« ForrigeFortsett »
(145 N.E.) the receipts and profits of the saloon busi- pand has held the offices of director of a ness, well knowing the falsity of such rep school district, village trustee for Bellwood, resentations and well knowing that the and precinct committeeman of the Chicago Schuetts were illiterate and ignorant and ward. For many years prior to March 19, knew nothing about the saloon business and 1917, the Schuetts and Richters were neighthe value of the property traded to them, bors and on very friendly terms. Richter and trusted them implicitly to deal with looked after and assisted and advised in the them fairly and truthfully. On the other transaction of a large part of the business of hand, the Richters contend that the Schuetts the Schuetts, so that they learned to demade full investigation of the property pend upon and trust him and repose confitraded to them and relied on others for in-dence in him in all transactions in the manformation as to the volume of the saloon agement of their property. Richter, knowbusiness and the probable profits of the ing this, induced them to enter into the consame; that as to the deal Richter told them tract by means of the following false, fraudthat the Lake street property was worth $7,- ulent, and material representations: That 000, and the saloon fixtures $1,000, that the the Lake street property was reasonably license then in force had cost $2,400, of worth the sum of $7,000, when, in fact, the which sum he had advanced $1,300, and that fair and reasonable market value thereof in the deal he would only charge them $5,- was not more than $3,000, which he well 500 for the Lake street property, $500 for knew; that Mrs. Fendt was making money the saloon fixtures, etc., $500 for the unex- in running the saloon and occupying the pired license, and would value the Bellwood premises, when, in fact, she was losing monproperty at $2,500; that all the documents ey and had lost in the business over $4,000 were executed accordingly with the knowl- in the preceding four years; that there was edge of the Schuetts, and that the notary sufficient stock on hand in the saloon to perwho drew the papers informed them fully mit the Schuetts to conduct it from 30 to 60 that the documents were so drawn; that he days without further buying, when he well made no false representations whatever as knew that the supply was only sufficient for to the property or the business and that all three or four days; that he was allowing his representations made to them were true. them $3,000 for their Bellwood property and
According to the contentions of the Rich- was valuing the Lake street property at $5,ters the $1,000 note secured by the trust deed 000 in the transaction, when he well knew he represents the actual difference in the value was allowing only $2,500 for the Bellwood of the Lake street property, less the $2,000 property and charging them $5,500 for the incumbrance thereon, and the value placed Lake street property; that the Schuetts by the parties on the Bellwood property, or were receiving the saloon fixtures, etc., and the difference between $3,500 and $2,500, and the license for the sum of $500, when in fact according to the same contentions the $1,000 he was charging them therefor $1,000. The note secured by the chattel mortgage was court further found that at the time of the given for the amount the Richters paid Mrs. transaction the Schuetts knew nothing whatFendt for the saloon fixtures, which was ever as to the value of the Lake street prem$500, and for the additional amount of $500 ises or the saloon business conducted there. for the unexpired license.
They were not informed as to the amount of There was a trial before the chancellor wines, liquors, cigars, or other merchandise and a jury, questions being previously form- on hand at that time. They had no knowled and submitted to the jury for their an- edge, except as informed by Richter, as to swers under the instruction of the court. the value of such goods or as to the amount The jury found, in substance, in answer to of business which had been or was being four questions, that the Richters did prac- transacted at that time, and relied wholly tice fraud upon the Schuetts in the negotia- and exclusively upon the representations tions for and the exchange for their respec- made to them by Richter. Richter knew tive properties; that the Schuetts were induc- that they were relying upon every represened to make the exchange of properties by tation made by him, and that they did not reason of the fraudulent representations a- make any investigation as to any of such foresaid ; that they were induced to sign the facts because of their reliance on him. He notes and mortgages by reason of the fraud made the representations for the purpose of practiced upon them; and that they have defrauding them. The fair and reasonable not affirmed the transactions after full market value for the Lake street property knowledge of the fraud. The court refused and the improvements thereon on March 19, to set aside the verdict of the jury on mo 1917, was not to exceed $3,000. The Schution of the appellants, and rendered the de- etts did not affirm or acquiesce in the fraud cree aforesaid against them.
practiced on them at any time after the disThe court found in its decree the follow-covery thereof, and in August, 1918, after ing facts, in substance: The Schuetts are the discovery of the fraud, they offered to simple, trusting, illiterate persons, unable to return the Lake street property to the Richread or write the English language. Richter ters and to take back the Bellwood property, 18 a man of considerable business experience which offer was refused by the Richters.
The evidence in the record is very volu- , street property for $5,000, less the $2,000 inminous, and we shall not attempt to discuss cumbrance thereon, and were to allow them any further details of it.
$3,000 for the Bellwood property, there would  At to the chattel mortgage and note, be nothing remaining in the way of differthe substance of the claim of the Schuetts ence as a basis for the trust deed and mort. is that it should have only been for $500; gage of $1,000. that this latter sum was the amount to be  We are unable to conclude, whatever paid for the fixtures, etc., and that there else may be said about the finding of the was nothing said to the effect that they were court, that its last finding, to the effect that to pay $500 more for the unexpired license. the Schuetts did not affirm or acquiesce in While the evidence is very greatly confused the fraud practiced on them at any time afton this question, the testimony of Schuetter the discovery thereof, is supported by the tends to show very clearly that he not only evidence in the record. The evidence of the knew that this note was given for $1,000, Schuetts shows otherwise. Their testimony but that it represented $500 for the saloon shows that they ran the saloon business from fixtures, etc., and $500 for the license. He the time they took possession until about Noat first testified that nothing was to be paid vember, 1917-over seven months. They refor the license. Later he testified: "Mr. newed their license the first of May, 1917. Richter said the value of the license was Schuett positively testified that the stock of $500. Mr. Richter paid $500 to the woman liquors on hand was exhausted within a very for the fixtures for me. That makes the $1,- few days after he began with the business, 000 for the license and what the woman and that he knew within about four days [Mrs. Fendt] had coming to her. I paid that that he had been defrauded by the Richters; by the month." Previous to this testimony that he knew within two days after he went he testified: "For the chattel mortgage I into the business that he had been cheated. got a license. I paid $125, and the rest I Mrs. Schuett also testified that they knew got from Mr. Richter." He evidently got right along that the property was not worth confused in his statements as to the license $5,000, and knew all about the bad condition he bought on May 1 and for which he paid of the house that they testified to; that they $500-$125 cash and the rest he borrowed saw that they were cheated, but did not take at the bank, Richter signing the note for him any action or tell the Richters anything as surety-but his testimony shows that he about it; that she never suggested to the knew that the chattel mortgage was for $1,- Richters, and her husband did not, that the 000 and that he had the idea the license was contract should be rescinded and the proppart of the consideration for the chattel erty reconveyed. In September, 1918, she mortgage and note. Besides, Wolf, the no- asked Richter to trade back, and told him tary public that drew up all the documents that they could not pay any more money on for the Richters and the Schuetts, testified the contract, but that she did not tell him that after they were drawn they were all that he had cheated them. The first claim read and interpreted, and that he explained that they ever made that they were defraudthe documents to them before they signed ed and wanted the contract rescinded, so far them, and that in doing so he spoke German as the record shows, was when they filed their to the Schuetts. Mrs. Schuett testified that original cross-bill and answer in this suit. Richter told them they were to have the Notwithstanding the knowledge they claimsaloon fixtures for $500, but she did not ed to have had of this fraud, they made pay. know what he said about the license. They ments to the Richters of $50, and sometimes both knew that they signed a note and chat. $55, per month on the chattel mortgage up to tel mortgage for $1,000 and a note and trust September 1, 1917, when they had paid $360 deed for $1,000, if the testimony of the no- thereon, and they made later payments on tary, who is apparently a disinterested wit- their contract. They paid the taxes on the ness, is to be believed. The Richters cor- Lake street property for 1916 on August 2, roborate the notary public, and they were 1917. They renewed the loan of $2,000 on all that were present at the execution of the property at the Greenebaum Bank, and the two notes and the two mortgages. The paid the interest on that loan in 1917 and in testimony in the record shows that the Schu- 1918. etts were unable to read or write English, The evidence on the question of a confiand it also shows that they had little ex. dential relation existing between Richter perience in business matters and none in the and the Schuetts is not, to say the least, very saloon business, and that the Richters were strong, but conceding that the record susmuch more experienced in business matters tains that contention of appellees there is of all kinds, but it also shows that the Schu- absolutely no evidence in the record that this etts speak and understand English, and that relationship continued after the Schuetts they testified in English. The record also took possession of the Lake street property clearly discloses that they both had intelli- and after they came into knowledge of the gence enough to know that if their contract fact that the Richters had cheated or swinwith the Richters was to the effect that the dled them. It would be rather unreasonable Richters were letting them have the Lake for them to claim that such a relation did
(146 N.E.) continue after knowledge of the fact that The decree of the circuit court is reversei the Richters had swindled them. There is and the cause is remanded. no evidence in the record as to the receipts Reversed and remanded. or profits of the Schuetts in the saloon business after they began it. There is no evi
(314 III. 316) dence upon the subject, but they claim that
ARMS et al. V. CITY OF CHICAGO et al. they did not make any profits,' and that this
(No. 16153.) was the reason why they quit operating the
Oct. 28, 1924. saloon in November, 1917, and that they (Supreme Court of Illinois. made their payments to the Richters and to
Rebearing Denied with Modification Dec. 5,
1924.) the bank on their debts out of money Schuett earned while working on the railroad as 1. Constitutional law ww63(2)-General As. a section hand while their son was running
sembly may exercise legislative power directthe saloon. The evidence does show that
ly or create municipalities and delegate power
to them. they quit paying the Richters after they closed the saloon, and that they closed it be
General Assembly may exercise legislative cause they did not have money enough to get and delegate to them for purposes of local gove
power directly, or it may create municipalities another license.
ernment such portion of power as it sees fit to  Our conclusion is that the decree of the grant. circuit court is erroneous in granting the re
2. Municipal Corporations en 64-Legislative lief prayed for in the cross-bill and in dis
power delegated may be taken away by Genmissing the original bill for want of equity. eral Assembly. It is a settled principle in equity that a per Any legislative power delegated by General son who has been defrauded will not be per- Assembly to municipalities may be taken from mitted, after he learns of the fraud, to stand them by it at its pleasure. inactive and fail and refuse to execute bis 3. Municipal corporations w 57—Have no inoption to rescind the fraudulent transaction
herent power. until the events of the future may deter
Municipal corporations have no inherent mine it to be to his interest, or otherwise to power, since they derive their existence and rescind. Follett v. Brown, 188 Ill. 244, 58 their powers solely from General Assembly. N. E 943. Stackpole v. Schmucker, 225 Ill. 502, 80 N. E. 314. The rule is stated in Pom. 4. Municipal corporations Om57-Must point
out statute giving authority to legislate. eroy's Equity Jurisprudence (section 897) in
In order to legislate upon or with reference this language:
to particular subject or occupation, municipal "The person who has been misled is required, corporation must be able to point out statute as soon as he learns the truth, with all rea- / which gives it authority to do so. sonable diligence to disaffirm the contract or
Om 58 - Statutes
5. Municipal corporations abandon the transaction and give the other
granting powers strictly construed. party an opportunity of rescinding it and of restoring both of them to their original posi
Statutes which grant powers to municipal tion. He is not allowed to go on and derive corporations are strictly construed, and any all possible benefits from the transaction and fair or reasonable doubt of existence of such then claim to be relieved from his own obliga- powers is resolved against municipality which tions by a rescission for a refusal to perform claims right to exercise them. on his own part.”
6. Municipal corporations Ona59"Implied The cases of Vigus v. O'Bannon, 118 Ill.
powers of municipal corporation" those nec
essarily incident to powers expressly granted. 334, 8 N. E. 778; Gillett v. Wiley, 126 Ill. 310, 19 N. E. 287, 9 Am. St. Rep. 587; and rations possess and can exercise are those nec
"Implied powers” which municipal corpoFarwell V. Great Western Telegraph Co., essarily incident to powers expressly granted. 161 Ill. 522, 44 N. E. S91, cited by appellees,
(Ed. Note.-For other definitions, see Words lay down the proposition that failure to use and Phrases, First and Second Series, Implied reasonable diligence to discover fraud in a Powers.] transaction is excused where there is a relation of trust and confidence between the 7. Licenses Em 6(1)-Power of city to license
occupation or require privilege tax must be parties. In this case there was a delay of
expressly granted. at least nine months after discovery of the
To license any occupation or require payfraud before an offer was made to trade back ment of tax for privilege of engaging in it, powor rescind the contract on the part of the er of city must be expressly granted in its charSchuetts, and then they made no claim of ter or necessarily implied in or incident to fraud to the appellants. It is not plausible, power expressly delegated. we think, to contend that the Schuetts re- 8. Municipal corporations eww 590—Enumeraposed confidence and trust in Richter after
tion of businesses over which city is given they discovered that he had defrauded them, control is exclusion of all other occupations and the evidence does not show that such or businesses. confidential relation continued between them, Enumeration in Cities and Villages Act, art. If it ever existed.
5, § 1, of occupations or businesses not nuiFor other cases see same topio and KEY-NUMBER in all Key-Numbered Digests and Indexes
sances per se, over which city is given control, , Decree for defendants, and plaintiffs appeal. is exclusion of all other occupations or busi- Reversed and remanded.
Charles P. Schwartz, of Chicago (William 9. Municipal corporations m58–Power may E. McNamara, of Chicago, of counsel), for be derived from one or two or more items of
Francis X. Busch, Corp. Counsel, of ChicaCity may derive its power to legislate upon given subject or with reference to particular go (Leon Hornstein, of Chicago, of counsel), occupation from one item or from two or more
for appellees. items of powers enumerated in Cities and Vil. lages Act, art. 5, § 1, but power must be expressly delegated or necessarily implied from
DE YOUNG, J. Chapter 36 of the Chicago power expressly conferred.
Code of 1922 is entitled “Department of Gas
and Electricity." Article 1 of that chapter, 10. Licenses em 6(1)-Cities have no unlimit consisting of sections 1623 to 1630, inclued licensing power.
sive, creates the department, and among othCities and Villages Act, art. 5, § 1, subsec. 4, does not delegate unlimited licensing power to
er things provides for the appointment of a cities, but has reference to subjects and occu- commissioner of gas and electricity and othpations which by other specific subsections mu
er administrative officers and defines their nicipalities are given express power to license. powers and duties. The second article of the
same chapter consists of sections 1631 to II. Statutes om 194–General words of descrip. tion following specific enumeration limited to 1641, inclusive, and its subject is electrical things of same class.
installation. Section 1631 prohibits the use General words of description in statute fol- of electric current for lighting, heating, or lowing specific enumeration are limited to things power purposes except in compliance with the of same class or nature as those specified. ordinance. Section 1632 prohibits the instal. 12. Licenses em 6(2)-City cannot license elec-lation of wires or other electrical apparatus tricians.
unless a permit shall have been obtained
therefor and the work is done under the suCity has no power to license electricians or exact fees for inspecting electrical construction pervision of a licensed electrician. By work, under Cities and Villages Act, art. 5, 8 section 1633 provision is made for the ap 1, subsecs. 4, 61, 63, 65, 66, 75, 78, 81, 82, 98, pointment of an examining board of five 100.
members to ascertain the qualifications of 13. Municipal corporations 0590-Not dele applicants for licenses. Each such applicant gated unlimited police power.
is required (1) to be at least 21 years of age; Entire police power of state was not dele. (2) to have a thorough knowledge of electrical gated to municipal corporations by Cities and construction; (3) to have had not less than Villages Act, art. 5, § 1, subsec. 66, but stat- 4 years' practical experience in the class of ute only delegates power to make effective pow- work mentioned in the application; (4) to ers expressly given.
pass the examination prescribed by the 14. Municipal corporations 590_Subsection board; (5) to have his application indorsed of statute regarding passage of ordinances by two responsible citizens to the effect that presupposes grant of authority.
he possesses the requisite qualifications; (6) Cities and Villages Act, art. 5, § 1, subsec. to deposit with the examining board the li100, conferring power to pass ordinances and cense fee fixed for the particular class of make rules and regulations, presupposes grant work; and (7) to file with the city collector of authority with reference to particular sub
an indemnifying bond, with good and suffiject or occupation by some other subsection.
cient sureties, in the penal sum of $5,000. 15. Constitutional law Ow68(1)-Question of Licenses are classified and the fees therefor
powers to be exercised by municipality is for fixed as follows: General Assembly and not courts.
Question of what powers may be exercised by municipality is for General Assembly and
year. ceeding year. not for courts.
General electrical 16. Licenses em 6(2)-Factory inspection law
$50 not to be invoked to sustain ordinance of city Electrical construction.. regarding licensing of electricians.
100 Factory inspection law of state is limited to
Maintenance license... inspection of wires and apparatus in factories and cannot be invoked to sustain city ordinance requiring electricians to be examined and to Licenses are renewed only within the relicense them.
spective classifications for which they were Appeal from Circuit Court, Cook County; classification the applicant is required to
originally issued. To transfer to another Francis S. Wilson, Judge.
pass another examination to determine his Bill of complaint by Harry Arms and oth- qualifications to act in the particular class to ers against the City of Chicago and others. which he desires to be transferred. The ex
Fee each suc
For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
(146 N.E.) amining board is given the power to adopt of its officers from enforcing the above mennecessary rules and regulations, and its judg- tioned ordinance. A motion for a prelim. ment whether or not an applicant is qualified inary injunction was made and denied and is made final. Upon complaint the board the bill dismissed for want of equity. The may summon a licensee to appear before it chancellor certified that the validity of an for examination, and if it should find that ordinance was involved and allowed an ap he is not qualified to do the work for which peal to this court. he has been licensed, or that he has not com (1-9] The Constitution vests the legislative plied with the ordinances of the city or the power of the state in a General Assembly. rules and regulations of the department, the That body may exercise the power directly board is required to certify the facts to the or it may create municipalities and delegate commissioner of gas and electricity, with a to them, for purposes of local government, recommendation for the suspension or revo- such portion of the power as it sees fit to cation of his license, as the board in its grant. Any power so delegated may be takjudgment shall deem advisable. The com- en from the municipalities by the General missioner may suspend for a period not ex- Assembly at its pleasure. Municipal corpoceeding 30 days, and the mayor may revoke, rations derive their existence and their powa license.
ers solely from the General Assembly. They Section 1634 empowers the commissioner have no inherent power. In order to legisof gas and electricity, and his assistants, to late upon or with reference to a particular inspect all electrical installation prior to and subject or occupation, they must be able to after its completion, and they are given for point out the statute which gives them the that purpose the right to enter any building authority to do so. Statutes which grant and to remove any existing obstructions, powers to municipal corporations are strictsuch as laths, plastering, or partitions. No ly construed, and any fair or reasonable person is permitted to interfere with them doubt of the existence of such powers is rein the performance of their duties. If the solved against the municipality which claims work proves to have been done in a safe and the right to exercise them. The implied secure manner, after payment of the inspec- powers which a municipal corporation postion fee the commissioner is required to issue sesses and can exercise are those necessarily a certificate of inspection. The use of elec- incident to the powers expressly granted. tric current in the absence of such a certifi- Since a city has no power, except by delegacate is made unlawful, except that the com- tion from the General Assembly, to license missioner may issue temporary permits for any occupation or to require the payment of such use during the construction or altera- a tax for the privilege of engaging in it, the tion of buildings. Section 1635 empowers power must be expressly granted in the city's the commissioner of gas and electricity to charter or necessarily implied in or incident inspect and re-inspect all wires and appara- to the power expressly delegated. Wilkie tus which conduct electric current for light, v. City of Chicago, 188 Ill. 444, 58 N. E. 1004, heat, or power, and when they are found to 80 Am. St. Rep. 182; City of Chicago v. M. be unsafe to life or property, to notify the & M. Hotel Co., 248 Ill. 264, 93 N. E. 753; owner to put them in safe and secure condi- City of Chicago v. Ross, 257 Ill. 76, 100 N. tion within 48 hours. A penalty is provided E. 159, 43 L. R. A. (N. S.) 205; People v. City for failure to comply. The commissioner is of Chicago, 261 Ill. 16, 103 N. E. 609, 49 L. authorized to call upon the police depart- R. A. (N. S.) 438, Ann. Cas. 1915A, 292; City ment for assistance, and every member of of Chicago v. Mandel Bros., 264 Ill. 206, 106 that department is obliged to perform the N. E. 181; City of Chicago v. Pettibone & duties required by the commissioner to make Co., 267 Ill. 573, 108 N. E. 698; Condon v. effective the ordinance, rules, and regula- Village of Forest Park, 278 Ill. 218, 115 N. tions relating to electrical installation. Sec- E. 825, L. R. A. 1917E, 314; Potson v. City tion 1637 requires the registered electrician of Chicago, 304 Ill. 222, 136 N. E. 594. Secto pay, prior to the issuance of any permit tion 1 of article 5 of the Cities and Villages to do electrical work, various inspection fees, Act (Cahill's Stat. 1923, p. 413), provides wbich are set forth at considerable length. that the city council in cities shall have the The minimum fee is fixed at $1. By section powers specified in its 100 subsections. The 1638 no alterations are permitted in any express enumeration in that section of the electrical installation without the inspection occupations or businesses not nuisances per required for new work. The provisions of se over which the city is given control is the sections 1636, 1639, and 1640 are not mate exclusion of all other occupations or busirial to the determination of the question nesses. People v. City of Chicago, supra; here involved. Section 1641 prescribes pen- Potson v. City of Chicago, supra. A city alties for violations of the second article. may derive its power to legislate upon a giv
Harry Arms and 112 master electricians en subject or with reference to a particular and electrical contractors filed their bill of occupation from one item or from two or complaint in the circuit court of Cook coun more items of the enumeration, but the powty to enjoin the city of Chicago and certain er must be expressly delegated or necessa