Clemens v. Crane

• Decision Date: 03 June 1908
• Citation: 234 Ill. 215,84 N.E. 884
• Parties: CLEMENS v. CRANE.
• Court: Illinois Supreme Court

234 Ill. 215

84 N.E. 884

CLEMENS

v.CRANE.

Supreme Court of Illinois.

April 23, 1908.

Rehearing Denied June 3, 1908.

Appeal from Branch Appellate Court, First District, on Appeal from Circuit Court, Cook County; Thomas G. Windes, Judge.

Proceedings for the allowance of the claim of Matilda M. Clemens against the estate of Gustav A. Bode. There was a judgment of the probate court in favor of Theresa M. Crane, administratrix, disallowing the claim, and claimant appealed to the circuit court where the claim was allowed. From a judgment of the Branch Appellate Court for the First District, affirming the judgment of the circuit court, the administratrix appeals. Affirmed.

Rehearing denied June 3, 1908; FARMER, SCOTT, and DUNN, JJ., dissenting.Francis E. Croarkin, for appellant.

Kretzinger, Gallagher, Rooney & Rogers, for appellee.

Matilda M. Clemens filed a claim in the probate court of Cook county against the estate of Gustav A. Bode for $7,000, which that court disallowed. The claimant appealed to the circuit court, and upon a hearing before that court without a jury the full amount of the claim was allowed, and judgment rendered against the estate, to be paid in due course of administration. Theresa M. Crane, administratrix of Gustav A. Bode's estate, took an appeal to the Appellate Court for the First District. That court affirmed the judgment of the circuit court. The administratrix by her further appeal has brought the record to this court for review.

The evidence introduced consists of a written instrument executed January 2, 1893, and certain supplementary agreements indorsed thereon, together with a number of letters between appellee and Gustav Bode. The nature of the questions involved is such that we deem it necessary to set out in detail the correspondence between the parties to the transactions out of which this litigation grows. Before doing so, however, a brief statement of some of the facts will throw some light on the written evidence hereinafter set out.

Prior to the year 1890 the husband of appellee appears to have been engaged in the manufacture of soda water, cider, ginger ale, and other nonintoxicating drinks. Gustav A. Bode at that time, and subsequent thereto, was a manufacturer of extracts. A very close and sincere friendship existed between Bode and Clemens, and their families were likewise intimately acquainted. About the year 1890 Bode and Clemens appear to have had under consideration the formation of a partnership between them. Clemens died in 1890, and no partnership agreement was entered into between them. After attempting to continue the business of her husband for a year or more after his death, the appellee sold the business and her home for $7,000. Before making this sale Bode and appellee had discussed the advisability of her selling out her business and investing it in the extract business with Mr. Bode. In February, 1891, appellee, in pursuance of a verbal understanding with Bode, sent him $1,000, and soon afterwards sent him $1,100 more, and in November, 1892, she sent $4,550 additional, and a little later $350 more, making a total of $7,000. This amount was subsequently raised to $7,777, $777 of which was afterwards returned to appellee, leaving the net amount of $7,000 in the hands of Bode. He remitted appellee $75 per month regularly until February 24, 1901. Bode died February 27, 1901. He paid the appellee at the end of each year about 18 per cent. on the amount of money due appellee, less the monthly payment of $75. The aggregate amount of payments made by Bode to appellee exceeded the principal sum in his hands belonging to her.

The defense interposed by appellant to appellee's claim is that the contract is usurious, and that the several payments made were payments of usurious interest, which being applied to the principal sum extinguished it, leaving nothing due. The appellee contends that she invested her money in Bode's business for a share of the profits and that she became a partner in the profits of his business, and that all payments made were on account of her share in such profits, and that therefore the whole of the principal sum is still due her.

The contract upon which appellee's claim is based is as follows:

‘This agreement, entered into this second day of January, 1893, by and between Gustav A. Bode and Mrs. M. M. Clemens, to wit: ‘The said Gustav A. Bode agrees to accept from Mrs. M. M. Clemens the sum of six (6) thousand dollars ($6,000), on which the said G. A. Bode agrees and guarantees a net profit to the said Mrs. M. M. Clemens of not less than fifteen per cent. per annum, said interest or profit to be paid between January 5 and 15 of each year, less $900, which $900 will be mailed to Mrs. M. M. Clemens in monthly lots of $75 per month, or $900 in twelve months. It is further agreed that $3,000 shall be paid back to Mrs. M. M. Clemens or her heirs in five years from this date, January 2, 1893, and the remaining $3,000 in eight years from this date, January 2, 1893. In the event of the death of the said Gustav A. Bode the said Mrs. M. M. Clemens agrees to surrender this instrument to the widow of the said Gustav A. Bode, who will pay to the said Mrs. M. M. Clemens the entire $6,000, together with an approximate of the profits earned since the date of last settlement. This is not transferable only to the heirs at law of the said Mrs. M. M. Clemens or their guardian, for the heirs' benefit. The above-named $6,000 can be used by the stated G. A. Bode either in his business or outside of it, as his judgment may elect.’

‘$7,000

‘Gustav A. Bode, $6,000.

‘M. M. Clemens.’

Indorsed on the back of this agreement is as follows:

The first indorsement:

‘Taking effect January 1, 1894, the sum total of the within agreement is increased to seven thousand dollars ($7,000), the conditions remaining the same, excepting that this additional $1,000 be returned to the said M. M. Clemens in January, 1895, or January, 1896, just as M. M. Clemens may dictate.

‘Gustav A. Bode.’

The second indorsement:

‘At request of Mrs. M. M. Clemens the above-mentioned one thousand dollars ($1,000) will remain a part of the within contract for two years from January 1, 1896.

‘M. M. Clemens,

‘Gustav A. Bode.’

‘By mutual agreement the amount is changed from $7,000 to $7,777, and the conditions remain the same as stated in body of agreement, excepting that time for return of the $7,777 is to be agreed upon January 15, 1901.

‘Dated at Galesburg, Illinois, January 14, 1899.

Gustav A. Bode,

‘M. M. Clemens.’

‘Galesburg, August 3, 1900.

‘Seven hundred and seventy-seven dollars of this contract has been this day refunded, leaving net investment seven thousand ($7,000) dollars. This agreement expires January 15, 1903, in place of 1901.

‘M. M. Clemens,

‘Gustav A. Bode.’

First of the letters in chronological order is dated February 14, 1891: ‘Matilda M. Clemens-Dear Friend: I am in receipt of your favor with agreements signed and also draft for $1,000. I inclose one of the agreements signed by me. I would say more now, but as I am a little rushed I will let it go until next time. Now that we are partners I will just simply say that I will do my utmost to make you feel satisfied with this world.

‘Yours very respectfully, G. A. Bode.’ The second letter is dated January 18, 1892: ‘Mrs. M. M. Clemens-Dear Friend: I received your letter with draft this forenoon. I think it best to give you a certificate showing that I have the money, and I enclose it. I made it for two (2) years. If you would rather have it for one year, send it back and I will exchange it and return it to you. I will do my best for you and remit the profit at same time that I remit the profit on the other $1,000. If you would rather have it some other way, advise me and I will do as you wish me. We are glad that Ic's improvement is permanent. Please accept our heartfelt thanks for your well wishes endeavors. Trusting you are having a nice trade, I am your friend, G. A. Bode.’

The third is a certificate bearing date November 28, 1892: ‘This is to certify that I have received from Mrs. Matilda M. Clemens, of Fairbury, Illinois, the sum of $4,550, to be used by me in such manner as to realize her the largest profitable income. Gustav A. Bode.’ Underneath the above is written: ‘Mrs. Clemens: The above will do until you get the other $3,450 in, and then I will give you one writing to cover the entire $7,000.’

The fourth is a letter written by appellee, the material parts of which omitting certain references to family matters, are as follows: ‘Fairbury, Ill., Jan. 16, 1893. Mr. G. A. Bode-Dear Friend: * * * I wrote you that I was not just satisfied with the agreement you sent. It was not what I expected, and your second letter convinces me we are laboring under a misunderstanding. I thought all the time you expected to use my money in your business and would give me such profits as it realized. Don't you remember me saying, before I sold my business, I would sell if you would let me put the money in your extract business, the same as you had the $1,000, and you said you would, and as you could not make any change in the business until the first of the year you would use that money I sent you to the best advantage until that date? Then I understood you was to put it in your business, and give me papers to that effect. I don't understand your writing about having it out on ninety days' time when I expected it to go into your business January 1. When you write the agreement I would much prefer you would say the money was in the business and state a per cent. that it will not fall below; in fact, just duplicate the agreement for the $1,000, only have it for $6,000. (I will just leave the $1,000 as it is, as it has one more year to run, and in case I should need the money in one year it will be due at that time). Have the article for $6,000 drawn up for a period of eight years, as Claude will be twenty-one then, and he can take...