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(145 N.E.)

the receipts and profits of the saloon busi-¡ and 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 of the Lake street property, less the $2,000 incumbrance thereon, and the value placed by the parties on the Bellwood property, or the difference between $3,500 and $2,500, and according to the same contentions the $1,000 note secured by the chattel mortgage was given for the amount the Richters paid Mrs. Fendt for the saloon fixtures, which was $500, and for the additional amount of $500 for the unexpired license.

There was a trial before the chancellor and a jury, questions being previously formed and submitted to the jury for their answers under the instruction of the court. The jury found, in substance, in answer to four questions, that the Richters did practice fraud upon the Schuetts in the negotiations for and the exchange for their respective properties; that the Schuetts were induced to make the exchange of properties by reason of the fraudulent representations aforesaid; that they were induced to sign the notes and mortgages by reason of the fraud practiced upon them; and that they have not affirmed the transactions after full knowledge of the fraud. The court refused to set aside the verdict of the jury on motion of the appellants, and rendered the decree aforesaid against them.

was allowing only $2,500 for the Bellwood property and charging them $5,500 for the Lake street property; that the Schuetts were receiving the saloon fixtures, etc., and the license for the sum of $500, when in fact he was charging them therefor $1,000. The court further found that at the time of the transaction the Schuetts knew nothing whatever as to the value of the Lake street premises or the saloon business conducted there. They were not informed as to the amount of wines, liquors, cigars, or other merchandise on hand at that time. They had no knowledge, except as informed by Richter, as to the value of such goods or as to the amount of business which had been or was being transacted at that time, and relied wholly and exclusively upon the representations made to them by Richter. Richter knew that they were relying upon every representation made by him, and that they did not make any investigation as to any of such facts because of their reliance on him. He made the representations for the purpose of defrauding them. The fair and reasonable market value for the Lake street property and the improvements thereon on March 19, 1917, was not to exceed $3,000. The Schuetts did not affirm or acquiesce in the fraud practiced on them at any time after the dis

The court found in its decree the follow-covery thereof, and in August; 1918, after ing facts, in substance: The Schuetts are simple, trusting, illiterate persons, unable to read or write the English language. Richter is a man of considerable business experience

the discovery of the fraud, they offered to return the Lake street property to the Richters and to take back the Bellwood property, which offer was refused by the Richters.

The evidence in the record is very voluminous, and we shall not attempt to discuss any further details of it.

[1] At to the chattel mortgage and note, the substance of the claim of the Schuetts is that it should have only been for $500; that this latter sum was the amount to be paid for the fixtures, etc., and that there was nothing said to the effect that they were to pay $500 more for the unexpired license. While the evidence is very greatly confused on this question, the testimony of Schuett tends to show very clearly that he not only knew that this note was given for $1,000, but that it represented $500 for the saloon fixtures, etc., and $500 for the license. He at first testified that nothing was to be paid for the license. Later he testified: "Mr. Richter said the value of the license was $500. Mr. Richter paid $500 to the woman for the fixtures for me. That makes the $1,000 for the license and what the woman [Mrs. Fendt] had coming to her. I paid that by the month." Previous to this testimony he testified: "For the chattel mortgage I got a license. I paid $125, and the rest I got from Mr. Richter." He evidently got confused in his statements as to the license he bought on May 1 and for which he paid $500-$125 cash and the rest he borrowed at the bank, Richter signing the note for him as surety-but his testimony shows that he knew that the chattel mortgage was for $1,000 and that he had the idea the license was part of the consideration for the chattel mortgage and note. Besides, Wolf, the notary public that drew up all the documents for the Richters and the Schuetts, testified that after they were drawn they were all read and interpreted, and that he explained the documents to them before they signed them, and that in doing so he spoke German to the Schuetts. Mrs. Schuett testified that Richter told them they were to have the saloon fixtures for $500, but she did not know what he said about the license. They both knew that they signed a note and chattel mortgage for $1,000 and a note and trust deed for $1,000, if the testimony of the notary, who is apparently a disinterested witness, is to be believed. The Richters corroborate the notary public, and they were all that were present at the execution of the two notes and the two mortgages. The testimony in the record shows that the Schuetts were unable to read or write English, and it also shows that they had little experience in business matters and none in the saloon business, and that the Richters were much more experienced in business matters of all kinds, but it also shows that the Schuetts speak and understand English, and that they testified in English. The record also clearly discloses that they both had intelligence enough to know that if their contract with the Richters was to the effect that the Richters were letting them have the Lake

street property for $5,000, less the $2,000 incumbrance thereon, and were to allow them $3,000 for the Bellwood property, there would be nothing remaining in the way of difference as a basis for the trust deed and mortgage of $1,000.

[2] We are unable to conclude, whatever else may be said about the finding of the court, that its last finding, to the effect that the Schuetts did not affirm or acquiesce in the fraud practiced on them at any time after the discovery thereof, is supported by the evidence in the record. The evidence of the Schuetts shows otherwise. Their testimony shows that they ran the saloon business from the time they took possession until about November, 1917-over seven months. They renewed their license the first of May, 1917. Schuett positively testified that the stock of liquors on hand was exhausted within a very few days after he began with the business, and that he knew within about four days that he had been defrauded by the Richters; that he knew within two days after he went into the business that he had been cheated. Mrs. Schuett also testified that they knew right along that the property was not worth $5,000, and knew all about the bad condition of the house that they testified to; that they saw that they were cheated, but did not take any action or tell the Richters anything about it; that she never suggested to the Richters, and her husband did not, that the contract should be rescinded and the property reconveyed. In September, 1918, she asked Richter to trade back, and told him that they could not pay any more money on the contract, but that she did not tell him that he had cheated them. The first claim that they ever made that they were defrauded and wanted the contract rescinded, so far as the record shows, was when they filed their original cross-bill and answer in this suit. Notwithstanding the knowledge they claimed to have had of this fraud, they made payments to the Richters of $50, and sometimes $55, per month on the chattel mortgage up to September 1, 1917, when they had paid $360 thereon, and they made later payments on their contract. They paid the taxes on the Lake street property for 1916 on August 2, 1917. They renewed the loan of $2,000 on the property at the Greenebaum Bank, and paid the interest on that loan in 1917 and in 1918.

The evidence on the question of a confidential relation existing between Richter and the Schuetts is not, to say the least, very strong, but conceding that the record sustains that contention of appellees there is absolutely no evidence in the record that this relationship continued after the Schuetts took possession of the Lake street property and after they came into knowledge of the fact that the Richters had cheated or swindled them. It would be rather unreasonable for them to claim that such a relation did

(145 N.E.)

continue after knowledge of the fact that | the Richters had swindled them. There is no evidence in the record as to the receipts or profits of the Schuetts in the saloon business after they began it. There is no evidence upon the subject, but they claim that they did not make any profits, and that this was the reason why they quit operating the saloon in November, 1917, and that they made their payments to the Richters and to the bank on their debts out of money Schuett earned while working on the railroad as a section hand while their son was running the saloon. The evidence does show that they quit paying the Richters after they closed the saloon, and that they closed it because they did not have money enough to get another license.

[3] Our conclusion is that the decree of the circuit court is erroneous in granting the relief prayed for in the cross-bill and in dismissing the original bill for want of equity. It is a settled principle in equity that a person who has been defrauded will not be permitted, after he learns of the fraud, to stand inactive and fail and refuse to execute his option to rescind the fraudulent transaction until the events of the future may determine it to be to his interest, or otherwise to rescind. Follett v. Brown, 188 Ill. 244, 58 N. E 943. Stackpole v. Schmucker, 225 Ill. 502, 80 N. E. 314. The rule is stated in Pomeroy's Equity Jurisprudence (section 897) in this language:

"The person who has been misled is required, as soon as he learns the truth, with all reasonable diligence to disaffirm the contract or abandon the transaction and give the other party an opportunity of rescinding it and of restoring both of them to their original position. He is not allowed to go on and derive all possible benefits from the transaction and then claim to be relieved from his own obligations by a rescission for a refusal to perform on his own part."

The cases of Vigus v. O'Bannon, 118 Ill. 334, 8 N. E. 778; Gillett v. Wiley, 126 Ill. 310, 19 N. E. 287, 9 Am. St. Rep. 587; and Farwell v. Great Western Telegraph Co., 161 Ill. 522, 44 N. E. S91, cited by appellees, lay down the proposition that failure to use reasonable diligence to discover fraud in a transaction is excused where there is a relation of trust and confidence between the parties. In this case there was a delay of at least nine months after discovery of the fraud before an offer was made to trade back or rescind the contract on the part of the Schuetts, and then they made no claim of fraud to the appellants. It is not plausible, we think, to contend that the Schuetts reposed confidence and trust in Richter after they discovered that he had defrauded them, and the evidence does not show that such confidential relation continued between them, If it ever existed.

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herent power.

57-Have no in

Municipal corporations have no inherent power, since they derive their existence and their powers solely from General Assembly. 4. Municipal corporations 57-Must point out statute giving authority to legislate.

In order to legislate upon or with reference to particular subject or occupation, municipal corporation must be able to point out statute which gives it authority to do so. 5. Municipal corporations 58- Statutes granting powers strictly construed.

Statutes which grant powers to municipal corporations are strictly construed, and any fair or reasonable doubt of existence of such powers is resolved against municipality which claims right to exercise them.

6. Municipal corporations 59-"Implied powers of municipal corporation" those neoessarily incident to powers expressly granted.

rations possess and can exercise are those nec"Implied powers" which municipal corpoessarily incident to powers expressly granted.

[Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Implied Powers.]

7. Licenses 6(1)-Power of city to license occupation or require privilege tax must be expressly granted.

To license any occupation or require payment of tax for privilege of engaging in it, power of city must be expressly granted in its charter or necessarily implied in or incident to power expressly delegated.

8. Municipal corporations 590-Enumeration of businesses over which city is given control is exclusion of all other occupations or businesses.

Enumeration in Cities and Villages Act, art. 5, § 1, of occupations or businesses not nui

For other cases see same topic 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.

nesses.

9. Municipal corporations 58-Power may be derived from one or two or more items of statute.

Charles P. Schwartz, of Chicago (William E. McNamara, of Chicago, of counsel), for appellants.

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), for appellees.

occupation from one item or from two or more items of powers enumerated in Cities and Villages Act, art. 5, § 1, but power must be expressly delegated or necessarily implied from power expressly conferred.

DE YOUNG, J. Chapter 36 of the Chicago Code of 1922 is entitled "Department of Gas and Electricity." Article 1 of that chapter,

10. Licenses 6(1)-Cities have no unlimit-consisting of sections 1623 to 1630, inclued licensing power.

Cities and Villages Act, art. 5, § 1, subsec. 4, does not delegate unlimited licensing power to cities, but has reference to subjects and occupations which by other specific subsections municipalities are given express power to license. 11. Statutes 194-General words of description following specific enumeration limited to things of same class.

General words of description in statute following specific enumeration are limited to things of same class or nature as those specified. 12. Licenses 6(2)-City cannot license electricians.

er things provides for the appointment of a sive, creates the department, and among othcommissioner of gas and electricity and other administrative officers and defines their powers and duties. The second article of the same chapter consists of sections 1631 to 1641, inclusive, and its subject is electrical installation. Section 1631 prohibits the use of electric current for lighting, heating, or power purposes except in compliance with the ordinance. Section 1632 prohibits the installation of wires or other electrical apparatus unless a permit shall have been obtained therefor and the work is done under the supervision of a licensed electrician. By section 1633 provision is made for the appointment of an examining board of five members to ascertain the qualifications of applicants for licenses. Each such applicant 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.

City has no power to license electricians or exact fees for inspecting electrical construction work, under Cities and Villages Act, art. 5, 1, subsecs. 4, 61, 63, 65, 66, 75, 78, 81, 82, 98, 100.

13. Municipal corporations 590-Not dele gated unlimited police power.

14. Municipal corporations 590-Subsection of statute regarding passage of ordinances presupposes grant of authority.

Cities and Villages Act, art. 5, § 1, subsec. 100, conferring power to pass ordinances and make rules and regulations, presupposes grant of authority with reference to particular subject or occupation by some other subsection. 15. Constitutional law 68(1)-Question of powers to be exercised by municipality is for General Assembly and not courts.

Question of what powers may be exercised by municipality is for General Assembly and not for courts.

16. Licenses 6(2)-Factory inspection law not to be invoked to sustain ordinance of city regarding licensing of electricians.

Factory inspection law of state is limited to inspection of wires and apparatus in factories and cannot be invoked to sustain city ordinance requiring electricians to be examined and to license them.

pass the examination prescribed by the board; (5) to have his application indorsed by two responsible citizens to the effect that he possesses the requisite qualifications; (6) to deposit with the examining board the license fee fixed for the particular class of work; and (7) to file with the city collector an indemnifying bond, with good and sufficient sureties, in the penal sum of $5,000. Licenses are classified and the fees therefor fixed as follows:

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Licenses are renewed only within the respective classifications for which they were originally issued. To transfer to another

Appeal from Circuit Court, Cook County; classification the applicant is required to 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

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(145 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 prelimment 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 aphe is not qualified to do the work for which peal to this court. he has been licensed, or that he has not complied with the ordinances of the city or the rules and regulations of the department, the board is required to certify the facts to the commissioner of gas and electricity, with a recommendation for the suspension or revocation of his license, as the board in its judgment shall deem advisable. The commissioner may suspend for a period not exceeding 30 days, and the mayor may revoke, a license.

[1-9] The Constitution vests the legislative power of the state in a General Assembly. That body may exercise the power directly or it may create municipalities and delegate to them, for purposes of local government, such portion of the power as it sees fit to grant. Any power so delegated may be taken from the municipalities by the General Assembly at its pleasure. Municipal corporations derive their existence and their powers 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 to do electrical work, various inspection fees, which are set forth at considerable length. The minimum fee is fixed at $1. By section 1638 no alterations are permitted in any electrical installation without the inspection required for new work. The provisions of sections 1636, 1639, and 1640 are not material to the determination of the question here involved. Section 1641 prescribes penalties for violations of the second article.

Harry Arms and 112 master electricians and electrical contractors filed their bill of complaint in the circuit court of Cook county to enjoin the city of Chicago and certain

tion 1 of article 5 of the Cities and Villages Act (Cahill's Stat. 1923, p. 413), provides that the city council in cities shall have the powers specified in its 100 subsections. The express enumeration in that section of the occupations or businesses not nuisances per se over which the city is given control is the exclusion of all other occupations or businesses. People v. City of Chicago, supra; Potson v. City of Chicago, supra. A city may derive its power to legislate upon a given subject or with reference to a particular occupation from one item or from two or more items of the enumeration, but the power must be expressly delegated or necessa

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