source: Caselaw Access Project

author: Mr. Justice Scott Mr. Justice Dickey,

license: Public Domain

text:
    J. Irving Pearce v. Ira Foote.

      Filed at Ottawa

      February 7, 1885.

    1. Gambling oontbacts — dealing in options. Section 130 oí the Criminal Code declares: “Whoever contracts to have or to give to himself or another the option to sell or buy at a future time any grain or other commodity,” shall be subject to a fine or imprisonment, and “all contracts made in violation of this section shall be considered gambling contracts, and shall be void.”
    2. Same—what is an “option." An “option” is what are called, in the language of the dealers, “puts" and “calls.” A “put” is defined'to be the “pSvilege of delivering or not delivering” the thing sold, and a “call” is defined to be the “privilege of calling for or not calling for” the thing bought. “Optional contracts,” in this sense, are usually settled by adjusting market values, as the party having the “option” may elect. It is simply a mode adopted for speculating in differences in market values of grain or other commodities. It is in this sense the term “option” is used in the statute.

      . 3. Same—what constitutes a gambling contract. In this case a person entered into a contract with a broker by which the latter was to take options, in his own name, and if there were profits the broker was to pay them to the other contracting party; if losses, the latter was to pay them,—the broker to receive a commission for his services. No property was to be bought or sold. The trade was to be in differences and in options alone, and to settle upon profit and loss upon the fluctuations of the market,—guessing or betting on it. This was held to be a gambling contract, and within the inhibition of the statute.
    4. Same—what contracts connected with a gambling transaction are within the statute. Section 131 of the Criminal Code declares void all promissory notes, bills, or other securities made, or given, or executed, where any part of the consideration thereof is money or any valuable thing won by wager upon any unknown or contingent event whatever, or made, or given, or executed, for reimbursing any money knowingly lost or advanced, at the time and place of such bet, to any person so betting.
    5. So where a person met with losses under an “optional contract,” and in adjusting such losses, transferred to his broker through whom and in whose name the deal was made, certain promissory notes which he held, with his guaranty thereon, it was held, the assignment and guaranty of the notes were void, not only in the hands of the immediate assignee, but also in the hands of another to whom the latter might transfer the notes without value, as, in the case of an assignment for the benefit of creditors.
    6. Same—recovering back money, etc., paid in a gambling transaction— who regarded as the “winner, ” in dealing in “options. ” Section 132 of the Criminal Code gives a remedy to recover back from the “winner” in a gambling transaction any money or property paid to him on account of such transaction.
    7. In a suit brought to recover the value of a promissory note alleged to have been delivered in payment of losses in a gambling transaction, it appeared that the plaintiff had entered into an “optional contract” with a broker, the latter to take “options” for account of the plaintiff, but in his own name, and in case there were losses, the plaintiff was to pay them, and if there were profits, he was to have the benefit of them, the broker to have a commission in either event. Losses having resulted, in adjusting the differences, the plaintiff transferred the note, which he held, to the broker, in payment. It was held, the broker was a “winner,” within the statute, and the action would lie.
    8. The broker could not be regarded as the “agent” of the plaintiff in a transaction of that character, in any such sense as would exonerate him from the statutory liability to refund that which he had received. There is and can be no such thing as “agency” in the doing of any unlawful act.
    9. Or, giving the contract the construction that the plaintiff should reimburse the broker for any losses he might sustain in optional or gambling contracts on the board of trade, in consideration that if any gains should be made in such dealing, the broker would pay the same to the plaintiff, and the plaintiff would pay him a commission for his services,—still the transaction would be a mere wager, and within the statute which gives a remedy to recover back money paid thereon.
    10. Same—to whom the statutory liability will attach, and in what capacity. The note which was received by the broker, in this case, on the settlement of thó differences in the option deal, was included in an assignment by him to another for the benefit of creditors. Demand was made upon such assignee by the owner who had transferred the note to the broker, for its surrender, which was refused. The suit by the loser to recover back his note, or its value, was brought against this last holder, the assignee for the benefit of creditors, not in his representative character as such assignee, but as an individual. The action was well brought, and it was proper that judgment be entered accordingly.
    11. Same—as to the rule of construction of the statute. Although the statute prohibiting the dealing in options is highly penal in its character, there is no warrant for construing it with any unreasonable strictness. It ought rather to have a just, if not liberal, construction, to the end the legislative intention may be accomplished,—to prohibit all dealings in options in grain or any other commodities.
    12. Pleading—declaration in trover to recover bach the value of property won under a gambling contract. In trover to recover for property delivered in payment of losses under a gambling contract, it was objected, on error, that the declaration did not contain the words, “whereby an action hath accrued to the plaintiff according to the form of this act. ” The declaration was in the usual form in trover, and was held to be sufficient in law to support a judgment in trover, although the action was really brought under the statute.
    13. Same—defective pleading cured after verdict. But if the declaration were insufficient by reason of not being framed under the statute, the objection comes too late after verdict, as the supposed defect could have been reached by special demurrer.
    Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Circuit Court of Cook county; the Hon. Thomas A. Moran, Judge, presiding.
    This suit was brought in trover by Ira Foote, in the circuit court of Cook county, against J. Irving Pearce, to recover the value of a promissory note for the sum of $5000, made by the trustees of the estate of Ira Couch, deceased, and payable to the order of Ira Foote, which note was assigned, by the payee to S. G. Hooker & Co., and by indorsement thereon the payee guaranteed the payment of the note at maturity. To the declaration, which is in the usual form in trover, defendant pleaded not guilty, and on the trial before the court, wdthout a jury, the court found the issues for plaintiff, and assessed his damages at $7265, being the full amount of the principal of the note, and interest to the date of the judgment, and entered judgment accordingly. Defendant excepted to the finding and judgment of the court. At the same term of court defendant entered, among other motions, one to vacate the judgment entered, and grant him a new trial, which motion wras supported by affidavit as to newly discovered evidence, but the motion was overruled, and to that ruling of the court defendant also excepted. The judgment so entered against defendant was afterwards, on his appeal, affirmed in the Appellate Court for the First District, and he brings the case to this court on his further appeal.
    Messrs. Dent & Black, and Messrs. Lyman & Jackson, for the appellant:
    The parties having been in pari delicto, at common law there can be no recovery. Broom’s Legal Maxims, *692; Dixon v. Olmstead, 9 Vt. 310; McBlair v. Gibbs, 17 How. 232; Worcester v. Eaton, 11 Mass. 368; McCullum v. Gourley, 8 Johns. 147; Foote v. Emerson, 10 Vt. 338; Lubboch v. Potts, 7 East, 449; 2 Parsons on Contracts, 747; Best v. Strong, 2 Wend. 325; Tennant v. Elliott, 1 B. & P. 2; Howson v. Hancock, 8 T. R. 575; Pepper v. Haight, 2 Barb. 429; Brothers v. Potter, 46 Vt. 402; Evans v. City of Trenton, 24 N. J. 764; Yates v. Foote, 12 Johns. 1; Bachman v. Bryan, 3 Denio, 340; Peck v. Briggs, id. 107.
    Section 132 of the Criminal Code has not changed the rule in this case. It authorizes a recovery only from the winner.
    Hooker & Co. were not winners, if this should be held a gambling transaction.

      As to the rulings on options, reference is made to Pixley v. Boynton, 79 Ill. 351; Wolcott v. Heath, 78 id. 433; Logan v. Musick, 81 id. 414; Sawyer v. Taggart, 14 Bush, 727; Lehman Bros. v. Strassberger, 2 Woods’ C. C. 554; Hibblewhite v. McMorine, 5 M. & W. 462; Clarke v. Foss, 7 Biss. 540. See, also, upon this subject, Rumsey v. Berry, 65 Maine, 570; Smith v. Bouvier, 70 Pa. St. 375; Petrie v. Hannay, .3 T. R. 418; Owen v. Davis, 1 Bailey, 315 ; Porter v. Veits, 1 Biss. 177; Knight v. Fitch, 80 E. C. L. 566; Rosewarne v. Billing, 109 id. 316; Gilbert v. Gaugar, 10 C. C. In. 340; Black v. Ferdiman, 11 C. L. N. 99.
    Mr. Emery A. Stores, for the appellee.
   Mr. Justice Scott

delivered the opinion of the Court:

This case is one of more than usual importance, on account of the sum involved, which is quite considerable, and on account of-the principles involved in the decision. There can be no controversy in this court concerning the facts. They must be regarded as having been settled by the finding and judgment of the trial and Appellate courts. This much is frankly conceded by counsel, and the position is taken, if the case shall now be considered as on a demurrer to evidence,— that is, conceding the truth of all the evidence tends to establish in favor of plaintiff,—the facts do not establish, in law, a right to recover. ■ The defendant does not claim he is an assignee of the note for value. It came to him from Hooker & Co., to whom it had been assigned by plaintiff, among the assets of that firm that were assigned to him for the benefit of their creditors. It is plain the defendant stands in the shoes of his assignors, and in the further consideration of the case it will be most convenient to treat it as though the action had been brought against Hooker & Co. The ease naturally falls into two parts: First, is the contract which has been found by the trial court to exist between plaintiff and Hooker & Co. a “gambling contract,” as those terms are used in the statute, and hence void; and second, if the contract shall be held to be obnoxious to the statute, since plaintiff has delivered the note under that contract, can he, under the statute, recover its value from Hooker & Co., or, what is the same thing, from their assignee ? At the outset this court disclaims any right to review controverted questions of fact. The issues having been found for plaintiff by the lower court, it will be understood that all the facts the evidence tends to establish in his favor will, as upon a demurrer to evidence, be held to have been so found for him.

Looking into the evidence to ascertain that which it' tends to prove, it is seen what the contract is or was between plaintiff and-Hooker & Co., out of which the present litigation ultimately sprang. As respects the original contract between plaintiff and Hooker & Co., Mr. S. G. Hooker, a member of the firm, testified that plaintiff said to him: “I don’t want to pay for any property. I want to trade in options exclusively. I don’t want to pay for any cash grain.” To which witness replied: “You shall not. I will trade with you in differences. ” And again, that plaintiff further said to him: “I don’t ever want to pay for any more property. I don’t want to carry any more property on the board of trade. I want to trade exclusively in differences in options,—betting on the market. ” To which witness answered: “I agreed to do just exactly that thing for him.” On being asked, “What thing,” the witness said, “To trade in differences and in options, and to settle upon profit and loss upon the fluctua- . tions of the market,—guessing or betting on it.” Plaintiff states the contract substantially in the same way. He says : “I told him (Hooker) I didn’t want to buy any grain, no lard, no pork, or any thing of the kind. He said he could make money in speculation,—for instance, buy for this month for delivery next month, then settle on differences. If there was a loss, I had to pay it; and if there was a gain, he would pay it to me.” The plaintiff further says neither Mr. Hooker nor Mr. Lincoln had any authority from him to deal in any other way except to settle on differences. Hooker says the contract he made with plaintiff was made on behalf of his firm, of which he was the head, and within five or six days after the making of it he informed Mr. Lincoln, his partner, of the arrangement he had made with plaintiff. It is due, however, to Mr. Lincoln, to say that he denies all knowledge on his part that the firm had contracted to deal in options with plaintiff, but it is freely and fully admitted by Hooker the contract was made with the firm, and the trial court must have found such was the contract, and that finding is, of course, conclusive on this court.

It is plain that under the contract between plaintiff and the firm of Hooker & Co., it was not in the contemplation of the parties any actual purchases or sales of grain or other commodities should be made for plaintiff, or on his behalf. Indeed, it was expressly agreed none should be made. All the speculating that was to be done was to be in differences in options,—or, as the parties termed it, “betting on the market.” Of course it was expected by the parties that such purchases and sales of grdin or other commodities that should be made, were to be made on the board of trade. As was said by this court in Pixley v. Boynton, 79 Ill. 351, the true idea of an option is what are called, in the peculiar language of the dealers, “puts” and “calls.” A “put” is defined to be the “privilege of delivering or not delivering” the thing sold, and a “call” is defined to be the “privilege of calling for or not-calling for” the thing bought. “Optional contracts,” in this sense, are usually settled by adjusting market values, as the party having the “option” may elect. It is simply a mode adopted for speculating in differences in market values of grain or other commodities. It must have been in this sense the term “option” is used in the statute. Such a contract-is obviously fictitious, having none of the elements of good-.faith, as in a contract where both parties are bound, and is defined by statute as a “gambling contract. ” Fictitious purchases or sales, such as were in the contemplation of the parties, were as nothing, and it is a matter of no consequence where it is pretended they were made,—whether on the board of trade or elsewhere. It would have been quite as well, and would have conformed as nearly to the contract of Hooker & Co., had they simply entered upon their books they had made such purchases or sales on behalf of plaintiff, without going upon the board of trade, and claiming they had made such purchases and sales, and on returning made such entries. “Betting on the market” could be done just as well in that way as in any other. It needs no illustration to make it apparent the contract between plaintiff and Hooker & Co., as the trial court must have found it from the evidence, comes exactly within the meaning of section 130 of the Criminal Code, that declares: “Whoever contracts to have or to give to himself or another the option to sell or buy at a future time any grain • or other commodity,” shall be subject to a fine or imprisonment, and “all contracts made in violation of this section shall be considered gambling contracts, and shall be void.” It is seen this statute forbids any one to contract to have, or to give to himself, or to contract to give to another, the privilege to deal in options. That is precisely what Hooker & Co. did. They contracted to give to plaintiff the privilege to deal in options and settle with them upon differences, as indicated or determined by the fluctuations of the market. That is one of the offences against which the statute is leveled. Of course the party who contracts to have the option is equally guilty with the party who contracts to give it. It is wholly immaterial whether plaintiff knew “optional contracts, ” such as his agreement with Hooker & Co. contemplated, were defined by statute to be “gambling contracts. ” His ignorance of the statute in that respect did not change the character of the contract. Undoubtedly, under the contract between the parties, Hooker & Co. may have made fictitious contracts with persons, unknown to plaintiff, on the board of trade, nominally, at least, on behalf of plaintiff, for the purchase or sale of grain, and may be other commodities, which were settled by differences in market values, in which transactions the losses greatly exceeded the profits. Finally, Hooker & Co. rendered plaintiff an account of such transactions, which included losses and commissions claimed to be due to them, growing out of these purchases and sales, amounting to a large sum,— perhaps over $22,000. It appears that plaintiff, by his attorney in fact, in settling this large demand made against him, paid Hooker & Co. $2000 in cash, and assigned to them, with his guaranty of payment written on the back, four notes of $5000 each, made by the trustees of the Couch estate to plaintiff. One of these notes passed to defendant, under the assignment made by Hooker & Co. for the benefit of their creditors, and is the note in controversy. It is admitted that before this suit was brought, plaintiff demanded the note of defendant, and on his refusal to deliver it this action was brought in the circuit court, and the recovery was for its face value and accumulated interest. It is obvious that under section 131 of the Criminal Code, which declares void all promissory notes, bids, or other securities made, or given, or executed, where any part of the consideration thereof is money or any valuable thing won by wager upon any unknown or contingent event whatever, or made, or given, or executed, for reimbursing any money knowingly lent or advanced, at the time and place of such bet, to any person so betting, the assignment and guaranty of the note in controversy .to Hooker & Co., under the circumstances proven, was void, and passed no title whatever to them or to their assignee, the defendant. It was so declared by this court in Tenney v. Foote, 95 Ill. 99.

Assuming, then, as must be done, the facts were correctly found by the trial court, the contract between plaintiff and Hooker & Co. was, in law, a “gambling contract, ” and hence void, the question arises on the other branch of the case, whether plaintiff, either at common law or under the statute of this State, can recover that which he paid to Hooker & Co. as money or property lost in a gambling transaction, from defendant, in whose hands the specific property is found. As the solution of this question depends solely upon the construction that is to be given to the statute of this State on this subject, no investigation will be made as to what the common law was in such cases. So much of section 132 of the Criminal Code as has any application to the point being considered, is as follows: “Any person who shall, * * * by any wager or bet upon any * * * contingent event, lose to any person so * * * betting, any sum of money or other valuable thing, (amounting in the whole to the sum of $10,) and shall pay or deliver the same, or any part thereof, the person so losing and paying or delivering the same shall be at liberty to sue for and recover the goods, money or other valuable thing so lost and paid or delivered, or any part thereof, or the full value of the same, by an action of * * * trover, * * * from the tuinner thereof, with costs, in any court of competent jurisdiction.” It is said, if it shall be conceded the contract between plaintiff and Hooker & Co. were a “gambling contract,” within the contemplation of the statute, this provision of section 132 does not apply to nor does it authorize an action against Hooker & Co., for the simple reason they had not won any money or valuable thing from plaintiff upon any gambling transaction,—or, more tersely stated, the argument is, the note in controversy “was not paid upon á bet or gambling transaction to the tvinner of such bet.” The position taken can hardly be maintained. The agreement, as the trial court was authorized to find it, is, that ^looker & Co. contracted to give plaintiff the privilege to deal in options with or through them, and “if there was a loss, ” plaintiff was to pay it to them, and “if there was a gain, ” Hooker & Co. were to pay it to plaintiff, and for their services they were to he paid a commission. The suggestion that Hooker & Co. merely acted as the agents for plaintiff in these unlawful transactions, may he rejected at once as having nothing in its support. There is and can be no such thing as agency in the perpetration of crimes or misdemeanors, or, indeed, in the doing of any unlawful act. All persons actively participating are principals. Treating all the parties engaged as principals, it is immaterial to which one the money or property lost was in .fact paid or delivered,—whether to Hooker & Co., or to any of the parties on the board of trade with whom they may have made fictitious contracts, and lost,—and paying to either principal is, in law, paying to the “winner.” But aside from this view, the contract in express terms provides the losses, if any, should be paid to Hooker & Co., and not to the person ■with whom they might have had “gambling contracts ” on the board of trade, or elsewhere, and the money and note wrere so paid and delivered to Hooker & Co., as the contract provided should be done. Plaintiff could not know with whom they may have had such transactions. It was a matter about which he had no concern, for the reason he was obligating to pay the losses to Hooker & Co., and to no one else. So far as he was concerned they were the “winners” of his money and property. Plaintiff did not, and could not, know any one else in the transactions. It was from Hooker & Co., and nobody else, that plaintiff obtained the contract to deal in options, and despite all subtle reasoning on this branch of the case, it is apparent Hooker & Co. are the actual “winners ” of plaintiff’s money and property, and he neither knew nor cared to whom they may have paid any portion or all of that which they obtained from him.

But there is another view that may be taken that leads to the same conclusion,—that is, under the most favorable construction that can be given to the evidence the contract between the parties was, that plaintiff w'ould reimburse Hooker & Co. for any losses they might sustain in optional or gambling contracts made on the board of trade, in consideration that if any gains, should be made in such dealing, Hooker & Co. would pay the same to plaintiff, and that plaintiff would pay them a commission for their services. Such a contract is obviously unlawful, as being inhibited by statute. (Crim. Code, sec. 132.) The wager in this case was upon market values within a given time,' or on a given day. What is a wager ? It is a contract by which two or more parties agree that a certain sum of money or other valuable thing shall be paid or delivered to one of them on the happening of a certain event. That is precisely what was done in this case. The betting was as to market values within stated periods, and was evidently done by Hooker & Co. with others whom they may have met on the board of trade. It is not probable the parties that won in such transactions from Hooker & Co. had any knowledge of plaintiff. ■ They looked alone to Hooker & Co. for payment of their winnings, and it is said they were paid by Hooker & Co. Plaintiff’s contract—if he made any— to reimburse Hooker & Co. for any such losses paid by them, is not only contrary to the statute, but is forbidden by a sound public policy, and is therefore void.

Although the statutes being considered are highly penal, there is no warrant for construing them with any unreasonable strictness. They ought rather to have a just, if not liberal, construction, to the end the legislative intention may be accomplished,—to prohibit all dealings in options in grains or other commodities. Nothing is productive of more mischievous results. Considerable fortunes secured by a life of honest industry have been lost in a single venture in “options.” The evil is all the more dangerous from the fact it seemingly has the sanction of honorable commercial usage in its support. It is a vice that has in recent years grown to enormous proportions. Legitimate transactions on the board of trade are of the utmost importance in commerce. Such contracts, whether for immediate or future delivery, are valid in law, and receive its sanction and all the support that can be given to them. It is only against unlawful “gambling contracts ” the penalties of the law are denounced, and no subtle finesse of construction ought to be adopted to defeat the end it is to be hoped may be ultimately accomplished.

The point is made the declaration is not framed under the statute, and is not sufficient in law to support a judgment on the evidence contained in the record. The defect insisted upon is, it does not contain the words, “whereby an action hath accrued to the plaintiff according to the form of this act.” The declaration is in the usual form in trover, and was evidently drawn from approved precedents. It is sufficient in law to support a judgment in trover. But if it were insufficient, under the evidence given, that objection ought to have been pointed out on the trial, as should have been done by special demurrer had the facts been stated in the declaration, when an amendment would have been allowable instanter. After verdict the declaration is clearly sufficient, under the statute of “Amendments and Jeofails,” (sec. 6, div. 9,) which declares no judgment shall be arrested or stayed after verdict for the want of any allegation or averment on account of which omission a special demurrer could have been maintained. It is now too late to insist upon the objection made, even if it might have been sustained at the trial had it been made specifically.

It is also made an objection to the present judgment it is rendered against the defendant individually, whereas he was sued as assignee of Hooker & Co., and if any judgment in this action was justifiable, it should have been rendered against defendant in his representative capacity, and not otherwise. A sufficient answer to the position taken is, the supposed fact on which the error is assigned has really no existence. Defendant was not sued in his representative character, but as an individual, for his alleged personal tort. Besides that, if he is guilty of a conversion of plaintiff’s property, it is his own wrongful act, and not that of his assignors. It is a matter of no consequence the descriptive appellation of assignee is affixed to defendant’s name. It does not indicate he was sued otherwise than for his personal wrongful act. The suit was properly brought, and if it- can be sustained it must be done against defendant as an individual, and not against him as the representative of his assignors.

As to the fifth error assigned, viz, the Appellate Court erred in not holding the circuit court erred in denying the motion for a new trial, based upon the affidavits filed and sworn to in the cause, there is clearly nothing in it. The granting of a new trial, under the circumstances disclosed by such affidavits, was a matter resting in the sound discretion of the circuit court, and it is only when this court is able to say there has been an abuse of such discretion, it will interpose. After the fullest and most careful examination, nothing is discovered that would warrant such interference in the present case.

The judgment of the Appellate Court must be affirmed, which is done.

Judgment affirmed.

Mr. Justice Dickey,

dissenting:

While there is testimony tending to show that Foote authorized Hooker & Co. to deal in options for him, and on his account, there is not one word of proof tending to show that there ever was, in fact, any dealing in options. The power in that regard was never exercised. Indeed, it is not claimed by counsel for appellee that any options .were in fact ever bought or sold. This, however, is not very material, as I concede, and we all agree, that the contracts which were in fact made were merely gambling contracts, and hence were unlawful, and could not be enforced by law.

The facts of the case as claimed by appellee, and as found by the Appellate Court, are as follows: In and before June, 1876, Hooker & Co., as brokers and agents of Foote, at his request made various time contracts on the board of trade in their own names, on account of Foote, nominally, for the purchase or sale of produce at a given price, at a future day, it being understood at the time that no delivery of the produce was intended, but that the matters were to be adjusted by the payment of differences between the contract price and the market price at the* time named for delivery. In some of these contracts profits were received, and in others losses were incurred, which Hooker & Co. paid for Foote. The losses exceeded the gains to such an extent that in June or July, 1876, Hooker & Co. rendered to Foote their bill for moneys thus paid out for him, and for commissions, amounting to over $22,000. After some dispute about the amount of the commissions, which wras adjusted to Foote’s satisfaction, he paid the bill, partly in cash and partly by the sale and delivery to them of certain promissory notes, and on each of which Foote indorsed his guaranty of payment at maturity. These notes were each made by the trustees of the Couch estate, payable to Foote at a future day, and for the sum of $5000. Hooker & Co., having sold all these notes except one, and afterwards failing in business, made a general assignment to Pearce, for the benefit of their creditors, of all their property and effects, and among other things this one note thus passed to Pearce. Foote, after demand made, brought an ordinary action of trover against Pearce for the value of this note. In other words, Hooker & Co., as the brokers and agents of Foote, at his request and in his behalf, made unlawful wagers on the board of trade, and suffered losses, and at his request Hooker & Co. paid these losses. In consideration of this payment of money for Foote, and of the commissions charged by them for transacting this unlawful business for Foote, and for no other consideration, Foote sold and delivered this note, and others of the same kind, to Hooker & Co., and indorsed on each of them his personal guaranty of payment at maturity. Hooker & Co. afterwards assigned this note to Pearce for the benefit of their creditors.

The only question presented by this record is, can Foote, in this state of affairs, because of the illegality of the consideration, rescind his action, retract his transfer and delivery of this note in such payment, and in an ordinary common law action of trover recover from Pearce the value of this note ? I think he can not lawfully do so. Undoubtedly, gambling transactions of this character are illegal, and incapable of enforcement in our courts. (See Lyon v. Culbertson, 83 Ill. 33.) By section 131 of the Criminal Code, all notes or securities are declared void which are made where any part of the consideration is any valuable thing won upon a wager on any unknown or contingent event, or made for reimbursing any money lent or advanced at the time and place of such bet, to any person so betting. The bets in this case were made when the time contracts were made. The money advanced by Hooker & Co. w7as not so advanced at the time of such bet, but at a subsequent time. The case does not fall within the latter clause of this section. The bets, however, were upon a contingent and unknown event, and had Foote made and given his note to the winner, promising to pay to him the money won by him, such note would have been void. The bets in this case were in the name of Hooker & Co., on Foote’s account, with the parties with whom they professed to make these time contracts. Foote was the real party betting with such parties. It was he, and not Hooker & Co., who was to win or lose upon the result. As it turned out, the parties with whom Hooker & Co. contracted were the winners, and Foote was the loser, nominally, Hooker & Co. were losers, but in reality Foote was the loser on these bets. Surely Hooker & Co. were not winners, even nominally, or in any sense.

Were this an action by Hooker & Co. to recover their demand for advances and commissions, or upon a note given to them by Foote for that consideration, it is plain they could not recover, because the action would be founded upon illegality. At common law, where a contract is founded upon an illegal consideration, it can not be enforced by either party by the aid of any court, in case the parties are in pari delicto. “In pari delicto potior est conditio defendentis et possidentis.” (Smith v. Broadley, 2 Doug. 696; Binnington v. Wallis, 4 Barn. & Ald. 650; Cowan v. Milburn, L. R. 2 Exch. 230.) Another maxim is, “Ex turpi causa non oritur actio.” But where contracts founded upon illegal consideration have been performed, the common law will not aid either party to place himself in statu quo by his rescinding the contract. In such case, the parties being in pari delicto, the law leaves them where it finds them, giving aid to neither. Mosher v. Griffin, 51 Ill. 184; Nellis v. Clark, 20 Wend. 24; Goudy v. Gebhart, 1 Ohio St. 266; Knowlton v. Congress Springs Co. 57 N. Y. 258; Hoover v. Pearce, 26 Miss. 627; McWilliams v. Phillips, 51 id. 196. Nor can any money or valuable thing which has been advanced in pursuance of such contract, be recovered back, at common law. Hanson v. Hancock, 8 T. R. 575 ; McClosky v. Gordon, 26 Miss. 260; Bouton v. Bouton, 4 Rich. (S. C.) 491; Thomas v. Richland, 12 Wall. 349; Setter v. Alvey, 15 Kan. 157; Adams v. Barrett, 5 Ga. 404; Babcock V. Thomson, 3 Pick. 446; Gill v. Webb, 4 T. B. Mon. 249; Welch v. Cutler, 44 N. H. 561; Danforth v. Evans, 14 Vt. 538; McCullum v. Gourley, 8 Johns. 147; Hudsforth v. Wilson, 2 Dev. (N. C. L.) 372. In fact, no exceptions are found to these rules where the principles of the common law control.

I can not appreciate, or recognize as sound, the suggestion that there is and cari he no such thing as agency in the perpetration of crimes and misdemeanors, or in the doing of unlawful acts. The mere fact that by our Criminal Code he who has advised or directed another to commit an offence is punished as though he had committed the sEtme in person, does not, so far as I can conceive, militate against the idea that the real actor is, in that regard, the agent of the other.

Where statutes have invaded or intrenched upon the rules of the common law stated above, the modification of these rules has always, so far as I can learn, been closely confined by the courts to the cases designated in the statute. And so in Indiana, where a statute of that State declared void all bonds and other securities where any part of the consideration should be for money or property won upon any wager, and that if any person should lose and deliver to another any money or property upon a wager upon any game, the person so losing and delivering might recover the money or thing so lost and delivered, by action of debt, it was held, in a case where two yards of broadcloth was lost and delivered, upon a wager on the result of the presidential election, that the loser could not recover for the same against the winner, and this upon the ground that the wager in question was not upon a game. The court said, in substance, that if the goods had not been delivered the winner could not have recovered the same, because the wager was unlawful; but the goods having been delivered, although upon an unlawful wager, the same could not be recovered by action, unless it be so provided by statute, and that the case did .not fall within the statute in that regard, because the wager was not upon any game. And the court cite, with approbation, the words of Lord Eldon, in Hanson v. Hancock, supra, that “there is no case to be found where money has been actually paid upon an illegal contract,—both parties being particeps criminis,—where an action has been maintained to recover it back again. ” Unless, therefore, in the case at bar the action can be sustained by some provision of the statute, of Illinois, it can not be sustained at all.

The consideration for the sale of the notes by Foote to Hooker was undoubtedly illegal, being services rendered and

money paid out in an unlawful enterprise; and on the same consideration rested the guaranty indorsed by Foote upon each of these notes. Foote and Hooker & Co. were in pari delicto, so far as the gambling is involved. It was therefore held in Tenney et al. v. Foote, 95 Ill. 99, (and properly held,) that no action would lie upon the guaranty of payment by Foote indorsed upon one of these four notes so sold by him to Hooker & Co. in this very transaction, and by them assigned to Tenney and others. Counsel for appellee seems to regard that decision as sustaining a right of action in the case at bar. This is clearly a misapprehension. Where parties are equally guilty of the illegality which taints a contract,—as Hooker & Co. and Foote were in this case,—the law, unless the statute so enacts, will give no aid in enforcing a contract which has not been executed,—such as was the guaranty of Foote upon these notes. Nor will it, where the contract has been executed, as by payment made by the delivery of the notes in this ease, give aid in putting the party in statu quo, by rescinding the sale and delivery of the notes. I do not understand that the decision in Tenney et al. v. Foote goes to the length of holding the fact of delivery of the note in payment to Hooker & Co., as was done, to be a void fact. It is not so stated in the opinion, and the only question in that case was upon the validity of the guaranty of Foote. That • guaranty, founded upon an illegal consideration, wre have seen could not be the basis of an action, and so it was there held.

It remains to inquire whether any statute of this State sustains this action. Eeliance is placed upon section 132 of the Criminal Code as supporting this action. That section, rejecting verbiage which can by no possibility apply to this case, provides: “Any person who shall, * * ’ by any wager or bet upon any * * * contingent event, lose to any person so * * * betting, any sum of money or other valuable thing, (amounting in the whole to the sum of $10,) and shall pay or deliver the same, or any part thereof, the person so losing and paying or delivering the same shall be at liberty to sue for and recover the money or other valuable thing so lost and paid or delivered, or any part thereof, or the full value of the same, by action of * * * trover, or proceeding in chancery, from the winner thereof, with costs, in any court of competent jurisdiction. In any such action at law it shall be sufficient for the plaintiff to declare, generally, as in actions of * * * trover, upon a supposed finding and the detaining or converting the property of the plaintiff to the use of the defendant, whereby an action hath accrued to the plaintiff according to the form of this act, without setting forth the special matter. ” And in case of failure in the loser to so prosecute within six months, “it shall be lawful for any person to sue for and recover treble the value of the money * * * and other things, with costs of suit, by special action bn the case against such winner aforesaid, one-half to the use of the county and the other to the person suing. ”

It is plain this action is not brought under that section of the statute. The declaration is a common declaration in trover at common law. It does not set forth any special matter to bring the case within the statute, nor does it, in lieu thereof, as permitted by the statute, use the words “whereby an action hath accrued to the plaintiff according to the form of” the statute in section 132 of the Criminal Code, nor does the declaration use any words indicating that the action is brought at all under the statute. In such case the statute can not be invoked in support of the action. Again, had the declaration stated that the action was brought under the statute, the case made by the facts is not the case provided for in this section of the statute. That section invades the common law, so as to permit the loser of property or money on a» wager, where it has been delivered or paid, by action at law, to recover back the same from the toinner to whom it has been paid or delivered, and it gives no action against any one except against the winner on the wager. I can not perceive how Hooker & Co. can in any rational sense be said to be winners. They made gaming contracts (for Foote) with other parties, and on these gaming contracts these other parties won. If Hooker & Co. are to be regarded as principals in these gaming contracts, then they were the losers, not winners. When, therefore, Foote paid to them their losses, by selling and delivering to them this note, he paid it to losers, and not to winners. This section of the statute does not say the title to property so paid out shall not pass by delivery. It simply gives a statutory action by the loser against the winner, and against no one else. Even if Hooker & Co. could be held to be winners, the statute does not give an action against an innocent assignee of the winner, who has received of the winner the money or thing won upon the wager. . Pearce can not be said to be a winner. He took no part in the wager. He has done no unlawful act. There was no wager between Foote and Pearce, wherein Foote lost to Pearce any money or other valuable thing. Even had the statute given action against an assignee of the winner, still this case would not fall within the statute, for there was no wager between Foote and Hooker & Co., the assignors of Pearce, on which Foote lost to Hooker & Co. any money or valuable thing. The statutory liability imposed upon the winner was intended as a punishment upon the guilty winner. Pearce was not guilty of gambling, and was not a winner. He not only was not a winner, but was entirely innocent of the gambling, and knew not of any fact pertaining thereto until the. trial of this cause. The controversy here is, in fact, between Foote on the one side, who was guilty óf gambling, and the creditors of Hooker & Co. on the other, who are represented here by Pearce. I do not think there is in this case anything calling upon us to extend, by construction, a penal statute so as to aid and abet one of the guilty parties to prevail against the honest and innocent creditors of Foote’s associates in violating the law.

I think the judgment against Pearce ought to be reversed.


author: Mr. Justice Mulkey

text:
    City of Mattoon v. Jane Fallin.

      Filed at Springfield

      March 30, 1885.

      1. Appeal—reviewing facts. In an action against a city for an injury received in consequence of negligence in keeping its sidewalks in repair, the time and place of the accident, the manner in which it occurred, the -condition of the sidewalk at the time, the alleged negligence on the part of the city, and the degree of care which the plaintiff exercised, are all questions of fact, with which this court has nothing to do, except in respect to the ruling of the trial court as to their admission in evidence, or for the purpose of passing upon the instructions.
    2. Practice—as to time and mode of talcing advantage of a variance. In case of a variance between the allegations and proofs of the plaintiff, the defendant should object to the evidence when offered, or move to exclude the same when it is all in, or ask the court to instruct the jury to find for the defendant, so as to afford an opportunity of removing the objection by amendment; and if he does not, the variance can not be urged as a ground of reversal.
    Appeal from the Appellate Court for the Third District;— heard in that court on appeal from the Circuit Court of Coles county; the Hon. C. B. Smith, Judge, presiding.
    Mr. Thomas L. McGrath, for the appellant.
    Mr. Horace S. Clark, for the appellee.
   Mr. Justice Mulkey

delivered the opinion of the Court:

In January, 1884, the appellee, Jane Fallin, recovered a judgment in the circuit court of Coles county, against the city of Mattoon, for $1000, on account of injuries received in a fall, occasioned by a defective sidewalk, which the city, as is charged, negligently suffered to become and remain out of repair. This judgment, on appeal, was affirmed by the Appellate Court for the Third District, and the city appealed to this court.

The point chiefly relied on for a reversal is, the declaration locates the defective sidewalk on the east side of B street, between Western avenue and Prairie avenue, whereas, it is claimed, the proofs show that the accident occurred in Prairie avenue itself, and that the evidence relied on to establish negligence on the part of the city relates mainly, if not altogether, to B street, and not to Prairie avenue, where the accident happened. Without stopping to inquire whether this is true as matter of fact, we do not think the point is well taken. The time and place of the accident, the manner in which it occurred, the condition of the sidewalk at the time, the alleged negligence on the part of the city, and the degree of care which the plaintiff exercised, were all questions of fact, with which we have nothing to do, except in so far as the trial court may have made some ruling in respect to them, and except, also, for the purpose of passing upon the instructions. If there was a variance between the proofs and declaration, as is now claimed, the defendant should have objected to the evidence at the time, or, at any rate, after the evidence wras all in, should either have entered a motion to exclude it from the jury, or have asked the court to instruct the jury to find for the defendant. But nothing of this kind was done. If this question had been raised in the trial court in either of the ways here suggested, assuming the variance to exist, it would have afforded the plaintiff an opportunity of amending her declaration so as to correspond with the facts proved; but instead of this the defendant remains silent, raises no objection to the relevancy of the evidence, goes before the jury upon the proofs as submitted, speculating on the chances of a verdict in its favor on the merits, and being unsuccessful in this, it removes the case to a court of review, where, for the first time, this specific objection is raised. Even in the motion for a new trial we do not find it. To permit the defendant, after all this, to finally prevail here on this defence, would be highly unjust to appellee. She is quite an old lady,—seventy-five years of age when she testified in the cause. The accident was clearly without any fault on her part. It occurred in the evening, between sundown and dark, while she was on her way to church, she being accompanied at the time by a lady friend, who stepped on a loose plank in the sidewalk, causing it to tilt up in front of appellee, whereby she was thrown upon the sidewalk, breaking her arm and otherwise seriously injuring her. By reason of her extreme age the bones of the broken arm did not unite, and, as the attending physician testifies, never will. Her suffering has been great, and her injury is permanent. In any view that may be taken of the case, it is certainly a serious one to her, and if, as the jury has found, the irreparable injury she has sustained was occasioned by the negligence of the city, no mere technicality should relieve it from responsibility.

We perceive nothing in the objections made to the instructions. They are substantially correct, and fully as favorable to the city as the law warrants.

Upon the whole, we think the law is with the appellee, and the judgment of the Appellate Court will therefore be affirmed.

Judgment affirmed.


author: Mr. Justice Scott

text:
    Washington A. Mitchell et al. v. George W. Shortt et al.

      Filed at Springfield

      March 30, 1885.

    1. Fraud—divestiture of title by collusion between vendor and purchaser to defeat an intermediate sale on execution or by voluntary conveyance. Where the owner of land under a lost unrecorded deed sells the same to another, who sells to A, who takes possession through a tenant, and A’s equitable title is divested by a sheriff’s sale and deed to B, if G obtains a deed from the original owner after his sale, by the direction of A, to defeat the sheriff’s deed, the deed to 0 will be fraudulent as against the grantee in the sheriff s deed, and a deed made by 0 to his wife, through his son, will be equally so, and will be set aside by a court of equity, the wife having the same notice of A’s title as her husband.
    2. Delivery of deed—without authority. Where an equitable owner of land, in the possession thereof, procures the holder of the legal title to make a deed to 0, which is left with the equitable owner’s son, with directions to return the same to the grantor and procure a deed to D, and the son delivers the deed to 0 without the direction or consent of the equitable owner, no title will pass by such deed.
    3. Jurisdiction in chancery—removing cloud upon title. A court of equity has no jurisdiction of a bill by the holder of the legal title to remove a cloud from the title held by parties claiming adversely, and in the actual possession of the land; but where the apparent legal title is in the party in possession, and it is necessary to set the same aside before the equitable or real owner’s title can prevail at law, a court of equity will have jurisdiction to set aside such apparent legal title, and having obtained jurisdiction for that purpose, will retain it, that full justice may be done to all parties concerned.
    Appeal from the Circuit Court of Morgan county; the Hon. Cyrus Epler, Judge, presiding.
    Messrs. Morrison & Whitlock, for the appellants.
    Messrs. Brown & Kirby, for the appellees.
   Mr. Justice Scott

delivered the opinion of the Court:

The real parties in interest in this case are the complainants, George W. Shortt and Virginia Shortt, and the defendants Washington A. Mitchell and Rebecca W. Mitchell. Other parties are made defendants, but they have no actual interest in the subject matter of the litigation. Only Washington A. Mitchell and Rebecca W.'Mitchell have joined in the appeal, and assigned error on the record. All other defendants have acquiesced in the decision of the circuit court, and in the brief discussion that is to follow, the defendants not assigning error will only be noticed when it may be necessary to an . understanding of the case to state their connection with it.

There is really no controversy as to the fact James L. Beggs was at one time the real owner of the premises involved in this litigation, and that Travis Elmore fenced the same, and held actual possession for him during a long series of years. Both parties concede this principal fact in the case, and the contention is, whether the .title that was in Beggs has come to complainants, or whether it is in Bebecca W. Mitchell,— one of defendants. The purchaser of the land in dispute from the government, was William Grow, now deceased. He sold this land to his son, John H. Crow, and made him a deed for it, but it seems that deed was lost without having ever been recorded. Afterwards, John H. Crow sold the land to his brother, Jerome E. Crow. It does not appear. John H. Crow ever made his brother any deed for the land. Jerome E. Crow sold the land to James L. Beggs, who, as before stated, went into the actual possession, although no deed was made to him at that time. In 1873, Albert Gr. Shortt obtained a judgment against James L. Beggs, and had the execution issued on it, levied upon this land, and at the sheriff’s sale he became the purchaser, and the usual certificate was issued to him. Afterwards, Albert Gr. Shortt died, and all his estate passed to complainants, to whom the sheriff made a deed for the land, it never having been redeemed from the execution • sale. This is the title that complainants claim is paramount, and should prevail. On the other hand, Bebecca W. Mitchell claims the land through mesne conveyances from John H. Crow, to whom it was conveyed by William Crow, the purchaser from the government, by deed, which has since been lost, and was never recorded.

It appears that John H. Crow and Jerome E. Crow, by quitclaim deed, conveyed the land to Washington A. Mitchell, who afterwards procured Travis Elmore, who was in the actual possession of the premises as the tenant of Beggs, to attorn to him, and either he or his wife, Bebecca W. Mitchell, have since held the possession so obtained. The conveyance of the land by Washington A. Mitchell, through his son, to his wife, Rebecca W. Mitchell, was- made upon the same notice to her that her husband had of the rights of Beggs in the property, whatever those rights were; and if it shall appear he had no title to the land, the title claimed by his wife will fail also. The bill charges the deed from John H. Crow and Jerome E. Crow, to Washington A. Mitchell, was wrongfully obtained, and was therefore fraudulent and void. On the hearing of the cause the court so found, and decreed that the deed to Washington A. Mitchell, and also his deed to his son, and his son’s deed to his mother, Rebecca W. Mitchell, be all set aside and held for naught, and that defendants surrender the possession of the premises to complainants.

The evidence contained in this record has been carefully examined, and it is thought it fully sustains the decree rendered. There is evidence showing that John H. Crow and Jerome E. Crow made a deed of this land to Beggs. It was never delivered to Beggs, nor -was it ever recorded. It seems this deed was returned by some one to the grantors. After-wards, Beggs directed John H. Grow and Jerome E. Crow to make a deed of the land to Mitchell, and send it to him, Beggs. Such a deed was made and sent to Beggs, but it was not delivered by him, or any one for him, to Mitchell. It was given by Beggs to his son, with directions to return it to the grantors, with a request to make another deed of the land to Albert G. Shortt. It ivas so sent. Afterwards, the deed seems to have got into the possession of the grantee, Mitchell. Beggs distinctly states he never consented it should be delivered to him. There is no satisfactory evidence in the record the grantors had any authority from Beggs to make and deliver the deed to Mitchell, under which he and his grantees claimed the land, and it must be regarded as having been made without the consent of Beggs.

The decided weight of the evidence seems to be, that at the time of the levy of the execution in favor of Albert G. Skortt, in April, 1873, Beggs was in possession of the land, and was then the equitable owner. He took possession in 1854, and held it up to some time in the fall of 1873. After Mitchell had obtained his deed from John H. Crow and Jerome E. Crow, March 25, 1873, he still treated the land as belonging to Beggs, and caused the same to be levied upon as the property of Beggs. That was in July, 1873, after the execution in favor of Shortt had been levied, in the previous April, upon the land. Certainly, if Mitchell had then been in possession of the land claiming to be the owner of it, he would not have had it levied upon as the property of Beggs. The decree is so fully sustained by the testimony, there is no reason to be dissatisfied with it on that ground. But, admitting the merits of the case might be with complainants, it is confidently asserted they have no remedy in a court of chancery. As defendants are shown to be in possession of the premises, the remedy, it is said, would be at law. If the bill was simply one to remove a cloud from complainants’ title, and the parties claiming adversely were in possession, the rule insisted upon would control it. As originally framed, it may have been nothing more than a bill quia timet, but by an amendment it asks other relief, that could be obtained only in a court of equity. The apparent legal title was in Rebecca W. Mitchell, and it was necessary the title in her should be set aside before complainants’ title could prevail at law. It is a familiar doctrine, that where chancery has rightfully obtained jurisdiction of a cause for one purpose, it will retain it, that full justice may be done to all parties concerned.

The decree of the circuit court will be affirmed.

Decree affirmed.


author: Mr. Justice Sheldon Mr. Justice Craig,

text:
    The Riverside Company v. William A. Howell.

      Filed at Mt. Vernon

      March 24, 1885.

    1. Municipal taxation—prerequisites to its validity. The power given to city councils, and boards of trustees in villages, by the general Incorporation act, to levy taxes, is subject to the restriction that such councils or boards shall ascertain the total amount of appropriations legally made, and that they shall, by ordinance, levy and assess such amount so ascertained. The act requires the annual appropriations to be first made, by ordinance, within the first quarter of the fiscal year, duly published, and their amount to be ascertained, and then that the levy and assessment shall be made, by ordinance, for the amount. These requirements being for the protection of the citizen, are not directory, merely, but mandatory. The power of the taxing authority is limited by the manner and conditions prescribed for its exercise.
    2. The prerequisite of an appropriation ordinance is a limitation upon the power of a city council to levy a corporate tax, and a failure to pass such an ordinance is not a merely formal defect, and so is not cured by section 191 of the Revenue law, but renders the whole tax illegal. A strict compliance with this requirement is necessary to guard against the abuse of the taxing power conferred.
    3. Tax title—in case apart of the tax is illegal and the residue was legally assessed—effect upon the validity of a sale for sueh taxes. Where a part of a tax for which a sale of real estate is made, is illegal, the sale will be void. This is so when judgment is rendered by default, and the owner of the land does not appear and resist judgment. So when the city taxes for certain years against lots are illegal, for want of an appropriation ordinance before their levy, and they are included in the judgment with other legal taxes, no title will pass by the sale under such judgment.
    4. Hazte—judgment by default for taxes—upon what questions conclusive. A judgment against land by default for delinquent taxes, is not conclusive against the owner as to the legality of all the taxes included in the judgment, and he may show that a part of the tax is illegal, and thus defeat the sale in a collateral proceeding, as, in ejectment to recover under the tax deed. Such a judgment is to be distinguished from a judgment confirming special assessments, which is conclusive upon the land owner.
    Appeal from the Circuit Court of Gallatin county; the Hon. William C. Jones, Judge, presiding.

      Mr. E. B. Green, and Mr. Carl Roedel, for the appellant:
    • Where a part of a tax for which a sale of real estate is made, is illegal, the sale is void, and no title passes. McLaughlin v. Thompson, 55 Ill. 249; Kemper v. McClelland, 19 Ohio, 308; Gamble v. Witty, 55 Miss. 26; Dogan v. Griffin, 51 id. 780.
    Section 89, article 7, of the Bevised Statutes of 1874, relating to cities, etc., requires the passage of the annual appropriation ordinance during the first quarter of each fiscal year, in which shall be appropriated such sum or sums of money as may be deemed necessary to defray all expenses and liabilities of the corporation, specifying the objects and purposes of each appropriation, and the amount thereof. Section 64 requires such ordinance to be published within one month after its passage. Section 111 authorizes the city council, on or before the second Tuesday in September (August) in each year, to ascertain the total amount of appropriations for all corporate purposes, legally made, and, by ordinance, levy and assess such amount, etc. A certified copy of such ordinance is to be filed with the county clerk.
    The record of the ordinance levying taxes for 1875 fails to show that the yeas and nays were taken upon its passage, as required by section 41 of the Revised Statutes. This disregard of the provision of the statute renders the assessment of city taxes in 1875 void. Steckert v. City of East Saginaw, .22 Mich. 104; Spangler v. Jacoby, 14 Ill. 297; 1 Dillon on Mun. Corp. (3d ed.) 303.
    The failure to pass the appropriation ordinances in 1875 and 1876 is also fatal. The power to levy taxes was limited to the amount of appropriations legally made. The donee of the power should be held to a strict execution of authority, because of the liability of the power to abuse. Cooley on Taxation, 212.
    All statutes which, expressly or by implication, limit the amount of taxes which may be levied, are mandatory. Cooley on Taxation, 295; French v. Edwards, 13 Wall. 507.

      The statute declares that all ordinances involving an appropriation of money, shall be published. This makes it mandatory. Cooley on Taxation, 218.
    These omissions are not merely formal, and cured by section 191 of the Revenue act. . People v. Miller, 74 Ill. 384; Hamilton v. Fond Du Lac, 25 Wis. 490; Prindle v. Campbell, 9 Minn. 212.
    Mr. R. W. Townsend, and Mr. T. M. Eckley, for the appellee :
    The judgment of the county court is conclusive as to all matters that could and ought to have been passed upon in rendering it. If it included too much taxes, or illegal taxes, it was but an error to be taken advantage of only by appeal or writ of error. Keeve v. Kennedy, 43 Cal. 653; Hahn v. Kelley, 34 id. 391; Murdock v. DeVries, 37 id. 528; Mayo v. Foley, 40 id. 283; Blackwell on Tax Titles, 221; Moore v. Wayman, 107 Ill. 192; Gage v. Parker, 103 id. 535; People v. Brislin, 80 id. 423; Lehmer v. People, id. 601; Prout v. People, 83 id. 154; Railway Co. v. People, id. 463; Andrews v. People, id. 529; Schertz v. People, 105 id. 32; Blake v. People, 109 id. 504; Ward v. Farwell, 97 id. 619; Monroe v. People, 102 id. 409; Fortman v. Ruggles, 58 id. 208; Mix v. People, 106 id. 425; People v. Smith, 94 id. 226.
    The proof fails to show that the appropriation ordinances have not been passed, and it is not necessary that the book of ordinances should show the yeas and nays were taken.
    It will be presumed that was done which ought to have been done, until the contrary is shown. Lattin v. Smith, Breese, 362.
    But if no appropriation ordinance was passed, it could not affect the tax title. It does not go to the substantial justice of the tax, and the omission is cured by section 191 of the Revenue act. Raley v. Guinn, 76 Mo. 273; Mills v. Gleason, 11 Wis. 497.
   Mr. Justice Sheldon

delivered the opinion of the Court:

This was an action of ejectment, for the recovery of a part of lots 1143 and 1144, in Shawneetown. Verdict and judgment were for the defendant, and the plaintiff appealed.

The defendant’s claim of title was under a tax deed, and the question presented for determination is upon the validity of such tax deed.

In 1875, lot 1143 entire, and lot 1144 entire, were separately listed to Henry O. Doeker, and various taxes were extended against them on the tax books of 1875. These taxes not being paid, the lots were returned as delinquent, in 1876, and in October of that year lot 1143 entire was forfeited to the State for $321.33, and lot 1144 entire for $608.88. In 1876, “E. pt. lot 1143,” and “E. pt. lot 1144,” were listed to the Eiverside Company, the plaintiff. Against “E. pt. lot 1143” were extended, on the collector’s books, city tax of Shawneetown for 1876, $54.41, and back tax and interest for 1875, $352.48, being the total tax charged on lot 1143 entire, for 1875, with interest. Against “E. pt. lot 1144” were extended, on books of that year, (1876,) city tax, $163.23, and back tax and interest for 1875, $663.83, being the total tax charged on lot 1144 entire, for 1875, with interest. These taxes not being paid, the said parts of the lots were returned as delinquent, in 1877, and there was a judgment against and sale of “E. pt. lot 1143,” and “E. pt. lot 1144,” for such taxes. The tax deed is under this sale. The taxes for which the tax sale was made, embraced the city taxes of Shawnee-town for the years 1875 and 1876.

It is objected to these city taxes that they were illegal and void because there had been no appropriation bill or ordinance passed by the city council, as required by the statute. The city of Shawneetown became organized under the general law of this State for the incorporation of cities and villages, on May 23, 1874. The fiscal year commenced on the third Tuesday of April. (Rev. Stat. 1874, chap. 24, sec. 48, p. 216; sec. 88, p. 227.) Section 2, of article 7, of that law, (Rev. Stat. 1874, p. 227,) provides: “The city council of cities * * * shall, within the first quarter of each fiscal year, pass an ordinance, to be termed the annual appropriation bill, in which such corporate authorities may appropriate such sum or sums of money as may be deemed necessary to defray all necessary expenses and liabilities of such, corporation,- and in such ordinance shall specify the objects and purposes for which such appropriations are made, and the amount appropriated for each object or purpose. No further appropria- . tions shall be made at any other time within such fiscal year, unless the proposition to make each appropriation has been first sanctioned by a majority of the legal voters of such city, either by a petition signed by them, or at a general or special election, duly called therefor. ” Section 3, article 5, page 223, provides that “all ordinances * * * making any appropriation, shall, within one month after they are passed, be published at least once, in a newspaper published in the city, etc. Section 90, page 227, provides that neither the city council nor the board of trustees shall add to corporation expenditures in any one year, anything over and above the amount provided for. in the annual appropriation bill of that year, except that by a two-thirds vote of the city council or board of trustees any improvement may be ordered the necessity of which is caused by any casualty or accident happening after such annual appropriation is made. Section 1, article 8, page 231, provides: “The city council * * * may assess and collect taxes for corporate purposes, in the following manner : The city council * * * shall, on or before the second Tuesday in September (August) in each year, ascertain the total amount of appropriations for all corporate purposes, legally made, and to be collected from the tax levy of that • fiscal year, and, by ordinance, levy and assess such amount, so ascertained, upon the real and personal property within the city, * * * subject to taxation, as the same is assessed for State and county purposes, ” etc.

It will thus be seen that there is here, in the interest of the tax-payer, most careful provision made against extravagance of expenditure and abuse of the power of taxation. There is to be passed, within the first quarter of each fiscal year, the annual appropriation bill, wherein is to be appropriated such money as may be deemed necessary for all expenses and liabilities of the corporation, specifying the objects and purposes of the appropriations, and the amount for each object and purpose, which is to be published; and no further appropriation shall be made at any other time within the fiscal year, except upon the sanction of a majority of the legal voters of the municipality. There is to be no addition to expenditures, in any one year, of anything over and above the amount of the annual appropriation bill, except in a specified contingency. The power given to the city council to levy taxes is with a restriction as to the manner in which the power is to be exercised,—that the city council shall ascertain the. total amount of appropriations legally made, and, by ordinance, levy and assess such amount so ascertained. The act requires the annual appropriations to be first made within the first quarter of the fiscal year, and their amount to be ascertained, and then that the levy and assessment should be made, by ordinance, for the amount. These requirements of the statute we regard as for the protection of the citizen, and not directory, but mandatory. The power of the taxing authority, in such a case, is limited by the manner and conditions prescribed for its exercise. (French v. Edwards, 13 Wall. 507.) The donee of such power should be held to a strict execution of the authority, because of the liability of the power to abuse. (Cooley on Taxation, 212.) We view the requisite of the appropriation ordinance as a limitation upon the power of the city council to levy the tax. The failure to pass such ordinance is not a mere formal defect, and so is not cured by section 191 of the Revenue law, (Rev. Stat. 1874, p. 890,) that “no error or informality in the proceedings of any of the officers connected with the assessment, levying or collecting of the taxes, not affecting the substantial justice of the tax itself, shall vitiate or in any manner affect the tax or the assessment thereof.” (See The People v. Otis, 74 Ill. 384; The People v. Lee, 112 id. 113.) The want of an appropriation ordinance we look upon as a defect in the proceedings which makes the city tax illegal,—which surely affects the substantial justice of the tax. See Cooley’s Const. Lim. 520; Prindle v. Campbell, 9 Minn. 212.

In Wilmerton v. Phillips, 103 Ill. 78, we said: “Purchasers at tax sales, while availing themselves of the opportunity of obtaining highly remunerative profits on small investments, are bound to know, at their peril, when purchasing at a tax sale, that the supposed delinquent is in truth and in fact a delinquent,—that he has been lawfully assessed, and has failed to make payment.”

Some question is made as to the sufficiency of the proof that there was no appropriation ordinance passed. The testimony of the city clerk, who produced the ordinance record and the journal of the city council, was, in addition to the showing of the books, that no appropriation bill or ordinance was passed by the city council in either of the years 1875 or 1876. The proof is satisfactory to us that there was no such ordinance passed. We therefore hold the city taxes for the years 1875 and 1876 to be invalid, and that therefore the tax sale was void, and no title passed under it. The authorities are to the effect that when a part of the tax for which a sale of real estate is made, is illegal, the sale is void. McLaughlin v. Thompson, 55 Ill. 249; Kemper v. McClelland’s Lessee, 19 Ohio, 308; Gamble v. Witty, 55 Miss. 26; Cooley on Taxation, 295, 296; Hardenburgh v. Kidd, 10 Cal. 402.

The tax sale being adjudged void and the tax deed invalid, upon the foregoing ground, it is unnecessary to consider other objections which have been taken to the validity of the tax deed.

It is insisted that the tax judgment should be held conclusive against the objection which has been considered, and not subject to attack in this collateral proceeding, and we are asked to revie.w and change our former holding to the contrary, where the tax judgment is by default, in the cases of Graceland Cemetery Co. v. The People, 92 Ill. 619, Belleville Nail Co. v. The People, 98 id. 399, Gage v. Bailey, 102 id. 12, and Stamposki v. Stanley, 109 id. 210, supposed by counsel to be in conflict with the line of decisions in The People v. Brislin, 80 Ill. 423, Lehmer v. The People, id. 601, Prout v. The People, 83 id. 154, Chicago and Northwestern Ry. Co. v. The People, id. 467, Andrews v. The People, id. 529, and Gage v. Parker, 103 id. 535. The case of The People v. Brislin, which the others followed, was one of the confirmation of a special assessment for park purposes. Not one of these cases referred to arose upon a judgment ordering sale of land for taxes, but they all related to the conclusiveness of confirmations of special assessments made under either section 3, chapter 105, of the Bevised Statutes of 1874, entitled “Parks,” or article 9, chapter 24, of the Bevised Statutes of 1874, entitled “Cities, Villages and Towns.” These confirmations of the assessments under section 3 of chapter 105, are in the circuit court, and are expressly declared by the act to be conclusive ; and under the 9th article of the City and Village law, they are made in the county court after full and proper notice of the proceedings to the owner of the property. Such confirmations of assessments are, in our opinion, to be viewed differently from a judgment to sell real property for the taxes due thereon. In carrying out the powers given cities, etc., by section 9, of article 9, of the constitution, of making local improvements by special assessments on contiguous property, these confirmations of the assessments may be regarded like that of the valuation of property by the proper officer in ordinary cases of assessment, and if the property owner fails to make his objections in the proper place, and the assessment is confirmed, then he may well not be permitted to go behind the confirmation in urging objections, when proceeding is taken for enforcing the payment of such special assessments. In the decision against the conclusive effect of tax judgments by default, somewhat of stress was laid upon the recognition by the statute, itself, of such judgments not having the conclusiveness of ordinary judgments by default. This consideration could not apply in the special assessment cases.

We see no sufficient reason for changing our former holding upon this point, as to a judgment by default in a tax sale proceeding not being conclusive, and we adhere thereto.

The judgment of the court below will be reversed, and the cause remanded for further proceedings.

Judgment reversed.

Mr. Justice Craig,

dissenting:

I do not concur with the majority of the court in the decision of this case, for the following reasons:

It is claimed that the judgment is void because it was rendered in part for city taxes of the city of Shawneetown, and the city council failed to pass an appropriation ordinance in the years 1875 and 1876, as required by law. I do not concur in this view. It is not entirely clear, from the evidence introduced on this branch of the case, that the city council failed to pass an appropriation ordinance within the first fiscal quarter, as provided by the statute, for these years; but, conceding the fact to be sufficiently proven, is the judgment void when called in question collaterally, as here ? The annual election in cities and towns organized under the general Incorporation law, is required to be held on the third Tuesday of April, in each year. The fiscal quarter in such cities, unless otherwise provided by ordinance, shall commence at the time provided for the annual election. Section 89, of chapter 24, of the Bevised Statutes, provides that the city council shall, within the first quarter of the fiscal year, by ordinance, appropriate such sums as may be necessary to defray all necessary expenses and liabilities of such- corporation, which ordinance shall specify the objects and purposes for which such appropriations are made, and the amount appropriated for each purpose, and no further appropriation shall be made during the fiscal year unless authorized by a majority of the legal voters of the city, by vote or petition. This section of the statute, as its reading plainly shows, has nothing whatever to do with the levy of city taxes by the corporate authorities. The power under which a levy may be made is conferred by section 111, which declares: “The city council * * * may assess and collect taxes for corporate purposes, in the following manner: The city council * * * shall, on or before the second Tuesday in September (August) in each year, ascertain the total amount of appropriations for all corporate purposes, legally made, and to be collected from the tax levy of that fiscal year, and, by ordinance, levy and assess such amount, so ascertained, upon the real and personal property within the city, * * * subject to taxation, as the same is assessed for State and county purposes. * * * A certified copy of such ordinance shall be filed with the proper clerk of said county, ” .etc. The levy in the years 1875 and 1876 was made in conformity to this requirement of the statute.

But it is argued, as the city council failed to pass an appropriation ordinance during the first quarter of the fiscal year, the tax was illegal and the judgment void. Had the failure of the city council to pass an appropriation ordinance increased the taxes of the property owner, or enlarged the burdens of taxation, or rendered the taxes unequal or unjust, we can see a gtiod reason why the failure to pass such an ordinance ought, in justice, to render the tax levy and judgment illegal and void. But such was not the case. So far as appears, not a single tax-payer was in the least injured by the failure of the city council to discharge a duty imposed by statute. The purpose of section 89 was not so much for the protection.of individual rights, as it was to guard the rights of the public. The protection of public interests was aimed at in imposing this official duty upon the city council. It was doubtless intended as a limitation upon the expenditure of the public money, without regard, particularly, to the levy and collection of taxes. As to the effect of a disregard of a requirement of this character, in Cooley on Constitutional Limitations, 520, in note 2, will be found the following: “It appears to us that where the requirement of the law which has failed of observance was one which had regard simply to the due and orderly conduct of the proceedings, or to the protection of the public interest as against the officer, so that to the taxpayer it is immaterial whether it was complied with or not, a failure to comply ought not to be recognized as a foundation for complaint by him. But those safeguards which the legislature has thrown around the estates of citizens, to protect them against unequal, unjust and extortionate taxation, the courts are not at liberty to do away with by declaring them non-essential.”

If the city council had passed an appropriation ordinance, the taxes would not have been diminished. How, then, was the tax-payer injured by a failure to discharge this duty? It is true the omission to pass the ordinance was an irregularity in the proceedings, and it may be that a tax-payer might enjoin the disbursement of the taxes where the council has failed to adopt an appropriation ordinance. The object of section 89, as is apparent from its language, is to limit and confine the city council, in the disbursement of public money, to such sums as may have been set forth in an appropriation ordinance. What is embraced in such ordinance they may spend for the purpose specified in the ordinance, and no more. But what has such an ordinance to do with the levy and collection of taxes ? As heretofore said, section 111 authorizes a levy, and although the appropriations may not have been made within the precise time required by section 89, I think, where the city council ascertains the amount of the appropriations and makes the levy within the time specified in section 111, that levy may be sustained. The proceedings may not be entirely regular, but in order to cure an irregularity in the proceeding which does not affect the substantial justice of the tax, section 191 of the Revenue law was enacted, which declares that “no error or informality in the proceedings of any of the officers connected with the assessment, levying or collecting of the taxes, not affecting the substantial justice of the tax itself, shall vitiate or in any manner affect the tax or the assessment thereof. ” This section seems .broad enough to cure the irregularity complained of in the present ease. Under this section, where an error or irregularity occurs in the proceedings of any of the officers in the assessment, levying or collection of the taxes, which does not affect the substantial justice of the tax, such error will not impair the validity of the proceedings. Here, the levy was not increased because of the failure of the city council to pass the appropriation ordinance within the first quarter of the fiscal year. No man’s taxes were larger, or smaller, or more burdensome. Indeed, so far as appears, the tax levy was precisely the same as it would have been had the appropriation ordinance been duly passed. How, then, was the substantial justice of the tax affected ? The answer is obvious. If not affected, then the omission or error of the city council was cured by the section cited.

In Buck v. The People, 78 Ill. 560, and in Chiniquy v. The People, id. 572, where local taxes were not levied and returned to the clerk in time, it was held the error in the proceedings did not affect the substantial justice of the tax, and it was cured by section 191. This court said in Chiniquy v. The People, 78 Ill. 577: “The amendment introduced into the 191st section of the present Revenue law has produced a radical change in proceedings to recover judgment for delinquent taxes, and has overruled or modified most if not all our previous decisions on the questions thus arising. ’’ In Thatcher v. The People, 79 Ill. 602, it was said: “Nearly if not all our previous decisions have been abrogated as rules for the determination of cases arising after the adoption of the amendment.” In Fisher v. The People, 84 Ill. 496, in construing section 191, the court further said: “This section we have construed as working a radical change in the policy of the law in respect to judgments for delinquent taxes, and rendering inapplicable all former decisions holding to great strictness and literalness in following the language of the statute in such cases.” Raly v. Quinn, 76 Mo. 273, a case involving the construction of a statute in that State relating to an error in a proceeding where land was sold for taxes, will be found to be in point here. .

Mr. Chief Justice Scholfield, also dissenting.


text:
    Victor Atwood v. Cyrus L. Buck.

      Filed at Ottawa

      January 22, 1885

    1. ' Assigning cross-errors— limitation. Where the record of a partition proceeding is brought before this court, and the plaintiff in error has assigned errors on that part of the decree that affects him injuriously, the defendant in error, under the statute, may assign cross-errors on the same record as to matters that affect him, even though such matters may have occurred more than five years before suing out the writ of error.
    2. Evidence—parol evidence as to proceedings in courts in a foreign jurisdiction—character of evidence admissible concerning disposition of will in court of another State. It is not competent to prove by oral testimony what proceedings may have been had in a court in any foreign jurisdiction. Such testimony that there was a contest as to a will in another State in its courts, is inadmissible, and can not be considered.
    3. To prove that a will had been offered for probate in the probate court in the State of Vermont, where the testator formerly resided, and was rejected, some oral testimony was introduced, to the effect there was some contest concerning it, in such State, together with the following marks and entries on the will: “Filed March 27, 1855.—Z. Cooley, Clerk.” “Bee. at the probate office, district of Georgia, Vermont, April 14, A. D. 1855.—J. Davis, Judge of Probate.” “ Cont’d to 17th of J uly, 1855." “Cont’d to July 31,1855.” “ Cont’d to Sept. 15, 1855, when it was adjudged, on trial, that said instrument was not the last will and testament of the said M. B., the attestation not being according to the laws of Vermont.—James Davis, Judge.” It was held, that the evidence was incompetent, and wholly insufficient to show there ever was any adjudication as to the will in any court in the State of Vermont.
    4. Only record evidence is competent to prove an adjudication touching a will in the probate court of another State having jurisdiction of such matters. Memoranda of the clerk or judge of such court, on the back of the will, can not be taken as a record of any judicial determination, and.foreign records must be exemplified and properly attested before they can be admitted in evidence.
    Writ of Error to the Circuit Court of Warren county; the Hon. Arthur A. Smith, Judge, presiding.
    Messrs. Kirkpatrick & Alexander, for the plaintiff in error.
    Messrs. Bull, Strawn & Ruger, for the defendant in error.
   Mr. Justice Scott

delivered the opinion of the Court:

The hill in this case is brought by William Buck, against Cyrus L. Buck, for the partition of certain lands of which it is alleged Murray Buck died seized, and which lands are situated in the county of Warren, in this State. After the bill was filed, William Buck became bankrupt, and on leave of court given for that purpose, the assignee, Victor Atwood, was substituted in his stead as complainant, and thereafter the suit progressed in the name of such assignee. All the other heirs of Murray Buck seem to have conveyed their interest in the lands involved, to defendant, Cyrus L. Buck, so that the controversy is confined solely to the interest claimed by William Buck. On the hearing in the circuit court it was found complainant was entitled to one share of the lands in controversy that had belonged to his father in his lifetime, and it was so decreed.

The commissioners, in making partition, set apart to complainant one share,—that is, what was thought to be one-eleventh part of the land,—by a sufficient description, and then set off the residue of the lands to Cyrus L. Buck, and also the right of way over a strip thirty-three feet wide on the west side of the tract, previously set apart to complainant. The only question made by complainant on the record is, had the commissioners the right, under the decree, to allot a portion of the lands to complainant as his share, and then create an easement over or upon it in favor of the other party holding the residue of the estate. It is contended by complainant they had no such power. Complainant only brought up so much of the record of the circuit court as presented the question he makes upon it, but defendant assigned cross-errors under the statute, and afterwards, on certiorari from this court, caused a complete transcript to be brought up, so that now the whole record of the cause is before this court. The bill alleges Murray Buck died intestate, and it proceeds on that theory, otherwise complainant would be entitled to no relief. This allegation of the bill is denied by defendant, and he has assigned cross-errors, the principal one being, the court erred in decreeing that Victor Atwood, as assignee of William Buck, was entitled to any share in the property in litigation. A motion has been made by plaintiff in error to dismiss the cross-errors, for the reason, it is said, more than five years have elapsed from the -time of rendering that part of the decree to which the cross-errors relate, and the suing out of the original writ of error herein. Since the return of the writ of certiorari issued out of this court, the entire record of the circuit court in the cause is before this court, and now that plaintiff in error has assigned errors on that" part of the decree that affects him injuriously, certainly defendant, under the statute, can assign cross-errors on the same record as to matters that affect him. Whether the question made can be raised on motion, or must be done by plea, will not be considered, for it is certain there is no statute of limitations that would bar defendant’s right to assign cross-errors oh the same record where plaintiff in error has assigned errors. His right to do so is secured by statute.

Prior to the death of Murray Buck, which occurred in March, 1855, in Knox county, in this State, where he had resided since the previous May, he made his will, which was executed and attested in conformity to the laws of Illinois. By the third clause of the will the testator devised the lands nowin controversy, to defendant, Cyrus L. Buck, together with certain personal property that might be on the farm at his death. The will was duly proven by the attesting witnesses, and was admitted to probate on the 24th day of October, 1876, in the county court of Knox county, where the testator died, and where he left both real and personal property to be administered. Treating the will of Murray Buck as valid, and as having been regularly admitted to probate in Knox county, where the testator died, it would pass the entire title of the land to defendant, Cyrus L. Buck, and that would be the end of all controversy. But it is said the will had been presented to the probate court in the State of Vermont, where the testator had resided immediately preceding his coming to this State, and that it was there adjudged it was not the will of Murray Buck, and that the refusal of that court to admit it to probate is final and conclusive. One difficulty in regard to the position taken is, there is no competent evidence in the record to sustain it. There is some oral testimony in the record that there was a contest as to the will in Vermont, but of course that is to be rejected. It would certainly not be competent to prove, by oral testimony, what proceedings may have been had in a court in any foreign jurisdiction. All the other testimony in the record on this branch of the case consists of certain entries appearing on the back of the will itself. The first is, “Filed March 27, 1855.—Z. Cooley, Clerk.” Where it was filed, in what court, or who the party is that purports to file it, does not appear. The other file marks are as follows: “Bee. at the probate office, district of Georgia, Vermont, April 14, A. D. 1855.—J. Davis, Judge of Probate.” “Continued to 17th of July, 1855.” “Cont’d to July 31, 1855.” “Cont’d to' Sept. 15, 1855, when it was adjudged, on trial, that said instrument was not the last will and testament of the said Murray Buck, the attestation not being according to the laws of Vermont.—James Davis, Judge.” The oral testimony is to the effect there was some contest in Vermont concerning the will, and that counsel was employed by the parties, but defendant had nothing to do with it. It is proven, at that time, and for a long time thereafter, he was incapacitated by mental weakness, induced by severe sickness, from giving the slightest attention to any kind of business. But it matters little what his condition was. The difficulty is, there is no competent evidence there was ever any adjudication touching the will, in any court or before any tribunal in the State of Vermont having jurisdiction of such matters. Only record evidence would be competent to prove that fact. The memoranda on the back of the will are in nó sense the records of any judicial adjudications. They are not attested or exemplified, as is usually done to make records competent evidence -in any foreign jurisdiction. Bejecting the entries on the will as no evidence there had ever been any adjudication in Vermont touching the will, there is absolutely nothing that militates, in any view of the law, against the jurisdiction of the county court of Knox county, in this State, to admit the will of Murray Buck to probate, as was done. It was proven to have been executed according to the laws of Illinois, where the testator resided at the time of his death, and that proof was made a matter of record, which is all that is required to be done to establish it as the last will and testament of the decedent.' That probate of the will stands unreversed, and no reason is perceived why defendant does not, under its provisions, take the entire land.

This view being conclusive of the whole case, it will not be necessary to consider the errors assigned by complainant. The cross-errors are well assigned, and the decree of the circuit court must be reversed, and the cause remanded for further proceedings conforming to this opinion.

Decree reversed.