text:
    Nicholas Ingebretsen, Appellant, v. John Lenc et al., Appellees.
    Gen. No. 41,472.

      Opinion filed February 26, 1941.
    Rehearing denied March 10, 1941.
    Weissenbach, Hartman, Craig & Okin, of Chicago, for appellant; Harry Okin and Cecil Magid, of Chicago, of counsel.
    Ralph S. McFarland, of Chicago, for appellees.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

This is an appeal by the plaintiff, Nicholas Ingre-bretsen, from a decree entered in the superior court of Cook county dismissing his complaint for want of equity, and entering judgment against him, and in favor of the defendants, in the amount of $565.40, taxed as costs.

The complaint was filed by plaintiff as a shareholder, to set aside an alleged fraudulent and secret sale, to John Lene, of 300 shares of treasury stock of the Grand Woodworking Company, for $6,000, which shares had been deposited with the said Lene, president of said company, as collateral security for a loan of $12,000 made by him to the company; also to declare null and void a deficiency of $6,340 allegedly resulting from said sale; and asking for an accounting. The evidence was taken before a master, a report was filed, and the decree appealed from was entered .pursuant to said report after written objections and exceptions thereto had been overruled.

The plaintiff’s theory of the case is that the defendant, John Lene, as president and director of Grand Woodworking Company, occupied a fiduciary relationship to the company and to the plaintiff as a shareholder thereof; that it was his duty in dealing with corporate assets to act in the best interests of the corporation and other shareholders thereof; that when Lene acquired the 300 shares of treasury stock of the corporation, for $6,000 (the same having become a corporate asset upon the corporation’s purchase thereof from John Nahnsen for $12,000), which stock had been deposited with Lene as collateral security for a loan made by him to the company in the amount of $12,000, at a secret and private sale, without notice to the corporation or to the plaintiff, and at a price not only 50 per cent below the cost thereof to the corporation, but greatly below the actual book value thereof, defrauded the company and caused injury to the plaintiff ; that Lene further violated his trust in causing additional shares of stock of the company to be issued to him in payment of an alleged deficiency in connection with said sale, in consequence of which the sale and alleged deficiency arising therefrom are null and void. The plaintiff’s contention is that the company is entitled to have the shares so acquired by Lene returned to it upon payment by the company to Lene of the amount of his loan, with interest, so that the company may either dispose of the stock to the highest bidder or retain the same as it may see fit.

The defendants contend that no unfair advantage was taken of plaintiff or the corporation by Lene in acquiring the 300 shares of treasury stock in question, at a private sale, held pursuant to the terms of the collateral note, which said shares were pledged to secure ; that the price paid for said shares was adequate; that plaintiff acquiesced in said transaction, and that neither plaintiff nor the corporation suffered any injury as a result thereof. The defendants, supplementing their theory as set out in plaintiff’s brief, further contend that plaintiff’s agreements and representations induced the transactions of which he complains; that defendant, John Lene, did not profit by his acts; that the real dispute in issue is between two shareholders of the corporation; that no fiduciary relationship existed between plaintiff and defendant, John Lene, as shareholders of the corporation.

The plaintiff in stating the facts contends that certain of the facts are not disputed, namely, that John Lene, plaintiff Ingebretsen, and Nahnsen, caused the defendant Grand Woodworking Company to be incorporated with 900 shares of capital stock of a par value of $10 each, aggregating $9,000, the original investment of all the parties, for which- 300 shares of stock were issued to each of them. It was intended that each own an equal number of shares, and a restrictive agreement was entered into between the parties regarding the sale of stock. John Lene at all times since the beginning of the company was president thereof. The plaintiff, Lene and Nahnsen drew only nominal amounts from the corporation as salaries, originally $25 per week, then later $50 per week, reaching $75 per week in 1938, which amount was then reduced to $50 per week in 1939. All of the earnings of the corporation were permitted to remain in the business, with the exception of dividend payments over a period of years of $4,100 to each of the parties. At the suggestion of Hikes, the auditor for the company, yearly salaries were voted to Lene in the amount of $20,000, and $15,-000 each to Nahnsen and plaintiff merely as a bookkeeping entry, and against which their weekly salaries were charged, and by that process there was accumulated on the books of the corporation as due to the. officers the sum of $100,239.07, which was never paid to said officers, was never intended to be paid to them, and was by them released to the company.

On January 3, 1939, the company purchased from Nahnsen his 300 shares of stock and his claim for salary for $12,000, Lene loaned the company $12,000 to enable the corporation to purchase said shares, and received a collateral note payable 60 days after- date, to evidence the loan, and the 300 shares of stock acquired by the company was given to Lene as collateral for said note. Thereafter on May 4, 1939, Mr. Cunningham, a director and attorney for the company, at the request of Lene, president of the company and holder of the note, conducted a private sale, the date of which had been fixed by Lene, Cunningham and Hikes. No notice thereof was given to the company or to the plaintiff. Hikes, then secretary of the company, attended the sale at the request of Lene and bid for said stock in the name of Mildred Smith, a daughter of said Lene, and purchased same for $6,000. Thereafter. the sum of $6,000 was credited by Lene against the corporate note of $12,000, leaving a deficiency in the amount of $6,340, which amount represented the balance due, including interest and attorney’s fees. Thereafter on May 5,1939, a new note was executed by the company for the deficiency, and this new note was paid by issuing additional shares of stock to Mildred Smith at the price of $20 per share.

On May 4, 1939, the date of the sale of the Nahnsen stock, the book value of the 900 shares of stock originally issued is claimed to have been approximately $67 per share. On January 3, 1939, at a joint meeting of directors and stockholders, an increase in the capital stock of the company from 900 shares of the par value of $10 per share to 1,950 shares of a like par value was authorized by resolution, making available 1,050 shares of new stock to be sold to the then shareholders at the price of $20 per share, this stock to be available to the then shareholders in proportion to the number of shares held by each of them. On the date of the adoption of this resolution, the plaintiff, Lene, and Nahnsen, were each the owners of 300 shares of stock. On the same date Nahnsen sold his 300 shares of stock, together with his claim for wages, to the corporation for $12,000. None of the foregoing facts are in dispute.

The plaintiff contends that the principle of law that applies in this case is that an officer and director of a corporation stands in relation of trustee to the corporation and its shareholders and is required to administer its affairs for the benefit of'all shareholders and to act solely in the interest of the corporation. This rule is the generally recognized rule, and our attention has been called to the case of Long v. Wilson Stove & Manufacturing Co., 277 Ill. App. 57, where this court passed upon an action brought by a dissenting minority shareholder to set aside a sale of corporate assets. The lower court sustained the sale, but this court on appeal, reversed the lower court and set the sale aside, saying:

“Under the facts in this case we are of the opinion that James B. Wilson violated the duty that rested upon him as a director of this corporation. He had known for months that the then depressed financial condition of the country was such that it would be difficult, if not impossible, to sell such property. From January to August of the same year Schott, on behalf of the company, had contacted 60 persons, firms or corporations of financial standing, endeavoring to interest them in the purchase of this property, but without avail. With such facts before him, it was his plain duty, as a director and in the capacity of trustee of the trust property to keep himself in such a position that he could at all times during the liquidation of the property exercise a fair and impartial judgment on matters arising on the sale of the property, and make every reasonable effort to sell it in such a way that it would bring the highest price to the corporation. When he filed a bid he removed himself from that position and violated his duty as a director and trustee. It is no excuse for him to say that no other bid was filed and that therefore if it had not been for his bid the sale could not have been made. Under the conditions, as then existing, he should have kept himself in such a position that he could fairly and impartially determine whether or not it was for the best interests of the corporation to sell the property at that time, or if it was to be sold, to place a minimum sale price upon the property before offering it, and reserve in the invitation the right to reject a bid that appeared inadequate. By the filing of his bid he placed his personal interests first, and therefore could not exercise such judgment on behalf of the corporation.

“At the stockholders’ meeting of November 15th, the resolution could not have been adopted except by vote of a part of the shares owned by James B. Wilson; at the directors’ meeting held on January 17th, following the opening of the bids, his bid for $15,000 could not have been declared to be the highest, except for his own vote as a director. Such a transaction cannot stand in equity. ’ ’

It is clear from the facts in this case that there was no attempt to obtain outside bidders, but the date and place of the sale was kept secret in order that Lene could, without opposition, acquire the shares of stock at an inadequate price, far below the actual value of the shares. It appears also that no one representing the corporation as such was notified of the time and place of the sale, nor was any notice given to plaintiff Ingebretsen, who obviously would have been an inter-' ested bidder. It appears from the record that Cunningham and Hikes were present at the sale, but that they did not undertake to act for the corporation. Cunningham conducted the sale on behalf of Lene, and Hikes made the bid on behalf of Lene. Under the circumstances, the principle of the Wilson case (supra) can be applied to the facts that we have before us.

Counsel for plaintiff contends that Lene knew that the shares, at the time of his purchase for $20 had a real value of $67 per share, as reflected by the balance sheet of the corporation for June, 1939. Lene testified that when he took the shares as collateral he considered them worth $12,000, and this at a time when, according to the stipulation of the parties, the salary indebtedness of Lene and plaintiff was still carried on the books of the company as a liability. Our attention has been further called to the fact that at the time of the sale, the salary claims had been erased from the books, and as is further shown by the balance sheet of June, 1939, the bank loans of $17,000 had been reduced to $8,500. From the facts as they appear in the record, the shares had a book value of $67 per share on the date of the sale.

Another citation called to our attention is the case of Union Ice Co. of Philadelphia v. Hulton, 291 Pa. 416, wherein the defendant was president of the plaintiff company and made loans to it of $33,000. The loans not being paid, he brought suit against the company and obtained judgment for the amount due, issued execution, sold the property at sheriff’s sale, and bid in for himself. He did not give notice to the directors of the company of the time and place of the sale. The defendant, in that case, alleged that the fair market value of the property was not in excess of the purchase price, which fact plaintiff denied and brought suit for an accounting. The court in that case upon consideration of the question involved, said;

“This was not such notice as the directors were entitled to receive. It was vague and indefinite, only indicating a possible future intention. They were entitled to know when the execution issued and the time and place of sale in order that they might take steps to protect the interests of the stockholders for whom they and defendant were trustees. Gilmore v. Gilmore Drug Co., 279 Pa. 193. Appellant further contends that he was not required to give notice of the execution and sale, that when he began legal proceedings to reduce his claim to judgment that was notice of all the consequences that might result from such proceedings, including notice that the property of the company would be sold after judgment if it was not paid. While it is true that in enforming his claim against a corporation a director or officer may employ the same methods as are open to other creditors (Corpus Juris, Vol. 14A, sec. 1905) yet in so doing he must take no unfair advantage of it. He must be scrupulous to see that someone on the corporation’s behalf knows what is being done so that its interests may be safeguarded. (Hechelman v. Geyer, 248 Pa. 430; Thompson on Corporations, section 1254, p. 245; Marr v. Marr, 73 N. J. Equity 643); the last citation being a case, closely analogous to the one at bar, where also the president of the corporation bought its property at a sale on his own judgment and in which he gave no notice of the sale and it was held that the complaining stockholder could either treat the defendant as his trustee to the extent that the defendant profited by the sale or set it aside. Law v. Fuller, 217 Pa. 439, cited by appellant in support of his contention that notice by him. of the execution and sale was not required, points out that, where an officer or director who is a creditor of the corporation enforces his claim against it and buys its property in at the sale, he is ‘subject to severe scrutiny and under the obligation of acting in the utmost good faith, ’ and that, while he may buy at the sale, the sale must be a fair one. In the pending case the proofs indicate that the price paid by appellant was not the fair value of the property.” . . .
“We are satisfied, in view of the fact that no notice was given of the execution or sale and in the light of the prima facie proof that by his purchase appellant will profit at his company’s expense, that the court properly decreed an accounting which will proceed in accordance with the equity rules.”

When we come to consider the question involved now before us, an officer and director of a corporation is required to act with scrupulous care so that if he decides to become a purchaser of treasury stock of a corporation he should give notice to the interested parties so that they may be present at the time and place of the sale and bid if they so desire. Such a rule is desirable because it removed all temptation and provides for the fairness of the sale provided for in a collateral note, which sale would be without question a sale that is carried on in the light of the law as it has been declared in the last above cited case.

The defendants urge in reply to the contention of the plaintiff that plaintiff executed the collateral note for $12,000 as treasurer of the company. That does not quite control. While it is true that plaintiff may have executed the collateral note as an officer of the company, this did not give the defendant Lene, the president of the company, the right to sell the collateral at a private sale without notice to anyone and to purchase the stock for $6,000, which had been given as collateral to secure a $12,000 loan to the company, and then to secure the balance by a further note of the company which was afterwards paid by the in-suance of 300 shares by the company, at Lenc’s request, at $20 per share or $6,000. Defendants, however, fully recognize the rule that an officer or director in dealing with the corporation must act fairly and be free form all fraud or oppression, and it is with this view in mind that defendants.submit their case to this court for its consideration. It is urged by defendants that plaintiff’s authorities announce no new principles of law, but on the contrary, merely state certain general principles of law which have been long recognized and apply them to the facts of a particular case. The further argument of defendant is that plaintiff, Ingebretsen, had full knowledge of and.participated in the transactions leading up to the sale of the collateral, and on the day following the sale, after being fully advised regarding the terms of the sale of the pledged collateral, executed a note on behalf of the corporation, representing the deficiency remaining after the sale of the collateral. Assuming that this suggestion of defendants is true, still the fact that plaintiff executed a note for $6,000, representing the deficiency, does not waive on behalf of the corporation the right to complain of the actions of its president in purchasing the stock in question. It is to be noted that the plaintiff’s action in the case is not for an accounting for his own benefit. This action is one for the benefit of the corporation and its shareholders. The only interest that Ingebretsen has is the same as the other shareholders have in the result of the action. While it is true that there seems to be some disagreement between the parties in this action, still the question here involved is whether the defendants. should account for the moneys or stock which they received by virtue of the sale of stock to the defendant, Mildred Smith, daughter of John Lene. This action arose out of the question as to the ownership of the Hahnsen shares, and being the owner, Hahn'sen had the right to receive the full value of the shares from the corporation, as— from the record — it appears that he did. There is no question but what the Nahnsen shares were purchased and pledged by the defendant corporation for $12,000, and that plaintiff as treasurer signed the $12,000 collateral note of the company to pay for the stock. The question is as to the notice that should have been given of the sale. It would seem that there was a disposition to keep outside bidders from coming in and bidding at the sale, and, if so, then of course, the defendants must make an accounting.

There is one further question that we desire to speak of and that is as to whether this plaintiff was in a position to complain. The rule that applies would seem to be that when directors or officers of a corporation enter into a contract, where they are parties, on behalf of the corporation, there must be a ratification or express sanction of a majority of the stockholders at a stockholders’ meeting, and, if there is the complaint of a single dissenting stockholder, there will be no ratification or sanction of the contract proposed. Upon this theory we desire to call attention to the case' of Endicott v. Marvel, 81 N. J. Eq. 378, where the court has said:

“There are engagements which may be made by directors of a corporation with themselves in behalf of the corporation which ratification or even express sanction of the majority of the stockholders at a stockholders meeting cannot support against the will of a single dissenting stockholder. In cases of that nature (as well as in cases of voidable contracts which have been promptly repudiated by the stockholders) a single stockholder may maintain a Bill for relief in behalf of the corporation similar to the present Bill, in the event his inability to procure the corporation to faithfully prosecute such a suit in its own behalf. While the business management of a corporation primarily belongs to its directors, and while, unless specially restrained, their powers necessarily include the exercise of a broad field of business discretion, yet that discretion must be lawfully and honestly exercised; they cannot give corporate property to themselves, or to others nor can the majority of stockholders sanction such an act. ’ ’ The court further said in conclusion;
“What is here made the basis of -this decision is the principle of law which denies to directors of a corporation, who are its creditors holding collateral security, the right to in effect foreclose the equity of redemption of the corporation in the collateral without adequate notice to the corporation which they represent. • If it be found that the value of the collateral was in excess of the amount of the debt, the illegality of the transaction as against the will of a single dissenting stockholder becomes the more apparent.”

Upon the questions involved here, we have the plaintiff as the dissenting stockholder who is complaining of the. sale of the collateral without notice and at a time when it was not published so that all stockholders could have been present and offered a bid. Here, the value of the stock appears to have been $12,000, the amount which defendant, John Lene, loaned to the corporation. He bid but $6,000 at the sale, and as we have stated in the facts, he obtained the 300 shares of stock and a note for the deficiency, which he had issued to him and the further 300 shares of stock issued in payment of this deficiency note, which stock is in the name of his daughter.

Under the circumstances as we have indicated them here and under the law, we are of the opinion that the defendant must account for the amount of money and stock that he received at a sale which was not held openly and which was without notice to the outside world as to the time the sale would take place. As a result of our conclusion the defendants must account to the corporation, and if, upon an accounting, the corporation is indebted to Josephine Lene and the corporation is without cash to pay same, a sale be made of the stock in question, of which sale notice shall be given to plaintiffs and others, so that they may be permitted to bid for such stock; all of the defendants are to make a full and fair accounting.

For the reasons stated, the decree dismissing the plaintiff’s complaint for want of equity is reversed and the cause is remanded with directions to enter a decree for an accounting in accordance with views herein expressed.

Reversed and remanded with directions.

Denis E. Sullivan and Burke, JJ., concur.


source: Caselaw Access Project

author: Mr. Presiding Justice Hebel

license: Public Domain

text:
    Arcus Ticket Company, Appellant, v. William Hale Thompson, Appellee.
    Gen. No. 41,526.
    Opinion filed February 26, 1941.
    Henry L. Blim and Leonard A. Scholl, both of Chicago, for appellant.

      James W. Breen, of Chicago, for appellee; Samuel L. Golan, of Chicago, of counsel.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

This is an appeal by the plaintiff from a judgment entered finding the defendant not guilty. The action is one for breach of a written contract by the defendant. Under this contract plaintiff was to print for the defendant 500,000,000 coupon roll tickets, said tickets to be delivered beginning in November, 1930.

The complaint was filed by the plaintiff alleging the execution of the contract, partial fulfillment thereof by the plaintiff, the refusal of the defendant to take further tickets under the contract, claims damages for the breach of the contract by the defendant and sets up in detail the items of damage.

Prior to the trial of the cause, defendant filed two answers, which answers denied most allegations of plaintiff’s complaint, and did not set up any affirmative defense, except that the second answer did set up the defense of lottery, as being in violation of the Illinois Revised Act of 1937. Plaintiff filed a reply denying the new matter pleaded in the second answer of the defendant pertaining to the alleged lottery and averring that plaintiff had nothing to do with the plan or scheme involved and had no knowledge thereof.

After trial, and after judgment had been entered in favor of defendant, on June 25, 1940, the trial of the cause having finished on that day, defendant filed a new answer setting up in effect the plea of accord and satisfaction and a plea that the contract was contrary to public policy for the reason that a lottery was involved, which new answer was filed over the objection of the plaintiff. The filing of this answer was the first and only time that defendant had offered or interposed the defense of accord and satisfaction.' The cause was tried before the court without a jury and at the close of all the evidence, the court found for the defendant and against the plaintiff.

Plaintiff’s theory is that it fully performed its part of the contract until stopped by the defendant; that it was ready, willing and able at all times to finish the contract; that it suffered substantial damages, which were alleged and proven; and that there had been no settlement of the controversy by way of accord and satisfaction or otherwise, and that the defense of lottery, if properly pleaded, was not pertinent to the issues, as the plaintiff had no part in the proposed lottery, and its printing of the tickets for the defendant was such a transaction separate and apart from the alleged lottery, as would make the defendant liable in any event.

The plaintiff calls our attention that apparently defendant’s theory is that at some time after the making of the contract and in or about the month of February, 1931, the defendant by making his last payment to the plaintiff had fully settled all matters in controversy; and that inasmuch as the tickets printed and to be printed for the defendant were in connection with a plan or scheme to award prizes in a drawing, that thereby the whole plan was contrary to public policy, and that as a result thereof the contract between plaintiff and defendant was against public policy.

The facts as they appear in this record are that prior to November 10, 1930, Critchfield & Company, an advertising agency, conceived the details of a so-called “Prosperity Drive” for William Hale Thompson. The complete details and plans of this prosperity drive were set out in a 7-page proof of a folder prepared by Critchfield & Company, which was in the possession of the defendant prior to his first conversation with Mr. Arcus, president of the Arcus Ticket Company. This plan provided in substance for the distribution of $1,000,000 in prizes, the plan being to have merchants purchase tickets through banks and other distributing points, which tickets would be furnished by William Hale Thompson, and to have merchants distribute one of these tickets with every 25 cent purchase made by a consumer in any co-operating retail establishment. The tickets were to be numbered and be in duplicate — one-half to be retained by the merchant and one-half by the recipient consumer. The retained coupon was then to be placed in some sort of container and drawings were to be held from time to time over a period of 13 weeks, and several thousand prizes aggregating a total of $1,000,000 were to be distributed to the holders of the winning number. Further details of this plan were contained in a mimeographed circular, a copy of which circular was given to Mr. Arcus, president of the plaintiff company, on the occasion of his first visit to Mr. Thompson to discuss the details of the proposed printing of tickets.

The contract that was entered into between the parties provided for the printing by plaintiff for the defendant of 500,000,000 coupon roll tickets at 22^ per thousand, tickets to be printed on a special paper with an agreement that the plaintiff was to contract with a mill for 330 tons of paper and secure a written agreement from the mill that it would not make a similar paper for anyone other than the Arcus Ticket Co. for 90 days after the closing of the prosperity drive. The tickets were to be delivered to the defendant in lots of at least 6,000,000 per day starting on November 28, 1930. The contract provided that Louis E. Golan was named by the defendant as his representative and agent in all matters pertaining to the contract.

It appears from the facts which do not seem to be disputed that plaintiff printed under this contract 85,000,000 tickets of which 16,000,000 were delivered leaving a balance of 69,000,000 undelivered. Defendant paid for the entire 85,000,000 tickets printed, at the contract price of 22^ per thousand. After the delivery of the 16,000,000 tickets, plaintiff was unable to secure instructions from defendant as to the delivery of the remaining 69,000,000 tickets, and they remained in plaintiff’s warehouse. Delivery under the contract — it is alleged — through no fault of plaintiff, dragged through the month of December and into January. In the meantime, not being able to deliver these 69,000,000 tickets, the plaintiff stopped printing under the contract.

The defendant in his reply to the statement of facts calls attention to the fact that the holders of the duplicate of the tickets were to receive cash prizes in various amounts; and further that the winning of the prizes was entirely a game of chance, and constituted a lottery under the statutes of the State of Illinois, the ordinances of the city of Chicago and the statutes of the United States; that when this fact was brought to the attention of the defendant, he directed the stopping of any further performance by the plaintiff in accordance with the contract. All tickets printed were paid for by defendant, and all paper purchased by plaintiff for use in the printing of said tickets, was paid for by the defendant. Plaintiff admits that it did not use all of said paper printing the tickets required to be printed under the alleged contract, but that it used some of the paper for other jobs, and still has some in stock, which was paid for by the defendant.

James S. Arcus, president of the plaintiff company, testified that he fully understood that there was to be a drawing for prizes with the tickets authorized to be printed under the contract. He testified that the drawing was a local affair, and that he did not consider the Federal Government had anything to do with it, as the drawing was to be held in the State of Illinois. He further testified that he told the defendant that he had had considerable experience with local drawings, and that he thought that local drawings were all right, and that “I do now, but I didn’t know then that the Federal Government considered the fact that if any merchant from out of the State of Illinois wrote into the State of Illinois to pay for the tickets, that the Federal Government might consider that a Federal violation.”

This suit is for profits that plaintiff alleges it would have made under the contract had it been permitted by the defendant to print the 500,000,000 tickets in accordance with the contract. The plaintiff admits that it received pay for all tickets printed, and for the purchase of a sufficient quantity of paper to enable it to print the entire 500,000,000 tickets. It is also conceded that plaintiff did not use all of .the paper purchased by it for the printing of tickets for the defendant, but that it used some of the paper for other jobs, and still has some on hand, for which defendant has paid. That the plaintiff considered the possibility of a violation of the law in the execution of said contract is established by one of the paragraphs in the contract, which reads;

“The undersigned hereby agrees to protect and save harmless the Arcus Ticket Co. of and from any or all liability, loss or damage that might result in the event that the printing, sale or distribution of the tickets hereby ordered is held to be in violation of any law or statute. ’ ’

As already indicated, the defendant paid the sum of $29,426.95, which said sum completely covered the work performed by plaintiff under the contract and paid for the purchase of all of the special paper on which the said 500,000,000 tickets were to be printed. The plaintiff in this suit .is only attempting to recover profits it claims it would have made had it not been stopped by the defendant from carrying out the contract.

The defendant contends that the plaintiff admitted on the stand that it received payment for all tickets printed and for the price of more paper than it used in work for the defendant, and contends that the de-fondant proved his case by a preponderance of the evidence. As already indicated, the plaintiff was paid the sum of $29,426.95, which sum included payment for all tickets printed, whether delivered or not, and for a sufficient amount of paper for the printing of the entire 500,000,000 tickets. At the close of the evidence, the trial court said:

“On the point of accord and satisfaction, I am inclined to think this way, that under the testimony of Mr. Arcus yesterday, I would almost be constrained to grant the defendant’s motion for a finding because in effect here was his testimony. He said on cross-examination that at least Thompson ought to pay him now for the cost of the paper, ‘I think at least he ought to pay some ten thousand dollars.’ This was the amount he got in addition to the actual payment for the eighty million tickets, and the natural and fair implication from that would be at least ‘I ought to have that ten thousand dollars to satisfy my requirements. ’ That was not in there. Then counsel for the defendant questioned him further and he said ‘No, that didn’t complete the contract.’ If it had not been for that ‘no,’ it would have occurred to me that he accepted the ten thousand dollars in final, full and complete settlement of what he expected under this contract from Thompson. So today the defense comes on with the witness and bears out that implication.” This is based upon the evidence that was heard by the court. Louis E. Golan testified that he told James E; Arcus, president and treasurer of plaintiff corporation, in February, 1931, that the federal authorities had definitely indicated they were going to call this a lottery and that the defendant didn’t want to take delivery of the tickets; that Mr. Arcus then said: “I have printed them, and I need the space in my warehouse, and I’ve got to deliver those tickets to you, and I’ve got to be paid for them.” Golan further testified that he later received a call from Arcus, in which Arcus told him that the Federal Government had definitely determined that this was a lottery, and that no further tickets could be printed, and that he wanted payment for the paper that he purchased for the entire job of some 500,000,000 tickets; that Arcus thought he was entitled to be paid for the printing job, and for the paper that he had contracted for, and that he was not going to go ahead with any further printing of these tickets because of the action taken by the Federal Government. The plaintiff denies and disputes part of the testimony of Mr. Golan; however, the court heard the evidence, and on the facts before the court, a finding was entered for the defendant based upon the evidence as it was submitted.

The defendant paid the plaintiff the sum of $29,426.95, which sum completely covered all work performed by plaintiff under the contract and the purchase of enough paper for the printing of the entire 500,000,000 tickets. The adjustment was reached when the plaintiff indicated that it should be paid for the paper that was ordered and on hand for the printing of the tickets, and upon the acceptance of this suggestion by the defendant the payment of $10,726.95 was made. This adjustment and payment indicates that there was a settlement.

When we come to consider the questions that were testified to we must also have in mind that provision of the contract in which the defendant agreed to “protect and save harmless the Arcus Ticket Co. of and from any or all liability, loss or damage that might result in the event that the printing, sale or distribution of the tickets hereby ordered is held to be in violation of any law or statute. ’ ’ This provision clearly evidences the fact that plaintiff wanted to be protected from any liability that might occur by reason of its doing the work called for by the contract.

From the facts that were considered by the court, we are of the opinion that the court did not err in entering a finding for defendant of not guilty, and for the reasons stated in this opinion the judgment that was entered on the finding will be affirmed.

Affirmed.

Denis E. Sullivan and Burke, JJ., concur.


author: Mr. Justice Burke

text:
    Leona Briske, Appellee, v. Village of Burnham, et al., Appellants.
    Gen. No. 41,376.

      Opinion filed February 26, 1941.
    Winston, Strawn & Shaw, of Chicago, for certain appellants; George B. Christensen and Douglas C. Moir, both of Chicago, of counsel.
    Markman, Donovan & Sullivan, of Chicago, for certain other appellant; Samuel K. Markman and John A. O ’Neil, of Chicago, of counsel.
    H. Meyer Simborg and Earl J. Walker, both of Chicago, for appellee.
   Mr. Justice Burke

delivered the opinion of the court.

At about 9 p. m. on September 21, 1935, plaintiff was injured when the automobile in which she was riding struck a barricade across vacated Entre avenue in the Village of Burnham, Cook county, Illinois. Entre avenue is also known as Center avenue. At the time of the accident plaintiff was 16 years and 10 months of age. She was then unmarried and her name was Leona Briske. Since the accident she married and her name is now Leona Ostrowski. In due time she filed her complaint in the circuit court of Cook county, and after a trial before the court and a jury a judgment for $3,000 was entered against the Village of Burnham, a municipal corporation, New York, Chicago & St. Louis Railroad Company, a corporation, and Baltimore & Ohio Chicago Terminal Railroad Company, a corporation. We will speak of the Village of Burnham as the Village, the New York, Chicago & St. Louis Railroad Company as the Nickel Plate and the Baltimore & Ohio Chicago Terminal Railroad Company as the B. & O. C. T. The defendants prosecute this appeal for the purpose of reviewing the judgment, and ask that a judgment be rendered here against the plaintiff, or in the alternative that a new trial be directed.

On the evening of the accident, Stanley Jakubcyk, the owner of a Ford automobile, accompanied by a friend, Casimer Francus, called at the home of plaintiff in Calumet city, and they decided to go to a ballroom in Hegewisch to spend the evening. A girl named Ann Warchol accompanied them. Stanley drove and plaintiff sat on the front seat to his right. Casimer and Ann sat on the rear seat. They drove north on Burnham avenue until they reached Pullman avenue, which runs northwest, and drove northwest on Pullman avenue until it intersected what was formerly known as Entre avenue. They turned northeast on what was formerly Entre avenue, intending to drive thereon about 1 block across the rights of way of the B. & O. C. T. and Nickel Plate to Brainard avenue, and to turn northwest on Brainard avenue. It is admitted that the accident occurred on what was formerly Entre avenue in the Village of Burnham at a point where Entre avenue intersects the railroad tracks. On August 12,1931, the Village passed an ordinance vacating Entre avenue from Pullman to Brain-, ard avenue. The ordinance was to become effective when it was recorded in the office of the recorder of deeds of Cook county and when Burnham avenue was opened to public travel. Both of these conditions were complied with. A certified copy of the ordinance was recorded on April 22, 1933, and Burnham avenue was opened for public travel on December 20, 1933. After the latter date Entre avenue between Pullman avenue and Brainard avenue was no longer a public street in the Village, and from that time on the Village had no jurisdiction or control over the maintenance or upkeep of the vacated street. Thereafter, that portion of what was formerly Entre avenue became private property. Thus, the accident happened nearly 2 years after the street was vacated and turned over to the railroads. The action of the Village in vacating that portion of the highway was taken as a part of a plan of extending and improving certain highways, which was approved by the Commerce Commission of the State of Illinois. This approval was necessary because the railroads involved had to relocate some of their tracks. One of the conditions under which the plan submitted to the Commerce Commission was approved was that the portion of Entre avenue heretofore mentioned should be closed for public use as soon as the Burn-ham avenue crossing should be opened for public use. The railroads paid the Village for the land which was taken. Prior to December 20, 1933, Entre avenue had been frequently used by motorists driving north into Hegewisch and Chicago. Stanley Jakubcyk had occasionally used Entre avenue prior to that time, but not thereafter. He had no knowledge or information that there had been any change in the street or railroad crossings. About 125 feet northeast of Pullman avenue, the B. & O. C. T. maintains a switch track running parallel with Pullman avenue, adjoining which track on the northwest side thereof was a regular cross buck warning signal. A barricade extends across the vacated street 200 feet northeast of Pullman avenue and about 50 feet northeast of the B. & O. C. T. property, and the tracks of the Nickel Plate were 50 feet beyond, or northeast of the barricade. The barricade consisted of a solid rail, suspended across the roadway of what was formerly Entre avenue, about 3% or 4 feet above the ground. This rail was held in place by 4 or 5 uprights driven into the pavement. The rail was painted in alternate Hack and white stripes. On top of the barricade at the center was a red reflector, which witnesses variously described as 6 inches, 8 inches and 1 foot square. There was no evidence as to when the barricade was erected, or who erected it. Stanley Jakubcyk testified that when he turned the automobile from Pullman avenue into Entre avenue, he observed that it appeared to be paved in the usual manner; that he also observed the railroad crossarm sign of the type customarily used at railroad crossings over public highways; that as the car passed the railroad cross-arm sign both he and plaintiff looked up and down the tracks of the B. & O. C. T. for the purpose of observing whether any trains were approaching; that suddenly the automobile struck the obstruction, or barricade. Plaintiff was thrown violently forward against the windshield and sustained injuries to her head, back and right ankle. She was knocked unconscious and suffered a concussion of the brain. There was a long cut on the face across the nose and eye, requiring 9 stitches. Although her physician recommended that she stay at the hospital, she was taken home where she remained in bed for 2 months. Plaintiff was the only occupant of the car who was seriously injured. Casi-mer Francus testified that he did not observe or know of the obstruction before striking it. He also testified that the lights on the automobile were lit. The weather was clear. Jakubcyk, the driver, stated that after crossing the B. & O. C. T. tracks, he did not see anything; that “everything just went black in front of me. After that we hit the barricade. ’ ’ The headlights showed a distance of 200 feet ahead.

Defendants argue that the proximate cause of the accident was the negligence of the driver, the presence of the barricade being a condition and not a proximate cause. They also contend that they were not guilty of any negligence or other breach of duty. It will be remembered that the driver claimed that as he ap-preached the barricade he was looking for trains along the switch track of the B. & O. C. T. After he crossed the B. & O. C. T., he had to travel an additional 65 feet before striking the barricade. The evidence discloses that the headlights showed objects 200 feet ahead. The reflector on the barricade was 3 or 4 feet above the pavement. The headlights on the automobile were also above the pavement. Had the driver paid attention to his driving and observed the condition of the roadway in front of him, he would have stopped before striking the barricade. As stated in Dee v. City of Peru, 343 Ill. 36, 42, “The law will not tolerate the absurdity of permitting one to testify that he looked and did not see the danger when the view was unobstructed, and where, if he had properly exercised his sight, he would have seen it.” The presence of the barricade did. no more than furnish a condition by which the injury was made possible. The proximate cause of the injury, however, was the negligence of the driver. For that reason, as a matter of law, none of the defendants is liable.

The Village asserts the separate defense that after the street was vacated it became private property and the Village was no longer charged with the maintenance and upkeep thereof, and is not liable for any injuries which occurred thereon. We agree with the position taken by the Village. It is true that the street as vacated retained the appearance of a public street. The Village had no right to obstruct the railroads’ access to the property that had formerly been a street. These railroads have the right to permit persons who desire to do business with them to enter upon their property. Clearly, the Village cannot be held liable because the railroad companies placed a barricade across their property. The place where the barricade was located was on the property of the railroads. They could maintain this property in such a way as to permit persons to come on their property with vehicles and on foot in order to deal with the railroads in their business as common carriers. Clearly, the railroads have the right to erect a barricade across their property in order to prevent persons from driving on to their tracks. On this barricade there was a reflector which the driver of the automobile in question would be bound to see if he were looking. We cannot perceive how the railroads can be held liable for doing that which they had a right to do.

Defendants also contend that the court erred in not granting them a new trial on the ground of newly discovered evidence. When the plaintiff was testifying she was asked as to whether she knew the whereabouts of Arm Warchol, the girl who was plaintiff’s companion on the night of the accident. She answered in the negative. The uncontradicted affidavits of Helen and Arm Warchol show that on the night of February 11, 1940, plaintiff and her mother talked with Ann at Ann’s home. This was 2 days before the trial started. About the time of the trial an agent of defendant attempted to locate Ann. He discovered that she had moved and he was unable to locate her. From the affidavit it appears that had Ann Warchol appeared as a witness she would have testified that after picking up the girls, Stanley Jakubcyk and Casimer Francus had two glasses of beer, and that before the accident she saw the barricade plainly; that the reflector on the barricade showed a “bright red glow” and that she called this to the driver’s attention. The affidavit presented on the motion for a new trial also swore that plaintiff had been in touch with Ann all along, and on the evening of February 11, 1940, 2 days before the trial commenced, plaintiff’s mother and a man called on her and asked her to appear as a witness, and that she, Ann, stated that she would “but that her testimony would be truth.” In view of the nature of the testimony which was introduced to support plaintiff’s case, we are of the opinion that in any event the court should have granted a new trial, based on the deliberate concealment by plaintiff of the whereabouts of the witness.

It is unnecessary to extend this opinion by a consideration of other points that are raised. From a careful consideration of the law and the evidence, we are of the opinion that it was the duty of the court to enter a judgment notwithstanding the verdict. Therefore, the judgment of the circuit court of Cook county is reversed and judgment entered here for the defendants and against plaintiff for costs.

Judgment reversed and judgment here.

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


text:
    City of Chicago, Petitioner, v. William H. McCausland et al., Respondents. Zeldon A. Parkhurst et al., Executors of Estate of Henry G. Wells, Deceased, Appellants, v. John Toman, Appellee.
    Gen. No. 41,387.
    Opinion filed February 26, 1941.
    Enoch J. Price and Owen N. Price, both of Chicago, for appellants.
    Thomas J. Courtney, State’s Attorney, for appellee; Neal J. McAuliffe, Jacob Shamberg, William

      J. Tuohy and Marshall V. Kearney, Assistant State’s Attorneys, of counsel.
   Mr. Justice Burke

delivered the opinion of the court.

On February 17, 1926, the City of Chicago filed its original petition in the superior court of Cook county (under the provisions of the Local Improvements Act) for the purpose of ascertaining just compensation for taking certain land for the opening and widening of Anthony avenue. The report of the commissioners appointed to determine the just compensation to be paid to the owners, was filed on May 26,1926, and judgment of condemnation was rendered on July 30, 1929. On January 27, 1936, the City of Chicago paid the amount of the judgments to the county treasurer for the use and benefit of the owners of the condemned land. The entire amount of the several condemnation judgment awards has been completely paid out, with the exception of $1,525. On August 22, 1939, Zeldon A. Parkhurst, John Bussell Wells and Alice Wells, executors of the estate of Henry Gr. Wells, deceased, filed a petition in the same case representing that they were the duly appointed and qualified executors of the estate of Henry Gr. Wells, deceased, who departed this life on December 3, 1932; that on February 17, 1926, said Henry Gr. Wells was the owner of certain real estate which was condemned in said proceeding, for the opening and widening of Anthony avenue; that they were entitled to payment of the amount in the hands of the county treasurer allocated to their property without any deduction for taxes for the years 1927, 1928 and 1929; that the county treasurer claimed the right to deduct from the amount so payable to them the general taxes for the years 1927, 1928 and 1929; and they prayed that the court order the county treasurer to pay such sum to them without withholding any sums to apply on the general taxes for the years mentioned. The county treasurer answered and asserted that the general taxes levied and assessed against the real estate described in the petition for the years 1927, 1928 and 1929 should be charged against and deducted from the awards claimed by petitioners. The court found against the petitioners and in favor of the county treasurer, and directed that the county treasurer pay to the petitioners the balance on hand to their credit in the sum of $1,525, after deducting therefrom the amount required to pay the general taxes for the years 1927,1928 and 1929, plus interest, penalties and costs. Petitioners prosecuted an appeal to the Supreme Court which, in an opinion reported in 374 Ill. 34, transferred the same to this court. The question before us is whether or not the general taxes levied and assessed, or becoming a lien on the real estate during the period elapsing between the time of the filing of the report of the commissioners and the entry of the judgment of condemnation, shall be deducted and paid by the county treasurer out of the balance of the awards remaining in his possession.

This proposition was before us in City of Chicago v. McDonough, 273 Ill. App. 392, and People ex rel. Carofiglio v. Gill, 291 Ill. App. 143. The McDonough case, decided by the first division, held that the general taxes which became a lien after the petition for condemnation was filed, could not be deducted from the compensation award, while the Carofiglio case, decided by the second division, held that the general taxes which became a lien after the filing of the condemnation petition but before the entry of the judgment, should be deducted from the award and applied in payment of such taxes The City of Chicago made no effort to have the McDonough case reviewed by the Supreme Court. In the Carofiglio case, however, a petition for leave to appeal was denied. The opinion in the Carofiglio case leans heavily on the case of People v. Price, 282 Ill. 519. In the instant case counsel maintains that the Price case is not authority for the ruling in the Carofiglio case. We have carefully read the Price case and are of the opinion that the views therein expressed are the law of this state on the proposition involved. Petitioners were seized of the legal title to the property until the date of the judgment. They were not deprived of their property until the final judgment was entered; and the city did not take actual possession until the damages awarded were deposited with the county treasurer.

The value of the property is determined as of the date of the filing of the report of the commissioners; but the owner is not deprived of title, possession, enjoyment or the rents, issues or profits of the land until judgment. Hence we do not perceive any valid reason why the taxes which became a lien during the period elapsing between the filing of the report of the commissioners and the entry of the judgment should not be deducted and paid by the county treasurer out of the balance of the awards remaining in his possession. Having carefully considered all of the authorities cited to us, we are of the opinion that the views expressed in People ex rel. Carofiglio v. Gill, 291 Ill. App. 143, are sound and state the law.

Therefore, the order of the superior court of Cook county is affirmed.

Order affirmed.

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


text:
    Edward P. Anderson and Michael J. Long, Successor Trustee, Appellees, v. Pearl Weiss et al., Appellees. Appeal of Sol Horwitz, Appellant.
    Gen. No. 41,423.

      Opinion filed February 26, 1941.
    Wesley F. Tegtmeier, of Chicago, for appellant.
    No appearance for appellees.
   Mr. Justice Burke

delivered the opinion of the court.

On August 3, 1928, Harry Weiss and Pearl Weiss executed a first mortgage trust deed to the Phillip State Bank and Trust Company, as trustee, conveying certain real estate to secure an indebtedness of $90,000, evidenced by 220 bonds. By reason of defaults, a bondholder accelerated the maturity of all the bonds, and in 1932 filed his bill to foreclose for the benefit of all the bondholders. Shortly thereafter the successor trustee, as the representative of all the bondholders joined in the proceedings as plaintiff, the trustee, a banking corporation, having been dissolved. ' On May 13, 1936, a decree was entered in the usual form finding that there was then due to the bondholders in principal and interest the sum of $133,-931.63, and to the successor trustee the sum of $4,319.50. The latter sum embraced solicitor’s fees in the sum of $3,750, successor trustee’s fees of $450, stenographer’s charges of $11.50, and charges by the Chicago Title & Trust Company of $108. The amount found due to the successor trustee, together with fees and expenses of the proceedings, are, by the decree, declared to be a first and prior lien on the premises. Following the decree, over a period of almost 4 years, eight sales were held by the master. At the first five sales no bidder appeared. At the sixth and seventh sales bids lower than that of the petitioner were made, and in each instance the sales were disapproved by the chancellor. Upon order of the chancellor, one of the sales was advertised in every daily newspaper in Chicago at a cost of over $500. At the eighth sale held on May 7, 1940, Sol Horwitz bid the sum of $7,000. That being the highest bid, the master sold the premises to him. The master’s report shows that all the requirements of the foreclosure decree were followed. In addition, advance notice of the sale was given to all the known bondholders. At the coming in of the master’s report of such eighth sale, the plaintiff, Michael J. Long, as successor trustee, filed his petition seeking the court’s instructions thereon, and setting forth all the material facts concerning the property. No other party filed any pleading and no objections to the master’s report of sale were filed. Pursuant to leave of court, Horwitz filed his verified petition seeking a confirmation of such sale, and a rule was entered on all parties to answer. Only the plaintiff, Michael J. Long, as successor trustee, answered. Advance notice of the hearing was given to all known bondholders. Although there are over 100 bondholders, only 3 bondholders were represented by counsel at the hearing. These bondholders orally expressed dissatisfaction with the amount of the return to them on their bonds and urged as their sole reason for opposing the confirmation the hope that some day the property might be worth more. The petition of the successor trustee represented that “if the sale of March 7th is approved there will be available for distribution to the bondholders approximately 2% of the face amount of the bonds.” An expert real estate appraiser testified concerning the nature and value of the property and his written appraisal was received in evidence. This evidence, which was uncontroverted, shows that the property, located at 6232-6238 Broadway in Chicago, consists of a three-story building containing four stores and eight four-room apartments. The'lot has a width of 75 feet and a depth of 125 feet. At the rear is a two-story building containing five garages and a loft. He represented that in order to preserve the building and obtain normal rentals, certain repairs were immediately necessary, namely, 1. Redecorate apartments and hallways; 2. Paint all exterior woodwork including porches; 3. Repair garage doors, bulged floor in south store and repair north store window front; and 4. Tuckpoint all stonework. He also stated that Broadway is a commercial street and that the neighborhood of this property is developed with buildings occupied by commercial tenants; that there is a lack of concentration of business in the neighborhood and an absence of national chain stores; that the property is not a good commercial piece; that the stores are of a secondary type in the midst of warehouses, garages and hardware stores; that because of the absence of the concentration of business in the neighborhood, and the location of the building on a commercial street, rentals are low, and there is no likelihood of an increase in rentals; that from the schedule of rentals it appears that if the building is put in good condition under owner operation, the stabilized rental, which is the basis used in fixing the economic valúation, would produce a normal gross income of $6,534, which is $1,667 more than the income at the time of the appraisal. He further reported that because of the type of construction, expenses were comparatively high. His opinion was that the property has a physical valuation of $40,921, and an economic valuation of $23,493, based on a capitalization rate of 7% per cent, and that the fair cash market value of the property, land and building, is not in excess of $25,000. He stated that the building “is the wrong type for the neighborhood, and its type has depreciated not only the value of the building but also the land on which it stands. For this reason the fair cash market value is closer to the economic value than to the physical value.” At the conclusion of the hearing the chancellor inquired whether the sum of $1,000 was available to be expended for the purpose of increasing the rents. A bondholder’s attorney advised the court that no such funds were available for such purpose. The record further shows that: (1) The bondholders’ committee was not in a position to make a bid of any amount at a foreclosure sale. (2) The delinquent general real estate taxes and penalties are in excess of $19,000 and taxes will accrue during the redemption period. In addition, delinquent special assessments exceed $600. The current tax bill is $1,561. Penalties on accrued taxes are $1,200 per year. (3) The property has been, since July, 1934, and is now in the possession of the county treasurer, as receiver under a tax receivership proceeding, and all net income has been applied toward payment of delinquent taxes and penalties. (4) During the year 1939 the gross income from the property was $4,867 and operating expenses were $3,679, leaving available only $1,188 for payment on 1939 taxes of $1,561 and 1939 penalties of $1,200 on prior delinquencies, and thus leaving a deficiency of over $1,500 on tax requirements for the year 1939. In disapproving the sale, the court stated: “You are the people who are concerned here. It is to your best interests, and I think we ought to wait and hope. I don’t care what the price of sale is because they are getting the property and some day it might be worthwhile.” This appeal is prosecuted by Sol Horwitz, purchaser at the master’s sale, for the purpose of reviewing the action of the chancellor in disapproving the sale. The appellant was the only party to file a brief. We are, therefore, deprived of the benefit of opposing views, if any.

Appellant states that the uncontroverted evidence affirmatively shows that the sale price was equal to the value of the property, and that under the circumstances the denial of confirmation of the master’s report of sale constitutes an arbitrary and unreasonable exercise of judicial discretion. He calls our attention to the case of Shultz v. Milburn, 366 Ill. 400, where the court said (403):

“A sale by a master in chancery is not, until confirmed by the court, a sale in a legal sense. The chancellor has a broad discretion in its approval or disapproval. The highest bidder . . . acquires no interest in . . . the land and his bid is a mere offer to purchase. Confirmation is final consent, and the court being in fact the vendor, may consent or not, in its sound judicial discretion. This discretion, unless abused, will not be interfered with by a court of review. . . . However, the discretion thus vested in the court is not a mere arbitrary discretion but must be exercised in accordance with established principles of law.” Appellant also cites Levy v. Broadway-Carmen Bldg. Corp., 366 Ill. 279. There, at a foreclosure sale, the mortgagee bid $50,000. The equity owner filed objections and claimed that the property was worth $80,000 and that the bid was inadequate. Both parties produced affidavits in support of their respective views as to the value of the property. The chancellor found the property to be worth $80,000 and disapproved the sale. On appeal it was held that although the court had power to disapprove' a sale for gross inadequacy, no such gross inadequacy existed in the $50,000 hid as would warrant disapproval of the sale. The court said (292):

“The proof did not sustain a greater value than $50,000 at the time of the sale, but if it be assumed that this was somewhat inadequate, the fact that there was a depressed market for real estate would not be a sufficient circumstance, coupled with the supposed inadequacy in the bid, to warrant the chancellor in disapproving the master’s report of sale. The power to disapprove a sale for gross inadequacy of bid exists independent of an economic depression. The chancellor abused his discretion and erred in refusing to approve the sale at $50,000.” In the case at bar the evidence shows that the building is the wrong type for the neighborhood and that it has depreciated the value of the land and that there is no likelihood of an increase in rentals. The income can be increased only slightly if the necessary repairs are made. No money is available for making these repairs. The tax burden is increasing on the property at the rate of over $1,500 per year. The 1939 tax bill amounts to $1,561 and penalties accruing in 1939 on prior" tax delinquencies are $1,200, or a total of $2,761. Only the sum of $1,188 is available from income to apply on this $2,761. The undisputed evidence is that the fair cash market value of the property is not over $25,000. In addition to the bid, the purchaser at the foreclosure sale takes subject to delinquent taxes in excess of $19,000 and special assessments of $600, plus taxes accruing during the redemption period. Therefore, the cost to a purchaser who bids $7,000 would be around $29,000. It is desirable that property in litigation be restored to private ownership, providing that can be done without harming those who are interested. It will be necessary to raise nioney in order to make the necessary repairs and pay the delinquent taxes, penalties and special assessments. There does not seem to be any prospect that on a subsequent sale a substantially higher bid will be made. There is only a hope for such a bid. If this sale is not approved, the property will continue to deteriorate and may become a derelict and an eyesore. We are conscious of the solicitude of the chancellor for the interest of the bondholders, but do not see how the bondholders ’ position is bettered by the disapproval of the sale. True, they stand to secure a very small return on their investment, which is regrettable. From appellant’s brief we assume that he intends tó pay up the delinquent taxes, penalties and assessments. In arguing for approval of the sale, he sets out these taxes are a burden which he will be required to bear. While the payment of these taxes, penalties and assessments will not benefit the bondholders, such payment will be of benefit to the people of the community. If we approve the sale the property will in due time be restored to private ownership, and the owner will probably rehabilitate the same, which will redound to the benefit of the community.

The decree allowed the sum of $4,319.50 for solicitor’s fees, trustee’s fees and various'expenses in addition to court costs and extra fees, all of which were made paramount liens. Undoubtedly, all of the parties concerned have put forth their best efforts in performing their respective duties. However, all are confronted with a situation for which none of the parties is responsible. If the fees and charges which are prior liens, stand, the bondholders will participate in a minor share of the purchase price of $7,000. We believe that those who are entitled to receive the respective amounts allowed as prior liens should voluntarily reduce their fees and charges to fit in with the situation which all face. Because of the factual situation presented by the record, we are of the opinion that the chancellor should have approved the sale, subject to the downward revision of the fees and charges. Therefore the order of the superior court of Cook county of May 29,' 1940, disapproving the sale, is reversed and the cause is remanded with directions to the chancellor to conduct a hearing for the purpose of securing a reasonable voluntary reduction in the fees allowed, and that on the fees being so reduced the chancellor enter an order approving the sale.

Reversed and remanded with directions.

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