text:
    Michael Carey et al. v. John Kutten.
    1. Payment — Of a Mortgage Debt After Assignment by the Mortgagee of the Mortgage Without Notice to the Mortgagor. — A payment of a mortgage indebtedness by the mortgagor to the mortgagee after an assignment of the notes evidencing the indebtedness and the mortgage securing them to a third party, is good in equity as against the assignee, when such, assignee has given to the mortgagor no notice, actual or constructive, of such assignment.
    Mortgage Foreclosure. — Appeal from the Superior Court of Cook County; the Hon. Farlin Q. Ball, Judge, presiding. Heard in this court at the March term, 1901.
    Reversed and remanded.
    Opinion filed November 21, 1901.
    Statement of Facts. — Appellant Michael Carey being indebted on his note to Theodore H. Schintz, and desiring to pay off that indebtedness and secure an additional loan, on June 6,1889, executed his note for §1,000, payable to the order of himself four years after date, with interest. He indorsed said note and interest notes in blank and delivered them to Theodore H. Schintz, and on the same date, June 6, 1889, to secure the payment of the same, executed jointly with his wife, Ellen Carey, a trust deed to said Schintz, as trustee, which was duly recorded June 15, 1889.
    On June 6, 1893, being the date of maturity of said principal note, the defendants, Michael and Ellen Carey, executed what purports to be an agreement for the extension of the time of payment on said note for four years from said date, June 6,1893. It was not recorded and was held by Schintz, to whom it was delivered, together with eight new interest notes for $30 each, executed by Michael Carey. From the time of the execution of said $1,000 note, Carey paid the interest as it fell due to Schintz, and continued to do so after the execution of the extension agreement, the notes, by their terms, being payable at Schintz’s office.
    In the fall of 1893, the appellee, John Kutten, purchased the note for $1,000, together with the interest notes and extension agreement, and received the same, with trust deed of June 6, 1889, from Schintz. This assignment to Kutten was not recorded, and Carey was not notified of the same and had no knowledge whatever of the transaction, but continued to pay his„ interest at the office of Schintz, where Kutten would call and receive the same.
    In May, 1897, when said $1,000 note was about to become due under the terms of the extension agreement, Schintz notified Carey in writing that the same would be due and payable at his office on June 6, 1897. Carey thereupon advised Schintz that he desired to extend the time of payment, and also that he wanted an additional loan of $200, and it was arranged that Schintz should make a new loan of $1,200 on the property in question, take up and cancel the $1,000 indebtedness, and pay Carey the balance. To evidence the $1,200 indebtedness, and to secure the same, Carey accordingly, on May 27, 1897, executed his principal note for $1,200, payable live years after date to the order of himself, with interest notes or coupons and a trust deed (signed also by his wife, Ellen Carey,) to said Schintz as trustee.
    On the same day, May 27, 1897, Mrs. E. K. Ware called at Schintz8s office, received the notes executed and indorsed by Carey, and gave therefor to Schintz her check payable to said Schintz for $1,200, the trust deed -of May 27, 1897, being left by her with Schintz, and recorded on that day.
    The $1,000 note became due on June 6,1897, and on June 8, 1897, Carey was furnished by Schintz with a statement of his account, containing a credit, “ by loan $1,200,88 and various charges incident to the making of the $1,200 loan, and also a charge, “ to old loan canceled, $1,030,” and showing a balance due Carey of $125.20 out of the $1,200. Carey did not ask for nor receive his canceled note from Schintz, supposing, as had been done in his previous dealings with him, it would be retained with the other securities for the $1,200 loan.
    On June 12, 1897, Schintz, as trustee, executed a release deed to Carey, conveying all interest acquired by the trust deed of June 6,1889, to the property in question, which was recorded June 1J, 1897.
    On July 19, 1897, Schintz failed. The $1,000, part of the $1,200 loan, which should have been applied to take up the Kutten note, appears to have been converted by Schintz to his own use.
    Several days after the failure of Schintz, Kutten having learned by a search of the records that the trust deed of June 6, 1889, had been released, called on Carey about the matter, and this was the first intimation Carey had that said $1,000 note had been assigned to Kutten.
    On July 31, 1897, Michael Carey and Ellen Carey, his wife, by warranty deed, conveyed to defendant Margaret Casey the premises in question, which deed was duly recorded in the recorder’s office of Cook County, on August 2, 1897. On August 5, 1897, Kutten filed his bill in the Superior Court of Cook County, praying that said release deed of June 12, 1897, be set aside, and the trust deed of June 6, 1889, be declared a subsisting lien and foreclosed.
    On March 28, 1899, the case was referred to a master in chancery, and on November 2, 1899, the master filed his report, together with the testimony taken by him, and on December 8, 1899, a decree was entered overruling the exceptions to said report and finding in conformity with recommendation of the master, that the equities are with the complainant, Kutten; that he has a valid and first lien on the property in question, and foreclosing the same, together with that of the trust deed of May 27,1897, held by Mrs. Ware, which is declared a valid lien subject to that of complainant.
    From this decree Michael Carey and Margaret Casey prosecute the appeal here.
    Thomas MoEnerny, attorney for appellant Michael Carey.
    George W. Wilbur, attorney for appellant Margaret Casey; John F. Mahon, of counsel.
    C. Milne Mitchell, attorney for appellee.
   Mr. Justice Sears

delivered the opinion of the court.

The question presented upon this appeal is as to whether a payment of a mortgage indebtedness by the mortgagor to the mortgagee, after assignment by the mortgagee of the note evidencing the indebtedness and the mortgage securing it to a third party, will be held good in equity as against the assignee, when such assignee has given to the mortgagor no notice, actual or constructive, of the assignment.

Appellant Carey paid Schintz, the original mortgagee, the amount of the indebtedness secured by the trust deed of June 6, 1889, after Schintz had assigned the note and trust deed to appellee, Kutten. But appellee, Kutten, had not recorded the assignment in the office of the recorder of deeds, nor had he given any notice of the assignment to appellant Carey. The question, therefore, is, does the doctrine announced in Olds v. Cummings, 31 Ill. 188, here apply to make the payment good in equity as against appellee, Kutten, the assignee of the mortgage? The doctrine first announced in the Olds case has been further defined and applied in a number of subsequent decisions. As stated in Buehler v. McCormick, 169 Ill. 269, “It is apparent that all that has been said in the different causes can not be fully reconciled.” The doctrine announced in Olds v. Cummings, to the effect that an equity which might be asserted by a mortgagor as against the original mortgagee, could as well be asserted against an assignee of the mortgage, was in that case applied only to an equity which existed at the time of the assignment of the mortgage, and which grew out of the fact that the note secured by the mortgage was usurious. But in other and later decisions it has been announced that the same doctrine applies equally to an equitable defense based upon payment of the mortgage debt by the mortgagor to the mortgagee after the mortgagee had assigned the note and mortgage to another, and where the assignee, seeking by bill in equity to foreclose, had given no notice to the mortgagor of the assignment to him before payment was made to his assignor.

The cases in which this more extended application of the doctrine of Olds v. Cummings has been announced, are: Towner v. McClelland, 110 Ill. 542; McAuliffe v. Reuter, 166 Ill. 491; Buehler v. McCormick, 169 Ill. 269; and Schultz v. Sroelowitz, 191 Ill. 249.

In Towner v. McClelland, supra, the payment of the mortgage debt was effected through a transaction which occurred prior to the assignment of the mortgage, and the precise question here presented did not, therefore, arise. The court, in holding that the payment was good in equity as against the assignee, said:

“Hotonly so, but where a mortgage is assigned, and the mortgagor without notice pays the payee, who has parted with the notes, that will discharge the mortgage, and in asuit to foreclose, such payment may be set up in bar of a decree for its foreclosure. The mortgagor, to relieve himself from liability on his note, must see that he pays the money to the holder of the note, who has deceived it by assignment before maturity, but not so to discharge the mortgage, because it is not assignable at law. The equitable assignee, to protect his rights against a payment by the mortgagor to the mortgagee, must give the former notice, actual or constructive, óf its assignment. He may place the assignment on record, or give notice of the assignment to the mortgagor.”

In McAuliffe v. Reuter, supra, the arrangement between the mortgagor and mortgagee, by which deposits in the bank of the mortgagee were to be received as credits upon the mortgage note, was made before the assignment of the mortgage note by the mortgagee, although the payments were made after the assignment. And in that case the doctrine, as announced in Olds v. Cummings and as more broadly announced in Towner v. McClelland, supra, was adhered to and applied to defeat a foreclosure in equity by the assignee.

In Buehler v. McCormick, supra, the assignment of the mortgage was made by the mortgagee after the note secured by the mortgage had been fully paid. In that case the chief question presented and considered was as to whether a note made payable to the order of the maker and by him indorsed in blank and delivered to the mortgagee, would, as a mortgage debt, be treated as within the application of the rule announced in Olds v. Cummings. The court held that no distinction could be made as between such a note and one payable in terms to the mortgagee, so far as the application of the doctrine in question was concerned, and in effect that a payment to the one who originally took the note thus drawn and secured by mortgage, was a payment to the mortgagee. In other words, the court declined to bold “ that by the terms of the instrument all the attributes of negotiable paper were imputed to this deed of trust,” and the court did hold that such paper did not fall within the exception made as to accommodation paper, as declared in. Miller v. Larned, 103 Ill. 562.

In Schultz v. Sroelowitz, supra, the payment of the mortgage note which was sought to be asserted as a defense in equity against a foreclosure of the mortgage by an assignee of the note, was made, not by the mortgagor, but by a purchaser from the mortgagor who had assumed and agreed to pay the note. The payment was made after the assignment. The court held that the payment did not constitute an equitable defense which could be asserted against the assignee of the mortgage under the doctrine of Olds v. Cummings; but the decision is put upon the ground only, that the payment was made by another than the mortgagor, and not at all upon the ground that the payment was made after the assignment. The ground of the decision is that the giving of a notice by the assignee to the mortgagor, which seems to be required by the decisions above cited to protect the assignee of the mortgage against the effect in equity of a payment after the assignment to the mortgagee, would have been of no avail, for the mortgagor was no longer in interest after his grantee of the mortgaged premises had undertaken the payment of the mortgage debt. The equities of the one who had assumed the debt and paid it, were to be classed as latent equities of third persons, against which the doctrine of Olds v. Cummings has no application. Silverman v. Bullock, 98 Ill. 11.

And:the court again announces the rule declared in the cases above cited, “that the assignee, to protect himself from payments by the mortgagor to the mortgagee, must give notice to the mortgagor, actual or constructive, of the assignment to him.”

Against the force of these various announcements by the Supreme Court, the learned counsel for the appellee presents and relies upon the decision in Keohane v. Smith, 97 Ill. 156.

In that case it appeared that one Sullivan had executed and delivered a note and mortgage upon property owned by him to secure a debt to one Eunyan. Shortly after it was made the note was sold by Eunyan to Mrs. Keohane. Afterward Sullivan made another note and mortgage, securing it upon the same premises, to Smith, to secure a loan of money by Smith to Sullivan. A part of the money loaned by Smith was to be used to pay off the Eunyan mortgage debt, so that it should be released as a lien prior to that of Smith. The money was paid to Eunyan for that purpose but was not so applied, and Mrs. Keohane received no part of it. The conflict of interests in the case arose upon the attempt of Mrs. Keohane to foreclose her mortgage and the claim of Smith that the Keohane mortgage had been discharged by the payment to Eunyan, and that his, Smith’s, loan, was not subject to the Keohane mortgage. As between the two claiming as lienors the Supreme Court held that the payment to Eunyan did not operate in equity to extinguish the rights of the assignee of Eunyan under the mortgage; that Smith and his attorney, in seeing to the application of the money loaned by him, had not exercised “ the usual care that an ordinarily prudent person observes in the transaction of his own business;” that equity will not postpone the interests of one who stands fair and who has omitted no duty devolving on him, to the interests of one whose negligence made it possible for the loss to occur; and that in this instance the negligence of Smith in failing to obtain the unmatured note when payment was made to Eunyan made the loss possible. No reference is made in the decision to the application of the rule announced in Olds v. Cummings. No question of the rights of the mortgagor is considered by' the court. Only the conflicting rights of the two mortgagees are considered, and as between them the court finds that the payment to the' mortgagee after assignment of the mortgage did not operate to bar the rights of the assignee.

In .the case at bar, as in the Keohane case, there are conflicting claims under two mortgages. Kutten, the assignee of the note secured by the original trust deed made to Schintz, claims under the one, and Mrs. Ware, the owner of the mortgage note given by Carey in part to pay the Schintz mortgage debt, claims under the other. But there is this difference between this case and the Keohane case, that in the latter Smith was aware of the prior mortgage to Runyan, and undertook, through his agent, to apply part of his loan to its payment, but in so doing acted so negligently that the money was misapplied by Runyan. Here, Mrs. Ware had no actual knowledge of any existing mortgage to' Schintz. In the Keohane case, as in ' the Sroelowitz case, the equity was sought to be asserted by another than the mortgagor, viz., another lienor under another mortgage. Here, while the case presents conflicting interests of two mortgagees, yet the equities arising from the payment by Carey to Schintz were sought to be availed of by Carey, the mortgagor, as well as by Mrs. Ware, in the court below. In this court Carey alone appears as appellant, Mrs. Ware not having joined in the appeal. By the decree below, the property mortgaged by Carey is subjected to both mortgages, the mortgage made to Schintz and assigned to appellee, Kutten, having been given a priority over that held by Mrs. Ware. It is not without difficulty that it can be determined whether the facts of this case bring it within the rule of Keohane v. Smith, as above stated, or make it a case to be controlled by Olds v. Cummings and the cases cited which have followed'that decision. If the controversy arose solely between appellee, Kutten, as holder of the mortgage first made, and Mrs. Ware as holder of the mortgage secondly made, it might perhaps be held that the Keohane case governed, upon the ground that Mrs. Ware, in loaning her money upon the property, or in purchasing a mortgage, should have seen to it that the money loaned upon the mortgage had been applied to pay the prior mortgage to the person holding the note by which it was evidenced.

But the case here presents squarely rights of the mortgagor. He is contending against a decision by which his property is subjected to the lien of both of these mortgages, one of which was given to pay the other. He has the right to invoke the rule of Olds v. Cummings if that rule is applicable to a case where payment is made to the mortgagee after the mortgage note has been assigned, without notice to the mortgagor, as well as when the payment has preceded the assignment.

In view of the various announcements by the Supreme Court to the effect that such a payment will operate to raise an equitable defense to a foreclosure by the assignee, when the assignee has not actually or constructively given notice to the mortgagor of the assignment, we hold that the defense of -appellant Carey was good as against the foreclosure suit of appellee, Kutten. We can not regard all of these announcements as obiter dieta. It is true that in several of the decisions, as above indicated, it was not necessary to decide this question, as in those cases the payment did precede the assignment. But in the Sroelowitz case the payment was, as here, after the assignment, and the question of its effect was squarely presented to the court. The court-was called upon to pass on the question of the effect of a payment subsequent to the assignment, as well as the effect of a payment by another than the mortgagor. And the court held in clear terms that a payment to the mortgagee after assignment would constitute a good defense for the mortgagor in equity against foreclosure by the assignee when the assignee had failed to gixm any notice to the mortgagor, actual or constructive, of the assignment. It could not be held here, as in the Sroeloxxdtz case, that the equities arising from the payment by Carey to Schintz are being asserted by others than the mortgagor, for while the record shoxvs conxmyance by Carey of the property in question to another, yet the decree finds that such conveyance was colorable only, and that Carey is still in equity the oxvner of the property.

We are therefore of opinion that the learned chancellor erred in decreeing that appellee, Kutten, xvas entitled in equity to an enforcement of his mortgage as against appellant Carey.

The decree is reversed and the cause is remanded.


source: Caselaw Access Project

author: Mr. Justice Sears Mr. Presiding Justice Windes

license: Public Domain

text:
    Peter A. Anderberg, Adm’r, etc., v. Chicago & N. W. Ry. Co.
    1. Hazards — Perils of an Employment — Unknown Dangers. — Where the peril is obvious and where no explanation by the employer can make it move .apparent to the ordinary intelligence than does the mere view of it, the doctrine of unknown dangers incident to a known defect does not apply.

      2. Same — Failing to See Obvious Obstructions. — The law imposes no obligation on a member of a train crew when on duty to be on the lookout for dangerous obstructions overhanging the track, for his service requires him to give his undivided attention to the careful and diligent performance of his duties and he has the right to rely upon the employer to give him a safe and unobstructed track, but this does not mean if he sees the danger or knows of it, or it is obvious to him, he is not required to avoid it, by the exercise of ordinary care, but it means he is not required to anticipate it, look for or expect it.
    _ 3. Master and Servant— When the Servant Accepts Service with Enoivledge of Dangers. — When a switchman accepts employment in the yards of a railroad company with knowledge of the character and position of structures from which employes might receive injuries he can not hold his employer liable for injuries received by reason of such obstructions.
    4. Same — Ordinary Care — Burden of Proof. — Where a switchman in the employ of a railroad company stands upon the top of a car, approaching an obstruction with which he is familiar, but with his back toward it, and so remains until he is struck by it and killed, in an action to recover damages resulting from his death, the burden of showing that he was in the exercise of ordinary care at the time, rests'upon his personal representative, without which there can be no recovery.
    Trespass on the Case. — Death from negligence. Appeal from the Circuit Court of Cook County; the Hon. Richard W. Clifford, Judge, presiding. Heard in this court at the March term, 1901.
    Affirmed.
    Opinion filed November 21, 1901.
    Statement. — This suit was brought by appellant, as administrator of the estate of Anton E. Anderberg, deceased, to recover damages for the death of his intestate, caused, as is alleged, through negligence of appellee. Appellant’s intestate was a switchman in the employ of the appellee railroad company. His duties took him, as one of a freight switching crew, into the yards of the Lassig Bridge Works and upon a railroad track owned and maintained by the bridge company. The track in part ran between two buildings of the bridge company, which buildings were connected by a bridge, extending from one building to the other and arranged to hold the belting which conveyed power from the one building to the other. This belting box or bridge was at a height of about eighteen or nineteen feet at its lowest part above the' surface of the rails of the railroad track, which passed beneath it. It was over this track, passing beneath this box or bridge, that appellants intestate and the other members of his switching crew were obliged to run cars belonging to the appellee.
    Appellant’s intestate was a good switchman, possessed of good eyesight and hearing. He had been in the employ of appellee for about seven months, Tor four months preceding his death he had, in the course of his duty, gone with cars in and out of the Lassig Bridge Works property and under- the box or bridge above described on an average three times a day. Upon the day of his death he went with his switching crew to take some cars out of the yards of the bridge works. The train, after coupling to the cars which were to be taken out, proceeded with them to the scale-house of the bridge company, presumably to have the cars weighed, and in so doing passed over the track under the box or bridge between the two buildings. The train was proceeding north at about the speed of a man walking, i. e., at the rate of about three or four miles per hour, when it passed under the box or bridge. Appellant’s intestate stood upon one of the box cars of the train looking to the south. As this car neared the box or bridge a boy at a window of one of the buildings called to him to warn him. He either did not hear or heed the warning, and as the car upon which he stood passed under the box or bridge, he was thereby knocked from the car, fell beneath the wheels of the next car following, and was killed. The distance from the top of the rail of the track to the top of the box car was about fifteen feet and four inches.
    The narr. consists of three counts. Each count charges negligence in the handling and managing of the train; the second count charges negligence also in causing the train to run under a structure across the track; and the first count charges a failure to give its employe, appellant’s intestate, “due and proper warning of the danger of said structure.”
    The evidence introduced by appellant established only the facts above set out, and the kinship of certain next of kin of the deceased. At the conclusion of the introduction of evidence by appellant, the court, upon motion of appellee, peremptorily directed a verdict for appellee. From judgment thereon this appeal is prosecuted.
    George Burry, attorney for appellant.
    E. E. Osborn, attorney for appellee; A. W. Pblver and Lloyd W. Bowers of counsel.
   Mr. Justice Sears

delivered the opinion of the court.

It is difficult to perceive how any negligence of the appellee can be predicated upon the facts of this case. No negligence is charged in the construction or maintaining of the structure by which appellant’s intestate was knocked from the car. None could be, for the structure was built and maintained by another, company, viz., the Lassig Bridge Works, upon its own property. It is charged by the declaration that there was negligence in the managing of the train, but none is shown by the evidence, unless it can be held that the very running of any train under the box or bridge constituted negligence. But it can not be held that the mere fact of running a train under a structure or into a building is negligence, if it be safe to do it under proper management. The facts of this case do not disclose that a train when properly managed could not easily be safely run under this structure and into the scale-house. On the contrary, it is disclosed that it had been done daily for months and by the deceased himself, with others. The declaration charges also negligence in that appellee failed to warn its employe, appellant’s intestate, of the danger incident to passing beneath this structure. But the employe Avas Avell aAvare of the existence of the structure and its relation to the track upon Avhich he worked, and he had been thus aware for months. The dangers incident to the structure were apparent; there was no latent or uncertain peril in it. Ho one of mature years and of ordinary intelligence could fail to see the dangers and all the dangers incident to the use of a railroad track passing beneath this structure and into a building. The duty of any further warning to an employe, thus familiar Avith the conditions and the danger, would of necessity involve the proposition that the company should have told its intelligent employe that he could not stand upright and pass safely through a space of three feet and seven inches, Avhich Avas betAveen the top of the car and tlie bottom of the bridge, or that it should haATe sent some one to Avarn the employe each time that he approached the structure upon a train. The absurdity of either proposition is apparent. 1 Shearman & Rediield on Heg. (4th Ed.), Sec. 203; 2 Bailey on Personal Injuries, Secs. 2729, 2731; Aerkfetz v. Humphreys. 145 U. S. 418; L. & N. R. R. Co. v. Hall, 87 Ala. 708.

But if there was any negligence imputable to appellee, and we are clearly of opinion that there is none, yet a recovery by appellant Avould be precluded upon the ground that this peril Avas'a hazard assumed by the employe as an ordinary risk of his employment.

Cases are cited by the learned counsel for appellant which hold that Avhere the defect is knoAvn to the employe, but the dangers incident to the defect may not be fully known and appreciated, then the doctrine of an assumed hazard can not apply to bar a recovery. Of such are: Swift v. O’Neill, 187 Ill. 337, and C., R. I. & P. Ry. Co. v. Cleveland, 92 Ill. App. 308. But Ave are aware of no case which holds, Avhere the peril is obvious and Avhere no explanation by the employer could make it more clear and apparent to the ordinary intelligence than does the mere vieAV of it, that then the doctrine of unknown dangers incident to a knoAvn defect can apply. The distinction between the rule as to perils which are obvious and those which are not is very clearly stated in N. C. St. R. R. Co. v. Dudgeon, 184 Ill. 477, wherein the court said, quoting from the decision in another case:

“ Simply failing to see the dangerous obstruction overhanging the track is not enough, unless the danger was obvious to him at the time, though it might have been seen if he had been on the lookout; for the law imposes no obligation on the train crew, or any of them, to be on the lookout for such things, but, on the other hand, they may give their whole and undivided attention to the careful and diligent performance of their duties, relying on the master to give them a safe, clear and unobstructed track. This does not mean that if they see the danger or know thereof, or it is obvious to them, they are not required to avoid it by the exercise of ordinary care, but it means that they are not required to anticipate it, look for or expect it.”

Counsel contend at some length for a distinction between the doctrine of assumed risk, as affecting this case, and contributory negligence. In our opinion the application of either doctrine equally bars a recovery. The risk with its obvious perils was assumed, and appellant has failed to show that his intestate exercised any care for his own safety. The deceased stood upon the top of a car, approaching the structure with which he was familiar, his back turned toward it, and remained in this position until the car reached and passed beneath the structure. Eo relieving or excusing facts appear.- The burden of showing an exercise of ordinary care upon the part of his intestate rested upon appellant. This he failed to show, but on the contrary, established by the evidence that the deceased was,'through momentary heedlessness or inattention to his surroundings, brought to his death. We are of opinion that upon the facts of this case no recovery could be sustained, and therefore that the learned trial court did ’ not err in peremptorily directing a verdict.

The judgment is affirmed.

Mr. Presiding Justice Windes

concurs in the conclusion reached to the extent that a recovery is barred by the contributory negligence of appellant’s intestate.


author: Hr. Justice Adams

text:
    Board of Trade et al. v. Central Stock and Grain Exchange.
    1. Bucket-Shops— Object of the Act Prohibiting. — The act to suppress bucket-shops and gambling in stocks, bonds, petroleum, cotton, grain, provisions and other produce (laws. 1887, p. 66) is directed against the keeping of any office or place wherein is conducted or permitted the pretended buying or selling of grain or other produce, on margins or otherwise, without any intention of receiving the property bought, or of delivering it, if sold.
    2. Same — Keepers Of, as Witnesses.— The keeper of a bucket-shop can not shield himself from criminal responsibility behind the fact that he made no inquiry of .his customers as to their intentions. He must know that the transaction is not gambling or, in good faith, have just reason to believe that the buying and selling is not within the intended prohibition of the statute.
    8. Same — Sufficiency of the Proof. — Where the proof establishes beyond question that purchases ai e made without any intention of receiving the commodity purchased and that the only object is to make money on the fluctuations of the market by the pretended purchase of grain on margins, such proof is sufficient to establish the existence of a bucket-shop within the meaning of the statute.
    4. Gambling — Speculation in Futures, Unlawful in this State. — I't is no longer lawful in this State, under any shift or device, however specious, to keep an office or other place where parties may under the pretense of buying or selling grain or other produce, engage in speculation in futures and gamble upon the rise and fall of the market.
    5. Presumptions — Where a Party Refuses to Testify — When a party refuses to answer relevant questions or to produce evidence in his possession, or subject to his control, the presumption is that the testimony, if given, or the evidence, if produced, will be unfavorable to him.
    6.. Injunctions — Restraining the Board of Trade from Prohibiting" Persons from Becoming Members.- — It is error to enjoin the enforcement of a rule of the Board of Trade which does not infringe public policy or any rule of law and is not in itself unreasonable.
    Bill for an Injunction. — Appeal from the Circuit Court of Cook County; the Hon. Edward P. Vail, Judge, presiding. ' Heard in this court at the March term, 1901.
    Reversed.
    Opinion filed November 21, 1901.
    Statement. — July 28, 1901, appellee filed a bill against the Board of Trade of the City of Chicago and the Western, Union Telegraph Company, alleging that appellee is an. Illinois corporation and is engaged in the business of dealing in grain, provisions, product and other commodities in the city of Chicago; that the Western Union Telegraph Company, which, by arrangement with the Board of Trade, transmitted to third persons the market quotations of the board, had,.by request of appellee, so strung its wires as to connect them with appellee’s place of business in the city of Chicago, and there attached them to instruments placed there by said telegraph company; and, by means thereof, communicated with appellee and delivered to it said market quotations; that said market quotations are affected with a public interest, and that the successful management of appellee’s business depends entirely upon receiving instantaneously the said market reports. The bill avers that the Board of Trade has threatened to prevent the market reports from being transmitted to appellee, and to withhold from the telegraph company information as to the market quotations, and to prevent the transmission to appellee of said quotations. The bill charges that it is the intention of the telegraph company, at the instigation of the Board of Trade, to cut off and disconnect its wires communicating with appellee’s place of business, and to remove therefrom the instruments and means of obtaining the market quotations. The bill also avers that the board has forbidden its own members to deal with certain members of the public, who are in receipt of certain market information, and who are engaged in the same kind of business as that conducted by members of the board on the floor of its exchange, but in competition With said members, under a penalty of disciplining any of its members who shall violate such regulation, etc.
    On the filing of the bill an injunction was issued, as prayed in the bill, enjoining the Western Union Telegraph Company ahd the Board of Trade of the city of Chicago from cutting off or disconnecting the telegraph wires from the line or lines of wires or circuits over which the market information of the Board of Trade has been and is being transmitted to the Central Stock and Grain Exchange at its place of business in Chicago, and from removing therefrom the instruments and appliances used in connection with said wires, and enjoining the Board of Trade from doing anything to prevent the Western Union Telegraph Company from gathering such information and market news of transactions on the board and furnishing them to complainant, and from making any contract with any person that will prevent the Western Union Telegraph Company or complainant from receiving said quotations as promptly as any other person, and from doing any act discriminating against complainant respecting the said quotations, and from interfering with or prohibiting any person, firm or corporation being a member of the Board of Trade, from doing business with the complainant the same as they do with other persons.
    The Western Union Telegraph Company entered an appearance, but filed no answer. July 21, 1900, the board of trade answered, averring, among other things, that appellee is engaged in conducting a bucket-shop, in which it makes with its customers certain pretended contracts respecting the purchase and sale for future delivery of grain and provisions, wherein the parties and the complainant only contemplate that such contracts or trades shall be settled according to the public market quotations of this defendant, without any liona fide transaction or contract for actual delivery, and that said pretended contract or trades are, in reality, but bets upon market prices, and that said market quotations are necessary to enable appellee to conduct said business. The answer further avers that by rea: son of the giving of the market quotations to bucket-shops by the telegraph companies, it adopted June 25, 1900, certain regulations concerning the distribution of the quotations, which were put in the form of a contract, which contract was submitted to the telegraph companies, including the Western Union company, with a notice that, in order to receive the quotations, they must sign the same' before August 1st; that the Western Union company declined to sign said contract, but the Cleveland Telegraph Company signed it. Attached to the answer, and made a part thereof, is the contract referred to between the board and the Cleveland Telegraph Company. The contract provides that the board will furnish the market quotations to the telegraph company, and the company agrees as follows:
    “ Said telegraph company agrees that it will not knowingly furnish or sell, directly or indirectly, said quotations or other news to any person, firm or corporation conducting a bucket-shop or other similar place where such quotations are used as a basis for bets, or other illegal contracts, based upon the fluctuations of the price of commodities dealt in on. said board of trade; nor will it knowingly continue to furnish such quotations to any person, firm or corporation, who shall re-transmit or furnish the same to any person, firm or corporation conducting such bucket-shop or other place, but said telegraph company shall be liable for costs in suits brought to enforce this clause only when it shall actively defend such suit. Said telegraph company agrees that it will not, directly or indirectly, furnish said quotations to any other telegraph company or other person, firm or corporation engaged in the business of distributing market news by telegraph or telephone, the intent hereof being that every such telegraph company or other disseminator of news shall come into direct contract relation with, and accountability to, said board of trade as a condition to its being furnished said quotations and news.”
    It is also averred in the answer that the board has established the following rule for the government of its members :
    Section 8, “ Any member of the association who shall be interested or associated in business with, or who shall act as the representative of, or who shall knowingly execute any order or orders for the account of any organization, firm or individual engaged in the business of dealing in differences on the fluctuations in the market price of any commodity — without a bona fide purchase and sale of property for an actual delivery — shall be deemed guilty of unmercantile conduct, which renders him unworthy to" be a member of the association; and, upon complaint to and conviction thereof by the board of directors, he shall be expelled from membership in the association.”
    August i, 1900, appellee filed a supplemental bill, averring that while a- motion for a dissolution of the in junetion was pending, counsel for the Board of Trade offered, in open court, to permit appellee to receive the quotations through the Cleveland Telegraph Co., and that thereupon an order was entered giving appellee leave to file a supplemental bill and permitting the Western Union Co. to discontinue the furnishing of quotations, and the board of trade to furnish them to the Cleveland Telegraph Co., and the latter company to furnish them to appellee; that, since the making of said order, the Cleveland Telegraph Co. is performing the same service for appellee which was formerly performed for it by the Western Union Co., and that all the allegations of the original bill as to the Western Union Co. are true as to the Cleveland Co. Prayer that appellee may have the same relief against the latter company as prayed in the original bill against the former company.
    . The Board of Trade answered, denying that it assented to any arrangement by which appellee was to receive the quotations from the Cleveland Co., and averring that since July 31, 1900, appellee has been receiving the quotations from that company in accordance with a contract between it and the company, set up in the answer of the company.
    The Cleveland company answered, setting out the contract of July, 1900, between it and the Board of Trade heretofore referred to, and also setting out a contract between it and appellee for the furnishing by it to appellee of the market quotations of the Board of Trade, which contract contains the following undertaking of appellee:
    “ That said party of the second part agrees that its business is and shall be the business of a dealer in grain, produce, stocks, bonds and other commodities; that said party of the second part is not conducting, and will not conduct, a bucket-shop, or other business contrary to the criminal laws of the State of Illinois, or use or allow any one else to use said quotations for that purpose.”
    It is also provided by the contract that (except in a case not here involved) neither party shall terminate the contract without giving to the other party thirty days’ written notice of its intention so to do. The cause was heard .before the chancellor on the testimony of witnesses and other evidence given and produced in open court. The court found, among other things, that the defendants have not, nor has any of them, any right to discriminate between persons and corporations engaged in business, and who are ready to pay for the market quotations, and to conform to all reasonable regulations as to the collection and transmission thereof. The temporary injunction is made perpetual by the decree and the relief prayed is granted.
    Henry S. Eobbins, attorney for appellants.
    Kern, Tullen & Brown, attorneys for appellee.
   Hr. Justice Adams

delivered the opinion of the court.

The sole defense set up in the answers is, that appellee is engaged in conducting a bucket-shop; in other words, that the appellee’s business is such as is prohibited by “ An act to suppress bucket-shops and gambling in stocks, bonds, petroleum, cotton, grain, provisions and other produce,” in force July 1, 1887. 1 S. & C. Eev. Stat. 1896, p. 1304 (laws 1887, 96). Section 1 of the act provides :

“ That it shall be unlawful for any corporation, association, copartnership or person, to keep or cause to bé kept within this State any bucket-shop, office, store or other place wherein is conducted or permitted the pretended buying or selling of the shares of stocks or bonds of any corporation, or petroleum, cotton, grain, provisions or other produce, either on margins or otherwise, without any intention of receiving and paying for the property so bought, or of delivering the property so sold; or wherein is conducted or permitted the pretended buying or selling of such property or margins; or when the party buying any of such property, or offering to buy the same, does not intend actually to receive the same if purchased, or to deliver the same if sold; and the keeping of all such places is hereby prohibited,” etc.

Section 2 of the act is as follows :

“ It shall not be necessary, in order to commit the offense defined in section 1 of this act, that both the buyer and the seller shall agree to do any of the acts therein prohibited, but the said person thus pretending or offering to sell, or thus pretending or offering to buy, whether the offer to sell or buy is accepted or not, and any corporation, association, copartnership or person who shall communicate, receive, exhibit or display, in any manner, any such offer to so buy or sell, or any statements or quotations of the prices of any such property, with a view to any such transaction as aforesaid, shall be deemed an accessory, and, upon conviction thereof, shall be fined and punished the same as the principal and as provided in section 1 of this act.”

The Supreme Court, in Soby v. The People, 134 Ill. 66, has, in a very careful opinion, stated the object of the act, and what would be violation of it. The.court say:

“ It is manifest that the object of the statute was to suppress and prevent gambling in grain and other commodities.” Ib. 71. Also:
“ A consideration of the act will, as before indicated, show that it is directed against the keeping of any office or place, etc., first, wherein is conducted or permitted the pretended buying or selling of grain or other produce, on margins or otherwise, without any intention of receiving the property bought or delivering it if sold. Under this clause of the first section, the offense consists in keeping the place, etc., where such buying or selling is conducted or permitted. That plaintiff in error kept the office or place is conceded, and that buying and selling upon margins, without any intention on the part of the customer to receive the thing bought or to deliver the thing sold, was permitted in such office or place so kept by the plaintiff in error is also substantially conceded, and if it were not, is abundantly proved. Under this provision of the act, the keeper of such office or place, etc., can not shield himself from criminal responsibility behind the fact that he made no inquiry of his customers. The statute is preventive in its character, and is aimed at the keeping of places where gambling in grain is permitted. The keeper must know that the transaction is not gambling, or, in good faith, have just reason to believe that the buying or selling is not within the intended prohibition of the statute. But if this were not so, there is abundant evidence in this record to show that the plaintiff in error knew that his customers did not contemplate an actual delivery of the commodity bought or sold. Again, the second clause makes it an offense to keep a place, etc., wherein is conducted or permitted the pretended buying or selling of such produce on margins. It is scarcely contended that the customer did not, in fact, intend only to purchase options, and to make money in the rise and fall of the market, without any expectation of receiving or delivering grain. In other words, it is too plain for argument,. that the buying and selling of grain was a mere pretense, at least so far as the customer was concerned. Again, the third clause creates the offense where the party buying such produce, or offering to buy the same, does not intend actually to receive the same if purchased, or to deliver the' same if sold. Here the proof establishes, beyond question, that purchases were made without any intention of receiving the commodity purchased. The onH object was to make money on the fluctuations of the market by the pretended purchase of the grain on margins.”

The evidence in the case is very voluminous. The evidence for the appellants, on whom the court held the burden of proof rested, was mainly directed to proving that the appellee kept a bucket-shop within the meaning of the statute; that the dealing at appellee’s place of business was solely on the market quotations of the Chicago Board of Trade, and that it knowingly permitted the pretended buying and selling by its customers of grain, with reference to such market quotations, and without any intention of receiving the grain ostensibly bought, or delivering that ostensibly sold, their only intention being to make money by the rise or fall of the market, as the case might be.’ Appellee’s evidence was mainly directed to proving that a large part of the business of the Board of Trade of the city of Chicago was similar to that of appellee, namely, that grain was bought and sold on the exchange of the board on margins or stop-orders, without any intention to deliver the grain; and, incidentally, that there were some deliveries by and to appellee.

Appellee does a very large business. It is the lessee of the following telegraph wires, which it uses in its business: From Chicago to Davenport, Iowa; Chicago to Galesburg; Chicago to Louisville, Ky.; Chicago to Milwaukee; Chicago to St. Louis, and another wire from Aurora to Geneva, Ill., and from Canton to Quincy; from Decatur to Sycamore: from Freeport to Gainesville; from Galesburg to Burlington, Iowa; from Green Bay, Wis., to Menominee, Mich.; from Indianapolis, Ind., to Cincinnati, Ohio; from Lafayette, Ind., to Crawfordsville; from Louisville to ¡Nashville, Tenn.; from Milwaukee, Wis., to Oshkosh; from Oshkosh to Green Bay; from Peoria, Ill., to Canton, Ill.; from Pontiac, Ill., to Fairbury, Ill.; from Rockford to Freeport, Ill.; from Springfield, Ill., to Decatur, Ill.; from Sycamore to Rockford, Ill. The wires that do not run to Chicago are part of the same system as the wires running to Chicago, and are connected with appellee’s place of business in Chicago. Appellee has correspondents in places outside of Chicago, who act as brokers, for commission in buying and selling grain, and who send their orders to appellee in Chicago; and the-evidence shows that appellee, although purporting to act as principal in the deals, shares in the commission of its correspondents. Elmer Southard, a clerk of appellee, who had, at the time of testifying, been in its employ two years, and whose business it was to keep books in which were recorded the trades made with appellee, testified that he took from the telegram conveying an order received from a correspondent, the number of the trade, the name of the customer, the quantity, the kind of commodity dealt in, and the price, which, when the telegram reached the witness, was marked on it in blue pencil, and he entered in his book the number of the trade, the price, and the price to which the margin would carry it, which was practically all. Illustrating, the witness testified :

u When, for instance, a telegram came opening a trade, if it is bought at seventy-five, we will know it is margined to seventy-four and one-eighth; that is the marginal price; it is generally one cent to all our customers.”

The evidence shows that the deal is closed in such case as that stated, at seventy-four and one-eighth instead of seventy-four, because one-eighth is reserved from the margin 'as the commission of the correspondent or broker who sends the order. This witness also testified, that if an order was to buy 1,000 wheat at seventy-five, with a stop at seventy-four, if the market should close one day at seventy-four and three-fourths and open the next day at seventy-three, the trade would be closed at seventy-four. Frank C. Williams, a clerk of appellee, whose duties were the same as those of the witness Southard, testified substantially the same as that witness.

W. E. Fildes testified that he had been a correspondent of appellee, at different places, for five years, the last place' being Bloomington, Illinois, where he had been fourteen months, ending in May next, before his testimony was given. He testified substantially as follows:

“ At my office in Bloomington there was a telegraph instrument, a blackboard and chairs and a desk or two. That office was upon one of the private wires running to the office of the complainant at Chicago, under an arrangement between myself and the complainant. Between the hours of nine in the morning and two in the afternoon the market quotations of the Chicago Board of Trade and the Hew York Stock Exchange came over that wire and were posted on the blackboard when they came in. There were persons sitting on the chairs where they could see the blackboard. These people would give orders to buy and sell grain or stocks, as the case might be; in stocks from ten shares upward and in grain from 1,000 bushels upward. These customers in placing orders made deposits of money —nothing less than one cent and upward on grain and stocks ■ — one cent a bushel — that was usually the first amount of money that was paid as margins, which would be $10 on 1,000 bushels of grain and $10 on ten shares of stock. I would then send the order to the complainant over this wire and the money would follow later by what is called a bank wire. All orders would be telegraphed in over this wire. The orders would read, buy or sell the number of thousand bushels and the price, if stipulated, and otherwise it would be supposed to be the market price, and margin 1, or some of them would read margin 2. This would mean that that was all the money that was margined on the transactions, or supposed to be lost. On 1,000 bushels of grain M. 1, would mean $10, and M. 2 would mean' $20, and on ten shares of stocks M. 1 would be $10. When this order was sent in to buy or sell, they would repeat back the message, whether it was margin 1 or margin 2. That would indicate that that was all the money supposed to be lost or deposited on that transaction. If the telegram read, ‘ buy 1,000 bushels, seventy-five, margin 1,’ it would indicate that it was supposed to be closed or exhausted at seventy-four and one-eighth. The commission of one-eighth added to the purchase price would make seventy-five and one-eighth net, and margined one cent per bushel would reduce the price down to seventy-four and one-eighth. That is also true of stocks. The complainants got their proportion of the commission of one-eighth and I got mine. Their portion in grain is twenty-five cents on a thousand; m37 portion would be $1. The commission on stocks would be one-quarter, or $2.25 for ten shares, of which the-complainant would retain sixty-two and one-half cents. In the course of business between me and the complainant, if an order of that kind had been sent saying, ‘ buy 1,000 bushels of wheat, 75, margin 1,’ and if the market declined to seventy-four and one-eighth, the man would lose $10. The loss on the transaction would be $10, and there would be no further telegrams between me and the complainant, because it was generally supposed when a man put up $10 and margined at one cent, he was watching the black-board, and could see when the market declined one cent a bushel, and take it for granted, so far as I know, that he was out of the market, and I make no further report to my customer about it, nor the complainant to me by wire. I would receive a statement bv mail. This would show the price at which' this transaction had gone out of the market or exhausted, whatever 37ou -wish to term it. The entire margin of $10 would be sent in by draft, or by telegraphic communication through the bank, and I would settle the difference with my customer, if there was anything coming to him; that was the end of it. After I gave an order to buy 1,000 at a given price, and mention margin 1 in the telegram, and the market went down below seventy-four and one-'eighth, I would give no further order in the matter. That is the regular course of the business.”

The witness further testified that in case a stop-order was put in at seventy-four, and the market closed at seventy-four and one-fourth one day. and opened the next at seventy-three and one-half, the trade would be stopped at the price mentioned in the stop-order, though the market never was at that price; also, that he, Avitness, never received nor delivered a 113' grain nor handled any Avarehouse receipts, nor suav any, in any of his transactions with appellee. On cross-examination this witness testified that he placed trades only with appellee, five or ten per day; that he might just as well have taken the trades himself so far as delivery was concerned; that he could not make delivery, not having the necessary capital to do so, and that his customers knew that both he and appellee ran bucket-shops; that such was the general opinion.

Other witnesses testified to having dealt in futures with appellee, or margins, and with reference to the market quotations, without any intention of receiving or delivering the grain bought or sold, and with the intention of settling on the differences in the market quotations.

The evidence shows clearly that the main part of appellee’s business was dealing in futures on margins, without any intention of delivering the grain sold or receiving that purchased by it, and that it kept a bucket-shop, within the meaning of the statute, and used the market quotations in its bucket-shop business.

Appellee’s counsel, in their argument, admit that actual deliveries and receipts of commodities were not a large percentage of the business transacted,” and this admission is fully sustained by the evidence. It appears that there were some deliveries of grain, but such were exceptional and insignificant in comparison with the bulk of appellee’s business. It also appears from the evidence that appellee sent out delivery notices, and, in some cases, required persons to sign a contract to receive, but when the person receiving such notice, or signing such contract, objected to delivery, he had no difficulty in settling his trade with appellee by paying or receiving, as the case might be, the difference between the price at which, the grain was bought or sold, and the price at which the trade was closed by stop-order or exhaust of margin.

The requiring a party who purchased or sold to sign a contract to accept or make delivery is an unusual circumstance, and not at all necessary in a T>ona fide transaction, the law in such case being that the party selling is bound to deliver and the party purchasing is bound to accept delivery. Therefore, the purpose of such a contract must have been something other than the securing of a legal right.

Stockton, witness for defendant, testified that McHie, appellee’s president, told him that the trades must be based on actual delivery, and that he, witness, would have to sign an agreement .to that effect, which he did; but that after he made the agreement^ although he sometimes made trades with appellee of 50,000 or 100,000 bushels of grain in a day, he never received from or delivered to appellee one bushel of grain, and never saw a warehouse receipt in any transaction he had with appellee. It also appears from the evidence that one of appellee’s rules was, that if one of jts correspondents sent an order by telegraph, the telegram should not contain a stop-order, but if a stop-order were intended, it must be sent by a second telegram. This, we think, was evidently for the purpose of preventing the original order from apparently showing that the proposed deal was purely speculative. In Soby v. The People, supra, the court say : “ We are of opinion that it is no longer possible in this State, under any shift or device, however specious, to keep an office or other place where parties may, under the pretense of buying or selling grain or other produce, engage in speculation in futures, and gamble upon the rise and fall of the market,” etc. The court ruled appellee to produce telegram received in its business since July 1,1901-, which it declined to do on the claim of constitutional privilege, which claim was allowed.

The witness Sanderson, clerk of appellee, testifies that he had, as such clerk, recorded on certain sheets trades made with appellee, and appellants moved for a rule on appellee to produce the sheets, which motion appellee resisted on the same claim of privilege, and the claim was allowed.. A number of the witnesses, some of them officers of appellee, refused to answer questions relevant to the issues, on the like claim of privilege. When a party refuses to answer relevant questions, or to produce evidence in his possession, or subject to his control, the presumption is that, the testimony, if given, or the evidence, if produced, would be unfavorable to him. 1 Jones on Evidence, Section 17. Although such refusal, if based on the ground that the evidence might tend to criminate the party, could not be used against him in a criminal prosecution, we are inclined to the view that in a civil case the general rule, as above stated, is applicable. Evidence produced by appellee tending to prove that a large part of the transactions between members of the Board of Trade is on futures and purely speculative, and not different in kind from that done by appellee, is irrelevant. Appellee is seeking relief, not the Board of Trade nor any member of the board. It is certified by the learned judge who tried the cause, that it was not necessary to a final disposition of said cause, to determine whether or not the complainant kept a bucket-shop,” and that such was his view is evidenced by the decree, and also by his opinion, a copy of which is filed in the cause here. We are committed to the opposite view. Christie-Street Commission Co. v. Board of Trade et al., 94 Ill. App. 229.

That was a case similar to the present, in which the appellant, complainant in the lower court, prayed an injunction to restrain the defendants from refusing to furnish the complainant with the market quotations, and the defense in that case, as in this, was that the complainant was keeping a bucket-shop, and wanted the market quotations for use in that business. In that case we said:

“ But aside from any question of pleading, we are of opinion that when it appeared to the chancellor that the aid of. the court was sought to enable the complainant, appellant, to carry on an enterprise which was prohibited by the law, the chancellor could not do otherwise than deny the prayer. If it is not within the scope of chancery jurisdiction to punish or prevent crimes at the instance of private suitors, it is surely quite as far removed from the scope of equity to assist the law-breaker in his violation of the statute.”

The injunction in. the present case not only enjoins the appellant from refusing to furnish to appellee the market quotations, but it enjoins the Board of Trade from enforcing the rule, Section 8, copied in the statement preceding this opinion.

The temporary injunction enjoined the appellants from “prohibiting any person, firm or corporation, being a member of the Board of Trade, from doing business with the complainant, the same as they do with other persons.” The temporary injunction is made perpetual by the final decree. We are of opinion that the rule, enforcement of which is enjoined by the decree, does not infringe public policy or any rule of law, and that it is not unreasonable. Such being the case, it was error to enjoin its enforcement.

In Board of Trade v. Riordan, 94 Ill. App. 298, we reversed a decree enjoining the Board of Trade from trying a member of the board charged with a violation of the rule in question, citing numerous decisions. The decree will be reversed.


author: Mr. Justicb Higbee

text:
    F. H. Ward et al., Partners as Ward Brothers, v. Athens Mining Co.
    1. Burden of Proof — Under the General Issue in Assumpsit. — The plea of the general issue puts upon the plaintiff the burden of not only-proving the contract but also the breach of it as assigned in his declaration.
    2. Evidence — What Is Admissible Under the General Issue. — Under the plea of the general issue in assumpsit, the defendant may give evidence that the contract sued upon was void or voidable in law; or if good in point of law, that it was performed by payment or otherwise; or if unperformed, that there was some legal excuse for the non-performance — as, a release or discharge before breach, or non-performance by the plaintiff of a condition precedent.
    3. Same — In Assumpsit Under the General Issue. — The question in assumpsit under the general issue, is whether there was a subsisting debt or cause of action at the time of commencing the suit; anything which goes in discharge of the promise upon which the action is founded, is admissible under the general issue, and any matter which shows that the plaintiff never had a cause of action may also be given in evidence under this plea.
    4. Same — Of Rescission of Contracts Under the General Issue in Assumpsit. — Evidence of the rescission of the contract sued upon, is properly admissible in evidence, under the general issue in actions of assumpsit.
    Assumpsit, on a contract of sale. Error to the Circuit Court of Peoria County; the Hon. Thomas M. Shaw, Judge, presiding. Heard in this court at the April term, 1901.
    Affirmed.
    Opinion filed July 12, 1901.
    Rehearing denied October 3, 1901.

      F. J. O’Brien and Sheen & Miller, attorneys for plaintiffs in error.
    Winslow Evans, attorney for defendant in error.
   Mr. Justicb Higbee

delivered the opinion of the court.

This was a suit in assumpsit brought by appellants, constituting a firm known as Ward Brothers, who were retail coal dealers in Peoria, Illinois, against appellee, a corporation engaged in mining coal at Athens, Illinois. On October 4, 1899, appellants entered into a written contract with the board of school inspectors of the city of Peoria to furnish all the coal required for the various school buildings in said city, for the year ending June 1, 1900. The coal was to be from the Athens mine and to be delivered as fast as needed in any and all of the school buildings. Appellants were to receive pay monthly for the coal delivered at the rate of $1.87£ per ton for mine run coal and $2 per ton for screened lump coal. On the same day the same parties entered into another written contract whereby it was agreed that appellants should furnish coal under said contract in car load lots, free upon the tracks in Peoria, and that the school inspectors should take the samo from the cars and deliver it at said school buildings, and as an allowance for hauling said coal to the various school buildings, said school inspectors should be permitted to deduct from all bills for coal' payable to appellants, the sum of twenty-five cents per ton; that appellants should cause to'be sent to the superintendent of schools, from the mines, the weights of the coal loaded upon the cars so sent and that settlement should be made upon the weights furnished by the mine, or in the event of failure of the mine to furnish correct weights, then upon weights obtained from the railway company transporting the coal. The intention of the second contract, as stated therein, was to permit the school inspectors to obtain the coal in car load lots and deliver it through their own employes at the various buildings and receive a deduction from the agreed price of twenty-five cents a ton for so doing; and also to relieve appellants of all responsibility of delivering coal from, the cars to the school buildings. Appellants then applied to Lee Kincaid, appellee’s manager, for coal to fill the contract. Kincaid agreed, on behalf of appellee, to furnish the coal free on board .cars in Peoria at $1.30 per ton for the mine run coal. Frank H. Ward, representing appellants, said it would take two car loads per day to fill his contract and Kincaid agreed to furnish that amount. It was also agreed that the coal should be shipped to H. W. Lynch, who was mayor of the city, and that he should receive pay for the same directly from the school board and not through appellants. Under the contract four car loads of coal were shipped by appellee, two on October 10 and two on October 11, 1899, and turned over to appellants. Of these four cars, one was sold and delivered by appellants to one of their customers named Luthy and the others delivered to the parties hauling for the school inspectors. It is also claimed by appellee that three wagon loads were taken by appellants from the cars turned over by them to the schools and sold to other customers of theirs, but this is denied by appellant Frank H. Ward. It was at once learned by the school board that part of the coal shipped to Mr. Lynch for them had been diverted to other uses and Mr. Stevens, a member of the board, immediately notified appellants that their action was unsatisfactory; that the contract was canceled and that the board would not take any more coal from them. Notice of the condition of affairs also came to the knowledge of Kincaid and he thereupon refused to furnish appellants any more coal. Athens coal was, however, delivered to the schools by other parties to the amount of about 2,250 tons. After the expiration of the school year, appellants brought this suit against the mining company, Lee Kincaid and H. W. Lynch, to recover damages for the failure of the company to deliver the coal under the contract between them.

The declaration contains two special counts based upon the oral contract between appellants and appellee for the delivery of coal as above set forth, its breach alleging also special damages arising out of the inability to fill the contract of appellants with the school inspectors. The declaration also contains the common counts. The only pleas filed were the general issue and denial of joint liability. Upon the trial the case was dismissed as to Kincaid and Lynch, so that the only plea left in force was that of the general issue.

Appellants claim that they had a profit of 32£ cents a ton under their contracts with appellee and the school inspectors, and that they are entitled to that much upon each ton of coal used by the school inspectors during the year. The jury before which the case was tried found the issues for the appellee and there was a judgment against appellants for costs.

Appellants insist that under a plea of the general issue a rescission of the contract for their default can not be proven. This position, however, is not correct. The plea of general issue puts upon the plaintiff the burden of not only proving the contract as alleged, but also the breach as assigned in the declaration. Under the general issue in assumpsit the defendant may give in evidence that the contract was void or voidable in law. Or if good in point of law, that it was performed by payment or otherwise; or if unperformed, that there was some legal excuse for the non-performance of it as a release or discharge before breach or non-performance by the plaintiff of a condition precedent, etc. * * * In short, the question in assumpsit upon the general issue is whether there was a subsisting debt or cause of action at the time of commencing the suit. * * * Formerly, matters in discharge of the action must have been pleaded specially; afterward a distinction was made between express and implied assumpsits. In the former these matters were still required to be pleaded, but not in the latter. At length, about the time of Lord Holt, they were universally allowed to be given in evidence under the general issue. (1 Tidd’s Practice, 591, and note N.) Almost anything which goes in discharge of a promise is admissible in evidence under the general issue, so any matter which shows that the plaintiff never had a cause of action may be given in evidence under the plea of nonassumpsit, and most matters in discharge of the action, which show that at the commencement of the suit there was no subsisting cause of action, may be taken advantage of under this issue. (Puterbaugh’s PL and Pr. 173, and cases cited.) It was, therefore, proper to permit evidence on the part of appellee tending to show that appellants had by their action used the coal for purposes not provided for bv the contract; that they had thereby forfeited the school contract, rendering it impossible for appellee to fulfill the contract to furnish coal for the school through appellants, and that the contract was, therefore, necessarily rescinded. That appellee was justified by the facts in refusing to continue to furnish coal to appellants is apparent from the evidence. Appellant Frank H. Ward himself testifies that he told Kincaid that he had the school contract and wanted two cars a day; that he wanted the coal for his school contract. Kincaid testifies that the agreement was to furnish the coal to fill the school contract. It is agreed by all the parties that a portion of the coal furnished under the contract was not turned over by appellants for the use of the schools, but was sold by them in their own private business. It is also proven that the school board thereupon refused to receive any more coal from them. Under such circumstances it became impossible for appellee, even if it had so desired, to furnish coal to the school board through appellants, and there was nothing for them to do but to cease making shipments.

Appellants claim that the court erred in its instructions by recognizing the right of appellee to refuse to furnish coal to appellants if it appeared from the evidence that appellants were not delivering the same to the school board.

Under the circumstances of this case, as above set forth, we think the court committed no error in giving instructions recognizing this theory and refusing those which did not. We find no reason in the record for reversing the judgment of the court below, and it is accordingly affirmed.


author: per Curiam.

text:
    Estate of Jacob Guyer v. George G. Caldwell.
    1. Waiver — Of a Jury is Exhausted by One Trial. — A waiver of a trial by jury is exhausted by one trial and a review of the case on appeal.
    2. Appellate Court Practice — Finding of Facts and Entry of Judgment. — The Appellate Court, on appeal from a judgment rendered on a trial without a jury, may find the facts differently from the court below and enter judgment, but if it does not do so and remands the cause, the parties are entitled to a trial by jury and the Appellate Court can not deprive them of that right by directing the entry of a specific judgment by the court below.
    8. Same— When Its Directions Are Rescinded by the Supreme Court. —Where a case has been reversed and remanded by the Appellate Court, with directions to the trial court to enter a specific judgment, and such directions after being obeyed by the trial court are rescinded by the Supreme Court, they no longer support the judgment thus entered, and it becomes the duty of the Appellate Court to reverse the same if necessary to carry into effect the directions of the Supreme Court.
    Claim in Probate. — Appeal from the Circuit Court of Peoria County; the Hon. Leslie D. Puterbaugh, Judge, presiding. Heard in this court at the October term, 1900.
    Reversed and remanded.
    Opinion filed October 1, 1901.
    James H. Sedgwick, attorney for appellant.
    Newton Wyeth and James A. Cameron, attorneys for appellee.
   Opinion

per Curiam.

This case was before us at the October term, 1S99, when we reversed a judgment, rendered by the court below after jury waived, allowing a claim against an estate in the sum of $25 only, and remanded the cause with directions to allow the claim in the sum of $975. (Caldwell v. Estate of Jacob Guyer, 89 Ill. App. 110.) The case was thereafter redocketed below, and on claimant’s motion such a judgment as we directed was entered, the court denying a motion by the estate for a re-trial of the cause. From that judgment this appeal is prosecuted by the estate, and claimant has moved to dismiss the appeal on the ground that no appeal will lie from a judgment entered pursuant to the directions given.

In our former judgment we omitted to enter any finding of facts, though our opinion showed we reached a different conclusion from the court below on the facts. After our former judgment and after the court below had entered the judgment we directed, the Supreme Court, in Osgood v. Skinner, 186 Ill. 491, decided that a waiver of a jury is exhausted by one trial and by a review of the cause on appeal, and that while the Appellate Court on an appeal from a judgment rendered on a trial without a jury may find the facts differently from the court below and enter a final judgment, yet if it does not do so, but remands the cause, the parties are then entitled to a jury trial and the Appellate Court can not deprive them of that right and direct the entry of a specific judgment below. It was thus settled that while we might have entered a finding of facts and a judgment thereon in favor of claimant for $975, yet the course we did pursue was erroneous. Afterward, on April 18, 1901, our former judgment was reversed in Estate of Jacob Guyer v. Caldwell, 189 Ill. 581, and we were there directed to strike out of our remanding order the direction to allow the claim and enter judgment. That was in fact a writ of error, though reported as an appeal, and it was sued out after our directions had been obeyed by the trial court. We have now obeyed the directions given us. While it was not error in the court below to obey the directions we gave it, (Roby v. C. & C. C. & D. Co., 154 Ill. 190,) yet those directions having since been rescinded, they no longer support the judgment entered pursuant thereto, and it becomes our duty to reverse the later judgment in order to carry into effect the directions of the Supreme Court,

The motion to dismiss the appeal is therefore denied, and the judgment is reversed and the cause remanded for a new trial. Eeversed and remanded.


author: Mr. Justice Hiobee

text:
    Antoine La Fleure v. Wm. Seivert et al.
    1. Delivery — When Placing a Deed upon Record is Equivalent to.— Where a husband makes a deed of conveyance to his wife, his act of placing it upon record is a sufficient delivery in law.
    2. Consideration — Relationship Between Husband and Wife Sufficient. — The relationship existing between husband and wife is a sufficient consideration for a conveyance of real estate.
    Bill for an Injunction. — Error to the Circuit Court'óf Kankakee County; the Hon. John Small, Judge, presiding. Heard in this court at the April term, 1901. Assumpsit, on a policy of accident insurance. Appeal from the Circuit Court of Kane County; the Hon. George W. Brown, Judge,

      Affirmed.
    Opinion filed October 8, 1901.
    Rehearing denied.
    W. R. Hunter, attorney for plaintiff in error.
    Charles B. Campbell, T. W. Shields and Arthur W. Deselm, attorneys for defendants in error.
   Mr. Justice Hiobee

delivered the opinion of the court.

This was a bill in chancery filed by plaintiff in error, Antoine La Fleure, against William Seivert, H. W. Guthrie, and Sam B. Glass, sheriff of Kankakee county, seeking to annul and set aside a judgment of the Circuit Court of said county in favor of Seivert against Anna Elizabeth La Fleure, wife of plaintiff in error, so far as the same affects certain real estate described in the bill, to recall and quash the execution issued thereon, and praying for a decree that said judgment and execution shall not be a lien upon said property. The bill also asked for an injunction against Glass as sheriff, restraining him from selling said real estate"or any part thereof. A temporary injunction was granted in vacation in accordance with the prayer of the bill, but upon the hearing of the cause in court the, injunction was dissolved and the bill dismissed at complainant’s costs.

The evidence in this case shows that on September 21, 1899, Antoine La Fleure was the owner of the property in question which is a lot in the city of Kankakee, worth about §2,000, upon which there were two houses, one occupied by him as a homestead and the other rented when possible. La Fleure was a Frenchman, seventy-six years of age, somewhat weak in mind and body and unable to read English writing. Upon that date, apparently through the efforts of defendant in error Guthrie, a marriage was brought about between La Fleure and an illiterate woman about seventy years of age named Anna Elizabeth Conrad. Just prior to the marriage, the latter, to pay Guthrie for his services in procuring her a husband, gave him her note for §500, dated September 20,1899, due thirty days after date, with a power of attorney to confess judgment attached thereto. This note was afterward indorsed and delivered to defendant in error Seivert, he paying Guthrie therefor $200 in cash, and giving credit for $250 Guthrie owed him. It further appears from the evidence that prior to his marriage La Fleure, who was a widower, had let it be known that he wanted a wife, and some fifteen different women had come or been brought to see him in regard thereto, but no marriage had been brought about until the Conrad woman came, to whom, after four days aquaintance, he was married.

The bill alleges, and there is some evidence tending to show that Guthrie and one B. F. Stull, conspired to induce certain women to threaten to bring suits against La Fleure for breach of promise; that in two instances La Fleure paid money to settle with such women, and thereafter being informed by Guthrie and Stull that several other women were threatening to commence suits for breach of promise, he became alarmed and deeded the real estate in question to his wife; that the reports that other women were about to commence suit were false and were brought about by Guthrie and Stull to cause him to deed his property to his wife and thereby place her in a position financially where the $500 could be collected from her. Whether his claims as to the deceit practiced upon him are true or not, he did in fact, on October 16,1900, convey to his wife, by warranty deed, the property in question, without any money consideration whatever. The wife did not join in the deed nor was there any apparent change of possession, but he and his wife continued to occupy one house as a -homestead, as before. On October 31, 1899, Seivert caused a judgment to be entered upon the note against Mrs. La Fleure and on the same day the latter deeded the property in question back to plaintiff in error, the deed being filed for record after the judgment was entered. An execution was issued on the judgment and levied upon said real estate. Afterward, on November 4,1899, the sheriff advertised that he would, by virtue of his said execution, sell u all the right, title and interest of the above named Anna Elizabeth La Fleure ” in said real estate. It was to prevent this sale that the temporary injunction was granted.

The argument of plaintiff in error is largety devoted to an attempt to show that the conveyance from him to his wife, was brought about by the false representations of G-uthrie and Stull, and that they procured such conveyance to be made in order that the note, upon which Seivert afterward obtained the judgment against Mrs. La Fleure, might be collected. The bill in this case, however, does not seek to attack the conveyance from La Fleure to his wife, but to annul the judgment, so far as it affects the real estate in question, and to recall and quash the execution, and it asks for a decree that the judgment and execution shall not be a lien upon said property.

The judgment in question, so far as this case is concerned, is a valid judgment against the wife from which no appeal has ever been perfected. It is therefore a valid lien against her interest in the property. It can not affect the homestead, as she did not join in the original deed, but there is no reason shown by this record why the interest which she had in the real estate, at the time the judgment was rendered, should not be subject to the lien of the same.

Plaintiff in error, however, insists that his wife had no interest in the premises to which the lien could attach, because, as he claims, no title passed from him to his wife, and the reasons advanced by him to sustain this position are:

1. He was frightened into making the deed.

2. Nfo consideration passed to him.

3. Possession of the property did not change.

4. There was no delivery of the deed.

The fact, if it is a fact, that appellant was frightened into making the deed to his wife by Guthrie and Stull can not affect the wife’s interest, as there is no charge in the bill that she conspired with them to cause the deed to be made, and she is not even made a party to this suit. While no money consideration passed between appellant and his wife, yet their relationship as- husband and wife was a sufficient consideration for the conveyance. It is true that possession of the property did not change, because the wife was already occupying the premises with appellant at the time the deed was made, and it would have been a useless thing for the two to have moved out and immediately returned to the house. While there was no actual, manual delivery of the deed to the wife, the act of appellant in placing the same upon record upon the day it was made, for his wife, was a sufficient delivery in law. Moreover, the bill itself averred the delivery of the deed to the wTife.

We are therefore of the opinion that the decree of the court below, dismissing the bill for want of equity, was right, and it is accordingly affirmed.


author: Mr. Justice Higbek

text:
    National Masonic Accident Association v. Georgianna A. Terwilliger.
    1. Accident Insurance — Where the Death of the Insured Does Not Occur Through Any of the Contingencies Insured Against. — Where a person is insured in an accident association, in a by-law of which it is provided that “no benefit shall accrue or be paid for any death or disability happening directly or indirectly, wholly or in part, because of, or resulting from, entering, leaving or attempting to enter or leave a moving conveyance using steam or electricity as a motive power,” and the evidence shows that in attempting to enter a train on the Chicago & Northwestern Railroad, he took hold of the hand-rails to raise himself into the car at about the time the train started, and after holding on for about two blocks be relaxed his hold, fell to the track and was killed, it was held he could not recover.

      presiding. Heard in this court at the April term, 1901.
    Reversed, with a finding of facts, Mr. Justice Waterman dissenting.
    Opinion filed October 8, 1901.
    Holmes, Lynn & Shirra, attorneys for appellant.
    A. B. St. John, D. W. O. Merriam and Harry G. Hempstead, attorneys for appellee.
   Mr. Justice Higbek

delivered the opinion of the court.

This was a suit by Georgianna A. Terwilliger, as beneficiary named in the certificate of membership of Jeremiah M. Terwilliger, in the National Masonic Accident Association of Des Moines, Iowa, to recover the amount of the insurance therein made payable to her upon his death. The certificate or policy provided for the payment of the sum of $5,000 to the beneficiary in the event of the death of the insured, occasioned by injury received while the certificate was in force, and directly caused by external, violent and accidental means, which alone, independently of ail other causes, occasioned the death within ninety days from the date of said injury. On the evening of May 16, 1898, the deceased, while returning from a Masonic lodge in company with a friend, Walter Chadband, attempted to board a suburban train of the Chicago & Northwestern Bail way Company at Bavenswood station, to go to his home at Bavenswood Park. The railway had double tracks at that station, the south-bound train using the east track and the north-bound train the west track. There was a platform at each of the tracks, and the two were connected by a board walk crossing both tracks. Terwilliger and his companion entered the station grounds on the east side, intending to take the train going north on the Avest track. They arrived at the station grounds just about the time the train Avas due. Chadband, avIio Avas the more active man, crossed the tracks to the platform on the Avest side and, as the train stopped, got upon the rear platform of the rear car. He called to Terwilliger, Avho was on the east platform, “Don’t hurry; you have plenty of time.” Terwilliger did not reach the platform, which was on the west side of the car, but attempted to board the car from the east side thereof, where there was no station platform, lie took hold of the hand-rails to raise himself into the car, and about the same time the train started. He did not release his grasp on the rails, and Chadband attempted to assist him onto the train. After holding on for about two blocks, Terwilliger relaxed his hold and fell to the track. His head struck the roadbed or rail and he was almost instantly killed. At the time of his death the beneficiary certificate held by him was in full force.

This suit was commenced by appellee July 1, 1899. At the February term, 1900, of the Circuit Court of Kane County, there was a trial by jury and a verdict in favor of appellee for $5,151.40, which, upon motion of appellant, was set aside by the court and a new trial granted. Afterward, at the following November term of said court, there was another trial, which resulted in a verdict in favor of appellee for $5,357.64, for which amount, a motion for new trial having been overruled, the court entered judgment.

Appellant claims that appellee failed to properly give the written notice of the death of the assured, required by the by-laws to be given within ten days, and to make proper proof of his death, in like manner required to be made within thirty days after the death occurred. Even if such notice was not so given and such proof so made, the evidence shows they were waived by the action of appellant.

The main contention of appellant, however, is that the death of the assured did not occur through any of the contingencies insured against. By section 10 of the by-laws it is provided “that no benefit shall accrue or be paid * * * for any death or disability happening directly or indirectly, wholly or in part, because of or resulting from * "x" * entering, leaving or attempting to enter or leave a moving conveyance using steam or electricity as motive power.”

It was an important question whether assured took hold of the hand-rails of the car just before or just after the car-started. The only eye witness was Chad band. The evidence he gave before the coroner, as written down by and under the direction of that officer and signed by Cbadband, was that Terwilliger “ came to the coach after it had started and caught hold of the ' hand-rail.” His testimony at this trial and at a former trial of this case in the Circuit Court, was that deceased took hold of the handrails 'just before the train started; that he could not be positive how long it was before but that “ it evidently was pretty close,” and that deceased did not get his foot on the lower step of the car. He explains the discrepancy in his testimony by saying, at the time of the inquest he was very nervous and had been up all night; that he did not read the evidence he signed, thought it was not read to him and did not remember what he testified on that subject. The evidence being conflicting, we assume the jury found and were warranted in finding that state of facts to exist which appellee insists is most favorable to a recovery, namely, that deceased took hold of the hand-rails just before the train started. We can not, however, agree to the contention of appellee that if the deceased got hold of the hand-rails before the train started the case does not come within the limitations prescribed by the section of the by-laws last referred to. Even if deceased had reached the train and taken hold of the hand-rails before it started, still it seems to us not to admit of dispute that the injury occurred by reason of the fact that after the train started he continued his effort to enter the moving conveyance. The death, therefore, was caused in a manner falling within the exception provided for b\r the by-laws, and appellant can not be held liable upon its certificate. As there have been two trials, and as Chadband, who was the only witness to the accident, ' was a witness in both, we must presume all proof on the subject has been produced. There is no conflict in the testimony except as to whether the train had started before Terwilliger took hold of the hand-rails, and we therefore think that no useful purpose can be served by remanding the case. The judgment of the court below is accordingly reversed.

Finding of facts to be incorporated in the judgment:

We find from the evidence that deceased reached the car and took hold of the hand-rails on the rear end of the rear car and attempted to enter it just before it started; that he was killed while and because of continuing his attempts to enter said car after it had started; that said car was propelled by steam and that under section 10 of the by-laws of appellant, which was part of the contract between Jeremiah M. Terwilliger, the deceased, and appellant, the latter was not liable to pay any benefits to the beneficiary by reason of the death thus caused.

Mr. Justice Waterman dissents.