text:
    Raymond H. Smith, Plaintiff-Appellant, v. Leo Glowacki, Defendant-Appellee.
    Gen. No. 11,154.
    Fourth District.
    May 18, 1970.

      Peter F. Ferracuti, of Ottawa, and Thomson, Thomson & Mirza, of Bloomington (Chester Thomson, of counsel), for appellant.
    Heyl, Royster, Voelker & Allen, of. Peoria (Richard M. Baner and James E. Bowles, of counsel), for appellee.
   RICHARDS, J.

This is an appeal from an order of the circuit court entered in favor of the defendant for a judgment notwithstanding a verdict in favor of the plaintiff. The complaint herein is for damages for personal injuries received by the plaintiff in a collision between the motorcycle he was riding and a pickup truck operated by the defendant. The defendant was the street and water commissioner, special policeman and the dogcatcher for the City of Minonk. The pickup truck involved was furnished by the city for defendant’s use in the performance of his various duties. The collision occurred in the street near the driveway to the defendant’s home.

The defendant’s answer contained an affirmative defense alleging that the defendant was an employee of the City of Minonk; that at the time and place of the occurrence defendant was in the scope of his employment ; that the plaintiff failed to file, within six months from the date of the injury, a notice to the City of Minonk regarding the accident and the contemplated suit as required by Ill Rev Stats 1965, c 85, § 8-102, and that because of such failure the plaintiff’s suit should be dismissed.

The answer of the plaintiff to the affirmative defense admitted that the defendant was an employee of the City of Minonk; denied that defendant was in the scope of his employment at the time and place complained of; admitted that plaintiff did not file notice of the contemplated suit as required by statute, and denied that by reason of said failure to file such notice he is barred from suing defendant.

The jury returned a verdict for the plaintiff in the sum of $12,000, but also answered in the affirmative the following special interrogatory: “Was the defendant, Leo Glowacki, at the time of the occurrence, acting within the scope of his employment for the City of Minonk ?” A motion for judgment notwithstanding the verdict was allowed on the jury’s finding that the defendant was acting within the scope of his employment and because of plaintiff’s admitted failure to give the city notice as required by the above-cited statute.

The plaintiff presents this appeal urging that as a matter of law the defendant was not in the scope of his employment and that the requirement in the statute of the notice to the city was in violation of the state and Federal Constitution. Section 65 of the Civil Practice Act, Ill Rev Stats 1967, c 110, § 65, provides:

“When the special finding of fact is inconsistent with the general verdict, the former controls the latter and the court may render judgment accordingly.”

Accordingly, the trial court was correct in setting aside the general verdict and entering judgment on the special finding of fact unless there was no substantial evidence to support the special finding or unless it was contrary to the manifest weight of the evidence. Borries v. Z. Frank, Inc., 37 Ill2d 263, 226 NE2d 16; Freeman v. Chicago Transit Authority, 33 Ill2d 103, 210 NE2d 191; Kirby v. Swedberg, 117 Ill App2d 217, 253 NE2d 699.

The question of whether the defendant was within the scope of his employment was presented to the jury in the issues instruction stating that such was an affirmative defense. An instruction to define the scope of authority of an employee was given by modifying IPI 50.06 to read as follows:

“One of the questions for you to determine is whether or not Leo Glowacki was acting within the scope of his employment.
“An employee is acting within the scope of his employment if he is engaged in the transaction of business which has been assigned to him by his employer, or if he is doing anything which may reasonably be said to have been contemplated as a part of his employment. It is not necessary that an act must have expressly been authorized by his employer.”

No objection to these instructions was made by plaintiff nor did the plaintiff move for a directed verdict on that point at the close of the evidence. The evidence shows that the defendant was on duty for the city in his various capacities twenty-four hours a day; that the pickup truck furnished the defendant had “City of Minonk” on it; that the defendant did not use the pickup for his personal use; that the defendant had started to work on the day of the occurrence about 5:30 a. m. at the water plant where he did certain chores, patrolled some of the streets, and after some of the other men reported for work, was, at about 7:30 a. m., on his way to his home to have breakfast and to take any phone messages that may have been left there for him, when the collision occurred. The plaintiff testified that he was acquainted with the defendant and recognized him and the city truck at the time of the occurrence. There is ample evidence in the record to support the jury’s finding on the special interrogatory that the defendant was acting within the scope of his employment, as defined in the instruction, at the time of the occurrence,

There is further question as to whether this court can properly review the judgment of the trial court because no motion for post-trial relief was presented to the trial court by the plaintiff. The plaintiff did file a motion to vacate the judgment notwithstanding the verdict but he also filed a notice of appeal before that motion was heard. The filing of a notice of appeal constituted an abandonment of plaintiff’s motion to vacate the judgment notwithstanding the verdict. Corwin v. Rheims, 390 Ill 205, 61 NE2d 40. Section 68.1 of the Civil Practice Act, Ill Rev Stats 1965, c 110, § 68.1, provides for relief to be granted in post-trial motions and in subparagraph (3) it is stated:

“. . . A party against whom judgment is entered pursuant to post-trial motion shall have like time after the entry of the judgment within which to file a post-trial motion.”

And subparagraph (2) provides:

A party may not urge as error on review of the ruling on his post-trial motion any point, ground or relief not particularly specified in the motion.”

Accordingly, as the plaintiff abandoned his motion to vacate the judgment notwithstanding the verdict, there is nothing presented here for review.

Nor can the question of constitutionality of the said statute and the requirement of six months notice be here raised without it having been presented to the trial court for a ruling. Haymes v. Catholic Bishop of Chicago, 33 Ill2d 425, 211 NE2d 690; Schear v. City of Highland Park, 104 Ill App2d 285, 244 NE2d 72.

The judgment of the circuit court of Woodford County is affirmed.

Affirmed.

SMITH, P. J. and TRAPP, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    Thelma Hudspeth, Plaintiff-Appellee, v. James L. Hudspeth, Defendant-Appellant.
    Gen. No. 11,126. (Abstract of Decision.)
    Fourth District.
    May 18, 1970.


author: CRAVEN, P. J.,

text:
    Alexander Lumber Company, Plaintiff-Appellee, v. Ralph Busboom, Defendant-Appellant.
    Gen. No. 11,155.
    Fourth District.
    May 18, 1970.

      Larry P. Cramer, of Urbana, for appellant.
    Mathis, Tumbow & Mathis, of Rantoul, for appellee.
   CRAVEN, P. J.,

delivered the opinion of the court.

Plaintiff filed a small claim complaint in October of 1968, seeking to recover $337.50 for lumber and sundry building material. Summons issued on that date. On November 6, 1968, a default judgment was entered against the defendant for the amount of the account. On December 30, 1968, a citation to discover assets was issued returnable January 15, 1969. The record contains an order of that date finding the defendant to have sufficient assets to pay the judgment and costs and ordering the same paid on or before January 20,1969.

On January 20, 1969, the defendant filed a petition for relief under section 72 of the Civil Practice Act (Ill Rev Stats 1967, e 110, par 72), together with an affidavit in support thereof. In the affidavit it was alleged that on the date the matter was set for hearing he was engaged in “necessary” farm work and that on that date he called the magistrate who was presiding and requested a continuance, and that following the telephone conversation he was under the “mis-apprehension” that a continuance would be granted. Further, the affidavit asserted that the defendant was not indebted to the plaintiff and that another person named in the affidavit charged the goods or merchandise to the defendant without authority and that the person who in fact purchased the merchandise made an effort to have the account transferred from the defendant’s name to the name of the actual purchaser. Plaintiff filed a motion to strike and dismiss the petition asserting that the petition pleaded conclusions, not facts, and disputing the reasonable basis for the defendant to conclude that a continuance would be granted. On argument of counsel, and apparently without any further hearing, the trial court allowed the motion to strike and entered a further order that the defendant pay the judgment on or before February 26, 1969. He did and now appeals.

Initially, the plaintiff asserts the appeal should be dismissed as moot, asserting that a judgment that has been paid is moot, and cites in support thereof Massell v. Daley, 404 Ill 479, 89 NE2d 861, 13 ALR2d 1356 (1949); County of Cook v. Malysa, 39 Ill2d 376, 235 NE2d 598 (1968); and Buford v. Chief, Park Dist. Police, 18 Ill2d 265, 164 NE2d 57 (1960).

Our examination of these cited cases does not support the contention that the payment of a judgment precludes appeal. Rather, we view those cases as ones relating to peculiar fact circumstances, most involving voluntary payment without compulsion, leading to a conclusion of mootness of appeal. We understand the general rule to be that acts performed in obedience to an order of court do not operate as a release of error and that the payment of judgment under such circumstances does not render the matter moot on appeal. In Pinkstaff v. Pennsylvania R. Co., 31 Ill2d 518, 202 NE2d 512 (1964), Mr. Justice Underwood, speaking for a unanimous court, stated (at 523 (202 NE2d at 514)):

“. . . In this, defendant has misconstrued the prevailing law in Illinois, for it is well established that the payment or satisfaction of a money judgment by a judgment debtor does not bar the prosecution of a writ of error or an appeal by such judgment debtor. Richeson v. Ryan, 14 Ill 74 [56 Am Dec 493 (1852)]; Hatch v. Jacobson, 94 Ill 584 [1880]; Armstrong v. Douglas Park Building Ass’n, 176 Ill 298, 301 [52 NE 886 (1898)]; Lott v. Davis, 262 Ill 148 [104 NE 199 (1914)]; Jacksonville Hotel Building Corp. v. Dunlap Hotel Co., 350 Ill 451 [183 NE 397 (1932)]; First Nat. Bank of Jonesboro v. Road District No. 8, 389 Ill 156 [58 NE2d 884 (1945)]; Kars v. Knauf, 13 Ill App2d 219, 141 NE2d 410 [1st Dist 1957].”

Accordingly, we hold that the payment of the judgment is not a bar to this appeal nor does it make moot the issues on this appeal.

We turn next to the issue presented by the petition under section 72 of the Civil Practice Act. Upon the filing of such a petition, the petitioner is required to establish his right to the relief sought either by competent evidence or by affidavits attached to the petition which frames the issue to be determined. Section 72, in substance, requires the petitioner to establish due diligence and the existence of a meritorious defense. Our examination of the petition and the matters set forth in the affidavit attached, together with the counteraffidavit attached to the motion, leads us to the conclusion that the trial court was in error in allowing the motion to strike. Although certain of the matters set forth in the petition and affidavit are in the form of a conclusion of the pleader, nevertheless, sufficient factual matter was set forth which, if true, would definitely establish the existence of a meritorious defense and, if true, would establish reasonable diligence on the part of the defendant.

We further note that the record does not establish that the plaintiff notified the defendant of the default or took any action with reference to an execution until more than thirty days after the rendition of the judgment. This is a proper circumstance to be considered upon application to set aside the default. A section 72 proceeding invokes the equitable powers of the court, although it constitutes the filing of a new suit. It is, of course, an elementary rule of pleading that the plaintiff’s motion to strike admitted as true all well-pleaded facts in the defendant’s petition. Pierce v. Carpentier, 20 Ill2d 526, 169 NE2d 747 (1960). The ultimate question, therefore, is whether these well-pleaded facts constitute grounds to vacate the default judgment. Esczuk v. Chicago Transit Authority, 39 Ill2d 464, 236 NE2d 719 (1968). In A. C. Allyn & Co. v. Tager, 78 Ill App2d 228, 223 NE2d 405 (1st Dist 1966), the court noted that upon considering a petition to vacate and a motion to strike it, with contradictory affidavits, the court would have to hear evidence to pass upon the issues even to deny the motion to vacate the judgment. See also: Washington Mfg. Co. v. American Uniform Rental Co., 73 Ill App2d 49, 218 NE2d 499 (5th Dist 1966); Carlstedt v. Kaufman, 119 Ill App2d 322, 256 NE2d 146 (1st Dist 1970). The judgment of the Circuit Court of Champaign County is accordingly reversed and this cause is remanded to that court for further proceedings consistent with the views herein expressed.

Reversed and remanded with directions.

SMITH and TRAPP, JJ., concur.


author: MR. JUSTICE ENGLISH

text:
    John Mertke, Plaintiff-Appellant, v. Frank Kracik, Defendant-Appellee.
    Gen. No. 52,633.
    First District, Fourth Division.
    November 5, 1969.
    Rehearing denied May 27, 1970.
    Eearl D. Yaffe, Yaffe and Yaffe, of Chicago, for appellant.
    Kenneth E.'Streekert, of Chicago, for appellee.
   MR. JUSTICE ENGLISH

delivered the opinion of the court.

Plaintiff, as lessor, brought a joint action to recover possession of certain premises in Chicago, and for unpaid rent due from defendant-lessee in the amount of $1,750 then accrued. The court rendered judgment in defendant’s favor on both claims. Plaintiff has appealed, and contends that the trial court erred in admitting paroi evidence to alter the terms of the lease agreement upon which the actions are based. The point at issue concerns a payment of $3,600 to plaintiff by defendant prior to execution of the lease, which the trial court credited to defendant as rent paid under the lease.

The lease in question is a standard printed form in which essential terms have been filled in by longhand, . and with a longhand rider attached. It provides for $9,000 rent, payable in 36 installments of $250 for the term beginning April 1, 1965, and expiring March 31, 1968. Both lease and rider were duly executed by the parties.

Defendant testified that he had entered into the lease with plaintiff for the purpose of conducting a rooming-house business on the premises. He admitted that he had not made any monthly installment payments of rent after January, 1967, but claimed that he had paid all rent due under the lease. He stated that plaintiff had asked for $3,600 in advance, which he paid; and that, plaintiff had asked for this payment “In case you no pay rent.” This latter testimony was objected to by plaintiff’s attorney on the ground that the terms of the written instrument could not be changed by paroi evidence, but the court overruled the objection. Defendant further testified that the $3,600 had been paid before they made a deal and prior to the execution of the lease; that he had not purchased anything with this money; and that it had been given to plaintiff as a security deposit applicable to the monthly installment payments. The $3,600 was paid in three payments between March 13 and 18, 1965. (The lease was executed on April 1, 1965.) Fifteen months later, defendant requested and obtained from plaintiff a single receipt for these payments. This receipt, prepared by plaintiff, recited that the payments had been made “for a 3 years lease, at a low monthly rental of $250.” Defendant did not accept the receipt, as he claimed it should have described the $3,600 as “rent security” instead of “low payment rent.”

Ida Kleinschmit testified on behalf of defendant that she had lived in plaintiff’s rooming house while working with defendant. She was responsible for arranging a meeting between plaintiff and defendant at which plaintiff offered the lease to defendant and demanded $3,600 “as deposit in case [defendant] doesn’t pay the rent.” The lease was not executed in the witness’ presence.

Plaintiff testified that the $3,600 payment (in effect, $100 per month for the term of the lease) was purchase money to buy the rooming-house business, and was distinct from the lease agreement to pay $250 monthly. When Mrs. Kleinschmit brought defendant to him, she said, “This man wants to buy your business.” In the conversation which then took place, he told defendant, “This business costs $3600 and costs you a low rental of $250.” He issued separate receipts for payments of $2,500 by bank draft on March 13, 1965, $100 in cash, and an additional $1,000 certified check on March 15,1965. The single receipt was given later, and indicated that it cancelled these prior receipts. The lease was signed after payment of the $3,600.

The basic issue before this court is whether the court erred in allowing testimony relating to the $3,600 payment and in deciding that it should be applied to rent under the lease. Plaintiff contends that this amounted to a variation in the terms of the written lease which “speaks for itself,” and that the court improperly resorted to paroi evidence to change the terms of a document which is clear and unambiguous on its face.

Where, as here, an agreement is reduced to written contract form, complete on its face and unambiguous, the writing affords the only evidence of the terms of the contract, and paroi evidence is not admissible to alter the terms as written. Lane v. Sharpe, 3 Scam 566; Armstrong Paint & Varnish Works v. Continental Can Co., 301 Ill 102, 133 NE 711. The paroi evidence rule is one of substantive law, a rule of contract construction. See Cleary, Handbook of Illinois Evidence, 1963, § 16.3. It was well explained in the Armstrong case, where the court stated at page 106:

When parties sign a memorandum expressing all the terms essential to a complete agreement they are to be protected against the doubtful veracity of the interested witnesses and the uncertain memory of disinterested witnesses concerning the terms of their agreement, and the only way in which they can be so protected is by holding each of them conclusively bound by the terms of the agreement as expressed in the writing. All conversations and paroi agreements between the parties prior to the written agreement are so merged therein that they can not be given in evidence for the purpose of changing the contract or showing an intention or understanding different from that expressed in the written agreement. . . . But the contentions of the parties to the contract are not the criterion which should guide the court in determining whether the written contract is a full expression of the agreement of the parties. The court must determine this from the writing itself. If it imports on its face to be a complete expression of the whole agreement, — that is, contains such language as imports a complete legal obligation, — it is to be presumed that the parties introduced into it every material item and term, and paroi evidence cannot be admitted to add another term to the agreement although the writing contains nothing on the particular term to which the paroi evidence is directed.

Defendant asserts that the paroi evidence rule cannot be invoked here since the testimony was not objected to. The premise of this contention is factually incorrect, however, because plaintiff’s counsel did object specifically to the introduction of the questioned testimony concerning the $3,600 payment.

The lease agreement is unequivocal: it contains no mention of a $3,600 payment. The only provision relating to payment sets forth defendant’s agreement to pay

as rent for said demised premises the sum of nine thousand ($9,000.00) dollars payable in thirty six installments of two hundred fifty ($250.00) dollars each in advance on the first day of each and every month of said term. . . .

We conclude that all evidence concerning the $3,600 payment was improperly admitted. The judgment of the Circuit Court is reversed, and the cause is remanded with direction to enter judgment in favor of plaintiff for both possession and rent.

Reversed and remanded with directions.

McNAMARA and STAMOS, JJ., concur.

       Plaintiff points out that the rental called for by the lease for the remainder of the term when defendant stopped making monthly payments, was not $3,600 but $3,B00.


author: MR. PRESIDING JUSTICE STAMOS

text:
    Stanley Turzynski, Plaintiff-Appellant, v. Samuel A. Libert, Defendant-Appellee.
    Gen. No. 52,523.
    First District, Fourth Division.
    January 21, 1970.
    Rehearing denied May 8, 1970.

      D. Adolphus Rivers, of Chicago, and Stanley Turzynski, pro se, of Chicago, appellant.
    Kachigian & Buonafede and Michael Levin, of Chicago (Michael Levin, of counsel), for appellee.
   MR. PRESIDING JUSTICE STAMOS

delivered the opinion of the court.

Plaintiff, Dr. Stanley Turzynski, brought suit to enjoin and restrain defendant, Dr. Samuel A. Libert, from resuming the practice of medicine in violation of a restrictive covenant. Plaintiff appeals from the judgment of the Circuit Court of Cook County which dismissed plaintiff’s complaint for want of equity and taxed costs including Master’s fees against plaintiff.

On May 4, 1961, the parties entered into a written agreement whereby defendant agreed to sell to plaintiff certain real estate, personal property and medical equipment, accounts receivable and defendant’s medical practice, located at 6165 Archer Avenue, Chicago, Illinois, and known as the Garfield Medical Center, for the sum of $185,000.

The agreement contained a provision, identified as “par 6,” that defendant would not practice his profession as a general practitioner or open a new office for the general practice of medicine directly or indirectly after the closing date of the transaction within a radius of 15 miles from 6165 Archer Avenue, Chicago, excepting therefrom the downtown area of the City of Chicago, River Forest and Oak Park, Illinois.

The sale was consummated on August, 19, 1961, and plaintiff entered upon the operation of the medical center. Pursuant to another provision of the agreement defendant was to be retained as an employee of plaintiff until December 1, 1961 for the purpose of effecting a “smooth transfer” of the medical practice.

Approximately two years after the consummation of the foregoing sale, plaintiff was advised that defendant was preparing to open an office and engage in the general practice of his profession next door to the premises of plaintiff, at 6167 Archer Avenue, Chicago, Illinois. Plaintiff thereupon initiated the instant litigation predicated upon the restrictive covenant.

Defendant filed as part of his affirmative defense to plaintiff’s complaint for an injunction, a certain document, Exhibit No. 3, dated December 1, 1961, and allegedly executed by the parties. The document commenced with the caption, “Amendment to the Memorandum of Agreement of May 4, 1961 between Dr. Samuel A. Libert and Dr. Stanley Turzynski,” and recited the following:

“(1) Whereas paragraph numbered 6 on page three
(3) is ambiguous and its validity questioned because line five states a prohibitive 15 mile radius but does not give a time limitation and
“(2) Whereas Dr. Turzynski desires to capitalize financially on the good name and offices of Dr. S. A. Libert
“Dr. S. Turzynski and Dr. S. A. Libert do mutually agree to cancel and set aside the conditions of section 6 of said agreement provided Dr. S. A. Libert agrees to remain employed by Dr. S. Turzynski for an additional three (3) months beyond December 1, 1961 as per paragraph or sction (sic) numbered 5.
“Dated and signed Dec. 1,1961.
(S) Samuel A. Libert, M.D.
(T) Samuel A. Libert, M.D.
(S) Stanley Turzynski,
(T) Stanley Turzynski, M.D.”

Plaintiff’s amended reply alleged that on or about December 1, 1961, at the Medical Center, the parties did execute a supplemental agreement, but that it was Exhibit No. 2. It provided that plaintiff was to make all subsequent installment payments to a named depository to the credit of defendant who was not to make any withdrawals therefrom until January 2,1963.

Plaintiff also alleged in his reply that if his signature appeared on Exhibit No. 3, it was obtained thereon by fraud or misrepresentation by defendant; that plaintiff executed Exhibit No. 2 at defendant’s request and that contemporaneously, by reason of defendant’s fraud and misrepresentations, plaintiff unknowingly executed Exhibit No. 3 in the belief that it was a copy of Exhibit No. 2.

In this court plaintiff, pro se, filed a reply brief and presented his oral argument. Plaintiff’s briefs raise the following contentions:

(1) There was never an agreement to enter into an amendment to cancel the restrictive covenant.
(a) There can be no agreement without a meeting of the minds of the parties to the contract.
(b) There must be an offer and an acceptance before a contract can come into being.
(2) The reviewing court has the duty to make its own independent investigation of the facts giving due consideration to the findings of the Master to determine whether the decree rendered by the Chancellor was supported by the evidence and in accordance with the law.
(3) The party who asserts the affirmative defense has the burden of proving its existence by a preponderance of the evidence.
(4) Where this is a lack of or gross inadequacy of consideration relief is afforded in equity to set aside such contract.

Plaintiff testified as follows:

He had a conversation with defendant about changing the payment provisions of the agreement and this occurred sometime in December, 1961. This conversation took place at the medical center and defendant advised plaintiff that this modification would allow defendant certain income tax advantages and handed plaintiff two documents to execute: Plaintiff read the top document and its copy and observed that it pertained to what he and defendant had just discussed. He retained both documents and laid them on a desk in the office without signing them and returned to his patients. (He also testified, however, that after he read the documents, defendant took them back.) Plaintiff did not see them again until three hours later when defendant inquired of plaintiff if he had signed and when plaintiff replied in the negative, defendant urged him to do so. Plaintiff then alone entered the office, closed the door, saw the documents ón the table, one directly over the other, and he proceeded to sign them. He did not look at the bottom document before he signed it. Plaintiff testified that when he affixed his signature to the first or the top document, he also wrote in the word “Chicago” above his signature. (This entry appears on Exhibit No. 2.) He did not make this entry on the bottom or second document when he signed it. After making the entry of the word “Chicago” on the first or top document and signing each document, he left them on the table and departed from the office.

Defendant testified that he recalled the day Exhibit No. 3 was executed because it was December 1, 1961, and was the termination date of his employment with plaintiff and unless the parties entered into this particular agreement, defendant’s obligations in this regard pursuant to the original agreement were fulfilled. Plaintiff wanted defendant to remain for an additional three months; this had been discussed in the previous months as well as the release of defendant from the restrictive covenant.

Defendant related that Exhibit No. 2 was executed four to five days or a week before Exhibit No. 3 and both were executed at the medical center. (Only one copy of Exhibit No. 2 and Exhibit No. 3 were executed by the parties. A copy of Exhibit No. 3 was handed to plaintiff’s receptionist-clerk, who then filed it.)

Plaintiff’s former receptionist-clerk was called as a witness on behalf of defendant and she related that she was present at the medical center office on December 1, 1961. She had seen Exhibit No. 3 at that time and remembered defendant asked plaintiff to sign and plaintiff responded he would if defendant remained working for plaintiff. She recalls that plaintiff signed Exhibit No. 3 in her presence and there was a yellow copy. Defendant handed this yellow copy to her and told her it was a very important document and she should file it. This was all in the presence of plaintiff. She had no recollection of ever having seen Exhibit No. 2 on December 1,1961.

The Master found that defendant remained employed by plaintiff for an additional three months beyond December 1, 1961, and that Exhibit No. 3 was not procured as the result of any trick or fraud on the part of defendant nor was the consideration grossly inadequate and recommended that the complaint be dismissed for want of equity. The trial judge confirmed and approved the Master’s Report and dismissed the suit.

OPINION

Plaintiff initially contends that his signature on Exhibit No. 3 was secured by fraud and deceit perpetrated by defendant and thus was of no legal effect because it lacked the essential legal requisites of an agreement.

In his brief plaintiff argues, “During the three hour interval between the reading and signing of said two instruments, the defendant substituted the copy of the addendum (Exhibit No. 2) with a copy of the fictitious amendment (Exhibit No. 3), having the instruments so arranged, that the substituted copy was covered entirely with the original of the addendum (Exhibit No. 2), except for a space to sign, to pose as the copy of the addendum (Exhibit No. 2).”

In Papke v. The G. H. Hammond Co., 192 Ill 631, 61 NE 910 (1901), the court at page 635 said:

“Fraud in the execution of the instrument is practiced, where the instrument is misread to the party signing it, or where there is a surreptitious substitu tian of one pwper for another, or where, by some other trick or device, a party is made to sign an instrument which he did not intend to execute.” (Emphasis supplied.)

In Bundensen v. Lewis, 368 Ill 623, 15 NE2d 520 (1938), the court stated at page 632:

“Rules governing transactions of this character have frequently been announced by this court. In Weininger v. Metropolitan Fire Ins. Co., 359 Ill 584, it was said: ‘The presumption very properly is that all men are honest. Where fraud is charged it must affirmatively be proved by clear and convincing testimony. It cannot be established upon mere suspicion.’ The burden is upon the one alleging fraud to prove it by ‘such clear and convincing evidence that the mind is well satisfied that the charge is true.’ This is the rule announced in Jaworski v. Sujewicz, 334 Ill 19; also Schiavone v. Ashton, 332 id. 484; Mosbarger v. Brown, 313 id. 238; Carter v. Carter, 283 id. 324.”

In the instant matter a cursory or superficial examination of Exhibits Nos. 2 and 3 would reveal they are not an original and copy. Plaintiff wrote in the word “Chicago” above his name on the first or top document, which he testified was Exhibit No. 2 but he did not make this entry upon the document he testified he assumed was a copy of Exhibit No. 2. It is singularly significant that although both Exhibits Nos. 2 and 3 were typewritten, Exhibit No. 2 was on plain paper, whereas Exhibit No. 3 was on the letterhead of an “S. Lee, General Agent.” Exhibit No. 3 had two typewritten lines for signatures with the parties’ names typewritten under the lines. Exhibit No. 2, however, did not have any lines for signatures nor any typewritten names.

Plaintiff’s theory suggests that defendant would anticipate that plaintiff would not immediately execute the documents, but that there would be another fortuitous circumstance of a three-hour passage of time in which defendant would have ample opportunity to substitute a copy of Exhibit No. 2 for Exhibit No. 3 and further anticipate that plaintiff alone in a room would not glance at the substituted document and discover defendant’s alleged fraudulent scheme. We cannot find that there was a “surreptitious substitution” or that there was a “trick or device” by which plaintiff was “made to sign an instrument which he did not intend to execute.” Papke, supra.

Plaintiff also contends that there was such a gross inadequacy or lack of consideration that Exhibit No. 3 should be set aside. Plaintiff relies upon the following authorities in support of this contention. Burroughs v. Mefford, 387 Ill 461, 56 NE2d 845 (1944); Logue v. Von Almen, 379 Ill 208, 40 NE2d 73 (1941); Page v. Keeves, 362 Ill 64, 199 NE 131 (1935); Spencer v. Wilsey, 330 Ill App 439, 71 NE2d 804 (1947) and Illinois Kaolin Co. v. Goodman, 252 Ill 99, 96 NE 867 (1911).

In Burroughs, supra, the aggrieved party received no consideration for the execution of a deed procured by the fraud of her guardians on the day she attained her majority. In Logue, supra, there was ample evidence that aggrieved parties were ignorant of the effect of executing a mineral deed and lacked knowledge of its contents and were illiterate and were dealing with a person who was a director in a bank having vast real estate holdings and possessing extensive business experience. The court in Logue commented that the transaction lacked fair and open dealing which equity demands where the parties do not stand upon an equal basis. In Page, supra, an eighty-one-year old, sick and infirm woman with mental illness was induced to trade her residence property for business property whose existing mortgage exceeded the sales price. The court commented that the consideration received was pitifully inadequate, in fact, it had no value. In Spencer, supra, the parties were joint venturers and the evidence disclosed a breach of a fiduciary relationship and clearly revealed that aggrieved party was induced by fraud and misrepresentation to transfer his interest in an invention. In Kaolin, supra, the evidence clearly revealed that aggrieved party was induced to execute leases by fraud and misrepresentation. That previous to signing, the aggrieved party could not read the small type, so when it was read to her, certain material interpolations were falsely read to her. The court further found that the lease lacked mutuality.

Plaintiff’s authorities correctly recite abstract propositions of law, see Burroughs, supra, page 467:

“Where the inadequacy of consideration is so great as to shock the conscience of a court of equity, and stamp the entire transaction with fraud from its inception, relief will be afforded in equity. (Fecht v. Freeman, 251 Ill 84; Schwarz v. Reznick, 257 Ill 479; Witherwax v. Riddle, 121 Ill 140.)”

In Fecht, supra, the aggrieved party, an insane person, exchanged a farm worth $12,500 for $1,250 cash, worthless mining shares and real estate mortgaged in excess of its value. In Schwarz, supra, the court found conclusive evidence of fraud. The evidence revealed that the aggrieved party was fraudulently induced to purchase by trade a $450 piece of real estate for a farm he had previously purchased for $4,500. In Witherwax, supra, the aggrieved party alleged and proved conclusively that he was fraudulently induced to pay the sum of $3,000 for alleged farm property that was worthless. It was proved that the seller fraudulently presented two persons to the aggrieved party who misrepresented that they were knowledgeable regarding the characteristics and value of the farm.

As we have pointed out, the foregoing cited authorities are readily distinguishable from the case at bar. Paragraph 5 of the original agreement referred to in Exhibit No. 3, provided that defendant was to effect a “smooth transfer” of the medical practice to plaintiff and also that defendant was not to publicize the sale but would remain at a salary of $300 a week for the purpose of effecting the transfer and to render medical services and perform administrative functions he ordinarily rendered while he was owner. We cannot say that the consideration in the case before us was grossly inadequate as to shock the conscience and require equity to intervene. The finding that the consideration for Exhibit No. 3 was not grossly inadequate is supported by the evidence. Defendant agreed to remain with plaintiff for an additional 3 months in consideration of the cancellation of the restrictive covenant. This arrangement was of mutual benefit.

We find that defendant established his affirmative defense by a preponderance of the evidence and further find that plaintiff failed to establish fraud “by such clear and convincing evidence that the mind is well satisfied that the charge is true.” Bundensen, supra.

We hold that the decree rendered by the court was a proper one under the law and the evidence and affirm the judgment. Gans v. Marlowe Pen Co., 112 Ill App2d 52, 250 NE2d 811 (1969).

Judgment affirmed.

DRUCKER and LEIGHTON, JJ., concur.


author: MR. JUSTICE SMITH

text:
    Justin Hulman, Commissioner of Savings and Loan Associations of the State of Illinois, Plaintiff-Cross-Appellee, v. Lawn Savings and Loan Association, Defendant-Appellee-Cross-Appellant.
    Gen. No. 53,401.
    First District.
    January 23, 1970.
    Rehearing denied June 23, 1970.

      Henry W. Kenoe and Raphael Fine, of Chicago, for appellee-cross-appellant Lawn Savings and Loan Association.
    Albert E. Jenner, Jr., Philip W. Tone and John G. Stifler, of Chicago (Raymond, Mayer, Jenner & Block, Alan J. Moscov, General Counsel, Paul McGraw, Associate General Counsel, and Daniel J. Goldberg, Assistant General Counsel, of counsel), for appellant Federal Savings and Loan Insurance Corporation, Receiver.
    William J. Scott, Attorney General of State of Illinois, of Chicago (Donald J. Veverka, Special Assistant Attorney General, Frank J. McGarr, First Assistant Attorney General, and Francis T. Crowe, Assistant Attorney General, of counsel), for cross-appellee Justin Hulmán.
   MR. JUSTICE SMITH

delivered the opinion of this court.

The directors of the defendant loan association adopted a resolution requesting the Commissioner of Savings and Loan Associations to take over custody of their association under the provisions of III Rev Stats 1967, c 32, § 848. This he did and sent in his examiners. Subsequently he designated a receiver under § 921 of the statute and requested the Attorney General to file a bill in equity for the orderly liquidation of the loan association as directed by § 922 of the same statute. The court entered an order providing for the liquidation and dissolution of the association and in that order appointed the former president of the association to be a liaison officer and directed the receiver to give him access to the premises, office help, secretarial help and “other accommodations reasonably needed by him.” This appeal is by the receiver from that part of the order appointing the liaison officer. The loan association cross-appeals from the decree ordering the dissolution and liquidation of the association on the ground that such a dissolution order must be based upon independent facts submitted to the court and that the decree in the case at bar was not supported by the manifest weight of the evidence.

If the order of dissolution entered by the court was unauthorized as contended in the cross-appeal, then the receiver’s appeal contending that the trial court went beyond his statutory authority in appointing a liaison officer falls by the wayside. We therefore first consider the propriety of the dissolution order.

At the very threshold of our inquiry, we are confronted with the question as to whether or not we are in the proper forum at the proper time with the proper issue. We think not. The Supreme Court in People ex rel. Knight v. O’Brien, 40 Ill2d 354, 240 NE2d 686, pretty well delineates the respective functions of the Commissioner, the receiver, the Attorney General and the court under § 921, et seq., of the statute. While that case deals with a review of an action of the receiver in selecting his own attorney and is not concerned with a review of any decision of the Commissioner in appointing a receiver, such observation does not militate against the decision as holding that there is a vast difference between a court created equity receivership and a statutorily established administrative receivership. We deal with the latter. In the latter, the jurisdiction of a trial court in matters of liquidation must be found in the statute itself and its jurisdiction “is limited to the terms of the act conferring the power.” People v. Peoria Life Ins. Co., 357 Ill 486, 490, 192 NE 420, 421. Under § 921 of the statute where the Commissioner determines that one or more reasons for taking custody continues to exist through the period of his custody of the association, he shall appoint a receiver. After the receiver has been so appointed, then § 922 of the statute directs the Commissioner to instruct the Attorney General to file a complaint in equity “in the name of the Commissioner in the circuit court of the county in which such association or trust is located and against the association or trustees or liquidators, . . . for the orderly liquidation and dissolution of the association or trust and for an injunction restraining the officers, directors, trustees, or liquidators, from continuing the operation of the association or trust.” It is therefore apparent that the jurisdiction of the court is not triggered until after custody has been taken, after the receiver has been appointed “for the purpose of liquidation” and that the use of the court under said section is not to determine whether a receiver should be appointed or whether a dissolution is necessary, but to provide a forum “for the orderly liquidation and dissolution of the association or trust and for an injunction. . . .” Section 923 of the statute prescribes the duties and responsibilities of the receiver as (a) to sell and compound all bad or doubtful debts on such terms as the court shall direct, (b) to sell the real and personal property of the association on such terms as the court shall direct, and (c) to apply to the court for the authority to borrow money to protect the assets, etc., after notice to the parties in interest and such loans may be obtained and assets pledged as security for such loans upon such terms and conditions as may be deemed expedient and necessary. Thus, the power conferred upon the court is the power to prescribe the terms and conditions of a sale or pledge, prescribe the notice and pass upon petitions for the selling, conveying and the marshalling of the assets of the association and O’Brien so states.

The association contends that even though the foregoing may be true, that since there is a provision for judicial review of a custody proceeding through administrative review and through direct proceedings in the circuit court, like avenues for review should obtain in the dissolution of a loan association. The difficulty with this position is that under § 852 of the Act, there is a specific provision that where a contention is made that there are no legal grounds for taking custody of the association, parties in interest may within ten days’ notice file a suit in the circuit court for a trial de nova on the Commissioner’s determination as to custody. There is no such specific provision where either liquidation or dissolution is concerned.

Indeed in 1955, section 860 of the statute provided that any person who felt himself aggrieved by any decision, order or action of the auditor might apply to the circuit court by filing a petition setting forth the subject matter of his grievance and the matter should be tried de nova by the court. Ill Rev Stats 1955, c 32, § 860. In West End Savings & Loan Ass’n v. Smith, 16 Ill 2d 523, 525, 158 NE2d 608, 609, the Supreme Court held this section of the statute unconstitutional and stated “. . . where authority has been conferred upon administrative agencies to perform functions of an executive nature, provisions for trial de nova in courts of law violate the separation-of-powers principle.” In that case the court clearly distinguishes between the power of a court to determine if administrative findings and orders have any support in the evidence from a power to hear new evidence or to reweigh the evidence or to try the issue de nova. That case, therefore, squarely meets the issue of whether or not the trial court in this proceeding or this court on review has any jurisdiction to allow a trial de nova on the issue of liquidation and dissolution as the association suggests. Following this decision, the legislature amended § 860 to provide for administrative review and stated:

“Except as otherwise specifically provided by this Act, any person who deems himself aggrieved by any decision, order, or action of the Commissioner may receive a hearing as provided in Sections 7-21 through 7-24 of this Act.” Ill Rev Stats 1967, c 32, § 860.

Under § 922 of the Act which provides for the jurisdiction of the trial court to dissolve an association no review is “specifically provided” from the order of the Commissioner determining that “liquidation and dissolution was necessary.” There is a means whereby the association might have reviewed this determination of the Commissioner by filing within ten days after the appointment of the receiver a complaint before the Savings and Loan Board. Ill Rev Stats 1967, c 32, § 861. If the aggrieved party was still unhappy after the final determination of that Board, then § 864 of the statute provides for a judicial review of the entire action under the Administrative Review Act. Ill Rev Stats 1967, c 110, § 264, et seq. There is therefore provided a judicial review of the judgment of the Commissioner in determining that liquidation and dissolution is necessary. In People ex rel. Chicago & N. W. Ry. Co. v. Hulman, 31 Ill2d 166, 169, 201 NE2d 103, 105, the court stated:

“. . . [I]t has become firmly established that where an act creating or conferring power on an administrative agency expressly designates that judicial review will be accomplished under the Administrative Review Act, the employment of preexisting methods of securing judicial review is prohibited.”

In addition, we would point out that prior to 1955, there was included in the Act a proviso for an aggrieved person to obtain a show-cause order and to compel proof of the reasonableness of the appointment of a receiver. In People v. Logan County Building & Loan Ass’n, 369 Ill 518, 17 NE2d 4, the Supreme Court held that having failed to directly attack the appointment of a receiver by the only method provided for by the then statute when such a remedy was available, the respondent by its own inaction had precluded itself from assailing the propriety of the auditor’s appointment collaterally in the proceedings then before the court. The association dismisses this case with the assertion that it can best be described as an unfortunate remnant from the days when the courts were yet “threading their way through the emerging mass of administrative law.” The association may dismiss this pronouncement of the Supreme Court with such an assertion, but we are not at liberty to do so. The issue the association now seeks to present could appropriately and properly have been resolved through administrative review of the Commissioner’s determination to liquidate by appeal to the Savings & Loan Board. The legislature has established a clear line of demarcation between what transpired before and what transpired after the filing of the complaint under § 922. If there is an incongruity in providing a trial de nova on the issue of custody and not so providing on the issue of liquidation and dissolution, the remedy lies with the legislature and not with the courts.

The association also distinguishes the Logan County case by suggesting that the Attorney General was to file a “bill” under the old statute, Ill Rev Stats 1937, c 32, § 251, whereas under the present statute the Attorney General is to file a “complaint in equity” and that by the choice of such language, the legislature intended to enlarge the powers under the former into a full-blown equity proceeding with unrestricted equitable powers. Such a construction, in our judgment, distorts simple language into wholly unintended consequences. The association also points out that the previous Act provided a direct judicial test of the appointment of a receiver by a trial de nova. This is true. The same proviso was eliminated from the present Act and having been so eliminated, it must be presumed that it was intentionally done. If it was intentionally done, the trial de nova on the Commissioner’s determination to liquidate is nonexistent under the present statutory pattern. We therefore conclude that the association is in the wrong forum at the wrong time under the wrong procedure for a determination of the issue it here seeks to present.

The receiver complains of that part of the order providing for a liaison officer and the appointment of the former president of the association to serve in that capacity. It was held in O’Brien that the trial court had no authority to select the receiver’s attorney and there stated that “nowhere in the Act is authority conferred on the court to choose or appoint counsel or any other employee of the receiver.” It is noted from the record that the trial court was seeking someone who could and would inform the court and the reserve shareholders of what was going on and stated that this was desirable in the proper performance of his duties as trial judge. The association urges that the liaison officer would not in any manner interfere with the receiver, would not disturb him in the daily performance of his duties and would only be available as someone who was familiar with the details of the past transactions of the association. It is pointed out that in this way the action of the trial court is so much different from the appointment of an attorney. The latter would have a daily voice in the transaction of the business whereas the liaison officer would only be around in case he was needed. If the liaison officer is not going to do anything, there is no occasion for him to have secretarial help, space or any advance information about what is going on in the receivership. So far as furnishing information to the court is concerned, all of the stockholders are notified of the proceedings in court that the liaison officer would furnish and the court would be fully advised. As a matter of fact, the former president and his attorneys have cooperated on request with the receiver. The fact that they may have appropriately and properly done so does not justify having them under feet day in and day out, nor does their cooperation father a power in the trial court to appoint such a liaison officer when nowhere in the statute is such authority given.

Accordingly, the order of the trial court appointing a liaison officer is reversed and the cause remanded with directions to vacate that portion of the order of dissolution in accordance with the views herein stated. In all other aspects, the order appealed from is affirmed.

Reversed and remanded in part; affirmed in part.

CRAVEN, P. J. and TRAPP, J., concur.


author: MR PRESIDING JUSTICE McCORMICK BURKE, J.,

text:
    Winter & Hirsch, Inc., Plaintiff-Appellee, v. Dominic Passarelli and Antoinette Passarelli, Defendants-Appellants.
    Gen. No. 53,205.
    First District, Second Division.
    March 10, 1970.
    Rehearing denied May 8, 1970.

      BURKE, J., dissenting.
    Seariano and Gubbins, of Chicago Heights, for appellants.
    Benjamin J. Schultz, of Chicago, for appellee.
   MR PRESIDING JUSTICE McCORMICK

delivered the opinion of the court.

This appeal is taken from an order denying a motion to vacate a judgment by confession. The judgment was entered against the defendants, Dominic and Antoinette Passarelli, on behalf of the plaintiff, Winter & Hirsch, Inc. Defendants made a motion before the trial court to vacate the judgment; the motion was denied, and from that order of the trial court this appeal is taken. The questions before this court are: 1) whether the loan entered into between the parties provided for a usurious rate of interest; and 2) whether the plaintiff was a holder in due course of the note evidencing the loan in question.

The defendants first contacted the Equitable Mortgage & Investment Corporation (hereafter referred to as Equitable), attempting to secure a loan. Equitable is a brokerage firm which makes its profits by selling loan contracts to finance companies at a discount. In this case Equitable was to lend the defendants $10,000. Of the several provisions in the note, we will consider the following: 1) a provision whereby the defendants agreed “for value received” to repay a total of $16,260 over a period of 60 monthly payments of $271 each; and 2) a confession of judgment clause. The promissory note signed by the defendants provided for payment to the bearer and was secured by a trust deed.

The maximum legal rate of interest which could have been charged the defendants was exceeded by Equitable, and it is uncontested that Equitable charged a usurious rate of interest. The question to be resolved by this court, however, is whether the defense of usury is available for use against the plaintiff, who claims to be holder in due course of the promissory note and therefore claims to have taken it free from the defense of usury. In the trial court the defense of usury was rejected and judgment was entered against the defendants based on the court’s conclusion that the plaintiff was a holder in due course of the promissory note.

In this appeal the defendants pray that the trial court’s order be reversed and that the loan be held to be usurious. Defendants further ask that the trial court be directed to enter an order allowing them twice the rate of interest, plus attorney’s fees and court costs. They seek this relief based on Ill Rev Stats 1965, c 74, § 6. At the time of the original transaction that section allowed one aggrieved by the imposition of a usurious rate of interest to be freed of the obligation to pay any interest at all, but an amendment to the statute, in effect at the time of trial, granted one the right to a penalty in the amount of double the usurious interest charged, plus attorney’s fees and court costs.

Defendants defaulted on the note and the plaintiff obtained a judgment by confession. At the trial the defendants attempted to show that before the plaintiff purchased the note it knew of the usurious interest being charged, and consequently could not have become a holder in due course. Defendants point out that the loan application which the defendants filled out on January 7, 1963, has on it the name of the plaintiff. They also call attention to the testimony of Dominic Passarelli that he had been told by an agent of Equitable that Winter & Hirsch might give them $10,000. By the terms of the promissory note the monthly payments were to be made at the office of Ralph E. Brown, an attorney for plaintiff.

The most compelling fact presented to the court is that plaintiff issued a check to Equitable for $11,000 on February 18, 1963, with the notation on the stub that the funds were for “the Passarelli deal,” but the defendants did not receive the $10,000 until February 28, 1963, ten days later. In other words, the plaintiff had extended the money to Equitable for the Passarelli loan prior to the time the defendants executed the note which plaintiff claims to have bought from Equitable. This fact renders inapposite an entire series of cases upon which plaintiff relies. Those cases hold that a loan may be discounted at more than the usury rate if the purchaser is without knowledge that the note was originally tainted with usury. Stevenson v. Unkefer, 14 Ill 103; Sherman v. Blackman, 24 Ill 345; Colehour v. State Sav. Institution, 90 Ill 152. The critical factual distinction between those cases and the one before us is that the plaintiff in the instant case provided the money for the usurious loan before the loan was actually made, whereas in the cited cases the party claiming to be the innocent holder of the usurious note had purchased it subsequent to its execution.

On oral argument counsel for plaintiff argued that there must have been a clerical error in the dates, and that no loan company would have given out money without the loan contract in its possession. The insurmountable difficulty with counsel’s argument is that the date of the check issued to Equitable (February 18) and the date of the note executed by the defendants (February 28) are clearly established through the admission into evidence, without objection, of the check issued to Equitable and the note signed by the defendants. This court must accept those dates as accurate.

From these dates it appears that the plaintiff was a cooriginator of the note since it advanced the funds for the usurious loan before the loan was formalized. As a cooriginator it is charged with the knowledge of the terms of the loan, and that knowledge includes information regarding anticipated return on its investment. Such information should have made it clear that a usurious rate of interest was being charged the defendants; nevertheless, the plaintiff still elected to consummate the transaction, and it must now accept the consequences.

We note, however, that the plaintiff has argued that it did not give the $11,000 to Equitable until after it saw the loan contract; in other words, that it was a purchaser of the note after it had already been executed. Although the facts do not sustain this contention because of the respective dates on which the check to Equitable was issued and the note signed by the defendants, even if that version were correct, we would hold for the defendants.

If the note was seen, as alleged by plaintiff, prior to its giving Equitable $11,000, then the plaintiff also saw that the defendants had signed a note promising to repay $16,260. From the face of the note one cannot ascertain the principal amount the defendants had received; it can only be known that “for value received” the defendants agreed to repay $16,260. We feel, however, that as reasonable businessmen, assuming arguendo that plaintiff did not know the truth, it should have raised the question of why Equitable was willing to sell a $16,260 note for $11,000. The difference between what the plaintiff was paying Equitable and the amount of the note, was a charge beyond that permitted under the usury statute, and plaintiff should, therefore, have inquired how much money the defendants were receiving. We cannot permit parties to intentionally keep themselves in ignorance of facts which, if known, would defeat their unlawful purpose.

The Uniform Commercial Code (Ill Rev Stats 1965, c 26, § 3-304(1)) provides that when an instrument is so incomplete as to call its validity into question, a purchaser of that instrument is on notice of the possibility of a claim against it. In this case we feel that the instrument, without the information as to the principal sum of the loan extended to the defendants, was “so incomplete” as to call its validity into question after plaintiff learned that it was able to buy it for only $11,000.

In Springer v. Mack, 222 Ill App 72, the court said at page 75:

“The question of usury was discussed exhaustively and the authorities reviewed in the case of Clemens v. Crane, 234 Ill 215, where it was held, in substance, that in determining whether the essential elements of usury are present in a particular case, the intention of the parties, as the same appears from the facts and circumstances of the case, may be considered in .connection with other evidence. The court also said, p 231:
“ ‘The form of the contract is not conclusive of the question. The desire of lenders to exact more than the law permits and the willingness of borrowers to concede whatever may be demanded to obtain temporary relief from financial embarrassment have resulted in a variety of shifts and cunning devices designed to evade the law. The character of a transaction is not to be judged by the mere verbal raiment in which the parties have clothed it, but by its true character as disclosed by the whole evidence. If, when so judged, it appears to be a loan or forbearance of money for a greater rate of interest than that allowed by law, the statute is violated and its penalties incurred, no matter what device the parties may have employed to conceal the real character of their dealings.’ ”

By failing to include the principal amount loaned to the borrower on the face of the loan contract or note, a subsequent purchaser of that contract is able to say “I had no idea that usury was involved. I simply bought the paper because it was a good buy.” If the principal amount were shown, however, all subsequent purchases would be put on notice if usury were involved, and they could not avoid their own involvement in the charging of a usurious rate by the purchase of such paper.

We feel we are justified in saying that where it appears from the facts and circumstances of the particular transaction under review that a reasonably prudent businessman would have found the purchase suspicious, he should inquire as to the truth. One should become suspicious when, as here, he is himself able to purchase paper at a price which is in itself so far below the amount to be repaid from the borrower that because of that differential the contract would have been usuripus had it been the original transaction. The suspicion should be all the more compelling when the paper is bought from a broker or other company that is in the business of selling such paper. Since brokers are in the business of selling loan contracts for a profit, they are likely to have loaned out less than the amount for which they are willing to sell the contract to another. Thus, if one is able to buy a loan contract from a broker for $11,000, it is more than likely that the broker had loaned some figure less than the $11,000, and the broker’s profit then becomes the difference between the amount he actually loaned and that for which he sold the contract. It would then appear likely that when this difference is itself usurious, the original transaction was also. Stevenson v. Unkefer, 14 Ill 103, and similar cases do not dictate a contrary result.

In Stevenson, the note for $800 was payable in Baltimore bank notes. We must not lose sight of the fact that this case was decided in 1852, at which time the bank notes were likely to prove worthless upon the due date, three years from the date of execution of the promissory note. It was because of that contingency that the court held that the interest charged was not usurious, since, while in form the transaction was a loan, “the real character of the transaction was more in the nature of a speculation in bank paper, than a loan of money.” (Page 105.)

In Sherman v. Blackman, 24 Ill 347, the court held that the defense of usury was not sustained in part, because there had been no showing that the plaintiff “had notice of the usury,” thereby indicating that had such notice been shown the result would have been different and the defense considered good. Partlow v. Williams, 19 Ill 132, was decided under the Stevenson rule. The facts which the court found relevant were that the note there under review “was not payable in money, nor in anything of a fixed and determinate value like money.” (Page 133.) Rather, the note was payable in sight exchange on New York City, which the court characterized as “ever fluctuating in value.” Under those circumstances the court felt the usury laws inapplicable since no one could foresee at the time the promissory note was executed what it would be worth at its maturity date.

The theory underlying these cases is that the risk assumed by the lender is great; namely, that the particular medium of exchange which the parties agreed would be used for repayment would be under par, and the lender would therefore actually sustain a net loss from the transaction. We believe the compelling reason for the creation of this rule was the great uncertainty as to the stability of local bank paper which existed at the time the above opinions were rendered. The lenders were speculators who were guessing that the bank paper would be more valuable than the currency they were lending. As the Partlow court put it, the notes “were not payable in money, nor in anything of a fixed and determinate value like money.” The same reasoning was applied in Griffin v. Marine Co. of Chicago, 52 Ill 130, 149, where the court rejected the defense of usury, noting that at the maturity date the New York exchange notes, by which the loans were to be repaid, might be under par.

These cases thus did not carve out the major rule by which the usury laws could be bypassed, but rather, a narrow exception to the imposition of the usury laws, an exception based on what the courts then believed to be a fair protection to lenders speculating in an uncertain commercial world. There may still exist situations in which the use of such a rule would be justified, but certainly, under the present case, the charging of an excessive interest rate cannot be justified upon the ground that the lender was to be repaid in a commodity uncertain in value. The lender was to be repaid in money, and it cannot be said that the value of money is so uncertain that a lender may charge in excess of the usury limits. The very point of the usury statutes is to create the limits one may charge for the lending of money, and these laws take into account potential fluctuations, but establish what is deemed the maximum interest allowable. Not even the Stevenson case, decided over a hundred years ago, said it would be permissible for one to charge more interest than was allowed under the usury laws. Such a rule would destroy the very purpose of our usury statutes. These cases have no application to this appeal.

Under the circumstances, if the plaintiff was a purchaser, as it claims to be, it was on notice of a defense, since section 3-304, chapter 26 of Ill Rev Stats 1965 provides:

(1) The purchaser has notice of a claim or defense if
(a) the instrument is so incomplete, bears such visible evidence of forgery or alteration, or is otherwise so irregular as to call into question its validity, terms or ownership or to create an ambiguity as to the party to pay; ....

This code provision is consistent with the earlier definition of “notice” found in section 1-201(25), chapter 26, providing:

A person has “notice” of a fact when
(c) from all the facts and circumstances known to him at the time in question he has reason to know that it exists.

The intendment of these provisions would seem to be an attempt to prevent those dealing in the commercial world from obtaining various rights when, from a reasonable inquiry into the true facts that person would have discovered that a fact existed which prevented him from obtaining the rights which he was seeking. Under the circumstances in the present case, it is fair to say that the plaintiff had “reason to know” there was a good defense against the note in question. Even the earlier cases point out that notice of usury destroyed one’s rights in the note.

We have already pointed out that on the basis of the dates when plaintiff issued its check to Equitable and when Equitable issued the note to the defendants, it is apparent that plaintiff was not a purchaser at all, but rather had advanced the very money to Equitable which Equitable, in turn, gave to the defendants. That being the case, plaintiff was a cooriginator of the note, and a defense against that note would be good against the plaintiff. Accepting plaintiff’s statement that the dates are in error and that it paid out the money only after it had already seen the note, we would still hold that plaintiff was on notice of the defense for the reasons stated. Under either theory, plaintiff was not a holder in due course of the note, and the trial court was in error when it found otherwise. The trial court’s judgment must be reversed.

It remains to be determined whether defendants are entitled to those rights as now provided for by statute; namely, a penalty of twice the interest charged, plus attorney’s fees and court costs. The statute so providing was in effect at the time of trial. At the time of the original transaction, however, the relevant statute simply provided that when a loan was found usurious the borrower was to be relieved of the obligation to pay any interest, and would only need to repay the principal amount loaned. We must determine which statute applies in the instant case.

This point was not argued by either side in the briefs. The defendants state that the trial court was in error in failing to assess the penalty provisions of the amended statute, while the plaintiff considers that the trial court's determination was correct. On oral argument, however, counsel for defendants suggested that the amended version should apply to this action because the penalty provisions are simply procedural aspects of the lawsuit. It is suggested that the amendment does not affect the substantive rights of either party, but is rather a subsidiary element of the main cause. We agree with the defendants.

It is true that many cases have stated the general proposition that prospective application of legislation is favored over retrospective application. In People ex rel. Saam v. Village of Green Oaks, 55 Ill App2d 51, 204 NE2d 149 the court said at page 54: “An amendatory act ordinarily is construed as prospective,.and not as retroactive, in the absence of express language declaring it to be retroactive. [Citing cases.]” The amendment under our review does not contain any express language requiring a retrospective application, but we conclude that such an application is necessary.

The rule regarding prospective versus retroactive application of statutory amendments is not quite so simple as to be disposed of by merely looking to see if the amendment contains any express language on the question of how it is to be applied. In Nelson v. Miller, 11 Ill 2d 378, 143 NE2d 673, the Illinois Supreme Court considered the question of whether the amended sections of the Civil Practice Act could be applied retroactively to obtain in personam jurisdiction over out-of-state defendants. At the time of the transaction which gave rise to the dispute, personal jurisdiction was not obtainable over the defendant, and only by use of a subsequent amendment to the Civil Practice Act could such jurisdiction have been attained. The court held that the new provisions were properly applied to the defendants.

The Miller opinion calls attention to the court’s earlier opinion in Ogdon v. Gianakos, 415 Ill 591, 114 NE2d 686, in which it had been held there was no vested right in any particular remedy or method of procedure. The court in Ogdon concluded at page 597 that “. . . when a change of law merely affects the remedy or law of procedure, all rights of action will be enforceable under the new procedure without regard to whether they accrued before or after such change of law and without regard to whether the suit has been instituted or not, unless there is a saving clause as to existing litigation.” The amendment before us contains no saving clause. The amendment in Miller also contained no saving clause, and the court found that the amendment merely created a new manner of obtaining jurisdiction to enforce already existing rights. At page 383 of the Miller opinion the court said: “Retrospective application of such a statute creates a problem only if that application operates unfairly against a litigant who justifyably [sic] acted in reliance on some provision of the prior law.”

Applying these principles to the case before us, we must conclude that remedial, not substantive rights are involved, and that retrospective application will not operate unfairly.

The Miller position is reaffirmed in another Illinois Supreme Court case, Hogan v. Bleeker, 29 Ill2d 181, 193 NE2d 844, where the court said at page 184: “Where a statute giving a special remedy is amended without a savings clause in favor of pending actions, all actions affected must be decided in conformity to the law then existing, both in the trial and Appellate Courts, without regard to whether the actions accrued before or after such change, or whether action had been previously instituted.” The statute here involved does give a “special remedy” and we believe that under the Illinois Supreme Court directives, the remedy existing as of the date of trial was applicable. It must be remembered that the section under review does not determine the substance of usury, nor were the elements of usury altered by the amendment; all that was altered was the remedy available in those cases where usurious interest has been charged.

The judgment of the Circuit Court is reversed, and the cause is remanded with directions to enter a judgment for defendants and for further proceedings in conformity with this opinion.

Reversed and remanded with directions.

LYONS, J., concurs.

BURKE, J.,

dissenting:

The defendants, husband and wife, needed funds to pay delinquent taxes on a vacant tract of land. The husband approached Equitable to procure the loan and was accommodated. The check representing the loaned funds was signed and delivered by Equitable to the defendants who received credit through usual banking channels. The papers evidencing the loan thus made through Equitable were purchased by and delivered to plaintiff in the usual course of business. The defendants made payments on the loan to the plaintiff from time to time until the default which resulted in the judgment.

The burden of proof was on defendants to establish usury by a preponderance of the evidence. The purchase of the note and mortgage from the lender, Equitable, at a discount greater than the rate of interest allowed by law does not constitute usury. Defendants, however, claim that Equitable was plaintiff’s agent. Equitable came into the transaction by the initiative of the defendants. The defendants failed to prove that Equitable was plaintiff’s agent or that plaintiff purchased the note and mortgage with notice of usury. The evidence shows that plaintiff is a holder in due course. For these reasons the order confirming the judgment should be affirmed.


author: MR. JUSTICE LEIGHTON

text:
    William Dobrin, a Minor, by Sidney Dobrin, His Father and Next Friend, Plaintiff-Appellee, v. Elmer C. Stebbins, Defendant-Appellant.
    Gen. No. 53,188.
    First District, Fourth Division.
    March 11, 1970.
    Rehearing denied and supplemental opinion May 13, 1970.

      Thomas P. Cernek, of Chicago, for appellant.
    No brief for appellee.
   MR. JUSTICE LEIGHTON

delivered the opinion of the court.

In a non jury trial, plaintiff recovered a judgment against defendant for personal injuries he suffered when he was bitten by defendant’s dog. Although plaintiff, who is the appellee in these proceedings has not filed a brief, we will review this appeal on the merits. Daley v. Jack’s Tivoli Liquor Lounge, Inc., 118 Ill App2d 264, 254 NE2d 814.

The facts are not in dispute. On July 16, 1964, defendant was the owner of a toy German Shepherd. He chained it to a pipe so that the dog was confined within defendant’s property at 6225 West 79th Street in the City of Chicago. Plaintiff, then 17 years of age, was selling magazines. There was no sign or posted notice on defendant’s property warning salesmen or others to keep off. Plaintiff went to defendant’s home. He walked up a dirt path that led from the sidewalk. When plaintiff was within five or ten feet of the door, defendant’s dog jumped on plaintiff, bit him in the abdomen and on the thigh. After getting away, plaintiff was taken to a nearby clinic where he received treatment for his injuries. Later in the day he visited his family doctor, who replaced the bandages and gave him a tetanus shot. Pain from the dog bites lasted three or four days. Plaintiff’s doctor submitted a bill which was paid.

Plaintiff filed suit against defendant and invoked what is colloquially the “Dog Bite Statute,” Ill Rev Stats 1963, c 8, § 12 (d), which provides:

Dogs attacking or injuring person — Liability of owner. If a dog, without provocation, attacks or injures any person who is peaceably conducting himself in any place where he may lawfully be, the owner of the dog is liable in damages to the person so attacked or injured to the full amount of the injury sustained. The term “owner” includes any person harboring or keeping a dog. The term “dog” includes both male and female of the canine species.

After hearing evidence, the trial judge awarded plaintiff damages in the sum of $750. Defendant appeals. He contends that plaintiff was a trespasser when he entered defendant’s property; therefore, no judgment could be recovered under the statute. In the alternative, defendant contends that the damage award was excessive.

A trespasser is one who does an unlawful act or a lawful act in an unlawful manner to the injury of the person or property of another. 87 CJS, Trespass, § 1; see People v. Goduto, 21 Ill2d 605, 174 NE2d 385. By this definition, plaintiff was not a trespasser on defendant’s land when he went there during the ordinary hours of the day to solicit magazine subscriptions.

An owner of property who provides a path or walk from the public way to his door, without some indication (sign, posting of notice or words) warning away those who seek lawful business with him extends a license to use the path or walk during the ordinary hours of the day. Persons who thus make use of the path or walk are licensees. Restatement, Second, Torts, § 332, Comment b; Stacy v. Shapiro, 212 App Div 723, 209 NYS 305 (1925); Reuter v. Kenmore Building Co., 153 Misc 646, 276 NYS 545 (1934). Our decision in Messa v. Sullivan, 61 Ill App2d 386, 209 NE2d 872 supports this view. Therefore, plaintiff was a licensee on defendant’s land when he was bitten by defendant’s dog. He was in a “[p]lace where he may lawfully be . . .” within the meaning of Ill Rev Stats 1963, c 8, § 12 (d).

This being so, proof that plaintiff while peaceably conducting himself and without provocation, was injured by defendant’s dog justified entry of judgment in favor of plaintiff and against defendant. Beckert v. Risberg, 50 Ill App2d 100, 199 NE2d 811; Bailey v. Bly, 87 Ill App2d 259, 231 NE2d 8.

The damages the trial judge awarded plaintiff were within the limits of fair and reasonable compensation. Johnson v. Eckberg, 94 Ill App 634; Sesterhenn v. Saxe, 88 Ill App2d 2, 232 NE2d 277. Judgment is affirmed.

Judgment affirmed.

STAMOS, P. J. and DRUCKER, J., concur.

SUPPLEMENTAL OPINION

Defendant petitions for rehearing on the ground that when plaintiff came upon defendant’s property, he saw the dog that bit him. Defendant argues that the best warning a property owner can give to those who may come upon his land is his dog chained, in plain view and standing guard. Defendant contends that presence of his dog in this way was constructive notice to the plaintiff that he could enter defendant’s property only at his peril.

We agree that a dog chained to guard its owner’s property where it can be seen, is notice that entry on the land is forbidden. However, the record in this case does not support defendant’s contention. Both plaintiff and the defendant testified that there were bushes on either side of the front door to defendant’s home. Plaintiff testified that he never saw defendant’s dog before it bit him because it “must have come out of the bushes . . . .” In other words, defendant’s dog was not where plaintiff could see it. The petition for rehearing is denied.

Petition for rehearing denied.


author: ALLOY, J. STOUDER, J.

text:
    James T. Franklin, Plaintiff-Appellant, v. Grossinger Motor Sales, Inc., Defendant-Appellee.
    Gen. No. 52,659.
    First District.
    March 20, 1970.
    Rehearing denied April 22, 1970.

      STOUDER, J., dissenting.
    Kreisman & Epstein, of Chicago (David S. Kreisman, of counsel), for appellant.
    Amstein, Gluck, Weitzenfeld & Minow, of Chicago (John F. McClure and Michael R. Turoff, of counsel), for appellee.
   ALLOY, J.

The action before us was instituted as an action for malicious prosecution of a civil case. The trial court directed a verdict in favor of defendant Grossinger Motor Sales, Inc., at the close of plaintiff James T. Franklin’s case. Following denial of a post-trial motion, the cause was appealed to this Court.

On October 1, 1960, plaintiff had gone to defendant’s place of business and agreed to purchase a 1960 Pontiac. The agreement involved a $400 trade-in allowance on the automobile then owned by plaintiff, which was taken as a trade, and a lien balance of $2,600 due on the old automobile was to be assumed and paid by defendant company. Plaintiff was, by the terms of the bill of sale, to pay $500 in cash, leaving a balance due defendant motor company of $3,345 which was payable over a three-year period, with the first installment being due on November 12, 1960. According to plaintiff’s testimony, after he signed the note and agreement, he paid the $500 down payment to Irwin Grossinger. Irwin Grossinger testified that the $500 was not paid, as he had forgotten to ask for it. After plaintiff left, driving the automobile, Irwin Grossinger instructed an employee to contact plaintiff and to obtain the $500 down payment. Plaintiff, however, refused to pay the $500, insisting he had already paid it. On October 7,1960, defendant repossessed the Pontiac which plaintiff had purchased, but plaintiff thereafter went to the Grossinger Motor Sales and took possession of his car again. Plaintiff thereafter consulted an attorney and returned the automobile to defendant company. The Pontiac remained in the possession of defendant. Defendant asserted it would store the car until the plaintiff came in with the $500. Defendant also insisted that the company had the right under the written agreement to repossess the car if the $500 was not paid.

Defendant company then turned the papers over to the attorney for the company instructing him to recover the loss but defendant gave the attorney no specific instructions as to what to do. On October 17, 1960, defendant company by its attorney filed a confession of judgment action against the plaintiff. This action was on the note which plaintiff had signed on October 1, 1960, and the judgment was entered on October 18, 1960, for $1,357.50 and costs. The first payment on October 1, 1960 note was not due until November 12, 1960. Plaintiff thereafter retained an attorney to represent him in connection with the judgment, and on November 17, 1960, plaintiff moved to vacate the judgment obtained by confession. Following several continuances, such judgment was vacated. On April 4, 1961, the suit was dismissed for want of prosecution.

Shortly after the judgment by confession was obtained, the attorney for defendant-company had execution issued, and such execution was served on plaintiff. No money was withheld or paid, nor was any property attached as a result of such execution. Plaintiff’s employer, Peer Cartage Co., received a “Wage Demand in Garnishment” on October 20, 1960, which had been mailed by the attorney for the defendant Grossinger Motor Sales. The evidence disclosed that plaintiff had worked for Peer Cartage Co. since August of 1956 and during this period, although employed by Peer Cartage, he worked at the Webcor Plant since Peer Cartage had contracted to furnish drivers to Webcor. Joseph Bielek, an employee of Webcor, was the supervisor and director of plaintiff’s activities. Plaintiff worked alone as a trucker.

On October 21, 1960, plaintiff was notified by Mr. Cade of Peer Cartage that his employment was terminated. In testifying in the case, as plaintiff’s witness, Mr. Cade stated that he was told to terminate the employment by Mr. Pyre, his superior. He testified that Peer Cartage did not honor “wage demands” but rather told employees that it was up to employees to work such problems out. No wages were withheld from plaintiff by Peer Cartage. Mr. Cade further testified that plaintiff would not have been allowed to continue his employment even if the wage demand had not been served, as his employment would have been terminated for “other things.” He further testified that the reason that plaintiff was fired was because he stopped for breakfast before going out on a run, in violation of union rules. Mr. Cade stated that the information he had as to plaintiff’s conduct was not from his own observations, but was rather communicated to him by Mr. Pyre, who was in the hospital when the case was tried. Mr. Cade, however, did testify expressly that the wage demand was not one of the reasons for terminating plaintiff’s employment. Mr. Bielek of Webcor, who had supervised the activities of plaintiff for four years, testified that he had no complaints about plaintiff’s work and had never heard of any complaints. He further stated that he had no power to fire employees of Peer Cartage but he could demand that they be removed from working for Webcor. Following the termination of his employment by Peer Cartage on October 21, 1960, plaintiff remained unemployed from that date until he was rehired by Peer Cartage on January 13, 1961.

The action which was instituted by plaintiff against Grossinger Motor Sales, Inc., was for malicious prosecution of a civil case, based on the confession of judgment case which was later dismissed for want of prosecution. It was alleged specifically by plaintiff that, as a direct result of the service of the wage demand, plaintiff’s employer terminated his employment. It was also recited that defendant’s action in failing to pay Mercantile Discount Corporation the amount of $740.92 had wrongfully resulted in a judgment as against plaintiff. On May 1, 1961, Mercantile Discount Corporation, which had financed plaintiff’s Cadillac which had been traded in on the purchase of the Pontiac, obtained a judgment by confession against plaintiff for $1,474, which amount was later reduced by agreement to $740. That judgment was still unsatisfied so far as the record discloses. The parties recognize the obligation of defendant as to payment of the Mercantile Discount Corporation obligation was not an appropriate basis for maintenance of a malicious prosecution action and that matters relating to defendant’s confession of judgment and wage demand referred to herein would be the sole basis for maintenance of such action.

Action for malicious prosecution of a civil proceeding is not favored by the courts of this State on the basic ground that courts should be open to litigants for settlement of their rights without fear of prosecution for calling upon the courts to determine such rights (Schwartz v. Schwartz, 366 Ill 247, 8 NE2d 668). In an action for malicious prosecution plaintiff is required to show that defendant began the proceeding against plaintiff with some ulterior purpose other than seeking the benefit that it would receive from a decision in its favor in such action. It must be shown in such type of action that defendant originally brought its action in order to force plaintiff to do something other than would normally be required as a result of a claim asserted, or that defendant anticipated some result apart from merely winning or other normal procedure in the lawsuit. As stated in Ammons v. Jet Credit Sales, Inc., 34 Ill App2d 456, 462, 181 NE2d 601:

“Abuse of process (or malicious abuse of process) is the misuse of proper process to effect an object not within its proper scope. It differs from malicious use of process in that the latter is the starting of process without probable cause, a prosecution upon a demand or accusation that has no foundation in fact.”

The court in the Ammons case also pointed out that the mere institution of a proceeding, even with a malicious motive, does not constitute an abuse of process. There must be both the existence of an ulterior purpose and an act in the use of legal process not proper in the regular prosecution of the proceedings. In the cause before us, the action of defendant was clearly to recover the amount it claimed to be due to defendant and there was no showing of an ulterior motive in bringing the action.

We, therefore, have before us an action for malicious prosecution of a civil suit. To sustain such action for malicious prosecution of a civil suit, the following are required to be shown: (1) the institution of civil proceedings by defendant, (2) termination of such proceedings in favor of plaintiff, (3) want of probable cause for the proceeding, (4) malice on part of defendant in bringing such proceedings, and (5) special injury to plaintiff as a result of such action (Ammons v. Jet Credit Sales, Inc., 34 Ill App2d 456, 181 NE2d 601; March v. Cacioppo, 37 Ill App2d 235, 244, 185 NE 2d 397; Carbaugh v. Peat, 40 Ill App2d 37, 47, 189 NE2d 14; Smith v. Michigan Buggy Co., 175 Ill 619, 51 NE 569). In the case before us, while there may be some areas of doubt as to want of probable cause or malice (Freides v. Sani-Mode Mfg. Co., 33 Ill2d 291, 296, 211 NE2d 286; Vasquez v. Jacobs, 23 Ill App2d 457, 464, 163 NE2d 230), the real question before us, and the basis upon which the court directed a verdict, stems from the asserted failure of plaintiff to prove “special injury” as required to maintain the action.

The plaintiff has asserted in the complaint that his credit was injured and for a time his property was subject to the lien of the judgment. The courts of this state have indicated that this alone is not “special injury” of the character required in a case based upon malicious prosecution (Schwartz v. Schwartz, 366 Ill 247, 8 NE2d 668). In the Schwartz case the court pointed out (at page 252):

“While the charge is that because of this judgment against him his credit was injured and his property became subject to a lien for the judgment, yet such are characteristics of all money judgments in ordinary civil cases. There is no evidence that appellant attempted to deal with his property during the few days in which this judgment was in existence. There is no evidence of special loss to him of any character, over and above the ordinary expense and trouble attendant upon the defense of an ordinary civil suit, and therefore, under the rule announced in Smith v. Michigan Buggy Co., supra, and other cases herein cited, there is no showing of special damages. General damages are such as the law implies and presumes to have accrued from the wrong complained of. Special damages are such as actually, but not necessarily, are sustained, and so are not implied but must be proved.”

As indicated in the Schwartz case, special damage of the character under consideration in the case before us must actually be proved and cannot be implied.

In March v. Cacioppo, 37 Ill App2d 235, 185 NE2d 397, a confession of judgment under a lease was involved. The lease had not been signed by the lessees and although there was no acceleration clause, judgment was confessed for rent of $1,050 which was the amount provided to be paid under the lease terms to the end of the period of the unsigned lease. Only $175 was due in rent at the time of confession of judgment. Defendant then actually garnished plaintiff’s bank account and deprived plaintiff from the use of $1,397.50 in his bank account from the middle of November 1960, until January 5, 1961, when the judgment was reduced to $175 and costs. The court there allowed a recovery for malicious prosecution of a civil suit, and found that all of the required elements for such action were present. In finding the required “special damage” or “injury” the court stated (at 245):

“The wrongful garnishment was an unwarranted seizure of property not done to secure the defendant’s debt, and the whole course of action, judgment and garnishment, constituted special injustice to the plaintiff not resulting in all suits prosecuted for like causes of action.”

The conditions referred to in the case of March v. Cacioppo, supra, were not present in the cause before us.

We should observe that defendant in this cause points out that even if plaintiff had shown that his discharge resulted from defendant’s action it would not justify maintenance of the malicious prosecution action. We do not believe it is necessary to decide this issue in view of the record in this case. Nor do we believe that we would be justified in departing from Dlinois precedents which emphasize that the “special injury” is essential to the maintenance of malicious prosecution actions. As stated in Caspers v. Chicago Real Estate Board, 58 Ill App2d 113, 119-20, 206 NE2d 787, the Illinois policy established in Schwartz v. Schwartz, supra, that courts should be opened to litigants for settlement of their rights without fear of prosecution for calling upon the courts to determine such rights, should be adhered to. It is pointed out in the Caspers case:

“The annoyance and distress suffered by a person of integrity, and good reputation in defending what he believes to be an unjust action is found in most litigation, including suits to collect debts, in which category belongs the basic action against plaintiff’s corporation.”

It is clear that if plaintiff fails to establish a special injury resulting from acts of defendant, as found by the trial court, the present action cannot be maintained.

It is argued by plaintiff that circumstantial evidence consisting of the closeness of the time between the time of the service of the wage demand and the termination of his employment, plus the fact that Peer Cartage Co. did not honor wage demands, is sufficient circumstantial evidence to establish that plaintiff had lost his job as a result of the wage demand. He argues that this is reinforced by the testimony of Mr. Bielek of Webcor, who stated that he knew of no reason why plaintiff should have been discharged. Direct evidence on the matter, however, consisted of the testimony of plaintiff’s own witness, Mr. Gade who testified that the wage demand had nothing to do with plaintiff’s loss of his job. When Mr. Gade was called as a witness on behalf of plaintiff in the action he testified as follows:

Q. “How many days after the service of this was Mr. Franklin’s employment terminated?”
A. “I couldn’t tell you now.”
Q. “Could it have been the next day ?”
A. “I don’t know, sir.”
Q. “Would he have been allowed to continue his employment at Peer Cartage had this Wage Demand not been served ?”
A. “No.”
Q. “You mean he would have been fired anyway?” A. “He would have been terminated.”
Q. “Why would he have been terminated ?”
A. “For other things that pertain not to this case.” Q. “For any one single thing ?”
A. “For many things.”
Q. “Of which notice of the Wage Demand was one?” Mr. McClure: “Objection.”
The Court: “Objection will be sustained.”
By Mr. Krupa:
Q. “Did this enter into the conflict at any rate as one of the reasons for which he was fired ?”
A. “No.”

It is clear that plaintiff’s witness, Mr. Gadej specifically established that the wage demand was not one of the reasons for terminating plaintiff’s employment. The conclusion of the trial court that plaintiff failed to prove an essential element to establish a prima facie case was, therefore, proper. On the basis of the record we would not be justified in reversing the action of the trial court.

The judgment of the Circuit Court of Cook County will, therefore, be affirmed.

Affirmed.

RYAN, P. J., concurs.

DISSENTING OPINION

STOUDER, J.

I do not agree with the majority of the court. My disagreement is limited to the narrow issue upon which the result reached by the majority rests, namely that evidence of special injury was insufficient to require the issue to be submitted to the jury. In my opinion, there is ample evidence in the record supporting the contention that plaintiff sustained a special injury as a direct result of defendant’s misconduct.

If plaintiff lost his job as a result of the service of the wage demand on plaintiff’s employer by defendant, the plaintiff has sustained a special injury and the majority of the court does not dispute this conclusion. The question posed is whether or not the evidence tends to show this cause and effect relationship.

The evidence is substantially undisputed, (1) that a wage demand was served on plaintiff’s employer, (2) that plaintiff’s employer did not honor wage demands, (3) that plaintiff was discharged shortly after the wage demand was served and (4) plaintiff’s supervisor, the only person testifying having personal knowledge thereof, indicated that plaintiff’s job performance was satisfactory and that the (supervisor) had made no complaint with respect thereto.

The above evidence standing alone amply tends to prove the cause and effect relationship, and in my opinion is quite sufficient to support a jury’s verdict in favor of plaintiff. The prima facie case so presented required that the issue be resolved by the jury.

The majority opinion ignores the legal effect of plaintiff’s evidence and instead relies on an assertion of Gade (an employee of plaintiff’s employer) that plaintiff was not discharged as the result of the wage demand. Both the trial court and the majority of this court in accepting the statement of Gade as conclusive have improperly weighed the evidence and substituted their opinions on an issue which ought to have been resolved by the jury.

It also appears according to the majority opinion, that the only evidence which could support the cause and effect relation in question would be direct testimony that plaintiff’s employer told plaintiff or someone else that plaintiff was discharged solely on account of the service of a wage demand. This to me places an intolerable burden upon the plaintiff and as indicated in Freides v. Sani-Mode Mfg. Co., 33 Ill2d 291, 211 NE2d 286 (dealing with probable cause) no such burden is required or necessary. Employers may or may not give reasons for the discharge of employees, and even where a reason is given, it may or may not be true. That other evidence might be more persuasive if it existed ought not to deprive a litigant of the probative value of that evidence which is available and which tends to prove the issue involved.