Jacobs v. Marks

In June, 1896, Dora Marks brought an action in the circuit court of Cook county, Illinois, against Lewis Jacobs, for false representations and deceit whereby the plaintiff had been induced to become a member of a corporation known as the Chicago Furniture & Lumber Company of Escanaba, Michigan, composed of said Jacobs and one Nathan Neufeldt, and to pay into such concern the sum of $5,000. The plaintiff sought to recover in this action the money so expended by her, alleging that the shares of stock so taken by her in said company were worthless.

The defendant filed a demurrer to the declaration, which was overruled, and thereupon he filed a plea of not guilty, and also several special pleas, in which he set up, in substance, that the plaintiff, on or about December 4, 1893, instituted an action in the circuit court of Delta county, Michigan, against the Chicago Furniture & Lumber Company, to recover the sum claimed in the present suit; that service was duly had upon said company, which entered its appearance, and said court acquired jurisdiction of the parties to said cause and the subject-matter thereof; that afterwards the said parties came to a settlement of said cause; that on July 25, 1894, the said court entered the following order: 'This cause having been settled, it is hereby discontinued by consent of both parties, without cost to either party;' and that the said plaintiff had, therefore, received full satisfaction of the claim upon which the present suit is based. These special pleas were traversed, and the trial resulted in a verdict in favor of the plaintiff for $4,000. At the trial of the present case the plaintiff put in evidence a written agreement between the Chicago Furniture & Lumber Company and Dora Marks, in the following terms:

'Articles of agreement made and entered into this 14th of July, A. D. 1894, by and between the Chicago Furniture & Lumber Company, a corporation, of the city of Escanaba, Delta county, Michigan, parties of the first part, and Dora Marks, of Denver, Colorado, party of the second part. Party of the first part agrees to purchase the twenty thousand dollars' ($20,000) worth of stock of the said Chicago Furniture & Lumber Company, which the party of the second part holds, for the sum of $4,000, to be paid for as follows: $1,000 to Mead & Jennings, attorneys for said party of the second part, as soon as the parties of the first part dispose of their treasury stock to the amount of $1,000 or interest other capital in said company to the amount of $1,000, and $3,000 to said party of the second part, on the day that the plant now occupied by the parties of the first part in said city of Escanaba is turned over to them, and a clear title to the property earned by them. Parties of the first part further agree to discontinue the damage suit now pending against the party of the second part, without cost. Said parties of the first part further agree to release said party of the second part from all liability of said second party for the balance due on unpaid stock. Party of the second part agrees to sell her said stock of $20,000 to the parties of the first part and accept payment as aforesaid mentioned. Party of the second part also agrees to discontinue the suit now pending under attachment proceedings against party of the first part, without cost. Said stock to be transferred as paid for.

'In witness whereof the parties have hereunto set their hands and seals the day and year first above written.'

Thereupon, over the objections of the defendant Jacobs, the plaintiff was permitted to testify that the company never carried out the agreement under which the suit was brought, and that she never recovered a single dollar in satisfaction of her claim. The defendant requested the court to instruct the jury that the settlement of the Michigan case constituted a bar to this action. These instructions were refused, and the trial resulted in a verdict and judgment in favor of the plaintiff in the sum of $4,000.

The cause was taken to the appellate court of Illinois, which first reversed, and then, on rehearing, affirmed, the judgment of the trial court; and afterwards to the supreme court of Illinois, which, on December 18, 1899, affirmed the judgment of the appellate court. A writ of error was thereupon allowed by this court.

Messrs. Louis J. Blum and Edgar C. Blum for plaintiff in error.

Messrs. John F. Dillon, Andrew J. Hirschl, and John W. Byam for defendant in error.

Mr. Justice Shiras delivered the opinion of the court: