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    Samuel Cohen, Administrator, and Florence Harbison, Appellants, v. Toy Gun Manufacturing Company, an Illinois Corporation, John Cudahy, George W. Wilbur and Lucy M. Glos, Appellees.
    Gen. No. 16,825.
    1. Corporations — stockholders’ liability for unpaid stock. One seeking to enforce a stockholder’s liability for unpaid stock may proceed at law under the Corporation- Act, § 8, or in equity either under Corporation Act § 25, or Chancery Act § 49.
    2. Corporations — remedy of judgment creditor of a corporation on return of execution unsatisfied under Chancery Act § lfi. Under Chancery Act § 49, providing that when execution is issued against the property of a defendant and is returned unsatisfied, the party suing out the execution may file a -bill against the defendant and any other to compel discovery of property etc., and that the court shall have power to decree satisfaction of the sum due on such judgments out of any personal property, etc., discovered, a judgment creditor of a corporation on return of execution unsatisfied may seek satisfaction against one or more stockholders for stock, which has not in fact been fully paid.

      3. Corporations — when judgment creditor of corporation may proceed in equity to enforce liability for unpaid, stock though judgment is on tort. Under Corporation Act § 25, providing for suits in equity against a corporation and stockholders, or those liable for the debts of a corporation, in case execution is returned unsatisfied and Chancery Act § 49, providing for bills of discovery against a defendant when execution against his property is returned unsatisfied, a judgment creditor may so proceed against a corporation, to enforce liability for unpaid stock, though his judgment is founded on a tort claim.
    4. Judgments — when judgment is a debt. A judgment is a “debt” whether founded on a tort or contract claim.
    5. Corporations — liability of stockholders who receive fully paid stock for property purchased by the corporation. Stockholders of an insolvent corporation must respond to the creditors for the. par value of fully paid stock, given for property purchased by the corporation, less the actual value of the property taken unless there is good faith in valuing the property.
    6. Corporations — presumption of bad faith when property purchased at an exaggerated value for fully paid stock. There is a strong presumption of bad faith where property is purchased by a corporation, at a highly exaggerated value, for fully paid stock.
    7. Corporations: — when acceptance of property at too high a valuation, not regarded as fraudulent. It is only when a mistake by directors of a corporation, in accepting property at too high a valuation in payment for stock is in a valid bargain and sale made in good faith in the intelligent exercise of honest judgment that it is not regarded as fraudulent over-valuation.
    8. Corporations — when proof showing over-valuation of property taken for stock may be made under bill. Where a bill alleges that there is $200,000 of certain stock subscriptions of a corporation due and owing to creditors thereof, the complainant may make proof of fraudulent over-valuation in property received for stock though there is no direct charge of fraud in the bill.
    9. Corporations — liability of assignor of unpaid stock to creditors. Under Corporation Act § 8, one who assigns stock to another is not released from liability to the corporation creditors for the unpaid portion.
    10. Corporations — effect of assignment of unpaid stock before bill filed to enforce liability. The fact that a stockholder sold and assigned his stock before the filing of a bill to enforce liability for the unpaid portion thereof, does not affect his. liability.
    11. Corporations — stockholders’ liability. On a bill to enforce liability against stockholders for unpaid stock, it is not necessary to make all the stockholders parties defendant.
    12. Corporations — conclusiveness of judgment. On a bill to enforce liability of Stockholders to satisfy a judgment against the corporation, the judgment is conclusive, where no fraud or lack of jurisdiction is shown; and a contention that no recovery can be had because the bill shows that the judgment is based on an ultra vires act of the corporation is without merit.
    13. Corporations — liability of assignee of unpaid stock,. An assignee of' stock with notice that it is not fully paid, though it purports to be such, is jointly liable with the seller for the balance unpaid.
    14. Corporations — when sufficient showing that assignee of stock knew that it was unpaid. On a bill by a creditor to enforce liability for unpaid stock, a sufficient showing is made that a defendant assignee of the stock knew that it was unpaid if the creditor establishes facts properly leading to an inference of knowledge that .property for which the stock was issued was overvalued.
    15. Corporations — when property transferred so over-valued as to make owners of stock issued therefor liable for unpaid portion. There is such fraud, either actual or constructive, in the organization of a corporation as to render the stockholders liable to creditors for unpaid stock, where a patent variously estimated as worth from $5,000 to $25,000 was transferred to it for its entire capital stock valued at $250,000.
    Appeal from the Circuit Court of Cook county; the Hon. Thomas C. Windes, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1910.
    Affirmed in part and reversed in part and remanded with directions.
    Opinion filed October 3, 1912.
    Edmund D. Carter and W. D. Elmer, for appellant.
    F. J. Griffen, for appellee.
   Mr. Presiding Justice Gridley

delivered tlie opinion of the court.

This was a bill in equity, filed in the Circuit Court of Cook county, June 7, 1907, by Samuel Cohen, administrator of the estate of Ervine E. Sanford, deceased, hereinafter called complainant, a judgment creditor of the Toy Gun Manufacturing’ Company, an Illinois corporation and hereinafter called the company. The bill was filed against the company, John Cudahy (one of the original subscribers to its capital stock), and certain other stockholders of the company (assignees of stock originally subscribed for either by Cudahy or Edward Hazelhurst), to subject the unpaid portion of the stock to the payment of complainant’s judgment, and invited other creditors to join in the bill. On August 29, 1907, Florence Harbison, hereinafter called intervener, filed her petition, alleging that she also was a judgment creditor of the company, and asked for practically the same relief as complainant. The judgment of complainant was for $6,000 and costs, rendered in said Circuit Court, April 13, 1907, upon which judgment execution had been issued, which after demand made by the sheriff had been returned “no property found” and no part satisfied. Said judgment was rendered against the company in a tort action for damages occasioned by the negligence of the company, resulting in the death of complainant’s intestate. The judgment of the intervener was rendered against the company in a tort action, for $300 and costs, .June 22, 1907, in the Municipal Court of Chicago, upon which judgment execution had been issued and, after demand made by the bailiff, had been returned “no property found” and no part satisfied. After evidence taken in open court, and after arguments by the solicitors for the respective parties, the chancellor entered a decree, March 26, 1910, dismissing complainant’s bill as amended, as well as the petition of the intervener, for want of equity, each party to pay his own costs and charges in that behalf. In said decree the court found, (a) that it had jurisdiction of the subject matter and of the parties; (b) that the judgments made the basis of the bill and the intervening petition arose out of tort; (c) that there was no such fraud, either actual or constructive, in the organization of the company as a corporation and the transfer of the patent for stock therein, as to hold the stockholders liable for any debts of the corporation for unpaid stock; and (d) that these judgments, being for torts, are without the purview of our statute on corporations as debts of the corporation for which the stockholders would he liable for unpaid- stock. Complainant and intervener jointly prayed an appeal to this court, which was duly perfected, and the record is before us.

The bill, as amended, after setting forth the recovery of complainant’s judgment and the return of the execution unsatisfied, charged substantially, in part, that the company was incorporated about Oct. 7, 1902, and still existed as a corporation; that its capital stock was $250,000, of which amount $125,000 was subscribed for by the defendant, Cudahy, and $125,000 was subscribed by Edward Hazelhurst, (who was not made a party to the bill); that not to exceed $25,000 of Cudahy’s subscription was ever paid to the company, and that there was still due from him on his subscription the sum of $100,000; that Cudahy and Hazelhurst, being the owners of an undivided one-half interest in a letters-patent for an improvement in toy guns, had issued to them and to others designated by them, in payment for the transfer of said patent to the company, the entire capital stock of the company; that said patent at the time of said transfer was not worth to exceed $50,000; that $200,000 of said capital stock was thereby left unpaid for; that there was owing to said company and its creditors $100,000 by Cudahy, on his subscription for said stock, and a like sum from Hazelhurst on his subscription; that Hazelhurst was wholly insolvent and a judgment against him would be of no value whatever; that on January 27, 1903, Cudahy assigned and transferred to Henry L. Glos, now deceased, all of his stock in the company; that thereafter said Glos and said Hazelhurst caused to be assigned and transferred to the defendant, George W. Wilbur, 250 shares of the stock of the company, so .subscribed for by the defendants Cudahy and Hazelhurst; that said Wilbur had notice that said stock so assigned to him had not been fully paid for; that about July 6, 1903, the company, through its negligence, caused an explosion of a chemical compound, illegally manufactured by it at its factory in Chicago, whereby complainant’s intestate was killed and others injured; that the company incurred liabilities, on account of its negligent act, of many thousands of dollars; that on September 21, 1903, the company filed a petition in bankruptcy in the United States Court for the Northern District of Illinois; that a sale of the assets of the company was made under order of the Bankruptcy Court to the highest bidder for cash, who, by previous arrangement with GHos, transferred said assets to certain persons named by Grlos, in which assets Grlos retained an interest, and from the proceeds of which the heirs and devisees of said Grlos, subsequent to his death, received money; that at the time of his death Grlos was the owner of 1,198 shares of the stock of the company and of a large estate; that prior to his death, Grlos caused the dismissal of the bankruptcy proceedings, and that since that time the company had ceased doing business. There was no direct charge of fraud on the part of Cudahy and Hazelhurst and the other directors in causing the 2,500 fully paid shares to be issued to Cudahy and Hazelhurst in consideration of the transfer of the patent.

The evidence introduced on the hearing tended to support such allegations of the bill as are above mentioned. The bill as amended made the company, John Cudahy, George W. Wilbur, and the devisees and heirs at law of Henry L. Glos, deceased, parties, and prayed that they might make full answer, etc., and especially that they “set out and discover the nature and situation, amount and value of all the property, interests and effects” of the company, and that they might be decreed to pay to complainant the amount remaining unpaid on the stock originally subscribed for by the defendant Cudahy, to the extent of the amount due complainant, for principal and interest on complainant’s judgment, and costs, including amounts that might be found due other creditors of the company who might join herein and contribute to the expense, etc. On the hearing, it appeared that the entire estate of Henry L. Glos had been left by will to his widow, Lucy M. Glos, that said estate had been fully settled and the executors discharged more than one year prior to the rendition of complainant’s judgment, and the case was dismissed as to the heirs and devisees of said Glos, excépt the defendant, Lucy M. Glos. She was retained as a defendant on the theory, as we understand it, that the evidence showed that as sole devisee of said Henry L. Glos, there came into her hands, after his death, the sum of $1,250 in cash as the proceeds of the assets of the company, which, as charged in the bill, after sale by the bankruptcy court, were transferred to certain persons named by Henry L. Glos and in which he retained an interest, that this was a contract, or secret arrangement, in fraud of the creditors of the company, and that Lucy M. Glos, having received the proceeds of that fraudulent contract, was liable to complainant to said amount of $1,250.

After a careful examination of the record and the briefs of counsel, we have reached the conclusion that neither the allegations of the bill nor the evidence introduced sustain complainant’s theory as to the $1,250 in the hands of Lucy M. Glos, and that the chancellor did not err in dismissing the bill and the intervening petition as to her.

As to the liability of the defendant Cudahy, the evidence showed that Edward Hazelhurst had made application for letters-patent for an improvement in toy guns; that on September 13, 1902, after some negotiations with the defendant Cudahy, Hazelhurst sold Cudahy a one-half interest in said patent for $5,000 cash, and $20,000 more to be paid out of the profits of manufacturing and selling the invention, and authorized the issuance of the patent to himself and Cudahy as equal owners, each of an undivided one-half interest; that about two weeks thereafter, and before the application had been allowed, Hazelhurst and Cudahy decided to organize an Illinois corporation, with principal office in Chicago, with a capital stock of $250,000, number of shares 2,500,-amount of each share $100, “to manufacture and sell toy guns, pistols and other toy articles,” one-half of said capital stock to go to Hazelhurst and the other half to Cudahy; that on October 7, 1902, the defendant company was organized as a corporation ; that Hazelhurst subscribed for 1,250 shares, Cudahy for 1,246 shares, Morris Cassard for 2 shares, Evan Humphrey for 1 share and Timothy D. Hurley for 1 share; that Cassard and Humphrey were employes of Cudahy and Hurley was Cudahy’s attorney; that at the first meeting of the stockholders the five subscribers were elected directors of the company; that Cassard and Humphrey paid nothing for the stock so subscribed for by them, and that they and Hurley represented no other interests than those of the defendant Cudahy; that at the first meeting of the directors a resolution was adopted in which it was set forth (as changed by interlineations) that Cndahy and Hazelhurst were the sole owners of an application for a patent, serial No. 103,961, and of a patent for the manufacture of toy guns, and that they had made a proposition to sell to the company the patent for the sum of $250,000, and “Be it Resolved” that said proposition be accepted and that the president and secretary be instructed to issue to them, as they may direct, capital stock of the company to the extent of $250,000 as “payment in full” for the transfer of all the right, title and interest of Cndahy and Hazelhurst in and to said application and patent to the company; that on October 16, 1902, Hazelhurst and Cndahy executed an assignment of the application for the patent to the company, and authorized its issuance, if allowed, to the company; that the patent was not allowed until March 24, 1903; that it was issued to the company, as assignee, by direct and mesne assignments from Edward Hazelbnrst, assignor; tbat in tbe meantime, on October 10, 1902, before said patent was granted, and before tbe assignment of tbe application for tbe patent by Hazelbnrst and Cndaby to tbe company, certificates of stock were issued to Hazelburst and Cudaby and tbe other subscribers in accordance with their several subscriptions; tbat two patent experts testified as to tbe value of tbe patent; tbat one of them placed its value at not to exceed $10,000, and the other at not to exceed $5,000; tbat tbe latter expert testified tbat tbe patent was not a basic patent, tbat it appeared from the file wrapper and contents tbat all of tbe claims except one, as originally drafted, bad been rejected by tbe patent office, and tbat tbe claims bad to be narrowed before tbe patent was allowed; tbat tbe inventor, Hazelburst, testified tbat be considered tbe patent to be worth $25,000 at tbe time tbe company was organized (which was tbe highest value fixed by any witness), and tbat be (Hazelburst) bad no property subject to execution. Tbe defendant‘Cudaby, and other witnesses called in bis behalf, in attempting to justify tbe sale of tbe patent to tbe company for $250,000 of stock fully paid, testified tbat tbe usual way of figuring capitalizations of companies was to take into consideration tbe profits tbat might result from tbe business. Cudaby also testified tbat when Hazelburst urged him to buy a one-balf interest in said patent, tbe latter made such representations to him, as to the great demand for tbe patented article and tbe great profits to be derived from tbe manufacture and sale thereof, tbat after a careful investigation be was led to believe, and did believe, tbat a profit of from $25,000 to $50,000 per year could be made, and tbat there was no fraudulent intent of any kind in bis mind at the time of tbe transfer of tbe application for tbe patent to tbe company in consideration of fully paid stock to said amount, because be believed at tbe time that, under proper management, the manufacture and sale of the article would pay a good dividend on a capital of $250,000. But the defendant Cudahy, and the witnesses called in his behalf, did not fix any definite value of the patent at the time of its transfer to the company. Cudahy also testified that he actually expended about $15,000 in the enterprise, $5,000 of which he paid Hazelhurst personally at the time of the transfer of the one-half interest in the patent to him, $5,000 as a loan to the company, and about $5,000 in the payment of the company’s bills as they came in; that the business was not a success and that the company paid no dividends; that he finally decided to sell out, having become dissatisfied with Hazelhurst, and directed Hazelhurst to try and find a purchaser for all of-his stock; that Hazelhurst brought Henry L. Grlos to him, and that during January, 1903 (this was before the patent had been allowed), he caused to be transferred all of his 1,250 shares of stock, which were in his name or in the names of others in his interest, to said Grlos, and that Grlos paid him the amount which he had actually expended in the enterprise — about $15,000. After Cudahy sold his stock he had no further connection with the company.

As to the liability of the defendant Wilbur, as assignee and purchaser of 250 shares of the Hazelhurst and Cudahy stock from Hazelhurst and Grlos, the evidence showed that he was retained as attorney for Hazelhurst and Grlos to assist in bringing about the sale and transfer of the Cudahy stock to Grlos and that he participated therein; that Hazelhurst described to him the manner in which the corporation had been organized; that Wilbur carefully scrutinized the record book of the corporation and decided to and did, as he testified, in the presence of all parties then in interest, Drake some changes and interlineations in the minutes of the first meeting of the board of directors, and particularly in the resolution as to the transfer of all of the stock in consideration of the transfer to the company of the patent; that Wilbur had notice of the manner in which the stock had been issued and how and to what extent paid for; and that after the consummation of this sale of the Cudahy stock to Glos, Wilbur was given and accepted 125 shares of Ilazelhurst’s stock and 125 shares of Glos’s stock, in all 250 shares, of the par value of $25,000. Complainant seeks to charge Wilbur, as assignee of Hazelhurst and as assignee of Glos, for the unpaid balance due on this stock, which, as is claimed, Wilbur received in consideration of legal services rendered Hazelhurst and Glos.

The evidence further disclosed that an explosion occurred at the factory of the company, in which complainant’s intestate was killed and others were injured ; that as a result the business of the company, as Wilbur testified, “had to cease”; that the company went into bankruptcy; that afterwards the bankruptcy proceedings were dismissed, but the company ceased doing business; that from the schedules filed in the bankruptcy proceedings on September 21, 1903, which schedules were signed “Toy Gun Mfg. Co., by Henry L. Glos, Treas. Pet.” it appeared that the total assets of the company were $17,639.12, and the total liabilities $14,139.10, and in which schedules was the item “One patent, Ho. 723,603 — uncertain value”; that at the bankrupt sale had thereafter the purchaser, or pretended purchaser, of said assets testified that, although the patent was transferred to him with the other assets, he gave nothing for said patent, and did not consider its value in making his bid.

It is first urged by counsel for Cudahy that the decree should be sustained because the judgments of complainant and of the intervener, being founded on tort claims, are without the purview of the statutes of this state as “debts” of a corporation for which the defendant Cudahy, as a stockholder, would be liable for unpaid stock. After a careful examination into this question and a review of the statutes of this state and of pertinent authorities, we have reached a contrary conclusion.

A party seeking to enforce a stockholder’s liability for unpaid stock may proceed, under the statutes of this state, at law under Section 8 of our Corporation Act, or he may proceed in equity, either under Section 25 of said Act or under Section 49 of our Chancery Act. Parmelee v. Price, 208 Ill. 544, 559. Section 8 of the Corporation Act provides:

“Every assignment or transfer of stocks, on which there remains any portion unpaid, shall be recorded in the office of the recorder of deeds of the county within which the principal office is located, and each stockholder shall be liable for the debts of the corporation to the extent of the amount that may be unpaid upon the stock held by him, to be collected in the manner herein provided. No assignor of stock shall be released from any such indebtedness by reason of any-assignment of his stock, but shall remain liable therefor jointly with the assignee until the said stock be fully paid. Whenever any action is brought to recover any indebtedness against the corporation, it shall be competent to proceed against any one or more stockholders at the same time to the extent of the balance unpaid by such stockholders upon the stock owned by them, respectively, whether called in or not, as in cases of garnishment. Every assignee or transferee of stock shall be liable to the company for the amount unpaid thereon, to the extent and in the same manner as if he had been the original subscriber.”

Construing this section, it has been decided by our Supreme Court in Parmelee v. Price, 208 Ill. 544, 555, that a stockholder who is still liable to the corporation for the unpaid portion of his subscription, is directly liable to a creditor under this section, and the creditor may sue the corporation and garnish the stockholder at the same time without obtaining a judgment against the corporation and having an execution returned “no property found,” and that the right of action accrues to the creditor and against the stockholder as soon as the debt against the corporation is due. But, as was said in the same case on page 556, “In the case at bar, however, no right of action accrued to the creditor under Section 8, supra, for the reason that, as between the corporation and the stockholder, the stock subscription was fully paid. A garnishing creditor in a proceeding by garnishment can assert no greater rights against the garnishee than- could his debtor. * * * Consequently appellant’s right of action against the stockholders in the case at bar did not accrue until they had a right to proceed, in equity, to set aside the fraudulent arrangement by which the stock had been issued in exchange for property received by the corporation at a fraudulent over-valuation. ” Complainant in the case before us “proceeded” in equity against the stockholders, making the corporation a party to the bill, after a judgment had been obtained against the corporation and a return of the execution thereon unsatisfied.

Section 49 of the Chancery Act provides:

“Whenever an execution shall have been issued against the property of a defendant, on a judgment at law or equity, and shall have been returned unsatisfied, in whole or in part, the party suing out such execution may file a bill in chancery against such defendant, and any other person, to compel the discovery of any property or thing in action, belonging to him, or held in trust for him, and to prevent the transfer of any such property, money or thing in action, or the payment or delivery thereof to the defendant, except when such trust has, in good faith, been created by, or the fund so held in trust has proceeded from, some person other than the defendant himself. The court shall have power to compel such discovery, and to prevent such transfer, payment or delivery, and to decree satisfaction of the sum remaining due on such judgments, out of any personal property, money or things in action, belonging to the defendant, or held in trust for him, with the exception above stated, which shall be discovered by the proceedings in chancery, whether the same were originally liable to be taken in execution at law or not; provided, etc.”'

Under this section it has been held that a judgment creditor of a corporation, after a return of an execution on its judgment unsatisfied, may seek satisfaction against one or more delinquent stockholders of the corporation for stock which has not, in fact, been fully paid. Young v. Farwell, 139 Ill. 326, 332; Palmer v. Woods, 149 Ill. 146, 156; Coleman v. Howe, 154 Ill. 458, 474; Siegel v. Andrews, 181 Ill. 350, 356; Singer v. Hutchinson, 183 Ill. 606, 618; Parmelee v. Price, 208 Ill. 544, 552.

Section 25 of the Corporation Act provides:

“If any corporation or its authorized agents shall do, or refrain from doing any act which shall subject it to a forfeiture of its charter or corporate powers, or shall allow any execution or decree of any court of record, for a payment of money, after demand made by the officer, to be returned ‘No property found,’ or to remain unsatisfied for not less than ten days after such demand, or shall dissolve or cease doing business, leaving debts unpaid, suits in equity may be brought against all persons who were stockholders at the time, or liable in any way, for the debts of the corporation, by joining the corporation in such suit; and each stockholder may be required to pay his pro rata share of such debts or liabilities to the extent of the unpaid portion of his stock, after exhausting the assets of such corporation. And if any stockholder shall not have property enough to satisfy his portion of such debts or liabilities, then the amount shall be divided equally among all the remaining solvent stockholders. And courts of equity shall have full power, on good cause shown, to dissolve or close up the business of any corporation, to appoint a receiver therefor,” etc.

In speaking of Sections 8 and 25 of the Corporation Act, our Supreme Court, in the case of Alling v. Wenzel, 133 Ill. 264, 272, said:

“These two sections, having reference to the same subject, — the liability of stockholders, and the remedies by which to enforce the same, — should be so construed that each may stand, and effect be given to the provisions of each. The first section creates the liability of the stockholder and defines its extent, and also makes his assignee equally and jointly liable with him. Section 25 authorizes creditors of the corporation to bring suits in equity against the corporation and stockholders to enforce the liability of the latter, if the corporation does, or fails to do, any act subjecting it to a forfeiture of its charter, or fails to make payment, or permits executions to be returned no property found, after demand by the officer, or shall dissolve or cease to carry on its business, as therein provided. The liability of the stockholder is for his unpaid stock. To the extent it is unpaid, he is liable for the debts and obligations of the corporation.”

Because of the language of Sections 25 and 49, and because of the decisions of our Supreme Court above cited, we are of the opinion that when any execution for the payment of money on a judgment is returned “no property found” against a corporation, the judgment is such an obligation or liability of the corporation as will allow the judgment creditor to proceed in equity under either section to enforce the liability of a stockholder. of the corporation on his unpaid stock to the extent it is in fact unpaid. In other words, we hold that the judgment creditor may so proceed when his judgment is founded on a tort claim. .

Counsel for Cudahy argues that Sections 8 and 25 make the holders of unpaid stock in a corporation liable only for “debts” of the corporation to the extent of the unpaid portion of the stock held by him, that a “debt” does not mean a claim for damages for a tort and that procuring a judgment on a tort claim does not change such claim into a “debt.” Counsel does not mention that portion of Section 25 which says “each stockholder may be required to pay his pro rata share of such debts or liabilities to the extent of the unpaid portion of liis stock.” Webster’s dictionary defines tbe word “liability” as “the state of being bound or obliged in law or justice * * * that which one is under obligation to pay.” Furthermore, we think a judgment is a “debt,” whether founded on a tort claim or contract claim. Bouvier’s Law Dictionary, under the heading of “Debt (Lat. debere, to owe; debitum, something owed),’’ defines a ‘ ‘judgment debt” as ‘ ‘ one which is evidenced by matter of record, ’ ’ and says “a debt may be evidenced by matter of record, by contract under seal, or by a simple contract. The distinguishing and necessary feature is that a fixed and specific quantity is owing and no further valuation is required to settle it.” In Grey v. Bennett, 3 Metc. (Mass.) 526, it was said: “The word ‘debt’ is of large import, including not only debts of record, or judgments, and debts by specialty, but also obligations arising under simple contract, to a very wide extent; and, in its popular sense, includes all that is due to a man under any form of obligation or promise.” In re Comstock, 22 Vermont 642, it was said: “There is no distinction, under the bankrupt law, between a judgment in an action arising ex delicto and a judgment in an action arising ex contractu. They are both ‘debts’ within the meaning of the law, and both provable against the estate of the bankrupt.” See, also, In re Brook, 3 McLean (U. S.) 317; Howland v. Carson, 28 Ohio St. 625. “A claim of tort against the corporation is not a debt of the company for which the stockholders or officers are liable.” 8 Am. & Eng. Enc. Law (2d Ed.) 993; see, also, Hill v. Bowman, 35 Mich. 191. And a claim for damages in an action of tort does not become a ‘debt’ by verdict before judgment. Zimmer v. Schleehauf, 115 Mass. 52. “But when judgment has been entered upon a verdict recovered in an action for a tort, the judgment is as much a debt as if recovered in an action ex contractu." 8 Am. & Eng. Enc. Law 994. “A judgment against a corporation is certainly a debt of tbe corporation without reference to the question whether it was founded upon a tort or upon a contract. Hence, where it is sought merely to subject what remains unpaid by the shareholder in respect of his shares, it is clear that any demand against the corporation which has been reduced to a judgment will be available as a basis of such a proceeding without reference to the nature of the original claim. If it is merged in the judgment it becomes a ‘debt of record,’ in the language of the common law.” 10 Cyc. 684; 3 Thompson on Corp., Sec. 3112; Powell v. Oregonian Ry. Co., 36 Fed. Rep. 726. In Clapp v. Peterson, 104 Ill. 26, 35, it was decided that a money decree, rendered against a corporation at the suit of a party who charged she had been induced by the fraudulent misrepresentations of the corporation to make a sale to the corporation of certain property for an inadequate consideration, is, in a subsequent action in equity, brought by said party to subject to the payment of said decree certain property in the hands of a former stockholder of the company, to be considered as “the highest evidence of an indebtedness by the company.” We are aware that there are decisions in other jurisdictions holding, under statutes subjecting the unpaid portion of shares of stock in a corporation to the payment of the debts of the corporation, that a judgment founded on a tort claim is not such a debt, but upon examination into many of these statutes and decisions it will be found that the statutes use the words “debts contracted,” or some other limitation on the word “debt.” We are also aware of some decisions in other jurisdictions squarely holding that a judgment founded on a tort claim is not a debt, but to this doctrine we cannot agree.

It is also urged by counsel for Cudahy that the court correctly found that there was no such fraud, either actual or constructive, in the organization of the defendant company as a corporation and the transfer of the patent for stock therein, as to hold the stockholders liable for any debts of the corporation for unpaid stock. Under the facts of this case we cannot agree with this contention. Unless there is entire good.faith in valuing property, purchased by a corporation for fully paid stock, the stockholders must respond to the creditors of the corporation, when insolvent, for the par value of such stock, less the actual value of the property taken. Coleman v. Howe, 154 Ill. 458. And where property is so taken at a highly exaggerated value, a strong presumption of bad faith arises which will be conclusive unless rebutted. And the issuance of fully paid stock to the amount of $300,000 for property worth but about $75,000 is fraudulent on its face. Coleman v. Howe, supra. The law requires that the directors of a corporation obtain money or money’s worth to the full amount of a stock subscription. If they see fit to accept property in lieu of cash, they can only take it at its fair cash market value, or, if it has no ascertainable market value, only at such a price as might be realized by selling the property to others for cash. They should ascertain the value of such property precisely in the same manner as they would do if they were about to invest their own money therein. The rule, that a mistake by directors in accepting property at too high a valuation in payment of a stock subscription cannot be regarded as a fraudulent over-valuation, applies only where the transaction constitutes a valid contract of bargain and sale, made in good faith by the directors, and in the intelligent exercise of fair and honest judgment on their part, and does not apply to a sham transaction. Gillett v. Chicago T. & T. Co., 230 Ill. 373; see, also, Sprague v. National Bank of America, 172 Ill. 149; Thayer v. El Plomo Mining Co., 40 Ill. App. 344, where mining property of little value was taken in full payment of the stock; Moore v. U. S. Barrel Co., 238 Ill. 544, where a patent of uncertain value was taken in payment for the stock. And a stockholder’s liability is not affected by the bankruptcy of the corporation. Tibballs v. Libby, 87 Ill. 142.

Counsel for Cudahy also makes the point that there was no allegation of fraud, in terms, in the bill, and no allegation that either Cudahy or Hazelhurst or the other directors, knowingly or intentionally over-estimated the value of the patent. While it is true there was no direct charge of fraud in the bill, it was alleged that there was $100,000 of the stock subscription of Cudahy, and a like sum of the stock subscription of Hazelhurst, due and owing to the creditors of the corporation, and we think this allegation was sufficient to enable complainant to make proof of fraudulent overvaluation. Under an allegation in a bill that the stock of a corporation is unpaid, proof of facts amounting to fraudulent over-valuation of the property taken by the corporation for it may be introduced, although fraud is not, in terms, charged in the bill. Coleman v. Howe, 154 Ill. 458.

Counsel for Cudahy also urges that at the time of the explosion at the factory of the company, Cudahy had sold and transferred all of the stock originally subscribed for by him, and that subsequently to such transfer he was not in any way, directly or indirectly, connected with the business of the corporation. Under Section 8, supra, an assignment of stock by a stockholder to another party does not release him from liability to creditors of the corporation for the unpaid portion upon said stock. Sprague v. National Bank of America, supra; Moore v. U. S. Barrel Co., supra. And the fact that the stockholder sold and assigned his stock before the bill was filed to enforce that liability makes no difference. Florsheim v. Illinois T. & S. Bank, 192 Ill. 382.

Counsel also urges, as a. reason why the decree should be affirmed, that all the stockholders, particularly Edward Hazelhurst, were not made parties defendant to the bill. There is no force in this contention. “A corporation creditor may, after judgment against the corporation and execution returned unsatisfied, proceed by bill against one or more delinquent stockholders without joining all, those sued having the right to bring in all others by cross-bill.” Palmer v. Woods, 149 Ill. 146, 155; Siegel v. Andrews, 181 Ill. 350, 356; Singer v. Hutchinson, 183 Ill. 606, 618; Coleman v. Howe, 154 Ill. 458, 474. “A creditor of a corporation seeking satisfaction of his debt need look no further than to find a solvent stockholder who is liable for it,a and he sustains no relation to the corporation which requires him to adjust equities between stockholders or between the corporation and others.” Edwards v. Schillinger, 245 Ill. 231, 244.

Counsel also argues, because the bill alleges that the company, through its negligence and carelessness, caused an explosion of a chemical compound, “illegally manufactured” by it at its factory, which resulted in the death of complainant’s intestate, that complainant’s judgment is based upon an ultra vires act of the company, and therefore, complainant cannot recover. This contention is, wé think, without merit. It is a well settled rule that a judgment rendered in a court of competent jurisdiction is conclusive between parties and privies in regard to all matters of controversy determined by the judgment; and all persons, represented by the parties, both plaintiff and defendant, are bound and concluded as privies by the judgment rendered. In the absence of fraud in obtaining the judgment against the company, and in the absence of a want of jurisdiction in the court wherein the judgment was rendered, which is not shown, we t.hinlr the complainant’s judgment was conclusive against the stockholders, under this bill. Singer v. Hutchinson, 183 Ill. 608, 612.

We have not been favored with a brief and argument on behalf of the defendant, George W. Wilbur. We are of the opinion that he is liable on the unpaid portion of the 125 shares of stock originally subscribed for by Hazelburst, and for the 125 shares of stock originally subscribed for by the defendant Cudahy, which 250 shares of stock, as the evidence disclosed, were assigned and transferred to him on January 27, 1903, and for which he signed a receipt. We think the evidence shows that when he received the stock he had notice that the stock had not been fully paid. When the assignee of stock in a corporation takes the same with notice that it is not fully paid stock, though purporting to be such, the assignee is jointly liable with the seller or assignor for the balance unpaid. Alling v. Wenzel, 133 Ill. 264, 272; Coleman v. Howe, supra; Sprague v. National Bank of America, supra; Higgins v. Illinois T. & S. Bank, supra; Garden City Sand Co. v. American Refuse Co., 205 Ill. 42; Gillett v. Chicago T. & T. Co., supra. And it is sufficient if, on the hearing, the creditor establishes such facts as properly lead to an inference of knowledge of overvaluation on the part of the purchaser. Garden City Sand Co. v. American Refuse Co., supra. And the apparent owner of the stock, as appears from the books of the corporation, is liable (Sherwood v. Illinois T. & S. Bank, 195 Ill. 112), and a person receipting for a certificate of stock is presumed to be the owner of the stock. Gillett v. Chicago T. & T. Co., supra.

For the reasons indicated the decree of the Circuit Court in so far as the same directs the dismissal of the bill as to Lucy M. Glos is affirmed, but in so far as it relates to the defendants, John Cudahy and George W. Wilbur, it is reversed and remanded with directions to enter a decree against said Cudahy and said Wilbur in accordance with the prayers of said bill of complaint as amended and said intervening petition.

Affirmed in part and reversed in part and remanded with directions.


source: Caselaw Access Project

author: Mr. Presiding Justice Gridley

license: Public Domain

text:
    William Sear, Plaintiff in Error, v. Thomas A. Moore, Defendant in Error.
    Gen. No. 16,857.
    1. Agency — when lease sufficiently signed by real estate agents as agents. Where real estate agents are verbally authorized by the owner of premises to sign leases thereof, a lease signed by. a manager of the agents’ renting department in the owner’s name by “M. & P. agents” is a signing by the agents as agents for the owner, when such manager is authorized to sign landlords’ names by them as agents.
    2. Statute op pbauds — when lease not within. A lease prepared and signed for the owner by a verbally authorized agent and signed and delivered to the agent by the lessee, is not unenforceable in an action for rent, though not to be performed within a year of the signing.
    3. Statute op pbauds — when lease not within section one. A lease though not to be performed within a year of the making may be executed by a verbally authorized agent.
    4. Statute op pkaudS' — when lease not within section two. A lease for one year though signed by the lessee and by a verbally authorized agent of the lessor some time before it was to go into operation is not unenforceable by the lessor under the statute relating to frauds and perjuries section 2, because the agent was not authorized in writing, since the term of the lease is not for more than a year.
    Error to the Municipal Court of Chicago; the Hon. W. W. Dietebich, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1910.
    Reversed and remanded.
    Opinion filed October 3, 1912.
    P. H. Bishop, for plaintiff in error.
    Albert H. Meads, for defendant in error.
   Mr. Presiding Justice Gridley

delivered the opinion of the conrt.

"William Sear, plaintiff in error and hereinafter called plaintiff, caused Judgment to be entered by confession against Thomas A. Moore, defendant in error and hereinafter called defendant, in the Municipal Court of Chicago, on May 14, 1910, for the sum of $373, for rent reserved in a written lease of an apartment in a building owned by plaintiff, for the full term of said lease, from May 1, 1909, to April 30, 1910, amounting to $348, together with $25 attorney’s fees. Subsequently, by stipulation of the parties, the judgment was vacated, and the cause was tried before the court without a jury. The court found the issues for the defendant and judgment was entered accordingly. This writ is prosecuted to reverse that judgment.

The material facts are as follows: The defendant was a tenant of plaintiff, occupying said apartment under lease expiring April 30, 1909. Prior to March, 1909, plaintiff called on Fred. A. Gates, manager of the renting department of McKey & Poague, real estate agents in Chicago, and stated that he wished McKey & Poague to take full charge of his apartment building, make repairs, collect rents and make leases. Gates agreed, on behalf of his employers, to do this, notified defendant of the fact, and from then on defendant paid the rent to McKey & Poague, as agents of plaintiff, for the apartment he was- occupying under said lease expiring April 30, 1909, including the April, 1909, rent. During March, 1909, Gates prepared a draft of a new lease for defendant to sign, which draft was in the form commonly in use and which demised the same apartment to defendant for the period of one year, commencing May 1, 1909, and which contained mutual covenants, and mailed same to defendant unsigned. Shortly thereafter defendant personally signed said instrument and delivered it to Gates. Thereupon Gates signed plaintiff’s name thereon, as follows, “Wm. Sear, by McKey & Poague, Agts.” Prior to April 30, 1909, defendant again called on Gates and informed him that he desired to be released from the lease in question. Gates said he had no authority to release defendant and told defendant to see plaintiff, the owner. Defendant then asked Gates if the latter could not rent the apartment to some one else. Gates replied that he would try and do so, caused a “To Rent” sign to be placed on the premises, and, as he testified, “did what he could to rent the apartment.” He did not succeed in doing so, however, and the apartment remained vacant from the time defendant moved out (which was immediately prior to the expiration of the old lease) until after April 30,1910. Shortly after defendant asked to be released from the lease in question, defendant, following Gates’ suggestion, called on plaintiff, the owner, and repeated his request to be released, and plaintiff replied that before giving defendant an answer he (plaintiff) would have to consult his son-in-law. The record does not disclose that plaintiff at any time, either verbally or in writing, released defendant from the obligations of the lease, nor does it disclose that Gates, or any other representative of McKey & Poague, at any time did so. It was admitted at the trial that no part of the rent reserved in the lease had been paid by defendant. Gates testified that during July, 1909, he telephoned defendant and asked him for the rent then due; that defendant said that plaintiff had released him, and Gates replied that he had seen plaintiff and that plaintiff had said that plaintiff had not released defendant; and that Gates, on two or three subsequent occasions, telephoned defendant and demanded payment of rent. The defendant, at the trial, denied having any of these telephone conversations with Gates, and testified that the first demand on him for rent was made in December, 1909, by an attorney of plaintiff.

While plaintiff did not in- writing authorize McKey & Poague to sign the lease in question, we are of the opinion that the record sufficiently discloses that he verbally authorized them so to do, and that the signing of the lease in the manner above described by Gates, who was in charge of the renting department of McKey & Poague and who was accustomed to sign “landlords’ names to leases hy McKey & Poague as agents,” was a signing hy McKey & Poague, as agents of plaintiff, verbally authorized.

It was contended at the trial by counsel for the defendant (and the trial court seemingly agreed with the contention) that the lease in question, being an agreement which was not to be performed within the space of one year from the making thereof, and which was not signed either by the plaintiff or some other person thereunto by him lawfully authorized in writing, was not enforceable against the defendant under Section 1 of our act “in relation to Frauds and Perjuries.” Counsel here urges the same point as a reason why the judgment should be affirmed.

We cannot agree with counsel because, first, the lease was signed by the party sought “to be charged” in this action and he was not released. The evidence shows that Gates drafted the lease, mailed it to defendant and the latter signed it and delivered it to Gates, who accepted it on behalf of plaintiff and acted upon it. The defendant made it his deed, thereby estopping himself. (Johnson v. Crane, 22 Ill. App. 366; Bowman v. Powell, 127 Ill. App. 114.) “In England, and generally in the United States, the only signature made necessary by the statute is that of the party against whom the contract is sought to be enforced.” (20 Cyc. 272; Raphael v. Hartman, 87 Ill. App. 634, 637; Farwell v. Lowther, 18 Ill. 252; Esmay v. Gorton, 18 Ill. 483; Gradle v. Warner, 140 Ill. 123, 135; Ullsperger v. Meyer, 217 Ill. 262, 271.) “And the rule that the writing must be signed by the party to be charged is applicable to a lease, and the statute is satisfied when the lessee signs and the lessor accepts.” (29 Am. & Eng. Enc. Law (2d Ed.) 860.) And we cannot agree with counsel for the further reason that, assuming for the sake of the argument only, that it was necessary that the lease be also signed by the plaintiff, or his agent “lawfully authorized,” it was so signed by said agent under verbal authority, and such authority is sufficient under Section 1 of said act. And, in our opinion, Section 2 of said act, which requires the agent’s authority to be in writing, cannot be applied to the facts in this case to aid counsel in his contention. It is the law that “in the absence of a statutory provision to the contrary, an agent’s authority to sign a memorandum of a contract within the statute of frauds is not required to be in writing any more than in any other case of agency.” (20 Cyc. 276; Doty v. Wilder, 15 Ill. 407; McConnell v. Brillhart, 17 Ill. 354; Johnson v. Dodge, 17 Ill. 433; Lake v. Campbell, 18 Ill. 106; Tibbetts v. West, etc., Ry. Co., 153 Ill. 147, 154.) There is no “statutory provision to the contrary” in Section 1 of our present act. That section provides:

“That no action shall be brought, whereby to charge * * * any person * * * upon any agreement that is not to be performed within the space of one year from the making thereof, unless the promise or agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized.”

This section does not say that the “some other person” shall be lawfully authorized in writing to sign the agreement or memorandum, which is “not to be performed within the space of one year from the making thereof.” Section 2 of said statute provides:

“No action shall be brought to charge any person upon any contract for the sale of lands, tenements or hereditaments or any interest in or concerning them, for a longer term than one year, unless such contract or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized in writing, signed by such party. * * * ”

This section does say that, upon any contract for the sale of lands, or any interest in or concerning them, for a longer term than one year, the “some other person” shall be lawfully authorized “in writing.” But this Section 2, under counsel’s contention, is not applicable to the facts in this case. The lease in question was an agreement which was “not to be performed within the space of one year from the making thereof.” It was signed by the defendant and accepted and signed by Gates under verbal authority from plaintiff during March, 1909. The term of the lease was one year and was to end on April 30, 1910. It has been repeatedly decided in this state that a verbal agreement, by which a party agrees to lease certain premises for a term of one year — the term to end more than one year after the mailing of the agreement — is unenforceable, under Section 1 of said act. Olt v. Lohnas, 19 Ill. 576; Comstock v. Ward, 22 Ill. 248; Wheeler v. Frankenthal, 78 Ill. 124; Cooney v. Murray, 45 Ill. App. 463; Rader v. Huffman, 125 Ill. App. 554. In Olt v. Lohnas, supra, it was decided that the language of a portion of the then existing act, practically identical with Section 1 of the present act, applied to agreements concerning land, although there was “another member of the section providing for contracts concerning an interest in land and allowing parol leases for lands for a term of one year or less.” It has also been decided that a leasehold is an “interest in or concerning” lands (Chicago Attachment Co. v. Davis Co., 142 Ill. 171, 180), and that, in suits between landlord and tenant, this Section 2 of the act includes leases of terms for more than a year. (Lake v. Campbell, 18 Ill. 106; Strehl v. D ’Evers, 66 Ill. 77; Creighton v. Sanders, 89 Ill. 543; Chicago Attachment Co. v. Davis Co., supra; Marr v. Ray, 151 Ill. 340; Leavitt v. Stern, 159 Ill. 526.) The term of this lease was not for “more than a year.” Therefore, Section 2 cannot be applied to.aid counsel in Ms contention. And under Section 1, as we have seen, the agent may he authorized verbally. We are aware of the decisions of our Supreme Court, such as Rogan v. Arnold, 233 Ill. 19, that where a lease, or a covenant for a renewal contained in a lease, for a term longer than one year, was sought to be enforced, and the lease was executed in the lessor’s name by a third person, written authority from the lessor to such third person so to execute the lease must be shown.

For the reasons indicated, the judgment of the Municipal Court is reversed, and the cause remanded for further proceedings not inconsistent with the views herein expressed.

Reversed and remanded.


text:
    Greenduck Company, Plaintiff in Error, v. Green River Distilling Company, Defendant in Error.
    Gen. No. 16,870.
    1. Replevin — election of remedies. Where the defendant refuses to accept, or pay for fobs delivered under a contract, but claims damages because they were not in accordance with the terms of such contract, the plaintiff, after having been defeated in a suit to recover the contract price, cannot bring replevin.
    Error to the Municipal Court of Chicago; the Hon. Edwin K. Walkeb, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1910.
    Affirmed.
    Opinion filed October 3, 1912.
    Gentzel & Crane, for plaintiff in error.
    Stephen C. Knight, for defendant in error; Clyde C. Colwell, of counsel.
   Mr. Presiding Justice Gridley

delivered the opinion of the court.

On April 26, 1909, Greenduck Company, an Illinois corporation, plaintiff in error and hereinafter called plaintiff, began a fourth class suit in replevin in the Municipal Court of Chicago against Green River Distilling Company, a corporation, with principal office at Owensboro, Kentucky, and having an office and agent in Chicago, defendant in error and hereinafter called defendant, to recover the possession of 10,320 watch fobs. It was alleged in the affidavit for replevin that plaintiff was lawfully entitled to the possession of said watch fobs, which were of the value of $619.20. It appears from the return on the replevin writ that the bailiff read the same to the Chicago agent of defendant,- demanded of him that he turn over said watch fobs, which the latter refused to do, and that the bailiff was unable to find the same, etc. On May 3, 1910, the appearance of defendant was entered, and on motion of plaintiff the court allowed plaintiff to file an additional statement to the effect that “plaintiff’s claim is for the wrongful detention by the defendant” of said watch fobs. Subsequently, the cause was tried by the court without a jury, and on July 30, 1910, the court found the issues against the plaintiff and entered judgment in favor of the defendant for costs. This writ is prosecuted to reverse that judgment.

The facts are, briefly stated, as follows: The plaintiff corporation was engaged in the business of manufacturing metal goods, and, in October, 1907, under contract with defendant, it manufactured, sold and shipped to defendant, at Owensboro, the watch, fobs in question, which defendant refused to accept or pay for, on the ground that they were not in accordance with the contract, and notified plaintiff that defendant held them in storage for plaintiff’s account. Other watch fobs had previously been shipped to defendant and had been paid for. Defendant claimed damages because of tbeir not being in accordance with tbe contract. After some further correspondence between the parties, and after defendant bad again refused to pay for said watcb fobs, on November 15, 1907, plaintiff brought an action against defendant in tbe Municipal Court of Chicago to recover the purchase or contract price of tbe same watcb fobs in question in this present action, a bearing was bad on the merits, tbe court found the issues for tbe defendant, and, on January 31, 1908, judgment was rendered in that action against tbe plaintiff for costs. Subsequently this present action was commenced, and on tbe trial, counsel for defendant urged said adjudication of January 31,1908, as a bar to tbe present action. Tbe trial court agreed to this and entered judgment against tbe plaintiff in this action for costs.

We think tbe judgment was correct. Plaintiff, after being notified that defendant would not accept the watcb fobs or pay for them, and that defendant claimed damages, etc., elected to affirm tbe sale and bring suit against defendant for tbe contract price of such watch fobs as bad been delivered but-not paid for, and in that suit, after a trial upon tbe merits, an adjudication was bad in favor of defendant. Subsequently plaintiff brought tbe present action against defendant for damages for the “wrongful detention by tbe defendant” of tbe same watcb fobs. “Any .decisive act of a party, with knowledge of bis rights and of tbe facts, determines bis election in case of conflicting and inconsistent remedies. * * * The prosecution of one remedial right to judgment or decree, whether tbe judgment or decree is for or against plaintiff, is a decisive act which constitutes a conclusive election, barring tbe subsequent prosecution of inconsistent remedial rights.” 15 Cyc. 259; Zimmerman v. Zimmerman, 15 Ill. 84; Fisher v. Brown, 111 Ill. App. 486.

Tbe judgment of tbe Municipal Court is affirmed.

Affirmed.


text:
    The People of the State of Illinois, Defendant in Error, v. A. B. Greenberg, Plaintiff in Error.
    Gen. No. 16,891.
    1. Indictment and information — duplicity. The objection that an information charges two distinct offenses, that of procuring a place as inmate in a house of prostitution for a female person and causing, inducing, etc., such -person to become an inmate, cannot be first urged on appeal..
    2. Pandering — information. An information charging pandering is not fatally defective as not alleging that the subjeet of the offense was a “female person,” if such fact clearly appears from the rest of the information.
    4. Pandering — information. An information charging pandering is sufficient as being substantially in the language of the statute although it does not allege that the causing and inducing was by promises, threats, etc.
    5. Information — endorsement. An information is not insufficient because the endorsement of the judge thereon does not show that the person presenting the same was examined as required by sec. 27 of the Municipal Court Act where such fact does appear from the order of the court directing the filing of such information.
    Error to the Municipal Court of Chicago; the Hon. Edward A. Dicker, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1910.
    .Affirmed.
    Opinion filed October 3, 1912.
    W. G. Anderson, for plaintiff in error; G. H. Sugrue, of counsel.
    John E. W. Wayman, for defendant in error; Zack Hofheimer, of counsel.
   Mr. Presiding Justice Gridley

delivered the opinion of the court.

On May 3, 1910, William P. Swain presented to one of the judges of the Municipal Court of Chicago an information against A. B. Greenberg, plaintiff in error and hereinafter called defendant, charging the offense of pandering, and asked leave to file the information. Such leave was granted, a capias was issued and served upon the defendant,, and upon his failing to give hail he was committed to jail. The order of the court granting leave to file sets forth that the judge examined the information and the person presenting the same, heard evidence thereon and was satisfied that there was probable cause for filing the same and so endorsed the same. It further appears from the transcript of the record that defendant executed a waiver in writing of a trial by jury, which was filed, and agreed to a trial by the court. The information was signed and sworn to by said Swain and informed the court that,

“A. B. Greenburg, late of the city of Chicago, heretofore, to-wit, on the 30th day of April, A. D. 1910, in the city of Chicago, aforesaid, did procure a place as an inmate in a certain house of prostitution in the city of Chicago in said county and state aforesaid, commonly known and described as 9166 Harbor avenue, a certain female person known as Anne Wagner. The said A. B. Greenberg did cause, induce, persuade and encourage the said Anne Wagner to become an inmate of said house of prostitution, contrary to the form of statute, * * * and against the peace and dignity,” etc.

The folio-wing endorsement by the judge appears on said information:

“I have examined the above information and am satisfied that there is probable cause for filing same and leave is hereby given to file it. It is ordered that an instanter capias issue against the accused. Bail fixed at $1,000.”

The defendant upon being arraigned, pleaded not guilty, and, after two postponements of the hearing on defendant’s motion, a trial was had on May 20, 1910, resulting in the court finding the defendant guilty “in manner and form as charged in the information,” upon which verdict the court adjudged “that said defendant, A. B. Greenberg, is guilty of the criminal offense of causing, inducing, persuading and encouraging one Anna Wagner to become an inmate of a house of prostitution, on said finding of guilty,” and further adjudged that he be sentenced to the House of Correction for six months, and to pay a fine of $300, and costs of suit, taxed at $24, and that execution issue against the defendant for the amount -of said fine and costs. This writ of error is prosecuted to reverse the judgment. No bill of exceptions is found in the transcript of the record.

A portion of Section 57g of Chapter 38 of the Illinois statutes (Hurd’s Stat., 1909), defining the offense of pandering, is as follows:

“Any person who shall procure a female inmate for a house of prostitution or who, by promises, threats, violence or by any device or scheme, shall cause, induce, persuade or encourage a female person to become an inmate of a house of prostitution, or shall procure a place as inmate in a house of prostitution for a female person, or * * *, shall be guilty of pandering, and upon a first conviction for an offense under this act shall be punished by imprisonment in the county jail or house of correction for a period of not less than six months nor more than one year and by a fine of not less than three hundred dollars and not to exceed one thousand dollars, * * *."

It is first contended by counsel for defendant that the information is substantially defective in that it charges two distinct offenses mentioned, among others, in the statute, viz.: (a) procuring a place as inmate in a house of prostitution for a female person, known as Anne Wagner, and (b) causing, inducing, etc., Anne Wagner to become such an inmate. This contention cannot be made for the first time in this court. It does not appear that the sufficiency of the information was at any time or for any reason challenged in the trial court by motion to quash or in any manner. Had its sufficiency been there challenged, the information could have been amended. Truitt v. People, 88 Ill. 518: Long v. People, 135 Ill. 435; People v. Manns, 146 Ill. App. 571, 573. Section 9, Division XI, of Chapter 38, Rev. Stat. Ill., provides: “All exceptions which go merely to the form of the indictment, shall be made before trial, and no motion in arrest of judgment, or writ of error, shall be sustained, for any matter not affecting the real merits of the offense charged in an indictment.” In Joyce on Indictments, Sec. 392, it is said: “When two or more independent offenses are joined in the same count it will be bad for duplicity. * * * The defect * * * has been held to be a mere defect of form which is cured by verdict.” Citing State v. Fox, 148 Mo. 517. It is said in Bishop’s New Criminal Procedure, Section 442: “Since the rule against duplicity stands in the law as a privilege to defendants, they may waive it. * * * After verdict, if the defendant did not object before, it has been demonstrated that the duplicity did him no harm; and by being silent when, if ever, he must have felt the hurt, he has waived all right to complain.’’ In People v. Jacobson, 247 Ill. 394, an information was filed against Jacobson charging- him with persuading a female (naming her) to enter a house of prostitution. An amended information was filed charging that Jacobson procured the person named in the first count, and another (naming her) as female inmates of another house of prostitution. Jacobson was arraigned and pleaded not guilty to both the amended and original informations, and a verdict of guilty “in manner and form as charged in the information filed herein” was returned. The court says (p. 297):

“It is finally urged that the plaintiff (in error) was tried at one time for two separate offenses, and that this was in violation of Section 9 of the bill of rights, * * *. Whether the defendant might have objected to going to trial on both the original and amended informations on other than constitutional grounds, is not presented to us and is not decided. He went to trial without objection and made no motion at any time to require the prosecutor to elect. There is no bill of exceptions in the record, and so far as appears no evidence of more than one offense was heard.”

It is next contended that the information is fatally defective in that the latter clause of the information, wherein the defendant is charged with causing, indue-, ing, etc., “the' said Anne Wagner to become an inmate,” etc., does not allege that she is a “female person.” This clause contains the language “the said Anne Wagner,” and in the clause immediately above is the language “a certain female person known as Anne Wagner.” In our opinion the contention is without merit.

It is further contended, inasmuch as the court found the defendant guilty “in manner and form as charged in the information,” and inasmuch as the court adjudged the defendant guilty of “causing, inducing, etc., Anne Wagner to become an inmate of a house of prostitution,” that the judgment of the court must have been based upon the latter clause of the information; that that clause of the information does not charge the offense in the language of the statute; that the offense as charged appears to be laid under the second clause of the statute which provides that any person who, “by promises, threats, violence or by any device or scheme, shall cause, induce,” etc., a female person to become an inmate, etc., shall be guilty of pandering; that no mention is made in said clause of the information that the causing and inducing was by “promises, threats,” etc., and that, therefore, the judgment is not based upon a sufficient information. We cannot agree with counsel. We think that the gravamen of the offense, mentioned in said second clause of the statute, is the causing, inducing, etc., a female person to become an inmate of a house of prostitution, and that the offense charged in said clause of the information was sufficient. It was substantially in the language of the statute and from it the charge, which the defendant was called upon to meet, could be easily understood by him and by the court or jury. Sec. 6, Div. XI, Chap. 38, Rev. Stat.; Glover v. People, 204 Ill. 170; People v. Scattura, 238 Ill. 313. The offense was set forth with “reasonable certainty.” (Sec. 27 Municipal Court Act.)

It is further contended that the information is insufficient to support the judgment in that the endorsement of the judge thereon does not show that the court examined the person presenting the information, as required by Section 27 the Municipal Court Act. While the endorsement of the judge on the information does not show that he examined such person, the order of the court, entered at the time the information was directed to be filed, does show that fact. Furthermore, the objection is raised in this court for the first time. No such objection was made at any time in the court below.

For' the reasons indicated the judgment of the Municipal Court of Chicago is affirmed.

Affirmed.