text:
    (No. 2359
    Samuel M. Smith, Claimant, vs. State of Illinois, Respondent.

      Opinion filed March 9, 1937.

    A. C. and B. F. Anderson, for claimant.
    Otto Keener, Attorney General; John Kasserman, ■ Assistant Attorney General, for respondent.
   Me. Justice Linscott

delivered the opinion of the court:

This is a claim filed under the Workmen’s Compensation Act and alleges that the claimant, while an employee of the State, under the Division of Highways, was injured on September 19, 1933; that at the time of the injury he was pushing a cement cart, used in road repairs, about three miles southeast of Charleston, Illinois; that the injury was caused by one J. W. Hardway, not an employee of the State, running a truck against the claimant.

The claimant received a fracture of the fifth sacral vertebra, and a fracture of the lower ramus of the pelvis.

It appears from the file that Hardway, at the time of the injury to claimant, was operating his own truck and was insolvent. Claimant was struck at the lower end of the spine and undoubtedly received a severe injury, and he claims that he has not been able to engage in any occupation since the injury.

It is stipulated that all parties are under the Act and that the injury arose out of, and in the course of claimant’s employment.

At the time of claimant’s injury, he was thirty-six years of age, and resided with his wife and four children, under the age of sixteen years. Since that time two more children have been born, and the question for this court to determine is the extent of the injuries and the amount that claimant should receive.

It appears that the State has paid medical expenses in the amount of $115.00, of a bill of $143.50, to the attending physician, leaving a balance unpaid in the sum of $28.50, which is due to the estate of Dr. C. H. Harwood, Dr. Harwood having died since claimant’s injury.

At the time of the injury, claimant was earning $12.00 per week, and compensation has been paid to April 1, 1934, in the amount of $159.00.

Claimant contends that prior to the injury he was in good health and had not had any illness of any nature, and as the result of the injury, he was confined to his bed about six weeks, and to his home for several months, and always has an ache across his back, and that the ache continues in the back of his head; that he has a limp in the right leg, but that does not pain him; that he has endeavored to work and has worked some in his garden and washing. The record does not state what was meant by the word “washing”, but we assume it means washing dishes and clothes. He further testified that when he works to amount to anything, he has an ache that comes up his back on the left side into the back of his head and makes him very sick; that he can lie down an hour or so and he will get relief; that he then will work more and lie down a while, and so on. He states that since the injury, he has pulled brush and chopped saplings, but the ache comes up his back and into his head; .that when be laid down for an hour or half an hour or two hours that the ache would leave. In more recent testimony, he says that he does not take any medicine, and says that he has to go in a half stooped position “in order to hold the ache down”. He testified that last fall he cut some broom corn when he was able, and that he had the same ache, and would have to lie down in the broom corn field for an hour or so; that then he could get up and continue to work and then was required to lie down an hour again; that since the accident, he has not been able to do any continuous physical labor; that during the last year or two, he has earned fifteen or twenty dollars from labor.

Claimant further testified that since Dr. Harwood’s death, he has employed Dr. Alexander. He further testified that his head hurt him the same as his back; that he had a pain in the back of his head. Claimant testified that he did not get sick in the stomach: “I just get sick, my flesh. When I have an ache in my back from stooping why it makes me sick, just like I was sick td the stomach only it is in my flesh, makes me deathly sick. I have to go lay down. I go and lay down and lay there until it wears off, probably an hour or half hour.” He was then asked: “How many times have you had to rest during the week from attempting to perform labor since the last hearing to the best of your remembrance?” To that he did answer: “I would say three times a week, because I wash twice.” He further testified that he helped with the housework and that the weakness above referred to would last probably an hour, but when he would lie down, it would wear off, but he said “That pain in the back that always stays there.” He further testified that when he got up and moved around the pain would come back again.

Claimant further testified that when he worked he got nervous; that he couldn’t sleep nights; that he had nervous spells; that when he would go to bed he couldn’t lie there; that he had to get up and move around; that he had never been able to sleep on his back or left side; that he could sleep on his right side, and always has, meaning since the accident.

This testimony was taken about two years or a little more after the accident.

On cross examination claimant testified that he went to his neighbors and pulled weeds out of the strawberry gardens, but was not paid by the day. He received whatever compensation the owner of the strawberry patch saw fit to pay him.

Claimant further testified that his left leg was not affected, and neither was his arms nor shoulders; that he had a limp caused by a little stiffness in the knee.

Dr. Swickard testified that he was engaged in the general practice of medicine and surgery in Charleston, Illinois, and had been so engaged for about twenty years. He testified that he had been in court and heard all of Smith’s testimony, and several hypothetical questions were put to the doctor, based upon that testimony. He further testified that he had examined the claimant a day prior for the purpose of qualifying himself to testify; that there is no fixation of the knee joint, but whenever claimant walks rapidly he stiffens his knee and it appears that there may be some tilting of the pelvis as he walks, but he could not explain why it was that way; that he examined the X-ray pictures taken of the claimant’s hips, and the pictures disclose a fracture across the fifth sacral vertebra, and a fracture of the right lower ramus of the pubis; that there was a large amount of callus on the right side of the fracture, and that the fracture of the sacrum had healed; that he palpated over the area which had been painful at the previous examination and that he could only elicit pain over the lower part of the back; that the region around the pubis was non-painful at this examination; that he had the claimant do some bending and that he could bend fairly well, and in the opinion of the doctor, the twisting of the pelvis when he bends, was the result of the crushing injury to his pelvis; that all other examinations of the heart and lungs were negative. This doctor also testified that there was no nerve running directly from the lower part of the spine up to the head; that the feeling claimant had in the back of his head was because of the pain lower down in the back going into the nervous center up to the base of the brain, and that the claimant only thought that the pain went through the back hut that was impossible, but that would be true of any individual who had an injury such as the claimant had.

It is strenuously contended in this case that the claimant has suffered total and complete disability arising from the accident. The same physician testified that he had examined the claimant on March 5, 1936, at his office; that that was the day before the testimony was taken. The physician was asked several hypothetical questions, which were improper. The first question was as follows:

“Assuming that the injury happened as related here by Mr. • Smith and his pelvis was crushed and injuries were made to the bones in that region as testified to at a former hearing by you, from your examination of the X-rays and from what testimony you have heard Mr. Smith relate here this morning with reference to this injury, have you an opinion what causes this pain that has been related by him, what is that?”

It will be noted that the question referred to the testimony by Mr. Smith, the claimant, which has in part been hereinabove set forth. In answer to the question the doctor testified that he believed that the pain and consequential disability is due to and resulting from the crushing injury which caused these fractures and the pressure upon the surrounding tissues, surrounding muscles and nerves. Again he was asked on direct examination:

“Assuming that all the testimony that has been given here this morning by Mr. Smith is true and assuming that his injuries are or have been sustained as narrated by him and assuming that his pelvis bone has been broken and one of the vertebra as shown in the X-ray pictures heretofore introduced in evidence in this cause, and assuming all these facts to be true, have you an opinion whether or not, based on a reasonable degree of medical certainty, this man’s present physical condition results from the injury assumed in the question?”

To this he stated that he had an opinion and believed that his condition was a direct result of the injury. Again reference is made to the testimony of Mr. Smith, which included his’testimony concerning aches, pains and sickness, etc. Again the physician was asked:

“Have you any opinion about when this man, assuming that the facts are true, would be able to do any labor that he is physically or trained to do ? ”

The witness answered that he had such an opinion, and when asked what it was he replied:

“I don’t believe he will ever be able to do the work that he did previously. ’ ’

He was then asked:

“Hot from your separate investigation, but from what you have heard here from Mr. Smith, assuming those facts are true and connecting with your examination of the exhibits, is your opinion that you have given here been based on that only?”

The witness answered:

“Based on the whole picture as I understand it”.

On cross examination he testified that in his opinion the right pelvis was tilted, and inclined a little to the right side. The doctor stated that when the patient walked slowly everything apparently shows just all right; that when he goes a little fast he gives down. He then stated that the left side appears to be a little higher; that the fractures that the claimant suffered were straight fractures. He was further asked on cross examination:

“In your opinion what was the cause of that tilting if simple fractures that have healed or knitted perfectly?”

The witness answered:

“I could not explain that to my own mind. I don’t know exactly just why. You have a feeling when you watch him walk that there might be a little shortness of that limb, but when he stops and stands up straight there isn’t. I am not quite certain why he gives down on that side. ’ ’

He was further asked on cross examination:

“Just what, in your opinion, is that permanent disability around the pelvis ? ’ ’

The witness answered:

“That is what I"could not satisfy my own mind. I can not tell just exactly what causes it. I do know it is the result of the soft tissues being injured at the time he was hurt, and those ligaments torn across the back. At the time he was told the ligaments were torn across the lower part of his back. I feel sure they must have been. The muscles and nerves must have been actually bruised and that is what he has not recovered from. The fractures have healed with an overproduction of callus where the right remus of the pelvis was fractured. Usually nature absorbs this callus. This excessive callus which formed during the healing causes pressure over this area, and explains the pain and trouble he has in his lower back. ’ ’

The witness also testified that in his opinion Mr. Smith’s suffering is the result of the injury to the soft parts rather than the bone itself. When he was asked if he could be more specific as to what muscles or tendons, tissues and nerves were injured, he answered:

“It is hard to tell just how many, but I believe the larger part of the muscles, nerves and tendons around the regions of both fractures were injured to such an extent that nature will never be able to repair them so that the man can go ahead as he normally did. I could not specify any one special group of muscles or nerves. The injury was clear across the lower part of the spine, clear across the fifth sacral vertebra. ’ ’

The doctor was then asked:

“Doctor, have you an opinion as to why the pain apparently is only on one side of the back, that is the left side?”

To this he answered:

“What I really thought about it I thought that probably due to the fact that there had been some injury to the left sacral iliac joint, that is where the pain originates and the soreness travels from that clear across the whole area, which does happen so many times with back injuries. That this pain that comes in his head is just a nervous reaction from his general nervous system because of the trouble in his back.”

Paragraph (i) of' Section 8 of the Compensation Act in part provides as follows:

“Provided, further, that all compensation payments named and provided for in paragraphs (b), (c), (d), (e) and (f) of this section, shall mean and be defined to be for injuries and only such injuries as are proven by competent evidence, of which there are or have been objective conditions or symptoms proven, not within the physical or mental control of the injured employee himself.”

This was an amendment made to the Act of 1925 and its objects and purposes are obvious.

The Supreme Court of this State in the case of Madison Coal Corporation vs. Industrial Commission, 320 Ill. 65, said at page 68:

“It was also error to permit the medical witnesses to detail complaints of the patient in his manifestations of pain, which were within his control, and then express an opinion as to the patient’s condition based thereon. Wells Bros. Co. vs. Industrial Com., 306 Ill. 191”.

The accident in the Madison Coal Corporation case, supra, occurred March 23, 1923.

In Wells Bros. Construction Co. vs. Industrial Com., 306 Ill. 191, a nerve specialist testified that on examination the applicant related to him facts of the accident and the condition of which he complained, as to pains in the back of the head and neck, nervousness, dizziness, noises in his ears, soreness in the head, weakness in the legs, and that he stumbled at times in walking. The doctor testified he found scars on the side of the head, a slight curvature of the spine, tenderness over certain vertebrae, a limited motion of the neck, that on bending the head backward the patient falls, that bending of the body forward caused dizziness, that the grip of the hand was impaired, and there were sensory disturbances, etc. There were objections that testimony was based upon subjective rather than objective conditions. The court said on page 199:

“This court has more than once held that the testimony of physicians is incompetent which is made after examination of the applicant with a view to testifying and is based wholly upon the physician’s observation of outward manifestations within the applicant’s control, such as pressure or twisting of the hands or turning in of the toes, (Greinke vs. Chicago City Railway Co., 234 Ill. 564; Casey vs. Chicago City Railway Co., 237 id. 140.) This court has also held that when the physician’s statement is based partly upon his own observation and partly upon the statement of the case made by the injured person such evidence is not admissible. (Chicago Union Traction Co. vs. Giese, 229 Ill. 260). Therefore it is clear that the testimony of Dr. Comes, so far as he testified it was based ‘only of his (Lydon’s) actions and statements,’ was inadmissible. It seems also clear from the reading of Dr. Rydin’s testimony that he based his conclusion partly upon the statements of the subjective symptoms made to him by his applicant. What was said by this court in Schmidt vs. Chicago City Railway Co., 339 Ill. 499, International Coal Co. vs. Industrial Com., 293 id. 524, McKenna vs. Chicago City Railway Co., 296 id. 314 and Central Illinois Service Co. vs. Industrial Com., 302 id. 27, does not in any way modify the conclusions reached by this court in the decisions already cited, as to the physician not being authorized to base his conclusions as to the person’s injury in part upon objective symptoms and in part upon subjective symptoms derived from the patient’s statements to the physician.”

These decisions were prior to the amendment of 1925 above referred to and it is fair to conclude that the purpose was to stop an evil that was developing in the administration of the Compensation Act and to make a legislative declaration that compensation should be payable only in cases where -the injury was established by competent evidence of which there -are or have been objective conditions or symptoms proven, notwithstanding the physical or mental control of the injured employee himself. There have been numerous cases in- which the court reversed awards of permanent total disability as being contrary to the manifest weight of the evidence and even on the ground that there was no evidence to support the award but in which the applicant had testified to great pain, inability to eat or sleep or to lift as much as a bucket of coal and in which there was competent evidence that there was no objective indication of any disability.

From an examination of the claimant himself, it is obvious to the fair-minded that he made exaggerated statements and groundless assertions that have no foundation, in fact are not the character of evidence which the law recognizes as worthy to support any legal finding.

Certainly this court would be lacking in experience if wé closed our eyes to give cases that have come under our personal observation where an applicant, with little or no indication of injury testifies in substance to pain and condition of disability or of total inability to work and in which medical experts in answer to hypothetical questions express opinions of permanent total disability but shortly after the settlement is made they return to work and earn full wages. Such conditions are contrary to the intents and purposes of the Act and are a fraud not only upon the State, but necessarily upon the taxpayers who bear the costs.

Dr. John R. Alexander also testified for -the claimant. He testified that he had examined the claimant recently, and that there was a very slight improvement. He was asked directly what claimant had told him with reference to his pain and suffering, and he answered:

“He says lie has the same symptoms that he had at thé time of the previous examination.”

He was then asked if he knew what those symptoms are, and he answered: •

“He says that his back aches and that when he bends over or does any work in which he uses his back and bends over that the pain shoots up his back into his head and that he then has to lie down for probably thirty minutes to an hour, then he will get all right and get up and try it again. He repeats this process once or twice and then is laid up a day or couple of days.”

Q. That is what he told you?

A. Yes.

Claimant also told the prior witness that he could take long walks and enjoy them without suffering. Dr. Alexander stated that his opinion concerning the claimant was practically the same as Dr. Swickard’s, and that he knew from his observations and the claimant’s complaints that he must have had some very severe traumatisms to the ligaments and tissues at the site of the fractures. He was asked if in his opinion the same condition now exists with reference to pain and suffering from his observation and from what he told you, and he replied that the initial injuries have healed, but when you have traumatisms of the tissues they heal with scars; that you have those scar tissues left which cause the trouble. He further testified that claimant’s legs were practically the same; that there was a negligible amount of atrophy of the muscles. He was again asked:

“Now, doctor, based upon your examination of Sam Smith and the X-rays that were taken and heretofore introduced in evidence and from what he has told you as his physician, have you an opinion now as to what the nature and extent of this man’s injuries are now at the present time?”

To this he answered that he had an opinion and that it was based on a reasonable degree of medical certainty; that he has healed fractures over his fifth sacral vertebra and pelvic bone along with pain on pressure over these areas, over these sites of the fractures; that is about the only objective symptom that he could elicit other than the limp he has when he walks or tries to climb stairs.

Other similar questions embracing like matters were asked and it is unnecessary to go further in this behalf, and what is said in this regard pertaining to the testimony of Dr. Swickard, applies with equal force to the testimony of Dr. Alexander.

A stipulation in this case was also entered into, which is as follows:

“It is hereby stipulated and agreed by and between the above claimant, Samuel M. Smith, by A. C. and Ben F. Anderson, his attorneys, and the above respondent, by Otto Kerner, its Attorney General that:

1. Dr. H. B. Thomas is a resident of Cook County, State of Illinois and a practicing physician and surgeon in the City of Chicago.

2. That Dr. H. B. Thomas is professor and head of the Department of Orthopaedic Surgery, University of Illinois, College of Medicine and Senior Orthopaedic Surgeon of St. Luke’s Hospital.

3. That Dr. H. B. Thomas examined the claimant, Samuel M. Smith, on May 5, 1936 in his office at Chicago, Illinois.

4. That Dr. Thomas made a report as follows:

“Henry Bascom Thomas, M. D., Chicago.
May 11, 1936.
Mr. M. K. Lingle,
Division of Highways,
Springfield, Illinois
Dear Mr. Lingle:
In regard to Mr. Samuel Smith, whom I examined 5-5-’36, three years ago while pouring curbing he was hurt by a truck. He was taken to the doctor’s office and then home. He lay in bed for awhile and later was X-rayed. His back was taped. He has had no cast or brace.
He complains of pain in a spot on the lower left back over the sacroiliac and in a region in the neighborhood of the 7th cervical vertebra. He has a scar over the right lower buttock. Straight leg raising is negative. He does not stoop well or bend sideways easily. No particular sensitiveness on pressure.
Appearance healthy.
We X-rayed sterioscopically the lower lumbar and sacro-iliac area including the pelvis and heads of both femora. There is an area of definite sclerosis of the 4th and 5th lumbar vertebrae and left sacro-ilias joint. There is an occult spina bifida. Films of the upper cervical region show no evidence of pathology.
There is no evidence now of, “Fracture of. the right ischium or inferior osseous ramus or of the 5th lumbar vertebra.”
I believe Mr. Smith shows results clinically and roentgenologically of severe traumatism around the lower lumbar vertebrae and left sacro-iliac joint.
I recommend that he have physiotherapy cautiously directed and a sacro-iliac belt. This treatment should be carefully ¡administered, predicting that he will improve gradually. If he does not, then an operative fusion is recommended.
His disability at present is 35%.
This patient has a fair chance of returning to normal with proper orthopedic treatment, elimination of all focal infection and his proper attitude toward his condition.
(Signed) H. B. Thomas.”

5. That the claimant does not wish to accept the treatment suggested in the doctor’s report as he feels it will be of no benefit to him on advice of physicians.

It will be noted under Paragraph 4 on the preceding page that the stipulation only goes so far as to say that Dr. Thomas made a report as follows: That the claimant’s disability at present is 35%, and that he has a fair chance of returning to normal, etc.

The per cent of loss that claimant suffered goes to the ultimate fact. An injured employee may testify how his injuries affect him and as to his ability to use injured eyes or limbs, but neither a lay witness nor an expert can testify in direct terms that the employee has lost any stated per cent of the use of any member, as such conclusion or finding must be made by the court itself. Pocahontas Mining Co. vs. Industrial Com., 301 Ill. 462; St. Louis Smelting Co. vs. Industrial Com., 298 Ill. 293. This is a well established rule and the stipulation does not go so far as to say that it is stipulated that the claimant is injured to the extent of 35%.

The testimony introduced pertaining to the ability of claimant to work was to the effect that he could not work as a laborer, that being his business prior to the time of the injury. On a hearing under paragraph (d) of Section 8, it is necessary to acquire proof of the actual earnings of the claimant for a substantial period before the accident and of the actual earnings of the claimant for a substantial period after his return to work after the accident, or in the event that he has not returned to work since the accident, proof of what he is able to earn in some suitable employment or business. (Groveland Coal Co. vs. Industrial Com., 309 Ill. 73.) The finding of a difference in earning capacity must find support in the evidence heard or it cannot be confirmed. It is impossible to award half the difference between the average amount of earnings before the accident and the average employee is earning or is able to earn in some suitable employment or business after the accident without evidence not only of the earnings of the injured employee before the accident but also of his capacity to earn after the accident.

After consideration of all the competent evidence in this case we are unable to determine the period of temporary total disability and manifestly can make no award thereon. It is equally clear that a person who has done and can do those things the claimant testified that he has done since his injury, is not rendered wholly and permanently incapable of work. It is apparent that claimant did receive some injuries that have rendered him partially disabled but the proper foundation has not been made for this court to determine the amount which should be awarded for such disability. Award is therefore denied. On proper petition further proceedings may be had in conformity with the Workmen’s Compensation Act.


source: Caselaw Access Project

author: Mr. Justice Linscott

license: Public Domain

text:
    (No. 2772
    Aurora, Elgin and Fox River Electric Company, a Corporation, Claimant, vs. State of Illinois, Respondent.

      Opinion filed March 10, 1937.

    Alschttler, Putnam & Johnson, for claimant.
    Otto Kbrner, Attorney General; John Kasserman, Assistant Attorney General, for respondent.
   Mr. Justice Linscott

delivered the opinion of the court:

This claim was filed by the Aurora, Elgin and. Fox River Electric Company, a corporation, on December 16, 1935, with the clerk of this court, alleging that it is a railroad corporation within the State of Illinois, and maintains its tracks and operates its trains within Kane County, and served the Elgin State Hospital, a State institution, by maintaining tracks and operating trains to the siding of that hospital.

It is also alleged that on the 1st day of February, 1929, a contract was entered into between the then manager of the Elgin State Hospital, who was duly authorized to enter into contracts on behalf of the State, which contract was known in railroad parlance as an “Average Agreement” and is attached to the petition filed in this cause, made a part thereof and marked “Exhibit A”. This agreement provided the rate for charges for demurrage of railroad cars which were to be in the future delivered to the Elgin State Hospital by the claimant; that the consideration for the signing of said “Average Agreement” by the then managing officer of the Elgin State Hospital was the adherence by the Aurora, Elgin and Fox River Electric Company, the claimant herein, to the National Car Demurrage Rules and Charges of The American Railway Association, and a copy of the applicable sections is attached to the petition filed in this cause, made a part thereof and marked “Exhibit B”. It is also charged that this agreement was in force and effect throughout the month of June, 1935, and during the said month of June, 1935, the Elgin State Hospital received large shipments of coal by way of various steam railroads, which railroads delivered their cars to the claimant for delivery to the Elgin State Hospital, and during this month of June, 80 cars of coal were delivered by the claimant to the Elgin State Hospital. (A Bill of Particulars is attached to the petition, which shows the car number, the date of delivery, the date they were returned, the total days, the free days, the debit days, credit days and excess. This Bill of Particulars shows a total debit days of 160, with 12 credit days, making a total of 148 days, at $2.00 per day, or $296.00. In excess, there were 7 debit days at $5.00 each, or the further sum of $35.00, making a total of $331.00. This is the sum computed under the plans set forth in the “Average Agreement” and the National Car Demur-rage Rules and Charges of the American Railway Association. ) Rule 9, Item 540, Section A of the Car Demurrage Rules and Charges provides that :

“One credit will be allowed for each car released within the first twenty-four (24) hours of free time. After the expiration of forty-eight (48) hours’ (96 hours on cars subject to Rule 8, Section A, Paragraph 2, Page 45) free time, one debit per car per day or fraction of a day, will be charged for each of the first four days. In no case shall more than one credit be allowed on any one car, and in no case shall more than four credits be applied in cancellation of debits accruing on any one car. When a car has accrued four debits, a charge of $5.00 per car per day, or fraction of a day, will be made for all subsequent detention and will apply on all subsequent Sundays and legal holidays, including a Sunday or holiday immediately following the day on which the fourth debit begins to run.”

It is further provided that:

“At the end of the calendar month the total number of credits will be deducted from the total number of debits and $2.00 per debit will be charged for the remainder. If the credits equal or exceed the debits, no charge will be made for the detention of the cars except as otherwise provided in Section A for detention beyond the fourth debit day, and no payment will be made by this railroad on account of such excess of credits; nor shall the credits in excess of the debits of any one month be considered in computing the average detention for another month.”

There are other provisions concerning the rules applicable hereto.

The respondent admits that such services were rendered by the claimant. An offer of compromise for the sum of $150.00 is shown to have been made but refused by the claimant. The evidence shows in a statement from Charles F. Read, managing officer, submitted to Mr. A. L. Bowen, Director, under date of December 30, 1935, that the statement of days cars of screenings were on the switch track is correct, but the total charges are excessive because of bunching by the Illinois Central Railroad Company; that on June 18,1935, 22 cars were delivered, but were shipped as follows: 5 cars, June 12th; 5 cars, June 13th; 8 cars, June 14th, and 4 cars, June 15th. This letter further states that they could not have avoided a demurrage charge, but these charges could have been considerably reduced if deliveries had been more evenly distributed. It also stated that the weather was very rainy and they were unable to keep their patients at the job of unloading as steadily as they had expected when ordering in the coal.

In another letter from Mr. Bowen to Mr. Read under date of January 3, 1936, he acknowledged receipt of the letter of December 30, 1936, and quoted that provision of Mr. Read’s letter of December 30, to the effect that “total charges were excessive because of bunching by the Illinois Central Railroad. * * * While we could not have avoided a demur-rage charge, same could have been considerably reduced if deliveries had been more evenly distributed”. Mr. Read was then asked by Mr. Bowen: “When the Elgin State Hospital ordered this coal in anticipation of a strike was the shipping company or the railroad given any instructions concerning the number of cars which could be handled daily? In other words, were the shipping concerns responsible for sending in several cars of coal which could not be unloaded and of subsequently entering a claim for demurrage; or, did the State Hospital fail to specify the amount of coal which should be delivered at stated intervals?” In a letter dated January 10, 1936, from Mr. Read to Mr. Bowen, it is stated: That their contract for coal for this period was divided between five different mines at five different locations in Southern Illinois, and each mine was instructed to ship two cars per day. He also stated that they were able to unload ten cars per day if weather conditions were favorable. He also stated that the mines shipped as instructed, but being located at different points, there was no way for the railroads to entirely control the rate of delivery to the hospital, and he closed Ms letter by this statement: ‘ ‘ However, there was no reason why twenty-two cars should be delivered on any one day except the fault of the railroads ’ ’.

We cannot see how there could be any fault of claimant in the statement of facts tendered. The sMpments did not arise on the line of the claimant, and it does not appear that the railroads ever received any notice to the effect that the hospital could only handle ten cars. As a matter of fact, it appears that the railroads were not so notified. As stated in Mr. Read’s letter: “The mines shipped as instructed, but being located at different points, there was no way for the railroads to entirely control the rate of delivery to us. ’ ’

It appears that a strike in the coal fields was being anticipated, and for that reason, the then managing officer of the Elgin State Hospital, very properly laid in an extra supply of coal. In tMs, we feel that he was entirely justified under the circumstances. No doubt, many other users of coal were doing the same tMng. Mr. Read was acting as a competent, careful, public officer should act under such circumstances. The railroads, including claimant, fully performed their duties. The only excuse for not unloading the coal within the time provided by the rules and agreements entered into with the claimant, was the fact that the weather was rainy and they were unable to keep their patients at the job of unloading as steadily as they expected. Of course, this would not be any reason to justify denial of the claim. The claimant rendered the service and no objection is made to the charge. The charge is made for failure to empty the cars and return them into commerce.

We have repeatedly held that where it is conceded that a claimant rendered services and furnished supplies to the State, and has not been paid therefor because of the lapse of appropriation for the purpose, and the amount is unquestioned, and no laches appearing on part of claimant, an award will be made for such services and supplies. No sufficient reason appearing why we should not adhere to that rule, an award will be made in favor of the Aurora, Elgin and Fox River Electric Company, a corporation, with offices at 46 Pox Street, Aurora, Illinois, for the full amount of the claim, to wit: the sum of $331.00.


author: Mr. Justice Tantis

text:
    (No. 2937
    Nick Gibbs, Claimant, vs. State of Illinois, Respondent.

      Opinion filed March 10, 1937.

    Burrel Barash, for claimant.
    Otto Kerner, Attorney General; Glenn A. Trevor, Assistant Attorney General, for respondent.
   Mr. Justice Tantis

delivered the opinion of the court:

On January 20, 1936 claimant Nick Gibbs was employed by the State of Illinois in the Highway Department as a truck driver. He had been thus employed for about a month at the rate of Fifty (50) Cents per hour on an average of eight hours a day and six days per week. He had previously been employed by the Department, sometimes as a helper and at one time as a foreman, and during the latter service he received Sixty (60) Cents per hour.

On January 19, 1936 he was operating a snow plow attached to the truck then driven by him. In examining his motor he slipped and the second finger on his right hand was caught in the water pump pulley. The end of the finger was badly torn, but immediate surgical attention was given, the torn end of the finger was sewed back on, it was dressed daily and a satisfactory union resulted. The patient was under the care of the attending surgeon, Dr. Andrew R. Mailer, for about two months. His condition at’ the time of the hearing showed a deformed finger nail, circulatory impairment and a scar at the tip and a little atrophy of the finger, and a limitation of flection to about fifty (50) per cent of the normal finger. From the doctor’s testimony there is a partial loss of use of the finger of at' least twenty-five (25) per cent. Due to the fact that the end of the finger was almost completely amputated and that the bone was cut in half, there has been surplus callous formation where the bone healed.

All medical, surgical and hospital bills incurred by reason of said injury have been paid by the State except Four ($4.00) Dollars, paid by claimant to the Gunning Clinic at Galesburg, Illinois, and claimant has been paid Ninety ($90.00) Dollars compensation.

On August 7, 1936 claimant filed his application for a further award of fifty (50) per cent loss of use of his finger, in the sum of Two Hundred Forty! ($240.00) Dollars. No question is raised by the record as to the fact that claimant was duly employed by respondent, and that the injury arose out of and in the course of his employment and that same is compensable under the record. The claim recites, and the proof shows, that the State has heretofore paid total compensation of Ninety ($90.00) Dollars, which the Division of Highways reports paid claimant’s compensation from January 24, 1936 to March 10, 1936, a period of seven and one-half (7y2) weeks, at the rate of Twelve ($12.00) Dollars per week; compensation being based at the rate of Fifty (50) Cents per hour, the rate he was receiving at the time of his injury; the average weekly wage at that rate being Twenty-four ($24.00) Dollars.

Respondent contends that his average wage should be determined under provisions of Par. (e) of Sec. 10 of the Workmen’s Compensation Act, wherein determination of award is made on a basis of 200 working days in the year, where it is the custom to operate for only a part of the working days in each year. While it is true that claimant had in fact received only Five Hundred Twenty -and 80/100 ($520.80) Dollars in total wages during the preceding year, the work in which he was engaged at the time of the injury, i. e. a truck driver is, so far as the record shows, a continuous employment throughout the year. Claimant’s average weekly wage is therefore determined at Twenty-four ($24.00) Dollars per week. His temporary compensation has been paid and an award is now due him for the partial loss of Ms second finger, wMch under the proof, is found to be twenty-five (25) per cent. An award is therefore made in favor of claimant for twenty-five (25) per cent loss of the use of his second finger on the right hand due to the accident in question, in the sum of One Hundred One and 41/100 ($101.41) Dollars, and $4.00 medical expense, or $105.41 total award.

This award being subject to the provisions of an Act entitled, “An Act making am, appropriation to pay compensation claims of State employees cmd providing for the method of payment thereof,” approved July 2, 1935 (Sess. Laws 1935, p. 49) and being, by the terms of such Act, subject to the approval of the Governor, is hereby, if and when, such approval is given, made “payable from the appropriation from Road Fund in the manner provided in such Act.”


text:
    (No. 2522
    Lehigh Portland Cement Co., a Corporation, Claimant, vs. State of Illinois, Respondent.

      Opinion filed March 10, 1937.

    Defrees, Buckingham, Jones & Hoffman, for claimant.
    Otto Keener, Attorney General; John Kasserman, Assistant Attorney General, for respondent.
   Mr. Justice Linscott

delivered the opinion of the court:

The complaint alleges that this claim is for the sum of $175.00 due claimant under a contract entered into between claimant and the Department of Purchases and Construction, Division of Purchases and Supplies of the State of Illinois, and wrongfully deducted from the payments made to claimant by the Auditor of Public Accounts for discounts contrary to the terms of the contract.

Claimant is a corporation incorporated under the laws of the State of Pennsylvania, and licensed to do business in the State of Illinois.

On December 7, 1932, the Department of Purchases and Construction requested of claimant a bid on furnishing 4,000 barrels of Portland cement to the Southern Illinois Penitentiary, and the claimant entered a sealed bid and forwarded the same to the Department, and on December 29, 1932, the claimant was notified by the Department-by telegram, that it, the claimant, had been awarded a contract for 2,000 barrels of Portland cement, and said Department followed this telegram with a purchase order for that amount of cement. The purchase order is for 2,000 barrels at $1.76 per barrel, less ten cents per barrel discount for each payment made within fifteen days from the date of invoice. A Bill of Particulars was filed with the complaint. This shows the sum of $175.00 due for discounts wrongfully taken.

There was considerable correspondence with the various State officers and on October 30,1933, the Director of Finance wrote the claimant as follows:

“We cannot say that your recent complaint concerning our deduction of cash discount in making remittance to you, is fully unjustified, as technically the discount date had passed at time of remittance. Nevertheless, we feel that we are justified in calling upon you for your cooperation at this time in accepting the remittance in the manner in which it has been made.
“Unfortunately, during the early months of this year, funds were extremely slow in coming into the State Treasury, and it became necessary to resort to extreme measures of economy to curtail expenses with a view toward placing the State in a position where it might be able in the future, to meet its obligations promptly.
“In the light of these circumstances, we ask you to give further consideration to this question of discount and we are confident that after so doing, we are assured of your cooperation in the matter at hand.
Very truly yours,
J. J. Rice,
Director of Finance

This the claimant refused to do.

A stipulation of facts was filed. No question arises as to the quality or quantities of the cement, and it clearly appears that the State would only be entitled to the discount of ten cents on each barrel if payment was made within fifteen days from the date of invoice. Claimant mailed its invoices to the proper officers of the State dated August 25, 1933, for five shipments of cement, and on September 25, 1933, the claimant received a warrant issued by the Auditor of Public Accounts in payment thereof, and in each instance, a discount of ten cents per barrel had been deducted. The warrants were mailed to and received by the claimant later than fifteen days after the date of the invoices in payment of which it was issued. Paragraph 5 of the stipulation is as follows: “That the sum of the amounts so deducted as discounts, as set out in the preceding paragraph hereof, for which claim is made herein, is $125.00”. The stipulation does not claim any other amount.

The Attorney General’s Statement, Brief and Argument states that the claim is for $125.00 due claimant under a contract for the purchase of cement. The Attorney General also states that there was a dispute as to the discount on two of the cars, and the claimant waived the claim as to the two cars, and thus reduced the claim to $125.00, this being the amount contained in the stipulation.

The only question that we are called upon to decide is whether a party to a contract who has not complied with its terms is none the less entitled to benefits expressly conditioned upon such compliance. It is clear from the elementary principles of the law of contracts that he is not.

Corn Products Refining Co. vs. Oriental Candy Co., 168 Ill. App. 585; J. Wolkind & Co. vs. R. & W. Cloak & Suit Co., 184 New York Supplement 460.

In the latter case, the court discussing a discount provision used the following language:

“The outstanding fact, however, is that defendant, whatever the terms of the discount were, never conformed to the terms, and therefore never was entitled to them, and the mere fact that it deducted the amount in paying the bills from time to time gives it no right it did not possess before.”

The letter of the Director of Finance under date of October 30, 1933, while commendatory under the circumstances, is not a legal defense to the claim, and no authority has been cited contrary to the views herein expressed.

We, therefore, allow the Lehigh Portland Cement Co., a corporation, the sum of One Hundred Twenty-five Dollars ($125.00).


author: Mr. Justice Yantis

text:
    (No. 3032
    George Murphy, Claimant, vs. State of Illinois, Respondent.

      Opinion filed March 10, 1937.

    Claimant, pro se.

      Otto Keener, Attorney General; Glenn A. Trevor, Assistant Attorney General, for respondent.
   Mr. Justice Yantis

delivered the opinion of the court:

Claimant George Murphy, of 649 East Marquette Road, Chicago, Illinois, was supply officer of the 8th Infantry, Illinois National Guard, and resigned effective May 2nd, 1933. The usual procedure for withholding any pay due, until the property accountability is adjusted, was followed. Claimant was entitled to two days pay at the rate of $4.66 per day for the days of May 1st and 2nd, 1933. The adjustment of his account however was not completed until after the lapse of the appropriations on September 30, 1933. The record shows that there is due him the sum of $9.32 for the two days in question, and that the only reason for the non-payment thereof has been the lapsing of said appropriation. His claim was filed December 1st, 1936 for said amount, and under the showing made, an award is hereby entered in favor of claimant for said sum of $9.32.


author:
      Mr. Chief Justice Hollerioh
      Per Curiam:

text:
    (No. 2821
    Karl A. Glover, Receiver of The First National Bank of Lawrenceville, Illinois, a National Banking Corporation of Lawrenceville, Illinois, Claimant, vs. State of Illinois, Respondent.

      Opinion filed March 11, 1937.

      Rehearing denied May 12, 1937.

    Sumner & Lewis, for claimant; William McKinley, of counsel.
    Jacob Logan Fox, Amicus Curiae.

    Otto Keener, Attorney General, and A. B. Dennis, Glenn A. Trevor and John Kasserman, Assistant Attorneys General, for respondent.
   Mr. Chief Justice Hollerioh

delivered the opinion of the court:

From the stipulation filed herein by the parties to this cause, the following facts appear:

Prior to and on November 1st, 1931 The First National Bank of Lawrenceville, a national banking association, was engaged in the banking business in the City of Lawrenceville, in the County of Lawrenceville, and State of Illinois. On the last mentioned date, Edward J. Barrett, State Treasurer of the State of Illinois, deposited in said bank $45,000.00 belonging to the State of Illinois, and in his possession as such Treasurer, and thereupon said bank issued to such Treasurer six (6) certificates of deposit in the usual form, in the total principal sum of $45,000.00; each certificate being payable to order of Edward J. Barrett, State Treasurer, or his successors in office, on the return thereof, properly endorsed, with 2 per cent interest per annum payable monthly, and bearing on the face thereof the following notation, to wit, “The right to demand five days notice of payment is reserved. Not subject to check.”

At the time of making such deposit, said bank deposited with and delivered to said treasurer certain assets belonging to said bank, including certain State of Illinois 4 per cent Highway Bonds, due 1946-1959, of the total par value' of $50,000.00, all of which assets were put up as collateral and pledged to secure the repayment of the aforementioned deposit. At the same time said bank and said treasurer entered into a contract which provided, among other things, that if, in the judgment of said treasurer, said collateral, or any part thereof, should become depreciated in value, said treasurer should have the right immediately to declare the entire amount of said deposit to be due and payable; and to sell all of said collateral at public or private sale, without notice to said bank, and apply the proceeds, after deducting the necessary costs and expenses, to the payment of the amount owing to such treasurer, whether due or not, and return the surplus, if any, to said bank.

On August 20th, 1932 said bank became insolvent and ceased doing business, and on August 22d, 1932 the Comptroller of the Currency of the United States appointed one J. B. Beid Receiver for said bank. Beid accepted said appointment and continued to act as such receiver until March 15th, 1934, at which time he resigned. Thereupon said Comptroller appointed the claimant, Karl A. G-lover, as receiver of said bank. Clover duly qualified as such receiver, and has been since the date of his appointment and is now the duly qualified and acting receiver of said bank.

On August 23d, 1932 the aforementioned State Treasurer demanded of said bank the repayment of said deposit of $45,000.00, and advised said bank that if payment was not received, and the margin became impaired, he would sell the aforementioned collateral to protect said deposit.

On August 25th, 1932 J. B. Beid, then receiver of said bank, advised said treasurer that he was not in position to remit the amount demanded.

On September 26th, 1932 said Comptroller of the Currency authorized said receiver to consent to the sale of the aforementioned State of Illinois Highway Bonds by said State Treasurer to secure sufficient funds to liquidate said deposit, with accrued interest.

On September 29th, 1932 said receiver notified said treasurer that the Farmers State Bank of Lawrenceville, Illinois, was sending him a draft for $50,593.34 in payment of said State of Illinois Highway Bonds of the par value of $50,000.00, including interest, and directed said treasurer to retain the amount due him, and deposit the balance, to wit the sum of $5,443.34 in the First National Bank of St. Louis to the account of said receiver.

Said draft was duly received by said treasurer, the sum of $45,150.00 was retained by him in repayment of the aforementioned deposit and interest, and the balance, to wit, $5,443.34, was deposited by said treasurer in the First National Bank of St. Louis to the account of said J. B. Reid, receiver, in accordance with the instructions of said receiver.

On October 5th, 1932 the account of said treasurer with said bank was closed; the certificates issued by said bank evidencing the aforementioned deposit, were returned to said receiver for cancellation, and thereafter the remaining securities held by said treasurer as collateral for said deposit were re-delivered by said treasurer to said receiver.

Claimant takes the position that the First National Bank of Lawrenceville had no power or authority to pledge its assets to secure deposits of State money; that said pledge was illegal and void; and that therefore the State is liable to the receiver of said bank for the difference between the amount the State Treasurer received by reason of the sale of the pledged assets, and the amount such treasurer would have received if said assets had not been pledged, and he had been required to participate in the distribution of the proceeds of such bank as a common creditor.

The respondent takes the position that said bank had full power and authority to pledge its assets to secure the deposit in question, and relies upon the amendment to Section 45 of the National Bank Act (12 U. S. C. A. sec. 90; U. S. R. S. sec. 5153) and Sections 1, 10 and 12. of an Act entitled “An Act in Relation to State Moneys,” approved June 28th, 1919, in force July 1st, 1919, commonly known as the State Depositary Act, (State Bar Assn. Stat. 1935, Chap. 130, par. 20, 29 and 31) which said sections provide as follows:

National Banking Act :
“Any association, may, upon the deposit with it of any public money of a State or any political subdivision thereof, give security for the safekeeping and prompt payment of the money so deposited, of the same kind as is authorized by the laws of the State in which such association is located in the case of other banking institutions in the State.”
State Depositary Act:
“Section 1. That the State Treasurer shall deposit all money received by him on account of the State within five days after receiving the same in such banks of the State as may be autthorized to receive such deposits under the terms of this Act. The money so deposited shall be placed to the account of the State Treasurer.”
“Section 10. No moneys in the State Treasury shall be deposited in any bank approved as a depositary under1 the terms of this Act unless such hank shall have deposited securities with the State Treasurer equal in market value to the amount of moneys deposited. The State Treasurer is authorized to enter into agreement in conformity with the provisions of this Act with any such depositary bank relating to the deposit of such securities.”
“Section 12. All securities deposited by approved banks under the provisions of this Act shall remain the property of the banks depositing such securities. Should the depositary fail or refuse to pay over the moneys, or any part thereof, deposited with" it, when due and payable, the State Treasurer may sell such securities in accordance with the terms of any agreement between the State Treasurer and the depositary bank. Such sale shall transfer absolute ownership of the securities so sold to the vendee thereof. The surplus, if any, over the amount due to the State and the expenses of the sale shall be paid to the depositary. Actions may be brought in the name of The People of the State of Illinois to enforce the claims of the State with respect to any securities deposited by an approved bank.”

Claimant contends that that portion of the State Depositary Act which provides in substance that no money in the State Treasury shall be deposited in any bank unless such bank shall have deposited securities with the State Treasurer equal in market value to the amount of the monies deposited, constitutes an amendment to the General Banking Act of this State; that inasmuch as said Depositary Act was not submitted to a vote of the people at the general election next succeeding the passage of the same, it is .unconstitutional and void, being in violation of Section 5 of Article 11 of the Constitution of 1870, which provides that:

“No Act of the General Asse'mbly authorizing or creating corporations or associations with banking powers * * * nor amendments thereto, shall go into effect or in any manner be in force unless the same shall be submitted to a vote of the people at the general election next succeeding the passage of the same,” etc;—

that inasmuch as there is no valid law of this State authorizing State Banks to pledge their assets to secure deposits of State money, national banks have no authority to pledge their assets to secure such deposits; that the pledge of its assets by the First National Bank of Lawrenceville was illegal; that the receiver therefore was entitled to the return of all of the pledged assets; and that the State Treasurer should have been considered only as a general creditor of said bank.

The respondent contends that the State Depositary Act does not constitute an amendment of the General Banking Act of this State, and that therefore the aforementioned constitutional provision has no application to such Act.

The respondent further contends that even though such enactment be held illegal, nevertheless, under the laws of this State, the claimant is not entitled to maintain its action in this behalf, and sets forth in its brief and argument numerous propositions and authorities in support of such contention.

The first question for consideration, therefore, is the question of the validity of the aforementioned Act commonly known as the State Depositary Act. If such Act is not subject to the objections raised, the claimant has no right to recover in this proceeding. If such Act is subject to the objections raised by the claimant, it is unconstitutional and void and it will then become necessary to consider the other contentions made by the respondent.

The question now under consideration may therefore be stated briefly as follows: Does the State Depositary Act constitute an amendment of the General Ban%king Act of this Statef

So far as we have been able to learn, this question has never been presented to or passed upon by the Supreme Court of this State.

The respondent claims that the State Depositary Law has been impliedly held constitutional by the Supreme Court of the United States, and by the Supreme Court of Illinois, and relies upon the case of Marion vs. Sneeden, 291 U. S. 269, and the cases of Nelson vs. Colegrove & Co. State Bank, 354 Ill. 408, and People vs. Wiersema State Bank, 361 Ill. 85, in support of its claim. The State Depositary Act was referred to, and the existence thereof as a law of this State was recognized by the court in each of such cases, but in neither case was the constitutionality of the Act drawn in question, and consequently anything said by either court with reference to such Act, cannot be considered as a determination of the constitutionality thereof.

Claimant concedes that not every law which affects banks constitutes an amendment to the Banking Act, within the constitutional prohibition, and although it contends that the Depositary Act constitutes such an amendment, it does not specify what section or sections are amended thereby.

The first G-eneral Banking Act of this State subsequent to the adoption of the Constitution of 1870 was passed in 1887. Several amendments were made thereto, and in 1919 the General Assembly adopted 11 An Act to Revise the Law in Relation to Banks and Banking,” which expressly repealed the Act of 1877 as amended. The Act of 1919, as thereafter amended, is still in force.

The question as to whether the provisions of certain laws enacted by the Legislature constitute amendments to the General Banking Act, has been considered by our Supreme Court in the following’ cases, to wit:

Reed vs. People, 125 Ill. 592.
Sykes vs. People, 132 Ill. 32.
Italia America Shipping Corporation vs. Nelson, 323 Ill. 427.
People vs. Gould, 345 Ill. 288.
McQueen vs. Randall, 353 Ill. 231.
People vs. Dennhardt, 354 Ill. 450.
People vs. First State Bank & Trust Co., 364 Ill. 294.

A review of such cases will be helpful in solving the question before us.

The case of Reed, et al vs. The People ex rel, 125 Ill. 592, involved the constitutionality of an Act of the General Assembly adopted in 1887, entitled “An Act to provide for the organization of Savings societies, or institutions for savings, for their supervision, and for the administration of their affairs”. It was contended that such Act authorized the creation of corporations having banking powers, and that the same was therefore an amendment of the General Banking Act. Upon consideration of the several provisions of the Act the court said:

“Under the sections of the Act we have referred to, the corporation is invested with full power to receive money on deposit, and to discount notes. These are banking powers, as has been abundantly shown.”

The court therefore held the Act there in question to be an amendment to the General Banking Act, and inasmuch as the same had not been submitted to a vote of the people, it was unconstitutional and void.

The case of Sykes vs. The People, 132 Ill. 32, involved the following facts: The Merchants’ Savings Loan and Trust Company was organized under the provisions of a private Act of the General Assembly approved January 28th, 1857 entitled “An Act to incorporate the Merchants’ Savings Loan and Trust Company”, which Act, among other things, conferred upon such corporation banking powers. Thereafter the name of the corporation was changed to “The Merchants Loan and Trust Company”, in accordance with the provisions of an Act of the General Assembly entitled “An Act to provide for changing the names * * * of incorporated companies”, etc., approved and in force March 26th, 1872. It was contended that the latter Act constituted an amendment of the previous Act, and that it was null and void for the reason that it had not been submitted to a vote of the people in accordance with the foregoing constitutional provision. In that case the court said:

"The provision fixing the name of the corporation created is an essential part of the Act and is an express Legislative declaration that the corporate name shall be as there given. ‘The identity of name is the principal means of effecting that perpetual succession, with members frequently changing, which is an important purpose of incorporation.’ * * *
"Any act therefore, which provides that a corporation shall or may take another name, changes in an essential particular the organic law of such corporation and is therefore necessarily an amendment thereto. * * * The charter of said corporation being an Act. creating a corporation with banking powers, within the meaning of the constitutional limitation above cited, was not subject to amendment except by an Act properly submitted to and adopted by the people of the State at a general election.”

In the case of Italia America Shipping Corporation vs. Nelson, 323 Ill. 427, the complainants were engaged in the business of buying and selling foreign exchange and the transmission or transfer of monies to foreign countries, and filed their amended bill of complaint in the Circuit Court of Cook County praying the court to declare unconstitutional and void an Act entitled “An Act in relation to the buying and selling of foreign exchange and the transmission or transfer of money to foreign countries”, approved June 28th, 1923. The defendants filed a general demurrer to the complaint. The Supreme Court ordered the demurrer sustained and the bill dismissed, and in the course of its opinion said (p, 430):

“Appellees’ first contention is that the Act is an amendment to the Act relating to banks and banking, which Act is entitled, "An Act to revise the law in relation to banks and banking,” approved June 23, 1919, and .ratified by vote of the people on November 2, 1920, and that being such amendment and not having been submitted to a vote of the people, as required by Section 5 of Article 11 of the Constitution of the State of Illinois, it is therefore unconstitutional and void. The ° basis for this contention seems to be that the powers of banking corporations are increased or enlarged by reason of their exception from, the provisions of the Act. While the passage of this Act may have a tendency to increase the amount of business done by banking corporations by reason of its restrictions upon other corporations, the Act does not increase or enlarge th'e powers of banking corporations, for the reason that prior to the passage of the Act it was within the scope of the ordinary functions of a bank to deal in foreign exchange and money.”

In the case of The People vs. Gould, 345 Ill. 288, the defendants, who were the president and cashier of the Savings Bank of Kewanee, were indicted and convicted of receiving a deposit in said bank when the same was insolvent and when said defendants knew of said insolvency, contrary to the provisions of Section 1 of an Act entitled “An Act for the protection of bank depositors”, approved June 4th, 1879, as amended in 1903.

A motion to quash the indictment was made, and one of the grounds for such motion was that the Act upon which the indictment was based, was an amendment of the General Banking Act of this State, and that the same was null and void for the reason that it had not been submitted to a vote of the people, as required by the aforementioned constitutional provision.

After a very thorough consideration of the question, the court said (p. 294):

“This Act did not authorize or create any corporation or association with banking powers nor was it an amendment to any such Act. There was no such Act in existence in the State of Illinois to which the constitutional prohibition could apply except the special charters granted by the Legislature before the Constitution was adopted, and these charters were in no way affected by the Act. No right or duty, no power or privilege, no liar bility or obligation, of any incorporated bank or banking association was added to or increased, subtracted from or diminished or in any way affected by the law. The mutual rights of the bank and its depositors, legal or equitable, were in no respect changed by it. It acted only upon the individual “bank or broker, or person or persons doing a banking business, or any officer of a banking company or incorporated bank.” The prohibition was to the individual. The responsibility was upon him and his was the punishment.”

Also, on page 302:

“The subject matters of Section 5 of Article 11 of the Constitution is the organization of corporations or associations having banking powers. Whatever law may be passed on that subject must receive the approval of a vote of the people, and so must every amendment. * * * The section refers to the manner of organization of banking corporations, the privileges granted to them, the duties and obligations imposed upon them, the supervision, regulation and control of them by the Auditor, and not to the general rules of commercial law, the law of negotiable instruments, and the great mass of substantive law to which the banking Act makes no reference.”

Also, on page 307:

“By no stretch of the imagination can the Act of 1879 be regarded as an amendment of the Act of 1919, under which the Savings Bank of Kewanee was incorporated.”

The case of McQueen vs. Randall, 353 Ill. 231, involved the constitutionality of “An Act defining the relations between banks and their depositors with respect to the deposit and collection of checks and other instruments payable in money”, approved July 8th, 1931.

McQueen was the holder of two checks which had been certified by the Maywood State Bank, which thereafter was closed by the Auditor of Public Accounts. McQueen filed a claim with the receiver of said bank, claiming a preference under the provisions of the aforementioned Act. The trial court held such Act unconstitutional, and allowed the claim as a general claim, and McQueen perfected an appeal to the Supreme Court. The case was thoroughly considered by the court and the previous cases of Reed vs. People, Sykes vs. People, and People vs. Gould were reviewed.

The court pointed out that the effect of the Act there under consideration was to change the relation between the bank and its depositors from that of debtor and creditor to that of principal and agent; and also pointed out that the effect of Section 2 of such Act was to establish a trust in favor of the holder of a certified check, and that the holder of such check thereby became a preferred creditor, whereas under the law in existence prior to the adoption of such Act, the holder of such check was only a general creditor of the bank. In that case the court said: .

“The appellee argues that the Act is an amendment of the Banking Act, and not having been submitted to a vote of the people is void under the provisions of Section 5 of Article 11 of the Constitution. On the other hand, the appellant asserts that the Act does not relate to the organization or creation of banking corporations or associations, is not an amendment of any such prior Act, and that therefore the constitutional provision does not apply.
"The title of the Act confines it to the relations existing between banks and their depositors. It is expressly stated in the title that the act defines the relations between banks and their depositors, having to do with “the deposit and collection of checks and other instruments payable in money.” No language is contained showing it to be an amendment of the Banking Act. Equally clear is the fact that the General Assembly was not dealing with the organization or creation of banking institutions.
“A careful survey of the Act of 1931 demonstrates that it does not make any attempt to change the primary obligation existing between a bank and its depositors under the subjects and conditions disclosed in the title of the Act. That primary obligation is, that if the bank has possession of funds of its depositors it is legally bound to pay them over when demanded. The Act of 1931 only changes the point (in time) respecting the deposit and collection of instruments payable in money when the bank gains title to the proceeds of such instruments. Under the old law the bank gained title to the instrument upon its deposit; now it does not gain title but obtains the instrument as an agent for the purpose of collection. When the proceeds have been collected by the bank and credited to the account of the depositor, then, and then only, do the proceeds become part of the general funds of the bank. Consequently the Act of 1931, to again use what we said in the Gould case, does not add ta or increase, subtract from or diminish, or in any way affect a right, duty, power or privilege of any incorporated bank or banking association. As it was not an amendment to the Banking Act, no reason existed for submitting the Act of 1931 to a vote of the people.”

The case of The People vs. Dennhardt, 354 Ill. 350, involved the same statute as was under consideration in the case of McQueen vs. Randall, and the court in the Dennhardt case, without further consideration of the constitutional quesr tion, applied the law as laid down in the McQueen case.

The case of The People vs. First State Bank and Trust Co., 364 Ill. 294, involved the following facts: One U. G. Orendorff entered into a contract with the First State Bank and Trust Company of Canton, pursuant to authority of the board of directors of such bank, whereby he purchased from such bank certain securities owned by it, on the promise of the bank to repurchase the same on demand, or in any event not later than certain dates set forth in said contract. Thereafter the bank was closed by the Auditor of Public Accounts-, and a receiver áppointed therefor. Orendorff demanded that said receiver carry out the contract for the repurchase of such securities. The receiver refused to do so, and justified his position by the provisions of Section 4 of “An Act for the protection of bank depositors”, approved June 4th, 1879, which provides in substance that it shall not be lawful for any bank to assume the payment for, or become liable for', or to guarantee to pay the principal or interest of any bonds, notes or other evidences of indebtedness.

Orendorff contended that said Section 4 constituted an amendment of the General Banking Act and was null and void; not having been submitted to a vote of the people.

The Supreme Court had previously held in the Gould case that Section 1 of this same Act was not subject to this objection. In considering the question presented in the' case before it, and referring to said Section 4, the Supreme Court, on page 296, said:

“This section of the Act has nothing to do with the organization of corporations or associations with banking powers nor with any act of the General Assembly amending existing laws on that subject. It is not an Act creating corporations or associations with banking powers but is penal in its nature. Various sections of this Act have previously been before this court for consideration, and it has been uniformly held that they do not constitute an amendment to the Banking Act and so do not come within the constitutional provision for determination by a vote of the People.”

The foregoing cases comprise all of the cases submitted to our Supreme Court since the adoption of the Constitution of 1870, in which any Act of the Legislature was claimed to be an amendment of the General Banking Act of this State.

Of the seven cases in which it was contended that the several legislative enactments involved therein constituted amendments of the General Banking Act, only two were held to constitute such amendments, and those two were the earliest decisions on the question, to wit: the decision in the Reed case, rendered in 1888, and the decision in the Sykes case, rendered in 1890. Furthermore, neither of said cases has any similarity whatsoever to the present case.

A careful study of the more recent decisions of our Supreme Court discloses the fact that such court has been gradually becoming more strict in its construction and determination of what is necessary to constitute an amendment of the General Banking Act.

Claimant’s position on the question here involved is set forth on page 25 of its Brief, in the following language:

“State Depositary Law is unconstitutional because it amends the State Banking Act by granting to banks additional powers not possessed prior thereto. This no law can do without the approval of the People at a referendum.”

In elaborating upon such proposition, claimant contends that the State Depositary Act attempts to change the primary obligation existing between a bank and its depositors and increases the rights, powers and privileges of banks by granting the power to pledge assets to secure deposits of State funds, which power they did not theretofore possess.

The primary obligation existing between a bank and its depositors was defined by our Supreme Court in the McQueen case, supra, as follows:

“That primary obligation is, that if the bank has possession of funds of its depositors, it is legally bound to pay them over when demanded.”

For the purpose of determining whether the State Depositary Act.changes this primary obligation, or grants any powers or privileges not theretofore possessed, we will consider briefly the terms and provisions of such Act and the legal effect thereof.

The title of such Act is “An Act in relation to State monies ’ \ There is nothing in the title of the Act which refers even remotely to banks or banking. The Act itself refers only incidentally to those subjects. It is complete in itself and entirely independent of any other Act. It prescribes the duties of the State Treasurer with reference to the deposit of State monies; provides for the collection of interest on such deposits; provides the manner of advertising for and receiving proposals for the deposit of public monies; the classification of depositaries; the manner of approval or rejection of such proposals; provides that all such proposals shall be filed in the office of the State Treasurer and shall be open at all reasonable hours to public inspection; and further provides that the State" Treasurer shall publish in pamphlet form a list of the banks approved as State depositaries of public monies, etc., which pamphlet shall be for general distribution by the State Treasurer. Section 9 of the Act specifically provides that the approval of any proposal shall confer no right upon any bank to receive deposits of public money. Section 10 provides that no monies in the State Treasury shall be deposited in any bank approved as a depositary unless such bank shall have deposited securities with the State Treasurer equal in market value to the amount of monies deposited. Section 11 defines the class of securities which may be accepted. Section 12 provides that the securities deposited shall remain the property of the banks depositing the same, and further provides' that should the depositary fail or refuse to pay over the money deposited, when due and payable, the State Treasurer may sell the securities. Section 23 provides that “any State official or other person who wilfully violates any provision of this Act, for which a penalty is not otherwise prescribed”, etc., shall be subject to a fine or imprisonment in the penitentiary, or both.

From this brief summary of the Act we deduce the following conclusions:

There is nothing whatsoever in the Act with reference to the organization of corporations or associations with banking powers, nor is there anything in the Act which purports to regulate banks or the banking business. The positive requirements of the Act have relation to the State Treasurer and the deposit of State monies. Any reference in the Act to banks or the banking business is merely incidental to the other provisions of the Act. There is no requirement that any bank shall become a State depositary, and any bank which becomes such depositary does so of its own volition. Under Section 9, if any bank makes application to become such depositary and the application is accepted, such bank nevertheless does not have a right to any deposit of State monies. The relation between the bank and the depositors remains the same as theretofore, to wit, that of debtor and creditor. The scope of the Act is indicated by the penal provision thereof, which applies only to “any State official or other person” who wilfully violates the same.

It is also a part of claimant’s contention that that portion of the Depositary Act which authorizes a pledge of deposits, increases the powers of banks, and thereby gives the State a preference over other creditors. As stated by claimant, the provisions of the Act must be judged by their legal effect.

An Act which has the effect of granting to certain creditors-a preference which they did not enjoy prior to the adoption of such Act, does not, by reason thereof, change the primary obligation existing between a bank and its depositors, and does not constitute such an increase of power as will make it an amendment of the Banking Act. This was expressly decided in the case of McQueen vs. Randall, supra. In that case the court pointed out that the effect of the Act was to change the relationship existing between the bank and its depositors from that of debtor and creditor to that of principal and agent, and further pointed out that under the provisions of the Act there in question, the holder of a certified check would become a preferred creditor, whereas prior to the adoption of such Act the holder of such check would be only a general creditor of the bank. Yet, notwithstanding such facts, the court said that the Act there in question ‘ does not add to or increase, subtract from or diminish, or in any way effect a right, duty, power or privilege of any incorporated bank or banking association,” and held that the same did not constitute an amendment of the General Banking Act. The McQueen case, on the facts and the principles involved, more closely resembles the present case than any of the other cases herein cited.

It may be contended that in the McQueen case there was no express grant of additional powers to the bank. This is correct; — but the legal effect of the provisions involved in each case is identical, that is to say, to grant a preference'; and, as stated by claimant, such provisions must be judged by their legal effect. " •

The decision in the McQueen case was approved in the recent case of The People vs. First State Bank and Trust Co., supra, and therefore is the last authoritative expression of the Supreme Court on the questions involved. In our opinion the decision in the McQueen case is decisive of the issues in this case.

Furthermore, the General Banking Act relates to and regulates only State banks. It has no application whatsoever to National banks. Consequently, in order to constitute an amendment of the General Banking Act, of the nature suggested by claimant, the amending Act (State Depositary Act) must increase the powers of State banks. The effect of the provisions of such Act authorizing a pledge of assets to secure deposits of State money, is to give a preference to the State; — hence, if the State was entitled to a preference prior to the adoption of the State Depositary Act, the powers of State banks have not been increased by such Act, and the General Banking Act has not been amended thereby. Our Supreme Court has repeatedly held, and it must now be considered the well established law of this State, that the State has a sovereign right at common law, to a preference over general creditors in the distribution of the assets of a closed bank. People vs. Farmers State Bank, 335 Ill. 617; People vs. Waukegan State Bank, 351 Ill. 548; People vs. West Englewood Bank, 353 Ill. 457; People vs. Oregon Savings Bmik, 357 Ill. 545; People vs. Wiersema State Bank, 361 Ill. 85.

In the Oregon State Bank case, supra, the court said:

“Upon the adoption of the common law the sovereign’s right to priority-in payment became an attribute of the People of the State. * * * It follows that although there is no constitutional or statutory provision on the subject, the State enjoys a right to priority in payment of its claims for undistributed tax moneys on deposit in insolvent State banks over creditors who do not have an antecedent lien against the assets of the bank.’’

In the Wiersema State Bank case, supra, the court said:

“No Legislation was necessary to establish or preserve the State’s sovereign right to a preference in the distribution of the assets to the general creditors of a closed bank. That right existed at common law.”

The State having a sovereign right to a preference prior to the adoption of the State Depositary Act, any provisions of such Act which give rise to such a preference, do not grant any additional powers. A somewhat similar question was presented in the Italia America Shipping Corporation case, supra, where the court held that the Act there in question did not increase or enlarge the powers of any banking corporations, for the reason that prior to the passage of such Act, banking corporations possessed the powers in question.

In determining the question here involved, we must also take into consideration certain well established rules of construction which have been approved by our Supreme Court in numerous cases.

In the case of People vs. Anderson, 353 Ill. 289, the court, on page 295, said:

“Constitutional provisions are to be liberally construed in order that the Legislative enactment may be sustained. All doubt and uncertainty arising from the Constitution itself as well as those in the statute should be resolved in favor of the validity of the statute.”

In the case of People vs. Gill, 358 Ill. 301, the court, on page 264, said:

“It is only where there is a clear conflict between the terms of the Act and some provision of the Constitution that the court is justified in holding the Act unconstitutional. Doubt and uncertainty must yield to the legal presumption in favor of the validity of the Act.”

In the case of Punke vs. Village of Elliott, 364 Ill. 604, the court said:

“The legal presumption is that a statute is valid, and if capable of two constructions, the one which favors its validity is the interpretation to be adopted, and one who challenges the constitutionality of a statute has the burden of showing clearly wherein it is in conflict with the Constitution.”

Upon a careful consideration of the foregoing and other authorities cited by claimant and respondent, as well as the terms and provisions of the State Depositary Act, we have come to the conclusion that such Act does not change the primary obligation existing between a bank and its depositors, and does not add to or increase the powers of any bank or banking association within the meaning of those words as used in the decisions hereinbefore referred to, and therefore does not constitute an amendment to" the General Banking Act. Consequently, it was not necessary that such Depositary Act be submitted to a vote of the people.

Having arrived at this conclusion, it will not be necessary to consider the other questions raised by the Attorney General.

The motion of the Attorney General to dismiss the case must therefore be sustained.

Motion sustained. Case dismissed.

Opinion on Rehearing.

Per Curiam:

Claimant filed a petition for rehearing herein on March 31st, 1937.

We find nothing in such petition which was not fully and carefully considered by the Court in arriving at its original decision, and the petition for rehearing will therefore be denied.


author: Me. Chief Justice Hollebich

text:
    (Nos. 2987, 2988, 2989, Consolidated
    Wiley Jenkins, No. 2987, Mary E. Jenkins, No. 2988 and Maurice Hellyer, by Wayne Hellyer, His Father and Next Friend, No. 2989, Claimants, vs. State of Illinois, Respondent.

      Opinion filed April 14, 1937.

    Cavanagh, LaMet & Irwin, for claimant.
    Otto Keener, Attorney General; John Kasserman, Assistant Attorney General, for respondent.
   Me. Chief Justice Hollebich

delivered the opinion of the Court :

1 All of the above cases grew out of the same accident and involve the same.principles of law, and inasmuch as all of the claimants .are represented by the same counsel, the cases are •doiisolidated for the purpose of this hearing.

.The facts involved in said several cases, as set forth in the respective complaints on file, are as follows :

1. On August 6th, 1936 the claimant, Wiley Jenkins, was driving his Nash automobile in a westerly direction on Wabash Avenue in the City of Carthage in Hancock County, at the. intersection of said Wabash Avenue with Scofield Street.

2. At that time Fred Ireland, a game warden and employee of the respondent in the Department of Conservation, was driving his automobile in a northerly direction on said Scofield Street.

3. The claimants, Mary E. Jenkins and Maurice Hellyer, were then and there riding in said Nash automobile.

4. While the claimant, Wiley Jenkins, was driving across the intersection of Wabash Avenue and Scofield Street as aforesaid, the automobile of the said Fred Ireland ran into and struck the rear end of the said Nash automobile and caused the same to turn over.

5. Each of the claimants was then and there in the exercise of all due care and caution.

6. As the result of the aforementioned collision the said Nash automobile was damaged, and the claimant, Wiley Jenkins, sustained injuries about the legs and burns about the eyes, for all of which he claims damages in the sum of $3,000.00.

7. As the result of said accident the claimant, Mary Jenkins, sustained severe and permanent injuries and cuts in and about the face and shoulders, for which she claims damages in the amount of $5,000.00.

8. As the result of said accident the claimant, Maurice Hellyer, sustained severe and permanent injuries and cuts in and about the face and body, for which he claims damages in the sum of $5,000.00.

The Attorney General has moved to dismiss each of said cases on the ground that there is no liability on the part of the respondent under the facts set forth in the several complaints.

This court has repeatedly held that the State is not liable for the negligent and wrongful acts of its servants and agents under the doctrine of respondeat superior, in the absence of a statute making it so liable. Audie Crank vs. State, No. 2868, decided at the January term, 1937, of this court, and cases there cited. Goldie Ryan vs. State, 8 C. C. R. 361, and cases there cited.

Such holding is in accordance with numerous decisions of our Supreme Court. Hollenbeck vs. County of Winnebago, 95 Ill. 148; City of Chicago vs. Williams, 182 Ill. 135; Minear vs. State Board of Agriculture, 259 Ill. 549; Gebhardt vs. Village of LaGrange Park, 354 Ill. 234.

The liability, if any, is upon the servant and not upon the State.

Under the law as above set forth, and under the facts set forth in the several complaints, we have no authority to allow an award. The motion of the Attorney General in each case is therefore allowed, and each case is dismissed.


author: Mr. Chief Justice Hollerich

text:
    (No. 2729
    Lowell Maxwell Kelly, a Minor, by W. F. Kelly, His Next Friend, Claimant, vs. State of Illinois, Respondent.

      Opinion filed April 14, 1937.

    Hassel B. Smith, for claimant.
    Otto Keener, Attorney General; Glenn A. Trevor, Assistant Attorney General, for respondent.
   Mr. Chief Justice Hollerich

delivered the opinion of the court:

Claimant filed his complaint herein on September 24th, 1935 and alleges therein as follows:

1. That on September 28th, 1934, about four-thirty o’clock p. m., he was riding as a passenger in a Chevrolet roadster, in an easterly direction on S. B. I. Route No. 14, about three miles east of McLeansboro.

2. That at that time and place Ray Rogers, an employee of the respondent in the Division of Highways, had charge of a crew of men who were engaged in clearing the underbrush from the right-of-way and burning the same.

3. That in connection with the work there being done, the said Ray Rogers left a State truck standing upon a portion of the concrete roadway, opposite a point where the men were engaged in burning underbrush as aforesaid; that the left side of said truck extended out into and over that portion of said highway which was customarily traveled by vehicles proceeding in an easterly direction.

4. That the burning of such .underbrush caused a screen of smoke to hang over and cover the traveled portion of such roadway, at and near the place which said truck was standing.

5. That the point or place where said motor truck was stopped as aforesaid was about two hundred (200) feet east of the crown or top of a hill sloping to the eastward.

6. That said Ray Rogers carelessly and negligently failed to post signals warning the traveling public of the fact that said motor truck was obstructing a portion of said highway.

7. ' That by reason of the foregoing, and while the claimant was riding as a passenger in said automobile, and while he was. in the exercise of all due care and caution for his own safety, the car in which he was riding, without any fault or negligence on the part of the driver thereof, struck the left rear corner of the aforementioned State truck, whereby the claimant sustained a compound fracture of the right arm at and near the elbow, as well as other bruises and injuries.

8. That the claimant has spent large sums of money for medical attention necessitated by such injuries, and his right arm has become permanently injured. Wherefore he claims damages in the amount of $10,000.00.

The Attorney General has entered a motion to dismiss the case for the reason that the respondent is not liable for the negligence of said Ray Rogers under the facts set forth in the complaint.

This court has repeatedly held that the State in the maintenance of its hard-surfaced roads is engaged in the exercise of a governmental function. Lester A. Royal vs. State, No. 2597, decided at the September, 1935, term, and cases there cited.

We have also repeatedly held that in the exercise of its governmental functions, the State is not liable for the negligence of its servants and agents in the absence of a statute making it so liable. Audie Crank vs. State, No. 2868, decided January, 1937, term; George McGready vs. State, No. 2604, decided September, 1936, term; Ryan vs. State, 8 C. C. R. 361, and cases there cited.

This rule is in accordance with the .uniform holding of our Supreme Court in cases, involving cities, counties, school districts, park districts, and other municipal corporations, while engaged in the exercise of governmental functions. Hollenbeck vs. County of Winnebago, 95 Ill. 148; City of Chicago, vs. Williams, 182 Ill. 135; Minear vs. State Board of Agriculture, 259 Ill. 549; Gebhardt vs. Village of LaGrange Park, 354 Ill. 234.

Under the facts set forth in the complaint herein, and the law as above set forth, we have no authority to allow an award.

Award must therefore be denied. Award‘denied. Case dismissed.