text:
    Joseph P. Lewis et al., Complainants, v. West Side Trust and Savings Bank of Chicago, et al., Defendants. Halsted Exchange National Bank of Chicago, Appellant, v. Joseph P. Lewis and William L. O’Connell, Appellees.
    Gen. No. 38,906.

      Opinion filed January 27, 1937.
    Rehearing denied February 16, 1937.
    J ohn M. Lee and Carl M. Loos, both of Chicago, for appellant.
    Gold & Liebman, of Chicago, for appellees; Charles Liebman and Maurice R. Kraines, of Chicago, of counsel.
   Mr. Presiding Justice Denis E. Sullivan

delivered the opinion of the court.

This cause comes before us on an appeal by the Halsted Exchange National Bank of Chicago from certain orders which were entered in the superior court. The main proceeding in the trial court was a stockholders’ liability suit filed on behalf of complainants and others to recover upon alleged causes of action against stockholders of The West Side Trust & Savings Bank of Chicago, for alleged liability imposed by Article 11, section 6 of the Illinois Constitution. Prom the evidence before us the facts appear as follows:

William L. O’Connell was appointed a receiver of the West Side Trust & Savings Bank on January 12, 1934, by the auditor of public accounts and on January 15, 1934, said O’Connell, as receiver, filed a bank liquidation and dissolution suit. Subsequently, several bills in chancery were filed by various creditors of said bank to enforce alleged stockholders’ liability imposed by Article 11, section 6 of the Illinois Constitution and all such suits were thereafter .consolidated under case number 575398. A second amended and supplemental bill was filed by complainants December 7, 1934, and again amended on December 13, 1934.

On December 26, 1934, the complainants, after giving notice to all solicitors of record, but not to stockholders who had not appeared, moved the court to enter the order of December 26, 1934, which order petitioners have sought to vacate. The latter order directed William L. 0 ’Connell, receiver of the bank, his successors, agents and attorneys and each of them until the further order of the court to withhold payment to any person who is or was a stockholder of said bank of any sum of money due or owing to such person by way of dividends or on claim of such person or as a creditor of said bank or for any other reason, and to withhold delivery to any person who is or was a stockholder of said bank and who is also the beneficiary or settlor of a trust of which said bank is trustee of all money, stocks, bonds, securities, personal property of real estate heretofore held by said bank as trustee, and to withhold delivery to any such person who is or was a stockholder of said bank of any securities, valuables or other property now in the control, custody or possession of said receiver and claimed by any such person to belong to him or in which such person may appear to have any right, title or interest except upon order of the court.

Paul Fernald was a stockholder, and prior to the entry of such order and prior to the appointment of William L. O’Connell, as receiver, had pledged various securities with the West Side Trust and Savings Bank of Chicago to secure his personal notes given to said bank. On or about October 4, 1932, Paul Fernald had executed an instrument and delivered the same to the Halsted Exchange National Bank, the terms of which were that he sells, assigns, transfers and sets over to the Halsted Exchange National Bank his entire interest, whatever it might be in certain securities therein listed and equity which he may have, which securities are on deposit with the West Side Trust and Savings Bank as collateral to a certain loan evidenced by collateral note dated September 6, 1932, signed by said Paul Fernald, being $850 in amount, said assignment being made expressly subject to the rights of the West Side Trust and Savings Bank of Chicago to the said securities under the said collateral note held by it. The securities referred to in the instrument delivered to the Halsted Exchange Bank are the same as those that were previously pledged with the West Side Trust and Savings Bank.

At the time William L. O’Connell was appointed receiver, January 12, 1934, the said Paul Fernald had on deposit with the West Side Trust and Savings Bank a sum of money in excess of the indebtedness owed by him on his $850 collateral note payable to the said West Side Trust and Savings Bank, which had been reduced to $100.35, which indebtedness was entirely offset by such deposit. Upon demand being made upon him by the Halsted Exchange Bank, William L. O’Connell, receiver, refused to turn over the securities in his possession arising out of the pledge of Paul Fernald to said bank because he is restrained from delivering up these securities to the Halsted Exchange National Bank by order of court entered December 26, 1934, in this cause, which order is now before us for review.

In the bill filed in the trial court, the suit against the stockholders to collect their double liability, we cannot understand the theory upon which O’Connell, the statutory receiver, was made a party. He has nothing to do with the collection of the funds in the liability suit. The record does not show that the receiver O’Connell had entered his appearance in such suit or that he had been served with summons and just how the court obtained jurisdiction of said receiver, the record does not show.

One has but to read the order of December 26, 1934, to see that it was improvidently entered. No charge was made in the bill that the defendants were insolvent, nor were there any facts alleged that any of the defendants were about, to transfer their property to defeat their creditors, yet the order finds:

“. . . that a large number of such persons are insolvent and have no other assets to satisfy any decree that may be entered against them herein for the payment of their respective liabilities to the creditors of said bank except such claims and such assets, and that a large number of stockholders who are creditors of said bank or have securities deposited by them with said bank as aforesaid or are beneficiaries of trusts of which said bank is trustee, as aforesaid, who now have sufficient assets to satisfy any decree against them which may be rendered herein, are about to conceal and transfer their assets, and it appearing to the court that it will be for the best interests of the creditors herein and William L. O’Connell, receiver of said bank, if before the said William L. O’Connell shall pay out to any such stockholders any moneys or other property in possession of the said William L. O’Connell and claimed by such stockholders, he shall make application to this court . . . . ” No charge was made in the bill that anybody was about to conceal or transfer their assets nor were there scarcely any other facts as were found in the said order. Such indiscriminate orders and findings based on nothing but the imagination of the person who drew the order, do not aid in the administration of justice but on the contrary are a distinct obstruction. Findings by a court of record, especially where they are as comprehensive as those contained in this order, should be based upon allegations and legal proof.

According to the allegations of the bill of complaint filed by appellees in the instant case, a similar order was entered in cause number 34-S-452 entitled, People ex rel. Barrett v. West Side Trust & Savings Bank. If such an order was entered in that case, the validity of which is not one of the questions before us, we fail to see why it should be repeated in this case. We might say in passing, that chapter 16a, Ill. State Bar Stats. 1935, defines certain duties and gives to the statutory receiver of a bank appointed by the State auditor certain rights as well as imposing upon said receiver certain specific responsibilities in the administration of such closed bank. Many things the receiver is authorized by such statute to do, without the aid or intervention of a court, and some of his actions and duties require the consent and direction of a court. He is required to give a bond to insure the performance of his duties and is liable for any violation thereof, so that the so-called injunction is not imperative.

As for that part of the order which requires that the said William L. O’Connell, receiver, withhold payment of any and all sums due or which may become due and to withhold collateral securities on other property in his or the bank’s possession belonging to such stockholders until the further order of court, we call attention to chapter 16a, par. 11, sec. 11, subsec. (c) Ill. State Bar Stats. 1935; Jones Ill. Stats. Ann. 10.11, which reads as follows:

“. . . Such receiver shall have authority to sue and defend in his own name with respect to the affairs, assets, claims, debts and choses in action of such bank. He shall also have the authority and it shall be his duty, under the direction of the Auditor, to surrender to customers of such banks their private papers and valuables left with said bank for safekeeping upon satisfactory proof of ownership. As soon as can reasonably be done, he (shall) resign on behalf of said bank, all trusteeships, guardianships, conservator-ships, and all appointments as executor and administrator, mailing in each case a proper accounting on behalf of said bank. He shall have the power and authority to redeem or take down collateral hypothecated by said bank to secure its notes or other evidences of indebtedness whenever the Auditor deems it to the best interest of the creditors of said bank so to do, and to do such other things and take such other steps from time to time under the direction and approval of the Auditor as may reasonably appear to be necessary to conserve the trust estate and secure the best interests of the creditors of said bank.”

We gather from the argument of complainants that the purpose of this order is to retain the property of its stockholders in the possession of the bank or the receiver so that should a judgment be entered in this suit against a stockholder for his constitutional liability, complainants could satisfy the judgment out of the property so retained by the receiver. In other words, such procedure and remedy as would be equivalent to an attachment at law.

In the case of Phelps v. Foster, 18 Ill. 309, the facts which are therein set forth are similar and the law as there defined is controlling in the instant case. The court at page 310, says:

1 ‘ The injunction in this suit was properly dissolved, for three very good reasons. First. No such case was made by the bill, as would authorize an injunction. If the allegations of the bill are true, the sale from Thomas P. Foster to J. W. Foster was void, absolutely, as to creditors, and the complainants had an adequate remedy at law, by attaching the goods; but even if that had not been the case, I am not aware of any principle of equity jurisprudence which will justify the issuing an injunction in such a case, to compel the parties to hold the goods pending a trial at law, to see if they will not be wanted to answer an execution upon a judgment which the complainant hopes to obtain. The bill was devoid of equity on its face. ...”

In the case of Shufeldt v. Boehm, 96 Ill. 560, at page 564, the court said: “If the property of an honest, struggling debtor could be tied up by injunctions upon mere unadjusted legal demands, he would be constantly exposed to the greatest hardships arid grossest frauds, for which the law would afford no adequate remedy. By taking his property out of his hands before the claim is due, or before its justice has been established by a judgment, in many cases would be to deprive him of the means of payment, and even of the means of defending himself against a vexatious and oppressive suit. In other cases, to prevent ruin to his business pending such litigation, he would be forced into unconscionable compromises involving losses he would be unable to bear. Moreover, such a rule as that contended for would be a constant temptation to selfish and avaricious creditors to endeavor, by the institution of such suits, to obtain an unjust advantage over other creditors, and, by reason thereof, litigation would be greatly increased, to the detriment of business generally, and to the ruin of many honest, struggling debtors. Every consideration, therefore, of public policy demands a strict adherence to the rule which forbids the institution of such suits.” In other words, there is no such thing as equitable attachment in this State and the theory of taking away the control of a person’s property by means of an injunction for the purpose of anticipating a judgment which may or may not thereafter be obtained by a litigant is abhorrent to the principles of equitable jurisdiction. As Mr. Justice Catón said in Ms opiMon in the Phelps case, which we have just quoted:

“. . .1 am not aware of any principle of equity jurisprudence which will justify the issuing an injunction in such a case, to compel the parties to hold the goods pending a trial at law, to see if they will not be wanted to answer an execution upon a judgment which the complainant hopes to obtain. . . .”

In considering the order entered on the petition of the Halsted Exchange National Bank in which petition it sets up its claim to certain collateral and asks that the injunction be dissolved so far as it affects the receiver O’Connell and petitioner, we note that by the terms of this said order the prayer of said petition was denied on motion and the said petition was dismissed. This latter order fails to disclose any reason for not permitting persons who set up an interest in a subject matter over which the court has asserted jurisdiction, to appear in such court and ask that it be heard concerning- its interests which were adversely affected by said injunctional order.

Courts were instituted for the hearing of claims and the adjusting of matters under controversy, and we tMnk the petition in this case sets up sufficient facts concerning which the court should have been advised by requiring that an answer be filed to said petition and the petitioner should have been given an opportunity to present his claim at a hearing and have the court decide just what Ms rights in the matter were. We do not wish to be understood as holding that the stockholders’ liability suit was a proper proceeding in which the petitioner, Halsted Exchange National Bank of Chicago, should have filed its claim to the collateral, but its petition for the purpose of having the injunction dissolved, in which suit the court had taken jurisdiction, should have been heard on the facts therein set forth.

We are not at this time passing upon whether the petitioner should later go into case General No. 34-S-452, People ex rel. Barrett v. West Side Trust & Savings Bank, in which case it appears from the meager information before us that the court has jurisdiction over all the assets of the bank including the collateral involved herein.

It has been suggested of record in this court that the said William L. O’Connell, Receiver, died on July 24,1936. The record and briefs in this cause were filéd in this court on May 13, 1936, and this cause was at issue prior to said O’Connell’s death. It is the order of this court that, under the authority of Citizens Securities & Investment Co. v. Dennis, 236 Ill. App. 307, and authorities therein cited, an order be entered here nunc pro tunc as of May 14, 1936.

For the reasons set forth in this opinion, the order entered by the superior court of Cook county on December 26, 1934, is reversed, and the order entered by that court on February 28, 1936, dismissing the petition of the Halsted Exchange National Bank of Chicago, is also reversed and the so-called injunction or restraining order is dissolved.

Order of December 26, 1934, reversed; order of February 28, 1936, reversed; and injunctional order dissolved.

Hebel and Hall, JJ., concur.


source: Caselaw Access Project

author: Mr. Presiding Justice Denis E. Sullivan

license: Public Domain

text:
    Paul Wolf, Appellant, v. Michael D. Matusak et al., Appellees.
    Gen. No. 38,937.
    Opinion filed January 27, 1937.
    Henry P. Heizer, of Chicago, for appellant.
    Levinson, Becker, Peebles & Swiren, of Chicago, for appellees; Leo Wolfson, of Chicago, of counsel.
   Mr. Presiding Justice Denis E. Sullivan

delivered the opinion of the court.

This is an appeal from a decree of the superior court of Cook county dismissing plaintiff’s bill for want of equity and costs of suit and decreeing that a lien of a trust deed securing his note be released and that said note be canceled and delivered to Michael D. Matusak.

On August 11, 1932, the plaintiff Paul Wolf filed his bill to foreclose a trust deed made by one Alexander D. Schuller and Marie A. Schuller to the Citizens State Bank of Chicago, securing notes totaling $15,000 and maturing at different dates. Wolf claimed to be the owner of note No. 1-A for $500, which was the first to mature. The trust deed made no provision that all notes secured thereby should be secured without preference of one over the other.

Michael D. Matusak, the then title holder of the real estate, and also the unknown owner of the remaining principal notes totaling $14,500 maturing at a later date than the note for $500, were made defendants.

The Federal Reserve Life Insurance Company, herein sued as an unknown owner, and said Michael D. Matusak answered the bill, and later they both filed their cross-bill to cancel the $500 note in question .on the ground that said insurance company had owned the entire issue of $15,000 in notes and when note No. 1-A for $500 matured on April 5, 1930, had sent it for collection to the Citizens State Bank of Chicago.

In answer to this cross-bill plaintiff alleged that he had purchased the said note of $500 from the said Citizens State Bank on June 27, 1931, without notice of any claims by the insurance company or anyone else.

” On the recommendation of the master in chancery, to whom the cause was referred, the court as before stated found for the defendants, dismissing the plaintiff’s bill for want of equity and canceling the $500 note of plaintiff and also decreeing that the lien of the trust deed securing the said $500 note with respect to the said property be released.

No question is raised on the pleadings nor is there any question as to the facts, which, briefly stated are as follows:

Alexander D. Schuller and Mary A. Schuller were . the owners of certain real estate and had borrowed $15,000 from the Citizens State Bank of Chicago and to secure said loan executed to said bank, as trustee, their trust deed dated April 5, 1927, securing their 13 notes. The note No. 1-A for $500, which is the basis of this suit, became due April 5, 1930. Note No. 2 for $500 became due April 5, 1931. Notes Nos. 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12 for $1,000 each and note No. 13 for $4,000, all became due April 5, 1932. All these notes in June, 1927, were sold by the Citizens Bank to the Farmers National Life Insurance Company and later by said Farmers National Life Insurance Company to the Federal Reserve Life Insurance Company, defendants. When the said note 1-A for the sum of $500 fell due on April 5,1930, said insurance company sent the note to the Citizens State Bank of Chicago for collection and remittance, and the Citizens State Bank remitted to said defendant, Federal Reserve Life Insurance Company, $500, being for value of said Note 1-A and also accrued interest on same and interest on all the remaining notes secured by the said trust deed. Instead of canceling’ this note 1-A, the trustee bank then drew up a written agreement extending’ the time of payment of the said $500 note 1-A to April 5, 1931, and some time later another extension agreement, extending payment thereof to April 5, 1932. These agreements were also signed respectively by Mr. and Mrs. Heine and Mr. and Mrs. Davidson, the then fee owners of the property, and also by the Citizens State Bank of Chicago, Trustee, “as agent for the owner and holder of the notes and trust deed hereinafter secured,” and such extensions were attached to the $500 note. The bank also indorsed and signed two memoranda on the back of the note showing the extension by agreement of the note of April 5, 1931, to April 5, 1932, respectively. The bank then sold the note, first, to a Mr. and Mrs. Haeflinger, later buying it back from them and, on June 27, 1931, sold it with the two extension agreements attached, to the plaintiff Paul Wolf and received from him therefor $500 plus some interest.

When plaintiff went to the bank to purchase the $500 mortgage he was shown several mortgages by the manager of the Real Estate Department, among which was the $500 note and trust deed in question. In reply to plaintiff’s inquiries, the manager stated that the bank owned the note; that it had originally made a loan of $15,000 to the owners of the property, and had sold $14,500 of the loan to an insurance company, but that it still owned the $500 note in question and that the note had been extended to April 5, 1932. Plaintiff thereupon paid the bank $500 and some interest and took the note with him.

Plaintiff’s theory of the case is as follows:

1st. That the note at the time he purchased it was not overdue for the reason that the extension agreements attached to it were valid;

2nd. That even if the note had been overdue at the time plaintiff bought it, all that one purchasing a past due note is required to show under sections 52 and 59 of the Negotiable Instruments Act, Ill. State Bar Stats. 1935, ch. 98, fifí 72, 79; Jones Ill. Stats. Ann. 89.072, 89.079, is that at the time the instrument was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it, and that the evidence shows that plaintiff had no notice of any defect in the title of the bank, or of any rights claimed by the Federal Reserve Life Insurance Company;

3rd. That one choosing a bank or any other agency for the collection of a note is bound by the acts of the agent ;

4th. That the defendant, insurance company, was negligent in sending a negotiable instrument payable to bearer to its agent for collection without indorsing on the note a direction to pay to the agent for collection;

5th. That where one of two innocent parties must suffer, it must be the one who made the commission of the wrong possible;

6th. That a purchaser of an overdue negotiable instrument buys it subject to any defense which can be made by the makers of the notes, but does not buy it subject to collateral attack by third parties, in which class the Federal Deserve Life Insurance Company must be placed.

Defendants’ theory of the case is as follows:

1st. That the note in question was overdue at the time plaintiff bought it, for the reason that the bank had no authority to make the extension agreements;

2nd. That an overdue note is subject to all defenses that can be made by the original mortgagor and also to all defenses of intervening third parties; and

3rd. That plaintiff obtained no title to the note by his purchase from the bank.

At this point it might be said that when the note was sent by the insurance company to the bank, the latter paid for it out of the bank’s funds and kept the note and did not cancel it.

When the Federal Deserve Life Insurance Company sent the note for $500 to the Citizens State Bank of Chicago, there was nothing on the note to indicate for what purpose it had been sent to the bank and the note being’ payable to bearer the Federal Life Insurance Company thereby invested the Citizens Bank with all the indicia of ownership. They constituted the holder their agent for the purpose of collection and in doing this they made it possible for the Citizens Bank to treat the note as their own paper and sell it to the plaintiff.

As was said in McCarthy v. Crawford, 238 Ill. 38 :

“Where the holder of a certificate of indebtedness purporting to be transferable by assignment signs the form of transfer and power of attorney in blank and delivers the certificate to a broker to sell, he thereby clothes the broker with the customary indicia of absolute ownership, and as against a subsequent bona fide purchaser of the certificate he is estopped to deny that the purchaser is his assignee for value, even though the broker has not accounted for the proceeds.”

Was the Federal Life Insurance Company bound by the action of the Citizens Bank in not canceling this paper and selling it to the plaintiff? As was said in the case of Vetesnik v. Magull, 347 Ill. 611, at page 616: “It has never been the rule that a third person may be bound by the acts of an agent which, while within the apparent scope of his authority, are fraudulent as against his principal. Mason v. Bauman, 62 Ill. 76.”

Again in the case of Drumm Const. Co. v. Forbes, 305 Ill. 303, page 308, the court said:

“The check here in question was complete when Forbes received it from Lamberton, and there was nothing in the character of the instrument to charg’e him with knowledge of any infirmity or put him on inquiry. It is clear from the facts disclosed in the record that Forbes became the holder of the check in good faith and for value and without any actual knowledge of any infirmity, and therefore by the weight of authority and sound reasoning the 'check in his hands was not subject to any of the defenses claimed by appellant. Moreover, we think a recovery cannot be had because of the well known rule that where there are two innocent parties in the case, the one who puts it in the power of a third party to commit the act causing it must bear the loss. (Otis v. Gardner, 105 Ill. 436; Hemstreet v. Burdick, 90 id. 444; Mason v. Bauman, 62 id. 76.)”

So far as the foreclosure of the interest in the real estate securing* the $500 note is concerned, the Federal Reserve Life Insurance Company has no interest or equity in this note. The insurance company is objecting to the owner of the note participating in any part of the proceeds of foreclosure of the trust deed. The insurance company has received payment of both principal and interest on this $500 note. It is quite plain from the record that the claim, if any, of the Federal Reserve Life Insurance Company was never divulged to the plaintiff here and, whether the note was not due or was past due, the plaintiff was not advised of the insurance company’s claim. They placed the note in the hands of the bank without any indorsement or indication or memorandum, attached thereto and, thereby, made it possible for the bank to defraud plaintiff. In this respect they were at fault.

As was said in Justice v. Stonecipher, 267 Ill. 448, quoting from the syllabus:

“A promissory note indorsed in blank passes by delivery, and its negotiability does not cease at its maturity but the note can still be negotiated by indorsement. . . . The mere fact that a promissory note indorsed in blank by the payee is overdue at the time the holder receives money thereon from a bank does not charge the bank with notice that the note is held for a special purpose or that there is any defect in the title. (Y. M. C. A. Gymnasium Co. v. Rockford Nat. Rank, 179 Ill. 599, followed; Side and Leather Rank v. Alexander, 184 id. 416, and Merchants’ Loan Co. v. Welter, 205 id. 647, distinguished.) ”

We believe under the circumstances in this case that the claim of the Federal Reserve Life Insurance Company should not prevail as against an innocent purchaser for value whose lien should be protected by the lien of the mortgage.

We are of the opinion that the decree dismissing the plaintiff’s bill for want of equity was erroneous and that plaintiff’s claim for a lien on said property under the terms of said trust deed should have been recognized and allowed.

For the reasons herein given the decree of the superior court is reversed and the cause is remanded with directions to proceed in such a manner as will not he inconsistent with the views herein expressed.

Decree reversed and cause remanded with directions.

Hebel and Hall, JJ., concur.


text:
    Leo Simons, a Minor, by George S. Simons, His Father and Next Friend, Appellant, v. The Dole Valve Company, Appellee.
    Gen. No. 38,942.

      Opinion filed January 27, 1937.
    Rehearing denied February 16, 1937.
    Joseph A. Weber and Daniel A. Uretz, both of Chicago, for appellant; Ernest Stout and Walter H. Shurtleff, both of Chicago, of counsel.
    Miller, Gorham, Wales & Adams, of Chicago, for appellee; Edward B. Adams and Herbert C. DeYoung, both of Chicago, of counsel.
   Mr. Presiding Justice Denis E. Sullivan

delivered the opinion of the court.

This cause came to this court on a petition for leave to appeal, which was granted, and the appeal perfected. At the close of plaintiff’s evidence the trial court gave an instructed verdict and a judgment for costs was entered against the plaintiff, from which judgment this appeal is taken.

Plaintiff filed his claim to recover damages for injuries to his hand, which injuries he alleges were caused by a gate located on the premises of the defendant company. From a reading of the evidence it appears that the gate in question was a double gate which opened in the middle, having a left wing and a right wing and is sometimes referred to as “gates.”

Plaintiff contends that the gates in the fence around the defendant’s premises, by reason of their massive and peculiar construction and the fact that they were always open, unlocked and unguarded, although there was a lock on the gates which was never used, and by reason of the further fact that the children in the neighborhood were allowed to play on the gates and on defendant’s premises unhindered and were never forbidden to play on the gates and on defendant’s premises; that this gate constituted an attractive nuisance and that it was incumbent on defendant to prevent the maintenance of a dangerous instrumentality on its premises by means of which children of tender age might be injured; that defendant thereby maintained an attractive nuisance on its premises which remained unguarded to children as invitees.

Defendant contends that the gates maintained on its premises were not an attractive nuisance and were not dangerous to the children playing on the premises, and that it had no knowledge of the injury to plaintiff and that the defendant corporation was in no way responsible for plaintiff’s injury.

As heretofore stated at the conclusion of the plaintiff’s evidence the court instructed the jury to find for the defendant, upon which verdict judgment was entered with costs against the plaintiff.

The facts disclose that the defendant, Dole Valve Company, a corporation, operates a factory on the west side in the city of Chicago, Illinois, and that a vacant lot owned by them adjacent to the factory had been used by the children of the neighborhood as a playground, there being no other suitable playground in that vicinity; that the lot was fenced in and was used by the employees of the defendant for parking their automobiles; that the automobiles used by defendant’s employees entered and left said premises through a certain gate and it is alleged that the closing of one of the wings of this gate was the cause of the accident in question. At the rear of the lot there was a shed for the storage of materials of the company. The buildings on both sides of the lot were inhabited by a number of families with children who used the premises as a playground. The plaintiff was a child of six years at the time of the accident and a member of a family of eight children.

The evidence shows that the gate in question was used at times for the children to swing upon, the wings of the gate being so constructed with a board on the bottom two by four inches in size, and another one about half way up of the same size, which made it convenient for the children to swing upon it, and that these gates were at all times left unguarded.

The evidence further shows that on September 2, 1933, plaintiff’s older brother was playing baseball in the lot described and plaintiff’s mother asked the plaintiff to call his brother home. Instead of going into the lot or yard, the plaintiff stopped at the gate, which was open at the time. He was leaning against the fence near the gate and apparently had his hand in the aperture between the gate and the gate post, while calling to his brother, when the gate closed from some unknown cause and crushed plaintiff’s hand. The plaintiff was taken to a doctor’s office where the wound was dressed, but later an infection set in and he was taken to the Cook County Hospital where the little finger on the left hand ivas amputated and the next finger to it was so badly injured as to render it useless.

Whether or not the gate in question was an attractive nuisance, nevertheless, it appears from the evidence that at the time plaintiff was injured he had not been attracted by the gate nor was he using the gate in any way. The plaintiff had been directed by his mother to go to the lot and tell his older brother, who was playing baseball inside the fence, to come home. The boy did as he was directed to do by his parent and, as near as we can gather from the evidence, he was standing outside the board fence, calling to his brother, when his hand inadvertently slipped into the aperture between the gate and the fence to which the gate was attached and the gate then being* moved, his fingers were caught and squeezed between the gate and the fence. Whether this gate is an attractive nuisance or not, or could be so construed, the facts in this case show that the boy had not been attracted to the gate, but went there at the direct command of his parent. The evidence discloses that he was not using the gate to play upon.

It is essential in order to prove the liability of one who maintains a so-called attractive nuisance, that the thing which attracted the child upon the premises, or something inseparably connected therewith, be the proximate cause of the injury. As the Supreme Court said in the case of McDermott v. Burke, 256 Ill. 401, 406: “It is a necessary element of the liability that the thing which causes the injury is tempting to children and to constitute a means of attracting them upon the premises which the owner should anticipate.”

The evidence in this case shows that the boy was not attracted by the so-called gate; that he was not standing on it nor playing with it as is charged in the complaint.

A gate is not inherently dangerous and there is no proof in this case as to who opened the gate or that the defendant knew that the gate was open, or who moved the gate at the time the boy’s fingers were injured.

The evidence further shows that the boys who went to this lot went there to play baseball and other games and that they did not go there for the purpose of swinging on the gate, nor was anyone swinging on the gate at the time of the injury to plaintiff. Matijevich v. Dolese & Shepard Co., 261 Ill. App. 498.

We have carefully gone through this record to find what evidence, if any, would sustain plaintiff’s contention that the defendant was guilty of negligence. While it is conceded that defendant owed plaintiff the duty not to purposely injure him, yet we cannot find any duty owing from defendant to plaintiff which it failed to perform. Further, the evidence does not show that the plaintiff was upon the defendant’s premises. In what respect the actions or non-actions of the defendant were the proximate cause of the injury, the evidence fails to show.

As was said in the case of Streeter v. Humrichouse, 357 Ill. 234, Mr. Justice Farthing speaking for the court said at page 238: “. . . the rule is that in passing- upon a motion to direct a verdict, if, when all the evidence is considered, with all reasonable inferences drawn from it in its aspect most favorable to the party against whom the motion is directed, there is a total failure to prove one or more necessary elements of the case, the motion should be allowed.” Applying this rule we fail to find any evidence in the record, considered in the light most favorable to the plaintiff, which proves or tends to prove that the necessary elements are present in this case to establish the liability of the defendant.

We are of the opinion that the trial court properly instructed the jury as to their verdict at the close of plaintiff’s evidence and for the reasons herein given the judgment of the superior court is affirmed.

Judgment affirmed.

Hebel and Hall, JJ., concur.


author: Mr. Justice Hall

text:
    Sarah L. Pedalty, Appellee, v. George F. Nixon and Company et al., Appellant.
    Gen. No. 38,671.
    Opinion filed January 27, 1937.
    Schuyler, Weinfeld & Hennessy, of Chicago, for appellant; Henry E. Jacobs, of Chicago, of counsel.
    Martin S. Gordon and Edward E. Newmann, both of Chicago, for appellee.
   Mr. Justice Hall

delivered the opinion of the court.

By this appeal, defendant, George F. Nixon & Company, a corporation, seeks the reversal of a fipdipg and judgment against it and in favor of plaintiff entered on June 5th, 1935, for the sum of $16,997.64. The trial was by the court without a jury.

The action was brought on January 23,1934, and by an amended complaint filed in the cause, it is charged, in substance, that on January 24, 1929, plaintiff entered into a written contract with defendant by the terms of which she agreed to purchase from defendant certain real estate situated in Cook county, Illinois, for the price of $35,000; that prior thereto and for the purpose of inducing the plaintiff to enter into the contract, the defendant, by its agents, represented to the plaintiff that the lots were of a value greatly in excess of $35,000; that it was the intention of the defendant to increase the purchase price of the lots to $40,000 within a short time after the date of the contract; that it would not be necessary for plaintiff to make all of the instalment payments for such property as should be provided by the contract proposed to be entered into between the parties; that if she purchased the property from the defendant, defendant would immediately resell the lots at a price in excess of the purchase price, and that the sale would be consummated by defendant for plaintiff before the first of the instalments should become due; that one Gf. W. Brown, who was the agent of the defendant in the negotiation of the proposed contract, represented to plaintiff that if plaintiff should enter into the contract, defendant then and at that time, had a purchaser for the lots in question at a price substantially higher than the price at which defendant was then willing to sell them to the plaintiff; that Brown, as agent for the defendant, represented and stated to the plaintiff that for certain business reasons, it was undesirable and impractical for the defendant to deal directly with this proposed1 purchaser, but that if plaintiff would purchase the lots from defendant, that defendant would conclude the sale of the lots to the third party at a substantially higher price, and with material profit to the plaintiff, and that the entire transaction would take place prior to the payment of even the first monthly instalment proposed to be provided for in the contract of sale; that relying upon such promise, plaintiff was induced to enter into the contract of purchase. It is further alleged that the defendant failed and refused to sell the premises at a price in excess of $35,000 to the damage of the plaintiff in the sum of $12,856, with interest from the date of the contract, January 24, 1929.

Plaintiff alleges that the contract was thereupon entered into between the parties on January 24, 1929, and that by its terms, it provides for the sale by defendant to plaintiff of lots 25, 26, 27 and 28 in Block 4 in George F. Nixon & Company’s Rapid Transit Park. It is further alleged that in this contract, the plaintiff agreed to pay defendant the sum of $35,000 for the lots mentioned, $7,000, to be paid on the date of the contract, and $350 or more on a certain day of each month thereafter, beginning with the first day of July, 1929, and to continue until the full amount was paid. The contract referred to contains, among other things, the following provisions:

“(1) Second party expressly represents to the first party that no representations of fact other than herein contained have been made or relied on by the second party, and that no representation or promise has been made to said second party by any person whosoever as to the transferability of this contract, or as to any waiver or any forfeiture that may hereafter accrue hereunder, or as to the purpose for which such lots can be used, or as to the character of the buildings that may be placed thereon, or by whom the same may be erected or built, or in relation to any other matter, cause or thing, except the use of said lots without any buildings thereon for such purposes as second party may see fit to use the same after requiring a deed of said premises.

“(2) It is expressly understood by the second party that the first party does not undertake or agree to resell for the second party the real estate herein described.”

In addition to the contract entered into, plaintiff executed and delivered to defendant, the following document contemporaneously with the signing of the contract:

“First: We do not agree to return the customer’s money or to resell his property.

“Second: We do not wish to sell our property to persons who do not buy it with the intention of paying for it in full. We do not offer our property as a speculation, though we do offer it in all confidence for homes, apartments, or business sites and as an investment of the highest class. In order for a real estate investment to be most profitable, the buyer should be able to hold on until the natural demand comes, which, in a community growing at the rate of Chicago and contiguous territory, is inevitable after a few years. We do not care to sell our property except to those who desire such property in a highly restricted district, or to those who will be able to hold it until an advantageous opportunity arises for a resale. Under proper conditions, we are confident that investments with us will prove remunerative and satisfactory, but we will not knowingly sell to non-income producers, who are dependent for a living upon the capital they propose to invest in land.

“This statement is to be signed by all customers, and is brought to their attention prior to signing our contract of sale, from the fact that, in a business as enormous as ours, misunderstandings may occur, which, without this warning, might lead purchasers into unwise investments.

“We want your business, but we want it under conditions which will insure permanent satisfaction to both parties. A good friend who is not a customer means more to George F. Nixon & Company than a customer who is not a good friend. If we carefully call your attention to these conditions of sale before the contract is signed, we can justly expect the customer thereafter to live up to its reasonable provisions.

“Date and sign here Sarah E. Pedalty
“January 24th, 1929”

In this amended complaint, plaintiff further avers that as and for her first payment on account of such contract, she assigned to the defendant what she terms to be “an equity” in another piece of real estate, and that also at said time, she assigned and delivered to the defendant certain shares of stock valued on January 24, 1929, at a sum of $12,856, and that she has frequently demanded the return of her stock, but that defendant has refused to return the same, and has converted the stock to its own use.

The charge is made by plaintiff that the representations made to her that the defendant had a purchaser for the lots which she contracted to purchase, were false and fraudulent, and were made for the purpose of inducing1 plaintiff to part with her stocks and with her contract to purchase the certain other lot from defendant, and to enter into the contract to purchase the lots in question, and that, relying upon such false and fraudulent representations, she surrendered her stocks to the defendant, and that as stated, defendant converted the stocks to its own use.

The grounds for reversal urged by defendants are that a false representation, in order to constitute a cause of action for fraud and deceit, must be a representation as to an existing or past fact, and not a mere promise to do some act in the future; that a party who signs an instrument, relying upon representation as to its contents, when he has an opportunity to ascertain the truth by reading and does not avail himself of the opportunity, cannot be held to say that he was deceived -by misrepresentation; that an innocent vendor is not liable for an action for deceit brought for a fraudulent representation of his agents, and that plaintiff cannot recover because she did not ask for rescission, or offer to return the contract or equity in the lots, but on the contrary, by her act of transferring the lots to Krenn & Dato for the property, she treated the contract as valid.

Plaintiff testified to the effect that in January, 1929, she engaged in a conversation with a Miss Hazel Schulman regarding investments in real estate; that subsequently, Hazel Schulman became associated with the defendant corporation, and that she thereafter called upon the plaintiff and stated to plaintiff that Nixon & Company had real estate for sale in Niles Center Garden Subdivision, and requested plaintiff to look at some of the properties; that Miss Schulman stated to plaintiff that plaintiff could buy a lot for $7,500 and easily sell it for $9,000; that plaintiff could pay a small amount down and get a loan on certain stocks which she told Miss Schulman she owned; that subsequently Miss Schulman and a man named Brown, sales manager for the defendant company, took the plaintiff to Niles Center and showed plaintiff some lots; that plaintiff then told Brown that she had 160 shares of common U. S. Gypsum Co. stock, and 17 shares of preferred stock in the same company; that shortly thereafter she was again taken to Niles Center, and that Brown and Miss Schulman showed her a lot which was priced at $7,500; that plaintiff was then taken to the office of the defendant company at 4406 Broadway, Chicago, where she met a Mr. Harrell, who was manager of that office; that Harrell drew a contract for the sale to plaintiff of a lot at the price of $7,500, and that plaintiff signed a contract and gave Brown the shares of stock referred to; that she then signed a statement dated January 14,1929, addressed to George F. Nixon & Company, wherein it is recited that she placed 60 shares of stock with the defendant company and authorized Nixon & Company to secure a loan upon the stock for a sufficient amount to make the down payment on lot No. 10 in Niles Center Gardens “which I am today purchasing from you at $7,500”; that thereafter she entered into a contract with Miss Schulman, by which she gave Miss Schulman the sole and exclusive right to sell the lot in question for $9,000. The record indicates that on January 15,1929, the plaintiff executed a note for $1,950 payable to the order of E. C. Harrell, and that she deposited with him collateral for the payment of this note, the shares of stock before referred to. The record also indicates that E. C. Harrell, the person referred to, died prior to the date of the trial. Plaintiff further testified that thereafter, at the request of Harrell, she signed another note at the Sheridan Trust Bank, and that Harrell returned to her the note above referred to. The last note executed by plaintiff, at the request of Harrell, was made payable to the Sheridan Bank & Trust Company. This witness further testified, in effect, that thereafter and on January 24, 1929, and after the transaction herein-before referred to had been completed, Brown called on her and told her that if she would purchase a certain corner lot for $35,000, that he Brown, had an immediate purchaser for the lot for the sum of $41,000, that the Sun Oil Company had made “us,” meaning Nixon & Company, an offer of $41,000 for the lot in question, but that Nixon & Company did not desire to sell the lot direct to the oil company because “people wouldn’t like it,” but that if the deal could go through plaintiff, she, plaintiff, could make a profit of $6,000 on the deal, and that Brown agreed to finance the proposed purchase through the use of her oil stocks and the lot she had already contracted to purchase. Thereafter, on the same day, to wit: January 24th, 1929, plaintiff executed the following document:

“George F. Nixon & Company Realtor Area Developers
Chicago Nixon Building
S. W. Corner Clark & Monroe
Private Branch Exchange
Randolph 0344
George F. Nixon & Company,
105 West Monroe Street,
Chicago, Illinois
Gentlemen:
“I am herewith delivering to you One Hundred (100) shares of United States Gypsum Company common and seventeen (17) shares of the preferred stock and to obtain sufficient loan on the balance of the com-' mon to make the full down payment on Lots 25, 26, 27 and 28 in Block 4 — Rapid Transit Park, which I have this date purchased from you.
“Signed Sarah E. Pedalty
“Sarah E. Pedalty.
“Stock Received:
E. G. Harrell
Director of Sales North Shore Properties”

Plaintiff also testified that on January 25, 1929, she executed a note payable to the order of E. C. Harrell for $2,200 and pledged as collateral for the payment of the same, 55 shares of U. S. Gypsum common stock. Plaintiff testified that she went to the First National Bank, gut her stocks, and turned them over to defendant; that after she had signed the contract involved here, which is, in substance, the same as is recited in the amended complaint filed in this cause, she frequently asked Brown to give her a contract to sell the lots, as he had agreed to do, but that he evaded her; that she then spoke to Mr. Nixon and Mr. Loriber, Mr. Loriber being connected with Nixon’s office, about the matter, and told them about Brown’s promise to sell the lots, as already suggested; that thereafter Brown called upon the plaintiff and requested her to give him more time, and that he would sell the lots and get her stock back; that during the controversy between the plaintiff and the members of the defendant company, Brown met her and told her that he was having difficulties with his employer over the matter; that subsequently, she called at the office of Nixon & Company, and was there informed by an office girl that Brown had been discharged, and that he had been caught in some bad deals. Plaintiff’s further testimony is to the effect that at the time Brown made his proposition to her to buy the lots in question, which he proposed to sell for her to the Sun Oil Company, she and Brown made certain memoranda on a slip of paper which she retained, and which on the trial, was offered and received in evidence. From her testimony, it is shown that Brown there noted the figures “41,000,” which she testified was the amount she was to get for this lot in case she purchased it at the price of $35,000. Other figures appear on this document, which, she stated, indicate that plaintiff was to pay $15,000 as a down payment on the purchase of the lot. This document also contains the following: “Balance of the payments through me to Nixon & Co. so Nixon a realtor will not be blamed for oil station there.” Plaintiff testified to the effect that these last words were placed on this document by her as her memoranda,. and were made by'her in the presence of Brown, and that at this time, he, Brown, wrote on the document the figures “41,000,” as indicating the price which she would get for the lot if she completed the deal. Plaintiff further testified that shortly after she had her conversation with Brown about the proposed purchase of the lot and the resale to the Sun Oil Company, she was called on the telephone by someone purporting to represent the Sun Oil Company, who wanted to know if he could buy the lot for $45,000, and that the witness told this person that he could; that she reported this conversation to Brown, and insisted that the deal be closed, and that she afterwards reported the conversation with this person to Mr. Nixon of the defendant company “quite a long time after the deal was closed.”

On cross-examination the plaintiff was asked whether she remembered that Mr. Hackett of the Nixon Company had called her up concerning the contract and her failure to make payments as agreed, to which she replied that she did not remember. She also testified that she made a deal with another firm for another lot of much less value, by which the contract of Nixon & Company was taken over as part payment, but that she lost this lot and everything' else.

Herbert J. Loriber, vice president of the defendant company, testified that at the time of the delivery of the agreement of January 24, 1929, to plaintiff, the salesman Brown was present, and that he, Loriber, read and explained to plaintiff the two documents executed by her, and asked plaintiff if she fully understood the contract, what the transaction was, and whether or not she could make the payments provided for in the contract, and that plaintiff signified to Loriber that she was in a position to make such payments, and that thereupon Loriber delivered the agreement to her. He also testified that because plaintiff had defaulted in payments on the contract commencing with the payment agreed to be made on July 1st, 1929, she was notified by defendant of such default both by letters and by telephone. Plaintiff does not take issue with the testimony of Loriber.

George F. Nixon, president of the defendant company, testified in substance that he had had no conversation with the plaintiff as testified to by her, and that “as a matter of fact, I have no recollection of ever having seen Mrs. Pedalty until today.”

Brown was not produced as a witness. There is nothing in the record to suggest that Brown did not make the representations to plaintiff, as alleged and testified to by her, in order to induce her to part with her stocks and to buy the lots in question. It is not denied that Brown was the agent of the defendant in the transaction. Defendant takes the position that a false representation in order to constitute a cause of action for fraud and deceit, must be a representation as to an existing or past fact, and not a mere promise to do some act in the future. It is in evidence, and not disputed, that Brown told plaintiff that if she would purchase these lots, he then, at that instant, had a purchaser for the lots from her at a price of $6,000 over and above the price which she agreed to pay for the lots which she agreed to purchase, and that Brown’s statement was false and untrue.

The principal points suggested by defendant as grounds for reversal, have been passed upon by both the Appellate and Supreme Courts. In Ginsburg v. Bartlett, 262 Ill. App. 14, an action was brought against the Frederick H. Bartlett Realty Company by a woman, who alleg’ed that the realty company had represented to her at the time she had made a contract with the defendant company for the purchase of certain lots, that “railroad transportation facilities were then being established, that a railroad company was the owner of the right of way adjoining the subdivisions, and that a contract had been entered into between the railroad company and Frederick H. Bartlett Realty Company wherein and whereby the railroad company agreed that within a short period of time complete railroad transportation would be maintained upon the tracks then being laid.” In that case, as stated in the court’s opinion, the contract between the parties contained the following provisions:

“Purchaser further agrees that the vendor has not represented or promised that there will be a new line of transportation to North Shore Highlands, notwithstanding the fact that it is generally understood that a public service corporation is the owner of a right of way through the said subdivision, it being now stated by the vendor that there may never be a new line of transportation on said right of way, and it is further agreed that a new line of transportation is not a part of the consideration of this contract.”

“.The undersigned purchaser has read and understands the whole of the above contract, and, in consideration of the sale and vendor affixing his signature, expressly agrees that no misrepresentations regarding the property have been made to him by any vendor’s agents or salesmen, and releases any right or claim he might have by reason of any misrepresentation if made by any such agent or salesman, and expressly states that no representation, promise or agreement not expressed in the contract has been made to induce him to enter into it.”

The railroad was never built, and plaintiff sued to recover her money. In the case cited, as in the case at bar, the representations were made by the agent of the company. In the case cited, the provisions in the contract between the parties and statement signed by plaintiff in that case, are very similar to the statements signed by plaintiff in the contract signed by her in the instant case. In the Ginsburg case, this court cites, with approval, the case of Bridger v. Goldsmith, 143 N. Y. 424, where there were provisions in a contract similar to those contained in the contract in the case at bar, and in the Ginsburg case. In the Bridger case, the New York court said:

‘A mere device of the guilty party to a contract intended to shield himself from the results of his own fraud, practiced upon the other party, cannot well be elevated to the dignity and importance of an equitable estoppel. If the clause has any effect whatever, it must be as a promise or agreement on the part of the plaintiff, that however grossly he may have been deceived and defrauded by the defendant, he would never allege it against the transaction or complain of it, but would forever after hold his peace. It is difficult to conceive that such a clause could ever be suggested by a party to a contract, unless there was in his own mind at least a lingering doubt as to the honesty and integrity of his conduct. I assume that there is no authority that we are required to follow in support of the proposition that a party who has perpetrated a fraud upon his neighbor may, nevertheless, contract with him in the very instrument by means of which it was perpetrated, for immunity against its consequences, close his mouth from complaining of it and bind him never to seek redress. Public policy and morality are both ignored if such an agreement can be given effect in a court of justice. . . . Such a principle would in a short time break down every barrier which the law has erected against fraudulent dealing. ’ ” In the Ginsburg case, as here, the action was for fraud and deceit, and this court affirmed a judgment in favor of plaintiff.

As stated, one of the points made by defendant in the case at bar is that the plaintiff cannot recover because she did not ask for a rescission of the contract, nor offer to return the contract or her equity in the lots, but that on the contrary, by transferring her interest in the lots to Krenn & Dato for other property, she treated the contract as valid. In reply to this, plaintiff’s counsel asserts that it was not necessary for plaintiff to ask for a rescission of the contract in order to maintain her action for damages, based on a charge of fraud and deceit. Plaintiff’s counsel cites no authority to support his contention. In support of its contention, defendant cites a number of cases, none of which is in point. We are of the opinion that defendant’s contention is without merit, and that plaintiff’s counsel correctly states the law.

In Siltz v. Springer, 236 Ill. 276, not appearing in either brief, plaintiff charged that he had been induced by fraud to purchase certain worthless notes. The court there held that the plaintiff might retain the notes and sue in an action for fraud and recover the difference between the true value of the notes and what they were represented to him to be worth, and that the action was not barred because he did not have the notes in his possession at the- time of the trial, and did not offer to return them. The books are replete with authority supporting the doctrine there stated. In the case at bar, however, there is no showing whatever as to the value, if any, of the property plaintiff acquired from Krenn & Dato, for which she testified she exchanged the contract with the defendant in this case. She does say that she lost everything, possibly, intending to include this property in what she lost. This statement is not sufficient to justify the fi-nrling and judgment.

The cause is reversed and remanded for a new trial.

Reversed and remanded for a new trial.

Denis E. Sullivan, P. J., and Hebel, J., concur.


text:
    Dominick Giganti et al., Appellees, v. Central Republic Bank and Trust Company et al., Defendants. Appeal of William L. O’Connell, Receiver of Chicago Bank of Commerce, Appellant.
    Gen. No. 38,718.
    Opinion filed January 27, 1937.
    Rehearing denied February 16, 1937.
    Schuyler, Weinfeld & Hennessy, of Chicago, for appellant; Henry E. Jacobs and Paul B. Edelstein, both of Chicago, of counsel.
    Francis E. Cash, of Chicago, for appellees.
   Mr. Justice Hall

delivered the opinion of the court.

Dominick Giganti, individually and as administrator of the estate of Frank Montelbano, deceased, Maria Rosa Giganti and Joseph Barbera, brought suit in the superior court of Cook county, against the defendants upon a check dated March 7,1930, issued by the Public Service Company of Northern Illinois, against the Central Trust Company, for the sum of $1,500, payable to the order of Joseph Barbera, Maria Rosa Giganti, Dominick Giganti and R. R. Co vello, “Attorney.” The complaint filed in the cause charges that R. R. Covello, one of the payees of the check, forged, or caused the names of the other payees of the check to be forged, thereon, as indorsees, signed his own name thereon, as indorsee, deposited the check in the Guardian National Bank, and that the check was paid by the Central Trust Company to the Guardian National Bank in the ordinary course of business. Here it is pertinent to note that William L. O’Connell, receiver of the Chicago Bank of Commerce, one of the defendants and sole appellant here, concedes the above allegations to be true, and concedes that the Guardian National Bank received the proceeds of this check. Plaintiffs further allege that subsequent to March 7, 1930, the Guardian National Bank was consolidated with the Union Bank of Chicago, and that the Union Bank of Chicago was subsequently consolidated with the Chicago Bank of Commerce; that the last mentioned bank was, on June 25, 1932, closed by the auditor of public accounts of the State of Illinois, and that a receiver was appointed for the Chicago Bank of Commerce. After a hearing, and on June 14, 1935, judgment for the sum of $1,922.25 was entered against William L. 0 ’Connell, as receiver of the Chicago Bank of Commerce. The court found, and the judgment order recites that the Chicago Bank of Commerce became the successor by consolidation with the Union Bank of Chicago, and that the Union Bank of Chicago became successor by consolidation with the Guardian National Bank. The appeal here is from that judgement.

It is admitted, 'as found in the order, that on March 22, 1930, the Guardian National Bank of Chicago became consolidated with the Union Bank of Chicago, and conveyed certain of its assets to that bank, as alleged in the complaint; that on Septemher 28, 1931, the Union Bank of Chicago became consolidated with the Chicago Bank of Commerce, and conveyed certain of its assets to that bank, and that, if there is any right of recovery, the judgment, according to its terms, was properly entered by the court. The appealing defendant insists, however, that the action should not and could not have been properly brought against the receiver of the Chicago Bank of Commerce without the consent of the court which appointed him, that the court admitted improper evidence as to the character of the mergers between the Guardian National Bank of Chicago, the Union Bank of Chicago and the Chicago Bank of Commerce; that because of the character of these various mergers there was no assumption of this claim by the Chicago Bank of Commerce, and that, therefore, the judgment should be reversed.

As to the contention that the suit could not be brought against the receiver without leave of the court which appointed such receiver, we call attention to the fact that the defendant O’Connell, receiver, was not appointed by the court. He was appointed under the power contained in par. 11, sec. 11, ch. 16a, Illinois State Bar Stats. 1935; Jones Ill. Stats. Ann. 10.11, which provides:

“If the Auditor determines that the bank cannot be reorganized, and that the same should be liquidated through receivership, he shall appoint a receiver, and require of him such bond and security as he deems proper. Such receiver, under the direction of the Auditor, shall take possession of, and for the purpose of the receivership, the title to, the books, records and assets of every description of such bank, ...” In a document filed by counsel for O’Connell, receiver, in the superior court in this case, it is recited that “Edward J. Barrett, Auditor of Public Accounts of the State of Illinois, did appoint William L. O’Connell as receiver of said Chicago Bank of Commerce on August 31st, 1934.”

In People v. Shurtleff, 353 Ill. 248, it is held that:

“There is no statute in Illinois which confers jurisdiction on a court of equity to appoint a receiver for a banking corporation or to decree its dissolution on the application of its stockholders or creditors.” See also People ex rel. Barrett v. West Side Trust & Savings Bank, 280 Ill. App. 308.

We are of the opinion that the consent of the court was not required to enable plaintiff to sue this receiver.

As to the point that by the articles of agreement made between these various banks by which the consolidation or mergers took place, this action cannot be maintained, the record shows the following: By an agreement entered into between the Guardian National Bank of Chicago and the Union Bank of Chicago, it is provided that:

“The Union [meaning the Union Bank of Chicago] is desirous of acquiring the business, good will and certain assets of the Guardian and of consolidating said business and assets with the business and certain assets of the Union under a plan of reorganization and upon the terms and conditions hereinafter set forth, to which the parties hereto have respectively agreed.”

In this agreement, it is recited that the Guardian National Bank sold, assigned, transferred and conveyed to the Union Bank of Chicago certain assets and properties of the Guardian National Bank to be selected by the latter, and to have a value of $600,000 in excess of certain liabilities assumed by the Union Bank, and that the Union Bank, in consideration of the assignment to it of the assets of the Guardian National Bank, agreed as follows:

“To cause the capital stock of the Union to be increased by authority of its board of directors and its stockholders, according to law, from 10,000 shares with a par value of $100 per share to 13,000 shares with a par value of $100 per share and to deliver 3,000 shares of its capital stock to the stockholders of the Guardian pro rata their respective holdings of the Guardian’s stock as the same appear of record on the transfer books of the Guardian at the close of business on the closing date, hereinafter defined.

“To assume and agree to pay the liabilities of the Guardian to its depositors as shown by its boohs of account as of the close of business on the closing date, hereinafter defined, including individual deposits, bank deposits, cashiers’ checks, certified checks, demand certificates of deposit, savings deposits, Christmas savings deposits, time certificates of deposit and deposits for bonds purchased on contract, and all liabilities of the Guardian to the payees, endorsees and/or holders of notes or bills payable, letters of credit or other evidences of indebtedness issued by the Guardian and outstanding at the close of business on said closing date as shown by the Guardian’s said books of account, plus all interest, if any, accrued upon said liabilities to and including said closing date. It is understood and agreed however, that the Union shall assume only such liabilities of the Guardian as are herein specifically set forth. and assume no other liabilities of the Guardian whatsoever.” (Italics ours.)

As to the relationship created between the Union Bank of Chicago and the Chicago Bank of Commerce, and the obligations assumed by the latter bank, the abstract filed by the defendant, receiver, contains the following* recitation:

“Indenture dated September 28, 1931, between Union Bank of Chicago (called the ‘Seller’) and Chicago Bank of Commerce (called the ‘Purchaser’). Seller agrees to sell, convey, transfer, assign, endorse and set over to Purchaser all of its assets, except specified exceptions, and sets out certain regulations and procedure to be used in the conveyance of its assets to the Purchaser. Provides that Purchaser does not take over, and the agreement does not release the stockholders of Seller from their contingent stockholders liability except as' to Purchaser. Purchaser agrees to assume and pay all liabilities, as shown by the records of Seller, except Seller’s liabilities to its stockholders.” (Italics ours.)

As stated, it is alleged in the bill of complaint and admitted that this cheek was deposited with the Guardian National Bank, and that this bank collected the amount of the check. In so far as the record indicates, it had the money, paid on this check, in its possession at the time it consolidated with, the Union Bank of Chicago.

In 7 Corpus Juris, under the heading Banks and Banking, page 635, it is said:

“Where checks or drafts are indorsed and deposited and are accepted as cash they become the property of the bank, and the bank becomes a debtor of the depositor in the amount of such check. ’ ’

We are of the opinion that the leg*al beneficiaries of this check were “depositors” under the terms of the contracts entered into between the various banks, and that by the terms of such agreements, a liability was created on the part of the merged banks to pay the amount of the check to the plaintiffs. Counsel on each side have cited a great number of authorities, but none of them is in point. The right of action of plaintiffs here is fixed and determined by the contract between the Guardian National Bank and the Union Bank of Chicago.

It has been suggested of record in this court, that William L. O’Connell, receiver, died on July 24, 1936. The record and briefs in this cause were filed and the cause was at issue in this court, and was taken by the court on April 15, 1936. It is the order of the court that, under the authority of Citizens Securities S Investment Co. v. Dennis, 236 Ill. App. 307, and the authorities there cited, an order be entered here nunc pro tunc, as of April 16, 1936, affirming’ the judgment of the superior court of Cook county.

Affirmed.

Denis E. Sullivan, P. J., and Hebel, J., concur.


text:
    Charles Kennedy, Appellee, v. Henry D. Middleton and Madge Middleton, Appellants.
    Gen. No. 38,769.
    Opinion filed January 27, 1937.
    Earl B. Dickerson and W. Robert Ming, Jr., both of Chicago, for appellants; Earl B. Dickerson, of counsel.
    George C. Adams, of Chicago, for appellee.
   Mr. Justice Hall

delivered the opinion of the court.

This is an appeal from a judgment of the municipal court of Chicago entered in a replevin suit, wherein and whereby the possession of certain personal property was awarded to the plaintiff.

The record in the case indicates that prior to March 19, 1931, one Mary Smith was indebted to plaintiff in the sum of approximately $450, and that by a writing, she conveyed the property in question to the plaintiff; that on April 19, 1931, the plaintiff reconveyed the property to Mary Smith by a conditional sales contract in writing, signed by both parties, in which it is recited that the consideration for such reconveyance is the sum of $350, which Mary Smith agreed to repay at the rate of $5 per month, without interest, until the whole amount should be paid. It is also recited in this contract that the title to the property shall not pass to the buyer with delivery, but shall remain vested in the seller until the entire purchase price is paid; that upon default by the buyer in the payment of any instalment, then, and in that case, the entire price remaining unpaid shall become due and payable at the seller’s option, and that the seller might, without notice, take possession of the property as the seller’s own and individual property, free and clear of any claim by the buyer, and retain any and all payments made as liquidated damages. It is further provided in this contract that the buyer grants to the seller the right to enter at any time any premises where the property might be located and take possession of the same.

Plaintiff testified that after the execution of this agreement, and at the request of Mrs. Smith, he moved the property to 6425 Langley avenue, in the city of Chicago, and delivered it to a Mr. Burdette, Mrs. Smith’s son-in-law, and that Mrs. Smith never paid any part of the balance due on the conditional sales contract. He further testified that thereafter he found the property in the possession of the defendants in another apartment than that to which he delivered the property, and demanded possession of it.

Henry D. Middleton, one of the defendants, was called by the plaintiff, for cross-examination, and testified, in substance, that Mr. Burdette and Mrs. Smith rented an apartment from him as joint tenants; that there was a verbal lease to them of the property, and that the two of them paid the rent; that the lease was verbal; that the first one to rent the apartment was Mrs. Smith, and that Mrs. Burdette brought to the plaintiff whatever rent was paid.

On her own behalf, Madge Middleton, one of the defendants, testified that the personal property in question was delivered to her by Mrs. Smith; that prior to that time, the furniture was on the first floor of the flat building in which the parties lived, and that about March 15, 1934, she caused the furniture to be moved to the second floor, where the witness resided; that at that time, Mrs. Smith owed the defendants a considerable amount of rent, and that Mrs. Smith told the witness to hold the furniture, and that “We are going to Ohio. We are not going without paying you. Just hold the furniture until you get your money.” On cross-examination, this witness was shown certain receipts, nine in number, for payments of rent to her beginning October 16, 1933, and ending March 7, 1934, all of which were made out to John Burdette, and signed by “M. W. Middleton” and Madge Middleton, defendants. These receipts were afterwards received in evidence on behalf of the plaintiff. On behalf of the defendants, there was also offered and received in evidence a statement delivered to the defendants by Mrs. Smith, which is as follows:

1 ‘ The furniture in the apartment at 6440 Evans Avenue is the property of Mrs, Mary L. Smith and is not to be moved from said apartment without the permission of Mrs. Smith and until rent is paid in full.
(signed) Mary L. Smith.
March 15, 1934.
Chicago, Ill.”

When this document was exhibited to Mrs. Smith while she was on the stand, she testified that the words "until rent is paid in full,” as shown in the document, were added after she signed it. On behalf of plaintiff, there was offered and received in evidence a document signed by John Burdette, by the terms of which he assigned certain wages due to him, to Henry D. Middleton, one of the defendants.

John Burdette testified on behalf of the plaintiff that he signed the lease and paid the rent for the apartment occupied by him, and that he, alone, was responsible for the full amount of the rent agreed to be paid; that in March, 1934, the defendant Middleton gave the witness a five-days’ notice; that Mrs. Smith was in and out, and only came to the premises as a visitor, and that when he moved out, he left the furniture in question in the possession of the defendant.

In Horvitz v. Leibowits, 274 Ill. App. 196, the defendant in a foreclosure proceeding had a deficiency judgment entered against him. From the statement of the case, as made by the court, we learn that the intervening petitioner in the foreclosure proceeding had installed refrigerators in the apartment building, which was the subject of the foreclosure proceeding, under a conditional sales contract exactly similar to that in the instant case, by the terms of which the petitioner retained the title to the property and the right to take possession of the same until the whole amount due for the chattels was paid. The court there held that the receiver of the property appointed in the foreclosure suit, was without authority to seize these refrigerators in satisfaction of the deficiency judgment, and that the petition of the intervening petitioner who had sold the refrigerators, should be sustained, and said:

“Section 20 of the Uniform Sales Act, ch. 121a, Cahill’s Revised Statutes, 1931, par. 23 (enacted in 1915), provides: ‘Where there is a contract to sell specific goods, or where goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of possession or property in the goods until certain conditions have been fulfilled. The right of possession or property may be thus reserved notwithstanding the delivery of the goods to the buyer. . . . ’

“Long prior to the passage of this act conditional sales contracts were recognized and enforced in this State except as against bona fide purchasers and execution creditors. In 1898 our Supreme Court in Gilbert v. National Cash Register Co., 176 Ill. 288, a leading case on the subject, said at pp. 294, 295:

“ ‘It seems to be settled by the weight of authority that “where by the written contract of the parties it is expressly provided that the title to the property shall remain in the vendor until the purchase money is fully paid, and there is no reservation of a lien, the transaction is a conditional sale and not a mortgage. ’ (6 Am. & Eng. Ency. of Law, — 2d ed. —, p. 446.) . . . The eases seem to hold, that there is no doubt as to the character of the instrument when, by its terms, personal property is delivered by the owner to another with the requirement that the title shall remain in the owner until the payment of the purchase price. In such case the transaction is uniformly held to be a conditional sale, and not a mortgage. In Plummer v. Shirley, 16 Ind. 380, where an instrument was given upon a sale and delivery of personal property and provided that the ownership thereof was to remain exclusively vested in the vendor and not in the vendee, until the latter had fully paid the purchase money, it was held that the parties' intended a conditional sale, and not a mortgage. To the same effect are the following cases: Sumner v. Woods, 52 Ala. 94; Bingham v. Vandegrift, 93 id. 283; Jowers v. Blandy, 58 Ga. 379; Nichols v. Ashton, 155 Mass. 205; McComb v. Donald, 82 Va. 903; McGinnis v. Savage, 29 W. Va. 362; W. W. Kimball Co. v. Mellon, 80 Wis. 133; ‘The Marina’, 19 Fed. Rep. 760; Vasser v. Buxton, 86 N. C. 335; Frick v. Hilliard, 95 id. 117.”

In the instant case, there is a contrariety of evidence as to whether or not Mrs. Smith ever became a tenant of the defendants. It is claimed by her, as already stated, that the words in the document she delivered to Mrs. Middleton, “and until rent is paid in full,” were added after the execution of the document by Mrs. Smith. The body of the document appears to be in a different handwriting than that of the signer, and Mrs. Smith’s statement in this regard, may or may not be true. However, the trial judge saw and heard the witnesses, and was in a better position to pass upon their credibility than we are. We can arrive at no other conclusion than that, under the conditional sales contract, and in view of all the facts in the case, plaintiff had the right to the possession of the property, and that the judgment of the municipal court should not be disturbed. Therefore, it is affirmed.

Affirmed.

Denis E. Sullivan, P. J., and Hebel, J., concur.


author: Mr. Justice Hebel

text:
    Lawn View Building Corporation, Appellee, v. Jacob Weinstock et al., Defendants. Appeal of Jacob Weinstock, Appellant.
    Gen. No. 38,794.
    Opinion filed January 27, 1937.
    Rehearing denied February 16, 1937.
    M. J. Myer, of Chicago, for appellant.
    Rosenberg, Toomin & Stein, of Chicago, for appellee ; Benjamin Rosenberg and Milton Gordon, of Chicago, of counsel.
   Mr. Justice Hebel

delivered the opinion of the court.

This is an appeal by Jacob Weinstoek, one of the defendants, from a decree entered upon findings by the court which held invalid, as a cloud upon plaintiff’s title to real estate, the lien of a judgment, which had been entered in the municipal court of Chicago, in favor of the defendant herein, and thereby removing as a cloud the lien of this judgment and the bailiff’s certificate of sale issued after the real estate had been sold to satisfy the judgment. The cause was heard upon the bill of complaint to remove the cloud upon plaintiff’s title, the answer of the defendant, also of the bailiff of the municipal court, and the evidence offered.

From the decree it appears that in 1925, Sam Cohen, Harry Pollack and Isadore Holzman owned certain real estate in the city of Chicago and executed a bond issue of $65,000, secured by a trust deed on the real estate therein described. The defendant Weinstock became the holder of two $500 bonds, numbered 100 and 101.

Certain defaults having occurred in 1931, in the payment of principal and interest on the bonds, the trustee, under the terms of the trust deed securing the bond issue filed a bill to foreclose in the superior court of Cook county, making all the bondholders of unpaid bonds numbered 31 to 198, parties defendant as “unknown owners.”

On October 5, 1932, Cohen, Pollack and Holzman were the owners of record of the real estate. The defendant instituted suit in the municipal court of Chicago, and obtained a judgment against them for $1,072.50 upon two $500 bonds issued by them and owned by Jacob Weinstock, the defendant here on appeal. On the same day judgment was entered and an execution issued and delivered to the bailiff of the municipal court of Chicago. On October 8, 1932, a decree was entered in the foreclosure proceeding, finding that bonds Nos. 31 to 198 were unpaid, and directing a sale for the amount found due by the court. On February 10, 1932, Cohen, Pollack and Holzman, with their respective wives, executed and delivered a quitclaim deed of the real estate involved in this foreclosure proceeding to the Liberty Bank of Chicago, as trustee, under its trust No. 1003, but this quitclaim deed was not recorded until January 16, 1933, 11 months after the same had been executed and delivered to the Liberty Bank of Chicago, as trustee.

The foreclosure sale was held in February, 1933, Milton A. G-ordon, being the purchaser at the sale, and within a few days thereafter the Liberty'Bank of Chicago, as trustee under its trust agreement, being the then owner of the title to the real estate, redeemed the real estate from the foreclosure sale, and thereafter conveyed it to the plaintiff herein.

The defendant caused a pluries execution to be issued on his judgment against Cohen, Pollack and Holzman, which had been entered on October 5, 1932, while they were the owners of record of the real estate, delivered the execution to the bailiff of the municipal court of Chicago, who levied upon and sold the real estate involved in the foreclosure proceeding to satisfy the judgment, and the bailiff issued his certificate of sale to the purchaser, and thereafter the plaintiff filed its bill of complaint to remove the judgment, and the bailiff’s certificate of sale as a cloud upon its title.

It is the theory of defendant Weinstock that when the defendant obtained a judgment on his bonds against Sam Cohen, et ah, the makers of the bonds, they were the owners of record of the real estate, and his judgment immediately became a lien on the real estate, and the Liberty Bank of Chicago took title subject to the lien of defendant’s judgment.

The plaintiff has admitted that if the defendant’s judgment were based upon any cause of action other than upon a bond secured by the trust deed, which was in the process of foreclosure, defendant’s judgment and the bailiff’s certificate of sale would have been a valid lien and plaintiff could not have maintained this action, for the reason that redemption by the owner of the equity would have satisfied the trust deed and foreclosure decree.

The plaintiff contends, however, that there can be only one sale of real estate to satisfy a specific lien thereon, and argues that the foreclosure sale was for the purpose of satisfying and did satisfy the lien of defendant’s judgment entered in his separate suit.

It will be seen upon an examination of plaintiff’s brief that the contention is made that the sale of the premises under the foreclosure decree removed the lien of the trust deed; that the lien no longer existed, as the trustee for and in behalf of all the bondholders had secured for them all benefit possible under the lien of the trust deed when a sale was had, as provided for in the foreclosure decree. The plaintiff admits that the debt was not extinguished. A portion of it remained unsatisfied by reason of the failure of the property to sell for the full amount of the indebtedness, and further admits that the defendant had the right to sue on the bond and secure payment, or the trustee for him, had the right to obtain a deficiency judgment; that this judgment is not based upon the lien of the mortgage but upon the personal liability of the mortgagor to pay the full amount of the indebtedness secured by the mortgage. The plaintiff contends however that the property in question is exonerated from the defendant’s lien because the property cannot be subject to two sales to satisfy the same debt.

The pertinent question involved in this litigation is whether there may be a number of sales of the same property to satisfy one debt.

The defendant undoubtedly had the right to the judgment entered in the municipal court of Chicago in his action upon the two bonds, which were also secured by the trust deed, the subject of the foreclosure proceeding, and upon the entry of the judgment it became a lien upon the property decreed in the foreclosure proceeding to be sold. The existence of this lien is not questioned by the plaintiff.

When the property was conveyed by deed and recorded on January 16, 1933, to the Liberty Bank of Chicago, trustee, the real estate was subject to the lien of this judgment at the time the trustee redeemed from the foreclosure sale. The plaintiff in this action in the acceptance of the deed from the trustee, accepted delivery subject to such liens as were not adjudicated in the foreclosure proceeding. The lien of the trust deed securing the payment of the bonds, was satisfied when the foreclosure decree was entered and the sale had. The title of the purchaser was not subject to the lien of the trust deed. Where, as in this case, there is a redemption by the owner of the equity from the purchaser at the foreclosure sale, the premises become subject to the lien of the defendant’s judgment.

In the case of Hack v. Snow, 338 Ill. 28, the court passed upon a somewhat similar question, where redemption from a foreclosure sale was had by the owner of the equity of redemption. The court said:

“Such redemption from the foreclosure sale defeated the title of the purchaser under it and left the premises subject to the lien of Liesik’s judgment in the same way as if the redemption had been made by the mortgagor himself. (Burgett v. Paxton, 99 Ill. 288.) Being redeemed from a sale the property was no longer encumbered by it and it ceased to be an element in the title of the property. Smith v. Mace, 137 Ill. 68.”

As we have indicated above, upon default in payment of a mortgage by the mortgagor, the mortgagee has three separate remedies, all of which he may pursue concurrently until he has one satisfaction, one of these remedies being to sue the mortgagor in assumpsit for a judgment upon the personal obligation, and this rule is not questioned by the plaintiff in this action.

We have in this case a judgment which was obtained by the holder of a bond against the maker of the bond in an action instituted by him for that purpose. This remedy is one of the three permitted by law, and it is necessary to refer to only one authority upon this question, namely, the case of Rohrer v. Deatherage, 336 Ill. 450, in support of the action taken by the defendant. The bonds being the personal obligation of the makers, the defendant asserted his right, and the judgment became a lien upon the property while the makers of the bonds still had title subject to this judgment lien when the holders of the property in question conveyed title to the Liberty Bank of Chicago, as trustee. The judgment was not satisfied' and was still in full force and effect when this property was redeemed by the trustee. The defendant had the undoubted right to have a pluries execution issued, and the sale under this execution was proper and was only for the purpose of satisfying the amount of the judgment.

Plaintiff points to the record to show that a sale was had of the real estate in the foreclosure suit, incumbered by the trust deed securing the payment of the bonds, for the purpose of satisfying the indebtedness, and that by the sale of the property the amount of the sale was not sufficient to satisfy the foreclosure decree. This court is of the opinion that notwithstanding that action the defendant had the right to assert his claim as against successors to the title, and in doing so, he had the right to pursue his remedy to the extent of directing the bailiff of the municipal court to levy upon the property by virtue of the issued execution. It follows that this was necessary in order to satisfy the amount of the judgment.

The plaintiff strenuously urges that by the entry of the decree the rights of the bondholders were merged in the amount found due under the terms of the trust deed, and that the sale of the property was for the benefit of all the bondholders. From the record, it is not altogether clear that by the sale provided for under the terms of the decree the amount of all the bonds was satisfied in full. While the law is settled that there can be but one satisfaction of a claim, still we must agree that by the assertion of the remedies provided by law, the defendant Weinstock was justified in pressing his claim, and, unless the judgment was satisfied, he was. permitted to assert and direct that execution issue by the clerk of the court for levy upon the property interests of the owners, or the successors to title as they appear in the record. There is nothing in the record to show that there has been a satisfaction of Weinstock’s claim. The record is silent except that there is an assertion that an amount was left with the clerk to be applied upon the claim of the defendant, but just what the amount was, does not appear in the record before us. Therefore, we have the right to assume that the defendant’s demand was not satisfied.

On the question of the right of the defendant to take the action he did to enforce his rights, the courts have held that the mortgagor is primarily liable for the mortgage indebtedness, and he remains so after the sale, if one is had that is not sufficient to satisfy the amount of the decree, and his interests in the property may be sold again to satisfy the lien of a deficiency decree, where the owner redeems from the sale. This holding is applicable to the situation before us. In this case, where the defendant seeks to collect the amount of the judgment from the maker of the obligation, the then holder of title to the property,- the successors to this title, by conveyance of the owner, are subject to this judgment lien.

In the case of Ogle v. Koerner, 140 Ill. 170, the Supreme Court said:

“When the redemption is made by a party primarily liable on the mortgage debt, it may be that the same property may be resorted to again for the purpose of subjecting it to the payment of an unpaid balance due on the mortgage, but that is not because of any right to enforce the mortgage lien against the same property a second time, but because of the rule of law which subjects all the property of a debtor to the payment of his debts until they are satisfied in full. ’ ’ Again, in Lightcap v. Bradley, 186 Ill. 510, the court on this question said:

“It is true, that if the premises are redeemed by the mortgagor they become like any other property owned by him and may be subject to execution and sale for a deficiency; but that is because they belong to the debtor, and not on account of any lien by virtue of the mortgage.”

When the owners of the title and makers of the bonds conveyed title to the trustee, and the trustee thereafter conveyed title to the plaintiff, the property was subject to the lien of the judgment of the defendant, and in holding that the judgment was a cloud on the title, the court erred, for the reasons stated in this opinion.

The plaintiff makes the further point that in order to raise the question in this court, the evidence should have been preserved in full, thus permitting the court to review the facts. As a general rule this is true, but from the face of the record before us the question is not one of fact but of law, and we believe there is sufficient in the record to justify our passing upon the questions raised by the parties.

The decree of the superior court is reversed and the cause remanded to the trial court to enter such further orders as may be consistent with the views expressed in this opinion.

Decree reversed and cause remanded.

Denis E. Sullivan, P. J., and Hall, J., concur.