{ "id": 2724987, "name": "Sidney Foreman et al., Appellants, vs. Henry K. Holsman et al., Appellees", "name_abbreviation": "Foreman v. Holsman", "decision_date": "1957-03-20", "docket_number": "No. 34021", "first_page": "551", "last_page": "555", "citations": [ { "type": "official", "cite": "10 Ill. 2d 551" } ], "court": { "name_abbreviation": "Ill.", "id": 8772, "name": "Illinois Supreme Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "9 Ill.2d 74", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5320555 ], "pin_cites": [ { "page": "79" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/9/0074-01" ] }, { "cite": "308 Ill. 255", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5097375 ], "opinion_index": 0, "case_paths": [ "/ill/308/0255-01" ] }, { "cite": "415 Ill. 453", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2682045 ], "opinion_index": 0, "case_paths": [ "/ill/415/0453-01" ] }, { "cite": "257 Ill. 491", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 4717341 ], "opinion_index": 0, "case_paths": [ "/ill/257/0491-01" ] }, { "cite": "7 Ill.2d 393", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2713110 ], "weight": 2, "pin_cites": [ { "page": "396" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/7/0393-01" ] }, { "cite": "346 U.S. 427", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6931436 ], "opinion_index": 0, "case_paths": [ "/us/346/0427-01" ] }, { "cite": "365 Ill. 432", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2582488 ], "opinion_index": 0, "case_paths": [ "/ill/365/0432-01" ] }, { "cite": "383 Ill. 454", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2487595 ], "opinion_index": 0, "case_paths": [ "/ill/383/0454-01" ] }, { "cite": "380 Ill. 15", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2554720 ], "opinion_index": 0, "case_paths": [ "/ill/380/0015-01" ] }, { "cite": "305 Ill. 265", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2428786 ], "opinion_index": 0, "case_paths": [ "/ill/305/0265-01" ] }, { "cite": "380 Ill. 44", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2553464 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ill/380/0044-01" ] }, { "cite": "324 U.S. 697", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6156456 ], "pin_cites": [ { "page": "704, 709-10" } ], "opinion_index": 0, "case_paths": [ "/us/324/0697-01" ] }, { "cite": "326 Ill. 379", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5188326 ], "pin_cites": [ { "page": "390" } ], "opinion_index": 0, "case_paths": [ "/ill/326/0379-01" ] }, { "cite": "311 Ill. 552", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5114380 ], "pin_cites": [ { "page": "558" } ], "opinion_index": 0, "case_paths": [ "/ill/311/0552-01" ] }, { "cite": "300 Ill. 425", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2426018 ], "pin_cites": [ { "page": "442" } ], "opinion_index": 0, "case_paths": [ "/ill/300/0425-01" ] }, { "cite": "9 Ill. App.2d 317", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5153135 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/9/0317-01" ] } ], "analysis": { "cardinality": 502, "char_count": 6888, "ocr_confidence": 0.799, "pagerank": { "raw": 4.192809932604205e-07, "percentile": 0.9129719531910934 }, "sha256": "dca9790e1cd6c0b1460c17c73ead70ee4fb454e1e020df14062f4304c4b80322", "simhash": "1:126c654b82f5c399", "word_count": 1125 }, "last_updated": "2023-07-14T20:22:31.902736+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Sidney Foreman et al., Appellants, vs. Henry K. Holsman et al., Appellees." ], "opinions": [ { "text": "Mr. Justice Hershey\ndelivered the opinion of the court:\nThe issue on this appeal is whether the purchasers of an unregistered security are precluded from rescinding the sale, pursuant to section 37 of the Illinois Securities Act of 1919, as amended, (Ill. Rev. Stat. 1951, chap. 121\u00bd, par. 132,) because of a contemporaneous agreement in which they purported to release the seller from any liability under the act.\nIn 1950, the plaintiffs, Sidney and Ruth Foreman, purchased 60 shares of beneficial interest in a certain trust for $6000. This trust, called the Jackson-Laramie Garden Homes Mutual Ownership Trust, had been created earlier that year for the purpose of constructing and operating an apartment house project. The purchasers agreed, in writing, to release the seller \u201cfrom the provisions of the Illinois Securities Act,\u201d and their trust certificate provided that the parties \u201chereby release each other from any requirement of, or liability under, the Illinois Securities Law.\u201d\nAfter tender, the plaintiffs filed the instant suit, asking for a return of consideration paid and reasonable attorneys\u2019 fees. There was a hearing before a master, who found that the certificate was a \u201csecurity\u201d sold in violation of the act and recommended a recovery. The circuit court of Cook County approved the master\u2019s report, entering judgment for the plaintiff for $6000 plus $1500 attorneys\u2019 fees. However, on appeal to the Appellate Court this judgment was reversed, the court being of the opinion that the plaintiffs\u2019 cause of action was extinguished by reason of the \u201crelease.\u201d (9 Ill. App.2d 317.) We granted leave to appeal.\nThe Illinois Securities Act of 1919 was enacted for the protection and benefit of the public as a whole \u2014 \u201cto protect the public from the dishonesty, incompetence, ignorance and irresponsibility of persons engaging in the business of disposing of securities of uncertain value whereby the inexperienced and confiding are likely to suffer loss.\u201d (Stewart v. Brady, 300 Ill. 425, 442. See also People ex rel. Emmerson v. Lee, 311 Ill. 552, 558; People v. Glassberg, 326 Ill. 379, 390.) Three remedies are provided, rescission, injunctive relief, and criminal prosecution, and together they constitute the plan for the enforcement of the act. Cf. Brooklyn Savings Bank v. O\u2019Neil, 324 U.S. 697, 704, 709-10.\nThe fact that upon rescission one may recover attorneys\u2019 fees, as well as the purchase price, indicates that this civil remedy is intended to afford an additional punishment for an offending party. To permit this remedy to be \u201cwaived\u201d or \u201creleased\u201d prior to or contemporaneously with the sale of unregistered securities would thwart the very objective of the statute and violate the declared public policy of this State. Such a holding would pave the way for the virtual nullification of this important legislative enactment. Cf. Anderson v. City of Jacksonville, 380 Ill. 44.\nThis court has consistently held that the benefits of a statute may not be waived by an individual in cases where the statute was enacted for the protection of the public generally, (Pitsch v. Continental and Commercial National Bank of Chicago, 305 Ill. 265; Kennedy v. City of Joliet, 380 Ill. 15; Anderson v. City of Jacksonville, 380 Ill. 44,) and we have often reiterated that a contract made in violation of established public policy will not be enforced. See, e.g., George v. City of Danville, 383 Ill. 454; Vock v. Vock, 365 Ill. 432.\nThe defendants stress the fact that the Secretary of State has prepared a form of release which may be used by parties in settling controversies under the Illinois Securities Act, and that once a right of action has accrued in favor of a purchaser, he may elect not to avail himself of that right. In discussing a similar contention made in respect to Federal securities legislation, the Supreme Court of the United States noted that \u201cwhile the Securities Act does not require petitioner to sue, a waiver in advance of a controversy stands upon a different footing.\u201d (Wilko v. Swan, 346 U.S. 427.) The threat of a possible civil action, with its attendant penalty of attorneys\u2019 fees, helps protect the public against the sale of unlicensed securities. Whether a cause of action once accrued may later be released is quite another matter.\nThe Appellate Court, in holding that the \u201crelease\u201d was effective to bar a recovery here, considered Cerny-Pickas & Co. v. C. R. Jahn Co. 7 Ill.2d 393, to be decisive of the issue. In that case, this court reaffirmed a position which it has consistently taken (from Checkley v. Illinois Central Railroad Co. 257 Ill. 491, to Jackson v. First National Bank of Lake Forest, 415 Ill. 453,) namely, that provisions which relieve the lessee from responsibility for its own negligence with respect to fires are valid contracts between private individuals with reference to private interests and are not against public policy. We there stated: \u201cThat one of the grounds of negligence charged in this case was the lessee\u2019s failure to comply with the building ordinances in making alterations in the building is not, we think, of controlling significance. See Johnson v. Pendergast, 308 Ill. 255.\u201d (7 Ill.2d 393, 396.) The only relation between the violation of the ordinances and the civil suit was the fact that the violations affected the burden of proof of common-law negligence. The ordinances neither created the cause of action nor was the civil suit established as a part of the enforcement machinery for the ordinances. Therefore, no question of public policy was involved, and the decision is clearly distinguishable from the case at bar.\nWe conclude that the Appellate Court was in error in holding that the \u201crelease\u201d defeated the plaintiffs\u2019 action. And since the judgment of reversal by the Appellate Court was based solely upon this erroneous view of the law and for such reason other assignments of error were not considered, the cause must be remanded to that court with directions to consider and pass upon such other questions. People ex rel. Hahn v. Hurley, 9 Ill.2d 74, 79.\nThe judgment of the Appellate Court is reversed, and the cause is remanded to that court with directions to pass on the other questions raised by the appeal.\nReversed and remanded, with directions.", "type": "majority", "author": "Mr. Justice Hershey" } ], "attorneys": [ "Edward W. Barrett, Robert A. SprEcher, and William L. LamEy, all of Chicago, for appellants.", "Horace A. Young, of Chicago, for appellees Henry K. Holsman, William T. Holsman, H. G. Croll\u00e1nd, and L. E. Adams, Jr., and Kirkland, Fleming, Green, Martin & Ellis, of Chicago, (WEymouti-i Kirkland, Vernon M. Welsh, Don H. Reuben, and Thomas M. Thomas, of counsel,) for appellee Trust Company of Chicago; and Madigan & Thorsen, of Chicago, (Robert Thorsen, of counsel,) for intervening petitioner-appellee." ], "corrections": "", "head_matter": "(No. 34021.\nSidney Foreman et al., Appellants, vs. Henry K. Holsman et al., Appellees.\nOpinion filed March 20, 1957.\nEdward W. Barrett, Robert A. SprEcher, and William L. LamEy, all of Chicago, for appellants.\nHorace A. Young, of Chicago, for appellees Henry K. Holsman, William T. Holsman, H. G. Croll\u00e1nd, and L. E. Adams, Jr., and Kirkland, Fleming, Green, Martin & Ellis, of Chicago, (WEymouti-i Kirkland, Vernon M. Welsh, Don H. Reuben, and Thomas M. Thomas, of counsel,) for appellee Trust Company of Chicago; and Madigan & Thorsen, of Chicago, (Robert Thorsen, of counsel,) for intervening petitioner-appellee." }, "file_name": "0551-01", "first_page_order": 551, "last_page_order": 555 }