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Bernard Bros., Inc. v. Deibler





Appeal by defendants from the Circuit Court of Lake county; the Hon. WILLIAM DUSHER, Judge, presiding. Heard in this court at the May term, 1950. Reversed and remanded. Opinion filed January 10, 1950, and recalled at the February term, 1951. Opinion filed July 12, 1951. Rehearing denied September 13, 1951. Released for publication September 17, 1951.


Rehearing denied September 13, 1951

Defendants, J.B. Deibler and May H. Deibler are appealing from an order of the circuit court of Lake county entered in a proceeding instituted by Bernard Bros., Inc., lessees, for an accounting and an injunction restraining the defendant lessors from enforcing a contested lease.

The appeal presents for our determination the issues of whether the circuit court entered a final appealable order, and whether this order was in accordance with the doctrine of res judicata and other canons of law.

In view of the prolonged litigation incident to this lease, this court is constrained to review the chronology of events and legal proceedings.

On June 18, 1940, the parties executed a five-year lease of a showroom and garage, owned in joint tenancy by the defendant lessors, at a rental of $250 a month, payable by the plaintiff lessee, Bernard Bros., Inc. The evidence in this proceeding is controverted as to whether there was an oral agreement dehors the lease. Plaintiff asserts, and defendants deny that plaintiff signed the lease as an accommodation to defendant, J.B. Deibler, who was to be a partner in the business enterprise.

Leonard Bernard testified to such an arrangement, and some of his former employees stated that Deibler confided that he was a partner. In support of his denial of any such agreement, defendant, J.B. Deibler, offered in evidence checks for $49.50 marked, "salary less $.50 social security deduction," along with the social security records which bore no indicia that the business was a partnership, and the record of the bank account which was solely in the name of Leonard Bernard doing business as Highland Motor Sales.

The evidence is uncontroverted that J.B. Deibler had no power to write checks, or access to the bank account, or the books kept under the direction of Leonard Bernard; that J.B. Deibler at no time received an accounting of assets or profits of the enterprise; that Bernard hired and discharged employees; that Deibler acted as manager for the first few weeks, but was replaced by a succession of managers hired by Bernard; and that Deibler thereafter preformed only the duties of a salesman until August 1941. Deibler maintains that he was discharged at that time. However, Bernard asserts that he left voluntarily.

With reference to May H. Deibler, there is no evidence that she had any knowledge or notice that the lease was affected by any other arrangement than that which appeared on the face of the lease.

In January 1942, plaintiff defaulted on the rent, and vacated the premises, although there is evidence that it then possessed a considerable number of cars to sell. Plaintiff endeavored to cancel the lease by mailing it with the keys of the premises to defendant, who refused to accept cancellation. Some payments of rent were extracted from plaintiff pursuant to confessions of judgment obtained by defendants under the terms of the lease.

Plaintiff, thereafter, moved to vacate the judgment of the municipal court for the June and July rentals, and the court sustained the motion on the ground that performance of the lease contract had been rendered impossible by certain federal restrictions. This decision was reversed by the Appellate Court and remanded with directions to reinstate the judgment. (Deibler v. Bernard Bros., Inc., 319 Ill. App. 504.) On a certificate of importance, the Supreme Court of Illinois affirmed the Appellate Court and held that the lease was an enforceable legal obligation, and was in no way terminated by the federal regulations which merely rendered the lessee's business more difficult and perhaps less profitable. 385 Ill. 610.)

No issue was raised by the lessee in the Municipal, Appellate or Supreme Courts that this lease was not what it legally purported to be, or that it was signed for the accommodation of the lessor, J.B. Deibler, or modified by any partnership agreement affecting the lessors' rights to the rentals. It was apparently assumed that the lease was a valid contract, and the sole defense interposed by the lessee was the impossibility of performance resulting from the federal regulations.

Pending the Supreme Court decision, the lessee, Bernard Bros., Inc., instituted in 1943, the instant suit in the circuit court of Lake county for an accounting and an injunction restraining the lessors, defendants herein, from proceeding to enforce the lease on the theory that defendant J.B. Deibler was a partner, and that the lease was signed for his accommodation.

The lessors, thereafter, filed special pleas setting forth the Supreme Court decision, and moved to strike the complaint on the grounds that it failed to state a cause of action, that the decision of the Supreme Court determined the rights of the parties, that the claim for an accounting was ...

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