text:
    Mary Busser, Plaintiff-Appellee, v. Donald Noble, Harold K. Pieper, Administrator of Estate of Donald E. Pieper, Deceased, Jack Schlueter et al. On Appeal of John L. Moore, Defendant-Appellant.
    Gen. No. 10,777.
    Second District.
    January 31, 1956.
    Released for publication February 17, 1956.

      Jacobs, Gorton & Rooney, and Wyatt Jacobs, all of Chicago, for appellant, John L. Moore; Joseph B. Lederleitner, of Chicago, of counsel.
    Warner and Warner, of Dixon, for appellee, Mary Busser; Henry C. Warner, and George F. Nichols, both of Dixon, of counsel.
   PRESIDING JUSTICE DOVE

delivered the opinion of the court.

Four automobiles were involved in a highway accident in Lee County shortly after midnight on the morning of October 18,1952. The plaintiff, Mary Busser, was a guest passenger in one of the cars which was being driven by Donald Pieper. As a result of the accident, Donald Pieper was killed and Mary Busser was injured. On January 22, 1954, the instant complaint, consisting of twelve counts, was filed by Mary Busser to recover damages for the injuries which she sustained.

Donald Noble, Robert Lizer, and Jack Schlueter were the drivers of the other cars involved in the accident, and count one of the complaint sought a recovery from Noble, and counts two, three, and four sought a recovery from Lizer, Schlueter, and Pieper respectively. Counts five and six sought a recovery against defendant, Harold F. Considine. Counts seven and eight were directed against defendant, John L. Moore. Count nine sought a recovery against Ruth K. Carney as the owner of the premises where Moore conducted his tavern. Counts ten and eleven were directed against Frank Dempsey as the owner and operator of a tavern on certain described premises, and count twelve made Violet Dempsey, wife of Frank Dempsey, a defendant and sought to have a conveyance executed by Frank Dempsey to Violet Dempsey to certain described premises set aside as a fraudulent conveyance made with the intent to hinder and delay the plaintiff in collecting any judgment she might obtain against Frank Dempsey.

The same day the complaint was filed a summons was issued and on January 23, 1954, was duly served on the defendant, John L. Moore. February 15, 1954, was the third Monday in February and the first return day. The defendants, who were served, other than defendant Moore, appeared and filed answers or motions to dismiss. Defendant Moore did not appear, and on February 17, 1954, on the motion of the plaintiff, defendant Moore was defaulted, and on the same day a hearing was had before the court resulting in a judgment in favor of the plaintiff and against the defendant, John L. Moore, for $15,000 and costs.

On March 8, 1954, Moore filed his motion, supported by affidavits, to set aside the judgment rendered against him on February 17, 1954, and for leave to plead. This motion was heard and denied on March 16, 1954, and this appeal follows.

The only counts of the complaint involved in this appeal are counts seven and eight. Count seven alleged that on October 18,1952, at approximately 12:30 o’clock a. m., Donald Noble was operating an automobile in a southerly direction upon Route 26 approximately two and one-half miles south of Dixon; that at the same time and place, Donald Pieper was operating an automobile in a northerly direction and Robert Lizer was operating an automobile in a northerly direction; that plaintiff was riding as a guest passenger in the motor vehicle being operated by Donald Pieper; that on October 17th and 18th, 1952, the defendant Moore owned and operated a tavern known as The Royal Palms and was engaged in selling alcoholic liquor, and upon those dates he sold or gave alcoholic liquor to Donald Pieper, a minor; that Pieper consumed said intoxicating liquor, and that said liquor caused or contributed to his intoxication at the time and place in question; that upon that occasion Donald Pieper did one or more of the following acts: (a) negligently drove his car while under the influence of intoxicating liquor; (b) negligently drove his car at a speed that was greater than reasonable or proper having regard for traffic and the use of the way; (c) negligently failed to drive his car upon the right half of the roadway; (d) negligently failed to keep his car under control; and (e) negligently failed to keep a proper lookout. This count then charged that as a direct and proximate result of the conduct aforesaid, the car in which the plaintiff was riding was struck and rolled upon its side, and the plaintiff was thrown in and about the car and upon the ground and thereby seriously injured. Count eight is the same as count seven with an additional paragraph which alleges that said sale of liquor to Donald Pieper was wilful and wanton and concluded that plaintiff was therefore entitled to recover both compensatory and exemplary damages against the defendant.

In support of the verified motion of the defendant to vacate the judgment, the affidavits of himself and P. J. Schukies were filed. The affidavit of the defendant states that immediately after he was served with summons in this case on January 22, 1954, he took the summons to the office of L. J. Welch Company at Dixon, through which he had purchased a policy of insurance; that upon the same day, R. H. Schmitt, of the Welch Company, sent the summons to Fidelity Insurance Agencies, Inc., at its address in Chicago; that on January 25, 1954, Fidelity Insurance Agencies advised the Welch Company it found no claim in their file involving the plaintiff in this suit and, therefore, could not refer the matter to the insuring company until further particulars were received; that on January 27, 1954, said R. H. Schmitt, of the Welch Company, wrote the Fidelity Insurance Agencies confirming a telephone conversation in which the Fidelity Insurance Agencies had stated that the claim had been located; that on January 28, 1954, the "Welch Company was advised by Fidelity Insurance Agencies that the summons in this case had been duly forwarded to the claim department of the insuring company. In this affidavit the defendant further stated that at no time did he hear from the insuring company, but was advised by Fidelity Insurance Agencies that his interests would be protected; that on February 11th or 12th, 1954, he called Fidelity Insurance Agencies in Chicago and again advised them of the return day of this summons and was assured the matter would be taken care of.

The affidavit of F. J. Schukies stated that he was the claim examiner for the Exchange Insurance Association with offices at 175 Wrest Jackson Boulevard, Chicago; that Exchange Insurance Association issued policy No. XLL11690 covering defendant as licensee, doing business as The Royal Palms; that this policy was sold by Fidelity Insurance Agencies, Inc., of Chicago; that the office of Exchange Insurance Association in Chicago is the Home office and that all documents, correspondence and summons relating to the outstanding policies of the company are delivered to the Home office in Chicago; that on January 28, 1954, the summons in this case was received in the mail room of affiant, having been received by the Insurance Exchange Association on January 25, 1954; that thereafter it was placed on the desk of affiant, along with some fifty-nine other files, but when or by whom affiant was unable to state; that the clerks in affiant’s office are instructed to red-flag all matters which require immediate attention, but no such red marker was placed on this file; that affiant’s attention was first called to this summons on February 18, 1954, after he received a telephone call informing him of the fact that this default judgment had been entered on February 17, 1954; that upon receipt of this information, affiant contacted the law firm of Fearer and Nye requesting them to represent defendant Moore, and when informed that they were unable to do so, arrangements were made with present counsel to represent appellant.

The Civil Practice Act provides that the court in which a judgment is rendered may, in its discretion, before final judgment, set aside any default and may, within thirty days after entry thereof, set aside any judgment or decree upon good cause shown by affidavit upon such terms and conditions as shall be reasonable (Ill. Rev. Stat. 1953, Chap. 110, sec. 50, par. 174, sub-par. 7 [Jones Ill. Stats. Ann. 104.050, subd. (7)]). Our Practice Act further provides that its provisions shall be liberally construed to the end that controversies may be speedily and finally determined according to the substantive rights of the parties (Ill. Rev. Stat. 1953, Chap. 110, par. 128, sec. 4 [Jones Ill. Stats. Ann. 104.004]).

A motion to set aside a judgment and vacate an order of default is addressed to the sound legal discretion of the court in which it is made and unless there has been a palpable abuse of such discretion an Appellate Court should not interfere. If, however, the action of the court to which the application is made is unjust and oppressive and has resulted in a substantial injury to appellant, such action will be reversed on review. Such motion or application should show a meritorious defense and a reasonable excuse for not having made that defense in due time. (Hitchcock v. Herzer, 90 Ill. 543.)

In Mason v. McNamara, 57 Ill. 274, the court, after stating that as a general rule the Supreme Court would not review the action of the lower courts in matters of discretion, went on to observe that cases may arise in which there has been such a state of facts as to call upon the upper court to interpose, to promote justice, by reviewing the decision of the circuit court even in the exercise of discretionary powers. The court then said (p. 277): “As we understand the long and well settled practice in this state, it has always been liberal in setting aside defaults at the term at which they were entered, where it appears that justice will be promoted thereby. . . . where it appears by affidavit, that the party has a defense to the merits, either to the whole or a material part of the cause of action, it has been usual to set aside the default, if a reasonable excuse is shown for not having made the defense. ... In such cases the object is that justice be done between the parties, and not to permit one party to obtain and retain an unjust advantage.”

In McMurray v. Peabody Coal Co., 281 Ill. 218, at p. 226, the court said: “It has been the long and well established practice in this state for courts to be liberal in setting aside defaults at the term at which they are entered where it appears that justice will be promoted thereby.”

In City of Moline v. Chicago, B. & Q. R. Co., 262 Ill. 52 at p. 65, in reversing a judgment and remanding the cause with directions to set aside the judgment of the lower court in a special tax proceeding and permit appellant to file objections to the confirmation of the tax, the court said: “Under the long and well settled practice in this state the courts have been liberal in setting aside defaults at the term at which they were entered where it appears that justice will be promoted thereby. When it appears by the affidavit filed in support of the motion that the party has a defense to the merits, either to the whole or a material part of the cause of action, it has been usual to set aside the default if a reasonable excuse is shown for not having made the defense.”

In Sempier v. Goemann, 165 Wis. 103, 161 N. W. 354, it appeared that a summons and a copy of a complaint by which plaintiff sought to recover for personal injuries was served on one defendant in April, 1914, and upon the other defendant on May 2, 1914. The defendants turned these papers over to an agent of the Royal Indemnity Insurance Company and claim to have received and relied upon the assurance of such agent that the insurance company would look after the matter and defend the lawsuit if necessary. Thereafter plaintiff’s attorney wrote one of the defendants on June 3, 1914, calling attention to the service and that the time for answering had expired, but no answer to this letter was received. About July 6,1914, a personal interview was had by counsel for the plaintiff with one of the defendants and the agent of the insurance company and the situation was discussed. On October 16, 1914, the defendants were defaulted and a hearing had and a verdict was returned against the defendants. The defendants, learning of this through a newspaper account, immediately consulted counsel and an application was made to have the proceedings opened and they be allowed to defend. This application was granted and in affirming the order of the trial court, the Supreme Court stated it was satisfied from the record that “in so doing, the court acted well within the field of judicial discretion.”

In Nash v. Treat, 45 Mont. 250, 122 Pac. 745, it appeared that the complaint contained two counts, the first against the defendant, D. E. Treat, and the second count against the said D. E. Treat and his wife. On July 17,1911, the summons and a copy of the complaint were served on the wife, at which time her husband promised her that he would consult an attorney and enter a defense. He did not do so and on August 12, 1911, a default was taken and judgment entered against both defendants. On September 8, 1911, the wife filed her motion to set aside the default and vacate the judgment. The trial court sustained the motion and in affirming that order, the Supreme Court of Montana said that the single question presented by the'record was whether the wife’s failure to appear because of the promise of her codefendant husband, was excusable neglect. In the course of its opinion, the court said: “While the courts should adhere to the rule that a party who has suffered a default ought not to have relief except upon showing a substantial excuse for his apparent neglect because the adverse party is prima facie justly entitled to the advantage which he has secured by the default, yet they should not indulge in refined distinctions or assign importance to matters of form, which might result in a denial of justice. Each case must be determined upon its own facts, and when the motion is made promptly and is supported by a showing which leaves the court in doubt or upon which reasonable minds might reach different conclusions, the doubt should be resolved in favor of the motion. ... It is the general rule that when a judgment has been rendered against a defendant who is in default for the reason that another person upon whom he has relied to attend to the defense for him, or who is chargeable with that duty by virtue of the relation of the parties, has neglected to do so, relief will be granted on the ground of excusable neglect. . . . Viewing the case as a whole, we do not think the court abused its discretion in holding that the neglect of the defendant was excusable.”

Hinz v. Northland Milk & Ice Cream Co., 237 Minn. 28, 53 N.W.2d 454, was an appeal from an order denying defendant’s motion to open a default judgment. It appeared in that case that the summons and complaint were served on the defendant on December 17, 1951, and on December 20,1951, were forwarded by the defendant to its insurer. The insurer mislaid the papers with the result that they were not forwarded to the attorneys for answering until December 29, 1951. On that day, plaintiff filed an affidavit to the effect that no answer had been filed and the matter was set for hearing for January 2, 1952. On that day, defendant’s attorney requested the plaintiff’s attorney for an extension of time to answer, but the request was refused and default was entered. On the same day, defendant served an unverified answer on the plaintiff, hut didn’t appear at the default hearing. On the following day, defendant obtained and served an order to show cause — accompanied by a notice of motion — why the judgment should not be opened and why the answer served the day before should not be permitted to stand. Upon the denial of this motion and the discharge of the order to show cause, the defendant appealed. In reversing the order of the trial court, the court quoted from the applicable provision of the Minnesota statute which provides, “The court, in its discretion, may likewise permit an answer or reply to be made, or other act to be done, after the time limited therefor by this chapter, or by its order may enlarge such time; or at any time within one year after notice thereof, in its discretion, may relieve a party from any judgment, order, or other proceeding taken against him throug*h his mistake, inadvertence, surprise, or excusable neglect,” and then said: “It appears, as already stated, that defendant, with reasonable promptness, delivered the summons and complaint to its insurer, which inadvertently mislaid the papers so that they were not forwarded to the attorney for the preparation of an answer until two days after the time for answering had expired, or on December 29th, the Saturday preceding New Year’s Day. By reason of the holidays, defendant’s attorney neglected to interpose an answer or to communicate with plaintiff’s attorney by telephone or otherwise prior to the reopening of business on January 2nd, the day on which plaintiff’s action came on for hearing as a default matter. Plaintiff’s attorney, on January 2nd, refused to grant an extension of time to answer on the ground that his client and witnesses were already on the way to the hearing and it was too late to intercept them. Immediately after the default hearing, judgment for $250 was entered in plaintiff’s favor. The files show that defendant’s motion to open the judgment accompanied by an order to show cause was served on January 3rd. Defendant’s attorney, by his affidavit, certified that defendant has a good defense on the merits. Where a defendant with reasonable promptness delivers the summons and complaint to its insurer which by contract is obligated to defend the suit, the negligence of the insurer in failing to forward the papers to the attorney for answering until shortly after the time for answering has expired, is not to be imputed to defendant so as to bar the opening of a default judgment where, in the exercise of a sound judicial discretion, it appears that defendant, after receiving notice, acted with diligence, has a defense on the merits, and where, as here, no substantial prejudice will result to plaintiff. . . . The discretionary power of the court to open a default judgment is not to be extended so as to encourage loose practice or to be so limited as to make orderly procedure an end in itself rather than a means by which justice is administered. Although justice delayed is justice denied, promptness in the dispatch of causes is not, for the sake of saving a few hours or even a few days, to be pushed with a zeal which does little more than put a premium on the efforts of one litigant to beat another to the draw and thus avoid a trial on the merits. An Appellate Court is reluctant to interfere with the exercise by the trial court of its discretion in the opening of judgments; but in this case, taking all the circumstances into consideration, it is clearly our duty to order a reversal.”

King v. Mitchell, 188 Ore. 434, 16 A.L.R,.2d 1128, was an action brought by a wife to recover damages for loss of consortium of plaintiff’s husband injured by an automobile owned by defendant Hines Lumber Company and operated by defendant Mitchell, an employee of said Lumber Company. The alleged injuries were sustained on August 30, 1943, and the complaint was filed October 3, 1947. Both defendants were served with a summons and a copy of the complaint on October 20, 1947. The Lumber Company appeared, filed a demurrer to the complaint, which was heard and sustained and a judgment entered in favor of the Lumber Company. Mitchell defaulted and a default order was entered against him on November 4, 1947. On May 12, 1948, judgment was rendered by default in favor of the plaintiff and against Mitchell for $12,500. On May 17, 1948, Mitchell moved to vacate the judgment, which motion was heard and denied and Mitchell appealed. The affidavit filed by Mitchell in support of his motion to vacate the judgment was to the effect that immediately after being served with the summons and complaint he delivered the same to Pat Maitland, the Safety and Personnel Director of the Lumber Company and was told that he would arrange with the Lumber Company for a proper defense of the action and Mitchell relied upon this assurance. It further appeared that through some misunderstanding the attorney for the Lumber Company’s insurer confined its defense of the action to that of the Lumber Company alone. In reversing the judgment of the trial court, the Supreme Court cited the Oregon statute to the effect that the trial court may, in its discretion, and upon terms as may be just, at any time within one year after notice thereof, relieve a party from a judgment, order or other proceeding taken against him through his mistake, inadvertence, surprise or excusable neglect. The court then said that the discretion of which the statute speaks is a legal discretion to be exercised in conformity with the spirit of the law and in a manner to subserve and not to defeat the ends of justice; that the statute was to be construed liberally to the end that every litigant shall have his day in court and his rights and duties determined only after a trial upon the merits of the controversy. The court then went on to say: “The whole controversy centers upon the question whether the defendant Mitchell’s showing of ‘mistake, inadvertence or excusable neglect’ was such that it was an abuse of discretion on the part of the court to refuse to relieve him from the judgment. In our opinion, Mitchell was entirely warranted in relying upon the assurance of Maitland that the Lumber Company would defend the action for him. It is not denied that Maitland was ‘the person directly responsible in said company for the handling of such matters.’ It is the practice in modern industry, where an employer and his employee are sued by a third party for injuries claimed to have been caused by the employee’s negligence in the operation of a motor vehicle on the business of the employer, for the latter to undertake the defense of the action for both. This is a fact of common knowledge. Almost universally, as in the present instance, the employer is protected by public liability insurance, which covers the employee as well as himself in such cases, and the insurance carrier provides the defense for both. Only an exceptionally untutored person in Mitchell’s position would have been ignorant of these facts, or would have thought it necessary to retain his own lawyer for the defense of the action. What Mitchell did was what any normal man in his position — what ‘a man of ordinary prudence’ (Freeman, op. cit., 484, § 243) — would have done. Since this is so, we can conceive of no good reason why the judgment should not have been vacated. There are many cases in the books in which reliance by one party on another to look after the defense of an action for him has been held to be ground for vacating a default judgment. . . . Although the precedents are useful as guides for decision, one case can hardly be said to control another, since it is doubtful whether two cases are to be found with identical facts. Each case must be determined, as we have said, on its own peculiar facts. ‘The question always is,’ Mr. Freeman says, ‘was the defendant reasonably justified under the circumstances in relying upon such a promise, or, in other words, was his neglect to attend to the matter himself, excusable.’ Freeman, op. cit. 492 § 246.”

In the recent case of Charles Ford & Associates of the Midwest, Inc. v. Goldberg, 7 Ill.App.2d 241, 129 N.E.2d 337, the court held that the Municipal Court of Chicago had the power, on an unverified application made within thirty days, to vacate an order of dismissal, to reinstate the cause of action and grant leave to file instanter an amended statement of claim and under the circumstances shown the trial court abused its discretion in denying such application. In its opinion the court calls attention to the fact that former sub-par. 7 of sec. 50 of the Civil Practice Act in effect at the time the motion in the instant case was determined, is now section 50 (6) of the Practice Act [Ill. Rev. Stats., 1955, ch. 110, §50, subd. (6); Jones Ill. Stats. Ann. 104.050, subd. (6)] effective January 1, 1956, and the present act omits the language “upon good cause shown by affidavit.”

Counsel for appellee state that the .question of whether neglect of a summons by an insurance company excuses a default has been before the Appellate Courts of this state several times and, without exception, the court has held that it does not. Counsel cite and call to our attention Chmielewski v. Marich, 2 Ill.2d 568; Gustafson v. Lundquist, 334 Ill. App. 287; Farber v. Bolotnikoff, 131 Ill. App. 345; Mendell v. Kimball, 85 Ill. 582; Schultz v. Meiselbar, 144 Ill. 26; and Hahn v. Gates, 169 Ill. 299, and insist that if this judgment is reversed, we overrule the Supreme Court and refuse to follow our own previous decision. We have read and considered these cases. The motions in the Chmielewski and Gustafson cases were filed after the thirty-day period had elapsed and the facts in the other eases are distinguishable from the facts as disclosed by this record.

We recognize that where a party is served with process and fails to act from negligence or without any reasonable excuse, he has no right to insist that he be permitted to defend. In the instant case defendant paid attention to this summons. He did not treat it with indifference. He did just what the ordinary individual would do. He delivered it to the agent of his insurance carrier. He thereafter made repeated inquiries concerning it and was assured his interests would be taken care of. His conduct was not inexcusable. The power to set aside a default and permit a defendant to have his day in court is based upon substantial principles of right and wrong and is to be exercised for the prevention of injury and the furtherance of justice. (31 Am. Jur. 279.) The question in the instant case is whether defendant was reasonably justified under the circumstances in relying upon the promise or statements of his insurance agent. We think he was. His neglect to attend to the matter himself was excusable. While the facts in Loomis v. Tadlock, 1 Ill.App.2d 298, and Rowe v. Mardis, 4 Ill.App.2d 81, 123 N.E.2d 340, are distinguishable from the facts in the instant case, what the courts held is persuasive.

It is finally insisted by counsel that the defendant was not diligent in the instant ease because eighteen days elapsed between default and the motion. There is no merit in this contention. As soon as defendant learned of the default, he contacted those who had assured him that his interests would be taken care of. The firm of lawyers first contacted were unable to represent defendant and there was a short delay in securing present counsel.

The affidavits in our opinion set forth a meritorious defense. The trial court so treated them and based its conclusion on what it considered the inexcusable negligence on the part of the .defendant. The trial court erred in so holding and its judgment is reversed and the cause remanded with directions to enter an order vacating the default and permitting appellant to answer counts seven and eight of the complaint.

Reversed and remanded with directions.

EOVALDI and CROW, JJ., concur.


source: Caselaw Access Project

author: JUSTICE CROW.

license: Public Domain

text:
    Ludwig R. Israel, Plaintiff-Counterdefendant-Appellee, v. Mildred F. Israel, Defendant-Counterplaintiff-Appellant.
    Gen. No. 10,872.
    Second District.
    December 1, 1955.
    Rehearing denied January 3, 1956.
    Released for publication February 10, 1956.
    Locke & Locke, for appellant; Albert Daniels, for appellee.
   Opinion by

JUSTICE CROW.

Not to be published in full.


author: PRESIDING JUSTICE LEWE

text:
    E. Richard Bagarozy, Appellant, v. Maria Caligeropolous Meneghini, Theatrically Known as Maria Callas, and Capitol Records Distributing Corp., Appellees.
    Gen. No. 46,700.
    First District, Third Division.
    November 23, 1955.
    Released for publication February 24, 1956.

      I. Harvey Levinson and Melvin E. Levinson, of Chicago, for appellant.
    Thomas H. Fisher, of Chicago, for appellees.
   PRESIDING JUSTICE LEWE

delivered the opinion of the court.

Plaintiff, a resident of New York, filed an action for breach of a written contract, against Maria Caligeropolous Meneghini, an opera singer professionally known as Maria Callas and a citizen of the United States but residing in Italy. Defendant Callas was personally served with process in Cook County, Hlinois. Joined with her as original parties defendant were The Lyric Theatre of Chicago, an Illinois corporation, and Capitol Records Distributing Company and Angel Records a division of Electrical and Musical Industries, Ltd., both foreign corporations.

Defendant Callas filed a special appearance contesting the jurisdiction of the court. Capitol Records answered admitting that it is a foreign corporation authorized to do business in Illinois and that it sells and distributes records containing operatic arias recorded by defendant Callas, but denies that it has contractual relations with defendant Callas and that there were moneys due her. Lyric Theatre filed a motion to dismiss the complaint pursuant to sections 7 and 48 of the Civil Practice Act [Ill. Rev. Stats. 1953, ch. 110, §§ 131, 172; Jones Ill. Stats. Ann. 104.007, 104.048]. Subsequently by agreement an order was entered dismissing defendant Lyric Theatre and Electrical and Musical Industries and on the same day that these parties were dismissed the court dismissed the complaint. Plaintiff appeals.

The material allegations of the complaint are as follows: Plaintiff, an attorney with wide experience in the theatrical profession, met defendant Callas in 1945. She was then residing in New York City. At the request of defendant Callas plaintiff’s wife, an experienced “voice coach” gave her voice lessons for a period of approximately eighteen months. In 1947 plaintiff “arranged to launch” the career of defendant Callas as an opera singer and “in furtherance” of her career plaintiff expended about $85,000.

July 13, 1947 plaintiff and defendant executed a written agreement which provided in substance that plaintiff was to be defendant’s' exclusive theatrical agent for a period of ten years with compensation of ten per cent of the gross fees subject to certain deductions not material here. Shortly after executing the agreement defendant left for Europe and has not returned to the continental limits of the United States except for an engagement at Chicago, Illinois, where she has agreed to appear under the auspices of the Lyric Theatre during the month of November 1955; that renditions of various operatic arias are being sold and distributed within this jurisdiction by Capitol Records and Angel Records, for which sums of money are dne defendant.

The complaint further alleges that defendant remained out of the United States for the purpose of avoiding process, and that she has refused to carry out the terms of the written agreement.

The prayer of the complaint asks that the court declare the written agreement between the parties to be valid, and for an accounting to plaintiff for all moneys and property received by defendant; and that defendant, her agents and attorneys, be restrained from contracting for services or accepting any engagements in any form of theatrical enterprise unless such engagement is approved by plaintiff.

A memorandum opinion filed by the trial court stated the following grounds for dismissing the complaint: (1) That the venue in this action is not properly in this forum by virtue of the provisions of the Illinois Venue Act; (2) That plaintiff is not deprived of any constitutional right; and (3) That the cause of action comes within the doctrine of forum non conveniens.

No affidavits or pleadings were filed by defendant Callas except the special appearance, nor did she adopt the motion of the Lyric Theatre to dismiss. In making its ruling the court appears to have considered the motion and affidavit filed by the Lyric Theatre of Chicago challenging the jurisdiction of the court.

The basic issue presented is whether proper venue for plaintiff’s action is in Cook County. The pertinent provision of Section 131, Chapter 110, Illinois Revised Statutes 1953, State Bar Edition, reads: “Every civil action shall be commenced in the county ... in which the transaction or some part thereof occurred out of which the cause of action arose. . . .”

The foregoing provision of Section 131 was first construed by this court in La Ham v. Sterling Canning Co., Inc., 321 Ill. App. 32. In that case plaintiff La Ham, a resident of Winneconne, Wisconsin, filed his complaint in the Circuit Court of Cook County, Illinois against Sterling Canning Company, an Illinois corporation having its principal office in Sterling, White-side County, Illinois, John W. and John C. Thrall, residents of Winneconne, Wisconsin, Douglas H. Thrall a resident of Eock Falls, Whiteside County, Hlinois, and two other defendants residents of Wisconsin, seeking to establish himself as the owner of one-third of the shares of the Canning Company alleged to have been acquired by purchase with funds contributed in equal parts by him and John W. and Douglas H. Thrall pursuant to an oral agreement entered into in Winneconne, Wisconsin. John W. and Douglas Thrall appeared specially to contest the jurisdiction of the court on the ground that the principal office of the Canning Company was in Whiteside County, that none of the defendants resided in Cook County, and that no part of the transaction out of which the plaintiff alleges his cause of action arose occurred in Cook County but that the transaction occurred at Sterling, Illinois or Winneconne, Wisconsin.

The question presented there was whether the court properly ruled that that part of the transaction out of which the cause of action arose occurred in Cook County. It appears that the only part of the transaction alleged to have occurred in Cook County related to the acquisition of the Canning Company in Chicago, where negotiations between the plaintiff and the Thralls took place. The wrongful acts alleged occurred after the purchase of the Company and took place either in Sterling, Hlinois, or Wisconsin. Plaintiff argued that the “transaction” embraces the entire series of transactions and if any of them occurred in Cook County the court had jurisdiction. The court said, at page 44:

“The word ‘transaction’ in the statute is modified by the phrase ‘out of which the cause of action arose’ and if no cause of action can be said to have arisen out of any of the events that occurred in Cook County, all of which were perfectly amicable and in accordance with the agreement of the parties, then no part of the transaction can be said to have occurred here within the meaning of the statute.”

Continuing further, the court in adverting to Craft Refrigerating Mach. Co. v. Quinnipiac Brewing Co., 63 Conn. 551, 25 L. R. A. 856, said:

“A ‘transaction’ is something which has taken place, whereby a cause of action has arisen . . . and by which the legal relations of such persons between themselves are altered.”

To the same effect are Heldt v. Watts, 329 Ill. App. 408, Schmelzle v. Transportation Inv. Corp., 341 Ill. App. 639, First Nat. Bank of Lacon v. Bauer Poultry Corp., 345 Ill. App. 315, and the most recent case, Christopher v. West, 345 Ill. App. 515, where the court in construing the provision of Section 131 here involved cited La Ham v. Sterling Canning Company, 321 Ill. App. 32 and Schmelzle v. Transportation Inv. Corp., 341 Ill. App. 639 with approval.

Here defendant argues that the transaction out of which the contract arose occurred “in New York and/or Italy,” and therefore no part of the transaction occurred in Illinois. We think defendant’s position is untenable, for the reason that plaintiff’s suit is not based on the transaction out of which the contract arose. Plaintiff’s cause of action, according to the allegations of the complaint, arose from the transaction resulting in the breach of the contract which occurred when the defendant Callas agreed to appear under the auspices of the Lyric Theatre of Chicago, in Co.o.k County, and refused to pay the commission due plaintiff under the terms of the agreement.

Under the authorities last cited we are impelled to hold that the proper venue for plaintiff’s action is in Cook County.

In view of our conclusion it was not necessary for plaintiff to join with defendant Callas any residents of Illinois as parties defendant in order for the Circuit Court to acquire jurisdiction.

Plaintiff contends that the trial court improperly applied the doctrine of forum non conveniens. The allegations of the complaint and plaintiff’s verified answer supported by affidavit show that defendant Callas is not amenable to process except in Cook County, Illinois.

Paragraph Seven of the complaint charges that “prior to her departure for Europe defendant Maria Callas and plaintiff, in order to formalize their understanding and' oral agreement, entered into a contract in writing.” The agreement is attached to the complaint and made a part thereof. Nowhere in the complaint nor in the written agreement is there any language from which it could reasonably be inferred that, in the event plaintiff was entitled to relief, suit therefor “would or might necessarily” be brought in an Italian forum.

The doctrine of forum non conveniens can never apply if there is an absence of jurisdiction or-mistake of venue. In all cases in which this doctrine comes into play it presupposes at least two forums in which the defendant is amenable to process. It furnishes criteria for choice between them. The court will weigh the relative advantages and obstacles to a fair trial. The plaintiff may not by choice of a convenient forum vex, harass or oppress the defendant by inflicting upon him expense or trouble necessary to his own right to pursue his remedy but unless the balance is strongly in favor of the defendant the plaintiff’s choice of forum should rarely be disturbed. (Gulf Oil Corp. v. Gilbert, 330 U. S. 501.) To the same effect see Thistle v. Halstead, 95 N. H. 87. The ultimate inquiry is where trial will best serve the convenience of the parties and the end of justice. (Koster v. Lumbermen’s Mut. Casualty Co., 330 U. S. 518.) Ordinarily the courts will not decline jurisdiction on a cause of action ex contractu involving foreign elements. 87 A. L. R. 1426.

In applying the doctrine of forum non conveniens the trial court rested its decision on Whitney v. Madden, 400 Ill. 185. There the defendant Madden, a resident of the State of Minnesota, sent a telegram from Minnesota to the plaintiff Whitney at his residence in Ohio. The telegram was alleged to contain false and libelous matters to the damage of the plaintiff at Chicago, Cook County, Illinois, and elsewhere. The defendant was served with summons in Cook County while spending the night as a guest in a Chicago hotel while in transit. We think the facts of that case are readily distinguishable from the facts in the present case. In the case at bar plaintiff and defendant are both citizens of the United States. Defendant Callas concedes that the written agreement here in question was made in New York and is governed by the laws of New York. But she asserts that all the issues that might arise are at least as easily determinable in the courts of Italy as in Illinois. No proof was offered to support this assertion. Moreover, the trial of a civil suit in Italy is not an adversary proceeding as we understand that term. See Buies of Evidence Under the New Italian Civil Codes, Hammelmann, 29 Journal of Comparative Legislation and Int. Law, 1947, page 39.

In Whitney v. Madden it was apparent that an appropriate forum was available to plaintiff in another State. In that case our Supreme Court in recognizing the constitutional guarantee of the right of every citizen of the United States to free access to. the federal and state courts of the several States, said, at page 188:

“The privileges of citizenship in the United States are consistent in the various States whether or not a citizen is also a resident of the State in which he seeks to redress his wrongs. This court has on many occasions recognized the duty of the judicial system in this State toward litigants whose residence was in a sister State and no one has been denied access to our courts by virtue of his nonresident status.”

Relegating plaintiff, an American citizen, to the courts of Italy to determine the issues involved in this case would not, in our view, furnish an appropriate forum available to plaintiff justifying invocation of the doctrine of forum non conveniens as defined in Whitney v. Madden.

Defendant Callas also complains that plaintiff failed to file security for costs as provided in Section 1, Chapter 33, Illinois Revised Statutes 1953 [Jones Ill. Stats. Ann. 107.038], State Bar Edition. The record does not show that this question was raised, argued or determined in the trial court. Therefore we shall not consider it. We have considered the other points urged but find no merit in them.

For the reasons stated, the judgment is reversed and the cause is remanded for further proceedings.

Reversed and remanded for further proceedings.

FEINBERG and KILEY, JJ., concur.


author: JUDGE KILEY

text:
    Sol Rich & Company, Inc., Appellant, v. P. M. Ross & Co., Appellee.
    Gen. No. 46,673.
    First District, Third Division.
    November 23, 1955.
    Released for publication February 24, 1956.
    Campbell, Miller, Carroll & Paxton, of Chicago, for appellant; J. R. Blomquist, of Chicago, of connsel.
    Francis J. Mahon, of Chicago, for appellee.
   JUDGE KILEY

delivered the opinion of the conrt.

This is an action for damages for breach of contract to deliver eggs. The conrt, without a jury, found for defendant and entered judgment accordingly. Plaintiff has appealed.

Plaintiff discussed with P. M. Ross, and submitted to tbe United States Army Quartermaster Corps, a bid to supply 400 cases of eggs. A contract between tbe Quartermaster and plaintiff followed. Plaintiff had no eggs but made a contract with Ross to supply and deliver them to tbe Quartermaster. Tbe eggs were rejected by tbe Quartermaster as not being of tbe required specifications. Tbe Quartermaster declared plaintiff in default and purchased eggs in tbe open market at a cost of $1,711.20 in excess of tbe Rich-Quartermaster contract price. Plaintiff responded to tbe demand of tbe Quartermaster and paid $1,711.20, to recover which it brings tbis suit.

Tbe important issue at tbe trial was whether plaintiff’s contract was with defendant corporation or Ross Produce Company of Unionville, Missouri. Tbe court found that tbe proof showed plaintiff’s contract was with Ross Produce Company and not- defendant. Plaintiff claims tbis finding is against tbe manifest weight of evidence.

There is no dispute that plaintiff contracted with one or tbe other Ross company for tbe eggs, that tbe eggs were not delivered and that plaintiff bad to pay tbe Quartermaster Corps $1,711.20. Plaintiff relies upon tbe testimony of its vice-president, Siegel, tbe oral and written admissions of P. M. Ross and tbe history of business between tbe parties to support its contention that tbe contract was with defendant.

Siegel’s testimony was that during tbe. telephone conversation between himself for plaintiff and P. M. Ross for defendant, tbe name of Ross Produce Company was not mentioned and that P. M. Ross told him to “bid tbis camp [Ft. McClellan] for me.” P. M. Ross testified that Siegel asked him if be could furnish eggs for tbis contract out of Ross Produce Company, Union-ville, Missouri, au approved Army plant; that he alternately talked on another telephone to Ross Produce Company and then told Siegel “if he received a contract, to confirm it with me that afternoon and the brother in Unionville would ship the eggs”; that the same afternoon Siegel told P. M. Ross he had the contract and Ross said “Okay. I will confirm it with the brother”; that later Siegel told him “Have your supplier have the eggs ready for inspection Monday, July 9 [7]”; that after the eggs were rejected Siegel told him to advise Ross Produce Company to dispose of the eggs; and that Siegel told Ross he had been having trouble with the Quartermaster and that both plaintiff and Ross Produce Company had fulfilled their contracts.

P. M. Ross admitted that in previous transactions with plaintiff he had sent bills on defendant’s letterheads and that plaintiff paid defendant. On the other hand he testified that plaintiff deducted its %% commission before paying defendant and that defendant deducted a like commission before making its payments to the supplier of the eggs. This deduction by defendant prompted the trial court to point out the distinction between a supplier’s profit on eggs and a broker’s commission.

On June 25th plaintiff confirmed in writing its contract with the Quartermaster saying, “Shipment will be made from the Ross Produce Company, Unionville, Mo.” P. M. Ross, for defendant, wrote the Quartermaster July 12th saying “In regular course of business we have at various times accepted orders” from plaintiff and “On June 25th, we accepted an order from . . . Rich & Co. to ship 400 cases . . . from Ross Pro., Unionville, Mo.”

Plaintiff also wrote the Quartermaster on July 30, 1952. This letter, though not competent to prove that on June 25th P. M. Ross disclosed Ross Produce Company as principal, does shed light on plaintiff’s understanding of what was intended between plaintiff and defendant. Siegel wrote “This contract was sub-let by us to the Ross Produce Company, Unionville, Mo., and they are protesting against alleged discrimination . . . , and they have filed a letter. ... We would ask you to refer to the letter from P. M. Ross & Co., Chicago dated July 12 . . . .” The July 12th letter thus appears to have been written by defendant as agent for Ross Produce Company.

Siegel and P. M. Ross had known each other and done business together for many years. Ross’ place of business was his apartment, he had no eggs and he testified he never made a contract on his own behalf to supply the eggs.

We have discussed sufficient evidence to show that this issue was decided, to a considerable extent, on the credibility of the witnesses. The court was in a better position than we are to determine which of the witnesses was more credible. Moreover, there was support for the court’s determination in the documentary evidence and in the nature of defendant’s compensation.

We see no merit in the contention that the finding is against the manifest weight of evidence.

Complaint is made that plaintiff was prejudiced at the trial because the court did not apply the doctrine of undisclosed principal. The finding of the court that the contract was with Ross Produce Company, and not with defendant, implies that the former was disclosed to plaintiff as defendant’s principal. Even if we assume the court did not consider the undisclosed principal doctrine, the judgment was nonetheless correct in view of our decision on the question of manifest weight. We think the court was justified in concluding that the contract did not bind defendant as principal. The evidence here renders the case of Wheeler v. Reed, 36 Ill. 81, inapplicable because here we think the court could find from the evidence that defendant disclosed its principal, that plaintiff knew the principal and that defendant did not make itself liable expressly or impliedly.

There was no reversible error in the court’s refusal to admit documentary evidence of previous transactions between plaintiff and defendant. These documents would tend to show no more than what defendant already admitted. And since there was no rebuttal to meet the testimony of P. M. Eoss concerning deductions on defendant’s part for commissions, we fail to see how the documents offered could have had any effect on the finding of the trial court. The situation here is not like that in Phillips v. Roberts, 90 Ill. 492, where the course of conduct, shown by the evidence, had been denied.

We have considered all the points raised and we affirm the judgment.

Judgment affirmed.

LEWE, P. J. and FEINBEEG, J., concur.


author: PRESIDING JUSTICE FRIEND

text:
    Evangelical Slovak Women’s Union, a Corporation, Plaintiff Below, Herman Brown, Appellant, v. Anna M. Papanek, et al., Defendants Below, Marie J. McLoughlin, Defendant and Petitioner Below, Appellee.
    Gen. No. 46,618.
    First District, First Division.
    January 9, 1956.
    Released for publication February 27, 1956.

      Leonard L. Levin, of Chicago, for Herman Brown, appellant.
    Robert L. Hnttner, Sinon A. Murray, and H. J. Rosenberg, all of Chicago, for Marie J. McLoughlin, appellee; Robert L. Hnttner of Chicago, of counsel.
   PRESIDING JUSTICE FRIEND

delivered the opinion of the conrt.

Evangelical Slovak Women’s Union, a corporation, filed proceedings in the Superior Court for the foreclosure of a trust deed. Pursuant to a master’s sale on August 23, 1934, the court on October 4, 1934 entered a deficiency decree against defendants Marie J. and William P. McLoughlin, her husband, in the amount of $6528.72. No execution ever issued. On January 13, 1953, some nineteen years later, plaintiff assigned the deficiency decree to Herman Brown who resided in the state of Michigan. The assignment was filed in the office of the clerk of the Superior Court on April 17, 1953.

Thereafter, on April 28, 1953, Brown, the assignee, brought suit at law against Marie J. McLoughlin in the Superior Court of Cook County for some $12,000, representing the amonnt of the decree plus accrued interest. On May 11,1954 defendant filed in the instant proceedings a verified petition to set aside the deficiency decree on the ground that she had not been served with summons. Her husband had died prior thereto. The merits of this defense are not an issne in this appeal. In her petition she also challenged the validity of the assignment for the following principal reasons: (a) the consideration paid by Brown was purely nominal; (b) the assignment was not executed under the corporate seal of Evangelical Slovak Women’s Union, or by authority of its directors; and (c) the assignment failed to state the amonnt of interest allegedly due on the decree.

June 9, 1954 Brown filed his verified answer to this petition, denying the allegations thereof relating to the alleged insufficiency of the assignment and stating that it was valid as against the defendant. The matter was then referred to a master in chancery who heard all the testimony as to the merits of the defense, and was then directed by the chancellor to file a preliminary report covering only the legal sufficiency of the assignment. The master filed such report on October 13,1954 finding that (a) the assignment was not a corporate assignment and was not executed pursuant to the authority or direction of the directors or under the corporate seal; (b) the acknowledgment of the assignment was void because the testimony of the notary showed that two of the officers who executed it did not appear before her; (c) there was no testimony to show who were the officers of the assignor, or whether they signed or delivered the assignment, or whether the assignee paid any consideration therefor; (d) the assignment was not executed as the corporate act of the assignor but by the assignors thereof in their individual capacities; and (e) the answer of the assignee failed to set forth under oath that he was the actual bona fide owner of the decree, or when and how he acquired it.

The only testimony taken by the master which is material to this appeal is that of the notary, Elizabeth Andrisek. After defendant had rested her case in chief, she called this witness in rebuttal. The assignee objected on the specific ground that her testimony was not proper in rebuttal, but the objection was overruled. This witness testified that she acknowledged the assignment as a notary public, but that the document was given to her for acknowledgment by Mrs. B. Spacek, who signed as secretary of the assignor; that she took the acknowledgment outside of the presence of Tanja B. Sturman and Zuzanna Benedek, who signed as president and treasurer of the assignor, but that she was familiar with the signatures of these persons. On cross-examination the assignee asked her to state if the signatures of these persons appeared on the document. General objection was made by defendant and sustained by the master. The assignee then offered to prove by this witness that the signatures on this document were the true signatures of Tanja B. Sturman and Zuzanna Benedek.

The assignee filed detailed objections to each and every adverse finding of the master, most of which were overruled. The decree appealed from was entered November 26, 1954. It sustained certain of the exceptions taken by the assignee to the master’s report, holding that the master should have found that acknowledgment of the assignment was unnecessary; that the acknowledgment was surplusage only; that the corporate seal was not required; that no consideration was required; that the question of consideration could not be raised by the defendant; and that the Civil Practice Act did not require the assignee to set forth in his answer to the petition to vacate the decree how he acquired title thereto. In these respects the decree is contrary to the basic conclusions of the master.

However, the court found that the assignment was executed by Tanja B. Sturman and Zuzanna Benedek in their individual capacities and not as officers of the assigning corporation; that the assignee did not prove that they were the officers of the assignor when the assignment was executed or that they executed the assignment as such officers; that the assignment does not indicate that it was executed by the authority of the assignor, a significant consideration in view of the fact that the assignor was not in the business of selling judgments; and that the officers had no implied power to assign the judgment. The decree found that the burden rested upon the assignee to make proof of the corporate authority, and accordingly that the assignee had no right to resist the petition of the defendant to vacate the deficiency decree. The master was therefore directed to proceed to file a subsequent report upon the merits of the petition to vacate the decree. That phase of the case is still pending in the Superior Court.

At the outset of her brief defendant argues that the decree appealed from “was an interim decree based on an interim master’s report”; that it was not final and therefore not appealable. Although no motion was made to dismiss the appeal, defendant suggests that the court should do so of its own motion. Walters v. Mercantile Nat. Bank of Chicago, 380 Ill. 477, and Reichwein v. McCarthy, 300 Ill. App. 237, are cited in support of this contention. Both these decisions are readily distinguishable. In the Walters case the Circuit Court entered a decree construing only one provision of a will, leaving the remaining important questions of construction undisposed of, and the rights of various parties undetermined. The Supreme Court dismissed the appeal with the observation that section 50 of the Civil Practice Act [Ill. Rev. Stats. 1955, ch. 110, § 50; Jones Ill. Stats. Ann. 104.050] does not have the effect of authorizing a court to construe a will by piecemeal and to enter separate decrees, at different times, leaving the construction of all other matters to future litigation and determination. In the Reichwein case the special issue as to whether or not plaintiff had the right to institute foreclosure proceedings was presented for determination; the decree of the trial court found that plaintiff had such right. The Appellate Court dismissed an appeal from the decree, holding that it did not dispose of any of the questions that the court would be obliged to consider in the foreclosure, nor did it adjudicate the rights of the parties. The decree in the instant proceeding determined Brown’s rights and has in effect finally eliminated him from the proceedings; it decided that he has no rights in this cause, denied him the right “to participate in any way in the hearing on the petition of said defendant, Marie J. McLoughlin, to vacate said deficiency judgment”; and directed the master to proceed to make his report on defendant’s motion to vacate the decree. The decree appealed from is final as to Brown and therefore appealable.

The legal validity of the assignment to Brown is the only issue in this appeal. Historically, there was no method of assigning a judgment at common law. Illinois statutes make no provision for assignment of judgments or decrees, but it has long been traditional with courts of equity to disregard the common-law rule and protect the assignee, and this principle ought to be the more readily applied when the assignment is of a deficiency decree duly entered by a court of equity, and where the assignee seeks to protect his rights in the same court which entered the decree. In the early case of Crawford v. Logan, 97 Ill. 396 (1881), on hearing of a creditor’s bill brought by an assignee of a judgment, defendants contended that the assignee could not maintain the bill, but the court expressly found that he was not precluded from doing so.

Where the principle of recognizing an assignment of a decree is being applied in a court of equity, which always looks to the substance rather than to the form, the rule has invariably been that no particular form of assignment is required; any document which sufficiently evidences the intent of the assignor to vest ownership of the decree in the assignee is sufficient to effect an assignment in equity. The only limitation which exists as to this principle, so far as we are able to ascertain, is section 2 of rule 15 of the Superior Court, which provides that judgments or decrees may be assigned by a duly executed instrument of assignment filed with the clerk or by an order of the court. Brown complied with this rule by filing the assignment in the clerk’s office on April 17, 1953.

“Generally, to constitute an assignment there must be a purpose to assign or transfer the whole or a part of some particular thing, debt, or chose in action, and the subject matter of the assignment must be described with such particularity as to render it capable of identification. No greater particularity, however, is required than is actually necessary to do this, with the aid of the attendant and surrounding circumstances.” 6 C. J. S. Assignments § 44. This principal has been followed in Illinois. Savage v. Gregg, 150 Ill. 161; Reinhardt v. Security Ins. Co. of New Haven, Conn., 312 Ill. App. 1; Colehour v. Bass, 143 Ill. App. 530. See also 6 C. J. S. Assignments § 58. In the circumstances, we think that the various technicalities raised by defendant have no legal validity; and it should he noted again that the court, in sustaining certain exceptions taken by the assignee to the master’s report, held that he should have found that acknowledgment of the assignment was unnecessary, that the acknowledgement was surplusage, that the corporate seal was not required, that the question of consideration could not be raised by defendant, and that the Civil Practice Act did not require the assignee to set forth in his answer how he acquired title to the judgment.

This leads to a consideration of the decisive question at issue, whether the assignment was properly and sufficiently executed by the corporate officers of the assignor acting not as individuals hut in their respective corporate capacities. The document is signed “Evangelical Slovak Women’s Union By Tanja B. Sturman (Seal), President, Zuzanna Benedek (Seal), Treasurer, Sealed and Delivered in the Presence of Bazen B. Spacek, Secretary.” The acknowledgment of the notary public certifies “That Tanja B. Sturman, President, and Zuzanna Benedek, Treasurer, personally known to me to be the same persons whose names are subscribed to the foregoing instrument, appeared before me this day in person, and acknowledged that they signed, sealed and delivered the said Instrument as their free and voluntary act, for the uses and purposes therein set forth, including the release and waiver of the right of homestead.”

Defendant takes the position that an examination of the face of the assignment, of “the wholly defective certificate of acknowledgment thereof,” coupled with the testimony of the notary public, warranted the trial court in finding that the assignment was not the legal act, of the corporation, that the deficiency judgment was not legally and validly assigned and delivered to Brown by plaintiff in its corporate capacity, that neither the president, treasurer or secretary of the corporation, individually or collectively, had the implied power to execute and deliver the assignment to Brown on behalf of the corporation without the specific authority of the board of directors; and she argues that Brown had the burden of proving the authority of officers to bind the corporation to the assignment.

In support of these contentions defendant relies principally on two cases discussed in her Additional Citation of Authorities and Supplemental Argument Thereon filed by leave of court after the case was argued orally. The first of these is Klemme v. McSay, 68 Iowa 158, 26 N. W. 53 (1885). Defendant there had a decree of foreclosure and judgment against one Youngck and became the purchaser of mortgaged land at a sale on special execution. The Farmers’ National Bank of Princeton, Illinois, held a judgment against Youngck, rendered prior to the foreclosure decree. The plaintiff, claiming to be “the owner and holder” of that judgment, filed an assignment in the clerk’s office purporting to be executed by and in the name of the bank by the president and cashier thereof and who were so designated in the acknowledgment of the assignment before a notary public of the State of Illinois. Plaintiff paid to the clerk the amount required to redeem from the sale to the defendant, but the sheriff refused to recognize the redemption on the ground that it was not made to appear that plaintiff was the owner or assignee of the judgment, and accordingly he made a deed for the land to the defendant. The assignee thereupon filed a bill in chancery to set aside the sheriff’s deed to defendant and to require the sheriff to make a deed to plaintiff as a redemptioner from the sale and judgment under which the deed was made. He relied upon the assignment of judgment and in addition thereto submitted his own evidence. Upon trial on the merits, plaintiff’s petition was dismissed by the court. The Supreme Court of Iowa affirmed the order of dismissal, first observing that the assignee, in attempting to make proof of the validity of the assignment, proved instead that the judgment was not owned by his alleged assignor, the Farmers’ National Bank of Princeton, Illinois, but that it really belonged to an individual named Goetz. As we read the opinion, this factor alone forms sufficient basis for the decision. However, there were other reasons for the refusal of the court to honor the assignment. The assignment itself contained no evidence as to the official character of those who executed it; their status as president and cashier of the alleged assignor bank appeared only in the acknowledgment, whereas, in the case at bar, the official standing of the officers is set forth in the assignment itself. With respect to the proof attempted to be made by the assignee, the Iowa court said that “there is not a particle of evidence showing or tending to show the official character of these persons, or that they, as officers, or in any other capacity, were authorized to execute the instrument in the name of the bank. They are designated in the acknowledgment as the president and cashier of the bank, but the officer taking the acknowledgment does not certify or state that they are such officers. It is not sufficient to establish the official character of a person to designate him as an officer. There must be competent and sufficient proof of his authority to act in an official capacity. . . . The assignment and acknowledgment, in the absence of proof of the authority of the persons executing the instrument in the name of the bank, are not sufficient to establish the fact of the assignment to plaintiff.” It is important to note that in the cited case the assignee sought affirmative relief. He had filed a bill in equity to set aside a sheriff’s deed, and it was therefore incumbent upon him to prove the validity of the assignment.

Similarly, in the case of Toledo Computing Scale Co. v. Computing Scale Co., 208 Fed. 410, the other citation upon which defendant relies in her supplemental citation of authorities, the assignee sought affirmative relief by way of enforcement of patent rights, and relief against an infringement. It should be noted that the acknowledgment involved a patent assignment, governed by Federal statute. The acknowledgment was taken in Massachusetts, and the document was executed in that state in accordance with the mandatory requirements of the Massachusetts statutes. In the case at bar, there is no requirement, statutory or otherwise, for acknowledgment of the assignment; furthermore, under Federal law, an assignment of a patent, in itself, is not proof of the execution thereof unless duly acknowledged. This is a special rule which applies to assignment of patents, as appears from the language of the court: “Certified copies of assignments of patents, not duly acknowledged, are not proof of execution.” See also Paine v. Trask (C. C.), 56 Fed. 233; New York v. American Cable Ry. Co., 60 Fed. 1016, 9 C. C. A. 336; and National Cash-Register Co. v. Navy Cash-Register Co. (C. C.), 99 Fed. 89. In the instant proceeding it was the decree debtor, or defendant, who sought affirmative relief, and obtained the entry of a decree finding that the assignment was invalid, thereby precluding Brown, the assignee, from participating in the proceedings. Under the circumstances, the burden of proof in establishing the invalidity of the assignment should rest solely on defendant. The decree appealed from found that the burden of proof rested upon the assignee.

Brown’s counsel calls our attention to a later Iowa case, Guernsey v. Black Diamond Coal & Mining Co., 99 Iowa 471, 68 N. W. 777 (1896), which is not cited by defendant. In that case an assignee of two judgments sued in chancery to set aside conveyances of real estate made by the debtor. One assignment was made by Marqnardt Savings Bank and was signed only “G. W. Marqnardt, Pres.”; the other assignment was by Iowa National Bank, signed “Ed H. Hunter, Pres’t Iowa Nat’l Bank.” The defendants objected to the assignments on the ground that it did not appear that the officers of the respective banks had authority to make them, and cited the case of Klemme v. McSay. The court differentiated the case as follows: “In that case it was questioned whether the persons executing the assignment were officers of the bank, authorized to make the assignment, while in this the objection is not, that they were not presidents of the banks for which they acted, but that it is not shown that, as such, they had authority to make these assignments”; and then proceeded to hold, as the assignee argues in this proceeding, that the president of the bank had inherent authority to execute the assignment, and a decree in favor of the assignee was accordingly affirmed. We think that the Guernsey case, rather than the Klemme decision, is in point. The Guernsey case brings the Klemme opinion into sharper focus by emphasizing that in Klemme v. McSay the assignment itself did not show in any manner that the persons who executed it had official standing with the assignor corporation.

Defendant’s petition to vacate the deficiency decree presented, in the main, only general legal objections to the validity of the assignment, most of which were decided against defendant by the decree which specifically held them unfounded in law; nevertheless, the decree concludes that the assignment is invalid. We are of the opinion that the court erred in so holding, and accordingly the decree appealed from is reversed.

Decree reversed.

BURKE and NIEMEYER, JJ., concur.


text:
    M. Paul Rovak and Nathan Kaplan, Doing Business as All State Painting Service, Appellants, v. Parkside Veterans’ Homes Project, Inc., Lewis Shaffer and Sidney W. Mandel, Appellees.
    Gen. No. 46,647.
    First District, First Division.
    January 9, 1956.
    Released for publication February 27, 1956.

      A. S. Frankenstein, of Chicago, for appellants.
    Shaffer, Seelig, Mandel & Shapiro, of Chicago, for appellees; David E. Maliar, and Ellis Shaffer, both of Chicago, of counsel.
   PRESIDING JUSTICE FRIEND

delivered the opinion of the court.

M. Paul Rovak and Nathan Kaplan, doing business as All State Painting Service, brought suit against Parkside Veterans’ Homes Project, Inc., hereinafter referred to as Parkside, a corporation, to recover $9200, alleged to be due them under a Standby Agreement.

It appears that Parkside was indebted to the Reconstruction Finance Corporation (RFC) in the amount of $565,000 for a loan which had been reduced to $86,426.44, evidenced by a note which had been assigned by RFC to Lewis Shaffer and Sidney W. Mandel. On January 6,1954 Shaffer and Mandel (who became parties to this suit upon the filing of their intervening petition) had purchased from RFC the balance of the indebtedness due it from Parkside, which was evidenced by the note delivered by RFC to the intervening petitioners. In addition thereto, RFC also assigned all its rights under the Standby Agreement to Shaffer and Mandel without recourse.

A determination of the main suit was deferred, pending a ruling on the petition of the intervening petitioners. The preliminary issue was submitted to the court for adjudication as a matter of law, upon facts set forth in the pleadings and an agreed statement of facts between the parties. Pursuant to argument and the submission of briefs, the court found the issues in favor of intervening petitioners Shaffer and Mandel, and ordered that the cause be dismissed at plaintiffs’ costs.

The agreement provided that plaintiffs would not take any action to enforce their claim until such time as the indebtedness dne RFC was paid. Plaintiffs, appealing, contend that they have a right to maintain their action and recover a judgment by reason of the fact that RFC has been paid the amount that was due it, that the restraints as contained in the Standby Agreement were set up for the benefit of RFC because of a trust and confidence reposed therein, and that upon its transfer and assignment of the indebtedness due it, plaintiffs were at liberty to prosecute their cause of action against Parkside, since the agreement not to enforce suit was not assignable. The question presented is whether the Standby Agreement was assignable. Intervening petitioners take the position that the restraints enjoyed by RFC passed to them on assignment, and that accordingly under the terms of the Standby Agreement plaintiffs filed their suit prematurely.

Paragraph 10 of the agreement in question reads in part as follows: “This Standby Agreement and all obligations hereunder or with respect hereto, of Borrower, Standby Creditor, and the Secondary Obligors, shall continue in full force and effect until payment in full of the indebtedness evidenced by the Note, notwithstanding any action which RFC, or Borrower, or others, with consent of RFC, may take or refrain from taking with respect to such indebtedness, and/or the Note, and/or any collateral . . . Standby Creditor and the Secondary Obligors hereby grant to RFC full power, in its uncontrolled discretion and without notice to them, to deal in any manner with the indebtedness evidenced by the Note and the collateral therefor. . . .” The inclusion of the words “or others, with consent of RFC” must be given effect in determining the intention of the parties as to the assignability of the agreement. This language unmistakably indicates that the obligation of the plaintiffs to refrain from suit against Parkside is not an obligation restricted to RFC; it is as well an obligation which may be owed to third persons when RFC consents. The assignability of a contract is determined by the nature of the obligations contained in the contract. As stated in the leading case of Devlin v. Mayor et al. of the City of New York, 63 N. Y. 8: “The assignability of a contract must depend upon the nature of the contract and the character of the obligations assumed rather than the supposed intent of the parties, except as that intent is expressed in the agreement.” It may well be that plaintiffs here consented to the restraints of the contract because they were dealing with the governmental agency of RFC, but they cannot now contend that the contract was unassignable, for there is nothing in the agreement reserving assignment; thus in consenting to the contract they faced the possibility — or the risk, as they prefer to consider it — of assignment. The contract, since it purported on its face to be complete, must be construed by the court as it stands; it cannot be altered by judicial interpretation. Carson Pirie Scott & Co. v. Parrett, 346 Ill. 252; In re Estate of Frayser, 401 Ill. 364.

Plaintiffs argue that contractual rights and privileges cannot be transferred or assigned if they involve a relation of personal confidence and trust and where the personal acts and qualities of one of the parties form a material portion of the contract. Corbin (4 Corbin on Contracts, § 865 (1951)) suggests that “in the matter of assignability as affected by the supposed ‘personal’ nature of the contract, ... or by the existence of a relation of ‘trust and confidence,’ it will be helpful to consider the following questions: (1) What was the performance required of the defendant obligor? (2) What were the conditions on which it was the defendant’s duty to render that performance? (3) What performance, if any, was the assignor under a duty to render?” Here, the performance required of plaintiffs was to refrain from prosecuting their claims against defendant during the length of the Standby Agreement. The conditions on which it was the plaintiffs’ duty to refrain from suit and “standby” were the lending by the RFC of $565,000 to defendant; and the duty of performance of the RFC, the assignor, under the Standby Agreement, was to loan $565,000 to defendant.

Assignability of rights under a contract is governed by one vital factor — whether the assignor has fulfilled his duties under the contract to the other contracting party before the assignment of the contract to the assignee. The early case of Perkins v. Hadsell, 50 Ill. 216, held that an instrument which gives to a person an option to buy land, upon his performance of certain conditions, which he may or may not perform, as he may elect, may not be assignable by such person before he has acquired any right of property under it by performing the conditions, but it is assignable, in equity, thereafter. As plaintiffs contend, it is a well settled principle that an executory contract is not assignable without consent of both parties thereto where the personal acts and qualities of one of the parties form a material and integral part of the contract, and they cite Grinsburg v. Bull Dog Auto Fire Ins. Ass’n, 328 Ill. 571, in support of this rule. The case involved the construction of an automobile policy insuring against theft in which it was specifically provided that no assignment of interest under the policy should become binding upon the association unless the written consent of the attorney was endorsed thereon and an. additional membership fee was paid. The automobile was stolen and never recovered; the owner assigned his claim under the policy to another party who brought suit against the insurance association. It based its defense upon failure of the insured to comply with the terms of the policy regarding assignment, but the court held that the facts in the case brought it outside the rule of nonassignability, saying: “After the contract has been fully executed and nothing remains to be done except to pay the money a different rule applies. The element of the personal character, credit and substance of the party with whom the contract is made is no longer material, because the contract has been completed and all that remains to be done is to pay the amount due. The claim becomes a chose in action, which is assignable and enforcible under section 18 of the Practice act. ... In 26 Corpus Juris, 447, it is said: ‘. . . an assignment is valid even though the policy provides that it shall be void if assigned, either before or after loss, without the consent of the insurer, for such an assignment relates to the cause of action and not to the policy.’ May on Insurance (vol. 2, sec. 386,) states the rule as follows: ‘An assignment after loss is not the assignment of the policy but the assignment of a claim or debt — a chose in action. . . . The reason of the restriction is, that the company might be willing to write a risk for one person of known habits and character and not for another person of less integrity and prudence, but after loss this reason no longer exists.’ ” In Sloan v. Williams, 138 Ill. 43, the assignee, Sloan, sued for specific performance of a contract for conveyance of land from defendant "Williams. Shortly after suit was instituted the defendant died, and his widow, heirs and administratrix were made parties defendant. The contract had been assigned to plaintiff by the original defendant’s attorney who had agreed to perfect title to certain real estate without remuneration, except that he was to have the option to buy or sell lots as therein set forth and he was not to be required to furnish any money. The Supreme Court affirmed the trial court in dismissing plaintiff’s bill for want of equity on the ground that, although after the contract had been executed by the person agreeing to perform such personal service or exercise such personal skill, he could assign his right to recover compensation therefor, he may not do so while any part of his services remains to he rendered. See also Price v. Pan-American Motors Corp., 217 Ill. App. 526.

The purchase of a negotiable instrument does not extinguish the obligations of the makers or affect the security given in connection therewith. The acquisition by the intervening petitioners of the note in question was a bona fide negotiation or purchase of the note, not a discharge of the indebtedness, and accordingly plaintiffs’ obligation under the Standby Agreement was not terminated; intervening petitioners are entitled to the rights and reservations enjoyed by RPC. In Reliance State Bank v. Zisook, 222 Ill. App. 610, defendant defaulted in certain bonds he issued; the bonds were secured by a real-estate mortgage. Plaintiff purchased the bonds from the holder at maturity and subsequently instituted foreclosure action. Defendants contended that plaintiff could not maintain such an action since he was seeking subrogation only, but the court held that plaintiff could realize upon his security directly and foreclose the mortgage. In an out-of-state case, Briscol v. American Southern Trust Co., 176 Ark. 401, 4 S.W.2d 912, there is the following pertinent language: “It is undoubtedly true . . . that a stranger may purchase negotiable paper either before or after maturity, in which event the paper is not discharged, and he becomes the holder of the same with all of the rights of his assignor, including the right to receive such collateral as his assignor may have had.”

We think the court properly ruled that plaintiffs’ suit against Parkside was prematurely filed, and therefore the order of dismissal is affirmed.

Order affirmed.

BURKE and NIEMEYER, JJ., concur.


text:
    Catherine A. Gearon, as Executrix Under Last Will and Testament of Timothy T. Gearon, Deceased, Appellee-Counter-Appellee, v. Airways Fireproofing System, Inc., Appellant-Counter-Appellant.
    Gen. No. 46,667.
    First District, First Division.
    January 9, 1956.
    Released for publication February 27, 1956.

      Tilley, Humphrey, Tiedemann & Hilgendorf, of Chicago, for appellant; Edward Wolfe, of Chicago, of counsel.
    Concannon, Dillon & Snook, of Chicago, for appellee; William H. Dillon, and John B. Dillon, both of Chicago, of counsel.
   PRESIDING JUSTICE FRIEND

delivered the opinion of the court.

Catherine A. Gearon, as executrix under the last will and testament of Timothy T. Gearon, deceased, brought suit upon a written contract to recover a balance alleged to he due decedent from defendant on corporate stock sold by him during his lifetime to defendant. The court entered an order striking defendant’s second amended answer and second amended countercomplaint, and defendant having elected to stand on its pleadings, judgment was entered for plaintiff, from which defendant appeals.

From the pleadings it appears that on December 19, 1952 the decedent, Timothy T. Gearon, his wife Catherine, George L. Candler, his wife Dorothy, and defendant Airways Fireproofing System, Incorporated, entered into a written contract under the terms of which decedent agreed to sell, and defendant agreed to purchase, 499 shares of corporate stock owned by decedent, for the sum of $18,657, payable in weekly installments of $150, the agreement to he retroactive to December 1, 1952. A copy of this agreement was attached to plaintiff’s complaint, as was a copy of a Bny and Sell Agreement, dated in 1947, between the principal stockholders of defendant corporation— plaintiff’s decedent, plaintiff, George L. Candler, president of the corporation, and his wife.

Under the terms of this Bny and Sell Agreement, Candler, Gearon and their respective wives agreed to canse insurance to be taken out on the lives of Candler and Gearon, and to accept the proceeds thereof (in the event of the death of either party) in full payment of such party’s equity in the defendant corporation. Article IV of the Buy and Sell Agreement provided: “It is mutually agreed that each of the parties hereto shall personally pay and be chargeable with the premiums payable on the policies of life insurance issued on the other. It is further agreed that such payment may be made directly by the corporation, and in that event the personal account of the owner of the policies shall be charged for specific premiums thus paid on out of such corporate funds on the life of the other.” The agreement also fixed the amount of insurance as of the date of its execution and provided that such insurance might be “supplemented by additional policies.”

The complaint alleges that decedent died January 18, 1954 and that subsequently plaintiff was appointed as his executrix; that plaintiff’s decedent and Candler were the owners of all the stock issued and outstanding by the corporation; that on Gearon’s death defendant, under the terms of the December 1952 agreement, still owed him the sum of $7807.15, payable at the rate of $150 per week; that between the date of his death and the filing of the complaint (May 11, 1954) defendant had refused to pay the weekly installments as provided for in the agreement, so that upon the filing of the complaint there was due and owing plaintiff’s decedent the unpaid balance of the purchase price of the stock.

Defendant’s original answer and countercomplaint, as well as its first amended answer and first amended countercomplaint, was ordered stricken on motion of plaintiff, and defendant was granted leave to file a second amended answer and counterclaim with prayer for declaratory judgment. In its second amended answer defendant admitted the execution of the contract of December 19, 1952 and of the Buy and Sell Agreement of 1947, denied that it was indebted to plaintiff, and averred that under articles IV and V of the Buy and Sell Agreement defendant bad paid insurance premiums for decedent for the original and additional insurance on the life of decedent so that on December 1, 1952, the date the Buy and Sell Agreement was canceled, decedent owed defendant on account of such payments the sum of $7344.20; that after giving plaintiff all her just credits, defendant owed only the sum of $815.53 which it tendered in court. Defendant also alleged in its answer that plaintiff’s decedent, both before and after the execution of the contract of December 19, 1952, stated that he owed defendant company the moneys advanced by it for insurance premiums, as shown in the statement of account as attached in defendant’s amended answer.

In its second amended counterclaim defendant, after repeating the foregoing averments of its answer, further alleged that from October 28,1947 to November 28, 1952 the company had advanced premiums on the life of decedent in the sum of $5595.50 which had been charged “to the personal account of the said Timothy T. G-earon” and carried on the books of defendant in the form of an account receivable from Gearon; that Gearon had failed to repay any of this sum which was still owing; that defendant also advanced premiums on additional insurance in accordance with the provisions of the Buy and Sell Agreement in the amount of $1748.78 which was likewise charged to decedent and was still due and owing. The countercomplaint alleged the existence of a controversy between the parties within the meaning of the Declaratory Judgments Act (Ill. Rev. Stat. 1953, ch. 110, par. 181.1 (sec. 57%) [Jones Ill. Stats. Ann. 104.057(1)]) and asked the court to declare the rights of the parties, i. e., that defendant upon payment of the sum of $815.53 was entitled to a declaration of rights that it had fulfilled its obligation to plaintiff and was entitled to receive the 499 shares of stock mentioned in the contract, free and clear of any claims. The countercomplaint further prayed that the court set off the sums of money due plaintiff under the 1952 contract as installments and find that there were not then any sums of money due plaintiff from defendant; in the alternative the countercomplaint prayed that the court find that the offer by defendant of the sum of $815.53 fully satisfied defendant’s indebtedness to plaintiff.

To these amended pleadings plaintiff filed a lengthy motion to strike and a prayer for judgment on the pleadings, which may be summarized as follows: plaintiff alleged that the second amended countercomplaint did not state a cause of action for the following reasons: (1) the cancellation, as of December 1, 1952, of the Buy and Sell Agreement of 1947, annulled all obligations and any set-offs allowable thereunder; (2) the allegations of the countercomplaint attempted to contravene the express provisions of the contract of December 19, 1952; (3) the allegations of fact in the second amended countercomplaint that plaintiff’s decedent in his lifetime, both before and after the contract of December 19,1952, said he owed defendant for insurance premiums advanced should be stricken because they were incapable of proof by reason of the provisions of section 2 of the Evidence Act (Ill. Rev. Stat. 1953, ch. 51, par. 2 [Jones Ill. Stats. Ann. 107.068]) ; that such evidence, if admissible, would constitute an attempt to vary the terms of a written contract by parol evidence; and (4) the provisions of the Buy and Sell Agreement did not obligate decedent to repay any premiums on insurance advanced by tbe defendant. After defendant filed its second amended answer and countercomplaint plaintiff had leave to file a supplemental complaint to bring the amount of payments down to date. The court thereupon ordered defendant’s second answer and counterclaim stricken, and upon refusal of defendant to plead further and its election to stand on its pleadings, entered judgment against defendant for $7049.75.

The question presented is whether payment made by defendant under the Buy and Sell Agreement of 1947 can be set off against the purchase price of $18,657 provided for in the agreement of December 19, 1952 which expressly canceled the Buy and Sell Agreement. Plaintiff takes the position that the agreement of December 19, 1952, wherein defendant undertook to buy the interest of plaintiff’s decedent in the corporation for $18,657, was intended to and did effect a complete settlement of all rights of the parties thereto; that the agreement of 1952, having expressly canceled the Buy and Sell Agreement, the rights of the parties must be determined with reference to the 1952 agreement; that since no reservations, express or implied, were provided for in the 1952 agreement concerning payments made under the Buy and Sell Agreement, no claim therefor can now be asserted without adding to the 1952 agreement terms and provisions wholly inconsistent with the express provisions contained therein; that the construction contended for by plaintiff follows and is consistent with the language of the agreement and does not require reading into it the inconsistent interpretation which would be required to furnish the support necessary to sustain defendant’s theory.

As of December 1, 1952 defendant had paid premiums on life-insurance policies in the amount of $7344.20, which it now contends are chargeable to plaintiff’s decedent under the terms of the Buy and Sell Agreement of 1947. This sum of $7344.20, which defendant argues should be set off against the purchase price of $18,657, had been expended by defendant prior to December 1, 1952, the effective date of the agreement of December 19,1952. Obviously, when the 1952 agreement was entered into, defendant had full knowledge of the payments made by it under the agreement of 1947, yet despite this knowledge it entered into the agreement of 1952 which expressly canceled the agreement of 1947 by mutual consent. The principle is well established that “when an executory agreement partly performed is thus mutually cancelled, if any right is reserved to recover unliquidated damages arising out of a previous breach thereof, it should be reserved expressly, and that the burden is upon one who alleges such a reservation to show that this was the mutual understanding. A mutual rescission, abrogation, release, or cancellation of such a contract, without reservations, terminates it so as to preclude the recovery of damages for any previous breach thereof.” Juniper Lumber Co. v. Nelson, 133 Va. 146, 112 S. E. 564, 24 A. L. R. 247, and cases collected in 24 A. L. R. 253. There is pertinent language also in McBee Binder Co. v. Fred J. Robinson Lumber Co., 267 Mich. 637, 255 N. W. 329: “If plaintiff intended to reserve a claim for the balance due it at the time of cancellation, that reservation should have been expressly made. Silence on its part was not sufficient.” McCreery v. Day, 119 N. Y. 1, 23 N. E. 198, states the rule succinctly: “Where a contract is rescinded while in course of performance, any claim in respect of performance, or of what has been paid or received thereon, will ordinarily ‘be referred to the agreement of rescission, and, in general, no such claim can be made, unless expressly or impliedly reserved upon the rescission.’ Leake, Cont. 788, and cases cited.” To the same effect are Vider v. Ferguson, 88 Ill. App. 136, Winton v. Spring, 18 Cal. 452; Eames Vacuum Brake Co. v. Prosser, 157 N. Y. 289, 51 N. E. 986; and Bailey v. Gordon, 8 F.2d 672 (Court of Appeals, Dist. of Columbia). Tbe rule on rescission of contracts as set out in the above citations is reflected in Williston’s discussion of tbe subject in bis Contracts, Rev. Ed. 1938, vol. VI, sec. 1827, page 5176. It has been held in Illinois that cancellation of any form of contract necessarily includes a waiver of all rights under it by tbe parties. Friedman v. City of Chicago, 374 Ill. 545. An examination of tbe agreement of December 19, 1952 clearly shows that defendant did not expressly or impliedly reserve any right to set off tbe 'sum of $7344.20 against tbe purchase price of $18,657. As we read tbe agreement, it effected a complete settlement of tbe rights of tbe parties thereto, and as heretofore stated, expressly provided that tbe Buy and Sell Agreement was canceled, effective December 1,1952.

Tbe 1952 agreement is too lengthy to be set out within tbe confines of this opinion, but there is nothing ambiguous about its wording, and it shows conclusively that defendant did not expressly or impliedly reserve any right to set off the - sum of $7344.20 against tbe agreed purchase price of $18,657; tbe specific language of tbe parties, whereby defendant undertook to purchase decedent’s interest in tbe corporation, completely negates any such obligation.

Tbe provision of tbe 1947 agreement, upon which defendant relies for its set-off, stated that tbe premium payments might “be made directly by tbe corporation, and in that event tbe personal account of tbe owner of tbe policies shall be charged for tbe specific premiums thus paid on out of such corporate funds on tbe life of tbe other.” Defendant relies upon this provision to support its contention that tbe amount of premiums paid by defendant was to be set off against tbe purchase price stipulated in tbe 1952 agreement. However, this was no promise made by either Gearon or Candler to reimburse tbe corporation for any premium payments made by it, and in fact neither Gearon nor Candler, during the entire period that the Buy and Sell Agreement was in effect, ever paid a premium on the insurance policies of which they were deemed the owners. Obviously neither of them considered it a duty to repay defendant for premiums advanced by it. Gearon and Candler were the sole stockholders, each owning fifty per cent of the stock, and when the corporation made premium payments for them it reduced by that amount the monies available for distribution, as dividends or salary, to Gearon and Candler. In essence, it was nothing more than a bookkeeping device. Defendant would have us construe the words “the personal account of the owner of the policies shall be charged for specific premiums” as a promise to repay, but we think that language was intended to be used only in the settlement of accounts between Gearon and Candler, and this object was effected by the 1952 agreement whereunder Gearon sold his entire interest in the defendant corporation. Defendant argues that it should in any event be given an opportunity to show the amount of premiums paid by the corporation for plaintiff’s benefit, and that the cause should be remanded for that purpose, but the 1952 agreement is express in its undertakings, and as a general rule, parol or extrinsic evidence is not permitted to vary, modify or contradict the terms or provisions of a written instrument purporting to be complete on its face. Since the contract of December 19, 1952 professes to be the entire agreement of the parties, parol evidence would not be admissible for purposes of variation. Decatur Lumber & Manufacturing Co. v. Crail, 350 Ill. 319; Armstrong Paint and Varnish Works v. Continental Can Co., 301 Ill. 102; Smith v. Rust, 310 Ill. App. 47. In the Armstrong case the court held that “the contentions of the parties to the contract are not the criterion which should guide the court in determining whether the written contract is a full expression of the agreement of the parties. The court must determine this from the writing itself. If it imports on its face to be a complete expression of the whole agreement, — that is, contains such language as imports a complete legal obligation,— it is to be presumed that the parties introduced into it every material item and term, and parol evidence cannot be admitted to add another term to the agreement although the writing contains nothing on the particular term to which the parol evidence is directed.”

For the reasons indicated we are of the opinion that the trial judge correctly entered judgment in favor of plaintiff, and the judgment is therefore affirmed.

Judgment affirmed.

BURKE and NIEMEYER, JJ., concur.