author: JUDGE SCHWARTZ

text:
    Hyman-Michaels Company, Plaintiff-Appellant, v. Massachusetts Bonding and Insurance Company, Defendant-Appellee, and Associated Agencies, Inc., Defendant.
    Gen. No. 46,531.
    First District, Second Division.
    December 6, 1955.
    Rehearing denied March 6, 1956.
    Released for publication March 6, 1956.

      Clausen, Hirsh & Miller, of Chicago, for appellant.
    Kirkland, Fleming, Green, Martin & Ellis, of Chicago, for appellee; David Jacker, John M. O’Connor, Jr., and Robert H. Klugman, all of Chicago, of counsel.
   JUDGE SCHWARTZ

delivered the opinion of the court.

Plaintiff as beneficiary brought this suit to reform a policy of insurance issued by defendant Massachusetts Bonding and Insurance Company (Massachusetts) and to recover on the policy as reformed. The policy insured Joseph E. Michaels, Secretary-treasurer of plaintiff, in the sum of $100,000 against injuries and death by aviation accident for a period of one year commencing September 6, 1948. It was limited to accidents occurring while the insured was a passenger on any one of eighteen groups of airlines therein listed. This list included British Overseas Airways Corporation (BOAC) but not British European Airways Corporation (BEA). On February 19, 1949, Joseph Michaels was killed while a passenger on an airplane operated by BEA on a flight from London to Glasgow. Plaintiff asserts that the failure of the coverage to include BEA was the result of a mutual mistake, in that both parties intended that a policy should be issued identical in coverage with that of an expired policy issued by another company. That policy would have covered the insured while a passenger on BEA. A separate count in the complaint set forth an action at law against Associated Agencies, Inc., (Associated) alleged by plaintiff to have been the agent of Massachusetts in this transaction. The chancellor ordered a separate trial on that count and transferred it to the law side of the court. He then proceeded with a trial of the issues between plaintiff and Massachusetts and at the conclusion of the evidence, dismissed the complaint for want of equity.

While there is a sharp and spirited dispute between the parties, it is not because of any important disagreement over the verity of the oral testimony or the written documents put in evidence. Bather, the dispute is over the conclusions to be drawn from the evidence, and requires a somewhat detailed statement of facts in order that the issues may be understood. Plaintiff does a worldwide business in the buying and selling of scrap metal. Its employees take plane trips to Europe, Africa and South America, as well as within the United States. Through one Jacob Weil, an insurance broker not employed by but officing and working with Associated, plaintiff in 1947 took out an aviation accident policy on six of its officers. That policy was issued by Grlobe Indemnity Company. It insured Joseph Michaels against death by an aviation accident occurring anywhere in the world on any regularly scheduled passenger airline. When that policy was about to expire, Weil informed Sheldon, an officer of plaintiff company in charge of a considerable part of its insurance business, that Grlobe would no longer write that type of insurance and if plaintiff wanted it “renewed,” he, Weil, would have to seek it elsewhere. Upon being advised that plaintiff did desire to continue that type of insurance, Weil took the matter up with Associated for the purpose of finding another insurer.

Associated is an incorporated general insurance agency. For many years it had handled a great deal of plaintiff’s insurance business. Its president and some of its other officers for a long period of time had cordial business and social relations with plaintiff’s officers. Bernard W. Boos, its vice-president, had charge of aviation accident insurance. He handled the issuance of both the Globe and the Massachusetts policies. He also countersigned the policies on behalf of Associated, as required under the terms of the transaction, before the policies were made effective. Through Boos, Weil obtained application blanks for a new insurance policy to be issued in an underwriting group known as United States Aviation Underwriters (USAU). This was an aggregation of twelve insurance companies, including Massachusetts, sharing ratably in premium receipts and in loss payments. Original applications, premium payments and loss claims were- processed through USAU. Late in August, 1948, seven applications were given to Sheldon, one to be signed by the company for group insurance, and one for each of six employees to be insured. These were duly executed and returned to Massachusetts. Policies were then issued together with an “Airsurance Agreement.”

The employer’s application signed by -plaintiff company by J. E. Michaels was entitled “Group Plan Airsurance.” The group of twelve insurance companies was listed therein and a check mark placed opposite the name “Massachusetts.” It listed the employees to be insured and the amount of coverage for each. The application contained a statement of what Group Plan Airsurance was. From this it appeared that two types of insurance were offered — basic and extended coverage. Basic insurance was limited to certain enumerated airlines, including BOAC, but excluding BEA. Extended coverage was defined as all the coverage provided for under basic insurance and, in addition, covered the insured while a passenger on a civil aircraft operated by any scheduled air carrier over its regularly established route. The basic rate was shown as $1.10 per thousand, and extended coverage as $2.70 per thousand.

The employees’ applications, including the application of Joseph Michaels, were also signed and returned. These were headed “Group Plan Airsurance” and at the top contained two items, one entitled “Basic Airsurance,” and the other, “Passenger Extended Coverage.” A definition of the respective coverages was shown in each item, maintaining the distinction we have described. The difference in rate was also shown, that is, $1.10 for basic, and $2.70 for extended coverage. Alongside each definition a square was provided in which the type of coverage selected by plaintiff could be shown by a check mark or an “X.” The application signed by Joseph Michaels shows a check mark in the square opposite the item “Basic Airsurance.” Plaintiff produced evidence to show that the mark was not placed there by the insured. It is conceded that no mark was placed in the square opposite “Passenger Extended Coverage” by anyone.

The “Airsurance Agreement” is a formal document, duly executed by USAU and by Hyman-Michaels Co., by E. B. Michaels, president. It is plainly written and relatively short. It provides for group insurance and states that plaintiff has agreed to submit applications covering five or more of its employees. The longest paragraph in the instrument is No. 4 which provides for the issuance of insurance on additional employees who make application. In that paragraph it is also stated that a policy issued pursuant to the agreement shall afford only basic airsurance coverage unless the application card referred to specifically indicates that “Passenger Extended Coverage” is desired.

The policy in question contains this legend across its face in capitals: “THIS IS A LIMITED POLICY READ IT CAREFULLY.” At the top of page 2 is a heading “Aviation Accident,” following which is a statement that the term means an accident occurring anywhere in the world and causing death or bodily injury to the insured while: “(a) A passenger in . . . any civil aircraft . . . operated by: . . .” and under this there are eighteen distinct items outlining in alphabetical order the airlines or groups of airlines covered by the policy. Item 7 is shown thus: “(7) British Overseas Airways Corporation (BOAC).” BEA, if it had been included, would in alphabetical order have been listed immediately before this. This paragraph takes up about half a page of the policy.

In addition to the documents we have described, there were items of correspondence between Weil and plaintiff in which Weil referred to the “renewal” of plaintiff’s “Aviation Accident policy,” and there is also a letter in evidence in which plaintiff refers to the “employer’s application for the renewal of our Aviation Accident policy.”

In analyzing the evidence we have in mind that in a suit to reform a written contract, a plaintiff is not merely seeking to rescind or avoid the contract but is seeking to enforce a contract different from that which he has signed. He must therefore be able to point to the contract he intended to make. Moreover, he must prove a like intention on the part of the defendant. In other words, both defendant and plaintiff must have had the intention to make the same contract, but failed to do so by each making the same mistake. These general principles are recognized in our decisions and are not disputed. Harley v. Magnolia Petroleum Co., 378 Ill. 19, 27, 28, 37 N.E.2d 760, 765; Biskupski v. Jaroszewski, 398 Ill. 287, 293, 294, 76 N.E.2d 55, 58, 59; Anderson v. Pettigrew Foundry Co., 297 Ill. App. 14, 23, 17 N.E.2d 60, 63. Since reforming a written contract qualifies the general principle that persons who execute contracts are. presumed to know what is contained therein, courts have held that proof of mistake must be “clear and convincing.” Biskupski v. Jaroszewsld, 398 Ill. 289, 293, 76 N.E.2d 58; Harley v. Magnolia Petroleum Co., 378 Ill. 19, 27, 37 N.E. 2d 760, 765; Du Teau Co. v. New Hampshire Fire Ins. Co., 156 Neb. 690, 57 N.W.2d 663.

To make its case plaintiff must prove three propositions: (1) that Associated was the agent of Massachusetts in its dealings with plaintiff; (2) that plaintiff understood and intended to obtain through Associated a policy having coverage identical with that provided in the previous Globe policy; and (3) that Associated likewise understood and intended that such a policy would be issued by Massachusetts. We must also keep in mind that a reviewing court will not reverse on issues of fact unless the decree is against the manifest weight of the evidence. Kinnah v. Kinnah, 184 Ill. 284, 56 N. E. 376; Baker v. Baker, 6 Ill.App.2d 557,128 N.E.2d 616, and cases there cited.

We will first consider whether Associated was the agent of Massachusetts or, more precisely, whether Associated’s knowledge of an alleged intention on the part of plaintiff to procure a given type of policy could be attributed to Massachusetts. The Insurance Act in effect at the time defined an agent as “any person, partnership, association or corporation, who or which solicits, negotiates or effects in this State, on behalf of any company, contracts for insurance of any of the following kinds, namely: Life, Accident, Health, Casualty, Fidelity, Surety, Fire and Marine.” (Ill. Rev. Stat. 1947, Ch. 73, Par. 588 [Jones Ill. Stats. Ann. 66.125(2)].) The evidence tended to show that Associated, although regarded as Massachusetts’ “general agent” for certain other lines of insurance, was not regarded as having that status with respect to aviation insurance. Associated did not keep blank Massachusetts policies but ordered them from USAU. On the other hand, the evidence was not clear as to what arrangement for commissions existed between Massachusetts and Associated or as to the disposition of the premium check which Associated received from plaintiff. Under some circumstances a broker purporting to represent an insured will be considered an agent of the insurer even though he was not a regular or licensed agent of the insurer. (See Boston Store of Chicago v. Hartford Accident & Indemnity Co., 227 Ill. App. 192; Moone v. Commercial Casualty Ins. Co., 350 Ill. App. 328, 112 N.E.2d 626.) In the instant case the president of Associated testified that he had authority to countersign the policy issued. In our opinion a prima facie case of agency was established. However, we cannot say that the finding of the chancellor to the contrary was against the manifest weight of the evidence. (Cf. MacDonald v. Milwaukee Mechanics’ Ins. Co., 167 F.2d 276; Indemnity Ins. Co. of North America v. Midwest Transfer Co., 184 F.2d 633.) Assuming that Associated was the agent of Massachusetts, we will consider the second and third issues involving the mutuality of mistake.

As to the second issue, the documents involved in the transaction unequivocally point to a type of coverage unlike the Globe policy. That policy covered six of plaintiff’s named officers, including Joseph Michaels. Three of these were listed under “Group I,” covering aviation accidents occurring in the United States and Canada within 150 miles of the United States border while on a regularly scheduled airline holding a certificate of public convenience and necessity from the Civil Aeronautics Board (CAB). Three of the employees were in “Group II,” which insured against accidents occurring on flights made on an aircraft operated anywhere in the world on a regularly scheduled passenger trip over its established route. Joseph Michaels was included in Group II. The premium was computed at 80 cents per thousand for Group I, which had a total coverage of $170,000, and $1.10 per thousand for Group II, which had a total coverage of $250,000. The total premium paid was $425.25, being $411 plus $14.25 for certain medical benefits. The Massachusetts policy covered the same six officers. Bach was insured in the same amount as under the Globe policy. The Massachusetts policy issued on the life of Joseph Michaels covered accidents occurring anywhere in the world while the insured was a passenger on any civil aircraft operated “by an American flag scheduled air carrier holding a Certificate of Public Convenience and Necessity issued by the USCAB,” or by any one of seventeen named foreign flag companies. It is conceded that the policies issued on the other employees of plaintiff were identical. It thus appears that while the Massachusetts policy was more limited than that issued by Globe as to the Group II category, in that it included only a limited number of foreign airlines, it provided a greater coverage for those employees who had formerly been insured under the Globe policy in Group I. The premium on the Massachusetts policy was computed at the rate of $1.10 per thousand, the total coverage being $420,000. This amounted to $478.80, which included $16.80 for medical benefit. This compares with eighty cents for Group I and $1.10 for Group II, making a total of $425.25, in the Globe policy. Thus, it appears that certain differences in rate as well as coverage between the two policies were clearly observable. The applications and the airsurance agreement also revealed a coverage different from that provided by the Globe policy.

Plaintiff, however, relies on the contention that none of its officers read either the policy or the other documents. And plaintiff urges upon us that courts have recognized that the business of insurance is intricate and complex; much more so than is necessary, counsel argues, and that this tends to confuse the insured so that few, if any, people ever read an insurance policy or the documents relating thereto. Therefore, it is argued, this court should take into account the realities of the situation and, in substance, give little heed to the actual contents of the policy or auxiliary documents, but enforce the real intent of the parties. It is true that courts have probably gone farther in this direction with respect to insurance policies than in any other field, and have held that failure to read a policy does not bar a suit to reform. German Fire Ins. Co. v. Gueck, 130 Ill. 345, 23 N. E. 112; Anderson v. Pettigrew Foundry Co., 297 Ill. App. 14, 17 N.E.2d 60; Stoltz v. National Indemnity Co. of Omaha, 345 Ill. App. 495, 104 N.E.2d 320; Quinn v. Mutual Benefit, Health & Accident Ass’n of Omaha, 244 Iowa 6, 55 N.W.2d 546. Courts do not from this proceed to a reductio ad absurdum that the parties’ written agreements have no weight. There must be limitations on the extent to which courts will ignore the provisions of even insurance contracts. At one time parties were bound absolutely and literally to the written contract. The word was supreme, whether in contract or statute. It was inconceivable that one should seek a meaning or intention apart from the written document. No heed was given to human fallibility. The emphasis was on the futility of any attempt to find the intention of the parties apart from their written expressions. Gradually, the injustice of the application of such a rigid rule to particular cases caused the courts to inquire into intention and to reform mistakes. Failure to read is not a bar to a suit to reform, but courts are not thereby excluded from consideration of other circumstances such as the nature of the transaction, the position and experience of the parties and the clarity and conspicuity of the writing itself. Failure to read the documents in this case did not involve oversight of a word, a phrase, or a line. It was failure to read an entire set of documents. Plaintiff’s officers had not read the Globe policy before the negotiations leading to issuance of the Massachusetts policy. Without knowledge of the contents of the Globe policy there could be no claim of an intention to obtain a new policy in a new company identical in its coverage. Plaintiff argues that it had a correct understanding of the Globe policy and that it is immaterial whether any of its officers had actually read the policy. It is true that failure to read would not be an absolute bar to a suit to reform but the chancellor in reaching a decision could properly take into account that plaintiff’s officers, men of experience in such affairs, had failed to read not one but two policies; that if they had examined the Globe policy they would have seen there were limitations on the “world-wide” coverage even in that policy, and a cursory examination of the new policy would have revealed the substantial differences between the two. The evidence offered by plaintiff fell short of establishing that plaintiff had a definite intention to obtain a continuation of the kind of coverage which it then knew it possessed.

The evidence is even less convincing that Associated likewise mistakenly ordered and delivered to plaintiff a policy of coverage different from that of the prior Globe policy. Here, if we accept plaintiff’s position, we must assume that Boos, an experienced insurance man, did not observe that there were two types of coverage — basic and extended — to be obtained from Massachusetts and did not observe the difference in rates between them, all of which appears implausible to us in view of the conspicuity and clarity of the differences in coverage and rates. The first item of evidence stressed by plaintiff to show Massachusetts’ intention to provide the same coverage in the new policy as in the old is that the old Globe policy file of Associated was stamped “Renewed.” This, it is argued, means renewed in a different company, to be sure, but with the coverage identical to the old. In construing an ambiguous word like renewed, we could under other circumstances give it the meaning plaintiff urges upon us. But here it may be argued with equal force that to men in the insurance business whose direct and immediate interest was in the continuation of the premiums out of which they receive commissions, the word renewal means that the business has been kept or retained. This is what the president of Associated testified to, and it so appears to us. In stamping the file “Renewed,” Roos was doing no more than making an inter-office memorandum. We cannot attach to that memorandum such significant meaning as plaintiff does.

It is next argued that the insurance ordered was at the rate of $1.10 per thousand, that this was the same as the Globe rate, and therefore Roos must have thought he was obtaining coverage for the plaintiff equivalent to that under the Globe policy. The Globe policy rates, as we have heretofore pointed out, were $1.10 for Group II and 80 cents for Group I, so that there was a substantial difference between the rates in the two policies. Still, the argument might have some force if the rate of $1.10 was not a rate used by Massachusetts for a type of air accident coverage. But Massachusetts did have that rate for its basic coverage. It seems equally reasonable, therefore, to assume that Roos ordered insurance at that rate because it was the rate Massachusetts charged for basic insurance. Perhaps Roos was influenced by the fact that this rate was closer to the sum plaintiff was spending for aviation accident insurance than the extended coverage rate. In any event, the chancellor had ample reason in the evidence for concluding that Roos knew what sort of policy he was obtaining for plaintiff.

No decision in this state has been found in which reformation was granted on such meager evidence. In cases where reformation has been allowed there has been a clear showing of what the plaintiff intended to procure and of the defendant’s knowledge of that intention, either by express directions from the insured or by knowledge of circumstances wholly inconsistent with the provisions of the policy. (Keith v. Globe Ins. Co., 52 Ill. 518; Home Insurance & Banking Co. v. Myer, 93 Ill. 271; Stoltz v. National Indemnity Co., 345 Ill. App. 495,104 N.E.2d 320; Cf. German Fire Ins. Co. v. Gueck, 130 Ill. 345, 23 N. E. 112; Beddow v. Hicks, 303 Ill. App. 247, 25 N.E.2d 93; Blumenfeld v. Neuman, 350 Ill. App. 306,112 N.E.2d 742; Tri-City Transp. Co. v. Bituminous Casualty Corp., 311 Ill. App. 610, 37 N.E.2d 441.)

Neither do the decisions of the courts of other states support plaintiff’s case. Plaintiff relies heavily on Martin v. American Ins. Co., 198 Wis. 214, 223 N. W. 437. There it appeared that a rider with respect to temporary vacancy attached to the original policy was changed in the renewal of the policy. Reform was granted on a showing that the insured left her policies with the agent of the insurer; that from time to time she asked and paid for renewal; that the insured did not see the policies and was never notified of any change. The agent himself testified that he intended to provide the same coverage as was originally had. On that basis the court granted reformation.

In Quinn v. Mutual Benefit, Health & Accident Ass’n of Omaha, 244 Iowa 6, 55 N.W.2d 546, reform was allowed when it appeared that the insurer’s agent and the insured agreed as to what was intended to be covered by the policy. In Du Teau Co. v. New Hampshire Fire Ins. Co., 156 Neb. 690, 57 N.W.2d 663, where the agent and the insured disagreed as to whether the insured received the policy he wanted, reformation was denied.

Several assignments of error charged erroneous rulings of the court with respect to the exclusion of evidence. These all related to the second issue, that is, whether plaintiff intended to obtain a policy from Massachusetts having coverage identical with that provided in the Globe policy. It has no bearing on the other issues- — that of the agency of Associated, and whether Massachusetts understood and intended that plaintiff should have such a policy. However, we will consider these errors. The first charged is that the court erroneously admitted the contents of a pre-trial deposition given by Weil, who died before the case came to trial. The court sustained an objection to the admission of his deposition but permitted defendant to examine Everett Michaels with respect to its contents. The defendant concedes that the hearsay rule bars the use of Weil’s statement, but argues that the evidence was offered only to show that Weil had made such statement. It is difficult to see how the statement without consideration of the contents thereof is of any value. In our opinion the court should have excluded this testimony, but under the circumstances it is not reversible error. It has no bearing on the issue of whether Massachusetts understood and intended that plaintiff should have a policy with the same coverage as that of the old Globe policy.

It is next argued that the court erroneously admitted into evidence Joseph Michaels’ individual application for insurance. The basis of the objection is that the application had not been attached to the policy and that the admission into evidence of an unattached application is forbidden by Section 360 of the Insurance Code of 1937 (Ill. Rev. Stat. 1949, Ch. 73, Par. 972 [Jones Ill. Stats. Ann. 66.1035]). This section was in effect when the policy was issued. Defendant points out that Section 360 was repealed in 1951, before this case was brought (Illinois Laws 1951, p. 611, Sec. 2) and that the section now applicable is Section 359a (Ill. Rev. Stat. 1953, Ch. 73, Par. 971a [Jones Ill. Stats. Ann. 66.1034(1)]) which does not exclude the application as evidence, but provides that the insured shall not be bound by the statements therein. Plaintiff argues that this involves a “vested right” and hence the statute in effect at the time the policy was issued applies. We think it is clear that this involves a rule of evidence and that the latter statute applies. People v. Lindheimer, 371 Ill. 367, 373-4, 21 N.E.2d 318, 321; Holcomb v. Boynton, 151 Ill. 294, 297, 37 N. E. 1031, 1032. The statutes in question were designed to prevent an insurer from avoiding a policy on the ground of misrepresentation made in an unattached application. (See e. g. Lampke v. Metropolitan Life Ins. Co., 279 N. Y. 157, 18 N.E.2d 14; Kirkpatrick v. London Guarantee & Accident Co., 139 Iowa 370, 115 N. W. 1107.)

In the instant case the application was not introduced to show representations made thereon by the applicant, but only to show what was printed thereon by the insurer. The application contained no limitations or conditions which were not contained in the policy itself. Plaintiff’s argument against admissibility rests largely on the proposition that the application showed on its face an apparent election of basic coverage by the applicant and that this election had not, in fact, been made by the applicant but by an employee of USAU. Assuming this fact to be true, the application was nevertheless relevant and admissible. (See Saunders v. Agricultural Ins. Co., 167 N. Y. 261, 60 N. E. 635.) It would still show that the insured made no election (which under the agreement was deemed to be an application for “basic”) and it also was relevant to the question of what Massachusetts understood to be the intention of the insured.

It is next contended that the court erred in excluding evidence by way of an express statement from one of plaintiff’s officers that plaintiff intended to renew the Globe policy. In an action to reform a contract parol evidence of intention is admissible. Ewing v. Sandoval Coal & Mining Co., 110 Ill. 290; McLennan v. Johnston, 60 Ill. 306, 311. This is an exception to the general rale that belief, conclusion and intention are not admissible in civil actions. It was in reliance on this principle that counsel for plaintiff asked its president:

“Q. — what was the intention of Hyman-Michaels Company with respect to the continuation of the insurance which it had in 1947 ?”

The court sustained an objection to this question. A corporation speaks through its duly authorized employees. In effect therefore the president of plaintiff company was asked to testify to the state of mind of all the officers who represented the company in insurance matters. This clearly was of no value. In any event it had a bearing on only one of the necessary elements to make plaintiff’s case and would not be reversible error.

Plaintiff objects that its offer to prove a long course of insurance dealings with Associated was rejected by the court. Plaintiff has quite definitely proved by evidence already in the record that it had extensive business and social associations with officers of Associated. The court’s ruling sustaining objection to a tender of invoices for insurance of various kinds with plaintiff’s checks in payment and a collective exhibit covering a ten-year period of their transactions was not erroneous.

Plaintiff assigns error on the ruling of the trial court’s dismissal of Counts 1, 2, 6 and 7. In its brief, however, plaintiff says, “If there is to be a new trial, these counts should be reinstated.” By this we understand a ruling is desired on this point only if the judgment is reversed and the cause remanded for new trial and there is therefore no need for us to pass upon the question.

Decree affirmed.

McCORMICK, P. J. and ROBSON", J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    Frank C. Steigerwald, Appellee, v. A. M. Steigerwald Co., Alfred M. Steigerwald and Libera Y. Steigerwald, Defendants. On Appeal of A. M. Steigerwald Co., Appellant.
    Gen. No. 46,776.
    First District, Second Division.
    December 6, 1955.
    Released for publication March 6, 1956.

      O’Keefe, O’Brien & Hanson, of Chicago, for appellant; James H. O’Brien, of Chicago, of counsel.
    Johnson & Wiles, of Chicago, for appellee; Walter E. Wiles, of Chicago, of counsel.
   JUDGE SCHWARTZ

delivered the opinion of the court.

This is an appeal from an interlocutory order enjoining the defendant corporation (appellant), Alfred M. Steigerwald, its president, and Libera Y. Steigerwald, its secretary-treasurer, from diverting any corporate funds to Alfred M. Steigerwald other than compensation determined and approved by its board of directors.

The principal question is the validity of the appointment by the president of an executive committee composed of nondirectors and the action of that committee in providing compensation for the president in addition to that fixed by the board. The chancellor held that this was in violation of Section 38 of the Illinois Business Corporation Act (Ill. Rev. Stat. 1953, Ch. 32, Par. 157.38, Sec. 38 [Jones Ill. Stats. Ann. 32.038]) which reads as follows:

“If the by-laws so provide, the board of directors, by resolution adopted by a majority of the whole board, may designate two or more directors to constitute an executive committee, which committee, to the extent provided in said resolution or in the bylaws of the corporation, shall have and exercise all of the authority of the board of directors in the management of the corporation; but the designation of such committee and the delegation thereto of authority shall not operate to relieve the board of directors, or any member thereof, of any responsibility imposed upon it or him by law.”

Plaintiff Frank Steigerwald and defendant Alfred are brothers. Libera is the wife of Alfred. In December 1937 they organized the defendant corporation. The common stock, 70 shares issued, was divided 35 shares to plaintiff, 34 to Alfred, and 1 to Libera. The three constituted the board of directors. Alfred was elected president and plaintiff was elected vice-president and treasurer. This continued to 1945, when plaintiff, by action of a majority of the board (being Alfred and Libera, his wife), was removed from office. Libera became secretary-treasurer. Thereafter a deadlock resulted and that situation has continued to the date of the hearing in question.

In 1949 plaintiff filed suit seeking an injunction, an accounting, dissolution of the corporation, and the sale and distribution of its assets. In April 1954 the board of directors, over objection of the plaintiff, adopted an amendment to the bylaws, providing for the creation of “a committee composed of three reputable business men ... to pass upon and fix all matters of salary-adjustment and compensation to be made to employees performing services as such employees for A. M. Steigerwald Co.” The members of the committee were to be selected by the president. In October 1954 the president reported that he had appointed such an executive committee consisting of persons who were not directors and that this committee had made provision for additional compensation for sales employees. The president stated that he proposed to make this compensation effective for himself as of January 1, 1955. That action led to the instant proceeding.

A petition for injunction was filed by plaintiff on January 4, 1955, charging that the bylaws and the executive committee are not in compliance with the requirements of the statute before quoted. The words of the statute clearly support plaintiff’s position. An executive committee must be composed of two or more directors. Nondirectors cannot sit on such a committee. No other reasonable construction can be derived from the language of the act.

The statute further provides that an executive committee appointed pursuant thereto may be empowered to exercise all the authority of the board. If the interpretation sought by defendant were correct, it would mean that a majority of the board of directors, ignoring the minority, could transfer to a group not elected by the stockholders all their authority, saving only their responsibility for those duties which the board is required to discharge under the law. The courts of this state have carefully preserved the power of stockholders to select those who shall control the corporations for them. People ex rel. Weber v. Cohn, 339 Ill. 121, cited with approval in Wolf son v. Avery, 6 Ill.2d 78.

The question as to whether an executive committee may be composed of nondirectors has never been passed on by a court of review in Illinois. In Delaware, where there is a statute similar to that of Illinois, the question arose as to whether or not a certain individual was a director. There was no record of his election as such in the minutes. The minute book, however, recorded his election as a member of an executive committee. From this the court concluded that he was a director because “members [of an executive committee] are chosen from the board of directors.” Bowen v. Imperial Theatres, Inc., 13 Del. Ch. 120, 115 Atl. 918. In Michigan a statute provided that “. . . such board may elect from their number an executive committee, of such number, and with such powers as the bylaws may provide.” The court there said:

“No officer can be chosen whose authority does not come directly from the choice of the stockholders or through the directors, and no delegation of powers to any committee is authorized by the law except to such as are members of the board. Sess. L. 1865, p. 726.”

Stewart v. Father Matthew Society, 41 Mich. 67, 73.

In an article in 18 Minn. L. Rev. 1, 6, the writer discusses a Minnesota statute which reads: “. . . board of directors may . . . designate two or more of their number to constitute an executive committee . . .” and then says:

“Most courts hold that since the directors are vested by statute with the management of the corporation they do not come within the rule of prohibiting the delegation of authority by an agent, and that therefore they may delegate to an executive committee of their own number the power to do any act for the corporation which they might perform for themselves.”

The Illinois statute further provides that if the bylaws so state the “board of directors, by resolution . . . may designate” the membership of the committee. The bylaws in the instant case, instead of giving authority to the board of directors to designate the membership of the committee, gave it to the president of the corporation. This, too, was a violation of the statute.

The next question is whether the president, through the appointment of an executive committee, could obtain additional compensation without the approval of the board of directors. He had attempted to procure such approval but was thwarted by the legal prohibition against his voting on the resolution. This left the board in deadlock. He then resorted to the appointment of the executive committee as before stated. In our opinion the trial court aptly summarized the situation by saying that he attempted thus by indirection to obtain what he could not obtain directly. It is now argued that under the law as stated in Joy v. Ditto, Inc., 356 Ill. 348, 190 N. E. 671, the president was entitled to additional compensation. We quote the following language from the Joy case, p. 355:

“The rule that an officer or a director of a corporation cannot receive compensation unless such is provided by the by-laws or resolution of the Board of Directors before the services are rendered has an exception now as fully established as the rule that where such officer or director has performed services clearly outside the scope of his duties as such officer or director, at the instance of someone of the corporation having general authority over its affairs and under a promise of payment for such services, he is entitled to receive pay therefor.”

It is to be noted that under the authority of that case, an officer or director may be entitled to additional compensation if he has performed services clearly outside the scope of his duties at the instance of someone of the corporation having general authority over its affairs and under a'promise of payment for such services. In this case the president owned 49% of the stock, and directed the policy of the corporation. He took orders from no one and had never entered into a written or oral contract of employment. The only basis for finding him an employee and entitled to additional compensation was his successful salesmanship for the company. It appears, however, that at the time of the organization of the company he was to take over management of the office and of sales and that he had managed the sales of the company throughout its existence. Moreover, as president he was head of all the executive activities of the company, including sales as well as operation. He cannot obtain additional compensation for such services unless it is authorized by resolution of the board of directors, and he is disqualified from voting on such a resolution. Bloom v. Nathan Vehon Co., 341 Ill. 200, 173 N. E. 270.

Plaintiff in his brief suggests that much of the abstract filed by appellant was unnecessary and that this court should enter an order requiring the defendants, Alfred M. and Libera T. Steigerwald, to bear all the costs of that portion of the record. No appeal was taken by those defendants, and this court can take no action on the suggestion.

Order affirmed.

MoCORMICK, P. J. and ROBSON, J., concur.


author: JUSTICE CBOW

text:
    People of State of Illinois, Plaintiff-Appellee, v. One Mechanical Device or Machine Designated as Bally Dude Ranch, Serial No. C-2603, and More Commonly Called a Pinball Machine, and Elmer C. Hallgren et al., d/b/a H & H Music Company, and Kenneth Taylor, Defendants-Appellants.
    Gen. No. 10,864.
    Second District.
    January 31, 1956.
    Rehearing denied February 14, 1956.
    Released for publication March 9, 1956.

      Francis J. Coyle, Sam M. Arndt, and Crowley, Sprecher & Weeks, all of Bock Island, for defendants-appellants.
    Bernard J. Moran, State’s Attorney, Bock Island County, of Bock Island, for plaintiff-appellee; Henry W. McÑeal, of Bock Island, of counsel.
   JUSTICE CBOW

delivered the opinion of the court.

On July 9,1954 the State’s Attorney for Bock Island County petitioned the Circuit Court requesting an order directing him to destroy a certain pinball machine. The petition stated that the machine had been seized by a police officer and turned over to the State’s Attorney, and that it was a device upon which money is staked, hazarded, bet, won, or lost, and was manufactured and made for the purpose of gambling uses and had no other lawful purpose, and was subject to seizure and destruction as the law provides for gambling devices.

Subsequent to the filing of the petition certain persons moved to intervene, which motion was allowed and they were made parties defendant. After preliminary proceedings, not involved in this appeal, they filed their answer denying that the machine was a gambling device. After a hearing before the Court, with both sides presenting evidence, which included a demonstration of the machine in operation, the Court entered an order on March 2, 1955 adjudging that the pinball machine was a gambling device, subject to seizure, and ordered its destruction.

The proceeding was brought under Sec. 2 of what is popularly known as the Gambling Device statute (Ch. 38, Ill. Rev. Stats. 1953, pars. 341-343 [Jones Ill. Stats. Ann. 37.271-37.273]), and the sole question presented is whether a pinball machine of this type is subject to the proscriptions of that statute.

That Act, originally passed in 1895, consists of three sections. Section 1 (Par. 341) provides penalties for persons who operate, keep, own, rent, or use, inter alia, slot machines or any other device upon which money is staked or hazarded, or into which money is paid or played upon chance, or upon the result of the action of which money or other valuable thing is staked, bet, hazarded, won or lost. Section 2 (Par. 342) declares such machines to be gambling devices and authorizes the seizure, confiscation, and destruction of such machines and devices by duly constituted authorities. Section 3 (Par. 343) provides for penalties as against various named types of people who have to do with the premises where the gambling devices are located or have to do with the devices themselves. This statute remained unchanged from its enactment until July 7, 1953, when Pars. 341 and 342 were amended, and, as so amended, the statute was in effect at the time material hereto and is now in effect in its original form, subject only to the 1953 amendment.

Construing the statute prior to the 1953 amendment, we held in People v. One Pinball Machine, owned by Henry Fox (1942) 316 Ill. App. 161, that a pinball machine, similar in most essential respects to the one here ordered destroyed, was a gambling device, fell within the ban of the statute, and was subject to destruction. That was in 1942. The amendment of 1953, however, calls for a re-examination of the problem.

This amendment to both Sections 1 and 2 (Pars. 341 and 342) adds the following to the original provisions, previously summarized:

“A coin-in-the-slot-operated mechanical device played for amusement which rewards the player with the right to replay such mechanical device, which device is so constructed or devised as to make such result of the operation thereof depend in part upon the skill of the player and which returns to the player thereof no coins, tokens or merchandise shall not be considered to be a gambling device within the meaning of this Act and any right of replay so obtained shall not represent a valuable thing within the meaning of this Act.”

In People v. One Pinball Machine, supra, where the cases and authorities were extensively reviewed, we based our affirmance of the destruction order on the fact that the free play feature represented “a valuable thing,” and since the device in question there had the requisite mechanical features defined in the statute and its operation depended upon chance all aspects of the then statute were satisfied to justify seizure and destruction. We are called upon to determine now whether or not the instant device satisfies in all respects the statute as amended in 1953, which was the basis of the present destruction order. The parties have not referred us to an Illinois case directly in point arising since the amendment, and we know of none. City of Chicago v. Wickey (1954) 4 Ill.2d 423, referred to by the defendants, involved a new tax statute of 1953 by which the State imposed a privilege tax upon certain coin-operated devices (Ch. 120, Ill. Rev. Stats., 1953, par. 481 b.1-481 b.12 [Jones El. Stats. Ann. 119.973(1)-119.973(12)]), and a city ordinance prohibiting certain pinball games, and held that the 1953 Act did not by implication repeal a section of the Cities and Villages Act authorizing a city to prohibit such games; it apparently was undisputed in that case that the device fell within one of the types described by the 1953 Act (though which type is not set forth) and also fell within the city ordinance, the facts had been stipulated, — and the only question was the legal question of whether there was or was not a repeal by implication; the details of the operation of the device are not set forth therein; in the instant case the question involved is not the same, the facts are disputed, there is no stipulation, and the details of the operation of this device are fully gone into in the evidence as we shall hereinafter set forth.

This particular machine bears the identifying name of Bally Dude Ranch and is manufactured and/or sold by the Bally Manufacturing Company of Chicago, Elinois. It is apparent from a reading of the record and viewing its actual operation in this Court, a demonstration having also been hád before us, that it has the usual features beguilingly present in most pinball machines, though this one seems to be more ingeniously constructed than most. It is mounted on four legs, stands about three and one-half feet high, and has an inclined horizontal playing field, dotted with numerous pegs, bumpers, rubber rings, spring bumpers, lights, and twenty-five numbered holes, all artistically decorated, and attractive. This, of course, is all under glass. A vertical score board or back plate or glass rises at the inclined rear end above the playing field. On this back plate or glass are three squares with numbers in them. The square to the left contains a series of numbers, twenty-five in all, corresponding to the numbered holes on the playing field. In this square there are five rows of five numbers each and it is designated as the First Card. Upon depositing a single dime this card lights up. The square on the right of the vertical score board is the Second Card and it is like the First Card. The Second Card lights up after depositing a second dime and gives the player twice the opportunity to score free games, which free games accord the player the right to replay without charge. Also on the vertical score board is a square in the. center with nine numbers in three rows of three each and it is called the Super Card. The Super Card works on the same idea as the First Card, except that three-in-a-row on it scores as many free games as four-in-a-row on the First Card, and if the four corner numbers on the Super Card are lit a larger number of free games is won. At the left top of the vertical score board is another square called “First and Second Card Corners Score 200,” and, when this is lighted by depositing a dime, then lighting the four corner numbers of the First or Second Card wins 200 games, but it is possible this First and Second Card Corners square will not light up when a dime is deposited, — the player having no control over that circumstance.

At the front, or player’s end of the device, on the right is a rubber tipped steel plunger mounted in a spring, with a knob on the end, so that by pulling it back and releasing it, it acts as a catapult. Below the plunger is a “ball guide plate” scored with several lines on which a player can measure how far out he pulls the plunger. One of the defendants’ witnesses says the design of the knob of the plunger is meant to give a player the maximum amount of “sensitivity” in gauging his shot. The dime deposited not only lights the First Card but releases five steel balls, the first of which immediately appears in a channel in front of the plunger. Releasing the plunger catapults the ball through a channel running approximately the length of the machine to the top end of the playing field. The ball comes out of the channel onto the playing field at a point at the rear, farthest from the player, then immediately rolls by force of gravity down the field, being deflected erratically and unpredictably in its downward course by the various impediments already described, until it either comes to rest in one of the numbered holes, or into a free ball hole, or drops out of play without scoring. If the ball goes in a given numbered hole an electrical contact is made causing a corresponding number, or numbers, on the vertical score board to light up. So far as the First Card is concerned the player hopes to light up the numbers in the card consecutively, either three or four or five in a line, diagonally, vertically, or horizontally, and, if so, a winner is scored, much as in the game of Bingo. If two dimes are played the Second Card illuminates and the purpose is the same as with the First Card. The other cards operate on the same general principle. The object of the various combinations, plus innumerable added features, is to increase one’s chances to win free games, and these are scored by a computing device in a little windowed square to the top right of the vertical score board. Thus the player knows, at any given time, the total number of free games to his credit, if any.

The game features are innumerable, and are cleverly designed. One way, for example, by depositing dime after dime and/or pressing various buttons, at a certain point in the game select certain features by which if he thereafter lights less than the usual amount of numbers in a row he nevertheless scores the equivalent of the usual amount of numbers, may increase the odds, or may obtain extra balls. Sometimes the deposit of a dime achieves nothing, and no change takes place,— which is to say that an additional payment does not automatically entitle the player to further odds, or game features, or extra balls, — those are circumstances the player has no control over, as was admitted by more than one of the defendants’ witnesses,- — -that is pure chance. One of the defendants’ witnesses said that each time a dime is deposited a change, — completely uncontrolled by the player, — in the electrical system occurs, but at times those changes, — whatever they may be, — occur with, strangely, no visible change on the vertical score board. All game features and odds are represented by appropriate figures illuminated on the score board. For a further example, depositing extra dimes may,- — -but not necessarily does,- — light up a couple of stars at the lower left and right corners of the score board, and, if that occurs, then, if one of the balls thereafter simply rolls over a corresponding spot on the playing field, numbers 8 and 23 will light up, which is equivalent to the ball dropping in the 8 or 23 holes. Whether those stars do or.do not light up on the deposit of coins is a circumstance the player has no control over. In fact, other than the First and Second Cards lighting up upon the deposit of the first and second dimes, the player does not know what is going to happen on the back of the machine and cannot control it.

The machine is equipped with a “tilt” device like a plumb bob which renders it inoperative when jolted too hard, voids the game, and disqualifies the player until an additional dime is inserted starting a new play. Various electrical devices are housed immediately behind the score board and they determine the odds and the frequency of occurrence of the added game features, over which the player has not the remotest control. If replays or free games have been won then the player thereafter pushes buttons instead of depositing coins in the playing of the machine. All in all, it is an intricate and attractive piece of machinery.

Does this device fall within the amendatory exception to the (rambling Device statute descriptive of devices which are not to be considered gambling devices and hence not subject to seizure and destruction? In order to come within that exception, the device must be (1) a coin-in-the-slot-operated mechanical device, (2) played for amusement, (3) which rewards the player with the right to replay, (4) which is so constructed or devised as to make the result of the operation thereof depend in part upon the skill of the player, and (5) which returns to the player thereof no coins, tokens, or merchandise.

Amendatory exceptions and provisos in a statute being designed to qualify or limit what is otherwise generally affirmed in the body of an act, are to be strictly construed, and the burden is on him who says he comes within some statutory exception to establish that he does: Doubler v. Doubler (1952) 412 Ill. 597, 600; State Public Utilities Commission v. Early et al. (1918) 285 Ill. 469. With this in mind, it is axiomatic that all five above conditions are prerequisites to its application, that is, before the amendatory exception can take the instant device out of the statute, all conjunctive conditions must be met, and if any be lacking the device does not come within the amendatory exception. That the machine in question is a coin-in-the-slot-operated mechanical device, and that it does not specifically reward the player with coins, tokens, or merchandise are undisputed. But, while there may be no evidence of the latter, it is, of course, common knowledge that the free game feature, with which it rewards the player, may be and is easily perverted for gambling purposes, and is more often so done than not. Players of these devices generally would not insert dime after dime solely to be amused — they obviously would hope for some pecuniary gain, directly or indirectly. What we stated in People v. One Pinball Machine, supra, bears reiteration:

“While it does not appear from the evidence in this case still it is common knowledge that the so-called free game is frequently but a subterfuge, and that the common practice is for the proprietor, when the player obtains a winning score, to pay off in money or merchandise. It is also common knowledge that the machine itself is sometimes used by players to determine who shall buy the drinks or pay for refreshments, cigars or lunch and when so used it is a gambling device within the meaning of our statute. The fact that there is no testimony in this case that the machine in controversy was being so operated, is not the test of whether it is a gambling device.”

Whatever may be our conclusions, however, as to why certain people play pinball machines, whether solely for amusement, or otherwise, their definitive expression is unnecessary here in the view we take of the fourth condition of the amendatory exception which requires that the device must be so constructed or devised as to make the result of the operation thereof depend in part upon the skill of the player.

The defendants strenuously contend that the result does depend in part upon the skill of the player. They would have us hold, in substance, that the phrase “in part,” as used in the amendment, can mean something infinitesimal or practically indiscernible.

That phrase is not fraught with any unusual obscurities and the intent of the Legislature can reasonably be determined.

“In part” according to Webster’s New International Dictionary, Second Edition, means “in some degree,” “partly.” In everyday speech, it means a portion of a whole and something reasonably discernible. It is not a modicum, minimal, or a scintilla of skill that the Legislature had in mind. We do not hold that the phrase necessarily means a predominate part, because a “part” can certainly be less than a half. But, it must be something about which one reasonably can either feel or talk and still not be feeling or talking about nothing or next to nothing.

It is fundamental that each word, clause, and sentence in a statute must, if possible, be given some meaning, and be interpreted reasonably: People ex rel. Roan v. Wilson et al. (1950) 405 Ill. 122, 128; Doubler v. Doubler, supra. We cannot assume the Legislature inserted the phrase, “in part,” uselessly, or casually. If we accepted the defendants’ arguments, we would have to practically ignore this rule, and if “in part” means what they urge as applied to this device then it is of only gossamer quality and the Legislature might as well have deleted the entire phrase or the entire clause. At one point in their briefs the defendants tell us that in every case they have found relating to the operation of a pinball machine the Courts have conceded that the operation involved some skill. That, of course, is much too broad a comment. But, if it were accurate, then, the Legislature being presumed to know the state of the law at the time it adopted the 1953 amendment, not only the phrase “in part” but the whole clause “which device is so constructed or devised as to make such result of the operation thereof depend in part upon the skill of the player” were completely unnecessary as to pinball machines, — they also depend in part on skill, under the defendants’ analysis, — and, hence, the whole clause is nothing but a pedantic exercise in mental gymnastics, and wholly pointless as to pinball machines.

Presumably the Legislature acted meaningly, however, intended the phrase and clause to have a sensible, reasonable, practical, substantive meaning, and did not use them lightly. We must, as the defendants suggest, give full recognition to the 1953 amendment, but, in doing so, that means full recognition to all of it, including the portion “which device is so constructed or devised as to make such result of the operation thereof depend in part upon the skill of the player,” and construing “in part” reasonably, practicably, and in accordance with what the Legislature must reasonably have intended. We think the Legislature must have had in mind that there are or may be some pinball machines which are so constructed or devised as to not really make their result depend on any real skill of the player, and that there are or may be, on the other hand, some other pinball machines which are so constructed or devised as to really make their result really depend in part on real skill of the player. We do not believe the Legislature was engaging in useless mental gymnastics, or acting pointlessly. Its attempt to categorize or distinguish different types of pinball machines is a matter of substance. It is not chimerical or gossamer in quality.

We, thus, come to a determination as to what the evidence discloses, apropos of this aspect. As we view the evidence, the element of player skill, if any, here is reduced to a minimum, is chimerical, and can not reasonably be equated with the language “in part” as used in the amendment. The amount of skill, if any, here involved is fantastically small, or almost nonexistent, and is not of a reasonable or substantive quality.

Certain witnesses for the defendants claimed that by “gunching” and “hulaing” the machine they could control the ball and “waltz” it between the various pins, bumpers and holes on the playing field to make it go a certain way and achieve a desired result. “Crunching” and “hulaing” are part of the argot or jargon of pinball devotees to describe the act of pushing, pulling, shoving, hitting, shaking, or tipping the machine at what they consider the psychological moment, usually just as the ball hits a bumper, to supposedly influence in some manner the course of the steel ball. One of the defendants’ witnesses says the legs on the machine are designed to carry the weight thereof but also allow “springiness” in action and permit gunching, though he does not say, and no one else says, the device is constructed or devised for gunching, — merely that gunching is permitted, he says, by the springiness of the legs. Actually, it would appear that “gunching” could occur with or without springiness in the legs, — springiness is not essential to gunching. But whatever so called “skill” may be present in these picturesque acts — and at -best it is very small — is nullified by the tilting mechanism. It is hard to see how gunching or hulaing the device can have any appreciable or discernible effect on the course of the ball before the tilting mechanism voids that particular play. And there is apparently no way of knowing how much, if any, “gunching” a particular machine will take before the tilting feature is activated, — it evidently depends somewhat on where the machine is located and the adjustment of the tilting mechanism. A machine apparently may take no, little, a medium amount, or much gunching before the tilt operates, — and, we assume, since the tilt mechanism is subject to adjustment, and that not by the player, a particular machine may vary from time to time as to when it will or will not tilt. And the very fact this machine has the “tilt” device, the only .purpose of which is to prevent or discourage “gunching,” is strongly persuasive that the machine is not so constructed or devised as to make the result of its operation depend in part upon the skill of the player (assuming that gunching can properly be considered “skill”). If there be “springiness” in the legs of the machine to permit gunching then there is an irreconcilable conflict in the physical construction of the machine between that and the tilt device to prevent or discourage gunching, and there is no satisfactory explanation thereof by the defendants.

Moreover, there is no evidence this device is so constructed or devised as to make the result of its operation depend in part, or at all, upon so called “gunching” or “hulaing.” “Depend,” in this respect, means “to be contingent — to require something as a condition — to be conditioned — ” and its applicable synonyms are “hinge, hang, turn”: Webster’s New International Dictionary, Second Ed. This device can be operated very well without any gunching or hulaing. Its operation and result are not contingent thereupon; it does not require such as a condition to its operation; it does not hinge, hang, or turn upon such gunching or hulaing. In fact, except for the picturesque allusions to such practices by some of the defendants’ witnesses, —none of whom said gunching or hulaing were indispensable to the operation of the device, — -the physical appearance of the device, as well as the other evidence, including the tilt mechanism, would indicate that under normal, orthodox conditions it is supposed to stand still, upright, and the only thing the player is supposed to do is put dimes in, or push buttons, and pull the plunger. One definition of “skill” is “the art of doing a thing as it ought to be done”: Bouvier’s Law Dictionary, P. 1115. And see: Steely v. Commonwealth, 291 Ky. 554, 164 S.W.2d 977. That the legs may have some “springiness” which may, incidentally, permit gunching or hulaing (though not essential thereto) is a far cry from saying the device is constructed or devised for gunching or hulaing or that its result depends at all upon gunching or hulaing. We suppose that almost any game or device, even ping-pong, or checkers, may, if a player be so inclined, be perverted by perhaps striking or moving the playing field or the table or support on which it rests or is played, but we’ve not heretofore thought such indicated any real “skill” in the player and we do not now think so, and we do not understand that such makes the result of the game’s or device’s operation depend thereon. Hence, so far as gunching or hulaing are concerned as being alleged elements of skill, the device not being constructed or devised to make its operation depend in part (or in any degree at all) upon gunching or hulaing, it therefore does not depend in part upon the “skill” of the player.

Nor does the plunger device or its knob or guide plate provide a means of exercising “skill” within the meaning of the amendment. The only thing that one could possibly control by the plunger, by the manner it is pulled back and released, is the probable side of the playing field on which the ball would initiate or begin its downward course. But, as soon as the ball starts down, the bumpers and other impedimenta come immediately into play, bouncing the ball erratically and unpredictably in no predetermined direction, and voiding, for all practical purposes, whatever minimal advantage one might have by the happenstance of the ball’s initial position on the left, or right, or center at the top or beginning of the playing field. As one of the defendants’ witnesses said, even if a player could start the ball 99 times out of 100 on the side of the playing field which he wished, the effect of whatever control he initially had over the ball would be completely lost (by the impedimenta) if he did not gunch the machine. One of the defendants’ witnesses, evidently an experienced devotee, said, in substance, that, by “gunching,” the best he could do was direct the ball in a general direction, — he could not release it so it would go in a particular hole every time, — and, disregarding the “gunehing,” he had no control over the ball after it leaves the top of the playing field. He also said a player would have to know the exact degree or spot on a bumper which a ball is about to hit before the player could know the exact course the ball would take at the time he gunched the machine, which lightning mathematical computations and predictions are, of course, obviously impossible in the short time it takes for the ball to roll down the field. Another witness for the defendants also said that if a player be “skilled” to some extent, — especially in using the plunger, — his “skill” is reduced by the very fact that the machine is admittedly not a precision machine. Another defendants’ witness said that ordinarily he would not be able to control the ball as he sent it out of the gate and down the field, — that was done by accident, fortune, or fate.

A witness for the plaintiff, a police officer, who had played a machine of this type for about a year, — and about 100 times, — and had observed about 200 other individuals play machines similar to it, said, in substance, that he did not see how the player could control the ball on the playing field after it had left the plunger, by hitting, slapping, or strildng the machine, and that there is no possible way to strike the machine and thereby direct the ball into a particular hole. Another witness for the plaintiff, another police officer, who had played about 100 games on a machine of this type, had watched 75 to 100 other people play such, and who had both “gunched” it and not “gunched” it when playing, said he did not have any control over the ball, and had no more control by gunehing than by not gunehing; some times gunehing might change the general direction of the ball’s downward progress on the playing field, but that was all.

It is apparent that the designer of this machine did everything possible to eliminate the element of player skill, and, in doing so, did remarkably well, for, we think, nothing of any consequence remains except the element of chance. What is more, the player has no control over the selection of odds payable on winning sequences, or added game features. He simply pays his money and takes a chance, and chance is the soul of this device.

Certain witnesses for the defendants testified that, in their opinion, they acquired a certain proficiency after playing the machine a thousand or more times. That, with an habitual player, may possibly be, but, even if true, to the average player the result of its operation is pure chance.

In State ex rel. Dussalt v. Kilburn, 111 Mont. 400, 109 P.2d 1113, 1115, 135 A. L. R. 99, this aspect was commented on as follows:

“While the evidence shows that by long practice a certain amount of skill may be developed, yet we must view the operation and result of the machine as it is played by the mass of the patronizing public, with whom it is purely a game of chance.”

And in Baedaro v. Caldwell, 156 Neb. 489, 56 N.W.2d 706 (1953), the Court stated:

“It is true that with practice a player may develop some skill which would aid him in bringing about the successful result of obtaining the right to a replay; but even with such practiced manipulator the chances of success in the playing of the five balls allotted to him are few and far between, and the opportunity for skill to have any appreciable effect on the result of the play is almost completely overshadowed by the element of chance.”

Also apropos is a recent federal case, Johnson v. Phinney (C. A. 5th, 1955) 218 F.2d 303. In that case, the Commissioner of Internal Eevenue assessed a wagering tax which was paid, and the appellant sued for refund. The issue was whether or not the operation of a so-called pinball machine constituted a lottery. The Court, said at page 307:

“When he begins the play, he can only propel the ball along a designated channel toward pins or holes, the location of which is likewise selected in the manufacture. No doubt, habitual players who have studied a particular machine may attain a degree of proficiency in deciding the force to apply to the ball or in nudging the machine so that the ball is more likely to strike a particular bumper or fall into a particular hole; but even the most skillful player combats predetermined conditions and odds which are completely beyond his judgment and control.”

The claim of these witnesses we would attribute not to any real skill actually acquired, but to the ingenuity of the designer in creating a device that, while removing all reasonable substantive elements of skill, gives to some of its devotees a delusion of expertness. In the view we take, the evidence indicates no reasonable substantive element of real skill is involved, its operation does not depend thereupon, the device is, pure and simple, a game of chance, and is, within the meaning of the general statute, a device “for the reception of money on chance” and “upon the action of which money is staked, hazarded, bet, won or lost.”

Since the device is not so constructed or devised as to make the result of its operation depend in part upon the skill of the player, within the meaning of the 1953 amendment, the amendatory exception is inapplicable, and therefore the right of free replay is a “valuable thing,” as we’ve heretofore held. Accordingly, the machine is one for the reception of money upon chance or upon the action of which money is staked, within the general statute. The free play feature thus subjects this device to destruction, as required by Section 2 of the Gambling Device statute. As we said in People v. One Pinball Machine, supra, “it (Section 2) does not require that money only be won or lost. Its efficacy is as potent as if it had expressly included the words ‘or other valuable thing.’ ” The Legislature has determined that gambling devices of the kind involved here are against public policy in that they stimulate the gambling propensity through their allure. Because the public good is thought to be better served without such allurements, the Legislature has declared them outlaw. This device does not come within the amendatory exception of 1953.

Many of the questions in this case are questions of fact. There were two witnesses for the plaintiff, — Robert P. Cherry and Bernard K. Rice, both police officers, — and there were five witnesses for the defendants, — Robert Breither, an employee of the company maufacturing and selling the machine, and Robert Lannon, Bert R. Nickerson, Michael Komodins, and Raymond G-. Moriarity, who are persons who have frequently played the machine or others like it. In addition, as we’ve said, there was a physical demonstration before the Court of the machine in operation. Under settled principles, the trial court having an opportunity to observe the conduct and demeanor of the witnesses, and to determine their credibility not only from their testimony but from such conduct and demeanor and also from such interest as they had as appears from the evidence, it is primarily the trial court’s responsibility to determine where the weight and preponderance of the evidence lies, and, insofar as fact questions are concerned, we should not disturb its conclusion unless contrary to the manifest weight of the evidence. We cannot say here that, insofar as fact questions are concerned, the judgment of the trial court is against the manifest weight of the evidence.

The machine in question, under the circumstances, is a gambling device and comes within the general ban of the statute. The Circuit Court was correct in ordering its destruction, and its order will be affirmed.

Affirmed.

DOVE, P. J. and EOVALDI, J., concur.