elgin National Watch Case Company, of Elgin, Illinois,” as the successor of “Illinois Watch Case Company,” whose watch case factory has been for some time located at Elgin. It also appears that the “Illinois Watch Case Company” sought to change its name to “Elgin Watch Case Company,” but that before such change of name was completed the complainant, “Elgin Watch Case Company,” was incorporated under the general laws of this state, and thereupon the secretary of state refused a license to change the name of the “Illinois Watch Case Company” to the “Elgin Watch Case Company,” presumably under the restriction contained in section 50 of the statute as to corporations above quoted, viz.: “That no name shall be assumed or adopted similar to, or liable to be mistaken for, the name of any other corporation.”

Some of the defendants, or those interested with them, thereupon applied to the supreme court of this state to obtain a writ of mandamus by which they sought to compel the secretary of state to issue the certificate of the change of name above indicated. The supreme court refused to so command; and it is the opinion of the supreme court in that case, cited above as “Illinois Watch Case Company v. Pearson.”

The fact that defendants are so anxious and so persistent in their determination to adopt this or some similar name may be regarded as an evidence that they think it is valuable and desirable. If valuable and desirable, why ? Is it not reasonable to presume that it is, in part, at least, because the complainant, the “Elgin National Watch Company,” has made it so, when connected with watches or parts thereof ?

When parties have,' by their mode of doing business, and by the quality of the product of their manufactories, and by selling and delivering to the public articles as valuable as represented or promised, built up under a chosen name, a reputation which is of great value, they should be protected in the use of that name.

The protection of the public in preventing any other persons from assuming a like or similar name is at the same time a protection of such parties. A trade-name, like a trade-mark, may be of great value, and that value may have been entirely created by the parties who seek to be protected in its use.

The words “Elgin” and “National” and “Watch” are general or geographical words or names that can not be appropriated to the exclusion of others; but they may be so used ■when taken together or in connection with certain manufactured articles as to create and establish a special signification, and in the use of those words, or any or either of them, in such connection, and with such special signification, the parties entitled thereto should receive protection from the courts.

A trade-name may not only be as valuable as is a trademark, but it will be protected the same as will a trade-mark. Gray v. Taper Sleeve Pulley Works, 16 Fed. 436.

The principles underlying the decisions supporting the views here expressed are: first, the injury to the public by leading them to suppose that the goods of one are the goods of the other, and, secondly, the injury to the owner of the trademark, or name, by the diversion of his trade into other channels, by the belief of the public that they are obtaining his goods. Farmers Loan & Trust Company v. Farmers Loan & Trust Company of Kansas, 21 Abbott’s New Cases, 104.

The rule as to trade-names herein stated applies to corporations the same, as it does to individuals.

That confusion would follow if “The Elgin National Watch Case Company, of Elgin, Illinois,” should be incorporated and continue to transact business in that name, seems to me certain, and is supported by numerous affidavits. As an evidence to my mind that such confusion would follow I may say that I found it necessary to write these several names down and thus impress them clearly upon my mind to prevent confusion in considering these cases. That damage to the complainant watch company would result seems to be more than probable.

From these conclusions it follows that the motion to dissolve the injunction must be denied.

NOTE.

For an editorial note upon the right of one corporation to restrain the use of its corporate name by another corporation see pp. 463 et seq., supra.—Ed.

       Affirmed 161 Ill. 417.—Ed.