People ex rel. Kaskaskia Commons Permanent School Fund v. Mitchell

240 Ill. App. 281, 1926 Ill. App. LEXIS 243
CourtAppellate Court of Illinois
DecidedFebruary 17, 1926
StatusPublished
Cited by1 cases

This text of 240 Ill. App. 281 (People ex rel. Kaskaskia Commons Permanent School Fund v. Mitchell) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People ex rel. Kaskaskia Commons Permanent School Fund v. Mitchell, 240 Ill. App. 281, 1926 Ill. App. LEXIS 243 (Ill. Ct. App. 1926).

Opinion

Mr. Justice Barry

delivered the opinion of the court.

This is an action of debt on the official bond of appellee as State treasurer. The statute [Laws 1909, pp. 425, 430] made it his duty, as such treasurer, to invest the ‘‘Kaskaskia Commons Permanent School Fund” in certain specific bonds or in “good first mortgages on real estate.” The United Flour Mills Company executed a trust deed on its real estate to the Continental and Commercial Trust and Savings Bank and Frank H. Jones, as trustees, to secure a bond issue of $500,000. At the time the trust deed was executed the bonds were not an actual indebtedness of the grantor, but were to be executed and placed in the hands of the said bank as trustee. $350,000 thereof were to be certified by said bank at once and delivered to the grantor, and the balance were to be held and issued from time to time for improvement purposes. The deed contained a provision that the property should be held for the equal pro rata benefit and security of the holders of the bonds, at whatever period the same may be issued, without preference or priority of one bond over another. The president and secretary of the grantor were authorized to immediately negotiate, sell, pledg-e or use $350,000 of the bonds to raise money for the use of the company and to pay its debts. By the terms of the trust deed there, was no actual mortgage indebtedness until some of the bonds were negotiated. Appellee invested $20,000 of the said school fund in 30 of the bonds aforesaid of the par value of $20,000.

The court sustained a demurrer to certain of appellant’s replications and rendered judgment in bar of the suit. Upon appeal to this court the judgment was reversed and the cause remanded. People v. Mitchell, 223 Ill. App. 8. We then held that the statute was intended to insure that the investment of the said school fund should be a first debt in priority of lien under the mortgage and not simply one of a number of the debts of the mortgagor, secured by a first mortgage, and of equal priority. In other words, that if other bonds secured by the trust deed were an equal lien with the bonds in question and were sold by the mortgagor, appellee had failed to invest the school fund in a “good first mortgage on real estate” as the law required. That opinion is the law of the case and is binding on this appeal. Worthy v. Birk, 224 Ill. App. 575.

When the cause was redocketed in the circuit court, appellant amended its declaration and appellee extended his pleas of nil debet, non est factum, performance and non damnificatus and withdrew all others. Issues were joined and it was stipulated that all evidence might be offered that would be admissible under special pleas properly pleaded. The plea of ml debet is not a good plea in an action of debt on an official bond, but if the plaintiff joins issue on such a plea he is bound to prove every material averment of his declaration. 1 Chitty Pl. 483; Price v. Farrar, 5 Ill. App. 536; Foster, v. People, 121 Ill. App. 165. As appellant joined issue on the plea of nil debet it assumed the burden of proof.

The recitals in the trust deed are not sufficient to show that at the time of its execution any of the bonds had become valid obligations of the grantor. They Were not to become binding until certified and negotiated. The United Flour Mills Company was a corporation under the laws of Minnesota and its principal office was in Minneapolis. William F. Kelm was the secretary of the company from the time of its organization until it ceased to do business. Appellant took the deposition, of Mr. Kelm for the purpose of showing that many of the bonds secured by the trust deed were sold. He' said that he was testifying from his own knowledge after refreshing his recollection by looking at an audit made under his direction and supervision and at a memorandum he had made. He was asked: “You may state, if you know, how many of the bonds were sold?” The question was objected to by appellee as without foundation, not the best evidence, calling for a conclusion, incompetent, irrelevant and immaterial. The objection was sustained. His answer was: “A, total of $391,500 bonds were issued; they were actually sold to the Continental and Commercial Trust and Savings Bank, $350,000; find $41,500 were in the treasury of the company at the time of the receivership, about $30,000 of this had been used as collateral to secure loans.” The court refused to allow the answer to be read to the jury. The witness was then asked: “On this proposition you are testifying from your knowledge of the matter?” And he. answered: “Yes, from my knowledge as secretary of the company.” Appellee then objected on the ground that the question was leading, suggestive, immaterial, incompetent and irrelevant. Although there had been no motion to suppress, the objection was sustained and the answer excluded.

Appellee, insists that the court did not err in excluding the answers aforesaid because the books and records of the corporation were the best evidence and should have been produced. The witness testified that he had an independent recollection of the facts and that he had been the secretary of the company since its organization. When it appears that a witness has a distinct and independent recollection of the matters of which he testifies, his testimony is not rendered incompetent under the best evidence rule by reason of the fact that he or some other person made a contemporaneous written memorandum of those matters which is not produced. 22 Corpus Juris 985. Where the matter to be proved is a substantive fact which exists independently of any writing, although evidenced thereby, and which can be. as fully and satisfactorily established by parol as by the written evidence, then both classes of evidence are primary and independent and parol evidence may be admitted regardless of the writing. 22 Corpus Juris 983-984.

It often happens that parol testimony as to a fact may be primary evidence although there is written evidence of the same fact. If the essential fact to be proved is not the contents of a written instrument, but an independent fact to which the writing is merely collateral or of which it is merely an incident, there is no reason for the application of the best evidence rule. Jones on Evidence, 203. A witness who has acquired his knowledge from looking at the waybills may testify as to where certain cars came from without the introduction of the waybills in evidence, since said instruments are merely memoranda and do not come within the best evidence rule. Wagner v. Chicago, R. I. & P. Ry. Co., 277 Ill. 114. The time at which trains should be run may be proved by oral evidence without producing the printed time-table. Chicago B. & Q. R. Co. v. George, 19 Ill. 510.

In an action on a note, the books of a banker showing entries made without the knowledge of the litigants are not proper evidence. They do not fall within any recognized class of written or documentary evidence. Barnes v. Simmons, 27 Ill. 512. A bank sold the property of a customer through a third party and received a written account of the sale. When the customer asked the cashier what the property sold for he was shown the account. It was held that the customer could testify as to the amount shown on the sales account without giving the bank notice to produce it and that such a paper is but the statement of a third party and is not regarded as an instrument which must be produced in evidence. First Nat. Bank of Decatur v. Priest, 50 Ill. 321. As a general rule the books of a corporation are not evidence against strangers. Chase v.

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240 Ill. App. 281, 1926 Ill. App. LEXIS 243, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-ex-rel-kaskaskia-commons-permanent-school-fund-v-mitchell-illappct-1926.