text:
    Henry Voge et al. v. Charles F. Breed et al.
    1. Estoppel by judgment. — Where it- is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be as to the point or question actually litigated or determined. The former verdict is conclusive only as to facts directly and distinctly put in issue, and the finding of which are necessary to uphold the judgment; it is not conclusive as to facts which may be in controversy, but which rest in evidence and are purely collateral.
    2. Ascertaining what has been decided. — In ascertaining what lias been decided, the actual judgment of the court must be consulted rather than the reasons urged in its support.
    3. Estoppel by conduct. — Where an act is done or a statement made by a party which can not be contradicted or contravened without fraud on his part and injury to others whose conduct has been influenced by the act or statement, the character of an estoppel will attach to what would otherwise be mere matter of evidence, and the party will be concluded from denying and disproving it.
    4. Judgment in replevin — Upon what points conclusive — Estoppel. — Appellants agreed to take the wheat in appellees’ elevator, the quantity of which was represented by appellees, both by letter and orally, to be two carloads, and $500 was advanced by appellants. That night the elevator burned down. The next day appellants demanded a return of their money or the wheat. Appellees were unable to pay, and pointing to a pile of wheatonly partially burned, said. “ Your money is in tha.t pile of wheat there.” Appellants brought an action of replevin and obtained a judgment establishing their right to the pile of wheat. Appellees now bring this suit to recover the value of all the wheat in the elevator, alleging that there were four instead of two car loads; that in their business intercourse with appellants they were in the habit of overloading the cars, and when they represented the quantity to be two car loads they meant such loads as they had been sending appellants. Held, that the judgment in the replevin suit is binding and conclusive upon the parties as to the ownership of the wheat; but that the amount of the wheat in the elevator was not necessarily or directly in issue in such proceeding, and the judgment is not binding as to such question; that appellees are estopped by their conduct from setting up that there were four car loads.
    Error to the Circuit Court of Madison county; the Hon. William: H. Snyder, Judge, presiding.
    Opinion filed April 18, 1884.
    Messrs. Meto ale & Bradshaw, for plaintiffs in error;
    as to res adjudicata, cited Bigelow on Estoppel, 27, 37.
    As to estoppel: International Bank v. Bowen, 80 Ill. 541; Young v. Fonte, 43 Ill. 33; Moser v. Kreigh, 49 Ill. 84; Kinnear v. Mackey, 85 Ill. 96; Ball v. Hooten, 85 Ill. 155.
    Messrs. Happy & Travous, for defendants in error;
    that a judgment is conclusive upon every matter actually and necessarily decided in the former suit, cited Freeman on Judgments, §§ 253, 256, 257; Hanna v. Heed, 102 Ill. 597; 2 Smith’s Leading Cas. 4th Am. ed. 572.
   Wall, P. J.

This suit was brought by the appellees against the appellants to recover the value of 2,202 bushels of wheat.

It appears from the evidence that appellees were operating a grain elevator at Worden, and that appellants were operating a flouring mill at Staunton. The two towns were on the same railroad and about six miles apart.

In October, 1882, the parties entered into an arrangement by which appellees were to buy wheat for appellants at a price four cents below the St. Louis market. By this arrangement the appellants were to advance money from time to time, the grade of wheat was to be equal to Ho. 2, St. Louis market, and to be subject to the inspection of appellants at Staunton. The grain was to be put upon the cars at Worden at the expense of appellees, but did not become the property of appellants until inspected by them at Staunton. Appellees were to report whenever they had a car load on hand.

On the 13th of February, 1883, appellees wrote to appellants that they had two car loads on hand which they could take or not as they liked. Prior to this time appellants had become tired of the arrangement on account of the speculative condition of the market, and had indicated that they would pay only at the rate of six cents below the St. Louis market, and in this letter of the 13th of February appellees requested appellants to state the price they would pay if they would take the wheat, and added that they would not buy at six cents under St. Louis prices.

On this day Townsend, one of the appellants, went to Worden, and had an interview with O liarles F. Breed, one of the appellees, and agreed to take the wheat then in the elevator which was stated by Breed to be two car loads in quantity, and advanced him $500 on account, there then being a small balance of about $37 due appellants on the former transactions.

It seems to have been clearly understood that there was to be no further bnying under the old arrangement, but that t .e amount then on hand would be taken; and though it was represented both by the letter above referred to and by Breed at the time, that there were two car loads of it, nothing was said as to the exact price to be paid. That night the elevator burned down. The next day appellants called upon the appellees for a return of their money or the wheat. The appellees were unable to pay and declined to do anything, saying “your money is in that pile of wheat there,” pointing to a quantity of wheat partially burned which had been saved from the fire. Thereupon the appellants brought an action of replevin for the pile of wheat, and upon a trial in the circuit court obtained a judgment establishing their right to it, sold it and gave appellees credit for the proceeds. Now the appellees bring this suit against the appellants to recover the value of all the wheat there was in the elevator which they have ascertained, as they allege, amounted to 2,202 bushels.

The case was tried by the court without a jury by consent, resulting in a judgment in favor of plaintiffs for the amount claimed, less $537, due appellants for money advanced.

It is urged by the appellees that the judgment in the replevin case must effectually estop the appellants from denying that they bought all the wheat in the elevator, and that it was their property at the time of the fire. On the other hand, the appellants urge that the appellees are estopped by their letter of February 13th, and their statements made orally the same day, from claiming that there were more than two car loads of the wheat, and that whatever there was, it was not at the risk of the appellants when burned. It appears that a car load of wheat was ordinarily from 375 to 475 bushels, but that these parties had been overloading, without the knowledge of the railroad company, at the instance of appellants, and that one car had contained 745 bushels; and upon this point Charles F. Breed says that he put in all the cars would hold if they would bear it, and that when he wrote the appellants that there were about two car loads, he meant loads such as he had been sending them, up near the highest, from six to seven hundred bushels'to the car. Townsend says that a car load is about twenty-eight or thirty thousand pounds, and that the average weight of loads shipped to them by appellants was about thirty thousand, pounds — five hundred bushels.

The replevin case was no doubt determined in favor of the appellants upon the ground that they were the owners of the wheat replevied at the time of the fire, and this must have been predicated upon the theory that the transaction on the 13th of February was, in substance, a sale by appellees to appellants of all the wheat then in the elevator, and to this extent it is quite clear, we think, the adjudication in that case is binding and conclusive upon the parties in this case; but the question is, whether the amount of wheat in the elevator was conclusively determined in the former proceeding and whether the appellees are not estopped by their conduct from now claiming that there were more than two carloads. A judgment or decree necessarily affirming the existence of any fact is conclusive upon the parties whenever the existence of that fact is again in issue, not only when the subject-matter is the same, but when the point comes incidentally in question in relation to a different matter in the same or any other court, except on appeal or writ of error or some other proceeding provided for its revision. When the former cause of action and the present are the same, the former judgment estops not only as to every ground which was actually presented as a basis of recovery or defense, but also as to every ground which might have been presented; but where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be as to the point or question actually litigated or determined in the original action, not what might have been thus litigated or determined. The former verdict is conclusive only as to facts directly andjdistinctly put in issue, and the finding of which are necessary to uphold the judgment. The doctrine of estoppel is restricted to facts directly in issue, and does not extend to facts which may be in controversy, but which rest in evidence aud are purely collateral, A fact or matter in issue is that upon which plaintiff proceeds by his action, and which the defendant controverts by his pleadings, while collateral facts are such as are offered in evidence to establish the matter or facts in issue. Freeman on Judgments, Oh. 12.

The case of Campbell v. Consalus, 25 N. Y. 613, well illustrates the proposition last above stated. In that case the proceeding was to foreclose a mortgage executed by the defendant to the assignor of the plaintiff, and the plaintiff insisted that the amount due upon the mortgage had been conclusively adjudged by the determination of certain previous actions which had been brought -by the mortgagor against the mortgagee for the purpose of having the mortgage declared satisfied, on the ground that the debt had been paid. Those actions had been decided against the mortgagor upon the report of the referees, who found and so reported that there was still due and unpaid upon the mortgage the sum of $2,754.88.

The question then was whether the mortgagor was estopped by the proceedings and judgment in his prior actions, from contesting the amount found'due in those actions, and it was decided that lie was not so estopped, for the. reason that while the amount due might have been and was the subject of contest in the former proceedings, it was so as a collateral and incidental matter merely, the substantial issue being whether there was anything due, not how much; the court saying in conclusion that it appears from the authorities cited that the principle of res adjudicada does not apply to matters arising incidentally or collaterally.

Applying this rule to the case at bar, we think it is a fair and legitimate conclusion that in the replevin suit the amount of wheat in the elevator was not necessarily or directly in issue; and while there was some evidence in regard to it, it was purely incidental and collateral to the main inquiry, the real issue in the case, which was as to the ownership of the wheat not consumed and which was lying in the pile after the fire.

There was no controversy as to the amount, for the “pile,” whatever it contained, was by the pleadings the property of either the plaintiffs or defendants in that case. We look in vain for any allegation or issue necessarily involving the number of bushels in the elevator at the time of the fire. The afiidavit as well as the declaration in replevin claimed under a videlicet “eleven hundred bushels of wheat recently damaged by fire, of the value of about five hundred dollar's”; and it appeared that the wheat actually replevied amounted to 1,018 bushels — about two car loads; but we are unable to perceive in what way it could have been judicially determined that the plaintiffs in the suit had 2,202 bushels of wheat in the elevator at the time of the fire. It was not important to know how much there was, nor was it necessary to know how much either party should be permitted to allege was then in the elevator

It is urged by counsel, however, that this was determined because the court held certain propositions of law which-are set out in the record, to the effect that unless the plaintiffs in that suit owned all the wheat in the elevator they could not recover. We see nothing in this to strengthen the position assumed. These propositions do not assume that there was any certain definite quantity, only that there was more than eleven hundred bushels.

The case was tried by the court without a jury, .and under our practice these propositions were presented for the purpose of enabling the parties to obtain a review of the judgment of the circuit court, upon its rulings as to the law of the case. We see nothing objectionable in the propositions, but we are not called upon to review them; and whether they are correct or not, applicable or not, their consideration can throw no light upon the question as to what was conclusively adjudicatedin the case. In ascertaining what has been decided, the actual judgment of the court must be consulted rather than the reasons urged in its support. Freeman on Judgments, Sec. 258. In any aspect of the matter we think the estoppel of this judgment can go no further than to the point that the appellants bought all the wheat in the elevator, or all that the appellees should be permitted to urge was there on the 13th of February; and this brings us to consider whether the appellees are estopped by their conduct to say there was more than two car loads. The rule is familiar, that where an act is done or a statement made by a party which can not be contradicted or contravened without fraud on his part and injury to others whose conduct has been influenced by the act or statement, the character of an estoppel will attach to what would otherwise be mere matter of evidence, and the party will be concluded from denying or disproving it. International Bank of Chicago v. Bowen, 80 Ill. 541.

Aside from the peculiar features of the case which tend to raise some doubt as to the good faith of the claim that there was twice as much wheat in the elevator as was then represented, we think that it would work injustice to permit the appellees to setup their present claim.

It is fair to presume the appellants would never have placed themselves in their present attitude had they supposed there were four car loads instead of two in the elevator. Appellees, after learning that they would no longer pay the old rate of four cents below the St. Louis market, wrote them that they had two car loads which they could take or not, just as they pleased, and asked what price they would pay.

When Townsend came there the same day, Breed repeated the same thing in substance — that there were about two car loads. After the fire, when these men met, the appellants wanting their money back or the wheat, there was no intimation that the appellants would expect them to pay for 2,202 bushels; indeed, they say now they did not know how much they had.

Having made a representation with regard to so important a matter, upon which the other party must be presumed to have acted, it is but reasonable and just that they should be held to the consequences.

Suppose the elevator had not burned, and the appellants had been notified that there were four car loads instead of two, as they supposed; would it be doubtful that they could have declined to pay for more than they had bought ? And does it change the matter in principle or in substance that they asserted their claim to what was left, in ignorance of the fact as to what was the real quantity on hand when they purchased? Had they known that there had been a misrepresentation of the quantity, they would have been warranted in refusing to stand by the purchase, and might have required the return of the money advanced by them. Hor is it material to determine whether the misrepresentation was intentional or not, since the result would be the same, so far as the right of appellants to rely upon the statement is concerned.

As the judgment is for the full amount which appellees now insist was in the elevator, and which is about double the quantity represented by them, we are of the opinion it is erroneous.

It is therefore reversed and the cause remanded.

Be versed and remanded.


source: Caselaw Access Project

author: Wall, P. -J.

license: Public Domain

text:
    Isaac Struble v. Samuel S. Hake, use, etc.
    1. Contract for benefit of a third person — Statute -of Frauds. — Where one enters into a simple contract with another for the benefit of a third, such third person may maintain an action and such contract is not within the Statute of Frauds.
    2. Novation. — In novation the debtor does not undertake to pay the debt of another but contracts an entirely new debt of his own, the consideration of which is the absolute discharge of the old debt. Consequently the new debt is not witbin'the provisions of the Statute of Frauds relating to the promise to pay the debt of another.
    S. Joint debtors — Release by novation.— Where appellant was treated on all hands and by common consent as the real and sole lessee, and F. was connected with the lease, only nominally. Held, that even if F. should be considered as a joint debtor with appellant, yet as appellant by the novation was in fact released, the legal effect would be to' release his co-debtor.
    4. Practice — Time to make objection.— Where certain evidence was admitted on the trial without objection, it was too late to make objection for the first time in the appellate court.
    Error to the Circuit Court of St. Clair county; the Hon. William H. Snydeb, Judge, presiding.
    Opinion filed April 18, 1884.
    Mr. W. P. Lattntz, for plaintiff in error;
    that the Statute of Frauds is a personal defense and only available to the party who desires to repudiate his own promise, cited Browne on the Statute of Frauds, §§128-135; McCoy v. Williams, 1 Gilm. 584; Mitchell v. King, 77 Ill. 462.
    If the promise is in the nature of an original undertaking to pay a debt to a third party, and is founded on a valuable consideration received by the promisor himself, it is not within the provisions of the statute: Runde v. Runde, 59 Ill. 98; Meyer v. Hartman, 72 Ill. 442; Walden v. Karr, 88 Ill. 49; Insurance Co. v. Olcott, 97 Ill. 439; Borchsenius v. Canutson, 100 Ill. 82; Bristow v. Lane, 21 Ill. 194; Rabbermun v. Wiskamp, 54 Ill. 179; Wilson v. Bevans, 58 Ill. 232; Eddy v. Roberts, 17 Ill. 505.

      Mr. E. F. Wingate, for defendant in error;
    that even if the defense was true, it could not avail plaintiff, for it is founded upon matter in confession and avoidance and should have been specially pleaded, cited 2 Ohitty on Pleading, 11th Am. ed. 276.
   Wall, P. -J.

This was an action of assumpsit by Hake against Struble and Frederick to recover two installments of rent due upon a lease. Service was had upon Struble alone, and the case proceeded without further notice of Frederick, resulting in a judgment in favor of the plaintiff and against the defendant for $1,675.05 and costs. The defendant Struble plead non assumpsit, and the case was tried by the court without a jury, by consent. It appears from the evidence that the lease mentioned in the declaration was duly executed by theplaintiff to Struble and Frederick, covering certain premises in the city of East St. Louis, which together with another parcel leased from the Wiggins Ferry Co., was occupied by the lessee as a stock yard.

The co-defendant, Frederick, seems to have"dropped out of the arrangement very soon after the lease was made, and Struble, who furnished all the money to make the improvements, and who was treated and acted as the sole lessee, placed the management of the business in the hands of one Cox, as his agentq

The business was conducted by the agent, Cox, for some time, he paying the rents to Hake, and reporting to Struble, who lived in Hew York.

Finally, the rent, being in arrears for two quarters, the lease was declared forfeited by Hake, notice having been given to Cox, as agent, and the stock yards were thereafter managed in the joint interest of Hake and Cox.;

It is stated by one. of the witnesses that the Ferry Co. lease was forfeited also, but the particulars as to this are not given.

Some time afterward Struble came to East- St. Louis, and an effort was made to settle matters of difference between him and Cox and Hake.

Struble insisted that his interests had not been properly cared for by his agent; that he was not aware that the rent was unpaid or the lease forfeited, and that he had still a claim upon the property, covered by Hake’s lease as well as that of the Wiggins Ferry Co., on account of the improvements, which had cost him a large sum of money; and at a meeting between him and Cox and Hake, these matters were the subject of an extended discussion. Cox claimed a balance from Struble for salary, etc., and Hake was claiming the rent. Struble had some accounts against Cox, and at this meeting it was finally agreed between the three men that Cox should pay the rent to Hake, and that Struble should be released therefrom, Struble allowing Cox certain credits on account and surrendering all his claim upon the leased premises and the improvements, giving Hake peaceable possession of all the yards and buildings covered by both leases. Hake was perfectly agreed to this arrangement, and released Struble, taking Cox in his place, upon the consideration of getting a complete surrender of the whole premises, and, as stated by one of the witnesses, thought he was pretty largely benefited.”

This occurred in 1875. Struble went back to Hew York; Cox went east a short time afterward and died, and in 1880, Hake brought this suit. It appears from the bill of exceptions that the trial court “ found as a matter of fact that Hake, Struble and Cox verbally agreed that Cox should assume this indebtedness to Hake, and Struble be discharged therefrom, and as a matter of law that the agreement was void under the Statute of Frauds and presented no defense to the action.” It does not appear that this proposition of law was asked by the plaintiff and held by the court in the manner prescribed by the Practice Act (Sec. 42, Ch. 110), but it is manifest this was the theory upon which the case was decided, and unless this view is correct the judgment was erroneous. It has been repeatedly held in this State, following numerous precedents, that where one enters into a simple contract with another for the benefit of a third, such third person may maintain an , action, and such contract is not within the Statute of Frauds: Eddy v. Roberts, 17 Ill. 505; Brown v. Strait, 19 Ill.88; Bristow v. Lane, 21 Ill. 194; Wilson v. Bevans, 58 Ill. 232; Walden v. Karr, 88 Ill. 49; Borchsenius v. Canutson, 100 Ill. 82.

In cases of this kind the promise is usually based upon some consideration moving from the party to whom it i.s made, such as the sale or transfer of property, the discharge of a lien and the like, and is regarded as an original uncWitaking the effect of which is to pay the debt of the promisor, ¡though it may incidentally result in discharging the debt of another. There is another class of cases to which the case at bar more nearly belongs, involving a transaction whereby a debtor is discharged from his liability to his original creditor by contracting a new obligation in favor of a new creditor by order of his original creditor. To this transaction the term novation is applied. In such a case the debtor does not undertake to pay the debt of another but contracts an entirely new debt of his own, the consideration of which is the absolute discharge of the old debt. Consequently the new debt is not within the provisionspf the Statute of Frauds relating to the promise to pay the debt of another. 1 Parsons on Contracts, Ch..l3; Runde v. Runde, 59 Ill. 98.

The subject as discussed in the treatise of Browne on the Statute of Frauds, §§ 165, 166, 193; 194, and it is stated that it is now settled by authority in England and America, that if by the arrangemént the original debtor is discharged, the defendant’s promise is good without writing; it clearly raises in such case an' original and absolute, not a contingent and collateral, liability.

The present case is controlled by the authorities cited. By mutual consent Cox received a credit in his account with Struble in consideration that lie should pay the debt to Hake. Hake might have availed himself of this arrangement and might have maintained an action upon it even if he had not been present at the time; but he was present, assented to it and distinctly agreed to discharge Struble and accept Cox in his stead, receiving therefor the valuable consideration of undisputed possession of the j-ards, and a surrender of all improvements remaining on his own land and that of the Wiggins Ferry Co.

This transaction effectually released Struble and must be regarded as a complete bar to the present suit.

Even if it be supposed Cox could interpose the Statute of Frauds there is no presumption that he would.

Such a defense is personal to him and could only be made by him. Browne on Statute of Frauds, §§ 128-135. But if it were unquestionable that the assumption by Cox was worthless and would so turn out, yet we think Hake received abundant legal consideration for the release. Counsel for appellee says in his brief that “unless the indebtedness due to Hake by Struble and Frederick under the lease, was extinguished under the facts as found by the court, such assumption was void,” thus apparently resting upon the point that there was no extinguishment of the joint liability of Struble and Frederick. As.has already been stated, Frederick, though nominally one of the lessees, withdrew very soon after the lease was made and took no actual part in the subsequent proceedings, Struble being treated on all hands and by common consent as the real and sole lessee, and we are unable to see why, upon such a state of facts, the nominal connection of Frederick with the lease at the beginning would be regarded, as at all important. But if it were important and if at the time of this arrangement Frederick should be considered as a joint debtor with Struble, yet, as Struble was in fact released, the legal effect would be to release his co-debtor, Frederick.

Counsel further insists that “even if the defense as claimed was true in fact it could not avail the plaintiff, for it is founded upon matter in confession and should have been specially pleaded.”

Without stopping to inquire whether the evidence could have been admitted under the plea of non assumpsit for the reason indicated by counsel, it is enough to say that no such objection was urged on the trial. Had the plaintiff made this specific objection the pleadings might have been amended if deemed necessary. Such an objection can not be made for the first time in an appellate court. I. & St. L. R. R. Co. v. Estes, 96 Ill. 470.

The evidence was admitted and considered by the trial court and the case was decided on the proof thus made.

For the reason assigned we are of opinion that the defense presented was a perfect answer to the plaintiff’s alleged cause of action, and therefore the judgment was erroneous and should be reversed.

Beversed.


author: Baker, J.

text:
    John M. Wright v. John E. Comley.
    1. Guardian and ward — Keeping down incumbrances. — 'Where a guardian, without an order of court, made payment from the income and profits of his ward’s estate for taxes, interest and payment on the mortgage debt, and these payments were manifestly for the benefit of the ward, and absolutely essential for the preservation of his estate, the guardian should be allowed these items in his settlement.
    2. Powers op guardian — Statute op “ Guardian and Ward.”— While the above power is not one of the powers enumerated in our statute as vested in the guardian, yet the statute of “ Guardian and Ward ” was not designed as a complete code, and except as therein otherwise provided, the common law regulating the powers, duties, rights and liabilities of guardians is left in force.
    3. Duties op guardian and administrator. — Where the taxes on the bond had accrued and were due before the death of the ward’s father and were not paid by the administrator, it was proper that the guardian should pay the same, for the taxes and mortgages were direct and immediate charges and liens upon the realty, and that was vested in the ward, and upon the guardian devolved the duty of its care and management. The administrator is not hound to protect the real estate and to it he is an utter stranger. . \
    Appeal from the Circuit Court of Bandolph county; the Hon. William H. Snyder, Judge, presiding.
    Opinion filed April 18, 1884.
    Mr. H.- Clay Horner, for appellant;
    that the guardian not only may beep down interest on incumbrances and pay off the principal, but it is his duty to do so without any order of court, cited Chambers’ Chancery Jur. of Infants, 529; Bingham on Infancy and Coverture, 173; Schouler’s Domestic Relations, 467; Ronald’s Heirs v. Barkley, 1 Brock. 361; Palmer v. Danby, 1 Eq. Ab. Cases, 261; Dennis v. Budd, 1 Eq. Ab. Case, 261; Earl of Winchelsea v. Norcliff, 1 Vernon, 436; Hooper v. Eyles, 1 Eq. Ab. Cases, 261; Jennings v. Look, 1 P. Wm. 278; Zoach and Loyd’s Case, 2 Vernon, 192.
    In these accountings the county court has chancery jurisdiction, and is governed by chancery precedents subject to statutory modifications: Bond v. Lockwood, 33 Ill. 212; In re Steele, 65 Ill. 424.
    “ Maintenance,” “Advancement” and “Easing the land from incumbrance,” are classes of expenses governed by widely different rules of law: Chambers on Infants, 529; Andrews v. Partington, 3 B. C. C. 60; Eyre v. Count of Shaftsbury, White & Tudor L. C. 1472-1481; as to rule in Eng., 1503; as to rule in U. S., Perry on Trusts, § 618; Davis v. Harkness, 1 Gilm. 178.
    Mr. A. G. Gordon, for appellee.
   Baker, J.

William Comley died in April, 1873, seized of certain real estate, and leaving five children and no widow.

Appellant was appointed guardian of appellee and the other minor children.

The land was worth $2,400, but was incumbered with overdue mortgages amounting to $975, besides accrued interest, and with the taxes of 1876 and 1877, amounting to $38.52. The premises were being advertised for sale, for these taxes, and-it. is admitted the mortgages would have been foreclosed had not appellant paid the accrued interest and $200 of the principal. Appellant charged himself in his account as guardian with the rents of said lands from 1878 to 1882, inclusive, aggregating $860.01, or rather as respects appellee, with one fifth of said sum. He also asked to be credited, among other things, with one fifth of the $38.52 paid by him for back taxes, and of the $200 payment on principal of mortgage debt, and of $287.50 interest paid on the mortgages, part of said interest having accrued prior to the decease of his ward’s father, and part since. _

It is also admitted the land has increased in value, since the death of the father, $600, and is now worth at least $3,000. It further appears that neither said taxes nor said mortgage debts have been presented to or allowed by the county court against the estate of the deceased; and also that no order of the county court, directing the payment of said taxes, interest or $200 of principal debt was made. The controversy grows "out of the refusal, both of the county and of the circuit courts, to allow the guardian, in his settlement, these items for taxes, interest and payment on principal debt. These credits, claimed by the guardian, should have been admitted. These payments made were manifestly for the benefit of the ward and absolutely essential for the preservation of his estate. A guardian may relieve his ward’s real estate from a mortgage or lien, which, if left unredeemed, would probably destroy the ward’s interest, and he may do this without first making application to a court. See decision of Chief Justice Marshall, in Roland’s Heirs v. Barkley, 1 Brock. 356, and 2 Perry on Trusts, § 607. Where there are incumbrances on an infant’s real estate the guardian must keep down the interest out of the rents and profits, and the guardian may, without the direction of the court, pay the interest of any real incumbrances, and the principal of a mortgage, because that is a direct and immediate charge upon the land. McPherson on • Infants, * p. 285. Taxes assessed upon real property are also a direct and immediate lien thereon. R. S., Ch. 120, § 253.

The decisions of the Supreme Court in Davis v. Darkness, 1 Gilm. 173, Cummins v. Cummins, 15 Ill. 33, Cummins v. Cummins, 29 Id. 452, and Bond v. Lockwood, 33 Id. 212, do not control this case, as the expenditures involved in those controversies were for the maintenance and support of the infant.

It is true the power here in question is not one of the powers enumerated in our statute as vested in the guardian; but the statute of “ Gruardian and Ward ” was not designed as a complete code, and, except as therein otherwise provided, the common law regulating the powers, duties, rights and liabilities of guardians, was left in force. Bond v. Lockwood, supra.

It is also urged the taxes on the land had accrued, and were due before the death of "William Comley,and-should have been paid by his administrator. Even were this so, yet they were not paid by him, and neither they nor the mortgage debts were either presented or probated against the estate of the deceased,' although both characters of indebtedness might have been if the holders thereof had been so advised. But as we have seen, both the taxes and mortgages were direct and immediate charges and liens upon the realty, and that was vested in the-ward, and upon the guardian was imposed the duty of its care and management. The administrator is not bound to protect the real estate, and to it lie is an uttei stranger. Stone v. Wood, 16 Ill. 177. It would he safer and advisable the guardian should, where it is practicable, and especially in cases of doubtful propriety, act under the direction of the court in discharging incumbrances on the land of the minor; but where he has acted in good faith and advisedly, and his acts have been beneficial to the interests of the ward and have had the effect of preventing a foreclosure and the loss of the estate, and such result has been accomplished by using the income and profits of the estate and without encroaching upon the principal of the trust property, justice would seem to require the approval of such acts. The judgment will be reversed and the cause remanded with instructions to allow the items of charge in controversey.

Reversed and remanded.


text:
    John McIntyre v. John Thompson, Adm’r, etc.
    1. Pleading — Waiving tort and suing in assumpsit. — If one person converts the property of another into money the owner may waive the tort and. sue in assumpsit. Where counts in assumpsit alleged a wrongful conversion of certain bonds and then averred a legal liability and subsequent promise in consideration thereof to pay. Held, that the counts were defective in not averring the fact of the sale and conversion of the bonds into money.
    2. Evidence. — The whole of an admission is to be taken together and when part of a conversation or statement is put in evidence by one party, the other is entitled to put in the whole so far as it is relevant, and it makes no difference whether the whole statement comes out upon the direct examination or part of it is drawn out on cross-examination.
    3. Instructions. — It is error in an instruction to single out a number of inconclusive circumstances in proof favorable to the one side, omitting all references to other circumstances favorable to the other side and bearing on the same point and inform the jury such circumstances were proper for their consideration in making up a verdict.
    4. Contract — Value op consideration. — Where one party agrees to give another certain bonds in return for the latter boarding and keeping the former for life, in the absence of fraud, the value or sufficiency of the consideration of such a contract is not a question for the jury.
    5. Statements op counsel. — Where counsel in his argument Ftated that he had numerous witnesses present by whom he could have proved that intestate was insane and that he would have proved it if appellant had attempted to show that he got the property in question by any contract with him, and the testimony in the case afforded sufficient ground for the introduction of the witnesses claimed to be on hand. Held, that it was error for the court to permit appellee’s counsel to make this statement against the objection of appellant.
    Appeal from the Circuit Court of Perry county; the Hon. Amos Watts, Judge, presiding.
    Opinion filed April 18, 1884.
    Mr. Charles W. Thomas, for appellant;
    as to misjoinder of counts, cited 1 Chitty on Pleading, 205.
    Messrs. Pierce & Fountain, for appellee;
    that if a person converts the property of another, the owner may waive the tort and sue in assumpsit, cited Dickinson v. Whitney, 4 Gilm. 406; Staat v. Evans, 35 Ill. 455; DeClerq v. Mungin, 46 Ill. 112; Creel v. Kirkham, 47 Ill. 344.
   Baker, J.

The declaration contained the common counts in assumpsit and four special counts. It is suggested these latter counts were in trover or trespass, and that there being a misjoinder of counts, the motion in arrest of judgment should have prevailed. We do not so regard these counts but understand them to be defective counts in assumpsit. They allege a wrongful conversion of the United States coupon bonds in question, and then aver a legal liability and subsequent promise in consideration thereof, to pay. If one person converts the property of another into money the owner may waive the tort and sue in assumpsit, and these counts were defective in that they did not aver the fact of the sale and conversion of the bonds into money. But the count for money had and received was sufficient for a recovery under the evidence. Anderson v. Semple, 2 Gil. 455; Staat v. Evans, 35 Ill. 455.

The motion in arrest was then properly denied.

The theory of the case of the plaintiff below, appellee here, was that his intestate had died at appellant’s house, owning and having in his possession some $2,000 in U. S. bonds, and that appellant had sold these bonds and converted the money to his own use. The theory of appellant was that the intestate had in his life-time sold and delivered the bonds to him. It can not be justly claimed there was no evidence before the jury tending to establish the defense. Appellee himself testified to certain statements made by appellant in the county-court, to the effect the intestate had about $2,000 in U. S. bonds, and that he, appellant, took them to St. Louis and sold them for $2,300, and on cross-examination appellee testified appellant also stated on that occasion that the intestate had given him the bonds in consideration that he, appellant, would keep, board and take care of him as long as he, intestate lived. The rule is that the whole of an admission is to be taken together, and that when part of a conversation or statement is put in evidence by one party, the other is entitled to put in the whole so far as it is relevant, and it makes no difference whether the whole statement comes out upon the direct examination, or part of it is drawn out on cross-examination. 1 Greenleaf on Evidence, Sec. 201; 2 Wharton on Evidence, Secs. 1108, 1109; Hatch v. Potter, 2 Gil. 725; Phares v. Barber, 61 Ill. 271. Moreover, proof of all these statements of appellant was. admitted without objection, and was before the jury for their consideration. It is, of course, immaterial, except as regards the weight to be given it, whether the testimony to prove or tending to prove a plaintiff’s case or a defendant’s defense is made to appear by witnesses introduced by the one party or the other.

The third instruction given for appellee was clearly erroneous in several respects. It singled out a number of inconclusive circumstances in proof favorable to the one side, omitting all references to other circumstances favorable to the other side and bearing on the same point, and informed the jury such circumstances were proper for their consideration in making up a verdict. It also directed the jury, in effect, that defendant must have given a sufficient consideration for the bonds, or be held liable. If the parties made the contract as claimed by appellant, then, in the absence of fraud, the value or sufficiency of the consideration of the contract is not a question for the jury. "We think there was ample evidence upon which to base the first instruction given for appellee; but it was perhaps subject to criticism in that it did not require the jury to find as a condition precedent to a right to recover in an action of assumpsit, the fact the property had not been converted into money. In the argument of the case to the jury, the attorney for appellee, against the objections of appellant, was permitted by the court to state he had numerous witnesses present, including several doctors, by whom he could have proved that intestate was insane, and that he would have- proved it if appellant had attempted to show that he got the property in question by any contract with him. There was before the jury the evidence we have heretofore mentioned as tending, at least in some degree, to establish the transfer of the bonds to appellant; there was also the fact of his possession of the bonds, and the corroborating circumstances of the indorsement, by deceased, of certain certificates of deposit, the details and bearing of which we need not give. This testimony afforded sufficient ground for the introduction, by appellee, of the witnesses claimed to be on hand. At all events, such witnesses were not introduced, and the cause should have been submitted to the jury solely upon the evidence before them, and counsel should not have been allowed by the court to make the statements under consideration. Bor the errors indicated, the judgment is reversed and the cause remanded.

Reversed and remanded.


author: Raker, J.

text:
    William Miller v. Bernhard Ticker.
    Former adjudication. — Where appellant prosecuted a suit before a justice of the peace, against appellee, and recovered a judgment for $2.25 and costs, and on that suit, the claim and account here involved, which did not exceed $200, and was in existence long before tbe commencement of that suit, was written out and presented for allowance as a set-off, and the justice passed upon all the matters in controversy between the parties but refused to allow appellee bis claim in giving judgment, and appellee did not appeal therefrom. Held, that the adjudication in the prior suit is a bar to the present action based upon the same account.
    Appeal from the Circuit Court of Perry county; the Hou. Amos Watts, Judge, presiding.
    Opinion filed April 18, 1884.
    Mr. S. C. Parks and Mr. H. P..Scott, for appellant. •
    Mr. R. W. S. Wheatley and Mr. M. G. Kelso, for appellee.
   Raker, J.

In the fall of 1879, Kiser rented to appellee a farm for the term of two years, appellee to give one fourth of the crops raised and to make certain improvements. He took possession and made some of the improvements contemplated by the contract. In May, 1880, appellant purchased the farm from Kiser, and was to have the landlord’s interest in the growing crops, and was to settle with appellee. Thereupon a new arrangement was made, whereby appellee was released from moving and shedding the log barn, from grubbing up the remaining stumps, and from cleaning up a meadow in tbe bottom; and whereby it was also provided tbe landlord’s rent should be one third instead of one fourth of the crops. Appellant got his third of the crops for 1880 and 1881, and the residue of the work, covered by the original contract, was never performed by appellee. The judgment of this case was in favor of appellee and against appellant, for |the value of the work done and improvements made while the land was owned by Kiser and the original contract between appellee and Kiser was in force. It also appears from the evidence that in the summer of 1881 appellant prosecuted a .suit, before a justice of the peace, against appellee, and recovered a judgment for $2.25 and costs; that on the trial of that suit the claim and account here involved was written out and presented for allowance as a set-off, and that the justice passed upon all the matters in controversy between the parties, but refused to allow appellee his claim in giving judgment in that case. If appellee ever had a just cause of action against appellant, it was barred by the result of the litigation before the justice of the peace in 1881. His supposed claim was in existence long before the commencement of that "suit, and it did not exceed $200; and he was bound to bring it forward then, or be forever barred from suing therefor. Sec. 4.9, Chap. 79, R. S. 1874; Mallock v. Krome, 78 Ill. 110. But he did present the claim, and the court passed upon and refused to allow it. If'he was not satisfied with the judgment rendered by the justice, he should have appealed therefrom.

The adjudication in the prior suit where this account was presented as a set-off is a bar to the present suit based upon the same account. Howell v. Goodrich, 69 Ill. 556; Hanna v. Reid, 102 Id. 596.

Moreover we are wholly unable to find in the record evidence tending to establish either an express or an implied contract on the part of appellant to pay for the work in question. Appellee himself testifies appellant never agreed to pay him for the work charged in the account, and that nothing was said by either about it at the time the lease was changed, or afterward. The evidence shows the consideration for increasing the rent from the one fourth to the one third part of the crops, was the agreement by appellee to release the tenant from' more than a moiety of the work he contracted to do on the farm.

The judgment of the circuit court is reversed, and as appellee has no cause of action, final judgment will be entered against him in this court for costs.

Reversed.


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    Thomas Harward et al. v. Henry Robinson, Adm’r, etc.
    1. Liability of administrator — Funds deposited in individual name. — Where an administrator deposits in his own individual name, funds of the estate in a hank which fails while holding such deposit, the loss is hi3 own and not that of the estate; and this though he had no other funds in such hank, and informed its officers at the time of- making the deposit that the funds were held by him in trust.
    2. Administrator depositing funds of estate in his individual name. — Where an administrator without any authority from the court deposited the funds of the intestate’s estate in a bank outside of the State, and the money was deposited in his individual name, hut he informed the teller of the hank at the time of the deposit that it belonged to the estate, and it was not mingled with funds of his own, hut with other trust funds also in his custody, and the hank failed. Held, that the administrator was personally hable for the loss; that taking the money outside of the State was an unlawful act, and the fact that it was discretionary with the court, if an application for such order had been made, to allow it to he deposited outside of the State, can not have any hearing on the liability.
    3. Gift to administrator by creditors. — Where some of the larger creditors of an estate thinking that the administrator had acted in good faith, even if unadvisedly, in depositing the money of the estate and losing it, and regarding the loss as a hardship, made the administrator a personal gift of eight per cent, of their claims against the estate, their object being to divide the loss with him to that extent. Held, that the heirs and distributees of the estate could not claim the money thus given.
    4. Taxing administrator with interest. — The court is of opinion that the administrator should not be taxed with interest on the moneys in his hands, as it is manifest from the evidence that it was notreasonably possible the administrator could have made final settlement of the estate in two years.
    5. Costs. — The court is of opinion that the estate should pay the ordinary costs of final settlement and the costs occasioned by the exceptions to the report, except the costs occasioned by the litigation over the bank deposit, which the administrator should personally pay.
    Appeal from the Circuit Court of Madison county; the Hon. William H. Snyder, Judge, presiding.
    Opinion filed April, 18, 1884.
    Messrs. Happy & Teavoüs, for appellants;
    that as the funds of the estate were deposited in the individual name of the administrator, and not as administrator, and while so deposited were lost by the failure of the bank, the administrator is personally liable for the same, cited 2 Story’s Eq. Juris. § 1270; Perry on Trusts, §§ 441, 443 and 448; Webster v. Pierce, 35 Ill. 158; Williams v. Williams, 55 Wis. 300.
    As to the $1,600 rebated by the creditors from their claims, the principle of equity is that trustees and others sustaining fiduciary relations can not'deal on their own account with the thing or the persons falling within that trust or relationship: Thorp v. McCullum, 1 Gilm. 614; Dennis v. McCagg, 32 Ill. 430; Phelps v. Reeder, 39 Ill. 173; Lockwood v. Mills, 39 Ill. 602; Wingate v. Pool, 25 Ill. 118; Nelson v. Hayner, 66 Ill. 487; Whitney v. Peddicord, 63 Ill. 249; Cookson v. Richardson, 69 Ill. 137; Hough v. Harvey, 71 Ill. 72.
    As to when an administrator should be charged with interest: R. S. Ch. 3, § 113; Horner’s Probate Practice, § 309; Hough v. Harvey, 71 Ill. 72.
    Messrs. Metcalf & Bradshaw, for appellee;
    cited Parsley v. Martin, Reporter of Boston, September 19, 1883; Beasley v. Watson, 41 Ala. 234-9; Bank v. Coleman, 20 Ala. 140; McTyer v. Steel, 20 Ala. 487; Estate of Schofield, 99 Ill. 513.
    If an administrator act honestly and prudently, though there be a loss to, or a total diminution of the intestate’s estate, he will‘not be liable: Christy v. McBride, 1 Scam. 75; Whitney v. Peddicord, 63 Ill. 249; Voorhees v. Stoolhoff, 11 N. J. 145; Deleny v. Ivey, 2 Jones, (N. C.) Eq. 370; Webb v. Bellinger, 2 Desaus, S. C. 482; State v. Meagher, 44 Mo. 356; Merritt v. Merritt, 62 Mo. 150; Fudge v. Dunn, 51 Mo. 264; 2 Story’s Eq. Juris., 1269; Furman v. Coe, 1 Cal, 96; Raynor v. Prescott, 3 Johnson, Ch. 578; Rubottom v. Morrow, 24 Ind. 202; Mikell v. Mikell, 5 Rich. 220; Noble v. Jones, 35 Tex. 692; Dorchester v. Effingham, Tamlin, 279; Key v. Jones, 52 Ala. 238.
   Baker, J.

This controversy arises upon the final settlement of an administrator. Prior to May 21, 1879, the administrator, without any authority from the court, deposited the funds of the estate in the Broadway Bank of St. Louis, Missouri. The money was deposited in his individual name, but it appears he informed the teller of the bank at the time of the deposit, that it belonged to the Iiarward estate. It was not mingled with funds of his own, but was mingled by the deposit with other trust funds also in his custody. At the date mentioned the bank failed, there then being to the individual credit of appellee, in said deposit account, the sum of $7,359.86. Of this sum he claimed $5,263.19 was money of the Harward estate. Subsequently a dividend of fifty cents was paid' by the bank. The administrator, in his report, claims a credit for $2,631.60, so lost by the failure of the bank, and for $290.29 for expenses incurred in looking after said bank matter. The exceptions filed by the heirs to these two items were overruled by the circuit court and the items were allowed the administrator as credits. Where an administrator deposits, in his own individual name, funds of the estate in a bank which fails while holding such deposit, the loss is his own and not that of the estate; and this though he had no other funds in such bank, and informed its officers at the time of making the deposit that the funds were held by him in trust. See Williams, adm’r, v. Williams, 55 Wis. 300. In the case cited there is a very full and satisfactory discussion of the authorities; and it were a work of supererogation to now go substantially over the same ground. This case is stronger than the Wisconsin ease in that the fund was mixed with other funds. The test is the loss of the identity of the trust fund, the placing it in such condition as that it has no ear-marks, the having it in such shape as that it has impressed upon it no-sign or indication of the specific trust to which it belongs.

The decision of the Supreme Court in the matter of the estate of Schofield, 99 Ill. 513, is not in point. The question there considered was as to, under what circumstances, in view of the provision of our statute in that regard, an administrator is chargeable with interest on the trust fund. Had the money there on deposit been lost by the failure of the bank, there is no doubt the administrator would have been liable. Had the administrator when he first collected the money put it in his pocket-book and mingled it with his own money, and it had been lost, he would have been liable; and yet, if under like circumstances it were not lost, he would not, under our statute; be chargeable with interest from the time he collected it. Again, Section 85, Chapter 3, R. S., provides, among other things, that no administrator shall, without the order of the court, remove any property wherewith he is charged by virtue of his letters, beyond the limits of this State, and that in case he does so remove any such property, judgment shall be rendered against him and his securities for the full value thereof, and such other damages as the parties interested may have sustained by reason thereof. The intention of this statute is to keep the trust property within the territorial limits of the State, and thereby within the jurisdictional reach of the court in which administration-is had. The administrator then, when he removed tire property from the State without any authority* from the court and carried it into the State of Missouri, did an unlawful act and one expressly prohibited, and that too under severe penalties, by the statute. As a result of this unlawful act the trust fund was lost. Without the fact of the subsequent loss the statute, in express terms, made both him and his sureties personally liable for the full value of the property and for damages.

It were strange if the consequent actual loss and damage, instead of aggravatingtheoffeuse,shouldhave theeffect to palliate it and relieve him from all liability whatever. It is urged it was discretionary with the court to allow the funds to be dc-posited in St. Louis, had an application for such order been made, and that therefore the matter should be considered, under the particular circumstances of the case, as though the order had in fact been entered. In view of the evident intent of the statute and the fiduciary character of the funds, it can not be assumed the court would, in the absence of any necessity therefor, have permitted the transfer of the trust funds to a foreign jurisdiction.

There were numerous banks of general deposit and good credit in the county where the administrator resided and the administration was pending, and at least two of these were located at the county seat from which his letters issued and at which he was required to make his settlements. And so the argument based on necessity has no application. In our view, it was erroneous, and on both the' grounds stated herein, to credit the administrator on his settlement with the moneys lost by the failure of the Broadway Bank and with the amounts expended by him in recovering that part of the fund on deposit in the broken bank, that was afterward collected.

The exceptions of the heirs to the report of the administrator in that regard should have been sustained.

"We think the rulings of the court upon the other exceptions taken to the report, were right.' The estate was quite large, its assets- being some $95,000. About $150,000 of claims were filed against it, of which over $50,000 were defeated by litigation. Its affairs were greatly complicated, and Judge Dale, who has had a long and varied experience upon the county bench in a large and populous county, expresses in his testimony his doubts whether there ever was an estate administered upon with such an amount of labor in it.

It was reasonably to be expected the fees paid, and the costs and expenses incurred in the course of the administration would be considerable. As respects the item of $1,600, there is no doubt that'profits arising from the use of a trust fund inure to the benefit .of the cestui que trust. The case of Wingate v. Pool, 25 Ill. 118, is not in point to charge the administrator with this item. In Wingate’s case a profit was made by discharging the claims with bank paper which was at a discount. In this case no profit was made by the administrator, but he actually lost over $2,600 of the trust fund, and for that he was personally accountable, and he also expended some $300 in endeavoring to recover the lost money. Some of the larger creditors of the estate, thinking he had acted in good faith, even if unadvisedly, in depositing the money as he did, and regarding the loss as' a hardship as respects him, made [him a personal gift of eight per cent, of their claims, their object being to divide with him the loss to that extent. There is evidence that to some if not all these creditors, there was an understanding this eight per cent, should be paid back in the event it should be judicially held the administrator was not personally liable for the loss. As the effect of our decision is to hold him responsible for the loss whereby the estate is made whole and the assets not diminished, it is difficult to see upon what just ground the heirs and distributees can claim this $1,600. They receive their money as it is nominated in the bond, and it is no concern of theirs that others, from considerations wholly personal to the obligor, have made him a donation to help him pay that bond.

As respects the claims made by the heirs and distributees for interest, we would call attention to the latter clause of Section 113, Chapter 3, B. S., 1871. It is manifest from the evidence it was not reasonably possible the administrator could have made final settlement of this estate in two years ‘Or in anything like that time; and it seems both the circuit and the county courts held that good cause was shown by him why he should not be taxed with interest on the moneys in his hands.

"We are not prepared to say upon consideration of the voluminous testimony contained in the record, that this holding of these courts was erroneous. A point is made upon the question of the costs of this litigation. It is proper the estate should pay the ordinary costs of final settlement. The costs occasioned by the litigation over the matter of the Broadway Bank deposit should be paid personally by appellee. The costs occasioned by the other exceptions to the report, should be taxed to the estate. An apportionment of the costs upon this basis can be made in tbe court below. As respects the costs of this court they will be taxed personally against appellee.

The judgment and order of the circuit court is reversed, and the cause remanded for further proceedings in harmony herewith.

Reversed and remanded.


text:
    First National Bank of Greenville v. Asa J. Sherburne.
    1. Banking — Loan by discount. — Where anote was indorsed, in blank by the payee and before maturity delivered for value to tbe appellant bank through its cashier. Held, that tbe fair and reasonable presumption from the fact that the note was taken in the “ usual course of business ” of a national bank would be that it was discounted; that although in form and in common parlance it was a purchase of the note, yet in substance it was a loan by way of discount made by the bank to the payee, and the relation of debtor and creditor as between them was created.
    2. Construction of statute — Purchase by discount. — In the absence of Federal or binding authority as to the construction to be given Section 5136, U. S. R. S., the court places its decision upon higher ground, and is of opinion that a purchase may be made by way of discount equally as well as a loan may be made by way of discount.
    3. Discount, meaning of. — Discount means ex vi termini, a deduction or drawback made upon advances or loans of money, upon negotiable paper or other evidences of debt payable at a future day, which are transferred to the bank.
    4 Notice to bank — knowledge of president. — Where a note, before maturity, was taken by the cashier of a national bank in the usual course of business, and he bad no notice or knowledge of tbe contract of warranty in regard to tbe machine sold or of any failure of tbe consideration of the note, and there was a like lack of notice or knowledge on the part of all the directors and officers of tbe bank except the president, who, being a mutual friend of tbe payee and appellee, wrote both the note and the contract of warranty, and also knew, as such friend, prior to the transfer of the note, that appellee claimed the machine had failed to work as warranted and had demanded a return of the note, but he never informed any of the directors or officers of the bank of these facts and did not know the bank had taken the note in question until two or three months after it had been assigned, and the board of directors did not appear to have defined the duties of the several officers as authorized by the National Bank Act. Held, that the knowledge of the president was not notice to the bank and the plea of failure of consideration is no defense; that if the notice in this case had been to either the cashier or the board of directors, it would have been notice to the bank.
    Appeal from the Circuit Court of Bond county; the Hon. A. G. Henry, Judge, presiding.
    Opinion filed April 18, 1884.
    Messrs. Yan Hoorebeke & Ford and Mr. W. A. Horthcott, for appellant;
    as to the duties of a president of a bank, cited Hodges v. First Nat. Bank, 22 Gratt. 51; Morse on Banks and Banking, 143; First Nat. Bank v. Bennett, 33 Mich, 520; Mechanics Bk. v. Rawls, 7 Ga. 791.
    As to the duties of the cashier: Caldwell v. H. Mohawk Bk., 64 Barb. 333; Ryan v. Dunlap, 17 Ill. 45; Morse on Banks and Banking, 156, 157; Story on Agency, § 114; Merchants Bk. v. State Bank, 10 Wall. 604; U. S. v. City Bk. of Columbus, 21 Howard, 356; Fleckner v. Bank U. S., 8 Wheat. 338; Wakefield Bk. v. Truesdail, 55 Barb. 602; Angeli & Ames on Corporations, §§ 299-308; Wild v. Bk. of Passamaquoddy, 3 Mason, 505; Paley on Agency, 156; Bissell v. First Nat. Bk. of Franklin, 69 Penn. 419.
    Hotice to the president or cashier in their official capacity is notice to the bank: La. State Bk. v. Senecal, 13 La. 525; Branch Bk. v. Steele, 10 Ala. 924; Everett v. U. S. Bk., 6 Porter, 166; Union Mining Co. v. Rocky Mt. Nat. Bk., 2 Colo. 248; Central Nat. Bk. v. Levin, 6 Mo. App. 543; Porter v. Bk. of Rutland, 19 Vt. 425.
    The unofficial knowledge of the officers of an incorporated bank is no more operative against the bank than the knowledge of a stranger: Atlantic State Bk. v. Savery, 18 Hun, 36; Nat. Bk. v. Horton, 1 Hill, 572; Seneca Co. Bk. v. Neass, 5 Demi. 329; Westfield Bk. v. Cornen, 37 N. Y. 420; 1 Parsons on Contracts, 65; Miller v. I. C. R. R. Co., 24 Barb. 312; Com. Bk. v. Cunningham, 24 Pick. 276; West St. Louis, Savings Bk. v. Shawnee Co. Bk., 95 U. S. 557; Farmers, etc. Bk. v. Payne, 25 Conn. 444.
    The power given in the act of Congress to discount embraces the power to purchase: Curtis v. Leavitt, 15 N. Y. 9; Leach v. Hale, 30 Ia.; Gen’l Ins. Co. v. U. S. Co., 10 Md. 517; President v. Cornen, 37 N. Y. 320; U. S. Ins. Co. v. Schriver, 3 Md. Chy. 381; U. S. Bk. v. Davis, 2 Hill, 462.
    Mr. W. H. Dawdy and Mr. S. A. Phelps, for appellee;
    that power to discount notes is not power to purchase them, cited Morse on Banks and Banking, 2d ed., 7; Lazear v. Nat. Un. Bk., 36 Am. R. 35; First Nat. Bk. v. Pierson, 24 Minn. 140; Farmers and Mechanics Bk. v. Baldwin, 23 Am. R. 683; Thompson’s Nat. Bk. Cases, 637.
    The making' of discounts is an inalienable function of the directors, and they can not invest any other officer of the cor-<. poration with that power: Morse on Banks and Banking, 109; Lyon v. Jerome, 29 Wend. 485; Bk. of U. S. v. Dunn, 6 Pet. 51.
    The distinction between notice to director as an officer and asan individual is not sustained by weight of authority: Wade on Hotice, § 683.
    When the president has knowledge of equities subsisting against the note, the bank is chargeable with notice: Wade on Notice, §675; Bk. of New Milford v. Town of New Milford, 36 Conn. 93.
    When a party is about to receive a bill or note, if there are any such circumstances within the knowledge of the party as would induce a prudent man to inquire into the consideration of the same, and he neglects to make the proper inquiries, he shall hold the note subject to all equities: Russell v. Hadduck, 3 Gilm. 233; Murray v. Beckwith, 48 Ill. 391; Stevenson v. O’Neal. 71 Ill. 314; Parker v. Merrett, 105 Ill. 293.
   Baker, J.

The power given to national banks as respects the matters here in issue, is “to carry on the business of banking by discounting and negotiating promissory notes, drafts, bills of exchange and other evidences of debt.” R. S. U. S., Sec. 5136. It is urged the transaction involved in this ease was a purchase by appellant of the note, that a national banlc has no power to make such purchase, and that the bank took no title thereto and can not recover thereon. The cases of Lazear v. Nat. Union Bank of Md., 52 Md. 78; F. & M. Bank v. Baldwin, 23 Minn. 198, and the First Nat. Bk. v. Pierson, 24 Minn. 140, are cited as authorities in that behalf. As we understand the facts of the case bearing upon the question under consideration, the note was executed by appellee and payable on the 1st of September, 1882, to the order of-one E. B. Wise, and was by said Wise on the 29th of June, 1882, and before maturity, indorsed in blank and delivered for value through its cashier to the appellant bank. Uo point was made in the court below as to the title of appellant, and the evidence does not disclose what discount was made upon the note.

The argument made here is based upon the statement of the cashier, that he purchased the note from Wise and that it was bought in the usual course of business as he bought other notes. It may be questionable whether the words used in the statute “ by negotiating ” are broad enough to include that which was here done by the bank; and yet according to the lexicographers, the word “negotiate” means not only “ to transfer,” “to sell” “to pass” but “to procure by mutual intercourse and agreement with another.” It appears the note was taken by a national bank and “ in the usual course of business.” Admitting the bank had no power to become vested with the legal title to the note otherwise than by “ discounting” it — the fair and reasonable presumption, from the fact it was taken in the usual course of business of a national bank, would be that it was discounted. The fact the cashier in stating the transaction uses the words “purchased” and “bought,” we do not deem of much importance. In Atlantic State Bank v. Savery, 82 N. Y. 291, a similar statute was under consideration and the word “ bought” was used by the witness and a written memorandum of the transfer was made and delivered at the time in which the word “ sold” was used, and yet it was held it was a discount and the title to the note was valid. In the present case the paper was procured from Wise, who was both payee and indorser, and was transferred by an indorsement imposing the ordinary liability upon the indorser.

Although in form and in common parlance it was a purchase of the note, yet, in substance, it was a loan by way of discount made by the bank to Wise; and the relation of debtor and creditor as between them was created.

Discount is the difference between the price and amount of the debt, the evidence of which is transferred; and the character of the paper with reference to its being business or accomodation paper is immaterial as respects the transaction being properly denominated a loan. National Bank v. Johnson, 104, U. S. 271. Had the transfer been by delivery only, or by an indorsement without recourse, then, probably, it might be regarded as an absolute purchase of the note.

This is sufficient upon this point for the purposes of the present controversy. We are inclined, however, in the absence of Federal or binding authority as to the construction to be given this section 5136, R. S. U. S., to place our decision upon higher ground. A purchase may be made by way of discount, equally as well as a loan may be made by way of discount. Discount means ex m termini, a deduction or drawback made upon advances or loans of money upon negotiable paper or other evidences of debt, payable at a future day, which are transferred to the bank. Fleckner v. Bank of U. S., 8 Wheat. 338, 350; and in the same case Mr Justice Story speaks of “ a purchase by way of discount.” If the party dealing with the bank assumes a responsibility, it is a loan; if he does not, it is an advance made to him in consideration of the transfer without recourse or by delivery. If a greater rate of discount is taken or reserved than the Bank Act allows, then the bank is liable to the penalties imposed by the act, but the title of'the bank to the paper is not affected. The decision of the New York Court of Appeals in Govery’s case, 82 N. Y. 291, is much in point. See, also, the able discussion of the subject in the dissenting opinion in Lazear’s case, 52 Md. 126. We think the logic of the opinion of the Supreme Court of the United States in National Bank v. Johnson, 104 U. S. 271, leads to the same conclusion.

The defense relied on at the trial was that of a failure of the consideration of the note. Of course, as the assignment was before maturity, such defense can not be successfully interposed if the appellant bank took the note in good faith and without notice. It appears from the evidence the note was taken by the cashier of the bank in the usual course of business, and that he had no notice or knowledge of the contract of warranty in regard to the machine sold or of any failure of the consideration of the note. There was a like lack of notice or knowledge on the part of all the directors and officers of the bank, except McNeill. McNeill was president of the bank at the time the note was executed and until January, 1882, and was vice-president from the latter date until after the supposed failure of the machine to do good work, in the harvest of 1882, and after the assignment of the note. He, as a mutual friend of the payee, "Wise, and appellee, wrote both the note and the contract of warranty; and he also knew as such friend, prior to the transfer of the note, that appellee claimed the machine had failed to work as warranted, and had demanded a return of the note. It also appears that McNeill never informed any of the directors and officers of the bank of the contract between Wise and appellee, or of the supposed failure of consideration; that the cashier and book-keeper did the general business of the bank and purchased the notes, and that the only part McNeill ever took in the purchase of notes was that, if he was present, the cashier might sometimes ask him about notes he was buying, and that he did not know the bank had taken the note in question until two or three months after it had been assigned.

The general management of the business of a national bank is confided to a board of directors, and this board appoints the president, vice-president, cashier and other officers. The National Bank Act nowhere defines the duties of these several officers, but authorizes the board to do so; and in this case, the board does not appear to have exercised that authority. The president and vice-president then, of appellant, must be regarded as having only such powers and duties as are necessarily incident to their respective offices.

The president of a bank has very little inherent power; it is his duty to preside at the meetings of the board of directors and he has charge of the litigation of the bank; and other than these he has no power inherently over and beyond another director. Hodge’s Exr. v. Nat. Bank, 22 Gratt. 51. We are not advised the vice-president of a bank has inherently any other than contingent duties to perform, unless it be he is also a member of the board of directors. As matter of fact, these officers may frequently transact important business for the bank. Sometimes it is done by express authority from the directors; and sometimes, if done with the knowledge and approbation or the tacit ‘sanction of the board, it may be regarded as legalized by the principles of ratification or usage, Morse on Banks, 128. The powers and duties of a cashier are much more numerous. In ail transactions in which the bank may lawfully engage, the cashier is its managing agent. While he is the business officer of the bank, it is in the sense of one who transacts the business, and not of one who regulates and controls it. Morse on Banking, 137.

Without discussing the relative powers and duties of a board of directors and a cashier, it may perhaps be safely assumed that if the notice in this case had been to either one or the other, it would have been notice to the bank.

Parsons states the rule of law to be that a notice to a corporation binds it only when made to an officer whose situation and relation to the corporation imply that he has authority to act for the corporation in the particular matter in regard to which the notice is given. 1 Parsons on Contracts, p. 77. In Story on Agency, Sec. 140, and following sections, the subject under examination is quite fully discussed,.and in Sec. 140 b, it is said: “If we examine the subject upon general principles, and with reference to practical convenience in the administration of banks, it might seem that, to bind the banks, the notice ought to be given to the proper agents of the bank legally intrusted with the particular business to which the notice relates. If the business be legally confided to the cashier, notice to him ought to bind the bank. If it is to be done by a board of directors, as, for example, in the discounting of notes, they ought to have official notice of any illegality or informality affecting the notes, and notice to one director only, unknown to others of the board, ought not to bind the bank.”

In Angelí and Ames on Corporations the same subject is discussed in Sections 306, 307 and 308. It is there said, among other things, that notice to either of the directors whilst engaged in the business of the bank, is notice to the bank; but that where a director is not engaged in the business of the bank, notice to him will not be deemed notice to the bank. And it is also stated, notice to the director of a bank will not be deemed notice to the bank, unless the director be constituted an organ of communication between the bank and those who deal with it; and that a private communication of a fact to a director, or his knowledge of it from rumor, is clearly no notice to the board unless he communicate thefact to the board.

The rule is stated in Morse on Banks, p. 109, to be that if the director acquired the knowledge in his official capacity, or in the course of, or in relation to, any special matter or function of which he had charge as an agent of the bank, then he knows it as a director, and the law holds that the bank also knows it; but that if he acquired it solely as any other private individual might have acquired it, and not officially, or in connection with his dischai’ge of the functions of his office, or if it did .not relate to any matter in which he owed a peculiar duty to thebank, he does not know it as director, and the bank does not know it by implication from his knowledge, unless, as a matter of fact, he communicated it to his co-directors or such of them as are present at the meeting.

Tested by the rules of the law as stated, above, it would seem the knowledge of McNeill was not notice to the bank, and that the plea of a failure of consideration is no defense under the circumstances of this case. The rulings of the court upon the instructions were in conflict with the views herein expressed, and were erroneous. .

The judgment is reversed and the cause remanded.

Reversed and remanded.


text:
    Theodore Selb et al. v. Anna Mabee, formerly, etc.
    1. Dower and homestead — Contribution by widow'. — In a suit for dower and homestead brought by the widow, plaintiffs in error set up certain incumbrances which they had paid, and contended that the widow should be compelled to contribute. The Supreme Court passed upon the right of the widow to dower and homestead, and the question now in controversy is as to the amount to he paid by the widow. Held, that the parties are to contribute in proportion to the value of their respective interests. The ratable proportion will be determined by the value of the widow’s estates as compared with the value of the fee simple.
    2. Present value of homestead to be considered. — The court is of opinion that the vice of the master’s report in this case, is that he proceeds upon the false assumption that the value of the homestead is fixed by law at §1,000. The present value of the homestead is first to be ascertained and deducted and then the widow would have dower in the residue.
    8. Evidence. — Where it was urged that it is recited iu the decree that the court heard evidence, and that it will he presumed the court had evidence before it of the value of tbe fee simple and of the present values of the dower and homestead, and from such evidence fixed the amount at §950, eto. Held, that such presumption might prevail were it not that the certificate of the chancellor is certified by him to contain “ all the evidence offered by either party on the trial of said cause,” the court, therefore, must hold that there was no evidence upon which to base tbe findings of tbe court in this regard.
    4. Jurisdiction. — As the question of the right of defendant in error to dower and homestead was settled by the Supreme Court, and the only controversy now involved is as to the amount she should pay toward lifting the incumbrances, this court has jurisdiction.
    Error to the Circuit Court of Madison county; the Hon. ‘William H. Shyder, Judge, presiding.
    Opinion filed April 18, 1884.
    Messrs. Kbome & Hadley, for plaintiffs in error,
    cited Selb v. Montague, 102 Ill. 446.
    Messrs. Metcalf & Bradshaw, for defendant in error;
    cited Merritt v. Merritt, 97 Ill. 243.
   Baker, J.

This is a suit for ,/Iower aud homestead. It has twice been before the Supreme Court. Selb v. Montague, 102 Ills. 446, and Montague v. Selb, 106 Id. 49.

When it was first there, the court said: “ The decree of the circuit court granting to the widow, unconditionally, dower and an estate of homestead, was therefore erroneous in not subjecting her rights each to the condition that she should, as to each right, contribute a ratable share, in regard to such right, of the redemption money paid by appellants for the discharge of the mortgages, before she should be permitted to avail herself of that right.”

The master in chancery reported the amount to be contributed by defendant in error, as respects her estates of dower and homestead, to be $1,247.98, but the court set aside the report and fixed the amount at $950.

Eatable share means the proportion in value that the two estates or interests of the widow bear to the fee simple.

The estates vested in the widow represent a certain value, and the estate in fee, the residue in value, of the whole property. The parties are to contribute in proportion to the value of their respective interests. The ratable proportion will be determined by the value of the widow’s estates as compared with the value of the fee simple. The matter may be thus stated: The value of the whole estate is to the value of the widow’s estates, as the whole debt is to what the widow ought to pay.

It is urged by counsel that it is recited in the decree that the court heard evidence, and that it will be presumed the court had evidence before it of the value of the fee simple estate and of the present value of the dower and homestead, and from such evidence fixed the amount of $950 as the ratable and just share the widow should pay.

Such presumption might prevail were it not that the testimony heard is preserved in a certificate of the chancellor, and is certified by him to be “ all the evidence offered by either party on the trial of said cause.” We must necessarily hold there was no evidence upon which to base the findings of the court in this behalf, and to justify the amount fixed in this decree.

It appears that the total amount of the incumbrances due at the date of the decree was $3,789.55. The computation reported by the master and that made by counsel for plaintiff in error in his brief, are founded upon this total of incumbrances. It would seem it must of necessity be that the amount which the widow should contribute must have the the same relation to the whole amount o.f the incumbrances, that her estates of dower and homestead' do to the estate in which she has her dower and. homestead.

As respects dower, there should be no difficulty in ascertaining the amount in gross it should contribute. Swaine v. Perine, 5 Johns. Chy. 491; 1 Scribner on Dower, 512. We think the vice of the master’s report to be that he proceeds upon the false assumption, the value of the homestead is fixed by law at $1,000. Merritt v. Merritt, 97 Ill. 243. The present value of the homestead right is first to be ascertained and deducted, and then the widow would have dower in the residue. The calculation as to homestead should be upon the basis, not of requiring her to keep down the interest on $1,000, but of requiring her only to keep down the interest on the present value of her homestead right. It would be unjust to charge her with interest on a greater value in the property than is vested in her. It is probable from the data afforded by the record, the correct ampunt defendant in error should contribute is intermediate the sum reported by the master and that fixed by the decree.

The matter of the apportionment of costs was one resting in the discretion of the circuit court.

There is nothing in the point made that this case is not properly in this court. The questions of the right of defendant in error to dower and homestead are settled by the adjudications made by the Supreme Court. The only controversy now involved in the case, is one as to the amount she should pay toward lifting the incumbrances on the land.

Por the error indicated, the decree is reversed and the cause remanded.

Eeversed and remanded.


author: Baser J.

text:
    M. Kingman et al. v. Daniel Draper et al.
    1. Set-off. — Set-off has application only to actions brought on contract; it is a counter claim which the defendant holds against the plaintiff, and usually arises out of a transaction extrinsic to that involved in the plaintiff’s cause of action; the defendant, on properly pleading it, may recover a judgment for any excess of indebtedness in his favor, and both the original action and the cross action are ex contractu.

    2. Recoupment. — Recoupment is a mere right to reduce or defeat the plaintiff’s demand, on account of some matter connected with the transaction upon which the suit is brought. The recoupment may be to the full extent of the plaintiff’s damages, but the defendant can not recover any excess of damages; a claim originating in contract may be set up against one founded in tort, and damages for a tort in a suit on a contract.
    3. Yerdict in recoupment in excess of damages. — In an action brought upon two promissory notes given in part payment for a mill, defendants relied upon a plea whose gist was the conversion of the mill to the use of the plaintiff subsequent to the giving of the notes. Held, in the absence of a special demurrer to be a good plea in the nature of a plea of recoupment, and it was erroneous to render an affirmative verdict and judgment for an excess of damages for the defendants.
    Appeal from the Circuit Court of Wayne county; the Hon. O. S. Conger, Judge, presiding.
    Opinion filed April 18, 1884.
    Messrs. Hanna & Adams and Mr. Edwin Beecher, for appellants;
    that if plaintiffs’ act in selling the mill was illegal, defendant can only set up, by way of recoupment, so much of its value as equals plaintiffs’ claim, cited Stow v. Yarwood, 14 Ill. 424.
    Messrs. Bobinson, Boggs & Johns, and Messrs. Creighton & Sibley, for appellees.
   Baser J.

Set-off has application only to actions brought on contract, and is a cross-debt, a counter demand of claim, originating in contract, which the defendant holds against the plaintiff, and it most usually arises out of a transaction extrinsic to that involved in the plaintiff’s canse of action. The defendant may plead the set-off, or may give notice thereof under the general issue or under the plea of payment, and may recover a judgment for any excess of indebtedness in his favor. The defendant stands in the attitude of a plaintiff in a cross-action and both the original action and the cross-action are ex eontraetu.

Recoupment proceeds upon another principle, and is a mere right to reduce or defeat the plaintiff’s demand, on account of some matter connected with the transaction upon which the suit is brought. The recoupment may be to the full extent of the plaintiff’s damages, but the defendant can not recover any excess of damages. A claim originating in contract may be set up against one founded in tort; and damages for a tort in a suit on a contract. The law of recoupment is well settled in this State. See the leading case of Stow v. Yarwood, 14 Ill. 424; also Streeter v. Streeter, 43 Id. 155, and Waterman v. Clark, 76 Id. 428. The cases of Bross v. C. & V. R. R. Co., 9 Bradwell, 363, and Burlingame v. Davis, 13 Bradwell, 602, are on the same line. This suit was brought on two promissory notes, the principals of which amounted to $810.

The verdict and judgment were for the defendants for $738.70. It is plain the judgment can not be sustained upon the record before us, unless it be upon the basis of the sixth plea. That plea is, in substance, that plaintiffs sold defendants a saw-mill, in consideration for which defendants executed the notes in suit and other notes; that afterward plaintiffs, assuming to act under and by virtue of a chattel mortgage, took possession of the mill and made a pretended sale of it to themselves, and then removed it and converted it to their own use; and that the mill was reasonably worth $2,000, and out of this sum of $2,000 the plea offers to set off and allow the plaintiffs the full amount of their damages. The plea is, in the absence of a special demurrer, a good plea, and may, not improperly, be named a plea of recoupment. The cause of action disclosed by it is in trover for a conversion of the property. It does not allege a promise or proceed upon the ground of a contract; but it is for a tort, and its gist is the conversion of the mill to the use of the plaintiffs. "We have seen that one may not set off a tort against a contract, or a contract against a tort, and recover an affirmative judgment for any excess of damages. The most he can do is to recoup, discount or mitigate the plaintiff’s damages, and thus reduce or wholly defeat a recovery by the plaintiff.

It may be urged the evidence shows the mill was afterward sold by the plaintiffs to a third party and converted into money, and that in such case the defendants may waive the tort and sue for the money. But then, the plea does not proceed upon that ground; and what is perhaps of more substantial moment as respects the real merits of the controversy, the amount of the verdict and judgment, and the instructions of the court, were all based upon the theory of a right in the defendants to recover upon their plea to the extent of the value of the mill, some $1,600, and not on the theory that the limit of the recovery on the plea was $1,050, the sum received by the plaintiffs for the mill. And so, the judgment is reversed and the cause remanded.

Beversed and remanded.