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    Mary C. Merrifield et al., Appellees, v. Thomas W. Burrows et al., Appellants.
    Gen. No. 5145.
    1. Corporations—how dissolution may he effected. In this state a corporation cannot he dissolved by a court of equity except under section 25 of the act concerning corporations.
    2. Corporations—power of chancery to appoint receivers. Section 25 of the Corporation Act does not deprive courts of equity of the authority to appoint receivers for solvent corporations where the facts are such that the appointment is within the ordinary powers of a court of equity.
    3. Corporations—jurisdiction, of chancery to appoint receivers. While courts of equity have the power to appoint receivers for solvent going corporations, they will not ordinarily take such action but will usually decline to assume control of the affairs of such corporation. Held, however, that from the facts set up in the bill in this case an extreme necessity had arisen and that the injunction granted restraining the holding of a particular stockholders’ meeting and of all other stockholders’ meetings until the further order of the court and appointing a receiver for the defendant corporation (which was a solvent going concern), were as well within the jurisdiction of equity as calculated to serve the best interests of the property and the parties in question.
    4. Chancery—effect of inappropriate prayer upon relief as a whole. All relief will not be denied to complainants because one part of the prayer cannot be granted under 'the facts stated in the bill.
    Bill in equity. Appeal from the Circuit Court of La Salle county; the Hon. S. C. Stough, Judge, presiding.
    Heard in this court at the April term, 1909.
    Affirmed.
    Opinion filed March 11, 1910.
    Stricken from rehearing docket April 13, 1910.
    Eddy, Haley & Wetten and Butters & Armstrong, for appellants.
    Duncan, Doyle & O’Conor and C. B. Chapman for appellees.
   Mr. Presiding Justice Dibell

delivered the opinion of the court.

On January 2, 1909, the Western Cottage Piano and Organ Company, hereafter called the Company, and Mary C. Merrifield, Louis W. Merrifield, George R. Wood, and Lilla M. Wood, owners of one half of the capital stock of said corporation, filed a bill in equity against Thomas W. Burrows and Jarvis R. Burrows, owners of the other one half of said capital stock. The bill contained a separate prayer by the Company that its co-complainants and the defendants be enjoined from holding or prolonging a certain meeting of the stockholders of the Company,, then in session, and from electing or attempting to elect at that meeting or at any time thereafter any directors or officers for said Company, and from interfering with the management and control of said Company’s business, till the further order of the court. All the complainants prayed for the appointment of a receiver to take charge of the property of the Company and to continue its business till the further order of the court. The injunction was granted immediately and without notice, and by agreement of complainants and defendants the motion for a receiver was set for January 4, 1909, on which date there was a hearing and a receiver of the property of the corporation was appointed, with directions to proceed to conduct the business of the corporation which was the manufacture and sale of pianos and organs. The person appointed receiver was agreed to by all the parties as a suitable person. Defendants appealed from the injunction order and perfected that appeal by the filing of a bond. They also appealed from the order appointing a receiver and perfected that appeal by the filing of another bond. One record has been filed here embracing both appeals, and the assignment of errors covers both appeals, and the appeals have been treated as if consolidated.

The bill prays, among other things, for the dissolution of the corporation. The authorities cited by appellant are conclusive that in this State a corporation cannot be dissolved by a court of equity except under section 25 of the Act concerning corporations. Hurd’s R. S. 1905, chap. 32, sec. 25. The corporation here involved is a solvent one, and the purport and tenor of the bill and of the other prayers therein is to carry on its business and save it from destruction. The bill does not state a case authorizing the dissolution of the corporation under said section 25. That portion of the prayer of the bill must be disregarded. The bill prays for an injunction and for a receiver, as above stated, and to.have the business carried on and also for other and further relief as equity may require. We are of opinion that complainants should not be denied all relief because one part of the prayer cannot be granted under the facts stated in the bill. It is clear from the authorities that in this State courts of equity will not readily grant a receiver for a corporation when the case made therefor is not under section 25 of the Corporation Act. We are of opinion however that it was not intended by these authorities to hold that courts of equity have been deprived by that Act of the authority to appoint receivers for solvent corporations where, the facts are such that the appointment is within the ordinary powers of a court of equity but for said section 25; in other words, that said section 25 is not to be construed to mean that the ordinary jurisdiction to appoint a receiver has thereby been withdrawn. In 23 Am. So Eng. Encyc. of Law 2nd. Ed. 1002, the general authority of a court of equity to appoint a receiver is thus stated: “The appointment of a receiver is a remedy of purely equitable origin, having originated in the English Court of Chancery, where it has been employed from a very early time. It is indeed one of the oldest equitable remedies, and grows out of the inherent power of a court of equity to afford relief where the remedies to be obtained in the courts of ordinary jurisdiction are inadequate. Prom its origin in English chancery, where all the leading principles in relation to its exercise were well established long before the American Eevolution, the power to create a receivership has naturally and regularly descended to', and become one of the inherent powers of, all courts exercising an equitable jurisdiction.”

On page 1004 of the same volume, after stating that it has been held in some jurisdictions that a court of equity has no inherent power to appoint a receiver for a corporation and therefore cannot do so without a statute, the authority thus continues: “But the power to appoint a receiver pendente lite, with power merely, to care for and preserve the property committed to his charge, is one incidental to the jurisdiction of a court of equity. It does not and never did depend upon statute, nor upon the character of the parties, whether individuals or corporations, nor upon the nature of the property. In most states the equitable powers of courts have been enlarged by statutes conferring express jurisdiction to appoint receivers over incorporated companies. Such statutes are strictly construed, and the appointment of a receiver usually rests within the sound discretion of the court.”

In 1 Morawetz on Private Corporations, 2nd. Ed. section 281, that authority says: “A court of equity will grant all relief to a shareholder which the nature of his case may require. But it has always been a settled principle, that no interference with the management of a corporation can be justified,, unless such interference be absolutely necessary to the attainment of justice. * * * Nor can a court of chancery interfere at the suit of a portion of the shareholders and remove an offending officer, or even enjoin him generally from acting for the corporation, unless this be essential to the protection of the corporate rights; as, for example, where the directors have conspired to defraud the corporation, or have otherwise shown themselves to be totally unfit to be intrusted any longer with the management of the company’s affairs. The court must ordinarily confine its remedy to the redress of the special wrongs which have been charged. The appointment of a receiver or manager of a solvent corporation must therefore be considered a strong remedy which can be justified only in a strong case; and the management of the corporation should be restored to its shareholders as soon as this can be done with safety. Thus, in Featherstone v. Cooke, Vice-Chancellor Malins appointed a receiver for a company because disputes had arisen between its managing agents, which caused a stoppage of the business and threatened to entail great loss upon the shareholders; but he discharged the receiver as soon as a general meeting of the shareholders had been called and new officers had been chosen.”

Again in section 543, of the same work, the rule is thus stated: “Cases may arise in which the removal of the directors of a corporation would be essential to the company’s welfare. Thus, the directors may be wholly unable or unwilling to perform their duties and protect the interests of the shareholders; they may even threaten the company with wilful mismanagement and financial ruin. Under these circumstances some remedy must be found. It has been pointed out in a preceding chapter, that the courts will grant relief, at the suit of individual shareholders of a corporation, whenever the company is unable, by reason of the fault of its agents, to maintain its rights. Hence, if the removal of the directors is absolutely essential to the protection of the corporation, and the corporation has no means of removing them or of revoking their powers, individual shareholders may apply to the court on behalf of the company, and the courts will grant such redress as justice requires. * * * It would seem, therefore, that a court of equity may remove the directors of a corporation from office at the suit of the corporation or a shareholder acting on its behalf, if for any reason the directors are incapable or unsuitable to perform the trust they have undertaken. It should be observed, that the courts will not remove the directors from office, or restrain them generally from representing the corporation, except in a case of absolute necessity. Ordinarily an injunction will be issued only to restrain specific threatened wrongs. If the powers of the directors are revoked in pursuance of an order of the court, a receiver should be appointed until a meeting can be held and new directors elected by the majority.”

In Lawrence v. Greenwich Fire Ins. Co., 1 Paige’s Ch. 587, the court said: “From the facts disclosed in the bill, answers, and petition it is evident there is no person at present authorized to take charge of and conduct the affairs of the corporation. If those who own a majority of the stock neglect to elect directors to take charge of the property of the corporation, the minority are not to be the sufferers in consequence of such neglect. Under these circumstances it is proper to appoint a receiver to take charge of the effects of the company, and preserve them for the benefit of the stockholders generally. The cases of Andrews v. Powis, 2 Bro. P. C. 504, and Maguire v. Allen, 1 Ball & B. 75, fully sustain the principle that a receiver may be appointed in any case, where it is necessary for the preservation of the property pending litigation.”

In Sternberg v. Wolff, 56 N. J. Eq. 389, 39 L.R.A. 762, Sternberg and his wife owned one-half of the capital stock of a corporation and Wolff and his wife owned the other half thereof, and they elected four directors, two being selected by the Sternbergs and two by the Wolffs, and such dissensions arose that the board of directors was in a deadlock, although the corporation had a large and going business. Sternberg and his wife filed a bill to enjoin Wolff from certain things, and prayed for a receiver. Wolff came in and resisted the injunction, but consented to a receiver. The court, however, refused to appoint a receiver, but enjoined both sides in various respects. On appeal the injunctions were vacated and the court below was ordered to appoint a receiver. The court there said:

“The dissensions between these two parties—Stern-berg and his wife on one side and Wolff and his wife on the other side—have brought the affairs of this company to a deadlock, so far as any corporate action by the board of directors is concerned. It may be assumed that the court of chancery has no jurisdiction to dissolve a solvent corporation, and distribute its assets, on the ground that the business of the corporation is improperly conducted by its board of directors, even though such mismanagement be with the concurrence of a majority of the stockholders; but the jurisdiction of the court of chancery to control the business of a company, especially a trading company, pending a litigation over the management and conduct of its business, must necessarily exist; and we think, pending a litigation such as is inaugurated by the proceedings in this case, a receiver may be appointed. Corporations such as the one now before us are mere trading companies with a corporate organization, for the convenience of conducting the business for which they were incorporated. Such a corporation has not the qualities of corporations created for public purposes. No reason appears why in the matter of the control and conduct of its business the corporation and its officers should not be within the control of the court of chancery to an extent corresponding with the control of that court over the business of a mere partnership. The cases seem to establish the power of the court in virtue of its general jurisdiction to preserve the subject of litigation pendente lite, though it may relate to the affairs of a trading company organized as a corporation. The two cases cited by the vice-chancellor in his second opinion are to that effect. Featherstone v. Cooke, L. R. 16 Eq. 298; Trade Auxiliary Co. v. Vickers, L. R. 16 Eq. 303. In the first case the complications in the affairs of the company arose out of a division in the board of directors, which made it absolutely impossible that the affairs of the company could be conducted with advantage. Vice-Chancellor Malins in that case says: ‘With regard to private partnerships, nothing is of more frequent occurrence than the quarrels of partners. If partners quarrel, oust each other from the management, or so conduct themselves that the partnership cannot go on with advantage, it is every day’s practice for the court to interfere by injunction, and appoint a receiver if necessary. With regard to public companies, I apprehend the same principle is applicable. If a state of things exists in which the governing body are so divided that they cannot act together, and there is the same kind of feeling between the members as there is frequently in the ease of private partnerships, it is clearly within the rule of this court to interfere, and it will do so.’ The court in that case intervened by injunction and receiver simply to protect the property of the company, to continue, however, no longer than until a governing body was duly appointed. In the latter case the dissension was also in the board of directors, one set of which closed the office doors of the company’s building, and the other set, with the aid of some laborers, broke open the doors with crowbars, and forced the office open. The prayer of the bill was for the appointment of a receiver until the proper board of directors was constituted. The vice chancellor placed the affairs of the company in the hands of a receiver pendente lite till a new governing body was appointed. The vice chancellor’s opinion states the principle to be that the court will not interfere with the internal affairs of joint stock companies unless they are in a condition in which there is no properly constituted governing body, or there are such dissensions in the governing body that it is impossible to carry on the business with advantage to the parties interested. In such a case the court will interfere, but only for a limited time and to as small an extent as possible.”

Various other authorities are there cited in further support of that position. The principles announced in the case last cited are in harmony with what is said in 10 Cyc. 1336: ‘1 Generally speaking, corporations have the same remedies at common law, in equity and under statutes, which are accorded to individuals in like circumstances.” In most of the Illinois cases cited the proceeding was under section 25 of the Corporation Act, or the application for a receiver was defeated because unnecessary under the facts of the particular case. The possibility of a state of facts requiring the court to appoint a receiver for a corporation when a case under said section 25 is not made seems to be recognized in Illinois. In Baker v. Admr. of Backus, 32 Ill. 79, where an order appointing a receiver of a corporation was reversed, the court stated the general rule that “this power to appoint a receiver is most usually called into action either to prevent fraud, save the subject of litigation from material injury, or rescue it from threatened destruction.” And again, “there was no necessity to appoint a receiver, because no fraud is alleged or shown and no sufficient proof that such a step was necessary to save the property from material injury or rescue it from impending destruction.” In First National Bank v. Gage, 79 Ill. 207, it. was held that a bill filed by certain judgment creditors against a corporation could be maintained as a bill for discovery, yet it did not warrant the appointment of a receiver. The court there said: “There is no necessity shown by- this bill, for the appointment of a receiver, for there is no distinct charge of fraud, nor does it appear, from the affidavits accompanying it, with clearness and distinctness, that there is any property or things in action to be preserved for the benefit of the judgment creditors. A receiver should be appointed in no case, unless it is made to appear there is an imperative necessity for the step to preserve some particular property for such parties as shall be entitled to the benefit.”

In Independent Brewing Assn. v. Klein, 135 Ill. App. 234, and in the same case on appeal in Klein v. Independent Brewing Assn., 231 Ill. 594, the courts there declined to determine whether the appointment of a receiver in that case could be sustained under the general power of courts of equity when essential to the protection of property rights, because they held that the facts did not warrant the exercise of such power if it existed. The corporation was a going- and solvent concern, and the bill was not filed under section 25 of the Corporation Act. The Supreme Court said on page 620: “If, as contended by counsel for appellants, a court of equity may, under its general chancery powers, at the instance of a stockholder, appoint a receiver for the preservation oí the property pending an accounting by the officers of a corporation for fraudulent misuse or conversion of its funds, the evidence shows that this is not a case where the exercise of such power was warranted. In First Nat. Bank v. Gage, 79 Ill. 207, it was said: A receiver should be appointed in no case unless it is made to appear there is an imperative necessity for the step, to preserve some particular property for such parties as shall he entitled to the benefit.’ The Independent Brewing-Association was a prosperous, solvent, going concern, and the evidence does not show that it was necessary for the preservation of the rights of appellants that it should be taken from the control of its officers, who had managed it successfully for many years, notwithstanding their wrongful conduct in the purchase of certain property. 23 Am. & Eng. Ency. of Law (2d ed.), 1023; 10 Cyc. 989-991.”

It will be seen that the court did not there deny the existence of such power in a court of equity, where absolutely necessary for the preservation of the property and the protection of the rights of its owners.' While the general tenor of High on Receivers, 2d ed., section 288, is against the exercise of such power in the absence of statutory authority, yet the authority of a court of equity to appoint a receiver of a solvent corporation in extreme cases to prevent the destruction of its property is not really denied, but that authority says that courts of equity in the absence of statute, will not ordinarily take such action, hut will usually decline to assume control of the affairs of a corporation. The case of Wallace v. Pierce-Wallace Pub. Co. (Ia.), 38 L. R. A. 122, which is in reality under a statute, is practically against the authority of a court of equity to take such action, but, even there, it is only said that “this is rarely, if ever done.” The court further said: “It is with great reluctance that any court authorizes the appointment of a receiver because of dissensions in the governing bodies.” It remains to inquire whether the facts of this case are such as to justify the exercise of this rarely used authority.

The bill of complaint contains a detailed history of the unfortunate controversies in which the company has been involved from the time when the defendants first became stockholders down to the day when the bill was filed, January 2, 1909. This history, up to January 9, 1908, was shown in a former bill in equity by the company v. Thomas "W. Burrows and Jarvis R. Burrows filed on that day, and these controversies are very fully narrated in our opinion in that cause, reported in Western Cottage Piano & Organ Co. v. Burrows, 144 Ill. App. 350. Without minutely repeating that history, which is again narrated in the present bill, we here refer to that opinion for many of those details. In some respects this bill of complaint is more definite, as, for instance, in its express averments of the insolvency of the defendants. We will here restate briefly that history down to January 9, 1908. Leonard B. Merrifield and others had conducted this business, first at Mendota, and afterwards at Ottawa, under the present and under a prior corporation, for about forty years, and at his death, in April, 1903, its assets were worth about $300,000 and its liabilities did not exceed $5,000. As he grew feeble in health, his son, Louis W. Merrifield, took active charge of the business. Thomas W. Burrows was the physician of Leonard B. Merrifield, and Jarvis R. Burrows, his brother, was a lawyer. Before Leonard B. Merrifield died it was arranged between L. B. Merrifield and the Burrows brothers that the Burrows brothers should purchase one-half of the capital stock. They purchased some from Leonard B. Merrifield, and became indebted to him therefor in the snm of about $69,000. They bought some stock of others, and procured Leonard B. Merrifield to guarantee the notes which they gave therefor. Five hundred shares of the capital stock, being one-half thereof, were in these ways transferred to Thomas W. Burrows and Jarvis B. Burrows, respectively, on the books of the company, and all that stock was pledged to and delivered to Leonard B. Merrifield to secure said indebtedness of about $69,000. The title to that indebtedness and possession of all the certificates of stock standing in the names of the Burrows brothers passed to Mary C. Merrifield, the widow of Leonard B. Merrifield, at his death. There is still about $30,000 due on that note, and she still has possession of all the certificates of stock standing in the' names of the Burrows brothers as security for that note. Among the purchases of said stock made by the Burrows brothers they bought 140 shares from one A. H. Merrifield and paid thereon $3,600 in cash, and gave for the rest of the purchase price the promissory note of Thomas W. Burrows for $30,000, guaranteed by the said Leonard B. Merrifield, who received no part of the consideration. Thomas W. Burrowrs became the administrator of the estate of Leonard B. Merrifield at his death. Instead of paying said note to A. H. Merrifield, he allowed it to be proved as a claim against the estate of Leonard B. Merrifield in the sum of $30,606.25, and being himself unable to pay the debt, he induced the company to give notes, executed by the company and endorsed by Thomas W. Burrows and by Louis W. Merrifield, for $20,000, which notes were discounted for $19,642.48, and induced it to borrow $8,000 from a bank and to place that amount in its account in that bank, and then to draw its check on that bank for $10,912.52, and the avails of the said discounted notes and of said check amounting to $30,555 were used by Thomas W. Burrows to pay said claim against the estate of Leonard B. Merrifield, deceased, the consideration for which claim has been wholly received by said Thomas W. Burrows. Thereupon said Thomas W. Burrows and said Jarvis .11. Burrows gave their note to the company for $30,045 and paid the small difference to the company. Said note matured December 16, 1907, and has never been paid. Thereafter the defendants alleged that the said last mentioned note given by them to the company was only executed for the purpose of making the books of the company balance, and that they were not liable thereon, and afterwards Jarvis R. Burrows abstracted said note from the files of the company and claimed to have destroyed the same. Said discounted notes, amounting to $20,000, became due and were not paid and had to be renewed, and Mary C. Merrifield was obliged to put up collateral security to obtain the renewals, which collateral security was worth $14,000 and she was afterwards compelled to purchase three of the four notes renewing said discounts. She began suits to collect some of these disbursements against the company and Louis W. Merrifield and Thomas W. Burrows; and the company commenced a suit against the Burrows brothers to collect said note for $30,045. Each of these suits is pending, and said Thomas W. Burrows and Jarvis R. Burrows are defending and denying their liability.

After the death of Leonard B. Merrifield, Louis W. Merrifield, who will hereinafter be called Merrifield, became the president and general manager, and Thomas W. Burrows, the vice-president, which officer under the by-laws was authorized to perform the duties of the president and general manager in the absence of the president. Thomas W. Burrows was also made treasurer and Jarvis R. Burrows secretary and traveling auditor.

Thomas W. Burrows became the physician of Merrifield, who was in poor health, and advised him to cease from labor, and, as a result of that advice, Thomas W. Burrows, the vice-president, took upon himself the duties of president and general manager, and so conducted the affairs of the company that in the spring of 1907 it was found that the assets of the company had depreciated nearly $100,000 and the liabilities had increased to $50,000, a net depreciation as we understand the bill of about $145,000 during the time that Thomas W. Burrows had conducted the business. The board of directors during that time had consisted of three persons representing the Merrifield interests, and of Thomas W. Burrows and Jarvis Burrows. Shortly after the Burrows brothers became stockholders, on motion of Thomas W. Burrows, the company ordered a dividend of fifty per cent, and later in the same year, on motion of Thomas W. Burrows, a further dividend of twenty per cent, and the bill alleges that these dividends were paid to Thomas W. Burrows and Jarvis B. Burrows, respectively, and they thereby received $35,000. In the case reported in 144 Ill. App. 350, it was contended by the Burrows brothers in argument that those dividends were paid upon their indebtedness, and it may be that this is so, for by some means their indebtedness to Mary C. Merrifield was reduced from about $69,000 to about $30,000, the amount for which she now holds their shares of stock as collateral security. Afterwards Thomas W. and Jarvis B. Burrows having overdrawn their accounts for their salaries, a further dividend of ten per cent was ordered, that the company might thereby collect said overdrawn accounts from their part of the dividend. No other dividend has since been declared, and the depreciation in assets is no doubt partly accounted for by said dividends. In the spring of 1907 Merrifield resumed the duties of president. Thereafter the Burrows brothers committed various acts as set out in our former opinion, calculated to embarrass the business of the company. In May, 1907, they filed a bill and obtained a receiver for the company, and in November of that year dismissed that suit. The by-laws required the annual meeting of stockholders to be held on the twenty-eighth day of December each year. There was a deadlock at the fl.nnna1 meeting on December 28, 1907, and ívt the adjoumed meeting held in January, 1908, the Burrows brothers voting their 500 shares one way and the Merrifields voting their 500 shares the other way. Two different sets of directors were alleged to have been elected and two sets of directors’ meetings were thereafter held, and Thomas W. Burrows thereafter sought to act as president and to overturn the authority of Merrifield, who also claimed to have been elected as president, and who held over as president if no president had been elected at that meeting. The injunction suit reported in 144 Ill. App. 350 followed thereafter. We there held that the pretended stockholders’ meeting and the subsequent directors’ meeting held by the Burrows brothers were fraudulent, and that either the Merrifield meeting was valid and Merrifield was elected president and Wood vice-president and the Burrows brothers were allowed to hold over as treasurer and secretary, or else that there was no valid election of officers that year and Merrifield held over as president and general manager, Thomas W. Burrows as vice-president and treasurer and Jarvis B. Burrows as secretary. In that bill the company claimed that there had been a valid election, electing Merrifield president and general manager and Wood vice-president. But in the present bill it is conceded that none of the elections in January, 1908, to which time the meeting of December 28, 1907, had adjourned, were valid. It concedes that the old officers held over.

The bill in this case then sets out at great length the events which have occurred since the bill in that case was filed. It states that in February, 1908, Thomas W. Burrows took out of the vault of the said company a pocket book containing about three hundred of the bills receivable of the company and carried them away and afterwards was adjudged in contempt of court for so doing; that Jarvis B. Burrows had removed to Chicago and that John H. Williams, whom though not a stockholder, the Burrows brothers had attempted to elect a director at their fraudulent meeting aforesaid, brought a suit against the company in the Municipal Court of Chicago and caused a summons to be served upon said Jarvis R. Burrows as secretary, and that he did not report that suit to the president of the company, and that it was only by accident that the pendency of that suit was learned, and that this conduct was intended to embarrass the company; that the bylaws required the secretary to countersign all notes and other documents requiring the signature of the company, and that he persistently refused to perform those duties and remained .in Chicago where he could not perform them, and that the company was greatly harassed because its bank refused to cash the checks of the company unless countersigned by said secretary or by Thomas W. Burrows, who under the bylaws had no authority to countersign such checks, and that by reason of its difficulty in drawing on its bank account the credit of the company and its business was greatly hampered and embarrassed. Thereupon the president called a special meeting of the directors to take action upon this condition of things, and the defendants obtained an injunction restraining the officers and directors of the company from holding such a meeting.

On Monday, December 28, 1908, at 2 o’clock p. m., in the directors’ room in the office building of the company, the annual meeting of the stockholders then convened. There were present Merrifield, the president, owning 180 shares; George R. Wood, owning 20 shares; Mary C. Merrifield, owning 150 shares, by her proxy and attorney in fact, Duncan McDougall; Lilla M. Wood, owning 150 shares, by her proxy George R. Wood, making 500 shares owned by the Merrifield interests; and Jarvis R. Burrows owning 250 shares and Thomas W. Burrows, owning 250 shares, by his proxy, L. W. Brewer, Jri On the evening of the first day’s session Jarvis R. Burrows had delivered at the office building of the company a cot and blankets, and he remained there day and night, and that meeting remained in continuous session night and day, and was still in session on Saturday, January 2, when this hill was filed. The persons representing the Merrifield interests were also compelled to be there night and day. No business was transacted. In voting for directors 500 votes were cast on one side and 500 votes on the other. Upon every motion or proposition that was voted upon there was a tie, including every proposition to adjourn, either to a fixed future date or indefinitely, the 500 shares of the Burrows interests being voted always against any adjournment. Propositions were made by the Burrows brothers to elect two of the Merrifield party and the two Burrows brothers and to agree upon a -fifth director out of three names submitted by the Burrows brothers, but these propositions were not accepted. The result was that the business of the company was demoralized. The president had to attend this meeting day and night, and did not have time to open his mail and to attend to the business presented thereby. It was evidently the intention of the Burrows brothers to keep that meeting in continuous session, night and day, without even a continuance for the purpose of sleep, until the owners of the Merrifield shares were exhausted, and then to secure the election of three directors selected by the Burrows brothers and the future control of the corporation. Originally the directors had to be chosen from the stockholders and as the Burrows brothers had not possession of their certificates of stock, they could not surrender them and cause a share to be issued to another party friendly to themselves, and if that by-law had remained in force they could not have elected more than two stockholders friendly to themselves. But in apparent anticipation of this contingency, Dr. Burrows, at a time when the relations between the parties were friendly, had proposed and secured the adoption of an amended by-law, which amendment it was after-wards ascertained omitted the requirement that the directors should be chosen from the stockholders. The situation then was this: The Burrows brothers were not in possession of the certificates for a single share of stock. The 500 shares upon which they voted were in the possession of Mrs. Merrifield as collateral security for a debt for the principal sum of about $30,-000 for the purchase price for this same stock. In addition they owed the company over $30,000, the real consideration of which was another part of the purchase price agreed to be paid by the Burrows brothers for their stock, which, by the manipulations already described, they had induced the company to advance. Suits were pending against them for these debts, and if they could secure the control of the corporation they could prevent the company from further prosecuting its suit against them. So far as appears, they have paid out but very little of their own money for their shares of stock, and all their efforts have resulted in the embarrassment and injury of the corporation. If Leonard B. Merrifield had caused these shares to be left in his name till paid for, or had caused them to be placed in the hands of a trustee till the Burrows brothers had paid for them, the present contingency could not have arisen. But the stock having been put in the names of the Burrows brothers on the books of the company, the law gave them the right to vote upon these 500 shares the same as if they were paid for, notwithstanding that the certificates are held in pledge by the Merrifield interests. While this situation remains and the Burrows brothers persist in the course of conduct described in this bill, there cannot be any fair election of a board of directors. If Mrs. Merrifield obtains a judgment upon her note and takes due proceedings to have the shares sold in payment thereof, the Burrows brothers will cease to own and to be able to vote upon one-half of the shares. The bill clearly shows that they are insolvent except as to the value of these shares, which are much depreciated by the course that has been pursued. So far as appears from ■this record they have paid but a small sum of their own money upon these shares. If the meeting had continued in session and by the physical exhaustion of the Merrifield family the Burrows brothers had been able to obtain control for a few minutes, they would have obtained control of the corporation and control of the several suits now pending, including some not mentioned here. If neither side became exhausted, the business of the company would be ruined because of the inability of the president to attend to it and because of the inability to elect any further officers. In our opinion a court of equity ought to have power to relieve that situation. On 'Saturday afternoon, January 2, 1909, this bill was filed, setting up these and many other facts and detailing at great length the injury being inflicted upon the property and business and credit of the company; and upon that bill the chancellor enjoined the further holding of this stockholders’ meeting or of any stockholders’ meeting till the further order of the court; and appointed a receiver, not of the company itself, but of its property and business, and selected as the receiver a person with whom both parties expressed themselves entirely satisfied. We are of opinion that this was a case of extreme necessity, and that it would be a reproach to our jurisprudence if a court of equity could not save the corporation from the destruction of its property and business and credit which was impending. We are of the opinion that the injunction was properly granted and that the facts alleged authorized the appointment of a receiver. It will be observed from the facts above stated that the Burrows brothers at one time had a receiver of this solvent corporation for several months, and that at another time they procured an injunction restraining its directors from electing a secretary and a treasurer; so that the principle of the orders here appealed from had the previous sanction of the Burrows brothers. Indeed, we are of opinion that these orders will be beneficial to their real interests.

The order does not mean, as seems to be supposed, that the stockholders are enjoined from holding a stockholders’ meeting 1‘except with the consent and under the direction of the receiver,” but the injunction against the stockholders from holding a meeting is absolute till the further order of the court. They are however enjoined from intermeddling with the management and control of the business of the corporation, except with the consent and under the direction of the receiver, which enables the receiver to avail himself of the services of any of the stockholders whenever he conceives that they will aid him in the discharge of his duties as receiver, and to this no exception is urged.

Criticisms are made upon the form of the prayer wherein the company alone prays for the injunction against all the stockholders, and all the complainants pray for the other relief. We do not see that the validity of the orders appealed from is affected by that circumstance. It is asked how long this receivership is to remain in force. We do not think it essential that that question be answered now. Upon the present appeal it must be taken to be absolutely true that the Burrows brothers are indebted to Mrs. Merrifield and to the company in the amounts stated, and it must be presumed that she and the company will recover judgments therefor, and, there being no other property available for the collection of those judgments, it must be assumed that Mrs. Merrifield will take steps to cause her judgment to be made out of the stock pledged to her, and that the company will levy upon those shares of stock to make its judgment, and that the Burrows brothers will either find other means to pay for their stock or will cease to be stockholders in this corporation. If they cease to be stockholders, there will be no difficulty in disposing of this suit. If they find means to pay these debts and become possessed of their certificates of stock and no change occurs in the feeling of the different parties towards each other, a serious question will arise as to.what shall be done with the receivership, but meanwhile the property and business will have been preserved for the just and equal benefit of all. We do not think it necessary to solve uncertain problems now. We think it was the duty of the court below to preserve this valuable property and business from the destruction which was impending because of the equal ownership of its stock between two warring factions. The holding of a stockholders’ meeting is only enjoined until the further order of the court. No doubt an order permitting a stockholders ’ meeting will be granted whenever it is shown that for any reason a board of directors can be elected. The bill does not seek to prevent a majority of the shares from controlling the business of the company. The case made is that those owning exactly one-half of the shares, but with comparatively slight financial interest therein, are seeking to ruin the business of the corporation, and thereby to ruin those who own one-half of the shares and who have possession of the certificates for the other one-half of the shares with a large equitable and financial interest therein. The object of the bill is to preserve the property and business and credit of the company for the benefit of every shareholder alike. If a court of equity is powerless to grant this relief, then those who own far the largest financial interest in this corporation are without any remedy except an unconditional surrender to such terms as the Burrows brothers may impose.

The orders appealed from are therefore affirmed.

Affirmed.


source: Caselaw Access Project

author: Mr. Presiding Justice Dibell

license: Public Domain

text:
    The People of the State of Illinois, Defendant in Error, v. Andrew A. Strauch, Plaintiff in Error.
    Gen. No. 5149.
    1. Appeals and errors—-when abstract insufficient to present for review overruling of motion to quash. An abstract should show the contents of the indictment to enable the court to determine from such abstract and without an examination of the record, the propriety of the action of the trial court in overruling a motion to quash.
    2. Bill op exceptions—when party not entitled to. A party cannot at one term have a bill of exceptions, preserving evidence heard upon some preliminary motion, and an exception to the action of the court thereon, at some former term.
    3. Bill op exceptions—when essential. What occurred in the presence of the court at the trial of a cause will not be preserved for review by affidavit, but a bill of exceptions must be employed for that purpose.
    4. Indictments—how cannot be impeached. Alleged conduct of the judge who presided over, the grand jury charged as improper and as affecting the validity of the indictment, cannot be shown by the affidavit of attorneys as to "what such judge said to them, nor by affidavits of grand jurors as to what occurred in the grand jury room.
    5. Indictments—when affidavits of grand jurors competent. Affidavits of grand jurors as to what occurred during the deliberations of the grand jury are competent to support an indictment.
    6. Indictments—effect of written motion to quash. A written motion to quash urging specific grounds, operates to waive points not specifically assigned.
    7. Indictments—what not essential to validity. It is not essential to the validity of an indictment that it be signed by the state’s attorney.
    8. Indictments—when motion to quash should not be permitted. It is improper to permit a motion to quash to be interposed based upon a technical ground after a plea of not guilty has been interposed and the Statute of Limitations has barred the offense charged in the indictment.
    9. Grand jury—appropriate method of instructing. The grand jury should only be instructed in open court; instructions by the judge delivered in the grand jury room are irregular but such irregularity will not vitiate all indictments subsequently rendered by such grand jury and no indictment "will be quashed in the absence of a showing of prejudice resulting.
    10. Jurors—when challenge for cause properly overruled. If the answer of a juror furnishes ground for challenge for cause, a challenge for cause is properly overruled if such juror hy subsequent answers makes it clear that his first answer was given under a misapprehension.
    11. Libel—when publication libelous per se. An article which charges a state’s attorney both directly and indirectly with corruption and gross abuse of his office, is libelous per se.

    12. Libel—what not competent in criminal prosecution. In a prosecution for a criminal libel a letter addressed to the defendant, written hy a witness prior to the publication of the libel, is not competent to show the hostility of the witness, where the witness admits he is hostile.
    13. Libel—what not competent to aid construction of. A defendant should not he permitted to testify to what he meant by the use of certain libelous expressions. The article is to be judged, not by the secret meaning that the writer had in his own mind nor hy the meaning which he might afterwards be willing to attribute to it, but by the sense in which ordinary readers of his newspaper would understand it.
    14. Libel—:what proof not essential in criminal prosecutions. The burden of proving the falsity of the libelous statements is upon the defendant.
    15. Libel—when refusal of instruction as to credibility of defendant not ground for reversal. Held, under the evidence in this case, that it was not reversible error to refuse to give a correct instruction as to the credibility of the defendant, notwithstanding the substance of such instruction was not contained in any other given instruction.
    Prosecution for criminal libel. Error to the Circuit Court of Ogle county; the Hon. James S. Baume, Judge, presiding.-
    Heard in this court at the April term, 1909.
    Affirmed.
    Opinion filed March 11, 1910.
    Rehearing denied April 13, 1910.
    E. E. Wingert and Franc Bacon, for plaintiff in error.
    Ralph E. Eaton and W. J. Emerson, for defendant in error.
   Mr. Presiding Justice Dibell

delivered the opinion of the court.

In and after June, 1907, Andrew A. Strauch, plaintiff in error, was the editor of a newspaper published in Carroll county, and he wrote and published in the issue of said newspaper for June 26, 1907, an article concerning Franklin J. Stransky, the state’s attorney of said county. He published another like article on another date. On November 20, 1907, the grand jury of said county returned an indictment against said plaintiff in error, charging him with a criminal libel against said state’s attorney in the writing and publishing of said article. The court then entered an order finding Stransky interested as a witness in said cause and appointing Ealph E. Eaton, an attorney at law, to prosecute said cause. At the March term, 1908, of said court, a motion by plaintiff in error to quas'h the indictment was heard and denied. Thereafter at said term, on motion of plaintiff in error, the venue of the cause was changed to Ogle county. At the April term, 1908, of the Circuit Court of Ogle county a plea of not guilty was entered, the cause was tried, and the jury disagreed. At the January term, 1909, plaintiff in error asked leave to amend his former motion to quash the indictment, and that motion was heard and denied. Thereafter the attorney for The People elected to prosecute plaintiff in error upon the first, second, third and seventh counts of the indictment, each founded on said article of June 26, 1907. The cause was then tried and plaintiff in error was found guilty as charged in said four counts. Plaintiff in error moved for a new trial, which was denied, and moved in arrest of judgment, which was denied. He was fined $300 and the costs, and ordered to stand committed till fine and costs were paid. Plaintiff in error has sued out this writ of error to review said judgment, and contends that the court erred in refusing to quash the indictment, in refusing leave to amend the motion to quash the indictment, and in certain rulings upon the admission of testimony and upon the giving and refusal of instructions.

The motion to quash the indictment was in writing and stated the specific grounds, ten in number, upon which the motion was based, viz.: (1) that the matters in the indictment stated did not constitute a crime; (2) that the indictment did not inform plaintiff in error of the nature of the accusation; (3) that the indictment did not constitute due process of law; (4) that -the statute under which the indictment was found was contrary to the fourteenth amendment to the Constitution of the United States in certain specified particulars; (5) that the grand jury was not drawn and selected in the manner provided by the statute; (6) that the grand jurors, except the foreman, were not sworn according to law; (7) that before the grand jury was impaneled the grand jurors were approached by persons adverse to plaintiff in error and advised as to the course to pursue to obtain said indictment; (8) that the grand jurors acted from political motives and for personal purposes and not from evidence produced before them; (9) that persons, other than the grand jurors, witnesses, state’s attorney and his assistants, strangers to the workings of said grand jury, were present in the grand jury room during the deliberations of the grand jury on this indictment and influenced the grand jury to bring in this indictment; and (10) that the indictment was informal, insuEcient and uncertain.

So far as said motion to quash is based upon the form and contents of the indictment no question is presented for our decision, for, although the indictment is exceedingly lengthy, covering seventy-seven closely typewritten pages of the record, and giving a very full statement of all the facts and circumstances to which the libel referred, yet the abstract contains only the word “indictment,” and in an index to the abstract a statement of the first and last pages whereon it may be found. Rule 16 of this court, 137 Ill. App. 625, requires the abstract to be suEciently full to present every question raised. As no part of the indictment is contained in the abstract, we must treat the motion to quash the indictment as properly overruled, so far as that motion was based upon the form and supposed insufficiency of the indictment.

So far as the motion was based upon the manner in which the grand jury was drawn, selected and sworn, and upon the charge that the grand jurors were approached before they were impaneled, and that they acted from political and personal motives and not from evidence, there is nothing in the record to support these points.

The ninth point is the only one brought before us by the record. Upon that point affidavits were presented in support of and against said motion, and in order to preserve for review the action of the court upon that evidence, it was necessary to take a bill of exceptions, setting out the evidence heard, and an exception to the ruling of the court. The motion to quash was denied on March 6, 1908, but plaintiff in error did not then present a bill of exceptions containing the evidence and an exception to the ruling of the court, nor did he at that term ask leave to do so. The leave to present a bill of exceptions was obtained in the Circuit Court of Ogle county on February 8, 1909, after plaintiff in error had been twice tried and had been convicted and judgment had been pronounced against him. The leave was general, and must be understood to have referred only to the matters occurring during that trial at that term. A party cannot at one term have a bill of exceptions, preserving evidence heard upon some preliminary motion, and an exception to the action of the court thereon, at some former term. Guyer v. D. R. I. & N. W. Ry. Co., 196 Ill. 370; Grand Pacific Hotel Co. v. Pinkerton, 217 Ill. 61, 83; Cella v. C. & W. I. R. R. Co., 217 Ill. 326. It follows that in our opinion the evidence heard upon the motion to quash by the Circuit Court of Carroll county at the March term, 1908, is not properly in this record.

Assuming, however, that this evidence is properly in the bill of exceptions, the most of it is incompetent, and if The People had not presented affidavits, there would have been no competent testimony in support of the charge. The claim is that while said grand jury was in session, and before they voted this indictment, the then presiding judge went into the grand jury room and delivered to the grand jury a written charge upon the subject of criminal libel, and that he was in fact prejudiced against plaintiff In error. To support this charge were the affidavits of the attorneys for plaintiff in error that the judge told them that he went to the grand jury room and there delivered to the grand jury a charge upon the law of criminal libel, and also the affidavits of two grand jurors that the judge came to the grand jury room and delivered such a charge. The proof of what the judge said to the attorneys was mere hearsay, and was incompetent.. Affidavits of grand jurors cannot be used to impeach any indictment returned by that body. Gitchell v. People, 146 Ill. 175. The affidavits of grand jurymen offered by plaintiff in error were therefore incompetent to show any circumstances occurring in the grand jury room which would tend to invalidate the indictment. Affidavits of grand jurors, however, may be received in support of an indictment returned by that body, and The People introduced affidavits of two grand jurors in support of the action taken. From these affidavits it appears that after the grand jury had heard the evidence upon this charge, but before they had discussed the matter with each other or voted upon the question of finding an indictment, a motion was made by a grand juror, and carried, that the foreman request the presiding judge to attend and instruct the jury as to the law governing criminal libel; that the presiding judge, in response to said request, went to the grand jury room where that body was in session, and there made to them a statement of the law applicable to the subject of criminal libel; that he did not name plaintiff in error or the state’s attorney or any person or party, nor did any grand juror name any person to him; that he expressly told the grand jury that he was not referring to any case pending before them nor to any facts that might be before them in any ease, and told them that his instructions only applied in general to the law of criminal libel, and concerned the law only, and had no application to any facts in any case which they might be investigating or might afterwards investigate, and that his instructions, or his presence there, should have no influence upon the grand jury one way or the other in any case which might be pending before them; that said judge did not by word or act manifest any prejudice or bias against any person; that he did not express any opinion in regard to any fact relating to any matter before said grand jury, and that said judge was not present at any time while the grand jury were deliberating or voting upon the question of returning an indictment against plaintiff in error. These affidavits, presented by The People in support of the indictment, bring into the record the -fact that the trial judge, at the request of the grand jury, went into the grand jury room and there gave them a general charge upon the law of criminal libel; and plaintiff in error is entitled to whatever result flows from that proof so introduced.

Although the course pursued has the support of Hall v. State, 134 Ala. 90, it will be assumed for the purposes of this decision that it is the meaning of our statute that the grand jury shall be charged by the presiding judge in open court after it has been impaneled and before it retires to the grand jury room to hear evidence and deliberate upon charges presented, and that it was an irregularity for the judge to go to the grand jury room and" there deliver a charge to the jury; and that the proper course would have been, upon receiving a request from the grand jury for a charge upon a particular subject, to cause the grand jury to be brought into open court and there deliver the charge. But the fact that an irregularity occurred in a grand jury room is not necessarily a ground for quashing all or any of the indictments returned by that body at that term. State v. Brewster (Vt.), 42 L. R. A. 444. The material question is whether plaintiff in error was injured or prejudiced by the course pursued, under the facts of this particular case. The cases cited, where a trial judge went to a petit jury room and communicated with the petit jury while it was deliberating upon a case, or sent additional instructions to a petit jury room, are not in point. Each party to a ease tried by a petit jury has a right to be present and to be heard at all stages of the proceeding. He has a right to have every communication to the petit jury made in open court, in order that he may be present and may be heard upon any subject presented, and, if additional instructions are to be given upon any subject, may embody and present his views of the law in instructions and request that they be given, and may take exception to all instructions or other communications to the jury which he deems against his interest. Although the grand jury are to be charged in open court and therefore every person who has been bound over to the grand jury or who knows or suspects that a charge against him is to be presented to the grand jury, has a right to be present' in open court when the grand jury are to be charged, yet he derives no benefit from that presence. It is assumed by plaintiff in error in argument here that he could have taken and preserved an exception to the charge in this case if it had been delivered in open court. We are not cited to any statute or decision or rule of practice which permits any one to take and preserve any exception to the charge to the grand jury. Even if the charge should erroneously state the law, no advantage of that error can be taken at that time. The only remedy of the accused is to properly present the law after he has been indicted, by motion to quash or at the trial, and to except if the court improperly holds the law against him. If the presiding judge had called this grand jury into open court, there was nothing requiring the court to notify, or secure the attendance of, plaintiff in error, who did not live at the county seat, and there is nothing to show that he then had counsel, and it is only a remote conjecture that if that course had been pursued plaintiff in error or his counsel might have been present and might have heard the charge. Again, the proofs presented upon this motion did not show that the presiding judge was informed what case it was which caused the grand jury to desire instructions upon the law of criminal libel. The record does not show that this was the only complaint of that kind pending before that grand jury. The proof is clear that no- case and no names and no facts were mentioned by any one while the judge was before the grand jury. The charge related generally to the law of criminal libel. The jury were expressly told that the charge had no relation to any facts in any case that might be before them. Again, the presiding judge took the precaution to deliver a written charge. No effort seems to have been made to procure that written charge and to have it embodied in the bill of exceptions. Nothing was proved tending to show that the charge was anything other than a correct statement of the law. It must be assumed under this showing that the judge did state correctly to the jury in general terms the law relating to criminal libel. We see nothing in the competent proofs introduced on this subject which tends in any degree to show that plaintiff in error was or could have been prejudiced by the course pursued. It is worthy of note in this connection that this offense was but a misdemeanor; that no action of a grand jury was needed, but that an information could have been filed in the county court without any action by the grand jury; and that in such a case it is specially proper that a mere irregularity in finding the indictment should not defeat it. McElhanan v. People, 92 Ill. 369. The motion to quash the indictment was heard by a judge other than the one who delivered this charge. We conclude that it was properly overruled.

The motion to quash was overruled on March 6, 1908. On May 5,1908, after the denial of another dilatory motion, plaintiff in error pleaded not guilty, and he was then tried and the jury disagreed. On January 19, 1909, just before the commencement of the second trial of the cause, plaintiff in error entered a motion for leave to amend his written motion to quash the indictment by adding thereto an eleventh special ground for said motion. The eleventh ground proposed to be added was in writing and very lengthy. The substance of it was that when the grand jury heard the evidence upon which they returned this indictment, the state’s attorney was not only a witness against plaintiff in error, but acted in his official capacity as state’s attorney and was present when the grand jury deliberated upon the evidence and found the indictment. In support of this motion, plaintiff in error presented an affidavit by one of his counsel in which he stated that the indictment must have been found upon the testimony of the state’s attorney or must have been due to his efforts in the grand jury room during ¿the hearing of the evidence and the deliberations of the grand jury upon this case. This was a mere conclusion. Plaintiff' in error also called the state’s attorney as a witness in support of the motion, and he testified that he signed the indictment; that he testified before the grand jury on this charge; that he was not present when any other witness testified upon this charge, and that he did not act as state’s attorney while this charge was heard by the grand jury, and that he did not advise the grand jury as to the law nor say anything to the grand jury as to the facts, except as a witness when called in by the grand jury. The court denied the motion for leave to amend the motion to quash, and that ruling is assigned for error. When this motion was made, heard and denied, there was a plea of not guilty pending. Plaintiff in error did not offer to withdraw the plea of not guilty. The point was specially made that the motion could not be entertained while the plea of not guilty was pending, but still plaintiff in error did not withdraw that plea. The motion was equivalent to a renewal of the motion to quash upon a new ground, and that motion could not be entertained after a plea of not guilty had been interposed without first obtaining leave to withdraw the plea, which leave it would be in the sound judicial discretion of the court to grant or refuse. If the original motion to quash had not been in writing, every point which could be made would have been included. When plaintiff in error put his motion in writing and assigned specific points, we think he should be held to have waived those points which he did not specify and which were not based upon the face of the indictment. It is held in regard to motions for a new trial that the specification of particular grounds is a waiver of all other grounds. Yarber v. C. & A. Ry. Co., 235 Ill. 589, and Chicago City Ry. Co. v. Smith, 226 Ill. 178, and cases there cited. We see no reason why this rule should not apply to a written motion to quash an indictment. The doctrine of waiver is applied in criminal cases. In McKenney v. People, 2 Gilm. 540, 556, a murder case, the court said: “A prisoner on trial, under our laws, has no right to stand by and suffer irregular proceedings to take place, and then ask to have the proceedings reversed on error on account of such irregularities. The law, by furnishing him with counsel to defend him, has placed him on the same platform with other defendants, and if he neglects in proper time to insist on his rights, he waives them.” Bulliner v. People, 95 Ill. 394; Graham v. People, 115 Ill. 566; Bruen v. People, 206 Ill. 417; Nagel v. People, 229 Ill. 598; Warren v. Glynn, 37 N. H. 340. This is especially true in misdemeanors. Brewster v. People, 183 Ill. 143; Paulsen v. People, 195 Ill. 507. The matter set forth in the eleventh ground has therefore been waived. Again, the fact that the state’s attorney signed the indictment and that he acted as state’s attorney at that term of court was as well known to plaintiff in error at the time the motion to quash was made as when the motion to amend was made. As two grand jurors made affidavits in support of the motion to quash, it is obvious that plaintiff in error could have learned from them at that time what action, if any, in regard to this case, the state’s attorney took before the grand jury. If the point had been made in the original motion to quash and had been sustained and the indictment quashed, another indictment could then have been obtained, but when the motion to amend was made, a new indictment could not have been sustained against plaintiff in error because of the statute of limitations. We do not approve of the course pursued in this case. We are of opinion that a special state’s attorney should have been appointed before the matter was presented to the grand jury. But the proof presented by plaintiff in error upon the motion to amend showed that the principal allegations of said proposed amendment were not true. The state’s attorney did not attend before the grand jury when any witness upon this charge was examined except himself. He did not give the grand jury any advice or instructions upon this case. The only important point stated in the proposed amendment and sustained by the proof is that the state’s attorney signed the indictment. That was well known to plaintiff in error when he made the original motion to quash. Its bearing upon the case could not have failed to be known to counsel for plaintiff in error. Plaintiff in error voluntarily waived that point when he omitted it from the grounds set forth in his original motion to quash. The record shows that he was furnished with a copy of the indictment before he entered his plea of not guilty.

But is the signature of the state’s attorney essential to the validity of an indictment in this state? Our attention is not called to any constitutional or statutory requirements, or decision by our Supreme Court, that in this state an indictment must be so signed. In 10 Ency. of Pleading & Practice, 446, it is said that at common law the signature of the prosecuting officer was not necessary to the validity of an indictment, and that this is the rule in those states of the Union where such signature is not required by statute; but that it is a formality in criminal procedure which, from long-use, it would he well to follow. To the like effect is 10 Am. & Eng. Encyc. of Law, 1st ed., 505. The authors of the article on Indictments and Informations in 22 Cyc. state their conclusion from many authorities thus, on page 251: “Although the signature of the public prosecutor is usually attached to an indictment, it forms no part of it, and, in the absence of a _statute, is in no manner essential to its validity.” Many authorities are cited in the three works just referred to. In 1 Bishop’s New Criminal Procedure, sec. 702, the rule is stated that the validity of the indictment comes wholly from the grand jury’s finding, and no endorsement by counsel for the government is required. In Joyce on Indictments, sec. 447, it is said that, in the absence of a statute, it is not essential to the validity of an indictment that it should be signed by the public prosecutor, but it is sufficient if the indictment is found by the grand jury and endorsed by the foreman. Moore’s Criminal Law, 675, note 3, says: “It is usual and customary for the state’s attorney to subscribe the indictment, but this is not legally essential to its validity.” In State v. Reed, 67 Me. 127, the court said it knew of no rule of the common law and no statute of that state which made such countersigning by the public prosecutor essential to the validity of an indictment. In Commonwealth v. Stone, 105 Mass. 469, where there was a conviction of a misdemeanor under an indictment which was not ■ signed, endorsed or countersigned by the district attorney, the court said: “The usual and proper practice is, that the prosecuting officer shall countersign indictments ; but there is nothing in the statutes requiring it, and we do not think it is indispensable to the validity of an indictment. It has been so held in New Hampshire. State v. Farrar, 41 N. H. 53. The bill is to be found by the grand jury and therefore the signature of the foreman is necessary. Webster’s Case, 5 Greenl. 432; State v. Squire, 10 N. H. 558; State v. Freeman, 13 N. H. 488. But the prosecuting attorney acts independently of the grand jury, and not as a part of that body.” In re Lane, 135 U. S. 443, was habeas corpus to release a prisoner convicted in the United States District Court under an indictment signed by an assistant United State's attorney. It was held that as the indictment was found by the grand jury, and endorsed as a true bill by the foreman, and filed in open court according to law, there was no error, and certainly none which went to the jurisdiction of the court. In Cross v. People, 66 Ill. App. 170, we affirmed a judgment of conviction of a misdemeanor, where the indictment was not signed by the state’s attorney, holding that at most the signing by the state’s attorney was a mere matter of form, and that it was waived by a failure to move to quash the indictment. An examination of the common law and statutory forms of indictments will show that they do not profess to be the act or presentment of the state’s attorney. They are the presentment of the grand jury, attested by the endorsement of their foreman. The purpose of the signature of the state’s attorney seems to be to show the grand jury that he has prepared the instrument, and approves and vouches for the correctness of its form. His signature does not make it an indictment. It becomes an indictment when the prescribed number of grand jurors have agreed to the finding, and an endorsement “a true bill” thereon has been signed by the foreman, and the grand jury has presented the instrument in open court. We therefore conclude that not only was it proper to refuse to permit plaintiff in error to raise this point for the first time after a plea of not guilty and after the statute of limitations had run against the offense, but also that the indictment is not defective because not signed by a specially appointed and disinterested prosecutor.

The article upon which the first, second, third and seventh counts are based is too lengthy to be reproduced here: We think it unnecessary to extend this opinion by analyzing the different charges and insinuations therein made against the state’s attorney of Carroll county concerning his acts and omissions in his official capacity. ' We deem it sufficient to say that, partly in direct language and partly by thinly veiled insinuation, it accuses him of favoritism, of prosecuting some offenders and screening others of the same class who were equally guilty; of causing himself to be employed to assist in the prosecution of the bridge trust in another county for the purpose of becoming so possessed of the facts concerning the unlawful methods of said bridge trust that he could compel the bridge trust to bribe him not to prosecute it in Carroll county; that in consequence thereof he had been richly remunerated by the bridge trust and that therefore it would not be prosecuted in Carroll county. It is clear that it in many ways charged the state’s attorney, both directly and by insinuation, with gross abuse of his office of state’s attorney. It was therefore libelous per se. If those allegations were true, that was an affirmative defense to be proved by the plaintiff in error. Fuller v. People, 141 Ill. App. 374, 238 Ill. 116. There is no evidence whatever of the truth of any of these charges. It was admitted that plaintiff in error wrote and published the article; it attributed to the state’s attorney gross misconduct in office, and was clearly libelous; and no effort was made to prove that the allegations were true. Plaintiff in error therefore was admitted to be guilty, and no defense was attempted. The sentence was mild, considering the gravity of the charges. No slight inaccuracies at the trial ought to disturb the verdict.

During the trial the state’s attorney was a witness on behalf of the prosecution, and, on cross-examination, he was shown an open letter addressed to plaintiff in error, which he admitted he wrote and caused to be published some eight months before the publication by plaintiff in error here complained of. Plaintiff in error offered that letter in evidence, and the court sustained an objection to the offer. The letter was ' published long before the publication here complained of. It did not relate to the same subject-matter. If this had been a civil suit by the state’s attorney to recover damages from plaintiff in error, it may be it would have been admissible in mitigation of damages only. If in this criminal case it had been the duty of the jury to fix the punishment, it may be it should have been admitted on the ground that it might be considered by the jury as constituting such provocation as would require a lesser punishment than would otherwise be inflicted. But the jury were only authorized to determine the guilt or innocence of plaintiff in error. The open letter in question had no tendency to show the defendant’s innocence. It could not authorize his acquittal. There was only one purpose for which it could be competent. The state’s attorney had been a witness for The People and if he had claimed to be not unfriendly to plaintiff in error, this letter would have been competent to show that he was hostile to plaintiff in error. But he admitted that hostility on cross-examination before this letter was offered, and that, while he had not been friendly with plaintiff in error since he learned of the connection of plaintiff in error with the bridge trust (Strauch v. People, 144 Ill. App. 283; People v. Strauch, 240 Ill. 60), still he did not like plaintiff in error before that. After this admission by the state’s attorney on cross-examination, we think the court was not obliged to admit the open letter in evidence for the purpose of showing that the witness was unfriendly to the plaintiff in error. The open letter related to many different subjects and was couched in terms which were bitter, unless the charges of the open letter were true. It could hardly have been avoided that the introduction of the letter would have been followed by an effort to prove the truth of its allegations so as to ascertain the extent of the hostility to plaintiff in error exhibited thereby. This letter shows on its face that it was in answer to a prior letter from plaintiff in error to the state’s attorney. The offer of that prior letter would have followed, and would have been apt to lead the case far from the case actually on trial. Davison v. People, 90 Ill. 221. We are of opinion that the court did not err in refusing to admit the letter. Plaintiff in error was asked by his counsel to state what he meant by one of the expressions contained in his publication of June 26, 1907. The court sustained an objection to the question. The article was to be judged, not by the secret meaning which the writer had in his own mind nor by the meaning which he might afterwards be willing to attribute to it, but by the sense in which ordinary readers of his newspaper would understand it. But if he should have been permitted to answer the question, that ruling alone should not reverse the judgment, for this was only one of many libelous expressions in the article.

It is contended that most of the instructions given at the request of The People were erroneous and that most of the instructions requested by the plaintiff in error, which the court refused, should have been given. A reading of all the instructions given, as one entire charge, satisfies us that the law was laid down with substantial accuracy and that the court gave to the jury everything to which the plaintiff in error was entitled, unless it be the proposition contained in refused instruction No. 14. Some of the instructions requested by plaintiff in error and refused were embodied in others which were given. Others of the refused instructions sought to cast upon The People the burden of proving the falsity of the libelous statements, whereas their truth was an affirmative defense and to be proved by plaintiff in error, as held in People v. Fuller, supra. Several of the refused instructions sought to single out fragments of the article, detached from the context. Others still were so plainly incorrect as not to require any discussion. The fourteenth refused instruction stated that plaintiff in error was a competent witness in Ms own behalf and that Ms testimony should not be discredited from caprice or because he was the party charged, but that Ms testimony was to be treated the same as any other witness and subjected to the same tests legally applied to other witnesses, and that, wMle the jury had the right to consider his interest in the result, yet they also had the right and duty to take into consideration the fact, if such was the fact, that he had been corroborated by other credible evidence or by facts and circumstances proved on the trial. Plaintiff in error was a witness in his own behalf and this instruction was a correct statement of the law applicable generally to the testimony of a party, and it was not embodied in any given instruction. But plaintiff in error did not testify to any material facts. He testified to nothing which could have influenced the verdict. He was not corroborated in any material part of his testimony upon any point in dispute by any other evidence or by facts and circumstances proved on the trial. The substance of Ms testimony was only that a few isolated charges, the least serious of those contained in the article, were published by him in good faith. His good faith was not material, unless the charges were also true, and even if he had been acquitted as to those isolated charges .referred to in the testimony of plaintiff in error, he must still have been convicted upon the other defamatory charges contained in the article. We therefore conclude that it was not reversible error to refuse instruction No. 14, although the instruction was approved under different circumstances in McElroy v. People, 202 Ill. 473, and Schultz v. People, 210 Ill. 196.

Upon the motion for a new trial it was contended that the court erred in overruling a challenge by plaintiff in. error of the juror Hornicke. An affidavit set forth that said juror was asked what the form of his verdict would be if after hearing the evidence he had a reasonable doubt “of the sufficiency of the proof showing his guilt beyond a reasonable doubt,” and he answered “as I understand it ‘guilty’.” He was then asked whether he would find plaintiff in error guilty or not guilty if the evidence should preponderate in favor of The People, but should not be sufficient to satisfy the juror of the guilt of plaintiff in error beyond a reasonable doubt, and he answered, “Not guilty, I should think.” Then followed the challenge for cause, which the court denied. It is evident that the first answer was given from a misapprehension of a somewhat involved question, and that the second answer removed all ground for challenge. The court properly overruled the challenge. Plaintiff in error then challenged the juror peremptorily and he did not sit in the trial. Moreover, the trial judge does not certify that these questions were put, these answers made, a challenge for cause overruled, and that plaintiff in error excepted. These alleged occurrences were shown only by affidavit, filed in support of a motion for a new trial. That which occurred in the presence of the court at the trial cannot be preserved for review by affidavit. Peyton v. Village of Morgan Park, 172 Ill. 102; Gallagher v. People, 211 Ill. 158, 171; C. R. I. & P. Ry. Co. v. Ross, 136 Ill. App. 518.

We find no reversible error in the record and the judgment is therefore affirmed.

Affirmed.


text:
    Altje Wiltz, Plaintiff in Error, v. Lewis Classen, Defendant in Error.
    Gen. No. 5,161.
    1. Appeals and errobs—when judgment presumed supported by evidence. In the absence of a bill of exceptions purporting to contain all the evidence heard or entitled to he considered by the trial judge, the presumption will prevail that the judgment was supported by the evidence.
    2. Replevin—when claims of true owner denied on grounds of ptiblic policy. Where two parties are engaged in an unlawful transaction, and in the accomplishment of an illegal purpose and one which is contrary to good morals and public policy one obtains possession of property claimed by the other, the law will not aid either party, but will leave the parties in • the situation in which they have placed themselves.
    Replevin. Error to the Circuit Court of vWoodford county; the Hon. G. W. Patton, Judge, presiding.
    Heard in this court at the April term, 1909.
    Affirmed.
    Opinion filed March 11, 1910.
    Barnes & Magoon, for plaintiff in error.
    J. A. Riely and Thomas Kennedy, for defendant in error.
   Mr. Presiding Justice Dibell

delivered the opinion of the court.

Lewis Classen, on or about March 1, 1906, sold a stallion to certain parties for $1,400 taking separate notes from the several buyers aggregating that sum. The notes were dated March 1, 1906, were due in one year, and were payable to Classen. Altje Wiltz claimed that he had bought this and several other stallions from Classen in the barn of the latter at Minonk, Illinois, on January 5 or 6, 1906, and that the notes given for this horse were his property. He brought this suit in replevin against Classen to recover possession of the notes, and failing to get them by the writ, added to his declaration in replevin a count in trover. Afterwards the notes (except two, aggregating $250 which were not in the possession of either party), were deposited with the clerk of the court, there to remain, with their proceeds if collected, to abide the final judgment in the case. It was stipulated that the case was to be treated as if the notes had been obtained upon the writ, that a proper declaration in replevin should be considered filed, that any defense be allowed that could be properly pleaded, and that a jury be waived. The cause was tried by the court without a jury, and there was a finding that Classen was entitled to the possession of the notes as against Wiltz. There was a judgment against Wiltz for the costs, except one-half of a certain item. Wiltz has sued out this writ of error to review said judgment.

It is not argued that the court erred in any ruling upon the admission of evidence or upon propositions of law. The assignments of error upon those subjects are therefore waived. The only question argued is whether the judgment is so clearly against the weight of the evidence that it should be reversed. The record discloses two reasons why the judgment must be affirmed.

1. The week before the trial of this cause a suit brought by Wiltz against Lewis Classen and his father and surety, Klaas Classen, upon a certain $1,500 note, had been tried before the same judge, in which suit Lewis Classen had filed a plea of set-off which involved to some extent the same subject-matter as this suit, and had filed a bill of particulars under said plea. At the commencement of the trial of the present suit it was stipulated by the parties that “as the trial court heard the evidence in the case of Altje Wiltz v. Lewis Classen and Klaas Classen this court, in considering the present case, may take into consideration any evidence given in said former case which the court deems competent under the-issues in this case.” In the bill of exceptions, after the evidence which it contains, is the recital: ‘ ‘ The foregoing was all the evidence and testimony in this case.” It does not purport to contain any of the evidence introduced at the trial of the former case. None of the evidence is contained in this bill of exceptions. It is said now that some remarks made by counsel just before Wiltz closed his case in chief waived that stipulation. That conversation was only to the effect that either party could have such parts of the testimony at the other trial as he desired written up by the reporter and put it in evidence. There was no retraction or modification of the former stipulation that the trial judge, who had tried the former case the week before, might take into consideration any evidence in the' former case which he deemed competent under the issues in this case. We think it plain that the later conversation between counsel was not intended to modify the stipulation under which this trial was had. The judgment of the court below is presumed to be proper till the contrary is shown by the party who seeks its reversal. Hence, if the evidence heard at this trial does not sustain the judgment, we must presume in its support that the evidence heard at the other trial by the same judge was considered, and authorized this judgment.

2. The proof introduced by Classen in defense was to the effect that Wiltz was a resident of East Fries-land, Germany; that for several years Wiltz had been engaged in the business of buying stallions in Europe, importing them to this country and selling them here; that in 1903 a statute was enacted which enabled a citizen of the United States to import stallions for breeding purposes without paying the duty of twenty-five per cent of their value imposed upon stallions imported by foreigners; that Wiltz, not knowing this, imported a lot of stallions in 1904 in his own name, upon which his brokers in New York were compelled to pay a duty of $1,285.25; that afterwards an arrangement was made between Wiltz and Classen, by which Classen made a false claim to the United States that these were his horses and imported by him for breeding purposes and therefore not subject to duty, and the duty was refunded by a check payable to Wiltz, but sent to Classen and by him delivered to Wiltz. It was then agreed between Wiltz and Classen that Wiltz should thereafter buy stallions in the name of Classen and import them in the name of Classen and thus avoid payment of the duty. A paper stating that Wiltz was buying horses abroad for Classen was executed by Classen and lodged in the New York Custom House. In 1905 Wiltz bought in France a lot of stallions in the name of Classen, paid for them with his own money as before, took the pedigrees in the name of Classen, consigned them to Classen, wrote Classen to meet him in New York, and gave him certain directions in regard to their shipment from New York to Minonk. Classen did meet Wiltz at New York. Wiltz paid the brokerage. The horses were shipped to Minonk and were advertised for sale there and elsewhere in the name of Classen, and the horse here in question was-sold by Classen as his own property, the notes therefor were made payable to Classen and he gave a personal written guarantee of the horse. The evidence introduced by Classen was to the effect that Classen never owned any of these horses, that they always belonged to Wiltz, and Classen was only the employe and agent of Wiltz in holding, advertising and selling them, and that the transaction was conducted in the name of Classen to avoid the payment of the duty. Wiltz testified that though it was his money which bought this second shipment of horses, yet that he bought them solely as the agent of Classen, and that after they reached Minonk Classen could not pay him and so he then bought them from Classen on January 5 or 6, 1906, in Classen’s barn at Minonk. He does not claim that any money or papers passed, or that the pedigrees were transferred to him, nor did he take possession of the horses. Classen thereafter kept the horses, and advertised and sold them in his own name, with the knowledge of Wiltz. Classen denied that he sold them to Wiltz in his barn, and denied that he had ever owned them. He refused to turn over these notes till certain controversies were settled concerning commissions and expenses claimed by Classen and concerning the $1,500 note, which was the subject of the other suit, and which had been given in some transaction concerning the horses imported by Wiltz in 1904. But being sued for the possession of the notes, he set up that they were given in a transaction which was being' so conducted for the purpose of defrauding the government of the United States out of the revenue to which it was by law entitled under the real facts. There were incidental facts and circumstances and certain letters not here mentioned which tended to support the version of the transaction given by Classen. The trial judge below believed Classen. We cannot say that he should have believed Wiltz instead. On the contrary, we find that the preponderance of the evidence supports that defense. It is suggested that the fraud is past, and that the notes are not connected therewith. If Wiltz had advertised and sold the horses in his own name and had taken notes to himself therefor, the revenue officials might have ascertained the facts and enforced the payment of the duty and prosecuted those guilty of the fraud. To carry out the scheme safely, it was at least wise if not essential to have the horses sold by Classen as if he were the real owner. The notes were taken as a part of the plan by which the United States was defrauded of the duty. Where two parties are engaged in an unlawful transaction, and in the accomplishment of an illegal purpose and one which is contrary to good morals and public policy one party obtains possession of property claimed by the other, the law will not aid either party, but will leave the parties in the situation in which they have placed themselves. Miller v. Marckle, 21 Ill. 151; Kirkpatrick v. Clark, 132 Ill. 342; Bishop v. American Preservers Co., 157 Ill. 284; McNulta v. Corn Belt Bank, 164 Ill. 427; Cook v. Meyers, 166 Ill. 282; Jolly v. Graham, 222 Ill. 550. Therefore, although Wiltz is the true owner of these notes, yet as the court below found from the greater weight of the evidence that the title to the notes was placed in Classen as a part of a scheme to which they were both parties by which the government was defrauded, the court below properly refused its aid to the plaintiff.

The judgment is therefore affirmed.

Affirmed.