author: JUSTICE EOVALDI

text:
    Ar-Tik Systems, Incorporated, Plaintiff-Appellee, v. Lark Sales Company, and L. S. Murchie, Defendants-Appellants.
    Gen. Nos. 10,957, 10,987, 10,988, Consolidated.
    Second District.
    January 9, 1957.
    Released for publication January 26, 1957.

      Graham, Califf & Harper, of Moline, for appellants; Robert G. Graham and Robert J. Shaw, of counsel.
    Bozeman & Neighbour, of Moline, Evans, Mershon, Sawyer, Johnston & Simmons, of Miami, Florida, for plaintiff-appellee; Virgil Bozeman, and O. B. Simmons, of counsel.
   JUSTICE EOVALDI

delivered the opinion of the court.

These three cases were consolidated for argument and opinion.

No. 10,957 is an appeal from an interlocutory order entered April 9, 1956 granting a temporary injunction upon the complaint of plaintiff-appellee. The injunction was granted after notice, appearance and a full hearing consuming several days.

Thereafter the defendant-appellant filed a counterclaim and made an application for temporary injunction, which was presented to the court and a full hearing had and an order entered denying the injunction requested by the defendant and the defendant has prosecuted an appeal to this court from that order in case No. 10,987.

Thereafter the trial court on June 29, 1956 modified the order entered on April 9, 1956 and the defendant-appellant appeals from that order. This was the order entered in No. 10,988.

In No. 10,957 a temporary injunction was granted on April 9, 1956 upon the complaint of plaintiff restraining Lark Sales Company, an Illinois Corporation, and L. S. Mnrchie, defendants-appellants herein, from collecting any monies from any persons for and on behalf of plaintiff and from using, withdrawing or otherwise disposing of any funds which defendants then had which belonged to plaintiff. The court granted the temporary injunction on motion of plaintiff, after hearing argument based on the pleadings, affidavits attached thereto, and certain restricted evidence offered on behalf of the parties.

All of the pleadings are verified. They consist of plaintiff’s complaint, plaintiff’s motion for a temporary injunction, defendants’ answer, answer of defendants to motion for issuance of a temporary injunction, and reply of plaintiff to said answers.

The prayer for the temporary injunction granted in this cause was by way of ancillary relief to plaintiff’s complaint which was in three counts. The first count consisted of a demand by plaintiff for an accounting from defendant, Lark Sales Company, alleged to be acting in a fiduciary capacity, in its duty to collect and remit monies for Ar-Tik Systems. The second count is a prayer for damages for breach of the contract. The third count is a prayer for permanent injunction. Defendants-appellants’ theory on this appeal is that the injunction violates the rule prohibiting temporary injunctions which do not maintain the status quo; that the effect of the injunction is to specifically enforce the contract and thus grant plaintiff substantially all of the relief obtainable by final decree; that the granting of specific performance or any other equitable relief to plaintiff in connection with the contract is improper where plaintiff has not complied with the provisions of the contract requiring performance on its part; that the granting of the injunction will re-suit in greater and more substantial injury and inconvenience to defendants and other parties to the contract than would have resulted to plaintiff from the refusal of the injunction; that all of the parties to the contract should have been made parties to the action before the granting of any injunction; and that there were no sufficient allegations in the complaint or sufficient showing in the evidence of irreparable injury to plaintiff.

Plaintiff’s theory of the case is that it made out a prima facie case for its right to an accounting, which right had in fact been admitted by defendants; that the evidence shows without question that defendants were acting as fiduciaries under a contract requiring them to collect and remit to the plaintiff all monies collected for plaintiff by the tenth of the month following collection; that defendants breached the contract in that, (a) they collected in excess of $60,000 which they failed and refused to remit to the plaintiff, despite repeated demands; (b) they converted the monies so collected to their own use; and, (c) they failed to comply with other plain provisions of the contract; that plaintiff had fully performed under the contract; that it had, pursuant to the terms of the contract, and prior to instituting suit, terminated defendants’ right to act for it; that there was no showing of any hardship on defendants; that the injunction required nothing more of the defendants than that which they had agreed to do by the terms of the contract; that the alleged hardships, if any, grew out of contractual terms and defendants’ breach thereof and not by virtue of the court’s injunction; and that the court had before it all necessary parties, all others having been shown by the record to have assigned their rights to defendant, Lark Sales Company; that under these circumstances, the trial court, in its sound discretion, properly granted a temporary injunction restraining the defendants from collecting plaintiff’s funds which were in the hands of defendants, pending a disposition of the lawsuit between the parties.

In No. 10,987 an order was entered on June 29, 1956 by the circuit court denying the motion of defendant, counter-plaintiff, for a temporary injunction, and allowing the motion of Ar-Tik Systems, Incorporated, counter-defendant, to strike said motion of counter-plaintiff for temporary injunction.

The counterclaim here involved was filed by leave of court on May 8, 1956. The pleadings involved on this appeal are the verified complaint of plaintiff; the motion for temporary injunction by plaintiff; the answer of defendant Lark Sales Company to the complaint; the answer of defendant Lark Sales Company to the motion for temporary injunction; and the verified counterclaim of Lark Sales Company filed on said 8th day of May, 1956; motion filed May 15, 1956 of Lark Sales Company for the issuance of a temporary injunction based on said counterclaim, supported by the affidavits of Henry N. Pieper, Secretary of Lark Sales Company, and the unverified motion of Ar-Tik Systems, Incorporated, to strike the motion of Lark Sales Company for a temporary injunction under the counterclaim.

The theory of Lark Sales Company, the defendant-appellant on this appeal, is that the counterclaim, motion for a temporary injunction under same, and supporting affidavits, stated an equitable case for the granting of a temporary injunction, and that the specific grounds set out in the motion of Ar-Tik Systems, Incorporated, to strike' Lark Sales Company’s motion for temporary injunction are not sufficient in law to constitute a defense to said motion so as to warrant its dismissal.

Plaintiff-appellee deems it material to this court’s determination of the propriety of the trial court’s action that consideration also be given to the other pleading’s which the record shows were disposed of at the same time by the trial court being:

1. Motion of Lark Sales Company for modification of order granting temporary injunction, No. I;

2. Motion of Lark Sales Company for modification of order granting temporary injunction, No. II;

3. Motion of Lark Sales Company for modification of order granting temporary injunction, No. Ill; and,

4. Motion of Ar-Tik Systems, Incorporated for modification of order granting temporary injunction; all of said motions being filed June 29, 1956.

Plaintiff-appellee’s theory of the case is that since the trial court had already entered one order in the cause with respect to injunction relief, which order had been entered after full hearings, the court did not err in requiring that all minutes relative to injunction relief be contained in one order, and that orderly procedure required a modification and conditioning of the present order rather than by the issuance of successive orders separately enjoining the various parties; that by accepting the court’s suggestion in that regard by making three motions for modification to obtain the precise relief prayed for in the motion for temporary injunction (the motion for modification being considered in case No. 10,988), defendant-appellant has in effect waived any defect in the court’s allowance of the motion to strike the motion for temporary injunction.

No. 10,988 is an interlocutory appeal from an order of the circuit court entered June 29, 1956, allowing the motion of the plaintiff for modification of the temporary injunction order granted April 9, 1956, and overruling the three motions of defendant Lark Sales Company, for modification of the temporary injunction order.

The only pleadings involved on this appeal are the three separate motions of defendant, Lark Sales Company for modification, and the motion of plaintiff, ArTik Systems for modification.

The first motion of Lark for modification of the Order granting a temporary injunction stated substantially as follows:

“That the Order granting a temporary injunction should be modified in the following respects:
1. That the temporary injunction heretofore granted shall remain in full force and effect pending further Order of this court, but that said temporary injunction is subject to and conditioned upon the performance of the following terms by Ar-Tik:
(a) That Ar-Tik shall not collect or attempt to collect any monies from any persons for and on behalf of Lark.
(b) That Ar-Tik shall, upon receipt of any monies to which Lark is entitled, make report thereof and forward such monies to Lark not later than the 5th day of the month following the month in which they were received.
(c) That Ar-Tik shall forward to Lark on or before the 1st day of July, 1956, any and all monies which it has collected between the dates of April 9,1956, and July 1, 1956, to which Lark is entitled.
(d) That Ar-Tik shall forward to Lark for the purpose of advertising and store services and to meet the commitments of the parties from the 4^ per gallon received by Ar-Tik in the Western Territory the sum of 1%$ per gallon; and from the 2‡ per gallon received by Ar-Tik for its own behalf in the Eastern Territory the sum of %‡ per gallon, said payments to be made not later than the 5th day of the month following the month in which said sums were collected.
(e) That Ar-Tik is not to commit any acts which modify or alter the contracts for commitments of Lark with third parties.
2. That Lark, upon receipt of any monies to which Ar-Tik is entitled, shall make report thereof and forward such monies to Ar-Tik not later than the 5th day of the month following the month in which they were received, after the deduction for advertising and store services on the basis of 1%^ per gallon from the 4=‡ received in the Western Territory and after the deduction of per gallon from the 2‡ received in the Eastern Territory.
3. That Lark shall forward to Ar-Tik on or before the 1st day of July, 1956, any and all monies which it has received between the dates of April 9, 1956, and July 1, 1956, to which Ar-Tik is entitled after the deductions according to paragraph 2 of this Order.”

The second motion of Lark for modification of Order granting the temporary injunction stated substantially as follows:

“That the Order granting a temporary injunction should be modified in the following respects:
That the injunction Order of April 9, 1956, is subject to and conditioned upon the performance of the following terms by Ar-Tik:
(a) That Ar-Tik shall not collect any monies from any persons for and on behalf of Lark.
(b) That Ar-Tik shall not use, withdraw or otherwise dispose of any funds which Ar-Tik has now which belong to Lark.”

The third motion of Lark for modification of Order granting the temporary injunction stated substantially as follows:

“That the Order granting temporary injunction should be modified as follows:
That the injunction Order of April 9, 1956, entered against Lark Sales Company is subject to and conditioned upon the performance of the following terms by Ar-Tik:
(a) That Ar-Tik shall not collect any monies from any persons for and on behalf of Lark, other than the 4:‡ in the Western Territory and the 2‡ in the Eastern Territory.
(b) That Ar-Tik shall not use, withdraw or otherwise dispose of any funds which Ar-Tik has now which belong to Lark.”

The motion of Ar-Tik for modification of Order granting the temporary injunction moves the court to modify the temporary injunction Order entered on its motion on April 9, 1956. This motion recites that inasmuch as defendants have moved the court that the Order granting the temporary injunction should be modified and have presented to the court three motions for modification setting forth the manner in which the Order should be modified, and inasmuch as Ar-Tik feels that none of the proposed Orders contained in such motions of defendants are proper, and inasmuch as the court has indicated that it will entertain a motion for modification of said injunction, Ar-Tik moves the court to modify the injunction by entering an Order in the terms hereinafter set out, the material portions of which are as follows:

1. That the injunction restraining defendant, Lark and L. S. Murchie from “collecting any monies from any persons for and on behalf of the plaintiff, Ar-Tik,” is modified to permit Lark to collect any monies which may be owing by the various franchise holders under what is known as the “Lark Sales Territory Agreement” entered into between Lark Sales Company and certain State and District operators.

2. As to other royalty payments of 4^ which may be due from the various State and District operators which have not, up until April 9,1956, entered into the Lark Sales Territory Agreement, Ar-Tik shall be permitted to collect the entire 4<¡¡ royalty payments.

3. That any payments made by State or District operators under paragraph 1 or 2 above shall constitute a discharge of their liability insofar as such payments do discharge it, with respect to both Ar-Tik and Lark.

4. That Lark shall forward to Ar-Tik on or before the 10th day of July, 1956, any and all monies which it has collected between April 9, 1956, and June 30, 1956, to which Ar-Tik is entitled, after deduction of the authorized commitments for advertising and store services.

That the aforesaid injunction as modified shall remain in full force and effect until further Order of this court, but that the said temporary injunction is subject to and conditioned upon the following terms as shall apply to Ar-Tik:

1. That Ar-Tik shall, upon receipt of any monies to which Lark is entitled, make report thereon and remit the same to Lark not later than the 5th day of the month following the month in which they were collected.

2. That Lark shall, upon receipt of any monies to which Ar-Tik is entitled, make report thereof and remit the same to Ar-Tik not later than the 5th day of the month following the month in which they were collected, after deduction of commitments for advertising and store services, provided, however, that Lark shall furnish Ar-Tik with a list showing the exact commitments.

3. That Ar-Tik shall forward to Lark for the purpose of advertising and store services from the amounts collected in its own behalf such amounts per gallon as have been previously committed, by the 5th day of the month following the month of collection, provided, however, that Lark shall provide Ar-Tik with a list showing the exact commitments made.

4. That Ar-Tik shall forward to Lark on or before the 10th day of July, 1956, any and all monies which it has collected between April 9, 1956, and June 30, 1956, to which Lark is entitled, after deduction of the authorized commitments of the parties for advertising and store services already paid out by Ar-Tik, and Ar-Tik shall furnish Lark with a list showing payments of such commitments and to whom made.

The theory of appellant Lark Sales Company on this appeal is that the order modifying the temporary injunction does not maintain the status quo; that it violates the terms of the contract, and grants to Ar-Tik, not only all the major relief obtainable on final decree but also grants more relief than could be obtained upon final decree under the contract; that there was no evidence before the court upon the granting of the modification, so that the granting of the modification in the terms of the modification was improper; and that at least one of the three motions of defendant Lark Sales Company for modification was the only manner in which to clarify the original temporary injunction and maintain any possible status quo.

Plaintiff-appellee’s theory of the case is that the trial court found a workable solution to the various contentions of the parties, that his action did not in effect disturb the status quo; that, in fact, the court’s order closely approximates the order sought by defendant; and that the trial court in working out this solution was entirely within the limits of his discretion and acted in the tradition of a court of equity.

The contract out of which this dispute arises is as follows:

“This agreement entered into this 31st day of December, 1954, by and between Lark Sales Company, an Illinois corporation, hereinafter referred to as Lark; Ar-Tik Systems, Incorporated, an Indiana corporation, hereinafter referred to as Ar-Tik; H. A. McCullough and H. F. McCullongli, co-partners doing business as McCulloughs’ Dairy Queen, hereinafter referred to as McCullough; McCulloughs’ Dairy Queen, Inc., an Illinois corporation, witnesseth:

Whereas, Harry M. Oltz developed, used and obtained Patent No. 2080971 upon a mechanical device for the manufacture of a frozen dessert, and thereafter, on July 31, 1939, entered into an agreement with McCullough (hereinafter referred to as the Western Agreement), a true and correct copy of which is hereto attached, made a part hereof and marked Exhibit “A”; and

Whereas, bn June 11, 1940, Harry M. Oltz assigned, transferred and set over to Ar-Tik the aforesaid patent, together with all his rights under the Western Agreement; and

Whereas, the Western Agreement was thereafter supplemented by an agreement between Ar-Tik and McCullough dated September 7, 1946, a true and correct copy of which is hereto attached, made a part hereof and marked Exhibit “B”; and

Whereas, on September 7, 1946, Ar-Tik and McCullough entered into an agreement (hereinafter referred to as the Eastern Agreement), a true and correct copy of which is hereto attached, made a part hereof and marked Exhibit “C”; and

Whereas, by agreement between Ar-Tik and McCullough dated September 17, 1947, in the nature of a license, a true and correct copy of which is hereto attached, made a part hereof and marked Exhibit “D”, Ar-Tik became the sole owner of the right to use the said patented mechanical device and the trade name “Dairy Queen” in the States of North Carolina, South Carolina, Georgia, Florida, Alabama and Mississippi, together with the right to receive and collect all of the royalty for its sole account and without division thereof with McCullough under the terms of the Eastern Agreement; and

Whereas, the Eastern Agreement was further supplemented by agreement between Ar-Tik and McCullough dated February 20, 1953, a true and correct copy of which is hereto attached, made a part hereof and marked Exhibit “E”; and

Whereas, from time to time certain interests in the said agreement hereinbefore mentioned have been held by Dairy Queen; and

Whereas, it was the intent of all of the parties to said agreements that McCullough would institute and develop a business for the sale of a frozen dessert through the use and sale or license of the said patented mechanical device and that in the institution and development of such business a trade mark and trade name would be used and published; and

Whereas, McCullough, and subsequently Dairy Queen, in compliance with the agreements and the intent thereof, did institute and develop a business which comprises the selling of a frozen dessert product in various forms under the trade name or trade mark “Dairy Queen” from retail outlets bearing the trade name or trade mark “Dairy Queen”, and also by advertising, and otherwise established the trade name or trade mark “Dairy Queen” throughout the United States, and used the trade name or trade mark on mechanical devices manufactured under the aforesaid patent in the preparation and dispensing of products known as “Dairy Queen”; and

Whereas, McCullough and/or Dairy Queen have obtained registrations of the trade mark or trade name “Dairy Queen” in all States of the United States except California and Wisconsin; and

Whereas, it was the further intent of the aforesaid Eastern and Western Agreements, as amended, that the trade name or trade mark and the patented mechanical equipment would be used together in the same business to the end that Ar-Tik would at all times receive a royalty or license fee for the use thereof in the Western Territory of 4/ per gallon on each gallon of mix processed through said patented mechanical device or sold under the trade mark or trade name “Dairy Queen”, and a royalty or license fee for the use thereof in the Eastern Territory of 2‡ per gallon on each gallon of mix processed through said patented mechanical device or sold under the trade mark or trade name “Dairy Queen”, but with the distinct understanding, in so far as the Western Agreement is concerned, that McCullough would pay said royalty or license fee on all of said mechanical equipment owned or operated by him, and that the said royalty or license fee would be paid over to Ar-Tik as funds therefor were received by McCullough for the account of ArTik from the operators (hereinafter referred to as licensees) of said mechanical equipment and/or the said trade mark or trade name, which were not owned or operated by McCullough or .Dairy Queen; and

Whereas, under the Eastern Agreement Ar-Tik collected and received from licensees a royalty of 4(5 per gallon on each gallon of mix processed through said patented mechanical device or sold under the trade name “Dairy Queen”, of which one-half was remitted to McCullough pursuant to the terms of the Eastern Agreement, as supplemented, until December 31, 1954; and

Whereas, by agreement dated March 20, 1954, McCullough and Dairy Queen assigned and transferred to Lark all their interests under the Western Agreement, except certain territory payments specifically set forth in Exhibit “C” attached to said agreement, a true and correct copy of which assignment agreement is attached hereto, made a part hereof and marked Exhibit “F”; and

Whereas, by assignments dated April 2, 1954, McCullough and Dairy Queen assigned and transferred to Lark interests under the Eastern Agreement, a true and correct copy of which assignments is attached hereto, made a part hereof and marked Exhibit “Gr-1”; and,

Whereas, by assignment dated December 31, 1954, Ar-Tik assigned and transferred to Lark the right to collect in its behalf, a true and correct copy of which assignment is attached hereto, made a part hereof and marked Exhibit “Gr-2”; and

Whereas, McCulloughs’ Dairy Queen, Inc., an Illinois corporation, has been formed as a permanent organization to hold title to the trade mark and trade name “Dairy Queen”, and McCullough, Dairy Queen and ArTik have assigned and transferred to the said corporation all of their right, title and interest in and to the said trade mark and trade name, and by Territory Agreement dated April 2, 1954, McCulloughs’ Dairy Queen, Inc., an Illinois corporation, granted to Lark the exclusive right to use, license and to permit others to use, sub-license and sub-contract the trade mark or trade name “Dairy Queen” throughout the continental United States, subject to prior rights, a true and correct copy of which Territory Agreement is hereto attached, made a part hereof and marked Exhibit “H”; and

Whereas, Lark is willing to collect and receive all sums of money which may become due and payable to Ar-Tik, for the purpose of remitting the same to Ar-Tik and for the purpose of carrying out all of the provisions of this Agreement; and

Whereas, pursuant to the terms of the aforementioned agreements, Lark has entered into certain revised territory agreements as provided under the terms of the Territory Agreement (Exhibit “H” hereto attached), and has made provision for the continuation without any interruption of all agreements relating to the said patented mechanical device and the trade name and trade mark “Dairy Queen”, and it is the intent of all parties to this agreement that Lark shall he the instrumentality for the further development of the interests of the respective parties, to the end that the said parties may cooperate together for their mutual benefit, that said development shall continue through one instrumentality, to more clearly and completely construe and define the undertakings of each of the aforementioned agreements, and to effect the intent of this agreement; Now, therefore,

In consideration of the mutual covenants and agreements herein contained and the sum of One Dollar ($1.00) in hand paid each to the other, and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged by each of the parties hereto, the parties hereby promise and agree as follows:

1. Ar-Tik consents to, approves and accepts the transfer, sale, assignment and delivery to Lark of all rights of McCullough and Dairy Queen in and to the said agreements made by and between Harry M. Oltz and H. A. McCullough under date of July 31, 1939, as supplemented by agreement dated September 7, 1946, between Ar-Tik and McCullough (except certain cash payments as shown by Schedule “C” of Exhibit “F” due to others), and agreement between Ar-Tik and McCullough dated September 7, 1946, as supplemented by agreement dated February 20,1953, between Ar-Tik and McCullough, and the agreement dated September 17, 1947, by and between Ar-Tik and McCullough relative to the operation of the business in six southeastern States in the United States, and said Ar-Tik does further acknowledge that Dairy Queen and McCullough have fully performed each and every of said agreements in this paragraph described to the date of this agreement, and does further release and discharge McCullough and Dairy Queen of and from all past and future liability in connection with or arising under said agreements. No assignment of this agreement shall be made by Lark without the written consent of Ar-Tik.

2. Lark shall endeavor to re-negotiate Territory Agreements to the end that the standards of operation of said Dairy Queen business shall be uniform and in accordance with the rules, standards and regulations required by McCulloughs’ Dairy Queen, Inc. in connection with the operation under and use of said trade mark and trade name, as set forth in the Territory Agreement Exhibit “H” attached hereto. Each and every such contract negotiated by it shall contain a provision requiring that the licensee shall pay a royalty or license fee of not less than 40 per gallon of liquid mix used in the preparation of the frozen dairy product sold under the trade mark or trade name “Dairy Queen” within such territory for the period of time that such rights shall be granted, which Lark shall collect and remit as set forth in Paragraph 5 of this agreement. Such Territory Agreements shall further provide that such payments shall be made regardless of the existence or non-existence of patents or after the expiration thereof or otherwise, and where either powdered or concentrated mixes are used, the payment shall be based on the equivalent in liquid mix and shall further require that such amount as shall be due and owing shall be computed at the end of each month’s operation, and remittance of the same shall be forwarded, together with proper reports, within such time as Lark shall require. Dairy Queen and Ar-Tik agree to assist Lark in negotiating such new Territory Agreements. No change shall be made in the Territory Agreements which shall diminish the rights of Ar-Tik hereunder except upon written approval of Ar-Tik.

3. Lark shall hold all reports as required under said Territory Agreements and make available to ArTik all information contained therein in such manner and form as may be determined by the parties from time to time. Lark further agrees to give notice to Ar-Tik of any default of licensees in payments or failure to report, not later than 30 days after such default or failure to report.

4. Lark shall further, in cooperation with Ar-Tik, take such measures to cure and eliminate any such defaults and failures to report, provided, however, Lark shall not be required to expend funds in excess of such as may be provided by Ar-Tik or Lark for such purposes.

5. Lark hereby undertakes the continued performance of said agreements described in Paragraph 1 hereof pursuant to the terms of this agreement and the terms of all sub-contracts, licenses or franchise agreements assigned to Lark and others, and shall collect all monies due Ar-Tik as hereinafter set forth. Lark shall use its best efforts to collect and receive for the account of Ar-Tik and Lark and others respectively, from the licensees (whether under licenses presently in existence or under re-negotiated Territory Agreements), on all mix used in the frozen dairy product sold under the trade mark or trade name “Dairy Queen” or processed through said freezers as shown in Exhibit “I” attached.

To enable Lark to collect from Licensees under the Eastern Agreement, Ar-Tik shall notify each of said licensees to make payment to Lark of all sums due Ar-Tik under their respective territory agreements “until further notice”, and Ar-Tik will not countermand such notice so long as Lark is not in default under this agreement.

Upon receipt of said monies, Lark shall pay over to Ar-Tik, or its assigns, only the amounts received for the account of Ar-Tik, as- hereinabove set forth, on or before the 10th day of the month following actual receipt of such monies by Lark.

Notwithstanding the foregoing, from such amounts per gallon so received by Lark, Lark shall retain such sum computed at such rates per gallon as shall be agreed upon from time to time by Lark and Ar-Tik and said sum shall be expended for the purpose of developing the Dairy Queen business as Lark and ArTik may from time to time determine.

6. Lark shall render to Ar-Tik a report of its costs of operations from time to time, which report shall show the areas occasioning such expenses and the amounts thereof, and Ar-Tik, within ten (10) days of receipt of such report, shall make payment to Lark of Ar-Tik’s share of such expenses in the proportions to which Ar-Tik and Lark are sharing revenue from such area as set forth in Paragraph 5 above.

7. Dairy Queen, Ar-Tik and Lark agree that should any one of them receive or have received any funds to which any one of the others is entitled, they will pay any and all such funds to Lark for distribution in accordance with the terms of this agreement.

8. Lark agrees to furnish to Ar-Tik such copies and information as Ar-Tik may request concerning all Territory Agreements hereafter granting rights to the use of the trade mark and trade name “Dairy Queen”, and will make available to Ar-Tik such copies and information concerning present Territory Agreements as it now has in its possession.

9. Lark agrees to make available to Ar-Tik at all reasonable times such records, contracts, reports for the determination and verification of any and all payments due to Ar-Tik.

10. Lark and Ar-Tik shall jointly undertake to improve and further the Dairy Queen business, including the development of new products, the improvement and invention of equipment for use in processing and selling Dairy Queen products, the obtaining of patent protection for said new products and equipment, the possible selection of secondary trade marks and the registration thereof, the originating of advertising matter and the like which may be copyrightable and the obtaining of copyright registrations therefor; and all property rights developed hereunder shall be for the use and benefit of Lark and Ar-Tik and the Dairy Queen business. It is understood and agreed that the ownership of all trade mark registrations, copyright registrations, and the like shall be vested in Mc-Culloughs’ Dairy Queen, Inc. which shall license the use of the same through Lark to the owners and operators of Dairy Queen business, and the ownership of all patent rights shall be vested in Ar-Tik, and Lark shall have the sole and exclusive right to make, use, and sell, and to license others to make, use, and sell said products and equipment in the Dairy Queen business. None of the parties hereto shall be obligated to defend any of said patents and all offensive litigation relating to said patents shall be controlled by the owner thereof who shall pay all expenses and retain all income resulting therefrom.

11. That all freezers used in the processing of the frozen dairy product sold under the trade mark or trade name “Dairy Queen” shall be manufactured and/or sold under the supervision and control of Lark.

12. Contemporaneously with the execution of this agreement and for the purpose of providing a permanent organization to control and make uniform the operations under, the quality of products and the use and protection of the trade mark and trade name “Dairy Queen”, Ar-Tik has sold, assigned, transferred and set over to McCulloughs’ Dairy Queen, Inc., an Illinois corporation, all its right, title, interest in and to the trade mark and trade name “Dairy Queen” as used on and in association with the sale of the frozen dairy product, together with the good will of the business in connection with which said trade mark and trade name is used, in exchange for and upon Lark executing the Territory Agreement with Ar-Tik for the territory comprising the States of Alabama, Georgia, Florida, Mississippi, North Carolina and South Carolina, (Exhibit “H” attached hereto).

Nothing herein contained or to be contained in the Territory Agreement with Lark, as hereinabove provided, shall be construed to require the payment of any sum of money to Lark for its own account on mix sold in the States of North Carolina, South Carolina, Georgia, Florida, Alabama and Mississippi.

13. Ar-Tik appoints Lark its attorney in fact with full power and authority in its or their joint names to sue for and collect all monies due from licensees under said Western Agreement and said Eastern Agreement, and upon receipt of such funds, to account for and pay over the same in accordance with the terms of this agreement.

14. In the event Lark shall have failed to take action to enforce the liability of licensees under said' Western Agreement or said Eastern Agreement or this Agreement, and Ar-Tik shall notify Lark in writing setting forth the nature of such claimed failure to act, and in the event Lark shall fail to diligently take steps to correct such condition within sixty (60) days thereafter, then Ar-Tik shall thereupon have a right in its own name or in the name of Lark and/or McCulloughs’ Dairy Queen, Inc. but at its sole cost and expense, to take such action as it may deem necessary or proper in the premises, and in the event recovery is made in any such action Ar-Tik shall account for any proceeds collected in accordance with the terms of this Agreement.

15. The provisions of this agreement relating to the collection and receipt of monies by Lark for the account of Ar-Tik shall continue for a period of five (5) years commencing January 1, 1955, and ending on December 31, 1959, and shall continue thereafter for successive five (5) year periods unless sixty (60) days prior to the end of any such period either Lark or Ar-Tik shall notify the other of the termination of such agreement in so far as Lark is acting for Ar-Tik in the collection and receipt of monies due Ar-Tik under the terms of this agreement. Lark does by these presents irrevocably name Ar-Tik as its nominee to receive payment of the said sums due Ar-Tik as set forth in Paragraph 5 hereof from all licensees under the Territorial Agreements effective upon termination hereof as provided herein.

16. Nothing contained in this agreement shall be construed as an assignment by Ar-Tik of any right, title or interest which it holds under the terms and provisions of the Eastern Agreement and the Western Agreement, as such Agreements are respectively supplemented, except to the extent hereinabove set forth.

17. If any one or more of the following events (hereinafter sometimes called “Events of default”) shall occur:

(a) If Lark shall at any time fail or refuse to pay over to Ar-Tik any sum of money received by Lark for the account of Ar-Tik under the terms and provisions hereof; or

(b) If Lark shall not continue to be qualified at all times as a corporation duly organized and existing under the laws of the State of Illinois, or shall make any assignment of any right under the Eastern Agreement and Western Agreement or Territory Agreement Exhibit “H” attached hereto except as herein provided; or

(c) If Lark shall otherwise fail or refuse to keep and perform any of the terms, covenants and agreements herein contained on its part to be kept and performed; provided, however, action by Ar-Tik under Paragraph 14 shall not be a default hereunder, unless Lark shall habitually or completely fail to endeavor to enforce the liability of Licensees under said Western, Eastern and this Agreement; and

(d) If Lark shall file a voluntary petition in bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file any petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future federal bankruptcy act or any other present or future applicable federal, state or other statute of law, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of Lark or of all or any substantial part of its properties or assets; or shall suffer a judgment or other lien upon any of its property or assets to remain unsatisfied; provided that at all times Lark shall not be in default in this respect if it is in the process of litigation in the matters mentioned in this Paragraph 17;

and such event of default shall continue for a period of fifteen (15) days after notice in writing by Ar-Tik to Lark, then and in either of such events of default, Ar-Tik may, at its option, terminate all rights of Lark to receive and collect any sum of money which may be due or become due to Ar-Tik.

18. If any portion of this agreement shall be held invalid, such portion shall be inoperative, but the remainder shall continue in full force and effect.

19. Any notice or notices which may be required to be given by the terms of this agreement shall be in writing and shall be considered to have been properly given if sent by United States mail, postage prepaid.

(a) If to Lark, addressed to Lark at P. O. Box 335 Moline, Illinois, or at such other address as Lark from time to time may have designated by written notice;

(b) If to Ar-Tik, addressed to Ar-Tik at 3280 SW 22nd Street, Miami, Florida, or at such other address as Ar-Tik from time to time may have designated by written notice;

(c) If to Dairy Queen, addressed to Dairy Queen at P. O. Box 335, Moline, Illinois or at such other address as Dairy Queen from time to time may have designated by written notice;

(d) If to McCullough, addressed to McCullough at P. O. Box 335, Moline, Illinois or at such other address as McCullough from time to time may have designated by written notice;

(e) If to McCulloughs’ Dairy Queen, Inc., addressed to McCulloughs’ Dairy Queen, Inc., at P. O. Box 335 Moline, Illinois, or at such other address as McCulloughs’ Dairy Queen, Inc. from time to time may have designated by written notice.

20. This agreement shall be binding upon and inure to the benefit of the respective parties, their respective heirs, executors, administrators, successors and assigns.

In witness whereof, Lark, Ar-Tik and McCulloughs’ Dairy Queen, Inc. have caused these presents to be signed in their respective corporate names and their respective corporate seals to be affixed, by their thereunto duly authorized officers, and H. A. McCullough and H. F. McCullough, co-partners doing business as McCulloughs’ Dairy Queen, and H. A. McCullough individually, have hereunto set their hands and affixed their seals as of December 31, 1954, on this the 25th day of February, 1955.

Signed, Sealed and Delivered in the presence of:

Leonard D. Hunt

Gladys C. Noah_

As to H. A. McCullough and H. F. McCullough, co-partners doing business as McCulloughs’ Dairy Queen

Leonard D. Hunt

Gladys C. Noah

As to H. A. McCullough individually

Lark Sales Company

By G. E. Stange

President

Attest: H. N. Pieper

Secretary

Ar-Tik Systems, Incorporated

By Harry M. Oltz

President

Attest: Roger D. Oltz

Secretary

H. A. McCullough

By L. S. Murchie Atty in Fact (Seal)

H. A. McCullough

H. F. McCullough (Seal)

H. F. McCullough

Co-partners doing business as McCulloughs’ Dairy Queen

H. A. McCullough

By L. S. Murchie Atty in Fact (Seal)

H. A. McCullough

McCulloughs’ Dairy Queen, Inc.

By Charles J. Hart

President

Attest: P. D. Robinson, Jr.

Secretary”

The case involves a dispute between the so-called royalty interests of the entire Dairy Queen Industry in the United States. The contract which is the subject of this dispute is not an ordinary one, and some knowledge of its background is necessary to an understanding of the case. Harry M. Oltz, the predecessor in interest of plaintiff, Ar-Tik Systems, Incorporated, patented a freezer in 1937. Thereafter he entered into various agreements with H. A. McCullough, the first being in 1939, by which McCullough and Ms successors in interest developed a business of selling a frozen ice cream product known as “Dairy Queen” throughout the United States, by virtue of which Oltz received certain payments per gallon of mix sold, as did McCullough. Prior to December 31, 1954, McCullough and his successors in interest transferred all of their rights to defendant, Lark Sales Company. On December 31,1954, the subject contract was entered into.

Por a number of years prior to December 31, 1954, the plaintiff Ar-Tik Systems, Incorporated, had been collecting the 4(S royalty payments throughout the entire United States. In the Western Area it was entitled to keep all collections. In the Eastern Area Ar-Tik was entitled to keep 2<¡¡, the other 2‡ belonging to McCullough. Ar-Tik geared its operations to the steady influx of royalties, which were necessary for its continued orderly operation.

When the patent expired, difficulties in collection of royalties arose and these difficulties, the practical necessity of consolidating the various royalty interests in a single entity for the purpose of national dealings and other considerations, led to the execution, on December 31, 1954, of the subject contract. By this contract, Ar-Tik surrendered its claims against H. A. McCullough personally, and also surrendered to Lark its vital and valuable right of direct collection of royalties, but in return therefor, exacted the clear and specific provision in paragraph 5 of the contract that upon collection of Ar-Tik’s monies by Lark, “Lark shall pay over to Ar-Tik the amounts received for the account of Ar-Tik on or before the 10th day of the month following actual receipt of such monies by Lark.”

The failure of Lark to pay over any part of the more than $62,000 collected by it on behalf of Ar-Tik, thus depriving Ar-Tik of the continuous flow of funds contemplated in the contract, is, in brief, the compelling reason for the institution of this suit by Ar-Tik.

The preamble to the contract contains the following language:

“Whereas, by assignment dated December 31, 1954, Ar-Tik assigned and transferred to Lark the right to collect in its behalf, a true and correct copy of which assignment is attached hereto, made a part hereof and marked exhibit Gr-2; and, . . .
“Whereas, Lark is willing to collect and receive all sums of money which may become due and payable to Ar-Tik, for the purpose of remitting the same to Ar-Tik and for the purpose of carrying out all of the provisions of this Agreement; . . .

Paragraph 2 of the contract provides that

“Each and every such contract negotiated by it (Lark) shall contain a provision requiring that the licensee shall pay a royalty or license fee of not less than 4^ per gallon . . ., which Lark shall collect and remit as set forth in Paragraph 5 of this agreement. . . .
“Dairy Queen and Ar-Tik agree to assist Lark in negotiating such new Territory Agreements. No change shall be made in the Territory Agreements which shall diminish the rights of Ar-Tik hereunder except upon written approval of Ar-Tik.”

Paragraph 3 of the contract provides:

“Lark further agrees to give notice to Ar-Tik of any default of Licensees in payments or failure to report, not later than 30 days after such default or failure to report.”

Paragraph 5 of the contract provides that Lark is to collect for Ar-Tik, but that upon receipt of said monies, Lark shall pay over to Ar-Tik the amounts received on or before the 10th day of the month following actual receipt of such monies by Lark.

Paragraph 6 provides that Lark shall render to ArTik a report of its costs of operations from time to time, which report shall show the areas occasioning such expenses and the amounts thereof.

Paragraph 10 provides: “Lark and Ar-Tik shall jointly undertake to improve and further the Dairy Queen business, . . .”

Exhibit Gr-2 to the contract dated December 31, 1954, which was a contract between Lark and Ar-Tik executed contemporaneously with the main contract provides:

“Lark hereby undertakes to collect for Ar-Tik the sums due or to become due to Ar-Tik under the terms of the aforesaid Western and Eastern Agreements and Supplements, all in accordance with the main agreement of even date, to which this agreement is to be attached, and promises and agrees to pay to Ar-Tik or its assigns all cash considerations received arising from receivables by Ar-Tik under contracts executed by H. A. McCullough, McCulloughs’ Dairy Queen and/or Lark to others in the nature of sub-contracts, franchises or licenses granted pursuant to said Western Agreement and Supplement (40 per gallon) and Eastern Agreement and Supplement (20 per gallon), except such portion thereof as Ar-Tik may, in writing, direct Lark to retain as its property.”

The preliminary hearing before the court developed the following facts: That Lark entered upon its duties as agent and attorney for Ar-Tik on or about the 23rd day of February, 1955. At that time Ar-Tik had in its possession about $62,000 which admittedly belonged to Lark (or the McCulloughs). Lark was also holding funds belonging to Ar-Tik, the exact amount of which was not shown. These funds, in the main had been accumulated during the Peoria litigation between the parties. Some time in a June conference between the parties, it was agreed that Ar-Tik was to hold the funds it had until such time as Lark’s collections in its behalf should reach the $62,000 figure, at which time the parties were to strike a balance. This balance was in fact struck on September 10, 1955, just two days after the Peoria litigation was concluded. The defendant Murchie of Lark contended throughout the hearing that their agreement for an offset on the $62,000 figure was to be a permanent thing, but he admitted receiving the document described in the next paragraph.

On June 21,1955 after a conference between Murchie, Mr. Pieper and Harold Oltz in Moline, Mr. Oltz of Ar-Tik sent Mr. Murchie of Lark a letter enclosing a memorandum of their June conference. This memorandum of their conference showed that Lark should retain collections until Ar-Tik’s balance was reached and that after the settlement of this account, Lark would send the Ar-Tik collections and that “These would be the net amounts due Ar-Tik after deducting the dues and whatever deductions are later agreed upon and authorized to be made.” By the enclosing letter Murchie was requested to “make any changes or alterations of the memorandum of that conference if it does not meet with your approval.” Murchie did not reply to this letter.

From September 1, 1955 to December 31, 1955 Lark collected monies belonging to Ar-Tik in the amount of $77,644.97 and it had deducted therefrom the gallonage deductions authorized by paragraph 5 of the contract in the amount of $15,558.43, but it had not remitted to Ar-Tik any of the balance of $62,086.54.

A further breach of the contract is shown by the evidence in that at no time since it assumed its duties did Lark make a report of the delinquencies of the store operators. Further, the contract specified precisely how Lark was to receive its funds from Ar-Tik for costs of operation which were properly attributable to Ar-Tik. Paragraph 6 required that a statement should be rendered showing the areas where the expenses were occasioned and Ar-Tik was to remit its share in accordance with a schedule attached to the contract within ten days after receipt. Lark did not comply with this specified procedure. On the eve of the hearing, defendants made their breakdown, but it had never been presented to plaintiff.

Defendants contend that Murchie was not a proper party to these proceedings, for the reason that he testified he was not a stockholder, director, officer or employee or managing agent of Lark. The record, however, shows that Murchie owned all the stock of McCulloughs’ Dairy Queen, Inc., which in turn owned all the stock in Lark; that Murchie was the person dealt with by anyone dealing with Lark; that Murchie was the only person who was thoroughly familiar with Lark’s affairs, and that his duties for Lark encompassed everything that any managing agent would perform. His name appeared on the contract of December 31, 1954 as attorney in fact for H. A. McCullough.

Without detailing the voluminous evidence in this case, it is apparent from an examination of the record that the trial court had before it a complicated and seriously disputed set of facts. The lower court acted after due notice had been given and a full hearing had in the matter, and after requiring plaintiff to furnish a substantial bond. In Forster v. Fruin & Walker Co., 170 Ill. App. 89, 91 the court states:

“ ‘The court having jurisdiction in equity, as we think, to hear and determine the case presented by the bill, the next question is, did the court improperly exercise its discretionary power in granting the temporary orders appealed from.
“ ‘The rule governing us on this question is that unless it clearly appears that the court below improperly exercised its discretionary powers in issuing the injunction pendente lite the order should be affirmed.’ ”

In McDougall Co. v. Woods, 247 Ill. App. 170, the trial court issued an interlocutory order enjoining defendant from collecting any monies which belonged to the plaintiff and from using any of said funds for his own use. The court said at page 172:

“The contract, in terms, made defendant the agent of complainant with reference to collections, and the bill alleges that defendant has a considerable sum of money in his hands belonging to complainant, for which defendant refuses to account. The bill prayed for an accounting and an injunction and the appointment of a receiver ....
“In appeals from interlocutory orders it is not our province to determine the rights of the parties in the subject matter of the litigation, but simply to determine from the averments of the bill whether the party probably is entitled to the relief sought. Where such an order is improvidently granted without notice, in a case where notice should have been given, or where the statute requires a bond as a condition precedent and none has been given, the interlocutory orders so improvidently granted will be reversed without reference to the merits of the cause. . . .

p. 174:

“The essence of the bill is the averment of a fiduciary relationship between the parties, in which defendant in the matter of collections made by him was the agent of complainant, having under his control the only books showing such collections and the accounts. There was no impropriety in temporarily enjoining the defendant from collecting or receiving any monies which equitably belonged to the complainant and from using any of said funds for his own use.”

In the case of Lee v. Hansberry, 291 Ill. App. 517, p. 522 the rule relative to a court of equity’s power in these cases has been stated as follows:

“A further point is made that the order is wrong and should be reversed because it disturbs ‘the status quo’ of the parties, in that Hansberry and his wife are ordered to vacate and give up possession of the premises at 6140 Rhodes Avenue within 90 days, and it is said that a preliminary mandatory injunction ‘cannot be entered except under rare circumstances,’ where the case has not been heard on its merits. . . .
“ ‘There is no magic in the phrase “Maintaining the status quo” which transforms an injunction essentially prohibitive into an injunction essentially mandatory.’ . . . There are cases in which the status quo ought not to be maintained.”

In Friedman v. Peckler, 255 Ill. App. 199, it was held that on appeal from an interlocutory decree for a temporary injunction the court would not interfere with the discretion of the trial court in granting the decree where the requirements of the statute on the granting of such interlocutory orders had been complied with by the giving of notice and bond by the complainant.

In its appeal in case No. 10,987 from the order denying defendant’s motion on its counterclaim for a temporary injunction, defendant contends that a preliminary injunction may be granted by the court without expressing, or without having the means of forming, a final opinion as to the rights of the parties; that until a final judgment is reached there can be no estoppel by judgment or by decree; and that orderly procedure in a court of equity does admit of the issuance of an injunction under the counterclaim.

Without this court making an exhaustive analysis of the many cases holding that the chancellor is not hound by rigid form, but may mold his decree to fit the situation, the Circuit Court of Appeals for the Fourth Circuit, in Bowen v. Hockley, 71 F.2d 781, 786 has aptly stated:

“. . . the chancellor always has had, and always must have, a certain power and freedom of action, not possessed by the courts of law, of adapting the doctrines which he administers. He can extend those doctrines to new relations, and shape his remedies to new circumstances, if the relations and circumstances come within the principles of equity, where.a court of law in analogous cases would be powerless to give any relief. In fact, there is no limit to the various forms and kinds of specific remedy which he may grant, adapted to novel conditions of right and obligation, which are constantly arising from the movements of society. While it must be admitted that the broad and fruitful principles of equity have been established, and cannot be changed by any judicial action, still it should never be forgotten that these principles, based as they are upon a Divine morality, possess an inherent vitality and a capacity of expansion, so as ever to meet the wants of a progressive civilization.”

The lower court had the matter under consideration from the time the complaint was filed and the motion for temporary injunction was presented by plaintiff. It had other motions presented and argued. It heard a substantial amount of testimony. It did, in fact, modify the original temporary injunction which it had issued. It found that plaintiff was entitled to relief as evidenced by the issuance of the temporary injunction, and by the subsequent modification of same. We do not find fault with defendant’s contentions. However, we believe that the lower court carefully considered all phases of the controversy and felt that defendant was not entitled to a temporary injunction on the state of the record as evidenced by the pleadings, motions and evidence which had been submitted. We are not inclined to disturb his actions.

In addition to defendants’ appeal from the court’s order denying them a temporary injunction on their counterclaim in case No. 10,987, the court had before it, in case No. 10,988, a situation where plaintiff and defendants each were seeking to have the trial court modify the original order for temporary injunction entered on April 9,1956. It is apparent from the terms of the order modifying the original order in the form presented by plaintiff that the chancellor was attempting to find a practical working solution to the situation created by the changed conditions brought about by the temporary injunction. In the various pleadings, hearings and orders appearing in this cause, it is further apparent that the ear of the chancellor was readily available to the respective complaints and contentions of the different parties on the different occasions these matters were presented in court. As was said in McDougall Co. v. Woods, supra, at 174: “We do not feel called upon to pass upon the demurrability of the bill or the merits of the cause.” We believe that the court’s decrees in issuing the temporary injunction sought by plaintiff, in denying the temporary injunction sought by defendants, and in modifying the original order granting the temporary injunction, were within the court’s discretion and should be affirmed.

Decrees affirmed.

DOVE, P. J., concurs in affirming the several orders appealed from.

CROW, J., concurs.


source: Caselaw Access Project

author: PRESIDING JUSTICE SCHEINEMAN

license: Public Domain

text:
    Victor Renner, Plaintiff, v. Walter Greathouse, et al., Defendants.
    Term No. 56-M-1.
    Fourth. District.
    January 14, 1957.
    Released for publication February 4, 1957.

      Paul P. Waller, Jr., of Bast St. Louis, for plaintiff-appellant.
    William L. Beatty, G. Edmond Cook, and Morris B. Chapman, all of Granite City, for defendants-appellees.
   PRESIDING JUSTICE SCHEINEMAN

delivered the opinion of the court.

The plaintiff, Victor Renner, is in the business of leasing coin operated amusement devices. He filed this suit for damages against Walter Greathouse, who is a business rival, and the individuals who were the mayor and alderman of Granite City.

The complaint charges that the defendants had agreed among themselves to put plaintiff out of business and eliminate any competition with Greathouse, for the purpose of securing certain personal advantages for themselves; alleges certain malicious acts done wilfully with intent to injure plaintiff’s business, such as using threats, intimidation, coercion, etc. to induce location owners to terminate agreements with plaintiff; alleges damage to his business and prays for damages.

To the complaint the defendants filed a motion to dismiss on the sole ground that the complaint is barred by a prior judgment in the same court, with a copy of the judgment attached to the motion. The motion was allowed and judgment of dismissal entered, from which this appeal is taken.

The prior judgment was on a petition for writ of mandamus, in the name of the people, on the relation of the present plaintiff, against the mayor and aider-men, to compel the issuance of a license to plaintiff. Plaintiff contends the parties in the new action are in a different capacity, the subject matter of the suit is different, the issues different, the relief prayed different, therefore the prior action is no bar to this.

The defendants seek to sustain the order dismissing this suit on the principal basis that the prior judgment decided there was no deprivation of plaintiff’s property involved, and no lack of due process. Since the prior judgment was merely on the pleadings, it is not contended that the merits were heard and decided.

Examination of the dismissal of the complaint for mandamus discloses that the court expressly held that the issuance of a license involved discretion on the part of the city council with which the court would not interfere. It was held that the exercise of the police power did not involve a property right, therefore the complaint did not state a cause of action, and would be dismissed.

The order of dismissal made it clear that the court was following the general principles pertaining to mandamus. It is an extraordinary remedy and will be issued only where a clear right is shown. Daniels v. Cavner, 404 Ill. 372, 88 N.E.2d 775. A court will not issue a writ the effect of which would be to substitute the court’s judgment or discretion for that of the body which is commanded to act. People ex rel. Walsh v. Board of Commissioners of Cook County, 397 Ill. 293, 74 N.E.2d 503. It is a general rule that mandamus will not lie to a municipal council with respect to duties involving discretion, 37 Am. Jur. Mun. Corp. § 69.

As to the court’s statement about property rights, it is apparent, and conceded by defendants, that this was on the theory that a licensee under a municipal ordinance has no inherent franchise or property right therein.

The applicable principles of the doctrine of res adjudicata, may be stated thus: subject to some exceptions, the doctrine is not applied unless the parties, the subject matter of the suit and the issues are the same. In comparing two cases, “the test generally applied is to consider the identity of facts essential to their maintenance, or whether the same evidence would sustain both. ... If the two actions rest upon different states of facts, or if different proofs would be required to sustain the two actions, a judgment in one is no bar to the maintenance of the other.” 30 Am. Jur. Judgments, Sec. 174.

Where one suit seeks the performance of an act and another a money judgment, the causes of action are not the same. Pillsbury v. Early, Adm., 324 Ill. 562. “The doctrine of res adjudicata is not available as a bar to a subsequent action if the judgment in the former action was rendered because of a misconception of the remedy available, or of the proper form of proceeding.” 30 Am. Jur. Judgments, Sec. 210. “A judgment holding that a declaration is bad is not a bar to a declaration stating facts which constitute a proper cause of action.” Id. Sec. 212.

Finally, it may be pointed out that a municipal officer “is not personally liable where it does not appear that the act of refusing to grant the license is based on any personal financial interest, or that there is a purpose to benefit himself or others at the expense of the applicant, or to do malicious injury to the applicant.” 37 Am. Jur. Mun. Corp. See. 267.

Based on the foregoing principles, it is our opinion that the mandamus action was dismissed as not an available remedy, so that the complaint failed to state a cause of action, while the present suit is against individuals for damages for alleged malicious acts designed to injure plaintiff for the personal benefit of defendants; that the subject matter is different and the proof which the court refused to hear in the first action, may be admissible in this action for damages against the individuals. The plaintiff has not had a day in court as to the facts or his right to damages, the prior judgment merely holding that the court would not mandamus a discretionary act; therefore we hold that the prior action is not a bar to this one, and the court erred in dismissing this suit on the ground of prior adjudication. The judgment is reversed and the cause remanded with directions to overrule the motion to dismiss based on the prior suit, and to proceed in normal course.

Reversed and remanded.

BARDENS, J., concurs.

CULBERTSON, J., dissents.


author: PRESIDING JUSTICE REYNOLDS

text:
    Gerald Dobie, Plaintiff-Appellee, v. M. Luther Livengood et al., Defendants, M. Luther Livengood et al., Defendants-Appellants.
    Gen. No. 10,089.
    Third District.
    January 17, 1957.
    Released for publication February 4, 1957.

      Harvey Gross, of Paris, for defendant-appellant.
    Massey, Anderson and Gibson, of Paris, for plaintiff; Earl R. Anderson, of Paris, of counsel.
   PRESIDING JUSTICE REYNOLDS

delivered the opinion of the court.

The plaintiff in this cause loaned the defendant, M. Luther Livengood, $10,000 on or about March 18th, 1952. The defendant and his wife, Blanche S. Liven-good, met the plaintiff in the office of Harry C. Kinne, Sr., an attorney at law, who was then and there acting for the plaintiff, Gerald Dobie, and at' that time the plaintiff delivered to the defendants a draft for $10,000 and at the same time, the defendants executed a note for the $10,000 secured by a trust deed on certain oil properties owned by the defendant M. Luther Liven-good. The interest rate agreed upon at that time was 6%. Nothing was paid on the note, and the plaintiff brought suit to foreclose said trust deed. The defendants filed their answer admitting the debt, but at the same time the defendant M. Luther Livengood filed his counterclaim for services allegedly rendered the plaintiff by the defendant Livengood. Later, defendants amended their answer and set up the affirmative defense of usury alleging that in addition to 6% interest required by the note, that the defendant M. Luther Livengood had orally agreed to assign to the plaintiff an undivided one-sixteenth interest in a wildcat oil lease. To this affirmative defense the plaintiff filed his answer. The counterclaim of the defendant as originally filed alleged the purchase of certain leases for the plaintiff for which a commission was claimed. The plaintiff in answering the claim of a commission due, set up as a defense that the defendant M. Luther Livengood had no broker’s license and was therefore not entitled to any commission. Afterwards, the defendant M. Luther Livengood amended his counterclaim to show that he had purchased interests in oil and gas leases and at the instance of the plaintiff had surrendered his interest to the plaintiff and thereafter performed certain duties in connection with the completion of the sale and claimed $1,000 as a reasonable value for his services.

Trial was had before the court without a jury, and the trial court found the defendants were indebted to the plaintiff in the sum of $10,000 together with interest of 6 per cent, making a total due' the plaintiff from the defendants of $13,575.80 as of the date of the decree. From that decree the defendants have appealed to this court.

Since the one ground raised on appeal by the defendants is that the decree of the. trial court is against the greater weight and preponderance of the evidence, it will be necessary to examine all the evidence in the case, both as to the claim of usury and as to the compensation claimed as a set off by the defendant, M. Luther Livengood. In considering these two disputed matters it must be kept in mind that both are affirmative defenses and the burden is on the defendants to prove them or either of them by the greater weight of the evidence. It is not disputed that the defendants had borrowed from the plaintiff the sum of $10,000. It is equally undisputed that the note carried interest at the rate of 6 per cent per annum. The sum of $1,000 was stipulated to be a reasonable attorney’s fee. It is further undisputed that the defendant Liven-good executed and delivered to the plaintiff an assignment of a one-sixteenth interest in a certain oil and gas lease known as the Englum lease. The testimony as to the time that this assignment was made is in sharp conflict. The plaintiff and the defendant agree that the assignment was discussed on the same day that the money was loaned and the trust deed was executed in the office of Harry C. Kinne. At that time, there seems to have been present Mr. Kinne, the attorney for the plaintiff, the plaintiff, the defendant M. Luther Liven-good, and his wife, Blanche S. Livengood. The plaintiff testified that the assignment of the one-sixteenth interest in and to the oil and gas lease known as the Englum lease was made after the note and trust deed had been executed and the money delivered, and that the assignment had no connection in any way with the loaning of the money and was an aftermath of the agreement pertaining to the $10,000. Mr. Livengood, the defendant, testified that the assignment was talked over by the parties before the money was loaned and before the execution and delivery of the note and trust deed, and that it was part of the whole transaction. Although Mr. Kinne was present and was active in the drawing up of the necessary papers, he did not testify as to whether the agreement for the assignment of the one-sixteenth interest was before or after the loaning of the money, and the testimony of the wife of the defendant does not touch on this question. The trial court in his memoranda of opinion held that it was the trial court’s opinion that the burden was upon the defendant to explain why these two witnesses did not testify so as to throw light on this particular transaction.

The defendant placed in testimony a note written by the plaintiff to the defendant in August, 1953. In that note or letter the plaintiff, after demanding payment of the $10,000 loaned or part of it, made this statement in the following language: “Something else annoys me is that you gave me a 34 6 interest in a lease on which you agreed to drill an exploratory well — this being part of the loan deal — and you let the lease lapse, so that in effect all I got was a piece of paper. I think you have an obligation here to substitute an interest in one of these two leases you have acquired.”

The defendant claims that this language shows that the assignment of the one-sixteenth interest in the Englum lease was in addition to the 6 per cent interest and was part of the loan of $10,000 and the execution of the note and mortgage.

In the trial court’s memorandum of opinion, the trial court says that counsel for plaintiff conceded that the language used in this letter was “an ill-used phrase,” but the trial court goes on to say that the language used in the letter may be reconciled with plaintiff’s theory of the case when all the surrounding circumstances and evidence are taken into consideration and most particularly the time and under the conditions that the letter was written, insisting, in the main, upon Livengood making payment of the principal loan of ten thousand dollars. And the trial court further commenting in the memorandum of opinion says that it does not seem logical that a man would appear at his attorney’s office with a draft in the amount of ten thousand dollars for the purpose of having the necessary legal documents prepared to safeguard him in his loan, would have completed the transaction and paid over the money, if a part of the consideration was the execution of an interest in an oil and gas lease. That the agreement to execute an oil and gas lease, being a freehold interest, would be void under the Statute of Frauds, and unenforceable unless some memorandum had been made, and that surely Mr. Kinne would have so advised the plaintiff.

Two other questions arise. One is the question of the value of the assignment of the one-sixteenth interest in the oil and gas lease, and the other is what services were rendered by the defendant for the plaintiff in the securing of other interests in oil and gas leases and the value of those services.

Mr. Dobie testified that he paid nothing for the assignment and that there was no consideration for it; that Mr. Livengood gave it to him and that it had nothing at all to do with the loan. In his testimony about the paragraph of the letter from the plaintiff to the defendant, relied upon by the defendant to show that the assignment was part of the transaction, the plaintiff testified that the assignment was not conditional to making the loan. As to the value of the assignment of the one-sixteenth interest in the Englum lease, the plaintiff testified that the finding of oil on this particular lease was highly problematical and that it had no definite value.

Walter W. Henigman, a witness with considerable experience in oil well drilling, testified that the value of an oil lease or interest in an oil lease, would be dependent upon the operator who tried to raise money and the more able the operator is to raise money, the more valuable the lease. Mr. Henigman valued the one-sixteenth interest at $750.

Mr. Kinne value the one-sixteenth interest in the lease at $1,000. C. M. Faulkner, a veterinarian, and oil well driller, testified that in his opinion the Englum lease was worthless. Robert P. Hennig, an oil producer and driller with considerable experience in oil well drilling testified that in his opinion the fair, reasonable market value of the one-sixteenth interest in the En-glum lease at the time it was assigned to Mr. Dobie was $79 or $80. Mr. Livengood, the defendant valued the one-sixteenth interest at $1,000, and testified that iii discussing the matter of the loan the day before they agreed upon the loan, in a conversation between himself and the plaintiff, that the plaintiff at that time told bfm that he could make more than six per cent on his money and that his only objection was to loaning the money out at six per cent; that at that time he, the defendant told the plaintiff about the one-sixteenth interest in the Englum lease and that they agreed then for the assignment of the one-sixteenth interest as further consideration for the loan.

The compensation claimed in the amended counterclaim is for services claimed to have been rendered by the defendant Livengood for the plaintiff in the purchase of other interests in what was known as the Dudley Field or Dudley Pool. Mr. Dobie testified that he was the owner of a one-sixteenth interest in the Brinkerhoff “B” lease in the Dudley pool; that in December 1951 he purchased an interest from Forrest S. Blunk and Leslie Vogel; that in purchasing their interest Livengood had nothing whatever to do with the purchase; that in April 1952, he purchased the interest of Barkley, Whitaker and others; that Liven-good had told him about the Barkley interest and recommended buying at $2,000 per barrel; that he examined the Dudley field and did not buy at that time; that later, the defendant Livengood again contacted him and told him that Barkley still wanted to sell; that he later learned he could purchase the Barkley interest at $1,750 per barrel; that he contacted Mr. Kinne and instructed him to go ahead and close the deal with Barkley on the basis , of $1,750 per barrel. Mr. Barkley testified that he had talked with Liven-good as well as others about selling his interest and the interests of others in the Dudley field, but that he did not deal with Mr. Livengood and that the transaction was handled by K. Parker Vosloh, his attorney. Mr. Kinne testified that he had considerable dealings with Livengood in connection with the purchase of the Barkley and other interests, and the assignment of their interests, but that he didn’t hire Livengood to do anything in connection with the matter. At that time, Mr. Kinne was acting for the plaintiff in the purchase of the Barkley and other interests. Yosloh, attorney for Barkley testified that Livengood was contacted several times in connection with the sale, but that he did not know in what capacity Livengood was acting and that he could have been a volunteer; that to his knowledge Livengood did not have any authority from Dobie to represent him.

The evidence is in conflict as to a number of questions of fact. The time of agreement for the assignment of the one-sixteenth interest in the Englum lease is1 in dispute, the plaintiff claiming it was after the loan was made, and the defendant claiming it was before, with two other witnesses who might have thrown some light on the matter not testifying on that question. The value of the one-sixteenth interest assigned to the plaintiff is disputed, some witnesses testifying it was worthless or of nominal value only and others valuing it up to $1,000. The value of the services, if any, rendered by the defendant for the plaintiff in the purchase of the Barkley and other interests in the Dudley field is disputed. The authority to render services is disputed. The services claimed rendered are in dispute.

As previously stated in this opinion, the defense of usury, and the counterclaim set out are affirmative defenses and must be proven by the defendant by the greater weight of the evidence. The defendant must not only prove that the assignment of the one-sixteenth interest in the Englum lease was part of the loan transaction, but must also prove that it had a value of sufficient amount to render the interest charged usurious. The note and the interest set forth do not show usury, on their face. And even if the note and interest charged, together with the assignment interest constituted usury, there must have been an intention on the part of both the borrower and the lender to contract for or make usurious interest. Because the defense of usurious interest is in the nature of a penal action, the usury must be proved by a clear preponderance of the evidence.

In the case of Replogle v. Scott, 299 Ill. App. 270, at page 274 the question of intention is discussed where the court said: “The transaction was conducted in good faith by all parties, and there was no intention to circumvent the statute against usury.” And in the case of Chicago Title & Trust Co. v. Kearney, 282 Ill. App. 279, on page 286, that court said: “The courts of this State have held that in the last analysis the question of whether a contract is tainted with usury is determined not by the form of the contract employed but by the intention of the parties.” Citing Curtis v. LeMoyne, 248 Ill. App. 99; Clemens v. Crane, 234 Ill. 215; Cooper v. Nock, 27 Ill. 301.

Therefore in addition to the requirement of proof by the greater weight of the evidence, on the part of the defendant, as to the other disputed facts, there is an additional burden placed upon him of proving that the parties themselves so understood and intended to enter into a usurious contract.

It is true that where a judgment is clearly and palpably against the weight of the evidence it is the duty of a reviewing court to interpose its judgment and reverse the judgment of the lower court. Ward v. Illiopolis Food Lockers, Inc., 9 Ill.App.2d 129; Bowman v. Illinois Central Railroad Co., 9 Ill.App.2d 182. But as said in the Ward v. Illiopolis Food Lockers case, “It is the law in Illinois that the reviewing court will not undertake to substitute its judgment for that of the trial court, unless the verdict or judgment is clearly and palpably against the weight of the evidence.” And a reviewing court has no right to substitute its judgment for that of the trial court unless the verdict or judgment is clearly and palpably against the weight of the evidence. This doctrine of law has been laid down by a long line of cases in Illinois, and applies not only to verdicts of juries, but equally to judgments and decrees of the court trying cases without a jury. Arliskas v. Arliskas, 343 Ill. 112; Olson v. Eulette, 332 Ill. App. 178; Beechley v. Harms, 332 Ill. 185; Horn v. Horn, 5 Ill.App.2d 346. In the Horn case, the court said, at page 355: “Where the evidence is conflicting the conclusions of the trial judge who saw and heard the witnesses and had advantages not possessed by the reviewing court in judging the weight of their testimony should not be disturbed unless clearly wrong.” Citing City of Quincy v. Kemper, 304 Ill. 303; Bellm v. Henry, 336 Ill. App. 525.

There is one matter that undoubtedly the trial court in considering this matter took into consideration. In the original answer and counterclaim, the defendants did not interpose the defense of usury. This came later and appears to have been an afterthought on the part of the defendant M. Luther Livengood. If there had been a definite understanding between the plaintiff Dobie and the defendant Livengood that this extra compensation or transaction with a claimed value of $1,000 was part of the loan transaction, the defendant was well aware of it and he would have pleaded it in the first instance.

Further there is the uncontradicted testimony by the plaintiff that Livengood had tried to interest him in the purchase of the interest in the Englum lease at a date prior to the loan date, and that he had refused to purchase the interest at any price. The trial court in his memorandum of opinion further relied upon the law as laid down in the case of Wilson v. Reed, 262 Ill. App. 230, where the court said: “The law seems to be that if an agreement can reasonably be construed as non-usurious, it should be so construed.” Citing Mosier v. Norton, 83 Ill. 519; Mumford v. Tolman, 157 Ill. 258.

After carefully examining the evidence and in view of the many questions of fact that are in dispute, this court is not inclined to substitute its judgment on those questions of fact for those of the trial judge, and is not convinced that the judgment of the trial court is so clearly and palpably against the weight of the evidence, as to warrant this court in reversing the judgment. The judgment will be affirmed.

Affirmed.


text:
    Charles L. Sharp, also known as C. L. Sharp, Plaintiff, Katherine Huber, Executor under the Last Will and Testament of Charles L. Sharp, Deceased, Plaintiff-Appellee, v. Grace Kennedy, Defendant-Appellant.
    Gen. No. 10,092.
    Third District.
    January 17, 1957.
    Released for publication February 4, 1957.

      Hutson & Hutson, of Monticello, and Nichols & Jones, of Tuscola, for defendant-appellant.
    Lemna & Lee, of Tuscola, and Griffin, Winning, Lindner & Newkirk, of Springfield, for plaintiff-appellee; James Lemna and Raymond Lee, Jr., of Tuscola, and Robert H. Brunsman, of Springfield, of counsel.
   PRESIDING JUSTICE REYNOLDS

delivered the opinion of the court.

On February 10th, 1955, Charles L. Sharp, also called C. L. Sharp, obtained Judgment by Confession in the Circuit Court of Douglas County, Illinois, against Grace Kennedy. Execution on said judgment was issued and the sheriff returned the execution as not satisfied.

On February 28th, 1955, Grace Kennedy, the defendant filed her motion to vacate and set aside the judgment of February 10th, 1955, and for leave to plead to the complaint, or, in the alternative, to reduce the amount of the judgment. This motion was verified by Grace Kennedy who stated that she had read the motion, and that the facts contained therein were true. On October 28th, 1955, defendant Grace Kennedy, made motion to file amended and supplemental motion to set aside the judgment and for leave to plead or, in the alternative, to reduce the amount of the judgment. This motion was allowed and on the same day the amended and supplemental motion of the defendant was filed. At the same time, suggestion of the death of Charles L. Sharp was made and on motion Katherine Huber, as Executor of the Estate of Charles L. Sharp was substituted as party plaintiff. On the same day, October 28th, 1955, the plaintiff filed a counter-affidavit, which attacked the defendant’s motion on the ground that the motion was not supported by sufficient affidavit as required by Supreme Court Rules 15 and 26 (SmithHurd Revised Statutes 1953, Chapter 110, pars. 259.15 and 259.26) and that the defendant Grace Kennedy was not competent to testify to facts occurring before the death of Charles L. Sharp and was not therefore competent to make affidavit in support of defendant’s motion. And on the same day, the defendant Grace Kennedy, obtained leave of court to file additional affidavit in support of her motions. This was done on November 2nd, 1955, by the filing of an affidavit by Patricia Kennedy Hutson, daughter of the defendant, which affidavit stated that the affiant had read the motion to vacate and set aside judgment and for leave to plead to said complaint, or, in the alternative, to reduce amount of said judgment; that she had read the amended and supplemental motion to vacate and set aside judgment and for leave to plead to said complaint, and that she had personal knowledge of the facts set forth in both motions, that said facts contained in said motions and each of them were true and that the affiant if sworn as a witness was competent to testify thereto. On November 10th, 1955, the plaintiff filed her second counter-affidavit, and for grounds for dismissal of defendant’s motion stated that the motion was not supported by sufficient affidavit as required by Supreme Court Bules 15 and 26, and that tbe affiant Patricia Kennedy Hutson under Section 2 of the Evidence Act (Smith-Hurd Bevised Stat. 1953, Chapter 51, Par. 2) was not competent to testify to facts occurring before the death of Charles L. Sharp and was not competent therefore to make the affidavit in support of the defendant’s motion. The second counter-affidavit of the plaintiff further contended that the affidavit does not set forth existing facts but is comprised of conclusions, and as a final ground the counter-affidavit set forth that the motion of the defendant as originally filed and the amended motion were inconsistent. To the second counter-affidavit of the plaintiff, the defendant moved to strike.

On December 16, 1955, the motion of defendant to strike plaintiff’s counter-affidavit was denied. The court also denied the motion to set aside the judgment and for leave to plead. Prom the ruling of the court, the defendant appeals to this court.

Prom the pleadings it appears that the plaintiff Charles L. Sharp, and Martin B. Kennedy, husband of Grace Kennedy were partners. The partnership was dissolved by agreement dated January 31, 1949, and' Martin B. Kennedy and the defendant Grace Kennedy, his wife, executed certain promissory notes as consideration for Sharp’s partnership interest upon the dissolution of the partnership.

There were nine of the promissory notes. Notes numbered 1 to 4, inclusive, were dated January 24, 1949, were payable to Charles L. Sharp, and were signed by Martin B. Kennedy and Grace T. Kennedy. Each of these notes were for $1,000 and bore interest at the rate of 4% per cent per annum. Notes numbered 5 to 8, inclusive, were dated January 1, 1952, were payable to Charles L. Sharp, and were signed by Martin B. Kennedy and Grace T. Kennedy. Each of these notes was for $1,000 and bore interest at the rate of 4% per cent per annum. Note numbered 9 was dated August 1, 1953, in the amount of $646.98, was payable to C. L. Sharp, and was signed by M. B. Kennedy and Grace Kennedy. This note bore no interest. On January 21, 1952, Charles L. Sharp and Martin B. Kennedy entered into an agreement which recited that on January 31,1949, they had entered into a contract dissolving their partnership, and that Sharp had received certain promissory notes as consideration for his withdrawal from the firm. This agreement of January 21, 1952, further recited that Sharp had executed a will providing for the cancellation of said indebtedness which might be owing from Kennedy to Sharp upon Sharp’s death. The agreement further provided that Kennedy, upon Sharp’s death would purchase Sharp’s undivided one-half interest in a building-owned by them as tenants in common for the stipulated price of $3,500.

On December 8,1954, Martin B. Kennedy died, leaving a last will and testament naming his widow, Grace Kennedy, the defendant herein, sole legatee and devisee. On February 10, 1955, judgment by confession was entered against Grace Kennedy in the amount of $9,881.49 and costs of suit. On March 21,1955, Charles L. Sharp died.

From the pleadings and from the language of the agreement, this court must conclude that a will was executed by Sharp incorporating the provisions of the agreement of January 21, 1952. However, this will is not in evidence and does not appear to have been probated, but a will bearing- a later date was probated.

While a number of grounds are urged by each party, it would seem to this court that two questions are at issue, namely, was the affidavit of Patricia Kennedy Hutson, supporting the motions of the defendant sufficient under the rules, and was the said Patricia Kennedy Hutson a competent person to make such affidavit. Or to state it otherwise, if she was competent to make the affidavit, then the only question would be as to the sufficiency of the affidavit. The other matters were not urged before the trial court and will not be considered by this court on appeal.

Taking up first the question of the competency of Patricia Kennedy Hutson as a witness under Section 2 of the Evidence Act, Chapter 51, Hlinois Revised Statutes, 1953, the plaintiff questions her competency on the ground that she is an interested person. In support of this position plaintiff cites said Section 2 of the Evidence Act and Bellman v. Epstein, 279 Ill. 34. Section 2 of the Evidence Act provides that: “No party to any civil action, suit or proceeding, or person directly interested in the event thereof, shall be allowed to testify therein of his own motion, or in his own behalf, . . . when any adverse party sues or defends . . . as the executor, administrator, heir, legatee or devisee of any deceased person, . . . .” It will be noted that this prohibition only applies to a person who is directly interested.

The case of Bellman v. Epstein, 279 Ill. 34, cited by the plaintiff, does not support the plaintiff’s contention that a daughter of an interested person would be incompetent. In that case, the Court said: “The interest which disqualifies a witness must be some legal, certain and immediate interest.” Here Patricia Kennedy Hutson was a daughter of Martin B. Kennedy and Grace Kennedy. Martin B. Kennedy was dead and by his will had left his entire estate to his widow, Grace Kennedy. This daughter had no legal, certain or immediate interest in any matter concerning her mother, or her father, since the widow could dispose of the father’s estate, could will it away or otherwise alienate all of it. It might well be that the daughter might be incompetent as to the estate of Martin B. Kennedy, where a contest of the will or something of that nature were involved, but here, she has no legal, certain or immediate interest in the matter in which her mother is a defendant.

In the case of In Re Estate of Gillen, 288 Ill. App. 436, which is somewhat similar to the instant case, James Gillen was a Catholic priest. His brother Peter Joseph Gillen was a doctor. Dr. Gillen and his wife borrowed from Father James Gillen the sum of $3,350 and executed notes for this amount. Later Dr. Gillen died with the notes unpaid, and Father James Gillen and the widow, Mary E. Gillen entered into an agreement for cancellation of the notes for $520. Upon the death of Father James Gillen, his executor filed a claim against the estate of Dr. Peter Gillen. The children of Dr. Peter Gillen and Mary E. Gillen were held to be competent witnesses, since by the will of Dr. Peter Gillen, his entire estate had been devised and bequeathed to Mary E. Gillen, his widow, and the children were not interested therefore as beneficiaries. And in that case, the court citing Britt v. Darnell, 315 Ill. 385, said: “The interest disqualifying a witness must be such that pecuniary gain or loss will result to the witness from the judgment or decree of the court.”

In the case of Williams v. Garvin, 389 Ill. 169, the plaintiff’s daughter Julia Foster and son-in-law Bay Foster, were held to be competent witnesses on the ground that they were not directly interested. The court in that case said: “A person directly interested within the meaning of Section 2 of the Evidence Act must also have an immediate interest, (Brownlie v. Brownlie, 351 Ill. 72,) that is, an interest which will result in a gain or loss from the judgment or decree (Britt v. Darnell, 315 Ill. 385). True, if the plaintiff did not outlive Julia Foster and did not dispose of the property prior to her death, the Fosters would profit. But this is not the character of interest which this court has held to be certain, direct and immediate. Julia may not outlive her mother or her mother may sell the property.”

In the case of Citizens Nat. Bank of Decatur v. Doran, 3 Ill.App.2d 383, the court said at page 398: “The interest which disqualifies a witness under sec. 2, ch. 51, Ill. Rev. Stats. 1953 (Jones Ill. Stats. Ann. 107.068) must be a legal interest which is direct, certain and immediate so that the party will gain or lose as a result of the suit.”

Here it is difficult to reconcile the position of the plaintiff with the facts in the case. The entire estate of Martin B. Kennedy had been left to his widow, Grace Kennedy, the defendant here. Mrs. Kennedy could dispose of it any way she saw fit and entirely disinherit her daughter. Whether or not a judgment was rendered against the mother, there was nothing direct, certain or immediate in the interest of the daughter. As was said in the case of Williams v. Garvin, 389 Ill. 169, Mrs. Kennedy might outlive her daughter, or she might dispose of her property.

In the case of Hughes v. Medendorp, 294 Ill. App. 424, which was a personal injury case based upon alleged negligence that caused the death of the plaintiff’s son, the daughter of the defendant was held to be a competent witness.

We must therefore hold that Patricia Kennedy Hutson, had no legal, direct, certain or immediate interest in the estate of her father, Martin B. Kennedy, and that she had no legal, direct, certain or immediate interest in the outcome of this suit, or such an interest that would result in a gain or loss from any judgment or decree entered. Patricia Kennedy Hutson is therefore a competent witness and competent to testify to the facts in the affidavit.

The other point is the sufficiency of the affidavit. The plaintiff attacks the affidavit on three grounds: 1. That Patricia Kennedy Hutson is an interested person and therefore incompetent to testify. This matter has been passed upon. 2. That the affidavit does not set forth existing facts but is comprised of conclusions of the affiant. 3. That the original motion of defendant and the amended motion are inconsistent. Taking up Ground No. 2, we cannot agree with the contention of the plaintiff. The amended motion of the defendant to vacate and set aside the judgment and for leave to plead sets forth in detail all the following: the notes in question; the partnership between Charles L. Sharp, original plaintiff and her husband, Martin B. Kennedy; the terms and conditions of the issuance of the notes; the dissolution of the partnership on January 31,1949; the agreement dated January 21,1952, between Charles L. Sharp and Martin B. Kennedy, for the cancellation of the notes upon the purchase of Sharp’s interest in a certain piece of real estate for $3,500, this contract being set forth verbatim in motion; the death of Martin B. Kennedy and the terms of his will; the death of Charles L. Sharp; the offer and tender of the sum of $3,500 for the purchase of the interest of Sharp in the certain parcel of real estate; the claim that the defendant was an accommodation maker only of the notes, and the statement that the defendant had a good and valid defense to the suit. In support of all these alleged defenses, an affidavit by a competent witness is to the effect that she, the affiant, has personal knowledge of the facts set forth in the motion; that the facts contained therein and each of them are true and that if sworn as a witness the affiant would testify competently thereto.

These are definite matters stated by the defendant, which would entitle her to a trial on the merits. And while the affidavit of Patricia Kennedy Hutson does not refer specifically to each matter alleged in the motion and restate the same, yet, the affiant does state under oath that she has personal knowledge of each fact alleged, and that the same and each of them is, true. This would seem to be sufficient. We do not believe that the rules impose upon the affiant the burden of restating everything in the motion, complaint or answer, and in such reference makes oath that these matters are true. We must therefore hold that the affidavit is sufficient as to detail and facts alleged.

As to Ground No. 3, the trial court permitted the defendant to file the amended motion. While there is no record of a withdrawal of the original motion on the part of the defendant, yet the filing of the amended motion in effect superseded the original motion. We see no merit in this contention.

In conclusion, we must hold that the trial court should have permitted the vacation of the judgment and allowed the defendant to plead and set up her defense. The agreement dated January 21, 1952, which was set out in full in the amended motion by the defendant together with the other matters pleaded, plead such a state of facts that it would entitle the defendant to plead to the complaint, and the trial court should have permitted her to plead, so that the issues so presented could have been tried on the merits.

The order of the trial court, denying the defendant’s motion to set aside the judgment and for leave to plead is reversed and the cause remanded with instructions to set aside the judgment and grant leave to the defendant to plead.

Reversed and remanded with directions.


author: JUSTICE BARDENS.

text:
    Lois Jayne Shappee, Plaintiff-Appellee, v. Bartlett Shappee, Defendant-Appellant.
    Term No. 56-M-5.
    Fourth District.
    October 9, 1956.
    Released for publication February 4, 1957.
    George M. Berry, for defendant-appellant; Jacoby, Patton and Manns, for plaintiff-appellee.
   Opinion by

JUSTICE BARDENS.

Not to be published in full.


author: JUDGE KILEY.

text:
    Leona Barana, Administrator of Estate of Louis M. Barana, Deceased, Appellee, v. James A. Hannah, Inc., Appellant.
    Gen. No. 46,920.
    First District, Third Division.
    December 28, 1956.
    Released for publication February 6, 1957.
    Mark H. Ellis, and Thomas K. Gifford, for appellant, Thomas C. Angerstein, George W. Angerstein, Charles Wolff, and Sidney Z. Karasik, of counsel; John C. Mullen, for appellee, Gerald M. Chapman, of counsel.
   Opinion by

JUDGE KILEY.

Not to be published in full.


author: PRESIDING JUSTICE DOVE.

text:
    John W. Hibser and Frances F. Hibser, Plaintiffs-Appellants, v. Zoning Board of Appeals of Peoria County, Illinois, et al., Defendants-Appellees.
    Gen. No. 10,955.
    Second District.
    January 9, 1957.
    Released for publication January 26, 1957.
    London G. Middleton, for appellants; James P. Kellstedt, Galbraith & Baymiller, Lester F. Carson, and Leiter and Durfee, for appellees.
   Opinion by

PRESIDING JUSTICE DOVE.

Not to be published in full.