text:
    John F. Wollensak v. Orlando P. Briggs.

      Filed at Ottawa January 25, 1887.

    1. Specific performance—where the party has put it out of his power to perform. A decree for the specific performance of a contract is properly denied when it appears that the defendant has placed it beyond his power to specifically perform it,' by sales and assignments to other parties who are not purchasers with notice of such contract, and who are not brought before the court.
    2. Chancery—bill for the discovery and surrender of property claimed under executory contract. A court of equity can not entertain a bill for the discovery and surrender of property" claimed under an executory contract which fails to give title to the complainant in the property to which it relates.
    3. Contract of sale—whether the property in the thing passes. In contracts of sale the rule is, when, by the agreement, the vendor is to do anything to the goods to put them into' that state in which the purchaser is bound to accept them, the performance of that thing, in the absence of circumstances indicating a contrary intention, will be taken as a condition precedent to the vesting of the property.
    4. So where a party agrees to make and deliver to another a novel machine for the manufacture of tin speaking tubes, etc., at a less cost than by the ordinary mode, for which final payment is to be made when the machine is completed and accepted, and should it prove a failure or not give satisfaction, a new one to be made that will be acceptable, no title to the machine will pass before its completion and delivery and acceptance.

      Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Circuit Court of Cook county; the Hon. M. F. Tuley, Judge, presiding.
    Appellant exhibited his bill in equity,, in the circuit court of Cook county, against the appellee, alleging therein, among other things, the execution and modification of certain contracts, marked, respectively, exhibits “A,” “B,” “C” and “D,” as follows:
    [Exhibit “A.”]
    “J. F. Wollensak:

      “Dear Sir—I propose to build, and deliver to your factory, and set up in complete running order, improved and special machinery, including shears and tools, for making 1 inch, 1J inch, lj-.inch tin speaking-tube, the tube to be made in 30-inch, one length, so that two lengths may be joined to make usual 5-foot lengths, the seam to be single lock folding smooth and close, and be air-tight, and require no solder. One end of the tube will be enlarged so the lengths can be fitted together in the usual way. I intend the machine to be an improvement over those now in use, and that it will produce a first-class article, and do it rapidly, so as to reduce the cost of manufacturing as much as possible, and I will assign all the improvements in the machine to you, if you see fit to cover them by patents right, and I agree to give it to you within ninety days from date, and in consideration of the foregoing you are to pay the sum of eight hundred dollars, ($800) when all is complete and approved by you. I will also investigate for you the best method of finishing door and other lock keys, and will give you my ideas as to which is the best kind of machinery or tools for the purpose, so that you can modify machinery you now have, or may want to make, for this purpose. 0. P..Beiggs.
    Chicago, August 8,1884.

    Accepted.—J. F. Wollensak.

      [Exhibit “B.”]
    “Chicago, March 9, 2885.
    “ J. F. Wollensak—I propose to build and deliver to your factory, set up in complete running order, improved and special machine, complete in all its parts, for making 1 inch, 1J inches, and lj- inch round speaking-tube elbows, of one piece, without the use of solder, the elbows to have the usual large end and small end, so as to fit into and over the speaking-tube for which I am now building machines for. The machine will be a first-class and durable article, and designed to make a superior elbow, and do it rapidly and cheaply, so as to enable you to compete successfully with any now in market.
    “I also agree to sign over to you any claim I may have for improvements on the machine, and assist you in procuring a patent for it, should you desire to secure a patent.
    “I also agree to deliver the machine, and have it in complete running order in your factory, in thirty days from date, and in consideration of the foregoing you are to pay me the sum of six hundred dollars ($600.)
    “You are to advance me, on signing this agreement, two hundred and fifty-($250) dollars, and two hundred ($200) dollars more, in two payments of one hundred ($100) each, while the machine is-being built,—this amount to apply on account, and the balance, viz., one hundred and fifty ($150) dollars to be paid me when you have finally accepted the machine, and are entirely satisfied with it. Should the machine prove a failure, or not meet with your approval, I propose to construct another which will. In that event I should, of course, require the time of delivery extended sufficiently to enable me to make necessary modifications.
    “It is understood that the assignment of the machine above mentioned, when patent is applied for, shall be an assignment to you in the patent of an exclusive and undivided right in the United States for making - speaking-tube elbows, and that I

      reserve the right to use the machine or patent for making stem-pipe elbows,—the idea being to limit your claim in the patent to the right for making speaking-tube elbows, and that anything I might do farther with the patent shall be subject to the assignment to you, and your right in this business shall also be protected m any subsequent improvements I might make in this kind of machine. q. P. Briggs.
    “Accepted.—J. F. Wollensak. ”
    [Exhibit “C.”].

      “No. -1088 W. Monroe, 88,517:

    . “This contract is modified so as to make the con tract, price nine hundred dollars ($900), instead of eight hundred ($800), and the'delivery April 10, 1885. • .,
    J. F. Wollensak, ■

      “March 9, 1885. O. P. Briggs.”
    [Exhibit “D.”]
    “This agreement is further modified, so that when a patent on the machine mentioned within is applied for,-the patent shall be assigned to J. F. Wollensak, for the exclusive and undivided right in the United States for making speaking-tubes ; that O. P. Briggs reserves the right in the machine for making stove-pipe and other articles, the idea being to limit Wollensak’s claim in the machine to the manufacture of speaking-tube, and that any assignment or disposition of the machine or patent shall'be subject to Wollensak’s claim, viz., that he alone shall have the use of the machine or patent for making speaking-tubes. This agreement also covers any subsequent improvement by Briggs in this kind of machine.
    J. F. Wollensak,

      “March 12, 1885. " O. P. Briggs.”
    It was further alleged, “that the first of said machines, being intended for the purpose of manufacturing speaking-tubes more rapidly and economically than then had been previously clone, and the second for making the elbows thereof in one operation, from a straight piece of tin-tubing, and without the use of solder, said machines were 'and are considered of great importance and value to your orator, and that because of this’ fact your orator was and is especially anxious to procure the same for use in his said business; that after the making of said contract, (Exhibit ‘A,’) the said defendant partially built one machine of the kind therein referred to, bringing the same almost to the point of full completion, which he tried and experimented with, but afterwards pronounced a failure; that the said defendant then, or about that time, showed and explained to your orator new drawings, which he said, he had prepared, and according to which he then proposed to build another machine in place of the one first built arid'tried," as aforesaid, and that your orator was so iinpressed therewith, and so desirous of procuring and having said machine, that he thereupon, and as a further consideration therefor, agreed to pay the said defendant the sum of $100'additional to the price mentioned and specified in said first agreement,' (Exhibit ‘A,’) and also as a part of the same transaction, and simultaneously therewith, entered into said agreement in reference to the building of said other machine, (Exhibit ‘B;’) that the said defendant afterwards began work on said second machine, which was to be built in accordance with said new drawings, as aforesaid, and after-bringing it almost tn the point of - completion, invited your orator over to his workshop to see the same operated, it being then substantially finished so as to make one size of speaking-tube, and, in fact, almost entirely finished in every respect, except as to the gearing attachments and a few small features or details of construction; that after the making of said agreement, (Exhibit ‘B,’) the said defendant also began ■work on said machine for making elbow joints, and substantially completed the same, but that it was never delivered to your orator, or in any way put into actual use or work, so far as he knows; that after building said machines fis above mentioned, but before delivering them, or either of them, to your orator, said defendant informed your orator that he had been put to greater expenses than originally contemplated or expected, and therefore suggested and insisted that your orator should pay him a larger sum for said machines than specified in said agreements; that in view of these facts, and because of his anxiety to get said machines, your orator then expressed his willingness to pay the said defendant a much larger sum therefor than he was under any obligations to pay, and that your orator has in fact, at various times, paid the said defendant, in all, the sum of $1200 on account of said machines; that afterwards, and after your orator had expressed his willingness to pay the said defendant a greatly increased price for said machines, and had in fact paid him the sum of $1200 on account thereof, the said defendant declined and refused to deliver said machines, or either of them, to your orator, or to execute and deliver to him any assignment or license in reference to said inventions or improvements, in accordance with the terms and conditions of said agreements, but that instead thereof, he, the said defendant, as your orator believes, delivered both-machines to other parties, and promised and agreed to assign and transfer to them, or did actually attempt to transfer and assign to'them,'the interest in said inventions and improvements which he had previously agreed to transfer to your orator, and that, although often requested so to do, he has refused, and still refuses, to deliver said machines, or others like them, to your orator, or to assign and transfer to him said interest in said inventions and improvements agreed to be assigned as aforesaid; that, as your orator is informed and believes, the said defendant, combining and confederating with others, is now seeking and endeavoring to cheat and defraud your orator out of the said money paid to him for said machines and said rights and privileges agreed to be assigned to your orator, as aforesaid, and> generally,' that the said actings and doings of the said defendant are calculated and intended to work great and irreparable loss and injury to your orator in his said business of manufacturing and selling speaking-tubes, as aforesaid; that, as your orator believes, the said defendant, in pursuance of his intentions to cheat and defraud your orator in the premises, has agreed to sell and assign, or actually attempted to sell and assign, said inventions and improvements to others, and at the instance or for the benefit of others has made, or ihtends-'to make, application for letters patent therefor, but that, applications for patents pending in the patent office being secret, your orator has no means of knowing or ascertaining all the actual facts in this respect, or obtaining copies of such application or applications, "if filed, and that all the facts in this respect being peculiarly within the knowledge of the said defendant, it is necessary for your orator to have a discovery and disclosure from him as to whether he has filed any such application or applications, and if so, the status thereof, and what proceedings have been taken therein; that said machines are of such peculiar kind and construction that your orator can not build the same, or have them built by others, and, as your orator is informed and believes, their construction and operation involve the use of said inventions arid improvements, which, so far as your orator knows, have never been described or explained to others, so as to enable them to manufacture or use the same; that the defendant has never delivered to your orator any specification or drawings of said machines, or otherwise explained their construction and operation, so as to enable your orator to build or use the same, or in any way "to utilize and enjoy the exclusive rights and privileges agreed to be assigned to him, and which, if capable of being used as intended and represented, would be of great value to him in his business, as aforesaid, and- that in order to enable your orator to have similar machines built, or in any way to use or utilize said inventions and improvements, it is necessary for him to have drawings, specifications or explanations thereof, and for this purpose to have a further discovery and disclosure from the said defendant, showing the exact construction and manner of operation of said machines, and such other facts as may be necessary to enable your orator to have them built and put into operation in his said business of manufacturing and selling speaking-tubes, as aforesaid. ”
    And afterwards the following additional allegations were filed, as an amendment to the bill: “Your orator shows and represents unto your Honors, that the said'defendant, while engaged in building the machines for your orator, referred to in the contracts nientioned herein, at various times .exhibited to your orator drawings of said machines, which your orator understood when the same were before him, and in accordance with which'- the said defendant was building said' machines; that your orator approved of and was satisfied with the machines-which were described and shown in such drawings, and which defendant was building for him, as aforesaid, and repeatedly told the defendant so, and at the time the defendant exhibited- the second machine to him, practically completed, except some gearing and other slight details of construction, your orator informed the defendant that he was satisfied with such machine, and approved of and was ready to accept and pay for the same, and at various times your orator has so expressed himself to the said defendant; that your orator is able to build the machines mentioned in the contracts declared on here, if he can have the drawings of the same which were exhibited to him from time to time by the said defendant, before him for examination and inspection, or copies of the same, and is ready and willing, and hereby offers, to build such machines himself, if the defendant will permit him to inspect and examine said drawings; that he has so expressed himself to the defendant at various times, and has requested him to permit an examination and inspection of such drawings, but the defendant has always refused to permit such inspection and examination on the part of your orator, or others for him, and now refuses to permit your orator such privilege; that your orator is informed, and believes, that said defendant is wholly irresponsible and insolvent, financially; that your orator has made inquiry and examination, and has been .unable to learn that defendant has any property in his own name that could be reached by execution, except a small quantity of stock in a stock company, which your orator is unable tq ascertain has any salable value whatever, and that, in the belief of your orator, any judgment against the defendant would be unavailable and uncollectible, and would afford your orator no sufficient or adequate remedy whatever in the premises; that your orator has, at all times and in all respects, faithfully carried out and performed all said agreements on his part, and is now ready and willing, and hereby offers, to perform and do everything on his part required by said contracts, or either or any of them, or which he ought, in equity and good conscience, to do in the premises; that your orator is without remedy in the premises, save in a court of equity, where matters of this nature are properly cognizable. ”
    The prayer then proceeds: “To the end, therefore, that the said defendant, Orlando P. Briggs, may answer the premises, (but not under oath, an answer under oath being hereby expressly waived,) that the said defendant may be decreed to carry out and specifically perform all and singular said agreements on his part; that he may be required to build, and deliver to your orator, machines of the kind and for the purpose aforesaid, and containing the inventions and improvements aforesaid, according to the letter and spirit of said agreements; that if he has not already made such applications, he may be required to make application for letters patent for said inventions and improvements, and to assign to your orator the rights and privileges therein, which he is entitled to under said agreements; that if unable so to build and deliver said machines, he may be required to make and deliver to your orator full and complete drawings, specifications and explanations thereof, so as to enable your orator to build the same, or have the same built elsewhere; that he may also be required to disclose and discover whether he has made any application or applications for lettters patent on said inventions or improvements, or either of them, and if so, the status thereof,' and, generally, what proceedings have: been taken therein; that he may be required to show and exhibit to your orator, or to mechanical experts or draughtsmen on behalf of 3rour orator, the said drawings of the machines mentioned in the contract declared on herein, which he has already made and prepared, and on several occasions showed to your orator while engaged in building said machines, and that he permit 3Tour orator, or others for him, to examine such drawings, and to make copies of the same for the use of your orator in building such machines himself; that he may also be enjoined, as. well preliminarily and provisionally as perpetually, from assigning to any other person or persons the rights and privileges in said inventions and improvements agreed to be assigned to your orator, as aforesaid, or from in any way incumbering the same, or seeking to hinder or embarrass your orator in the full or free use and enjoyment thereof; that he may also he decreed to pay over to your orator all the damages which your orator has sustained by reason of his failure to carry out and perform said agreements on his part; and that your orator may have such other.and further relief in the premises as may be agreeable to equity and good conscience, and as to your Honors shall seem meet. May it please your Honors to grant unto your orator the People’s writ of summons, issued out of and under the seal of this honorable court, directed to the said defendant, Orlando P. Briggs, commanding him, by a certain day and under a certain penalty, to be and appear in this honorable court, then and there to answ'er the premises, and to stand to and abide by such order and decrees as may be made against him; and also the writ of injunction, as well preliminary and provisional as perpetual, issuing out of and under the seal of this honorable court, enjoining and restraining the said defendant, Orlando P. Briggs, his agents, attorneys, servants and workmen, as is heretofore in that behalf prayed.”
    The circuit court sustained a demurrer to the bill, and that judgment was affirmed, on appeal, in the Appellate Court.
    Messrs. Banning & Banning, for the appellant:
    If this bill can not be maintained as one for the specific performance, the court may grant the other relief sought,— a discovery that may enable appellant to avail of his rights under the contracts.
    The information asked can readily be furnished by the production of drawings or copies of patent applications, or, in other words, by the production of documents. As to the power of courts in this respect, see Maden v. Veevers, 7 Beav. 542; Davis v. Dysart, 20 id. 405; Pennell v. Dysart, 27 id. 542; Greenwood v. Greenwood, 6 W. R. 119; Lord Brougham v. Convin, 16 id. 688; Bishop of Winchester v. Bowker, 29 Beav. 481; Lambert v. Rogers, 2 Mer. 490; Thorpe v. Holdsworth, 7 L. R. 147; Cooper’s Eq. Pl. 59; Bray on Discovery, 276-279; Copinger on Title Deeds, 54.
    These authorities certainly sustain the proposition, that in ordinary cases a party interested in .property is entitled to a discovery of what the property is, and it has always been recognized that this form of relief is especially applicable in patent causes. Colgate v. Compagnie Francaise du Telegraphe de Paris a New York, 23 Fed. Rep. 85,—citing Vidi v. Smith, 3 El. & Bl. 969; Morgan v. Seward, 1 Webst. Pat. Cas. 169 ; Russel v. Cowley, id. 458; Shaw v. Bank of England, 22 L. J. Exch. 26.
    Assignments of inchoate rights, or of improvements to he made, and agreements to assign interests in patents when obtained, are constantly recognized and upheld by the courts. Gayler v. Wilder, 10 How. 492; Railroad Co. v. Trimble, 10 Wall. 379.
    Mr. Jesse Cox, for the appellee:
    The writings sought to be enforced are not contracts. The completion of the machine, and its acceptance, were necessary to make the offer a binding contract. McKinley v. Watkins, 13 Ill. 142; Olney v. Howe, 89 id. 556; Bickford v. Davis, 11 Fed. Rep. 549; Hester v. McNeille, 6 Phil. 234; Manby v. Life Ass. Society, 29 Beav. 439; Brace v. Wehnert, 25 id. 348.
    The alleged contracts not being binding on Wollensak, were, therefore, not binding on Br'iggs. By a well established rule, specific performance can not be decreed on such propositions. And it is certain that no bill for specific performance would lie against appellant to compel him to approve the machines .which Briggs had so indefinitely agreed to invent. Marble Co. v. Ripley, 10 Wall. 339; Richmond v. Railroad Co. 33 Iowa, 486; Bickford v. Davis, 11 Fed. Rep. 549; Sutherland v. Parkins, 75 Ill. 338; Brace v. Wehnert, 25 Beav. 348; Palace Car Co. v. Railroad Co. 11 Fed. Rep. 625.
    A contract providing for personal services which require mechanical skill, etc., will not be specifically enforced; nor will the courts enjoin the performance of the same services for others. Baldwin v. Society, 9 Sim. 393; Clark v. Price, 2 Wils. Ch. l57; Kimberly v. Jennings, 6 Sim. 340; Kemble v. Kean, id. 334; Hambleton v. Dinneford, 2 Edw. Ch. 528; Richmond v. Railroad Co. 33 Iowa, 486.
    The .fact that appellee has put it out of his power to perform, is always .an answer to the bill for specific performance. Bickford v. Davis, 11 Fed. Rep. 549; Woodward v. Harris, 2 Barb. 439; Maulden v. Armistead, 18 Ala. 500.
    As to the prayer for the inspection of the applications and drawings, it is not alleged that application for a patent was ever made, or, if so, that the drawings, etc., are now in defendant’s possession.
   Mr. Justice Scholfield

delivered the opinion of the Court:

The opinion of the Appellate Court in this case, by Bailey, J., shows, quite satisfactorily, that this bill can not be maintained as a bill for the specific performance of a contract. Counsel for appellant, however, virtually conceding this, contend that the bill is not to be regarded as a bill for the specific performance of a contract, but as a bill for the discovery and surrender of property. The correctness of this position depends upon whether the contracts and modifications .set out in the bill give title to appellant in the property to which they relate, before delivery by appellee, and acceptance by appellant. We are clear in the opinion that they do not. The proposition in both contracts is in substantially the same language. It is: “I propose to build, and deliver to your factory, and set up in complete running order, improved and special machinery,” etc. In both, final payment is to be made when the machine is completed, and approved by appellant. It is true, that in the second contract it is provided that $250 is to be paid by appellant at the time of signing the contract, and $200 more is to be paid, in two payments, of $100 each, while the machine is being built; but that this is not intended to vest any present property, is clearly shown by the further stipulations that the amounts are to be applied on account, and that if the machine should prove a failure, or not meet with appellant’s approval, appellee was to construct another which would meet with his approval. The fact that appellant, on being shown a machine, and the drawings thereof, expressed himself satisfied therewith, and offered to accept the same, only shows that appellant was then willing to accept what appellee had done, as a compliance with his part of the contract. But the machine was not yet entirely perfected, and there was no delivery,—no acting upon the offer of appellant,—and so no property passed.

In contracts of sale, the rule is, “where, by the agreement, the vendor is to do anything to the goods, for the purpose of putting them into that state in which the purchaser is to be bound to accept them, or, as is sometimes worded, into a deliverable state, the performance of those things shall, in the absence of circumstances indicating a-contrary intention, be taken to be a condition precedent to the vesting of the property.” Benjamin on Sales, (1st Am. ed.) 221; Blackburn on Sales, (Am. ed.) 60, *151.

Since no property passed in the machines, it is impossible that any property could have passed in drawings, specifications and explanations, which are but incidents to the machine, and the cases cited in appellant’s brief are therefore not analogous. Appellant has nothing but an executory contract, which, unfortunately for him, is of that peculiar character whereof specific performance can not be enforced by a decree in equity.

We are, moreover, of opinion, that relief was properly denied on the further ground that it affirmatively appears that appellee has placed it beyond his power to specifically perform his contract by sales and assignments to other parties, who, it is not alleged, are purchasers with notice, and who are not brought before the court.

The judgment of the Appellate Court is affirmed.

Judgment affirmed.

Mr; Chief Justice Scott, dissenting.


source: Caselaw Access Project

author: Mr. Chief Justice Scott

license: Public Domain

text:
    George W. Harris et al. v. Levi Bressler et al.

      Filed at Ottawa January 25, 1887.

    1. Usury—what is recoverable, in case of an usurious transaction— former decision overruled. Under the statute, the effect, in a court of law, of contracting for or reserving usury in a promissory note, is the forfeiture of all interest, and only the principal remaining due after the deduction of all payments, whether of principal or interest, is recoverable. The case of First National Bank v. Davis, 108 111. 633, in so far as it announces a different rule, is overruled.
    2. Same—recovery back of usury paid. The rale that usurious interest, voluntarily paid, can not be recovered back, does not apply when the transaction has not been settled and closed, and tho creditor brings suit to recover an alleged balance. And when the note sued on is one given in renewal of a prior one upon which usurious interest has been paid, the debtor may have all such payments applied upon the principal debt.
    Appeal from the Appellate Court for the Second District; —heard in that court on appeal from the Circuit Court of Whiteside county; the Hon. William Brown, Judge, presiding.
    This suit was brought in the circuit court of Whiteside county, by George W. Harris, Solon F. Gleason and Adam Smith, against Levi Bressler and Henry Bressler. The declaration counts on three promissory notes, of the date of January 22, 1872, each for the sum of $241.67, with interest at ten per cent per annum, and payable in one, two and three years, respectively. The pleas filed by defendants allege a defence to the entire cause of action, except as to the sum of $66.66, and as to this sum, a tender, with costs, is made. Lhe defence insisted upon is, payment, and usury in the original notes given for the indebtedness for which the suit was brought. The pleas are broad enough to let in proof of the matters relied upon as a defence to the action. On the trial, the court rendered a judgment in favor of plaintiffs, and against defendants, in the sum of $642. On the appeal of defendants, that judgment was reversed in the Appellate Court for the Second District, and judgment rendered in that court in favor of plaintiffs for the sum of $140.57, and ordered execution to issue therefor. A majority of the judges of the Appellate Court having made the necessary certificate to enable them to do so, plaintiffs bring the case to this court on appeal. On the hearing of the cause, the Appellate Court found the facts, and incorporated the same in and made them a part of its judgment, as follows:
    “That the only cause of action in this cause was a certain promissory note for the sum of $241.67, due in one year after date, payable to Joseph S. Martin, with interest at the rate of ten per cent per annum, signed by appellants, and indorsed by said Martin to the appellees, long after due. The above note was given to said Martin in only consideration of a note given by appellants to M. S. Henry & Co., for the sum of $427.18, of date July 1, 1858, due in sixty days after date, drawing ten per cent interest after due, and was in fact a renewal of said last mentioned note, which said last mentioned note, after it became due, was, for value, indorsed to one G-eorge W. Hoover, with full knowledge on his part, prior to and at the time of indorsement, that the makers, the appellants, claimed, and would insist on, the defence of usury in and to said note so given to said M. S. Henry & Co.; that the said Hoover retained the possession and ownership of said note from the time he obtained it till the giving of the first mentioned note sued on in this case, being some ten years, and was, at the time said new note was given to said Martin, the owner of the said old note and also of the note sued on herein, after it was given the said Martin, being only an accommodation holder of said note; that in taking the new note, no claim or allowance of usury was deducted from the amount of the old note, but the settlement was made as though no usury had existed; that during the time the old note of date of July 1, 1858, was in the hands of said Hoover, the appellants paid, in various payments on said note, all but $58 of the amount of- the said note, after excluding the usury contained in the face of the note, and all interest called for by the note after due. It is further found, that there was usury contained in the face of the said first note of July 1, 1858, as follows : The payees charge interest from the date of said note (July 1,1858,) to the time the note matured, being sixty days, at the rate of three per cent per month of the amount borrowed, or $25.63, and added it to the amount borrowed into the face of the note, and which made up a portion of the face value of the note, and that it was a greater rate of interest than ten per cent per annum on each $100, and more than the" law allowed, and was in fact usurious. It is found that said Hoover, the person who purchased said note and was the indorser, had notice prior to his purchase and indorsement to him of said note, and at the time thereof had full notice of the said usurious contract in the making and obtaining the said note; that said Martin, the payee of the note sued on, is also chargeable with notice of the said usurious contract at the time the said note was executed to him; that the- appellees, also, at and before the said note in suit .was sold and indorsed to them, and all persons holding said note prior to the time they held the note, are chargeable with full notice of the existence of usury in the note sued on, as well as the original note, and the right of the defence of usury the appellants had to the note in suit; that the $58 of principal due on the said original note, after deducting the usury contained in the face of the said original note, and all interest, after it became due, to the date of the note in suit, and adding ten per cent interest to the said $58 from the date of. the said note in suit, (January 22, 1872,) the amount of interest called for in said last named note, to the date of the judgment rendered herein, is the amount of and comprises the amount of said judgment. The court also finds all other facts, as stated in the opinion herein, are as stated in said opinion. ”
    Messrs. Monahan & Ward, for the appellants:
    The defence of usury must be specially pleaded. Rev. Stat. 1874, chap. 74, sec. 7; Hadden v. Innes, 24 Ill. 383; Perkins v. Conant, 29 id. 184; Maury v. Stockton, 34 id. 306.
    Where a new note is given for an agreed sum, to a different payee, it will constitute a new contract; and usurious payments made on the old note can not be set off in a suit on the new note. Puterbaugh v. Farrell, 73 Ill. 213; Cuthbert v. Haley, 8 T. R. 390; Jackson v. Henry, 10 Johns. 195; 3 Parsons on Contracts, 120; Parsons on Notes and Bills, 419, and cases cited.
    But in no event were appellees entitled to a deduction of more than the “interest contracted to be received” in the usurious contract, and as to the residue of the debt the plaintiffs occupied the. position of ordinary creditors. The provision of the statute in this behalf is, the creditor “shall forfeit the whole of said interest so contracted to be received.” Sec. 6, chap. 74; National Bank v. Davis, 108 Ill. 633; Ammondson v. Ryan, 111 id. 510; Walsh v. Mayer, 111 U. S. 31; Hawhe v. Snyder, 86 Ill. 201.
    The only mode of making the defence of usury at law, is in a suit upon the usurious contract. Hadden v. Innes, 24 Ill. 385; Perkins v. Conant, 29 id. 185; Maury v. Stockton, 34 id. 306.
    Messrs. J. & J. Dinsmoor, for the appellees:
    Under the statute, the entire interest is forfeited when an usurious rate has been contracted for. Stockham v. Munson, 28 Ill. 51; Hamill v. Mason, 51 id. 488; Hefner v. Vandolah, 62 id. 483; Reinback v. Crabtree, 77 id. 186; Peddicord v. Connard, 85 id. 102; Saylor v. Daniels, 37 id. 331; Mitchell v. Lyman, 77 id. 525; Booker v. Anderson, 35 id. 66.
   Mr. Chief Justice Scott

delivered the opinion of the Court:

Since the Appellate Court has found the facts, and made the same a part of its judgment, it only remains to consider the questions of law that arise upon the record as it comes before this court. These are few in number, and will require no extended discussion. It is seen that thq court found that plaintiffs, at and before the notes in suit were sold and indorsed to them, and all persons holding them prior to the time they held the notes, were chargeable with full notice of the existence of usury in the notes sued on, as well as in the original note, which would let in the defence of usury as against the present plaintiffs. It therefore follows, the only question to be considered by this court arises on the law applicable to the facts of the case as found by the Appellate Court, and incorporated in its judgment.

It appears, the court found the transaction was not purged of usury that existed by the original contract, except, perhaps, as to the sum of $58, and therefore allowed plaintiffs no interest, except upon the small sum before mentioned, and treated all payments, whether for usury, or otherwise made, as so much paid on the principal of the debt. In this ruling there was no error. The statute in force at the date of the original transaction out of which this litigation arose, provided, if any person or corporation in this State shall contract to receive a greater rate of interest or discount than the rate per cent fixed by such statute, upon any contract, verbal or written, such person or corporation shall forfeit the w'hole of said interest so contracted to be received, and shall be entitled only to recover the principal sum due to such person or corporation. (Bev. Stat. 1874, chap. 74, see. 6.) In the act of May, 1879, the words declaring the forfeiture are precisely the same as the act of 1857. The meaning of this section of the statute would seem to be so obvious as to need no construction. It ought to be understood to mean exactly what it says,—that is, if any person or corporation in this State shall contract to receive a greater rate of interest than is lawful under the statute, such person or corporation shall forfeit the whole interest “so contracted to be received, and shall be entitled only to recover the principal sum.” How the legislative intention could be expressed with more clearness it is difficult to comprehend.

This statute has been in force since 1857,—now nearly thirty years,—and during that time this court has had frequent occasion to refer to it as applicablé to cases being considered. In the early ease of Stockham v. Munson, 28 Ill. 51, 'it was said, the act of 1857 declares a forfeiture of the whole interest when a usurious rate has been contracted for, and accordingly it was held, only the.principal sum was recoverable. The-doctrine of that case has been followed in many cases since that time, and the same rule adhered to, invariably. So in Hamill v. Mason, 51 Ill. 488, where the contract was usurious, in referring to Stockham v. Munson, supra, it was said, it was held in that case the recovery could only be for the principal sum, without interest, as the statute, has so provided. In Hefner v. Vandolah, 62 Ill. 483, it was said, as the note, upon its face, bore a greater rate of interest than ten per cent, the whole of the interest was forfeited, under the statute, (act of 1857,) and only the principal sum due was recoverable. In the case of Saylor v. Daniels, 37 Ill. 331, the question made as to usury arose under the act of 1857, ’and it was there said: “While it is the rule of this court that usurious interest, once paid voluntarily, can not be recovered back, yet that rule does not apply when the transaction has not been settled, and the lender brings his action for the recovery of an alleged balance. In such case, the borrower may defend by claiming credit for whatever usurious interest he has paid in. the transaction. This is not using the usury law as a sword, but strictly as a shield. ” This case has many features in common with the case being considered, and the principles stated are conclusive upon analogous questions here involved. The doctrine of .this latter case was approved and re-stated in Mitchell v. Lyman, 77 Ill. 525, where it was said: “This court, while deciding that usurious interest, voluntarily paid, can not he recovered back, holds, still, that so long as any part of the debt remains unpaid, the debtor may insist upon a deduction-of all usurious interest paid, therefrom.”

It is needless to cite other cases in this court on this subject. The rule established by the earlier cases has stood so long, and has been so closely followed, it ought not now to be departed from. If a different rule is to be adopted, it should be done by legislative action, and not by judicial construction. ■ Undoubtedly there are cases where a court of equity has required the debtor to pay interest on the sum borrowed, where the contract was usurious; but it has always been done on the principle, where a party asks a court of equity for relief from the letter of his contract, which he could not obtain at law, the court will impose terms upon him to do equity. .But the principle of that class of eases can have no application in common law actions, where the defendant simply defends on the ground of his legal rights under the statute.

The case of First National Bank v. Davis, 108 Ill. 633, so far as it may state a different rule from that stated in this opinion, or declare principles in conflict with the doctrine of the cases ut supra on the same subject, must be regarded as not having been well considered, and it is therefore overruled to that extent.

The judgment of the Appellate Court must be affirmed.

Judgment affirmed.


author: Mr. Justice Mulkey

text:
    The Continental Life Insurance Company v. Caroline S. Rogers.

      Filed at Ottawa January 25, 1887.

    1. Life insurance—of the application—whether a warranty or merely a representation—of the relative■ effect. As a general rule, where the application for insurance on a person’s life is expressly declared to be a part of the policy, and the statements therein are warranted to be true, such statements will be deemed material, whether they are so or not; and if shown to-be false, there can he no recovery on the policy, however innocently made, and notwithstanding their falsity may have no agency in causing the loss or producing the death of the insured. But this rule is subject to some qualifications amjl exceptions.
    2. Where.the statement in a policy of insurance, that the answers) statements, etc.-, in the application, “are warranted by the assured to be true in all respects,” is followed by the further statement, “that if this policy has been obtained by or through any fraud, misrepresentation or concealment, said policy shall be absolutely null and void,” which fraud, etc., relates to the answers to the questions in the application, such of the answers not material to the risk as were honestly made in the belief they were true, will not he binding on the assured, or present any obstacle to a recovery.
    3. Same—notice and proof of death—waiver as to sufficiency. Where notice and proof of the death of the assured, in the case of a life policy, have been made out and delivered to the insurer in due time, and they are retained by it without objection, it can not, when sued on the policy, question their sufficiency.
    4. So where an insurance company, after the death of the assured has-occurred, places its refusal to pay upon some ground not affecting the merits of the ease, as, for instance, want of proper notice, all other formal objections not then urged or pointed out will be regarded as waived. If the refusal to pay is placed upon the ground of fraud, breach of warranty, or other grounds affecting the binding force of the insurance contract, the company can not afterward urge a merely formal objection to the right of recovery, and no evidence need be given of the notice and proof of the death of the assured.
    5. If some kind of proof of the death of the assured is in apt time delivered to the insurance company, its failure to make any objection to the same will estop it from afterward questioning its sufficiency, no matter how defective it may have been.
    6. Pleading — of the declaration on a life insurance policy. In an action upon a life policy of insurance, the plaintiff, by setting out in hcee

      verba the application, which is made a part of the contract of insurance, makes it a part of the declaration, and the legal effect of it is the same as if every fact therein stated had been in the ordinary way expressly averred.
    7. Pleading and evidence—in suit on life insurance policy—as showing a right of recovery—and herein, of matters availing only in defence. In an action on a life policy of insurance, the plaintiff must aver in the declaration the making of the policy, its terms, the payment of the premium, the death of the assured, and the giving of the notice and making of the proof thereof to the defendant, as required in the policy; and upon proof of such averments, in so far as their proof is not waived or dispensed with, a prima facie right of recovery will be established, which the defendant must meet by some affirmative action, to defeat a recovery.
    8. Where the answers in an application for insurance are to be treated as merely representations, as distinguished from warranties, any defence founded upon an alleged misrepresentation or fraudulent concealment must be set up as a defence to an action on the policy.
    9. In such an action, it is not necessary for the plaintiff to either allege or prove such matters as appear in the application, only. To be availed of, without regard to whether they are warranties or representations, merely, their falsity or breach by the assured must be set up and proved by the defendant as a matter of- defence.
    10. Same—as to conditions precedent—necessity for averment and proof of them—and when they need not be proven. Where a contract contains promissory conditions, or conditions precedent undertaken by the plaintiff, if they have not been waived or dispensed with by the defendant, the plain tiff, in an action on the contract, is bound, at his peril, to aver and prove their performance, or an offer to perform-them.
    11. But it is not necessary, in any case, to prove the performance of a condition which has been waived by the party having the right to demand its performance. A condition once waived is forever gone.
    12. Noticie to produce original papers—how to be shown. The filing of the declaration upon a policy of life insurance, alleging the giving of notice a'nd proof of the death of the assured, is, of itself, notice to the company to produce the notice and proofs, and, failing to do so, parol evidence of the same may be received.
    13. Practice—directing what the verdict shall be. It is the settled practice in this State, when no evidence has been offered to prove any material allegation in the declaration which is put in issue, and not admitted for the purposes of the trial, or otherwise waived or dispensed with, for the court, on motion, to exclude the evidence offered on either issue in the case, or direct the jury to find for the defendant.

      Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; ■ the Hon. Joseph E. Gary, Judge, presiding.
    Messrs. Swift & Campbell, for the appellant:
    It is the well settled practice in this State, that where there is any one essential allegation of a declaration which has no evidence to support it, it is the duty of the court to exclude all the evidence in the case, or to instruct the jury to find for the defendant. Frazer v. Howe, 106 Ill. 563; Abend v. Railroad Co. 111 id. 202.
    The reference to the application in the policy made the application a part of the policy, and a warranty that the statements in the application were true. Vose v. Health Ins. Co. 6 Cush. 47; Daniels v. Insurance Co. 12 id. 416; Insurance Co. v. Cotheal, 17 Wend. 73; Ripley v. Insurance Co. 30 N. Y. 136; Life Ins. Co. v. Robinson, 59 Ill. 123.
    The application being thus made a warranty, the truth of the statement therein contained was a condition precedent to the right of plaintiff to recover on the policy, and the burden of proving the truth of the same was on the plaintiff, under the familiar rule that the plaintiff must aver and prove the performance of every condition precedent. Babbit v. Insurance Co. 66 N. C. 70; McLoon v. Insurance Co. 100 Mass. 472; Manufacturing Co. v. Insurance Co. 21 Conn. 19; Kelsey v. Insurance Co. 35 id. 225 ; Wilson v. Insurance Co. 4 R. I. 59; Ripley v. Insurance Co. 30 N. Y. 163; Craig v. Insurance Co. 1 Pet. 410.
    Messrs. Smith & Burgett, for the appellee:
    The fact'that the local agent had been notified of the death, and furnished blanks for proof of death, and promised to forward such proofs to the home office of the company, and that Barton, who had charge of the settlement of losses, came to Chicago and had interviews with plaintiff’s attorney about the loss, and that he finally refused to pay the policy, without suggesting any defect in the proofs, amounts to a waiver of any defect in formal proof of death. Edwards v. Insurance Co. 20 Fed. Rep. 661; Allegre v. Insurance Co. 6 H. & J. (Md.) 408; O’Neil v. Insurance Co. 3 N. Y. 122; Insurance Co. v. Crandell, 33 Ala. 9; Clark v. Insurance Co. 6 Cush. 342; Bartlett v. Insurance Co. 46 Me. 500; Insurance Co. v. Dowdson, 67 Ga. 11; Insurance Co. v. Reynolds, 32 Gratt. 613; Insurance Co. v. Mayer, 93 Ill. 271; Insurance Co. v. Lewis, 18 id. 553; Insurance Co. v. Hope, 58 id. 75; Insurance Co. v. Staaden, 26 id. 360; Insurance Co. v. Gould, 80 id. 388; Insurance Co. v. McDowell, 50 id. 120; Insurance Co. v. Ward, 90 id. 550.
    In an action upon a life insurance policy, the plaintiff is not bound to prove the truth' of a warranty, unless it is, by special plea, denied, and put in issue by the defendant; and it is held, by the weight of authorities and with the better reason, that the burden is on the defendant to prove a breach of warranty. Insurance Co. v. Ewing, 92 U. S. 377; Insurance Co. v. Brown, 57 Miss. 308; Redman v. Insurance Co. 49 Wis. 431; Swick v. Insurance Co. 2 Dill. 160; Holabird v. Insurance Co. id. 166; Jones v. Insurance Co. 61 N. Y. 79; Boisblanc v. Insurance Co. 34 La. Ann. 1167; Simmons v. Insurance Co. 8 W. Va. 474; Insurance Co. v. McGookey, 33 Ohio St. 555; Jacobs v. Insurance Co. 1 McArthur, 632; Boos v. Insurance Co. 6 T. & C. (N. Y.) 364; Grattan v. Insurance Co. 15 Hun, 75; Trenton v. Insurance Co. 4 Zabr. (N. J.) 576; Murray v. Insurance Co. 85 N. Y. 236; Secte v. Insurance Co. 7 Eng. L. and Eq. 578; Insurance Co. v. Hogan, 80 Ill. 35; Insurance Co. v. Graham, 2 Duv. (Ky.) 506; Insurance Co. v. Robertson, 59 Ill. 123; Herron v. Insurance Co. 28 id. 235; Insurance Co. v. Stanton, 57 id. 354; 2 Greenleaf on Evidence, (14th ed.) 390, note a.
    The burden of proof was on the defendant to set up and ■ prove the making of the application and the want of truth in the statements therein made, this being a suit on a life policy, even though the policy refers to the application, and declares it to be thereby made a part of this policy and a warranty on the part of the assured. Redman v. Insurance Co. 49 Wis. 431; Jacobs v. Insurance Co. 1 McArthur, 632; Insurance Co. v. McGookey, 33 Ohio St. 555; Insurance Co. v. Hogan, 80 Ill. 35; Simmons v. Insurance Co. 8 W. Va. 478; Insurance Co. v. Robertson, 59 Ill. 123; Herron v. Insurance Co. 28 id. 235.
   Mr. Justice Mulkey

delivered the opinion of the Court:

The appellee, Caroline S. Rogers, recovered a judgment in the Superior Court of Cook county, against' the Continental Life Insurance Company, for $5522.50, on a policy of insurance issued by the company to the plaintiff, upon the life of her husband, Herbert S. Rogers. The policy is in the usual form, and bears date May 23,1881. On the defendant’s appeal, the judgment was affirmed by the Appellate Court for the First District, and the company thereupon appealed to this court.

The declaration is in assumpsit, and contains two counts. The first is a special count, setting out the policy and application in hcec verba, followed by the usual averments in such cases. The second is a consolidated common count for money had and received, for interest, and for money due on an account stated. The plea of non assumpsit, alone, was filed to the whole declaration.

The plaintiff, being sworn as a witness in■ her own behalf, testified that she was the wife of Herbert S. Rogers at the time of making the policy; that he died on the 16th of December, 1883, at Minneapolis; that she found the policy, together with the company’s receipts showing payments of the premium, among his papers, which were produced in court, and put in evidence. The application, being in the possession of the defendant, was not offered in evidence by plaintiff, or, indeed, by either party; nor had the defendant been served with any notice to produce it on the trial, other than that which may be implied by law from the bringing of the suit, and setting it out in the declaration. The policy offered in evidence contained the following provisions:

“Provided, always, and it is hereby declared to be the true intent and meaning of this policy, and the same is granted by the company, and accepted by the assured, upon the following express conditions and agreements: * * *

“Second—That the answers, statements and declarations contained in or indorsed upon the application for this insurance,—which application is hereby referred to and made part and parcel of this contract, as if fully recited herein, and upon the faith of which this agreement is made,—are warranted by the assured to be true in all respects, and that if this policy has been obtained by .or through any fraud, misrepresentation or concealment, said policy shall be absolutely null and void.
'“Seventh—That no claim shall exist under this policy unless due notice and satisfactory proof of death shall be presented, in writing, to the officers of said company, at the home office, in Hartford, Connecticut, within two years after the death of the person whose life is hereby insured.”

In addition to this, the application, which is signed by the company as well as the .assured, contains the following provision: “And it is hereby covenanted and agreed, that the statements and representations contained in this application and declaration shall be the basis of, and form part of, the contract or policy of insurance between said party or parties signing this application, and the said Continental Life Insurance Company,—which statements and representations are hereby warranted to be true; and any policy which may be issued upon this application by the Continental Life Insurance Company, and accepted by the applicant, shall be so issued and accepted upon the express condition that if any of the statements or representations, in this application are in any respect untrue, or if any violation of any covenant, condition or restriction of the said policy shall occur on the part of the party or parties signing this application, then the said policy shall be null and void, and all money which sh&ll have béen paid on account of said policy shall be forfeited to the said company. ”

The plaintiff, then, for the purpose of showing that notice had been given and proofs made of Rogers’ death, put Stewart Marks, the general manager of the company for its northwestern department, upon the stand, who testified, in substance, that certain blanks were sent to Mr. Williams, the company’s agent at Minneapolis, for the purpose of making out such proofs; that they were subsequently -handed to him by Mr. Smith, the plaintiff’s attorney, to be forwarded to the company at its home office; that he could not answ-er whether he had sent them, because he was not able to find he had done so, from an examination of his letter book; that ordinarily, as a matter of convenience to policy holders, he sent such proofs to the home office; that Major Henry P. Barton, superintendent of the company’s agencies, generally has charge of the settlement of policies when deaths occur, and was such superintendent in January, 1884; that witness met Major Barton and plaintiff’s attorney in Grannis Block, ° in reference to this claim, and several conversations were had about it. Mr. Smith, plaintiff’s attorney, then testified as follows : “I delivered them (the proofs) to Mr.' Stewart Marks, under this policy. They were delivered to him by me on the 1st of January, 1884, to the best of my recollection. The day before this suit was commenced, I was notified by Mr. Marks that Major Barton was here, and would like to meet me at their office in reference to this matter. They declined to pay it. Didn’t put it on any ground, but simply declined to pay it. Said he would give me the amount of - money the man had paid them.”

Upon this state of facts, the court refused, upon the defendant’s application, to either exclude the evidence from the jury, or to instruct them to find for the defendant. The defendant declined to offer any evidence, and the cause was submitted upon the foregoing evidence, with the result already stated.

It is earnestly contended by appellant’s counsel, that the trial court erred in refusing to instruct the jury to find for the defendant, or to exclude the evidence from the jury. This contention is based upon four distinct propositions, which, if true to the extent claimed, clearly justify the conclusion which counsel draw from them. These propositions are as follows:

First—That the plaintiff, by setting the application out in the declaration, makes it a part of the same, and that the legal effect of it is the same as if every fact therein stated had, in the ordinary way, been expressly averred.
Second—That the matters and things set up in the application, being declared both in the policy and application to be a part of the contract, and being also expressly warranted by the assured “to be true in all respects, ” are, by the terms of the contract itself, made “material, ” or, in other words, are made “warranties, ” without regard to whether they were, in fact, material to the risk or not.
Third—That the answers, statements and representations in the application being warranties, they are conditions precedent to a recovery, and the. plaintiff was bound to prove them,- regardless of their form, nature and character, to justify a recovery.
- Fourth—It is the settled law and practice in this State that where no evidence has been offered to prove any material allegation in the declaration put in issue by the pleadings, and not admitted for the purposes of the trial, or otherwise waived or dispensed with, the court should, on motion, exclude the evidence offered on other issues in the case, or direct the jury to find for the defendant.

The last proposition is fully sustained by the decisions of this court, and may be admitted to be true, without qualification. (Frazer v. Howe, 106 Ill. 563; Abend v. Terre Haute and Indianapolis Railroad Co. 111 id. 202.) The first proposition is also equally true, and is so elementary in its character as to require no authority in its support.

With respect to the second proposition, it is believed it can not be maintained as universally true, without some qualification. It is, however, generally true, that where the application is expressly declared to. be a part of the policy, and the statements therein contained are warranted to be true, as was the case here, such statements will be deemed material, whether they are so or not, and if shown to be false, there can be no recovery on the policy, however innocently made, and notwithstanding their falsity may have no agency in causing the loss or producing the death of the assured. (Ripley v. Ætna Ins. Co. 30 N. Y. 136; O’Niel v. Buffalo Fire Ins. Co. 3 id. 122; Barteau v. Phoenix Mutual Life Ins Co. 67 id. 595.) While this is true as a general rule, still there are cases to be found in which the statements in the application have been held to be representations, merely, notwithstanding they v'ere expressly declared to be warranties, as-they are here. Thus, in Fitch v. A., P. and L. Ins. Co. 55 N. Y. 557, which was an action on a life policy, and the defence an alleged breach of warranty by the assured in untruly answering certain questions in the application, the policy, among other statements, contained the following: “Fraud or intentional misrepresentation violates the policy, and the statements and declarations made in the written application for this policy, and on the faith of which it was issued, are warranties, in all respects true, and do not suppress or omit any fact relative to the insured, affecting the interest of the company, or which, whether material or not, would tend to influence the company in taking thé risk. ” In the concluding part of the application occurs the following: “I, the undersigned applicant, * * * do hereby declare that the preceding answers to the annexed questions and written statements, in the preceding statement, declaration or warranty, together with the statements made to the examining physician, are warranties, correct and true, * * * and shall be the basis and form part of the contract or policy between the undersigned applicant and the said company, and if not in all respects true and correct, the policy shall be void. ” It is also further said in the policy, that the same is issued and accepted “in entire, unconditional honesty and good faith, and with the just intent of scrupulously fulfilling all the conditions and engagements of the contract with absolute certainty,” etc. Under this state of facts, one of the questions made in the case was, whether the statements in the application -were warranties or merely representations, and it was held they were the latter. The conclusion reached seems to, have been placed mainly on two grounds, namely: First, because the good faith and honest intentions of the contracting parties are so studiously and conspicuously kept in the foreground of the transaction; second, it was thought, that because of the frivolous character of many of the questions and answers, and the difficulty, if not impossibility, of proving many of them after the death of the assured, it could not have been intended to give them the force and effect of absolute warranties. As to the first ground of the decision, it was certainly a work of supererogation, so far as the assured was concerned, to make any reference whatever to his good intentions, honest purposes, etc., if, as was claimed, his answers and statements were all warranties, binding him absolutely, without regard to whether they were made honestly or dishonestly.

Both of the elements forming the basis of the decision in that case are clearly present in this. Thus, the statement in the policy that the answers, statements, etc., in the application, etc., are warranted by the assured to be true in all respects, is followed by the additional statement, “that if this policy has been obtained by or through any fraud, misrepresentation or concealment, said policy shall be absolutely null and void. ” It is clear, the fraud, concealment and misrepresentation here • contemplated can have no application to anything other than the answers to the questions in the application. If true and full answers, there could be neither fraud, concealment nor misrepresentation, and if not full and true, upon the hypothesis they were warranties, the assured would incur a forfeiture of the policy, whether there was any intentional misrepresentation or suppression of the truth or mot. If the answers, however, are simply representations, as ■contradistinguished from warranties, in the technical sense ■of those terms, then such of the answers, not material to the risk, as were honestly made, in the belief they were true, would mot be binding upon the assured, or present any obstacle to a recovery. It is clear, therefore, the only way in which to give that provision of the policy relating to fraud, concealment and misrepresentation, any effect at all, is by treating the answers in the policy as mere representations, and not warranties. If so treated, any defence founded upon an alleged misrepresentation or fraudulent concealment, it is clear, would have to be set up and proved by the company. And is this not more in consonance with the presumed intentions of the parties than the opposite view?

Turning our eyes to the policy, we find the assured is exhaustively examined with respect to his afflictions, through life, in the way of diseases. Bach disease is specifically pointed out, and called to his attention in a separate interrogatory. Question follows question, until the number of diseases brought in review amount altogether to twenty-four, which is followed by just that number of categorical answers. Some of the diseases in this imposing list are of such a character that most persons afflicted with them would naturally shrink from giving publicity to the fact, and, consequently, mo proof could be made after their death, one way or the other.

Again, lie is asked the condition of his father’s mother’s health previous to her death, and he answers he does not know. Now, suppose this answer is to be regarded as a warranty, and that the plaintiff is bound to prove, as is claimed, the truth of it, as a condition precedent to a recovery, is it not clear no recovery could be had at all ?—for, from the very nature of the answer, no proof could be made about it after his death. Moreover, this fact was just as well known to the parties at the time as it was after the death of the assured. The question then arises, ought a construction to be accepted, as the true one, which will lead to such consequences, when another reasonable construction can be adopted which will not lead to such results, and will, moreover, give effect to all the provisions of the policy, which the opposite construction clearly would not ? We think not.

But leaving this all out of the question, whatever may be the holding of other courts on the subject, the. rule seems to be well settled in this State that it is not necessary for the plaintiff, in an action on the policy, to either allege or prove such matters as appear in the application, only. To be availed of as a defence, without regard to whether they are warranties, or representations, merely, their falsity or breach by the assured must be set up and proved by the defendant, as matter of defence. Herron v. Peoria Life Ins. Co. 28 Ill. 235; Illinois Ins. Co. v. Stanton, 57 id. 354; Mutual Life Ins. Co. v. Robertson, 59 id. 123; Guardian Life Ins. Co. v. Hogan, 80 id. 35. The same view is taken by the United States Supreme Court in Piedmont Ins. Co. v. Ewing, 92 U. S. 377. It is there said: “The number of questions now asked of the assured in every application for a policy, and the variety of subjects and length of time which they cover, are such that it may be safely said no sane man would ever take a policy, if proof, to the satisfaction of a jury, of the truth of every answer were made known to him to be an indisputable prerequisite to payment of the sum secured, that proof to be made only after he was dead and could render no assistance in furnishing it. On the other hand, it is no hardship, that if the insurer knows or believes any of the statements to be false, he shall furnish the evidence on which that knowledge or belief rests. He can thus single out the answer whose truth he proposes to contest; and if he has any reasonable grounds to make such an issue, he can show the facts on which it is founded. The judge of the circuit court was, therefore, right in refusing to instruct the jury that the burden of proving the truth of these answers rested with the plaintiff below.”

The view taken in that case has our hearty concurrence, and it is believed to be supported by the later and better authorities. It is certainly founded in convenience, and is promotive of justice. Nor does the rule and practice here sanctioned at all conflict with the general and well recognized doctrine, that the plaintiff must aver in his declaration, and prove on the trial, performance, on his part, of the agreement, or, at least, an offer to perform, otherwise he will not be entitled to recover, unless he is prepared to show there has been a waiver of such performance by the defendant. Such promissory conditions in the contract as he has undertaken to perform, are known to the law as conditions precedent, and if they have not been waived or dispensed with by the defendant, the plaintiff is bound, at his peril, to aver, and prove them on the trial. This elementary rule of law applies as fully to actions on policies of insurance, as to any other class of cases. So in this case, the plaintiff was bound to aver, and show in her declaration, the making of the policy, its terms, the payment of the premium, the death of the assured, and the giving of notice, and making proof thereof, to the company. When these averments had all been proved, in so far as their proof had not been waived or dispensed with, a prima facie right of recovery was made out against the defendant, which the latter was bound to meet by some affirmative action, otherwise the plaintiff was entitled to judgment.

It is contended, however, that even upon this theory the plaintiff was not entitled to recover, for the reason there was no competent testimony before the jury from which they were authorized to find that notice and proofs of the death of the assured were made out and given to the company within the time and in the manner required by the policy. This is conceded. Nevertheless, we do not think the defendant is in a position to take advantage of the deficiency of the proofs in this respect. It is an elementary principle of law, that it is not necessary, in any case, to prove the performance of a condition which has been waived by the party having the right to demand its performance. A condition once waived is forever gone, and the performance of it can not be thereafter required.

We regard the doctrine well settled, that where notice and proofs of loss, or of the death of the assured, in the case of a life policy, have been made out and delivered to the company in due time, and they are retained by it without objection, the company can not, when subsequently sued on the policy, question their sufficiency. Peoria Marine and Fire Ins. Co. v. Lewis, 18 Ill. 553; Hartford Fire Ins. Co. v. Walsh, 54 id. 164; Great Western Ins. Co. v. Staaden, 26 id. 360; Herron v. Peoria Marine and Fire Ins. Co. 28 id. 235. Moreover, it is well settled, that where an insurance company, after a loss has occurred, places its refusal to pay upon some ground not affecting the merits of the case, as, for instance, want of proper notice, all other formal objections not then complained of or pointed out will be regarded as waived. On the same principle, when the claim is, that the policy, for any cause, never became legally binding upon the company, and it places its refusal to pay on that ground, it can not be heard afterwards to urge any mere formal objections to the right of recovery.

We think the facts’in this case warranted the jury in finding that proofs, "and notice of the death of the assured, were délivered to the company in due time. The proofs were made out and handed to the company’s agent at Chicago, to be sent by him to the home office, at Hartford, Connecticut, on the 31st of January, 1884. The agent swears it was his custom, as a matter of convenience to the patrons of the company, to send proofs in that way, and it is but reasonable to presume he performed his duty in that respect, although he says he did not always do it, and could not say whether he did it in this case or not. At all events, in May following, the general adjuster of losses was in Chicago, and at his request, Mr. Smith, the attorney of the plaintiff, called on him in connection with this claim, and several interviews were had between them about it, resulting in an offer on the part of the company to return the amount of the premiums paid by the assured, but a refusal to pay anything on the policy. It is evident, from these circumstances, that the claim of the plaintiff had been referred by the company to its general adjuster of such claims, and this probably would not have been done if proofs of no kind, of the death of the assured, had been received at the home office. Neither in these interviews, nor at any other time, does it appear any formal objections were interposed to the payment of the claim. The conduct of the company in offering to return the premiums, and making no formal objections to the proofs, or otherwise, we regard as equivalent to denying all liability on the policy. We also think the placing of its refusal on that ground was a waiver of all merely formal defences, and, consequently, relieved the plaintiff from proving anything for the purpose of meeting merely formal objections, such as the making out and delivery of the proper proofs. But this is not all. Assuming, as we do, there was sufficient evidence before the jury from which to find that some kind of proofs of the death of the assured were in apt time delivered to the company, their failure to make any objection to them estopped them from afterwards questioning their sufficiency, consequently, the offering of them in eviclence would have been a mere idle ceremony, for, however defective they may have been, no advantage could have been taken of it. In addition to all this, ive think, with the Appellate Court, that the filing of the declaration in this case was-of itself implied notice to the defendant to produce the proofs in question on the trial, and not having done so, the verbal testimony offered on the subject was, in our opinion, sufficient to warrant the finding of the jury. Malby v. Greenough, 5 Fost. 325, and cases cited; 2 Phillips on Evidence, Cowen & Hill’s notes, (5tli ed.) marg. page 538, note 461.

It is hardly necessary to say, in conclusion, that the evidence before us has been discussed exclusively in its relation to the motion to withdraw the case from the jury or to instruct the jury to find for the defendant, and not'at all with the view of determining whether the facts were properly found by the jury or by the Appellate Court.

Judgment affirmed.


author: Mr. Justice Shope

text:
    The City of Joliet v. Maria Conway.

      Filed at Ottawa January 25, 1887.

    1. Evidence—admissibility—general rule. The evidence in each particular case must relate to some issue presented by the pleadings, and tend to establish some fact or facts legally competent for the consideration of the jury.
    2. Measure of damages—personal injuries from negligence—defective sidewalks. Municipal corporations, in cases arising from a neglect of their officers to discharge the duty of maintaining sidewalks, streets, etc., in suitable repair, are liable for such damages as will compensate for the injuries-received in consequence of such neglect, by persons passing over the same, using ordinary care.
    3. In actions for personal injuries occasioned by the negligence of the-defendant, on the question of damages, it is not only proper, but important, for the plaintiff to show, by the evidence, his previous physical condition and ability to labor, or follow his usual avocation, as well as his condition since the injury, to enable the jury to properly find the pecuniary damage.
    4. In an action by a married woman against % city, for personal injuries •sustained by her through a defective sidewalk, the damages must be confined to such as she has herself sustained; and the fact that she had a family, or had the care of or maintained the same, will form no proper element in the ’ •assessment of her damages. She can not recover for damages resulting to her family.
    Appeal from the Appellate Court for the Second District;— heard in that court on appeal from the Circuit Court of Will •county; the Hon. Charles Blanchard, Judge, presiding.
    Mr. Fred Bennitt, for 'the appellant.
    Mr. J. L. O’Donnell, for the appellee.
   Mr. Justice Shope

delivered the opinion of the Court:

This was an action brought by appellee, against appellant, the city of Joliet, to recover damages for personal injuries •alleged to have been sustained by reason of the failure of appellant to maintain in suitable repair a certain sidewalk in the city. A trial resulted in a verdict and judgment for plaintiff below, from which the city prosecuted its appeal to the Appellate Court for the Second District, where the judgment of the circuit court was affirmed. From that judgment the city now prosecutes this further appeal to this court.

The judgment of affirmance by the Appellate Court has •settled all controverted questions of fact, and leaves, as it is •conceded, hut a single point now urged as error.

The declaration is in the usual form. On the trial the plaintiff was called as a witness in her own behalf, and after testifying to her in j uries, their nature, and extent, and their •effect upon her ability to labor, she testified, without objection, that she had done housework for her family ever since .she had been married, until the time of her injury, etc. The •evidence tended to show that in consequence of these injuries received she was incapacitated to perform such labor. She was then permitted to testify, against the objection of defendant, that at the time of the,injury she was doing the housework for her husband and eight children. The error assigned ■questions the admissibility of this evidence.

The objection to this evidence might properly be disposed ■of upon the ground, that if its admission was erroneous it ■could not have operated to the prejudice of the defendant. It had already been shown properly, and without objection, that the plaintiff was a married woman, residing with her husband; that she had been in good health, and had done her housework continuously from her marriage until she ivas injured, as charged; also, that one of the consequences of the injuries received was a miscarriage; that she was at the time nursing an infant, and by reason of the injury to her breasts the secretions were dried up, and that her injuries were of a very serious and probably permanent character. It is difficult, with this evidence before the jury, to perceive in what way proof of the mere fact that she was doing the work for her husband and eight children, or that there were eight children in the family, could have been prejudicial to the defendant. It is familiar doctrine that error without prejudice will not reverse. But the admission of this evidence was not erroneous. The rule is, that the evidence in each particular case must relate to the issue therein presented, and tend to establish ■some fact or facts legally competent for the consideration of the jury. Municipal corporations, in cases arising from the neglect of their officers to discharge the duty of maintaining sidewalks, streets, etc., in suitable repair, are liable for such ■damages as will compensate for the injuries received in consequence by persons passing over the same, using ordinary care. (City of Chicago v. Kelly, 69 Ill. 475.) In determining what is compensation for injuries so received, any permanent injury, or result of the injury, causing a disability from future labor or exertion, is a proper subject for consideration by the jury. It becomes necessary to inquire into the ability and capability to labor or carry on business, or pursue some avocation, prior to the injury, for it is manifest that what would be compensation to one person would be greatly in excess of what another should recover, and inadequate to compensate still another. This court has frequently reversed judgments for the reason that the amount recovered would yield a greater-income than the plaintiff could have earned by his labor, orín any avocation for which he was fitted prior to his injury. It became of the first importance that the jury, in estimating-the damages plaintiff had sustained from the permanent character of her injuries, and her disability to labor in consequence, should know her previous physical condition and ability to-labor or follow the avocation in which she was engaged. The only purpose of the evidence complained of, undoubtedly was to show her occupation, and the extent of her ability to perform labor, that the jury might, if they found her injuries permanent, and her ability to labor diminished in consequence,, compensate her for the loss thus sustained.

It is, however, contended, that the evidence under consideration brought into the case the care for and support of the-plaintiff’s family, and the effect would be to unduly enhance-the damages, and improperly influence the jury, beyond the> sum necessary to compensate the plaintiff. Undoubtedly the-law is, that the damages must be such as the plaintiff has herself sustained, and the evidence confined to proof of such damages, and the fact she had a family, or that she had the-care of or maintained it, would form no proper element for consideration by the jury in fixing compensation. (Pittsburg, Ft. Wayne and Chicago Railway Co. v. Powers, 74 Ill. 341; City of Chicago v. O’Brennan, 65 id. 160.) In both cases cited, the probable loss of support by the family of the plaintiff was-shown as constituting an element for assessment of his damages. This the court criticizes, and holds to be incompetent. ■In this ease there is no attempt to show that the family were ■dependent upon the plaintiff for support, care or maintenance, and the jury, we think, could not have so understood it, ■especially in view of the fact that the instructions expressly limit the right of recovery to such damages as resulted to the plaintiff alone.

Perceiving no error in the record, the judgment of the Appellate Court will be affirmed.

Judgment affirmed.