text:
    William Hill v. Sarah A. Reno et al.

      Filed at Ottawa May 10, 1883.

    1. Partition—of the right to partition—whether it is discretionary with the court. Where a case is fairly brought within the law authorizing a partition, the right to partition is imperative, and absolutely binding upon courts of equity. They are not clothed with such discretion as that, under a given state of facts, they may grant the relief or refuse it, and yet commit no error. To invoke this equitable remedy is a matter of right, and not of mere grace.
    2. Same—as between a lessee of premises, who also holds the fee in a part of the reversion, and other tenants in common. The lessee of real estate, the reversion in fee of which is in several tenants in common, can, by purchasing a part of the reversion, and taking an assignment thereof to himself, demand, as a matter of right, a partition in chancery, even though such partition will necessarily result in a sale of the premises.
    3. So where a lessor of premises died, leaving several heirs at law, to whom the property descended, upon the purchase by the lessee, of the fee in the reversion belonging to one of the heirs, he acquired a right to have partition, as against the heirs who retained their shares, and, if necessary to the making of partition, to have the entire premises sold.
    4. Same—effect of a sale on the rights of the respective owners, as to the leasehold estate. In such case the purchase by the lessee, of the interest of one of the heirs in the reversion in fee, would operate as a merger, pro tanto, of the term, and consequently all covenants in the lease, to pay rent, taxes, etc., would thereby be extinguished as to the part purchased by him. But,this would in nowise affect the respective rights under the lease, of those of the heirs who still retained their interest in the reversion. As to them, and their several shares in the property, the lease and all its provisions would remain in force and effect just as though no merger or extinguishment had taken place, each of them holding his rights under the lease in severalty, having no interest in or concern with the rent belonging to the others.
    5. In the event that a partition could be effected only through the instrumentality of a sale of the premises-and a distribution of the proceeds of such sale among the several parties in interest, the mere fact that difficulties may arise in the adjustment of the distribution, or inconveniences, or even possible losses result from the change in the relations of the parties to the estate, by reason of a sale, will in nowise affect the absolute right to have partition.

      Appeal from the Superior Court of Cook county; the Hon. John A. Jameson, Judge, presiding.
    Messrs. Campbell & Custer, for the appellant:
    In case a sale is decreed, can it be made of the whole premises subject to the lease, as an entirety, or must the undivided interest of appellees be sold subject to the lease, and the undivided interest of appellant be sold free from the lease ? If the assignee of the lease were not connected with the freehold, any one of the tenants in common would be entitled to partition, and the sale would be subject to the unexpired lease. Scoville v. Hilliard, 48 Ill. 453; Fight v. Holt, 80 id. 84.
    On the question of merger of' the leasehold interest of appellant in the freehold, counsel cited Richardson v. Hockenhull, 85 Ill. 124; Worcester National Bank v. Cheeney, 87 id. 602; Campbell v. Carter, 14 id. 286; Ætna Life Ins. Co. v. Case, 89 id. 170; Dunphy v. Riddle, 86 id. 22; James v. Morey, 2 Cow. 246; Freeman v. Paul, 3 Greenlf. 260; Dougherty v. Jack, 5 Watts, 456.
    It is only by decreeing the continued existence of the lease as an entirety that equal and exact justice can be done to the parties, and then a sale should be subject to the lease. Would a sale of the premises in any manner be so inequitable, as to appellees, that a court of chancery, administering the statute law on partition, would refuse to decree such sale ? To establish the affirmative of this, it must appear not only that appellees would be injured thereby, but that there is something in the law itself, or in the relations of these parties, which prevents or estops appellant from claiming his right to a partition by a sale. Hilliard v. Scoville, 52 Ill. 449.
    Messrs. Waite & Clarke, and Mr. J. B. Skinner, for the appellees:
    Pending the existence of the lease there could be no partition of the premises by sale, and the dismissal of the bill was correct. Neither party to the lease, nor his assigns, without mutual consent, could do any act, pending the term created by the lease, to impair or extinguish its covenants, or the demised term. When the two estates met in appellant his leasehold interest was pro tanto merged, and became extinct. Carroll v. Ballance, 26 Ill. 9; Lansing v. Pine, 4 Paige, 639.
    As to instances where a partition has been refused as inequitable or in contravention of contract, etc., see Shillito v. Pullan, 2 Disney, (Ohio,) 588; Peck v. Cardwell, 2 Beav. 137; Cubbage v. Franklin, 62 Mo. 364; Selden v. Vermilya, 2 Sandf. Ch. 568; Lansing v. Pine, 4 Paige, 639.
    The right to partition under the statute is not absolute in all eases, even if the parties have done nothing to bar or waive the right. Hartman v. Hartman, 59 Ill. 103.
    While appellees would suffer injustice by decreeing a partition by sale, appellant can suffer none at all by a refusal, for he is already entitled to the exclusive possession of the entire premises until the expiration of the term. On a sale appellant would occupy a better position as a purchaser than appellees, who, on a purchase, would be forced to invest their money in property the market value of which has been impaired, and from which they could get no return for over nine years.
   Mr. Justice Mulkey

delivered the opinion of the Court:

This is an appeal from a decree of the Superior Court of Cook county, dismissing, on the hearing, a bill brought by William Hill, the appellant, against Sarah A. Beno, Eugenia M. Little, Charles A. Beno and Jacob H. Little, the appellees, for the partition of certain real estate in the city of Chicago.

No controverted questions of fact arise upon this record. The undisputed facts of the case are, that Abner B. Beeves, being the owner in fee of the land in controversy, on the 28th of January, 1872, leased the same to William Parmelee for a term of twenty years, from the first day of April then next following, at an annual rent of $2400 for the first five years, to be paid quarterly. At the expiration of the first five years, and at the end of each successive five years, a new valuation or rental of the premises, equal to six per cent of their entire value, was to be fixed by arbitrators, to be chosen as in the lease provided. The lessee was to pay all taxes and assessments, including water rates, and in case of failure to do so, they were made a lien upon the improvements to be erected on the premises by the lessee. The latter covenanted and agreed to erect on the demised premises a building, to be worth at least $10,000, which the lessor agreed to purchase at the end of the term, at a price to be fixed by arbitration. The lessee was authorized to sell or assign his interest in the term, but the assignee was to be bound by all the covenants in the lease. While this lease was in full force, to-wit, on the 31st of October, 1875, the said Abner Beeves died intestate, seized in fee of the reversion in said premises, leaving certain collateral relations as his heirs at law, among whom were his sisters, Sarah A. Beño and Eugenia M. Little, the other appellees being their respective husbands. Having acquired, by purchase, the interests of some of the other heirs in addition to what they had inherited themselves, Mrs. Beno and Mrs. Little, at the time of filing the present bill, respectively owned about one-third of the premises in question, and the residue belonged to the appellant, as hereinafter shown. Parmelee erected the house on the premises, as provided for in the lease, and subsequently sold and transferred the same, together with said lease, to others. In 1880, appellant purchased the leasehold estate, together with the building thereon, and took an assignment of the lease. In the following year he purchased and became assignee of so much of the reversion in said premises as was not owned by appellees, being a fraction over a third interest. After the commencement of the present suit, to-wit, on the 23d of May, 1882, appellant and appellees selected arbitrators, in pursuance of the provisions of the lease, who appraised the rent for five years, from April 1, 1882, to the satisfaction of the parties, respectively, since which time appellant has regularly paid appellees their respective shares of the rent under such appraisement. It was also stipulated between the parties, for the purposes of the hearing, that the premises in question were not susceptible of division, except by means of a sale thereof.

Under the facts stated the simple question presented for determination is, whether the lessee of real estate, the reversion in „fee of which is in several tenants in common, can, by purchasing a part of the reversion, and taking an assignment thereof to himself, demand, as a matter of right, a partition in chancery, when such partition will necessarily result in a sale of the premises.

Before giving a direct answer to this question it is proper to determine the exact legal relations of these parties with respect to the property in controversy.. Upon the death of Beeves, the lessor, there was, by operation of law, a severance of the estate into as many distinct freeholds as he left heirs succeeding to the property, the share of each depending upon the nearness of the relation he bore to the deceased; but the law did not, and of necessity could not, ascertain or define the boundaries of their respective estates, hence it left them to possess and occupy the premises as a whole, according to their respective interests, until a partition could be effected in some mode authorized by law,—in other words, upon the death of Beeves his heirs at law succeeded to the property in question as tenants in common. The same law, therefore, which clothed them with the title to the property imposed upon them and their assigns all the inconveniences and hardships incident to the ownership of real estate thus held. (Sec. 1, chap. 39, Rev. Stat.; 1 Washburn on Beal Prop. (4th ed.) 653.) Perhaps the most important right which the law has annexed to this kind of tenancy is that of partition. In very ancient times this right, at least at law, was confined exclusively to lands held in parcenary, and as parceners always acquired title by inheritance, it followed the right extended only to estates in fee. But the law in this respect was changed by an act of the British parliament, as early as 31 Henry VIII, extending the right of partition to estates of inheritance, in joint tenancy, and in common.

But it is not necessary to go back to the common law, and ancient British statutes made in aid thereof, in support of the right in question in this State, for it is expressly conferred by our own legislature. Section 1, chapter 106, of the Revised Statutes, provides, “that when lands, tenements or hereditaments are held in joint tenancy, tenancy in common, or co-parcenary, whether such right or title is derived by purchase, devise or descent, or whether any or all of the claimants are minors or of full age, any one or more of the persons interested therein may compel a partition thereof, by bill in chancery, as heretofore, or by petition in the circuit court of the proper county, ” etc. Since the statute gives to every tenant in common of a freehold estate the right to coercive partition by bill in chancery, as the right had existed and been enforced by courts of equity before the passage of the act, it is important to determine, with some particularity, the true limits of chancery jurisdiction over the subject as it exists, independently of statutory provisions. While there is considerable controversy among authors as to when courts of equity first assumed jurisdiction in partition cases, and also as to the true grounds of the jurisdiction, yet all concede that it is of very ancient origin, extending back to the time of Elizabeth, and that no branch of equity jurisdiction is more .universally recognized or firmly established than it is.

But the material question, so far as the case in hand is concerned, is, is this right to partition imperative and absolutely binding upon courts of equity where a ease is fairly brought within the law authorizing a partition, or are courts of equity clothed with such discretion that, under a given state of facts, they may grant the relief, or refuse it, and yet commit no error,—or, differently put, when they may grant the relief without committing an error, are they bound to do it ? That they are so bound we think is fully shown by the general current of authorities. Freeman, in his work on Co-tenancy and Partition, sec. 424, in discussing this question says: “It is now certain that unless, when the titles of the respective parties are spread before a court of equity, it can see that there are legal objections to the complainant’s title, he can demand, as a matter of right, that it proceed with the partition." No question is made - as to the sufficiency of appellant’s title in this case. In Smith v. Smith, 10 Paige, 470, it is declared that partition is as much a matter of right in equity as it is at common law. In 5 Wait’s Actions and Defences, the author lays down the rule in these words: “Tenants in common have an absolute right to a division of the land held in common, notwithstanding inconveniences may thereby result to the other tenants, or if partition can not be made, to a sale, and division of the proceeds, ”—citing many authorities in support of it. Bispham, one of the most polished and accurate of modern law writers, in discussing this subject, in his work on Equity, (2d ed.) p. 532, holds this language: “This jurisdiction was assumed some time about the reign of Elizabeth, and became so well established" both in England and the United States, that to invoke this equitable remedy has become a matter of right, and not of mere grace.” In support of the text numerous authorities are cited which fully sustain it. See, also, to the same effect, 2 Leading Cases in Equity, pt. 1, p. 906, et seq.

In Howey et al. v. Goings, 13 Ill. 95, this court cite with approval the following language held by the court in Parker v. Gerard, Amb. 236, namely: “That such a bill” (being a bill in equity for partition) “is a matter of right, and there is no instance of not succeeding in it but where there is not proof of title in plaintiff. ” It will be thus seen that this court at an early day placed itself in line with the general current of authority on this question, in strong and emphatic terms.

Notwithstanding the rule as stated is almost universally conceded, nevertheless there are certain well recognized modifications of it. For instance, if an estate should be devised or otherwise conveyed to two or more, upon the express condition that it should not be subject to partition, or if several tenants in common, or joint tenants, should covenant between themselves that the estate should be held and enjoyed in common only, equity would not, in the absence of special equities, award a partition at the suit of some of the parties, against the objections of the others; and where the title of the complainant is doubtful,—or, in other words, where he does not show a clear right to partition,—it will not be awarded. So where several persons had purchased land, with a view of selling it out into lots for building ground, according to a certain plan, and it was agreed among them that neither of them should dispose of his share except in a certain manner, it was held, in a suit by the representatives of one of the parties against the survivors, that the agreement barred the right to partition. Peck v. Cardwell, 2 Beav. 137. See, also, in this connection, Cubbage v. Franklin, 62 Mo. 364; Selden v. Vermilya, 2 Sandf. (N. Y.) 568.

The principle which seems to underlie all these cases is, 'that equity will not award a partition at the suit of one in violation of his own agreement, or in violation .of a condition or restriction imposed upon the estate by one through whom he claims. The objection to partition in such cases is in the nature of an estoppel. It is supposed by counsel for appellees that some such defence arises out of the relations of the parties to this record, which renders it inequitable to grant the relief; but just what he or those under whom he claims have done to deprive him of the right of partition, the most valuable of all rights incident to such an estate, counsel have not satisfactorily shown.

Laying aside any vague or general notions we may have with respect to the merits of this case, let us look at the evidence itself to see if any such estoppel exists, and if so, the precise grounds upon which it rests. In the first place, it is to be observed that Parmelee, the original lessee, entered into no covenant or agreement, for himself or his assigns, that he or they would not purchase the reversion, or any part of it, after the execution of the lease, and no one pretends that under the general law there was anything illegal or inequitable in doing so. It follows, therefore, that appellant, as assignee of the lessee, had a clear legal and equitable right to acquire his interest in the reversion as he did. By his purchase he became tenant in common of the freehold and inheritance Avith appellees, and, so far as the right to partition is concerned, he unquestionably acquired the same right which the heirs had from whom he purchased. Noav, it is manifest that either of the heirs, upon the death of. Reeves, could, notwithstanding the lease made by him, have compelled a partition, by bill in equity, against the objections of all the other heirs and the oAvner of the term combined, although the partition would have .resulted in a sale of the premises, and consequently, if not purchased by appellees, in depriving them of their shares of the rent and of all interest in or power to enforce the covenants in the lease,—a matter to which great importance seems to be attached by appellees’ counsel. If either of the heirs might, through the instrumentality of a court of equity, have accomplished this without any violation of appellees’ rights,—and this is not at all questioned,—upon what principle can it be contended that appellant, the assignee of such heir, may not do the same thing, for, at the very farthest, he asks to do nothing more than what is conceded the heir might have done? The ordering of a sale of the premises will not necessarily deprive appellees of their rights under the lease. They have the same right to purchase them that any one else has, and if they are struck off to another for more than they are worth, or for more than appellees are willing to give, appellees will get the benefit of the enhanced price. As these matters are always taken into account by purchasers seeking investment for capital, viewed as a business transaction, it is to be presumed that the interest on the purchase money during the term would be about an equivalent for the rent, in which event appellees would lose nothing.

We agree with counsel for appellees on the question of merger. We think it clear, from the authorities, that upon appellant’s purchase of his interest in the reversion there was a merger, pro tanto, of the term, and consequently the covenants to pay rent, taxes, assessments, etc., were thereby extinguished as to the part purchased by him. (Taylor on Landlord and Tenant, sec. 502; Carroll v. Ballance, 26 Ill. 19.) But we do not agree with counsel for appellees as to all the consequences which they assume will flow from such merger. As we understand it, the merger of the term and extinguishment of the covenants as to appellant’s interest did not, and does not, at all affect the respective rights of appellees under the lease. As to them, and their several shares in the property, the lease and all its provisions are in force and effect just as though no merger or extinguishment had taken place, and will so remain as long as they continue to'be owners of the reversion. But, as we have just seen, like all tenants in common of real estate not susceptible of partition except through the instrumentality of a sale, they are liable to lose all interest in the estate unless they will pay as much or more for it at' the sale than any one else. As already seen, by the death of Beeves there was a severance of the freehold and inheritance into as many distinct estates as there were heirs, and an apportionment of the rent between them according to their respective interests. After such apportionment of the rent neither of the heirs had any interest in or concern with the rent belonging to the others, and upon appellant’s purchase of the shares of some of these heirs, it relieved him from the payment of so much of the rent as would have been due them but for his purchase; but his liability as to the other heirs and their assigns remained precisely as it did before. Taylor on Landlord and Tenant, (7th ed.) sec. 385; Crosby v. Loop, 13 Ill. 625.

Counsel for appellees say in their brief: “By the merger of the leasehold into the fee as to part of the premises, the covenants to pay rent and all taxes and assessments on that portion so merged have been forever extinguished, so that whoever should buy the premises as an entirety would take them in a very unsatisfactory condition. The sale would be made subject to the lease, and as appellant has a lease on two-thirds of the premises until April 1, 1892, and as, from the nature of the premises, it would be impossible to lease an undivided third to any other tenant, that portion would be not only entirely non-productive during the next nine years, but at the same time require the purchaser to pay out large sums for taxes and assessments.” This is a misapprehension. The purchaser, in the case supposed, would have the same right to occupy and enjoy the-premises, in proportion to his interest in the present estate, as the lessee himself; and if the lessee assumed the exclusive possession, he would be bound to account to the purchaser for something over one-third of their rental value, or the purchaser might rent, as is often done, his third interest, either to the lessee or’a third party. A tenant in common has the same right to sell or lease his estate as an owner in severalty having exclusive possession. Freeman, in his work on Co-tenancy, sec. 220, says: “Co-tenants may lease either to one another or to strangers. They may all concur in the lease, or each may lease his moiety separately. If, however, the lessors be coparceners, or tenants in common, the lease operates as the separate demise of each, and must be so treated, ”—and this is the well recognized doctrine on the subject.

The further statement of counsel, that appellant “being in possession of an undivided two-thirds by virtue of his lease, must, of course, get the benefits of the whole of the premises, as in that way alone could he secure his rights to 0 an undivided two-thirds, ” is therefore wholly unwarranted. It may be conceded that inconveniences, and even losses, might occur by reason of the state of things suggested, but they would not necessarily happen, and they are only such inconveniences and possible losses as are incident to such ownership of property, and all property is liable to become subject to this species of ownership. Whoever, therefore, succeeds to an estate thus circumstanced, whether by descent or purchase, while accepting the benefits which it confers must submit to all such inconveniences and losses as are , # t incident to property thus held.

So far all the questions we have discussed are clearly set-tied by the authorities in the way we have stated, leaving ho real ground for controversy. There is a single point, however, to notice, which presents the only difficulty or matter of doubt in the case. It is conceded if partition is awarded the premises are to be sold, and if so, of course must be sold as an entirety, subject to the lease, for we are satisfied the statute does not contemplate any other kind of sale. This being so, if the value of the shares of appellees, which are alone subject to the lease, are thereby enhanced, it is clear that a division of the proceeds of the sale in proportion to their shares in the fee would not be equitable to them; and if the converse of this hypothesis is true,—that is, if their shares are worth less, by reason of being subject to the lease,—they would receive more than they are entitled to if the proceeds were divided in that ratio. What is here said of the shares of appellees subject to the lease, with a slight modification of the language, of course, is equally applicable to appellant’s share without the lease. It may well be that the shares in the fee now held by appellant, if bought by a stranger, being divested by the merger of all right to demand rent under the lease from the lessee, and of all right to demand of the lessee payment of taxes or assessments, are less valuable than had no merger occurred. It may be that the mere right to occupy and use the premises in common with the lessee of the shares held by appellees is not so valuable as would have been the rights under the lease had no merger occurred. These are questions which pertain to the distribution of the proceeds, and not to the right to have partition made. If it be true that by the merger of the lease pro tanto, mentioned above, the value of the shares in the fee held by appellant has been impaired, and the value of his leasehold estate has been thereby enhanced, the relative value of the shares in the fee held by appellant, (as they actually now exist,) and of the shares held by appellees, with the benefits of the lease, if any, can readily be ascertained by the master, and the partition of the proceeds of'the sale should be made upon this basis.

But does this difficulty, if it may be so regarded, in the absence of any other valid objection, warrant a denial of the right of partition altogether? Appellees maintain that it does, and cite two cases that seem to favor that view of the subject, namely, Lansing v. Pine, 4 Paige, 639, and Shillito v. Pullan, 2 Disney, (Ohio,) 588. But it does not appear the statutes of the States in which these cases arose, regulating partitions, are the same as our own, and even if they were, we would not feel ourselves absolutely bound by them in giving effect or a construction to our own statute.

But waiving this consideration, to which we attach but little importance, and viewing the question in the light of the acknowledged general principles which govern courts of chancery in administering this branch of their jurisdiction, we are unable to perceive how the possible difference in the value of the shares of the parties, growing out of the fact that some of them are subject to an _ unexpired lease and others are not, presents an insuperable obstacle to a partition of the premises. It has always been understood, and it is so stated in all the text books we have examined on the subject, that one of the peculiar and main advantages of a partition in equity over one at law is, that in the former all inequalities of this character may be fairly and equitably adjusted. Where an actual partition is made, and there is any inequality in the value of the shares not justified by the interests of the parties in the estate, the court will decree pecuniary compensation, called owelty. But where, from any cause, one’s share is worth more than another’s, and a sale is ordered, the parties’ rights are easily adjusted by a proper division of the proceeds. Bispham’s Equity, secs. 491, 492; Freeman on Co-tenacy and Partition, sec. 425.

Applying these principles to the case in hand, if appellees’ shares of this property are worth more by reason of being leased, as is contended by their counsel, is not that fact susceptible of proof, and can not the difference be fixed by the evidence as definitely as any other fact which depends upon the opinions of witnesses ? We are unable to perceive any serious difficulty in determining this difference, if any such exists, and when once ascertained there would certainly be no trouble in making distribution of. the proceeds of the property accordingly. This course would be in strict conformity with the practice of courts of equity in exercising this jurisdiction, from the earliest times. Moreover, after a most careful examination of the standard text books on the subject, we find no such qualification or limitation in them as that contended for, and this we regard as a very significant fact.

The decree of the court below is reversed, and the cause remanded for further proceedings in conformity with the views here expressed.

Decree reversed.


source: Caselaw Access Project

author: Mr. Chief Justice Scholfield

license: Public Domain

text:
    Carrie E. Dyer et al. v. Myron Hopkins et al.

      Filed at Ottawa November 17, 1884.

      Rehearing denied March Term, 1885.

    1. Degree—how far conclusive in another suit—as to defences not interposed at the proper time. Adult defendants who have been duly served with process in a suit to foreclose a mortgage, and make no defences, but suffer the mortgaged premises to be sold and the time for redemption to pass, will be precluded by the decree in such case from afterward defeating the title derived under it by alleging the defences of usury and payment of the mortgage debt in a subsequent suit, unless they were prevented from ' defending by the complainant in the foreclosure suit. It is not enough that some other person induced them to make no defence.
    2. Witness—competency—against executor or devisees. A person having an undivided interest in fee in a tract of land, and also an estate of homestead therein, on a bill filed by him to set aside an adverse title against parties defending as executors and devisees, is not a competent witness to testify to statements and declarations of the testator in his lifetime, for the purpose of impeaching the title acquired by him to the land. Nor will he be rendered competent by any release or transfer of his interest made for that puipose, only.
    3. Error will not always reverse—as to decree not really affecting rights of parties. On a bill by heirs of a deceased mortgagor to set aside a foreclosure sale as having been made under a decree obtained by fraud, the devisees of the mortgagee and purchaser filed a cross-bill, under which a transfer of the defendant in the foreclosure suit to a third person, and a conveyance by the latter to such defendant’s wife, was set aside and the original bill dismissed: Held, if there was error in setting aside the deed under the cross-bill, it could work no injury, as the title of the mortgagor was divested by the foreclosure sale.
    Appeal from the Circuit Court of Kendall county; the Hon. Clark W. Upton, Judge, presiding.
    On the 14th of May, 1879, Emily J. Dyer, Franklin E. Dyer, her husband, William Pollock, Caroline Knight, and Carrie E. Dyer, filed their hill in chancery in the office of the clerk of the circuit court of Kendall county, against John A. Knight, Thomas Atherton, Myron Hopkins, and William H. Hopkins, executors, etc., and on the 16th of December, 1880, they filed, in the same office, their amendment to said bill. As amended, it is, among other things, alleged in the bill, that one C. J. Dyer, being the owner of a tract of thirty-seven and three-quarters acres of land in Kendall county, therein particularly described, conveyed the undivided half thereof, subject to the mortgage hereinafter mentioned, to John A. Knight, and by subsequent conveyances this interest has been conveyed to his wife, Caroline Knight; that on the 15th of January, 1863, Dyer mortgaged this tract of land to Robert Hopkins, to secure the payment of a promissory note of that date, payable four years thereafter, for $1260, with interest at the rate of ten per cent per annum,—which note is usurious, a considerable part thereof being for interest upon money loaned, computed at the rate of twenty-five per cent per annum ; that Dyer and his wife, together with said Caroline and John A. Knight, occupied said tract as a homestead until the death of said Dyer and his wife, (both of whom are long since deceased,) and have been so occupied by said Knight and wife since; that said Dyer, in his lifetime, made various payments upon said note, amounting, in the aggregate, to the sum of $800, and after his death said John A. Knight, with money equitably belonging to complainants, in the proportion of their respective interests as heirs at law of said Dyer, paid to said Robert Hopkins the balance that was due upon said note and mortgage, and fully satisfied the same, but, notwithstanding their satisfaction, said Hopkins, conspiring with said John A. Knight to cheat and defraud complainants, falsely and fraudulently represented and proposed that, inasmuch as said Dyer and wife were both dead, it would be better and cheaper for complainants, and would give a better title to said land, for him to file a bill in the Kendall circuit court to foreclose the said mortgage, and that, on a decree being rendered for foreclosure and sale, said land could be sold at master’s sale, and thereby a perfect title could be obtained, and said John A. Knight could bid in said tract, and convey to each of the complainants his or her respective interest in the same; that the complainants then, having perfect confidence in the honesty and integrity of Hopkins and Knight, and believing said statements, assented to his proposals, and said Hopkins thereupon, in pursuance of such conspiracy, on or about the 28th of December, 1874, filed his bill in the circuit court of Kendall county, against the complainants, and the defendant John A. Knight, and others, to foreclose the said mortgage; that the complainants were served with process, but relying on the agreement aforesaid, with said Hopkins, and his honesty and good faith in the premises, etc., did not appear and put in their several answers to the bill, and afterwards, on the 9th of January, 1875, at the January term, 1875, of the court, the defendants to said bill were defaulted, and said bill was taken for confessed as against them and each of them; that the amount due, upon the mortgage was found to be $2772.35, and it was decreed the mortgaged land be sold for the payment of the same, with interest from the date of the decree, and that in case of failure to redéem, deed be given to the holder of the certificate of purchase; that after such decree was rendered, the master in chancery, on the 17th of April, 1875, sold said premises to said Hopkins, for $2886, and gave him a certificate of purchase; that complainants, relying upon the promise of Hopkins, and believing that he and Knight would perform all that Hopkins had represented to the complainants should be done, permitted Hopkins to take such certificate of purchase, as they had previously permitted him to take the decree in said cause, in his own name, without asserting their rights in the premises, on the full understanding and agreement with Knight and Hopkins that on the payment of the costs of the said cause to the clerk of the court, by John A. Knight, or by furnishing the same to Hopkins so that he could pay the same, he, Hopkins, would assign the certificate of purchase to said Knight, and Knight could take the deed to said premises, and could then carry out the agreement with the complainants in regard to the proper division of the tract among them; that Knight, pursuant to said agreement, paid to L. Gr. Bennett, clerk of said court, all the costs in the cause, and paid to said Hopkins all the money that was required to pay said master his commissions and all other costs attending the sale, but that, after the payment of said costs, said Hopkins and Knight neglected, from time to time, to have said certificate of purchase assigned to Knight, but stated to the complainants that they were willing to do so at any time,—that it was all right, and when the master in chancery made the deed on the sale, it should be executed to said John A. Knight; that said Caroline Knight, and John A. Knight, her husband, have continued in the sole and peaceable occupation of said tract since said sale and the making of said certificate to said Hopkins. It is then charged that said John A. Knight, in violation of said agreement and in fraud of the rights of the complainants in the premises, wholly neglected to procure the assignment of said certificate from Hopkins, and wholly neglected to obtain a deed from the master in chancery to said tract, but that said Hopkins, in violation of his said agreement with the complainants and said Knight, and in fraud of their rights, obtained a deed to himself on the said master’s certificate, but concealed knowledge thereof from the complainants; that said Hopkins died testate about June 1, 1878, and his executors and legatees are made defendants. It is further alleged, that said executors have commenced a suit of forcible entry and detainer, against said Caroline Knight, and her husband, John A. Knight, and are attempting to recover possession of said tract under said master’s deed to Hopkins, which suit was then pending on the common law side of the circuit court of Kendall county. The prayer is, that the master’s deed to Hopkins be cancelled and declared for naught, that the master in chancery be directed to execute a deed to said John A. Knight, and that said Knight be decreed to convey to complainants their respective interests in the estate, etc.
    The adult defendants, except John A. Knight, put in answers denying the material allegations of the -bill, and the minor defendants answered by guardian ad litem, also putting in issue the material allegations of the bill. The executors and legatees of said Robert Hopkins, deceased, thereupon filed their cross-bill in said cause, in which, after reciting the prior pleadings, they allege an agreement between the executors and said John A. Knight,. whereby it was agreed that said Knight should sell and convey to said executors an island in Fox river, containing about ten acres, and surrender possession of said tract so sold on foreclosure, etc., as aforesaid, and conveyed to said Robert Hopkins by the master in chancery, within a month or so, and said executors should pay him for said island $200, and dismiss said suit of forcible entry and detainer; that shortly after making such agreement, said executors took possession of the said premises, except the house and barn, and held the same for several days, but afterwards John A. Knight evicted them therefrom; that they are ready and willing to pay the $200 and dismiss the forcible entry and detainer suit, etc. It is also alleged therein, that said John A. Knight made a conveyance of an undivided half of said tract to said Caroline Knight, through one George Meredith; that such conveyances are clouds upon the title of complainants. The prayer is, that the agreement between said executors and said John A. Knight be decreed to be specifically performed, and that the deed from John A. Knight and wife to Meredith, and from Meredith to Caroline Knight, be cancelled and set aside, etc. The defendants- to the cross-bill answered, denying its material allegations.
    Replications were filed to the several answers, and the cause was heard on bill, and amended and supplemental bills, and answers, and cross-bill and answers, and evidence.intro-. duced. The court decreed that the bill, and amended and supplemental bills, be dismissed, and that the deeds of John A. Knight and wife to Meredith, and of Meredith to Caroline Knight, be cancelled and set aside. This appeal is prosecuted from that decree, and numerous errors, raising the questions discussed in the opinion, are assigned.
    Mr. Chas. Wheaton, Mr. A. J. Hopkins, Mr. N. J. Aldrich, and Mr. F. H. Thatcher, for the appellants, contended, from the evidence, that the decree below should be reversed, and made the following points of law:
    Where a witness does not testify on his own motion or in his own behalf, he is competent. Remann v. Buckmaster, 85 Ill. 403; Funk v. Eggleston, 92 id. 515; Caprez v. Trover, 96 id. 456.
    Husbands are competent witnesses for their wives in all matters pertaining to the separate estate of the wife. Funk v. Eggleston, 92 Ill. 515.
    Neither W. H. Hopkins nor any of the defendants, except Knight, were competent witnesses in this case for the defendants. They all come within the provisions of section 2, of chapter 51, of the Revised Statutes, on “Evidence and Depositions.” The complainants sue as heirs of C. J. Dyer, deceased, and all the defendants who have been sworn in this case are parties to the record, and are interested, and are called on their own behalf and on their own motion. They are incompetent. Stone v. Cook, 79 Ill. 424; Langley v. Dodsworth, 81 id. 86; Pyle v. Oustatt, 92 id. 209.
    Mr. A. C. Little, and Mr. R. P. Goodwin, for the appellees, after a full discussion of the evidence, made the following points of law:
    The second section of the act of 1867, making parties witnesses, with certain exceptions, contemplates that both the parties shall be living, and have an opportunity to testify.
      Boynton v. Phelps, 52 Ill. 219; Langley v. Dodsworth, 81 id. 86; Merrill v. Atkin, 59 id. 20.
    Knight was incompetent as a general witness for complainants. Marshall v. Peck, 91 Ill. 187; Pyle v. Oustatt, 92 id. 209; Corderey v. Hughes, 6 Bradw. 401; McCann v. Atherton, 106 Ill. 31; Wagenseller v. Prettyman, 12 Bradw. 341; Crane v. Crane, 81 Ill. 165.
    None of the executors testified as to any transactions except as to such as have occurred since the death of C. J. Dyer. As to such transactions they are competent witnesses. Holloway v. Calloway, 51 Ill. 159; Funk v. Eggleston, 92 id. 515; Stone v. Cook, 79 id. 424.
    But as a matter of law, the complainants do not, in the sense of the statute, sue as the heirs of C. J. Dyer. This bill is filed to set aside a decree against them personally, because of frauds which they allege were practiced upon them since Dyer’s death, and since their interest became vested. The distinction is a material one, and once seen determines the question.
   Mr. Chief Justice Scholfield

delivered the opinion of- the Court:

It is specifically alleged in the bill that all who are complainants in the present suit were made defendants to the bill to foreclose, and were properly summoned, as such, and before the court when the decree of foreclosure was rendered. They then had an opportunity to set up the defences of usury and payment, and unless they were prevented from doing so by the complainant in that suit, (Robert Hopkins,) they are now estopped from urging such grounds for relief. (Thomson v. Morris et al. 57 Ill. 333; Clubb et al. v. Wise, 64 id. 157.) But the bill alleges that “said Hopkins, conspiring with said John A. Knight to cheat and defraud complainants, represented that, inasmuch as said Dyer and wife were both dead, it would be better and cheaper for complainants, and would give a better title to said land, for him to file a bill in the Kendall circuit court to foreclose the said mortgage, and that on a decree being rendered for foreclosure and sale, said land could be sold at master’s sale, and thereby a perfect title could be obtained, and said John A. Knight could bid in said tract, and convey to each of complainants his or her respective interest in the same; that the complainants, having perfect confidence in the honesty and integrity of Hopkins and Knight, and believing said statements, assented to his proposals, ” etc.; and further, that they, “relying on the agreement aforesaid, with said Hopkins, and his honesty and good faith in the-' premises, etc., did not appear and put in their several answers to the bill, ” etc. It became, therefore, necessary, upon'the trial, to satisfactorily prove these allegations. If they were not proved, the excuse for not putting in answers to the bill to foreclose has failed, and the complainants are bound by the decree of foreclosure as to all.matters of defence occurring anterior to the time at which it was rendered.

We have been unable to find sufficient competent evidence to sustain these allegations. John A. Knight, who, as we shall hereafter show, was incompetent to prove any agreement with or declarations of Robert Hopkins, is the only person whose evidence pretends to detail an agreement with said Hopkins in regard to the foreclosure and sale thereunder, but it shows no agreement with .the complainants. It shows, on the contrary, distinctly, if anything, an agreement between Hopkins and the witness alone, whereby there was to be a foreclosure and sale thereunder, to enable the witness to cut off and defeat all rights of the complainants in the mortgaged property. On his first examination he said, as his evidence is abstracted by the complainants’ counsel: “After these payments were made, the way the mortgage came to be foreclosed, was this: My sister-in-law, Emily Dyer, was up here. I told the doctor [i. e., Hopkins] so, and asked him to come down. He did so, and she wanted to know what I would give her to sign off her right in the place. I told her, $100, and no more. At the train, when she went away, I offered her $100 if she would sign the release to that place. She would not take it, but offered to take $800. I told her the doctor proposed to administer on that estate of C. J. Dyer. I saw the doctor, and had a talk with him. He said I could sell the place at a mortgage sale, and it would not cost as much as it would to administer on the estate. We sat down on a pile of lumber near the depot, and talked this matter over. I agreed to have it sold at a mortgage sale,—that is, sell the place in controversy where I live. He said it would not cost over $20 to do it, and that he would get me a good title. He said she didn’t have anything or any interest in the place; that she had never done anything to have any interest there; that my wife, Caroline Knight, had always taken care of the old folks. This was before filing the bill. We talked about the amount due, and he said he had to go a good deal by memory, and he said he would sell it and give me a good title. We didn’t make any defence, for it was for my especial benefit. This was the day that Emily Dyer went home, and the foreclosure was to get the title of the place in me,—that was the reason the bill was filed. Emily Dyer is a sister of my wife. She and her husband were living in Logan county. There was talk of taking out letters of administration on the estate. The doctor said it would be cheaper to foreclose the mortgage, and he would sell it at a mortgage sale, so I would get a deed for it and shut her out. ” On a subsequent examination the same person testified, on cross-examination: “At the time the summons was served, my wife knew all about it, and that the mortgage was paid, and I told her that she need not look after it, but that I would. I told her that it was all right. I had no idea that the mortgage was being foreclosed for the doctor to get any money out of me. Neither had my wife. If we had thought of such a thing we would have put in a defence to the mortgage. The reason we did not put in' a defence to the mortgage, was because of the arrangement with Dr. Hopkins.”

But when Knight was first examined, he was the owner in fee, subject to the mortgage, of an undivided half of the mortgaged property. When he was next examined he had conveyed, by quitclaim, to Meredith, and Meredith, by the same kind of conveyance, had conveyed this undivided half to Knight’s wife. It is shown, however, that this property constituted, and was occupied by Knight and wife as, a homestead, before the conveyance and since, and up to the time of giving his evidence. He, then, must have had, when last examined, an estate of homestead in the property, or at least in an undivided interest therein. The statute allowing parties in interest to testify, makes the exception that “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 person sues or defends, * * * as the executor * * * or legatee or devisee of any deceased person.” (Rev. Stat. 1874, p. 488, sec. 2.) Indeed, the conveyances from Knight to Meredith, and from Meredith to Knight’s wife, seem, and were so found by the court, purely colorable, and were, doubtless, made as releases of his interest merely for the purpose of rendering him competent as a witness. If this was the purpose of their execution, they could not have the intended effect, for it is provided by the seventh section of the statute relating to evidence and depositions, (Bev. Stat. 1874, p. 490,) that “in any civil action, suit or proceeding, no person who would, if a party thereto, be incompetent to testify therein under the provisions of section 2 or section 3, shall become competent by reason of any assignment or release of his claim made for the purpose of allowing such person to testify.” In either view, however, Knight was not competent to testify to transactions occurring with and declarations of Hopkins in his lifetime. The opposite parties defend as executors and legatees of a deceased person, and he is himself directly interested in the event of the suit, and testifies in favor of that interest. McCann v. Atherton et al. 106 Ill. 31; Plain v. Roth et al. 107 id. 588.

Divesting the case of the evidence of John A. Knight, the only evidence that we can find in the abstract upon the question under consideration is as follows: George Ernst testified, speaking of the foreclosure and sale: “I had a conversation with Dr. Hopkins about the matter. I was crossing the river one morning with him. I said, ‘Doctor, you are not going to sell that place of John’s, are you?’ He said, ‘I have got to, in order to get him a good title.’” C. J. Dyer, a nephew of the deceased C. J. Dyer, speaking of the foreclosure and sale, testified: “I met Hopkins, and asked him if he was going to sell them out, and what for. He said the sale would get Knight a better title, on account of Franklin E. or Emily J. Dyer,—that the sale would help John’s title.”

If, anywhere in this record, there is evidence of a contract between Hopkins and these complainants in regard to this foreclosure and sale, or of an act done or word said to them by him to induce them to not appear and defend against the foreclosure, we have been unable to find it. Conceding, for argument’s sake, only, that as to Knight there is such proof, Knight is not complainant here, and he therefore neither seeks nor is entitled to affirmative relief under the pleadings. Nothing is shown to have been done or said, even by him, to induce the complainants not to appear and defend against the foreclosure suit; and it can not be claimed he was acting as their agent, for the evidence quite as clearly shows, as it shows anything, that he was intending by the sale to cut off their rights and obtain for himself the entire title. The complainants have had their day in court, and having neglected to interpose their defence against the mortgage then, they can not now be allowed to urge the same matters as grounds for affirmative relief.

We are unable to say the decree on the cross-bill is not authorized by the evidence; but whether so, or not, if we are right in what we have said as to the relief sought under the original and supplemental and amended bills, these complainants are not prejudiced thereby. That decree takes nothing from them to which they would otherwise be entitled.

The decree is affirmed.

Decree affirmed.

Subsequently, upon an application for a rehearing, the following additional opinion was filed:

Per Curiam : We have considered the several reasons assigned for a rehearing in the petition, and still remain of the opinion heretofore announced.

If it shall be conceded to be proved, as is in the petition suggested, that John A. Knight, with the knowledge and approval of his wife, Catherine, and as her agent, as well as for himself, entered into a contract with Hopkins, whereby to have the title to the property in controversy so Vested in himself as to cut off the title of the heirs at law of Dyer, it. may be answered, first, that is not the case made by the bill, and so a decree, as prayed by the bill, can not be rendered thereon; and secondly, such an agreement is iniquitous and fraudulent as to the heirs at law of Dyer, and so is insusceptible of enforcement in a court of equity. If, also, we shall concede that as to Carrie E. Dyer and the other heirs at law of Dyer, Knight was, as is in the petition contended, a competent witness, it is sufficient to answer, as is shown in the foregoing opinion, that his evidence does not prove, as to them, the allegations of the bill. But the rule of chancery practice whereby parties were allowed to testify, was limited to cases where their evidence could not be used in their own favor. (Bragg v. Geddes, 93 Ill. 39.) Here, the interests of the parties, on the case made by the bill, are so interwoven and inseparable that it is difficult to conceive how effect could be given to the evidence tending to prove the alleged agreement, with reference to some, and not to all, claiming under that agreement. Inasmuch as the claim of estate of homestead of John A. Knight is coextensive with the claim of estate in his wife, it is impossible that his evidence in favor of his wife shall not equally be evidence in his own favor. His interest, if it be admitted that he has no other estate than that of homestead, still exists in the property to that extent; and it is not separate and independent from her estate, but, on the contrary, results from or grows out of it, so that if her estate fails, his must fail also. But if he has an interest or claim in the property separate and apart from this, that only increases his interest in the litigation, and renders it still more certain that he is incompetent.

The rehearing is denied.

Rehearing denied.


author: Mr. Justice Mulkey

text:
    The Erie and Pacific Despatch v. George Cecil, Jr., et al.

      Filed at Ottawa November 17, 1884.

    1. Contract — association of railroad companies—contract by one company, whether binding on all. Where a combination or association of three or four different railroad companies is formed for the transportation of freight and the transaction of the business of a common carrier, which is , conducted by the general managers of each of the component companies, as in the case of a partnership, so long as one of the companies acts within the general scope of its powers in making contracts or performing other acts on behalf of the association, the association itself will be bound, although the particular company acting for it has exceeded its authority, as tested by its laws or articles of association.
    2. Same—contract with carrier for rebate on freight—of its validity. A contract of. a railway company or association of such companies, made by its usual agents, with a shipper, to ship and carry a large quantity of grain at a reduced rate, which is five cents on the hundred pounds less than the customary rates, but that the same should be billed at the regular rates then current and the freight paid at the latter rates, the difference in the two rates to be forthwith paid back to the shipper, is valid and binding on the company or companies making the same.
    3. Evidence—question assuming fact in dispute. It is a general rule that a question to a witness should not be so framed as to assume the existence of a material fact of which there is no proof, particularly if the fact is-a controverted one, and the person testifying is what is known as a “willing” witness. Still, a court of review will not interfere with the exercise of the discretion of the judge who tries the case in such matters, except where it is apparent the complaining party may have been injured by the ruling.
    4. So, in a suit to recover a promised rebate of a part of freight paid on a shipment under a special contract, the making of which was not disputed, but where the authority of the agent and question of a ratification were in dispute, the plaintiff called his agent who made the contract for him, and asked him this preliminary question: “With whom were the contracts for the shipment of this corn made?”—which the court allowed, over the defendant’s objection: Held, that there was no error in allowing the question in such a case.
    5. Same—to prove authority of agent to malte a contract. Where the power of an agent to make a contract is disputed, the most convenient and natural course to pursue is, first, to establish the fact that an agreement was made, by showing its terms and the names of the parties who officiated in settling them, and then to show that those who assumed to act had the requisite authority to do so.
    6. Same—communications between third persons—on the question of authority of agent. On the question of the authority of a local railroad agent to make a special contract for shipping corn at reduced rates, the company, denying the agent’s authority, offered in evidence several telegrams of about the date of the contract, between its general agent and another local agent, tending to show that the former agent had refused to make any reductions for others on freight between the same points: Held, that the telegrams were properly excluded, as having passed between persons who were strangers to the contract in question.
    7. Same—articles of association between railroad companies—as bearing on the same question. In a suit against an association of railway companies on a contract made by a local agent of one of the companies, the defendant offered in evidence the articles of agreement between the several companies composing the association, for the purpose of showing a want of power in the local agents to make the contract: Held, that they were not admissible in evidence against the plaintiff, as the public could not be bound by them, or the rules and regulations they might contain.

      8. Same—letters between agents, as showing the terms of a contract. A letter of an agent of a shipper, who made a special contract with an agent of a railway company in this State, for the shipment of grain, stating that fact, and' that the railway agent would say what length of time would be allowed to fill certain of the cars, which was indorsed by the railway agent addressed: “ Can’t specify any time—the 250 cars for immediate shipment, ” the latter signing the same, was admitted in evidence in behalf of the plaintiff in a suit by the shipper to recover for a rebate upon freight paid, as tending to show the terms of the contract, over a general objection to its relevancy: Held, no error, and that the letter with the indorsement was competent to show the contract as actually made, leaving the railway agent’s authority to be shown otherwise.
    9. Same—telegrams to show ratification of contract. To prove the ratification of a special contract made by a station agent of a railway company in this State, which company, with others, constituted an association in the nature of a partnership, it appearing that the general manager of the same company approved such contract, the plaintiff offered in evidence three telegrams between the general manager of the railway company and the general manager of the association, showing that though the first had exceeded his orders, the latter would protect him: Held, that the telegrams were competent evidence on that question.
    10. Same—performance of contract made by an agent as evidence of ratification. Where the general manager of an association of railway companies has notice of the existence and terms of a special contract for transporting grain at a reduced rate, made by an agent of one of the associated companies, and afterward furnishes cars and transports the grain, this is evidence from which a ratification of the special contract may be found.
    Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. Rollin S. Williamson, Judge, presiding.
    Messrs. Willard & Driggs, for the appellant.
    Messrs. Walker & Carter, for the appellees.
   Mr. Justice Mulkey

delivered the opinion of the Court:

On the 15th of December, 1882, George Cecil, Jr., and William R. Anthony, the appellees, brought an action of assumpsit in the Superior Court of Cook county, against the appellant, the Erie and Pacific Despatch, an association of railway companies, for an alleged breach of a special contract, whereby, it is claimed, the defendant agreed to pay the plaintiffs a special rebate on certain shipments of freight made by them over the defendant’s lines of road. The cause was tried before the court and a jury, resulting in a verdict and judgment for the plaintiffs for $8644.86, which judgment, on appeal, was affirmed by the Appellate Court for that district, and the defendant, by further appeal, brings the ease here for review.

The declaration charges, in substance, that the plaintiffs, on the 15th of April, 1881, through their agent, John E. Morgan, made and entered into a contract with the defendant, a common carrier and association consisting of the New York, Lake Erie and Western Railroad Company, the Cleveland, Columbus, Cincinnati and Indianapolis Railway Company, the Indianapolis and St. Louis Railroad Company, and the Illinois Midland Railway Company, whereby the defendant agreed to furnish the plaintiffs a large number of cars, to-wit, two hundred and eighty- six, for the transportation of grain from Peoria, Illinois, to Jersey City, New Jersey, and upon completion of which service and labor defendant was to receive from plaintiffs the sum of twenty-two and a half cents per hundred pounds of grain so transported, it being further agreed that the defendant was to bill said grain to plaintiffs at the regular rates then current for similar service, which said regular rates plaintiffs were thereupon to pay to defendant, and defendant then and there promised the plaintiffs, upon their payment of such regular rates to the defendant, that it, the defendant, would forthwith repay to plaintiffs the difference between the said regular rates and the said sum of twenty-two and a half cents for each one hundred pounds of grain so transported as aforesaid. The declaration then proceeds, by appropriate averments, to show a performance of the contract on the part of the plaintiffs, and a breach by the defendant, in neglecting and refusing to repay to the plaintiffs the difference between the current rates and the contract price for the transportation of said grain, which is averred to be, in the aggregate, $8368.80.

The evidence, we think, tends to establish the material facts in the declaration, as above charged.

It is said by appellant’s counsel, in the commencement of their written argument: “The only questions seriously controverted below, were, first, whether the appellant contracted or ratified a contract to repay to appellees the difference between the current rate and a rate of twenty-two and a half cents per hundred pounds, and if so, whether such contract, if made, was valid and binding on appellant. In the trial court both questions were determined in favor of appellees, and they had judgment for $8644.86. The Appellate Court having affirmed the judgment, the first of the two questions mentioned is, of course, eliminated, except so far as the same shall be found involved in the rulings of the trial court upon the admission and rejection of testimony, and the giving, refusing and modifying of instructions.” This statement of counsel we accept as eqrrect, and as showing the true status of the case in this court. The second question thus referred to as having been settled adversely to appellant,—namely, whether the contract, assuming it to have been made, was valid and binding on the appellant,—being one of law, is, of course, open for reconsideration in this court, and as it goes to the very foundation of the action, it will be first disposed of.

The contract in question seems to be assailed mainly on the ground that if given effect it would lead to great abuses, and place associations like the defendant completely at the mercy of its agents. We think counsel entirely over-estimate the evils and inconveniences that are likely to result from sustaining a contract of this character. Most of the objections urged against this contract would apply with equal force to all contracts made by agents within the scope of their general powers, where they have transcended mere private instructions. To release the principal, in such cases, from responsibility, would be violative of one of the fundamental rules of the law of agency, and would seriously derange and unsettle the present system of conducting business through the agency of others. It is of the utmost consequence to the community that all servants and agents entrusted with the transaction of business in which the public are interested should be reliable and trustworthy, and the most effectual means of attaining this object is to hold those-who have the selecting of them, responsible for their conduct while acting within the general scope of their authority.

But the question we are considering is not a new one in this court. Toledo, Wabash and Western Ry. Co. v. Elliott, 76 Ill. 67, like the present case, was an action to recover a rebate on freight paid by the shipper for the transportation of a lot of corn, under a special agreement. In that as in this ease, the contract under which the shipment was made was assailed both on the ground it was illegal and that the agent had no authority to make it. In answer to these objections this court there said: “There was certainly an apparent authority in the local agent to contract for carrying the grain under some special arrangement. It seems quite certain, from all the evidence, the corn was shipped over defendant’s road on the agreement the company would allow plaintiffs a rebate on the usual charges, and having availed itself of the benefits of the contract, the company ought not now to be permitted to repudiate it on the ground their agent had no authority to make it. * * * The contract was, to carry the grain at the customary rates. The rebate in the charges was matter of private agreement between the carriers and the shippers.” What was there said is equally applicable here, and under the authority of that case we must hold the agreement in this, valid and binding.

The contract in the present case was made, on behalf of the plaintiffs, by Morgan, at Peoria, Illinois, with Nash, the local agent of the Midland Railway Company, who assumed to act for and on behalf of the Erie and Pacific Despatch, though his authority to do so is denied by the appellant. Morgan having been introduced by plaintiffs as a witness, for the purpose of showing the agreement and circumstances under which the shipments of the grain were made, was asked this preliminary question: “With whom were the contracts for the shipment of this corn made?”—which the court permitted the witness to answer, against the specific objection of the defendant that the question assumed the existence of such contracts, without any evidence of the fact. While we recognize the general rule that a question should not be so framed as to assume the existence of a material fact of which there is no proof, particularly if the fact is a controverted one and the party testifying is what is known as a willing witness, yet the examination of witnesses is a matter so largely in the discretion of the judge who presides at the trial, that courts of review will not interpose except where it is apparent the complaining party may have been injured by the ruling of the trial court. Testing the case by this rule, it is manifest the ruling of the court complained of, affords no ground for reversal. That a special contract was made by Nash, on behalf of appellant, for the shipment of the grain, is not and was not a controverted question in the case. The frictional point upon which the case turned on the trial below, was whether this contract was in fact and in law the contract of appellant,—0115 differently stated: first, whether Nash was authorized to make the contract on behalf of. the appellant; and if not, secondly, whether appellant subsequently ratified the contract. It is clear the interrogatory complained of does not assume either the fact of Nash’s authority, or the fact of appellant’s subsequent ratification. The object of the inquiry was simply to disclose the particular individuals through whose agency the agreement under which the corn was shipped was effected, and we think for that purpose the question was proper. It is conceded the grain was shipped over the appellant’s lines of road in its own cars, under a bill of lading signed by Baker, its local freight agent where the shipment was made, and that it received from appellees full rates for the transportation of it, and of necessity it must .have been shipped under some kind of a contract, either express or implied, and there was therefore nothing improper in so framing the question as to assume the existence of such a contract. It is clear appellant could not have been injured by it.

The contract for the shipment of the grain was made about the 18th of April, 1881. Three days latei", and before the transportation of any of the grain, Morgan prepared a letter, dated the 23d, addressed to appellees at New York, their place of business, and setting forth the fact of having procured cars from the Illinois Midland Bailway Company for the shipment of the grain over appellant’s line of road, and the terms upon which they were obtained. On the 25th this letter was submitted to Nash for his indorsement, before enclosing it to appellees. The letter, together with Nash’s indorsement thereon, was then mailed to appellees, at New York. It is as follows:

“ILLINOIS MIDLAND RAILWAY COMPANY,
L. Genis, Receiver,
Peoria Station, April 23, 1880.
“George Cecil, Jr. & Co., New York:
“Gents—I have just contracted with the Illinois Midland B. B. for the shipment of 250 cars of corn grain, from here to New York, by E. '& P. D. fast freight line, at 22 and a half cents per one hundred pounds. The other 300 cars, 100 cars by the White line, and 200 cars by the South Shore line, and we have month of April to fill. Mr. Nash will O. K. this contract, as stated, how long a length of time we have to fill the other 250 cars by the E. & P. D.
“Yours, etc., John F. Morgan.”
“Peo., 4, 25, 1881.
"George Cecil, Jr. & Company:
“Gents—Can’t specify any time—the 250 cars for immediate shipment.
“Yours, truly, J. L. Nash. ”

On the trial, this letter, together with the indorsement thereon, was admitted in evidence, against the objections of the appellant, and this is assigned for error. The objection was of a general character, going only to its relevancy. While the instrument is in the form of a letter, merely, yet, when taken in connection with the indorsement of Nash, we think it was competent, for the purpose of showing the terms of the agreement as actually made between Morgan and Nash, leaving open the question of the Midland company’s authority, through Nash, to bind the appellant, to be determined by such proofs as might be offered on that subject. That this was done, is abundantly shown from the record. In all cases where the power of an agent to make a contract is questioned, the most convenient and natural course to pursue, is to establish the fact that an agreement was made, by showing its terms and the names of the parties who officiated in settling them. The next step is to show that those who assumed to act, had the requisite authority to do so. Such was the order of the proofs in this case, and we perceive no objection to it.

The evidence tends to show that the contract, as made by Morgan and Nash, was approved by A. E. Schraeder, general manager of the Illinois Midland Railway Company, whose headquarters were at Terre Haute, Indiana, but that H. R. Duval, the general manager of the Erie and Pacific Despatch, did not, in the first instance, approve of it;- that on being informed by Frank Baker, the local agent of appellant at Peoria, as to the character of the agreement, he sent to Schraeder the following telegram:

“New York, April 19, 1881.
“A. E. Schraeder, Traffic Man., Terre Haute, Ind.:
“Baker wires me you contracted 150 cars for E. & P. Despatch on 16th, at five cents off. My orders positively prohibit me making any concessions whatever on tariff. Will you be able to protect this ? I imagine you will.
H. R. Duval.”
—To which Schraeder, on the same day, answered as follows:
“Peoria, Ill., April 19, 1881.
“H. R. Duval, 6 Bowling Green, New York:
“No, I can’t; but I took it for granted you certainly would do as well as other managers. Your telegram frightens me.' Please answer quick. . _ „ „
„ A. E. Schraeder.

As a reply to this last dispatch, Duval on the next day sent to Schraeder the following:

“New York, April 20, 1881.
“To A. E. Schraeder, Peoria, Illinois:
“Of course I will have to help you out, although I am very sorry that you did it. You need not be frightened, howeyer.
H. B. Duval.”

This reply the court admitted in evidence against the objections of the defendant, and its ruling in this respect is assigned for error. We think the court ruled properly in admitting the evidence. One of the questions involved in the case, as stated by appellant’s own counsel, was, whether, assuming Nash acted without authority in making the contract with Morgan*’ there was a subsequent ratification of it on the part of appellant, and we think this was competent evidence tending to establish the affirmative of that issue. It showed, conclusively, the appellant, through its general manager, prior to the performance of the contract had notice of its existence, which, taken in connection with the fact the appellant, without any new understanding or arrangement, proceeded to furnish the ears and transport the grain as in the original contract provided, certainly tended to prove a ratification.

Several telegrams which passed between Baker and Duval, dated, respectively, the 16th, 18th and 19th of April, 1881, and tending to show that the latter, as general manager of the appellant, refused to make any reduction on current rates from Peoria to New York, were offered in evidence by appellant by way of defence, but, on appellees’ objection, were excluded from the jury. We think the court ruled properly in not admitting these telegrams in evidence. The appellees are not connected with them, and they are mere communications between strangers, and we are aware of no principle upon which appellees should be bound or injuriously affected by them.

Other evidence of a similar character was offered in defence, and, on objection, ruled out by the court, and, for the reasons just stated, we think properly. Of this class of evidence offered and rejected, were the articles of agreement between the companies constituting the Erie and Pacific Despatch. These articles were offered in evidence for the purpose of showing that neither Nash nor Schraeder had the power to make the contract sued on, and that Duval was equally powerless to so ratify it as to bind the appellant. The court, however, as already indicated, properly excluded them from the jury. These articles of association would have been altogether proper had the controversy been between the companies, or the officers of the companies, composing the association, and the inquiry had been, as to the rights and powers of the members of the association or its officers. But that was not the case. The public do not and are not supposed to know anything about the rules and regulations defining the powers and prescribing the duties of such an association, and consequently it would be highly unjust to hold those dealing with it responsible for any infraction of its rules and regulations by its own members or agents. The business of the defendant association seems to be conducted by the general managers of the railway companies composing it, and such agents and subordinate officers as they may appoint Glare provided for under their articles of association. These companies thus associated together are in their business relations to the public much like a partnership, and many of the general principles that apply to one are equally applicable to the other. As in the case of a partnership, so long as one of these companies acts within the general scope of its powers in making contracts, or performing other acts on behalf of the association, the association itself will be bound, although the particular company acting for it has exceeded its authority, as tested by its by-laws or articles of association. It is manifest the public could not safely do business with it on any other principle.

With respect to the instructions little need be said. The exceptions taken to the two given on behalf of appellees raise a question we have already discussed, namely, the validity of the contract upon which the action is brought. If the declaration discloses a good cause of action,—and we are of opinion it does,—then there was no error in giving plaintiffs’ instructions, for, in effect, they merely told the jury that if they found the facts as charged in the declaration, they should find for the plaintiffs. In short, we are of opinion appellant has no just cause to complain of the rulings of the court in the giving, refusing or modification of instructions.

The judgment will be affirmed.

Judgment affirmed.


author: Mr. Justice Walker

text:
    Ferdinand W. Peck v. Timothy Cooper.

      Filed at Ottawa November 17, 1884.

      1. Officers of corporation—individual liability of officers for any wrongs done by their order. If an officer of a private corporation performs an illegal act, or such act is performed by his orders where he has authority to control the servant doing the act, and such illegal act results in injury to another, the officer directing the act will be individually liable in damages to the injured person; nor-will he be exonerated from such liability from the fact that the corporation may also be liable.
    2. Same—excluding colored persons from public conveyances by direction of an officer of the corporation—liability of the officer. Where the president of an omnibus line, an incorporated company, promulgated an order to its drivers to exclude all colored persons from riding in their conveyances, and in pursuance of such order a driver ejected the plaintiff, who was a colored person, from his omnibus, thereby inflicting a personal injury, it was held, that the president individually was liable to the plaintiff for the damages received.
    3. Evidence—as to extent of defendants interest—in suit against officer of a corporation for injury done by a servant under his direction. In an action against the president of an omnibus line, a private corporation, to recover for an injury in being ejected from an omnibus by the driver, in obedience to a general order of the president, evidence on the part of the plaintiff that the defendant was a large stockholder in the company, and that he and his brother owned a major part of the stock, and as to what disposition they had made of the same, is wholly irrelevant and immaterial. The only proper inquiry should be, whether he had control of the management of the company and the direction of its affairs.
    4. Measure of damages—evidence as to retaining servant after damage from his unlawful act—in suit against the master. The retaining of a servant of a company after knowledge is brought home to the officer or agent of the company of his misconduct resulting in a personal injury to another, or-failing to discharge him for negligence, etc., has been held admissible in evidence, when the fact was known to the officer or agent of the company having power to dismiss the negligent servant, as characterizing the animus of those controlling the company, and as an ingredient in the measure of damages.
    5. Error wide not always reverse—as to the admission of evidence. It is only when this court can see that the admission of irrelevant and wholly immaterial evidence has worked, or has probably worked, an injury to the party complaining, that it will reverse for error in receiving the same.

      Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. Sidney Smith, Judge, presiding.
    Mr. Wm. W. Gurley, for the appellant:
    The doctrine of respondeat superior does not apply to intermediate agents, hut only to the ultimate principal. Thompson on Liability of Officers of Corporations, 489; Bath v. Caton, 37 Mich. 139; 2 Thompson on Negligence, 1060; Hewitt v. Swift, 3 Allen, 420; Bacheller v. Pinkham, 68 Me. 253; Stone v. Cartwright, 6 T. R. 411; Nicholson v. Mounsey, 15 East, 384; Peck v. Cooper, 8 Bradw. 403, and 13 id. 37.
    The trial court erred in admitting evidence tending to show that after the injury to the appellee, the driver, Lewis, was retained in the employment of the company.
    The court below erred in admitting evidence in regard to the amount of the capital stock of the People’s Omnibus and Baggage Company held by the appellant and his brothers.
    Mr. E. B. McClanahan, for the appellee:
    In Peck v. Cooper, 8 Bradw. 408, the court say: “The mere fact that a person is a director and stockholder in a corporation does not render him liable for the torts of the corporation or its agents.” The soundness of this principle is not disputed, but it is limited in its application by another question, which is one of fact, and in the same connection the court say: “Some knowledge and participation in the act claimed to be tortious must be brought home to him. ”
   Mr. Justice Walker

delivered the opinion of the Court:

This action was brought to recover for damages claimed to have been sustained by plaintiff by being forcibly ejected from an omnibus controlled and operated by defendant in Chicago. There have been several trials, in the Superior and Appellate courts. On the last trial the jury found, and the court rendered a judgment, against defendant for $2600, and the case comes to this court by appeal from th'e Appellate Court for the First District.

The “People’s Omnibus and Baggage Line” was organized and became a corporation in 1871, and before the injury of which complaint is made. The horses and omnibus belonged to, and the driver was employed by, the company. Appellant was the president of the company, and was sued individually in this action, and was held liable for the injury.

The law conferred on appellee the right to travel in the omnibus, and if he, in the exercise of that right, was injured by the order of appellant, the latter is liable to respond for the injury in damages. The fact that appellant was th,e president of the corporation is no protection to him in the commission of an illegal act, and where an officer of an incorporation performs an illegal act resulting in an injury to another, he is liable. Nor does it exonerate him from such liability because the corporation may also be liable. The only question, therefore, is, did appellant give the order to the drivers of omnibuses of the company to exclude colored persons from traveling therein? That is a question of fact that was submitted to a jury, and they found appellant gave the general order tinder which appellee was expelled and injured by the driver. The Appellate Court have, by affirming the judgment, approved of the finding, and we are precluded from reviewing the evidence on that question. There being no semblance of authority to justify the promulgation of such an order, appellant was properly held liable on proof of the fact, unless the trial court has committed some error as to the law in trying the case. We will proceed to determine whether any such error was committed.

It is urged that the court erred in permitting evidence to he introduced that appellant was a stockholder in the corporation, that he and his brothers held a majority of the stock, and to inquire as to their disposition of the stock. This was clearly irrelevant to the issue, as whether they were stockholders, or not, was wholly immaterial. Appellant was the president of the company, and if he had control of its management and the direction of its affairs, it was wholly immaterial whether he owned its stock, or what amount, or what he did with it. But notwithstanding the evidence in question was irrelevant, we are unable to perceive how it could have prejudiced appellant before the jury. If we were to reverse in every case where immaterial evidence is admitted, but few judgments would ever be sustained. It‘is only when we can see that the admission of such evidence worked, "or probably did work, an injury to the party complaining, that we reverse.

There is an objection that the court erred in admitting the evidence of Young and Collins, who were drivers for the company at that time, that they had received from the assistant superintendent orders not to permit colored persons to ride in their omnibuses. If they received such orders, it was from a superior officer in the management of the affairs of the corporation. It may be it was inadmissible under the strict rules of evidence, but it was, under the circumstances of this case, irrelevant, and could have done no harm.

It is also urged that the court erred in admitting evidence that the driver was retained in the employment of the company after appellee was injured. Such evidence has been held admissible, when the fact was known to the officer or agent of the company having power to discharge the negligent servant, as characterizing the animus of those controlling the company, and as an ingredient in the measure of the damages. Inasmuch as we are precluded from considering the evidence, we must hold there is no error for which the judgment of the Appellate Court should be disturbed, and it is affirmed.

Judgment affirmed.

Mr. Chief Justice Scholfield: I do not concur in this opinion.