Reighley v. Cont'l Illinois Nat. Bank & Trust Co. of Chicago

• Decision Date: 21 May 1945
• Docket Number: No. 28281.,28281.
• Citation: 390 Ill. 242,61 N.E.2d 29
• Court: Illinois Supreme Court
• Parties: REIGHLEY v. CONTINENTAL ILLINOIS NAT. BANK & TRUST CO. OF CHICAGO et al.

390 Ill. 242

61 N.E.2d 29

REIGHLEY

v.CONTINENTAL ILLINOIS NAT. BANK & TRUST CO. OF CHICAGO et al.

No. 28281.

Supreme Court of Illinois.

March 21, 1945.

Rehearing Denied May 21, 1945.

Appeal from Third Division of Appellate Court, First District, on Appeal from Superior Court, Cook County; Grover C. Niemeyer, Judge.

Actions by Lily Parsons Reighley against the Continental Illinois National Bank & Trust Company of Chicago and Reginald B. Parsons to enforce a written instrument, wherein the defendant Reginald B. Parsons filed a counterclaim. From a judgment of the Appellate Court, 323 Ill.App. 479, 56 N.E.2d 328, affirming a decree for plaintiff, the defendant Reginald B. Parsons appeals.

Affirmed.

Heth, Lister & Flynn, of Chicago (Lloyd D. Heth, of Chicago, of counsel), for appellant.

Theodore M. Stuart, of San Francisco, Cal., and Winston, Strawn & Shaw, of Chicago (James H. Cartwright and George B. Christensen, both of Chicago, of counsel), for appellee.

GUNN, Justice.

Lily Parsons Reighley, hereafter called plaintiff, filed suit in the superior court of Cook county against Continental National Bank and Trust Company of Chicago, as trustee, hereafter called the bank, and appellant, Reginald B. Parsons, her former husband. The purpose of the suit was to recover support money claimed to be owing by Parsons and secured by deposits of securities with the bank, and to be paid to the plaintiff monthly on account of Parsons to the plaintiff. The superior court found in favor of plaintiff, and entered judgment for the amount due with interest. The judgment of the superior court was affirmed by the Appellate Court for the First District. Appeal to this court has been allowed.

The suit involves the validity of the contract for future support entered into between the plaintiff and the defendant in Berlin, Germany, while they were husband and wife. Two contracts are involved. The support contract, hereafter referred to as the Berlin contract, was made in Berlin, and just before a proceeding taken on behalf of the wife to terminate the marriage. This contract provided that Parsons would pay to the plaintiff the sum of $1000 per month throughout her life, regardless of whether she remarried. It also provided Parsons would provide security that the monthly payments would be made by depositing stocks or bonds with the Continental Illinois National Bank and Trust Company of Chicago sufficient to guarantee that the monthly payments would be made as agreed. The second contract will be hereafter referred to as the Chicago contract. The Berlin contract was executed August 17, 1936, before the marriage had been terminated by the Berlin decree, and was signed by the plaintiff and Parsons. The Chicago contract was entered into October 2, 1936, after the decree had been entered, and was signed by the bank and Parsons, and recites it is made in accordance with the Berlin contract, a copy of which was attached to it.

The complaint recites the Berlin contract, the annulment decree in Berlin, the execution and terms of the Chicago contract, the delivery of securities to the bank by Parsons, the payments to plaintiff by the bank under the contract, the notice to the bank by Parsons to stop payments, the plaintiff's demand for the resumption of payments and the bank's refusal. The bank answered setting forth the securities held by it and their value, and in substance that it had no interest in the funds other than to see that they were paid to the party adjudged by the court entitled to the same, and that there was no one interested in the funds other than the plaintiff and the defendant Parsons. Parsons in his answer charged that the Berlin contract was void for want of consideration; that the decree of annulment and the agreements were the result of a fraudulent scheme made and carried out by the plaintiff; that plaintiff has since remarried to one Reighley, who was a party to the fraud; that the Berlin contract was void because it was made to facilitate the decree separating the parties and was against German and American public policy; that the contract was entered into under a mutual mistake of the parties; that Parsons had no duty to support the plaintiff after the annulment; that the contract was shocking and inequitable. Replies were made to these several matters and issues formed which presented questions of law and fact.

The defendant Parsons also filed a counterclaim in which he alleges that the Chicago contract was made by reason of the provisions in the Berlin contract, that the securities were deposited with the bank in accordance with it, and that, since the Berlin contract was absolutely void, the Chicago contract was necessarily void also, and prays that the court decree the Berlin contract null and void, and that the obligation to deposit securities be declared discharged and terminated and the shares of stock returned to the defendant Parsons. The plaintiff answered the counterclaim in effect denying all of the charges therein and reasserting her right to a recovery. It is to be observed that the validity of the Chicago contract is not assailed except in so far as it was required by the alleged invalid Berlin contract.

Upon analysis, the contention of Parsons that the Berlin contract is invalid resolves itself into three principal points: (1) that the contract is void and unenforcible for lack of consideration; (2) that the contract providing for support money after remarriage is void as against public policy, and also because it was made to facilitate a separation of the parties; and (3) that the contract is unenforcible for the reason it is the result of a fraudulent scheme upon the part of the plaintiff. The other issues raised by the pleadings were either abandoned, had no evidence offered to support them, or are here considered under the three defenses above. The plaintiff, in answer to the contentions made by appellant, contends that the contract was valid; that no public policy was violated; that there is no evidence whatever of fraud; and that the Chicago contract is a fully executed trust, and valid, regardless of all of the other matters alleged as a defense.

At the outset, one of the first questions for determination is whether the contract is governed by German law or that of the court in which the suit was instituted. It is claimed by appellant that the contract expressly provides that its legality and construction be determined by the law of the State of Illinois, and, therefore, even though it be held valid under the laws of Germany, yet, construed by Illinois law, it is void.

We will first examine the position of the parties without reference to the alleged contract provisions electing to be bound by Illinois law, and determine the effect of the contract between the parties as though it did not contain any such provision. A contract made in one jurisdiction will usually be enforced in another jurisdiction if legal where made. Burr v. Beckler, 264 Ill. 230, 106 N.E. 206, L.R.A. 1916A, 1049, Ann.Cas.1915D, 1132;Chicago & E. I. R. Co. v. Rouse, 178 Ill. 132, 52 N.E. 951,44 L.R.A. 410;Miller v. Wilson, 146 Ill. 523, 34 N.E. 1111,37 Am.St.Rep. 186;Oakes v. Chicago Fire Brick Co., 388 Ill. 474, 58 N.E.2d 460. A fortiori a contract made in one country and to be performed in another will be enforced in the latter, unless contrary to public policy. George v. Hass, 311 Ill. 382, 143 N.E. 54;Benedict v. Dakin, 243 Ill. 384, 90 N.E. 712;Oakes v. Chicago Fire Brick Co., 388 Ill. 474, 58 N.E.2d 460. If no place of performance is specified in the contract it is presumed to be performed at the place of making. Lewis v. Headley, 36 Ill. 433, 87 Am.Dec. 227; 40 Am.Jur. p. 724; Oakes v Chicago Fire Brick Co., 388 Ill. 474, 58 N.E.2d 460.

However, both the Berlin contract and the Chicago contract provide that payments be made at the place of residence of plaintiff. Clause 2 of the Berlin contract provides that payment be made within the first week of each month at the place of her residence designated by Mrs. Parsons. Her place of residence at that time was Berlin. The subject matter of the contract was support of the wife for a contemplated ‘cancellation’ or ‘dissolution,’ because in paragraph 1 of the contract it recites that a suit has been filed for the cancellation of the marriage; and in paragraph 9 reference to the dissolution of the marriage is made. The Berlin contract does not use the word ‘annulment,’ as recited in the first paragraph of the Chicago contract. Section 1345 of the German Civil Code provides that if the nullity of the marriage was known to one of the spouses at the time of the contract of marriage the other spouse may have a judgment of unllity or for a dissolution, and demand maintenance as though in the case of divorce, provided the ground of nullity was not known to such party. Support of the wife in case of justifiable separation is also a proper subject matter of contract in Illinois, VanKoten v. VanKoten, 323 Ill. 323, 154 N.E. 146, 50 A.L.R. 347.

The marriage was annulled in the Berlin court on the ground of impotency, which in Illinois is a ground for divorce and not annulment. In view of general principles and the provisions of the German Civil Code the Berlin contract would be held valid, unless there was an agreement to have its validity and construction determined by Illinois law and, under the latter, it was void. It is said that the Berlin contract expressly provided that the law of Illinois should be adopted and become a part thereof. Ordinarily the law of the country where the contract is made is considered a part of the contract, but it is permissible for the parties to agree, subject to certain limitation, that the construction of a contract and the validity of the same may be governed and controlled by a law agreed upon between the parties. Mutual Life Ins. Co. v. Cohen, 179 U.S. 262, 21 S.Ct. 106, 45 L.Ed. 181;Mc.Allister v. Smith, 17 Ill. 328, 65 Am.Dec. 651;...