struction, on the ground that the performance of it would be inconvenient or unfavorable to either one of the contracting parties. Where the rights of third persons do not intervene, parties to a contract are bound to carry it out as they have made it, and the proper function of courts is to enforce the performance of contracts voluntarily entered into without fraud, which are not in violation of the law. The fact that the performance of a contract might lead to insolvency has never been considered any excuse for a failure to perform it. It certainly cannot be said that the parties to this contract intended that it should not be performed if the corporation preferred to expend its net income in increasing the capital or assets by adding to the library and rendering it more useful and valuable. That would enable the officers not to perform the contract at all, at their own option.

There is one particular in which the contract is in violation of the law and not enforceable, and that is in the provision to pay dividends before the payment of necessary expenses and keeping the capital intact, which would include necessary rebinding and otherwise keeping the library up to the point that the capital stock would not be impaired. An agreement to pay dividends out of the capital stock, which amounts to the same thing as to pay back to the shareholder a part of the capital paid by him, is illegal and void. Cook on Stock and Stockholders, 270; 9 Am. & Eng. Ency. of Law (2d Ed.) 701. The officers of a corporation have no power to decrease the capital of the corporation in order to pay dividends, but, on the other hand, a construction cannot be adopted which would permit the officers to add to the library so as to increase the value of the capital at the expense of the shareholder and in violation of the contract. It was evidently contemplated that dues could be fixed at such a price as to pay all the obligations and fulfill all the purposes named in the by-laws, to the extent of purchasing necessary new law books and periodicals. It may be that experience has shown that the contract interferes to some extent with the full development of a complete library by the addition of new books, thereby increasing its value and adding to the capital, but that fact affords no excuse for failure to perform the agreement so far as it is legal and valid. Scarcely any library contains all the books and periodicals that are published, and there is practically no limit to which the corporation might not go in expending its income for the purchase of books and legal journals, but an increase of the capital cannot be permitted to defeat the rights of shareholders. Such increase of capital could only be effected by the sale of capital stock or some other method which would not interfere with the rights of complainant. His rights are to dividends from the net income, and net income is what remains after deducting all

legitimate charges as herein explained. We see no reason why the contract should not be enforced by applying to the payment of dividends the net income after deducting the expenses for conducting the library, and for losses and deterioration of books, so as to keep the capital intact and unimpaired. Whether the library would be less useful or valuable as a result of doing so than it otherwise would be cannot be considered.

It is urged that the claim of complainant is barred by laches. That doctrine cannot apply to violations of duty on the part of officers which have occurred within a few years prior to filing the bill. The bill alleges that complainant never acquiesced in the construction put upon the by-laws by the officers, and that he has repeatedly sought an accounting and never abandoned his right to it. It cannot be said that there has been such acquiescence on his part as would deprive him of all his rights, and there has been no injury to the corporation or its officers by the delay in filing the bill. The allegations of the bill are that the corporation and its officers are still disregarding the rights of the complainant by adding to the library; that there has been no meeting of stockholders since 1895; that no meeting of directors has been called for several years; and that the defendants, other than the corporation, have been engaged in buying up the shares of stock at reduced prices, so that the library is now maintained only for the benefit of a few individuals. The directors hold a fiduciary relation toward the stockholders, and we are not prepared to say that the complainant is barred of his rights by laches.

The judgment of the Appellate Court and the decree of the circuit court are reversed, and the cause is remanded to the circuit court, with directions to overrule the demur

rer.

Reversed and remanded.

(219 III. 485.)

FITZGERALD v. BENNER et al. (Supreme Court of Illinois. Feb. 21, 1906.) 1. TRIAL-QUESTIONS FOR JURY-CONFLICTING EVIDENCE.

In an action on a building contract, the question of the date of the completion of the work was for the jury, where the evidence was conflicting.

2. INTEREST-PAYMENT-VEXATIOUS AND UNREASONABLE DELAY.

Where a building contract provided that the contractor was to be paid in installments as the work progressed, upon a certificate of approval signed by the architect, evidence in an action to recover on the contract that after January 18th plaintiff's account was checked up, and the certificate for the amount agreed on was made out under the architect's direction; that the architect put off payment of the amount at one time by asking that it be allowed to rest for a day or two until he could see defendant owner; that several weeks thereafter, when plaintiff demanded the certificate, the architect said that he had talked with defendant, who was pressed for money, and asked that

the matter be allowed to rest awhile longer; that thereafter defendant referred plaintiff to the architect, stating that on production of the latter's receipt defendant would pay the amount, but that, on demanding the certificate, the architect informed plaintiff that he was instructed by defendant not to give the certificate; and that plaintiff was sent back and forth between the offices of defendant and the architect several times thereafter-showed a vexatious and unreasonable delay of payment, rendering defendant liable for interest. 3. EVIDENCE-RES GESTÆ.

In an action to recover a balance due on a building contract, defendant set up that the work was not completed within the stipulated time. A subcontractor under plaintiff for the furnishing of certain of the iron work, while examined as a witness, for the purpose of showing that the delay in putting up the iron work was due to defendant's fault, stated that he was at the building almost every day between certain dates, but was unable to proceed, as the iron was lying around the street, being kicked about and blocking up the street, testifying: "I asked every day, telephoned every day, 'Can't I start?' because I had a gang idle." that the words "Can't I start?" were merely an exclamation, constituting a part of the res gestæ, and tending to illustrate the condition of affairs then existing at the building, and to show why plaintiff could not proceed with the work, and were admissible.

Held,

4. WITNESSES-REFRESHING MEMORY-MEMO

RANDUM.

Where, in an action to recover on a building contract, defendant set up plaintiff's failure to complete the work within the stipulated time, and a witness stated that the work was completed at about a certain date, he was properly permitted to make use of entries in a memorandum book, made at the time of the events referred to by him and in the course of his duty as an employé of plaintiff in and about the business in controversy, for the purpose of refreshing his recollection as to such date and as to the condition of the weather on certain dates, regarding which he had been questioned on cross-examination by defendant. 5. APPEAL-HARMLESS ERROR-OPINION EVI

DENCE.

Where, in an action to recover a balance due on a building contract, all the conversations between plaintiff and defendant, and the latter's architect, relating to payment of the amount in controversy, were fully and particularly given in the testimony, testimony of plaintiff that defendant "kept putting him off" with reference to the payment, even if a statement of a conclusion only, and not of a fact, was harmless error.

6. WITNESSES-CROSS-EXAMINATION.

Where, in an action on a building contract which required as a condition precedent to pavment of installments as the work progressed the approval of plaintiff's account by defendant's architect, plaintiff testified that he was informed, when seeking the architect for the purpose of securing his approval of the account, that he had gone to Europe, and on cross-examination by defendant gave the names of at least three persons who had informed him of the architect's departure, it was not error to refuse to permit counsel to proceed further on that subject. 7. TRIAL

INSTRUCTIONS

· ASSUMPTION OF

FACT BY COURT. Where a building contract provided that payment should be made to plaintiffs on the execution by defendant's architect of a certificate of approval of the work, an instruction that if the jury believed from the evidence that the architect accepted the work performed by plaintiffs and that the contract was completed in accordance with the terms thereof, and that if they further believed from the evidence

that the architect withheld or refused to deliver to the plaintiffs such certificate, either because defendant owner directed the architect to withhold or refuse to deliver the same, or for any other reason not in accordance with the terms of the contract, "if shown by all the evidence in this case," plaintiffs were not bound to produce the certificate before they could recover, was not subject to the criticism that it assumed as a fact that the defendant directed the architect to withhold and not deliver the final certificate to plaintiffs.

8. TRIAL-INSTRUCTIONS-CONSTRUCTION AS A

WHOLE.

In an action on a building contract, defendant cannot complain of an alleged error in an instruction as to the terms and effect of the contract, where four other instructions given for defendant announced the construction contended for by him.

9. SAME NEGATIVING MERE MATTER OF DEFENSE NECESSITY.

In an action to recover a balance alleged to be due on a building contract, an instruction ignoring the question of damages claimed by defendant by way of set-off as liquidated damages for delay in completing the contract was not erroneous, as it is not always necessary to negative a mere matter of defense; the instruction in question simply relating to the question of excuse for the nonintroduction of the architect's certificate of approval, which, under the contract, was a condition precedent to payment. 10. CONTRACTS-ACTION FOR BREACH-IN

STRUCTIONS.

In an action to recover on a building contract which required the production by plaintiffs of a certificate of approval by defendant's architect as a condition precedent to payment, an instruction that if the architect inspected the work, and accepted the same as being in compliance with the contract, and that if the jury believed from the evidence that the contract was completed in accordance therewith, and that the architect in bad faith and without just cause refused to deliver to plaintiffs a final certificate showing such acceptance and completion and the balance due plaintiffs, if any, plaintiffs were entitled to recover, clearly informed the jury what facts under the circumstances of the case would amount to bad faith and the absence of just cause.

11. SAME QUESTION FOR JURY.

Where, in an action to recover on a building contract, providing for the execution by defendant's architect of a certificate of approval of the work as a condition precedent to payment, plaintiffs' evidence tended to show that the architect acted under defendant's instructions in refusing to deliver the certificate, and also tended to show a vexatious and unreasonable delay in payment, it was for the jury to say whether such delay was occasioned by defendant's fault; the architect being to a certain extent defendant's agent.

12. DAMAGES BREACH OF CONTRACT-INSTRUCTIONS.

In an action to recover a balance alleged to be due plaintiffs on a building contract, an instruction that if the jury found from the evidence and under the instructions of the court that plaintiffs were entitled to recover, and that the money due them, if any, was withheld by an unreasonable and vexatious delay of payment, the jury might allow plaintiffs interest at a certain rate on such sum as from the evidence and under the instructions of the court they believed plaintiffs were entitled to recover from the date the same became payable, as shown by the evidence in the case, was not subject to the criticism that it left the jury to estimate the amount of damages according to their own individual notions of right and wrong, as it specifically referred them to the evidence under the instructions of the court.

13. TRIAL-INSTRUCTIONS-CERTAINTY.

In an action to recover a balance due on a building contract, an instruction that the facts must be decided by the jury from the testimony, even if erroneous, as excluding by the use of the word "testimony," in place of "evidence," the documentary evidence in the case, was not misleading, where the concluding sentence directed the jury not to consider anything but the "evidence" introduced before them. 14. TRIAL-REMARKS OF JUDGE.

Where, in an action to recover on a building contract, a witness stated that certain letters introduced by defendant were the only ones in his possession, and subsequently another letter which defendant stated was in the witness' possession at the time he testified was produced, whereupon the court asked if the letter was in the witness' possession when he was on the stand, and, on counsel answering "Yes," said, "I would like to have him here," such remark of the court was not erroneous, as intimating to the jury that the witness had willfully suppressed a letter in his possession while on the stand.

15. APPEAL-HARMLESS ERROR-REMARKS OF JUDGE.

Where, in an action to recover a balance due on a building contract, a witness, in testifying as to the state of the weather alleged to have caused the delay in completing the work, was asked on cross-examination in regard to the matter whether he voted at the election in a certain year, and on exclusion of the question defendants' counsel stated that "it had something to do with the memory,' a remark of the court that, "if he isn't right, you can bring in the weather bureau man,' was not prejudicial; it appearing that a further continuation of the cross-examination in regard to the weather was wholly unnecessary, enough having already been drawn out on the question.

Appeal from Appellate Court, First District.

Action by William D. Kent and another against William Fitzgerald. Judgment for plaintiffs, and defendant appeals. Affirmed.

This is an action of assumpsit, brought on July 10, 1900, in the circuit court of Cook county, by the appellees, William D. Kent and Mathias Benner, constituting the firm of M. Benner & Co., against the appellant, William Fitzgerald, to recover a balance of indebtedness claimed to be due upon a building contract, together with interest thereon. The trial resulted in a verdict and judgment in favor of the appellees for $6,000. This judgment has been affirmed by the Appellate Court, and the present appeal is prosecuted from such judgment of affirmance.

The declaration, as first filed, consisted of the common counts for goods sold and delivered, for the reasonable value of said goods, for money loaned and advanced, and upon account stated; the ad damnum being laid at the sum of $15,000. Afterwards, on December 24, 1901, certain additional counts were filed, wherein the building contract was set forth in hæc verba, and wherein it was alleged that the appellees had fully completed said contract, and there was due to them from the appellant upon the same the sum of $6,408.62. The second additional count, after stating the contract and that it had been completed, and that a certificate of the amount due had been demanded, and that the archi

tect had figured up and agreed as to the amount due, alleged that the architect, acting in bad faith and in collusion with appellant as owner, refused to issue a final certificate to the appellees. Pleas of the general issue, and denying the charges of collusion and bad faith, were filed. The building contract in question was dated August 22, 1892, and was executed between appellant, as party of the first part, and appellees, under the firm name of M. Benner & Co., as parties of the second part, wherein Benner & Co. agreed to erect and complete the iron work for a six-story flat building belonging to the appellant, at the corner of Twenty-Sixth and State streets, in Chicago. The price to be paid by appellant to appellees was fixed by the contract at a certain sum for castings per ton, another sum for beams per ton, and other sums per pound for punching, coping. riveting, and for anchors, steel plates, stirrups, and straps; and also a certain sum was to be paid as the price per square foot for Hyatt lights. Between August 22, 1892, and some date in the winter of 1892 and 1893, or in the spring of 1893-about which latter date the parties differ-material and labor amounting to $22,908.63 are alleged to have been furnished by the appellees. There were paid to them upon the contract the following amounts: November 23, 1892, $5,000; December 17, 1892, $5,000; February 21, 1893, $6,500, making $16,500 as the total amount of payments, which, taken from $22,908.63, leaves $6,408.63, being the amount due according to the claim of the appellees.

By the terms of the contract the work was to be done under the direction and supervision of Clinton J. Warren, an architect, who was required to certify in writing as to all materials, workmanship, etc. Payment was to be made upon presentation of certificates signed by the architect. The contract contained the following provision: "And in case the parties shall fail to agree as to the true value of extra or deducted work or the amount of extra time, the decision of the architect shall be final and binding. The same in case of any disagreement between the parties relating to the per formance of any covenant or agreement herein contained." The contract also contained the following: "Damages for delay will be $50.00 per day, for each and every day the work remains unfinished after above date. Damages for delay as mentioned in specifications, will be deducted from the contract price as liquidated, and furthermore fifteen percentum of the value of all work done and materials furnished shall be held back until this contract is declared by Clinton J. Warren completed, or if contract is completed at specified time or times, said fifteen percentum kept back shall then be paid four days after the work of this contract is declared by the architect finished, provided said work and materials are free and discharged from all claims, liens and charges whatsoever, and so

kept during the process of said work. Time -Basement and first story, September 29; second, October 6; third, October 13; fourth, October 20; fifth, October 27; sixth and roof, November 1. Time contingent on strikes, fires, unavoidable accident, or causes beyond our control." By the terms of the contract Benner & Co. agreed "to furnish at their own expense and under the direction and supervision of Clinton J. Warren, to be approved and certified by a writing or certificate under the hand of the said Clinton J. Warren, all materials, workmanship and labor, required by the said drawings and specifications, and to protect the materials and workmanship from damage by the elements or otherwise until the completion of the work, and to remove all improper materials and work, when directed by architect, and to substitute therefor such materials and work as, in his opinion, are required by the drawings and specification aforesaid, and will deliver said building to the said party of the first part free and discharged of all claims, fiens and charges whatsoever, completely finished at such time as set forth in the specification." No time seems to have been stated in the specification; the language therein being as follows: "Time: All work to be finished on or before -."

The following instructions were given by the trial court to the jury, to wit:

"(16) The court instructs the jury that in this case he has not expressed, and does not in any of these instructions express, any opinion on the facts of the case, nor upon the credibility or want of credibility of any witness. The facts must be decided by the jury from the testimony which is received in open court. Offered testimony, to which objection was sustained, or which was stricken out by order of the court, is not before the jury, and should not be considered in arriving at your verdict. Statements of counsel for either side, if any, which are unsupported by the testimony, or which are irrelevant to this case, should not be considered. The instructions given you by the court are to be considered as a series. The court has not expressed an opinion on the facts, and has not expressed an opinion on the credibility or character of any witness, and the court has no right to do so, and if the jury overheard anything said between the court and counsel in discussing questions of law, or otherwise, the jury should not consider anything but the evidence introduced before them and the law as laid down in the instructions of this court.

"(17) If you believe from the evidence and the instructions of the court that the architect or superintendent named in the contract in this case accepted the work performed by the plaintiffs as the work progressed, as required by the contract, and if you further find from the evidence that such contract was completed in accordance with the terms thereof, and you further believe from the evi

dence that, after the contract was completed, the architect accepted the work performed by the plaintiffs, and if you further believe from the evidence and instructions of the court that the architect withheld or refused to deliver to the plaintiffs his statement, or certificate in writing, showing the amount due the plaintiffs, if anything, either because the defendant, the owner, directed him, the said architect, to withhold or not to deliver the same, or for any other reason not in accordance with the terms of the contract between said parties, if shown by all the evidence in this case, then you are instructed, if you find such facts proven from the evidence, that the plaintiffs would not be bound to produce such certificates before they were entitled to recover in this case.

"(18) The court instructs the jury that if you believe from the evidence that the architect, Clinton J. Warren, in this case inspected the work in question and knew its character and quality, and that said architect accepted the work done and materials furnished by the plaintiffs as being in compliance with and in full performance of the contract on plaintiffs' part, and if you further believe from the evidence, and under the instructions of the court, that said contract was completed in accordance therewith, and you further believe from the evidence that said architect in bad faith and without just cause refused to deliver to the plaintiffs a final certificate showing such acceptance and completion and the balance due the plaintiffs, if any, then the plaintiffs are entitled to recover whatever, if anything, the jury shall find from the evidence is due upon the contract.

"(19) The court instructs you that if you find from the evidence and under the instructions of the court that the plaintiffs are entitled to recover from the defendant, and if you find from the evidence that such money as you find the plaintiffs are entitled to, if any, was withheld by an unreasonable and vexatious delay of payment, then you may allow the plaintiffs interest at the rate of five percentum per annum on such sum, if any, as you believe from the evidence and under the instructions of the court, the plaintiffs are entitled to recover from the defendant from the date the same became payable. as may be shown by the evidence in the case. what the facts are you must determine from the evidence."

David K. Tone and William H. Fitzgerald, for appellant. William A. Doyle, for appellees.

MAGRUDER, J. (after stating the facts). In this case the evidence shows that the labor and material, for the price of which this suit is brought, were furnished by the appellees; and the defense of the appellant rests upon substantially two grounds: The first ground of defense is that there can be no recovery, because the certificate of the architect was not produced, as required by