author: Mr. Presiding Justice Wolfe

text:
    Hubert B. Snyder, Appellee, v. C. C. Shepard, Appellant.
    Gen. No. 9,479.
    Heard in this court at the October term, 1939.
    Opinion filed February 17, 1940.

      B. Jay Knight and James A. Penny, both of Rockford, for appellant; Frederick H. Haye, of counsel.
    Hyer & Gill, of Rockford, for appellee; Stanton E. Hyer, of counsel.
   Mr. Presiding Justice Wolfe

delivered the opinion of the court.

This is an appeal from a judgment of the circuit court of Winnebago county, in which the plaintiff ap-pellee, Hubert B. Snyder, procured a judgment against the defendant appellant, C. C. Shepard, for damages he alleged he sustained through an automobile accident in which the cars of the plaintiff and defendant collided at the intersection of North Church street and West Jefferson street, in the city of Rockford, Illinois.

The plaintiff filed a declaration consisting of four counts. He also filed a bill of particulars, which stated that the first count charged the defendant with driving his automobile into the intersection, as specified in the complaint, at a speed, in excess of 20 miles per hour. Count two charged that the defendant failed to stop his car before entering the intersection. Count three charged the defendant with wilfully and wantonly driving his car through the intersection, and against the red light at a speed of between 25 and 35 miles per hour. The fourth count charged that the plaintiff had the right of way at the intersection, and that the defendant negligently drove his car at an unreasonable rate of speed into the intersection. Plaintiff asks damages in the sum of $25,500. The defendant filed his answer to this petition, in which he denied all acts of negligence, or violation of the law in the operation of his automobile.

The case was tried before a jury who found a verdict in favor of the plaintiff, for the sum of $7,300. The defendant entered a motion for a new trial, which was overruled, and judgment was then entered on the ver-diet in favor of the plaintiff for the amount of $7,300. It is from this judgment that the case is brought to this court on appeal.

There are traffic signals commonly called stop and go lights at the intersection of West Jefferson street and North Church street, in the city of Rockford, Illinois. The accident in question happened at the intersection of these streets on December 25, 1935. The plaintiff’s testimony tends to show that as he approached' the intersection from the south, the green light was in his favor; that as he was passing through the intersection the defendant was coming from the east, at a rapid rate of speed; that the collision occurred, and the plaintiff was injured. He has testimony to corroborate his evidence.

The defendant’s evidence tends to show that as he approached the intersection from the east, the green light was in his favor; that he was following a car which stopped at the intersection, and as he entered the intersection, the plaintiff’s car suddenly appeared in front of his car, and the collision occurred. There is evidence tending to corroborate the defendant’s testimony. An examination of the record of the evidence in this case shows clearly that there was an issue of fact as to which of the parties to the suit had the right of way at this intersection, and as to which was negligent in the operation of his car, which caused this accident. Under such circumstances, the courts have many times held, that the instructions given to the jury relative to the law of such cases, must be free from error. Among the instructions presented by the plaintiff and read to the jury by the court, is plaintiff’s Instruction No. 8, which is as follows: “8. The Court instructs the jury that, if you belieye from a preponderance of the evidence that the stop and go signal lights at the corner of North Church Street and West Jefferson Street in the city of Rockford were operating, at the time of the accident and if you further believe that the plaintiff, Snyder, while in the exercise of ordinary care for his own safety, entered the said intersection on the green light, then you are instructed that the said plaintiff had the right of way and it was the duty of the defendant, Shepard, to permit the plaintiff, Snyder, to clear the defendant’s lane of travel before the said defendant proceeded, and if you further believe, from a preponderance of the evidence, that the said defendant negligently failed to permit the said Snyder to clear the defendant’s lane of travel and that as a proximate result of said negligence, ran into the said Snyder’s automobile and that the said defendant thereby proximately caused injuries to the said Snyder, and his automobile, then you should find the defendant Shepard guilty. (Guilty.)”

Through inadvertence, instead of marking this instruction “Given,” the court wrote on the margin of instruction, the word 11 Guilty. ’ ’ The appellant claims in this court, that the giving of this instruction so marked, constitutes reversible error, and the case should be reversed on this ground alone. The appellee readily admits that it is error to so mark an instruction, but seriously contends that it was a harmless error, and cites some cases that would tend to sustain their contention. Our attention has not been called to any case where the mistake has been one exactly of this character. In the case of Florschuetz v. City of Mendota, 277 Ill. App. 627 (Abst.), decided by this court at the October Term, A. D. 1934, we had an occasion to pass upon a somewhat similar question. This case is not reported in full, so we are including in this opinion, a copy of what we said in the former opinion, and it is as follows:

“Appellant objects to the instructions given on behalf of appellee. Thirteen instructions were given for appellee. Ten of these contained at the close thereof citations of authorities comprised of the title of the case and the volume and page where such decision was reported. Instruction No. 2 concluded with the following citations: ‘Graham v. City of Rockport, 203 Ill. 214, affirming 142 Ill. App. 306; also, Leslie v. Chicago, 257 Ill. App. 633.’ Instruction No. 3 concluded with the following citation: ‘City of Springfield v. McCarthy, 79 Ill. App. 388.’ Instruction No. 4 concluded with the following citation: ‘City of Springfield v. McCarthy, 79 Ill. App. 388.’ Instruction No. 5 concluded with the following citation: ‘ City of Lanark v. Dougherty, 153 Ill. 163 (166).’ Instruction No. 6 concluded with the following citation: ‘Butler v. John R. Thompson Co., 260 Ill. App. 625.’ Instruction No. 7 concluded with the following citation: ‘Daniels v. People, 21 Ill. 439.’ Instruction No. 8 concluded with the following citation: ‘Town of Normal v. Bright, 223 Ill. 99.’ Instruction No. 9 concluded with the following citation: ‘Long v. City of Rock Island, 234 Ill. App. 359. ’ Instruction No. 10 concluded with the following citation: ‘Welch v. City of Chicago, 323 Ill. 498, affirming 236 Ill. App. 520.’ Instruction No. 13 concluded with the following citation: ‘Long v. City of Rock Island, 234 Ill. App. 359.’ Appellant objects to the citation of authorities at the conclusion of appellee’s instructions as above set out. While appellant urges that the same constitute reversible error, yet it affords this court no helpful references, but leaves the court to its own devices.

“Mr. Blashfield in his text book on instructions (1902) on p. 410 thereof, with reference to instructions containing marginal citations of reports or text books, states that it should not constitute reversible error unless prejudice results therefrom to the complaining party. In cases where the court of review is of the opinion that the jury could not properly have returned any other verdict than that returned, then although the placing of marginal citations upon the instructions is improper, it is not necessarily erroneous under such conditions. But, where a case is purely one of fact, as the present one, and the facts are sharply in dispute, the amount of the verdict attacked, a different situation is presented than in a case where it is possible to say that the jury could have returned no other verdict.

‘ ‘ There are holdings to the effect that since the jury is bound to accept the instructions given them by the court as being the law applicable to the case, that marginal citations could not make the instruction any more the law than it would be if they were not written thereon. City of Jacksonville v. Loar, 65 Ill. App. 218. However, the Supreme Court in the case of Wright v. Brosseau, 73 Ill. 381, 386, recognizes the fact that such reference to authorities would add strength to the instructions. This is a logical conclusion and such would be a most logical result upon the untutored mind. The jury cannot help but understand that such references are to decisions of higher courts sustaining the propositions of law incorporated in the instructions. It would not be unnatural to suppose that they would give to such instructions more weight than to those having no such sustaining authorities cited. They might readily assume on the one hand that those rules of law as announced in the instructions bearing citations, had been sustained by higher courts, while as to those propositions of law submitted in the other instructions, they might naturally assume had no higher sustaining authority than that of the trial court.

“The giving of instructions is an act of the court. It is the pronouncement of a court to the jury of the law applicable to the case. The fact that so many of plaintiff’s instructions bore citations to the decisions of the Supreme and Appellate Courts of this State, while none given on behalf of the defendant bore any such citations, could not help but attract the attention of the jury. While we are unable to say to what extent the jury was swayed or influenced by this, yet it presents a most dangerous situation and one fraught with so many uncertainties that it cannot be sanctioned as a general proposition of law. To do so would permit every instruction to become a brief on behalf of the party submitting it.

“Appellee makes no reference to these instructions in her brief. Counsel for appellee stated in oral argument that if it was error, it was an unintentional error, as it had not been intended that these instructions should be presented to the court; but that copies thereof which bore no such citations had been expected to be so delivered, and by mistake these were given in their stead. It is stated in the case of Springer v. Orr, 82 Ill. App. 558, 563, that instructions of this nature are improper. Again, in People v. Bradley, 324 Ill. 294, 310, the giving of such instructions is said to be error. We do not understand that this means it is error under all circumstances. A record need not be free from all error, but it must be free from error which might be prejudicial to the rights of the complaining party. People v. Schueneman, 320 Ill. 127, 135; People v. Nusbaum, 326 Ill. 518, 528. It therefore becomes a question to be determined in each case, from all the facts and circumstances, whether the error is deemed to have been prejudicial to the rights of the complaining party. We are compelled to the conclusion that in this instance, the giving of the above instructions was prejudicial to the defendant’s rights and constitutes reversible error.” See also People v. Marks, 251 Ill. 475. We think that the quotation from our former opinion clearly sets forth the law relative to such cases.

In the present case it is unfortunate that the instruction in question, is a peremptory one, and has reference to the very thing that is the gist of the case, namely, whether the plaintiff, or the defendant had the right of way at the intersection. The appellee has filed affidavits of some of the jurors, stating that they were not influenced by this mistake of the court. This court cannot sanction such procedure, as it is fraught with many uncertainties.

There are numerous other assignments of error, but as the case will have to be reversed and remanded for a new trial, we do not think it necessary to pass upon them. Because the court erred in marking this instruction “Guilty,” instead of “Given,” the judgment of the trial court is reversed and the cause remanded.

Reversed and remanded.


source: Caselaw Access Project

author: Mr. Justice Dove

license: Public Domain

text:
    People of the State of Illinois ex rel. Ernest Palmer v. Peoria Life Insurance Company. In re Claims of Margaret Harwick et al., Appellants, v. Charles V. O’Hern, as Receiver of Peoria Life Insurance Company and Alliance Life Insurance Company, Appellees.
    Gen. No. 9,403.

      Heard in this court at the October term, 1938.
    Opinion filed February 17, 1940.
    Harry E. Brown, of Geneseo, Shurtleff & Niehaus, Miller, Elliott & Westervelt and George Jochem, all of Peoria, and Charles F. Welsh, of Detroit, Mich., for appellants; Donald G. Beste, of Peoria, of counsel.
    Cassidy & Knoblock, of Peoria, for certain appellee; John E. Cassidy, of Peoria, and John F. Sloan, Jr., of counsel.
    D. I. Jarrett, of Chicago, George Z. Barnes and George W. Hunt, both of Peoria, for certain other appellee.
   Mr. Justice Dove

delivered the opinion of the court.

On November 15, 1933, the People of the State of Illinois, upon the relation of Ernest Palmer, director of insurance, by the Attorney General filed a verified complaint in the circuit court of Peoria county for the purpose of liquidating the Peoria Life Insurance Company, which was alleged to be insolvent. The defendant Life Insurance Company entered its appearance in that proceeding and a decree was rendered finding that the capital stock of defendant was wholly impaired, that sufficient cause -existed for the appointment of a receiver and provided that when the receiver was appointed he should immediately take possession of the books, records and affairs of the company and proceed to liquidate the same. The decree fixed the amount of the bond and on the same day the director of insurance appointed Charles D. O’Hern receiver, who qualified, and the assets of the company passed into his hands. On November 18, 1933, the court entered an order authorizing the receiver to accept all premiums tendered by policyholders, giving his receipt therefor and to hold such premiums subject to the further order of this court. In 1934 a reinsurance contract was entered into by the receiver, acting under the directions of and with the approval of the court and the Life and .Casualty Company of Chicago, an Illinois Corporation. This company thereafter changed its name to Alliance Life Insurance Company and will hereafter be referred to as the Alliance Company. The court in its decree relative to this contract found that it was in accord with the plan of liquidation adopted by the receiver pursuant to the statute and concurred in by the director of insurance and that it was for the best interest of all concerned or interested in the assets of the Peoria Life Insurance Company that it be executed and made effective. By this decree the court further found that the then value of the assets of the Peoria Life Insurance Company upon any fair basis of valuation was wholly insufficient to meet its liabilities and the contract of reinsurance had to do with only assenting policyholders and dealt with no other contract or obligation of the insolvent company. This decree, which was entered on August 22, 1934, provided: “That all contracts, written or oral, entered into by the Peoria Life Insurance Company for the services of persons to act as agents, managers or supervisors, or to sell contracts of insurance or collect premiums thereon due to the Peoria Life Insurance Company be, and the same are, and each of them is hereby disaffirmed as of November 15, 1933, the date of the entry of the order of liquidation in the above entitled cause and the date of the appointment of the receiver.”

Thereafter the Alliance Company filed its claim with the receiver for the amount of all claims assigned to it by assenting policyholders as provided in the rein-sur anee contract and the decree approving the same. Claims were also filed with the receiver by Margaret Harwich, as assignee of Hugh E. Van DeWalker, Fidelity and Deposit Company, assignee of George C. Berra, T. A. Curnow, Thomas E. Rogers, Edwin B. Seidel, C. H. DeLong and W. H. Logan. These claimants or their assignors were former insurance agents of the Peoria Life Insurance Company and their claims are based upon contracts which they had with that company by the terms of which they were to be paid commissions upon insurance business written by them, including commissions on renewal premiums ranging from the second to the fifteenth year of the life of the policy. The object of the claimants being, as expressed by their counsel, to recover renewal commissions accruing after November 15,1933, the date of the receivership, on insurance business written by the agents prior to that date. Each claimant also, by leave of court, filed an additional claim against the Alliance Company, claiming that they were equitably entitled to recover from it commissions on premiums paid to the Alliance Company after November 15, 1933, by assenting policyholders covered by their respective commission contracts with the defunct Peoria Life Insurance Company.

The claims were consolidated for hearing in the lower court. At the conclusion of the hearing an order was entered confirming the receiver’s disallowance of each claim and dismissing each claim against the receiver of the Peoria Life Insurance Company for want of equity. Subsequently an order and decree was entered denying each claim as against the Alliance Life Insurance Company. From these orders and decrees the claimants appealed to the Supreme Court on the ground that the appeals involved constructions of the constitutions of the United States and of this State and that the public interest required an appeal directly to that court. The Supreme Court transferred the cause to this court without opinion.

The contracts upon which the several claimants rely were agency commission contracts executed by the claimants or their assignors and the Peoria Life Insurance Company on various dates between 1914 and 1929. These contracts are not identical and while they varied somewhat in their terms, it is not necessary to point out the dissimilarities. All provided that the party with whom the contract was made should solicit applications for life insurance and pay over to the Insurance Company all premiums which he collects, that he would be allowed commissions on premiums paid the company, on policies issued under the contract according to certain schedules attached to the contract, that the commissions would accrue as premiums are paid to the company in cash, that if any policy remains unpaid after 30 days of grace and is subsequently restored, except wholly through the instrumentality of the agent, the company is discharged from any liability to the agent for compensation on account of such policy, that unless otherwise terminated the agreement may be terminated by either party by 30 days ’ written notice and if the contract remains in force and the agent performs all the conditions thereof and devotes his entire time to the company for a period of three years from the effective date of the contract, then renewal commissions shall be paid for the full period as specified in the attached schedule.

It is the contention of counsel for appellants that appellants have a vested property right in all the renewal premiums paid either to the receiver or to the Alliance Company up to the amount of the renewal commissions provided in their contracts and it is insisted that the evidence discloses that there has been no interruption in the payment of the premiums by the policyholders whose policies have been taken over and assumed by the Alliance Company, that the premiums paid are in like amounts to the payments made prior to receivership and that a portion of that premium represents renewal commissions to which appellants are entitled under their several contracts with the Peoria Life Insurance Company.

It is the contention of appellees that the several contracts of the claimants with the Peoria Life Insurance Company were terminated by the decree of liquidation rendered on November 15,1933, that each contract provided that appellants were only entitled to commissions on premiums when those premiums were paid to the Peoria Life Insurance Company in cash, that the renewal premiums, when paid after November 15,1933, were not paid to the Peoria Life Insurance Company but were paid either to the receiver thereof or to the Alliance Company and are not assets for the benefit of the creditors of the Peoria Life Insurance Company nor are they burdened with any lien or equity in favor of appellants.

In O’Hern v. DeLong, 298 Ill. App. 375, it appeared that appellant herein, DeLong, had on February 6, 1928, executed his” note for $2,100, secured by a mortgage to the Bank of Peoria and by that bank assigned, on November 12, 1931, to the Peoria Life Insurance Company. This note and mortgage came into the hands of O ’Hern upon his appointment as receiver for the company on November 15, 1933. Default having been made in the payment of principal, interest, taxes and insurance, the receiver, on December 31, 1934, filed his complaint in the circuit court of Vermilion county to foreclose the same. In that proceeding DeLong filed his answer admitting the execution of the note and mortgage but denying all right of recovery and filed an amended counterclaim setting forth his agency contract (which forms the basis for his recovery in the instant proceeding), and alleging that by virtue of the insolvency of the company, there was a termination of his contract contrary to an implied condition that the company would continue in business and the agent would have collected commission on renewal premiums in excess of the amount due the receiver upon the note and mortgage sought to be foreclosed. By his counterclaim he insisted that such insolvency constituted an anticipatory breach of said implied condition and the defendant was entitled to set off the damages he thus sustained as a vested right under the terms of his contract with the company. The chancellor held that there was an anticipatory breach by the company of said obligation under the agency contract, allowed the set-off and decreed the mortgage satisfied. In reversing that decree and directing the lower court to dismiss the counterclaim, and render a decree of foreclosure upon the original complaint, the court, in its opinion, cited and quoted at length from Hepburn v. Montgomery, 97 N. Y. 617; People v. Globe Mut. Life Ins. Co., 91 N. Y. 174; Layton v. Illinois Life Ins. Co., 81 F. (2d) 600 and Martin Emerich Outfitting Co. v. Siegel, Cooper & Co., 141 Ill. App. 147, affirmed in 237 111. 610 and held in effect that this agency contract was subject to an implied condition that the company would be relieved from paying commission on renewal premiums where performance becomes impossible by reason of its insolvency and destruction. See Annotation, 79 A. L. R. 475.

The record in the instant case discloses that five of the agents ’ contracts were terminated prior to the date of the receivership and only two were in effect on November 15, 1933, the date O ’Hern was appointed receiver. Counsel for appellants concede that by the receivership proceedings these two contracts were terminated in the sense that the agents could no longer sell insurance for the Peoria Life Insurance Company and could have no claim for damages by reason of the loss of the right to so act as agents, but insist that the receivership could not deprive the agents of moneys already earned before receivership or absolve the Alliance Company inasmuch as it was de facto successor of the Peoria Life Insurance Company. Counsel argue that the Peoria Life Insurance Company receivership started out as a simple liquidation but that by the efforts of the receiver in getting the various assenting policyholders reinsured in the Alliance Company, the nature of the receivership proceedings was thereby changed from a liquidation proceeding to a reorganization proceeding.

General American Life Ins. Co. v. Roach, 179 Okla. 301, 65 P. (2d) 458, is the controlling decision, so counsel for appellants assert, upon which they rely in support of their contention that appellee, the Alliance Company, is successor to the Peoria Life Insurance Company and therefore obligated to appellants by virtue of the provisions of their several contracts. It appeared in the Roach case that the International Life Insurance Company had made a contract with Kellie M. Roach in 1.913 by the terms of which he became State manager for the State of Oklahoma and in addition to receiving certain monthly payments and a specified percentage of the first annual premium on insurance sold by him, he was also to receive a percentage of the renewal premiums. In 1928, the International Life Insurance Company transferred all its assets, contracts and choses in action to Missouri State Life Insurance Company, which recognized and fully complied with International Company’s contract with Boach and paid to him or his assignee the agreed share of the renewal premiums. In 1933, Missouri State Life Insurance Company became insolvent and the Insurance Commissioner of the State of Missouri took charge of the company under the laws of that State. A few days later said insurance commissioner approved a contract between the Missouri State Life Insurance Company and the General American Life Insurance Company, by which that company became the owner of all the assets, property, contracts and choses in action of the Missouri State Life Insurance Company and further assumed all the obligations of the Missouri State Life Insurance Company, including its indebtedness to policyholders, agents and other creditors to the extent of 50 per cent thereof. The suit was instituted by the assignee of the Roach contract, whom the court stated occupied in every respect the legal position of Roach and was brought to recover from the General American Life Insurance Company 5 per cent of the renewal premiums collected by it under the contract which Roach had originally entered into with the International Life Insurance Company. The defendant recognized the binding effect of the Roach contract for the payment of a percentage of the renewal premiums but contended that such contract was modified by the provisions of its contract with the Missouri State Life Insurance Company limiting its obligation to pay the creditors of that company only 50 per cent of their claims. The court held that Roach’s right to receive 5 per cent of the renewal premiums under his agency contract became fixed as soon as the policy was taken out, that this right was his property and existed as long as the policy continued in force and that when payment was made to the collecting company, the right of the agent to receive the same attached simultaneously with the collection, that due to the contractual relations between the parties, the International Life Insurance Company and its successors, including the defendant, stood in a trust capacity toward Roach, the agent.* In the instant case, the reinsurance contract which the court approved does not provide that Alliance Company assumed all the indebtedness due or to become due appellants nor did Alliance Company acquire every asset of Peoria Life. In the instant case the reinsurance contract was made by the receiver of Peoria Life not with that company itself. In the Roach case the General American Life Insurance Company became the successor to the Missouri State Life Insurance Company and purchased all of its assets and assumed its liabilities subject to certain attempted limitations. Not so here. We do not think Alliance-Company is the successor of the Peoria Life Insurance Company in the sense that the General American Life Insurance Company was the successor of the Missouri State Life Insurance Company nor do we think it is the successor of the Peoria Life in the sense insisted upon by appellants. The reinsurance contract here was made in an effort upon the part of the receiver to liquidate that company under the directions of the court and pursuant to the statute and was a step only in the liquidation proceedings and while Alliance Company by that contract incurred some of the liabilities of Peoria Life, the claims which appellants are here endeavoring to assert against it were not among those liabilities.

In Layton v. Illinois Life Ins. Co., supra, it appeared that George F. Bachman had entered into an agency contract with the Illinois Life Insurance Company on September 1, 1919, and continued as an agent of the company until the appointment of General Abel Davis as receiver for that company on November 29, 1932. Bachman filed his claim in the receivership proceedings contending that his contract providing for post-agency commissions had been breached by the appointment of a receiver and the consequent inability of the company to perform. The district court denied the claim and the circuit court of appeals in affirming that order cited with approval Moore v. Security Trust & Life Ins. Co., 168 Fed. 496, where it appeared that the Insurance Company had voluntarily incapacitated itself from a further continuance of the life insurance business by conveying all its assets to another company and where it was held that such conduct on the part of the company did not constitute an anticipatory breach of an agreement with its agent that would sustain an action by the agent to recover the present worth of future commissions. The court also cited Pellet v. Manufacturers’ & Merchants’ Ins. Co. of Pittsburg, 104 Fed. 502, where it was held that the discontinuance of business by an insurance company in no way breaches an agency contract. In the Layton case the agency contract obligated the company to pay to the agent a commission on renewal premiums which were collected, paid to and received in cash by the company. In construing the contract, the court said that the agent’s right to commissions on future premiums was a prospective right and contingent upon payment being made by the policyholders and was a condition within the contemplation of the contracting parties. “The very nature of the agency contract,” continues the court in its opinion, “impels the conclusion that it must have been within the contemplation of the contracting parties that the company might some day become incapacitated from continuing in the insurance business. When the district court assumed jurisdiction over the affairs of the company and appointed a receiver, we think this amounted to a termination of the contract by operation of law reasonably within the contemplation of the parties and not an actionable breach on the part of the company. . . . The continued solvency of the company and its continued ability to collect and receive future premiums from those insured was one of the contingencies to be accepted alike by the agent and the company and therefore within the reasonable contemplation of the parties. The success or failure of the company was of like importance to the agent and the company. . . . We think a fair construction of the contract as a whole indicates clearly that the right to renewal commissions is conditioned on the continued existence of the company and the continued collection of premiums.” Counsel for appellants insist that in the Layton case it appeared there was a true liquidation while here there is a reorganization inasmuch as all the assenting policyholders were reinsured and not a liquidation of the Peoria Life. An examination of Daniel v. Layton, 75 F. (2d) 135 and Ballou v. Davis, 75 F. (2d) 138, disclose that a reinsurance contract was entered into by the ■ receiver of the Illinois Life Insurance Company with the Central Life Assurance Society of Iowa as a step in the liquidation proceedings of the Illinois Life Insurance Company and there, as here, the contract of reinsurance permitted but did not require, policyholders to accept the terms of the reinsurance contract.

In People ex rel. Lowe v. Old Colony Life Ins. Company, 270 Ill. App. 403, the court, in speaking of an order of the circuit court which directed the receivers of the Old Colony Life Insurance Company to accept a reinsurance proposal of the Life and Casualty Company of Chicago, said: “The sole purpose of the order was to carry out the liquidation of the defendant insurance company. Walrath v. Pyplatz, 178 Ill. App. 581. The reinsurance of the policies was for the benefit of the holders and a step to protect the policyholders in the liquidation of the company.” So in the instant case this reinsurance agreement is simply a step in the liquidation of the assets of the Peoria Life Insurance Company and as said in Ballou v. Davis, supra, a highly commendable method of handling the affairs of a financially embarrassed, insolvent insurance company.

Counsel for appellant also insist that by the provisions of the reinsurance contract the Alliance Company is more than a reinsurer inasmuch as it took over all the business of the Peoria Life Insurance Company and therefore it assumed all the burdens inseparable from that business; that for all practical purposes the Alliance Company stands in the place of the former company and that therefore it, the Alliance Company, is liable for commissions to former agents whose efforts created a large portion of the insurance business of the Peoria Life which is now enjoyed by the Alliance Company. There is no merit in this contention. The reinsurance agreement entered into by the receiver and the Alliance Company is long and involved and covers many finely printed pages of the abstract, but an analysis of that contract does not warrant the conclusions insisted upon by counsel. By that contract the Alliance Company did make an offer of a definite insurance contract to each policyholder of the Peoria Life Insurance Company and each policyholder either accepted or rejected that offer. None of its provisions obligates the Alliance Company to pay appellants for any services they may have rendered their former employer, the Peoria Life. The conclusion reached by the Appellate Court of the Third District in the case of O’Hern v. DeLong, supra, and its construction of this agency contract meets with our approval as does also the reasoning in Layton v. Illinois Life Ins. Co., supra, and the claims of appellants were properly denied by the chancellor and the decrees and orders appealed from will therefore be affirmed.

We have not overlooked appellants’ suggestion that the chancellor erred in denying their motion for a continuance on December 1, 1937. The record discloses that these claims had been pending for many months, evidence had been taken at various times and on November 17, 1937, the court set the cause for final hearing for December 1, 1937. The witnesses whom appellants desired to examine were the president and secretary of the Alliance Company. Subpoenas for these witnesses had been issued a week before December 1, 1937, but had not been served as these parties were out of the State for a portion of the time after the subpoenas had been issued. Counsel say they desired to examine these witnesses with reference to the transactions between the Alliance Company and the receiver in connection with carrying out the reinsurance agreement. There is nothing suggested which could be considered by this court as material to the issues herein. The chancellor, therefore, did not err in refusing to continue the hearing.

The decrees and orders appealed from will be affirmed.

Decrees and orders affirmed.


author: Presiding Justice Biess.

text:
    Commissioners of Nutwood Levee and Drainage District of Greene and Jersey Counties, Illinois, Appellees, v. Neal D. Reardon et al., Appellants.
    Gen. No. 9,143.
    Heard in this court at January term, 1939;
    opinion filed October 19, 1939;
    rehearing denied February 23, 1940.
    Neal D. Beardon, for appellants; Clement L. Smith, of counsel; G. B. Schwarz and Du Hadway & Suddes, for appellees.
   Opinion by

Presiding Justice Biess.

“Not to be published in full.’’


author: Presiding Justice Wolfe.

text:
    Lona Hodgett, Appellee, v. Fremont Bates, Appellant.
    Gen. No. 9,469.
    Heard in this court at October term, 1939;
    opinion filed February 14, 1940.
    James H. Andrews, Gregg A. Young and Harper Andrews, for appellant; Thomas J. Welch and Vera M. Sinks, for appellee.
   Opinion by

Presiding Justice Wolfe.

“Not to be published in full.”


text:
    Lockwood Glass Company et al., Appellants, v. Harry W. Love et al., Appellees.
    Gen. No. 9,487.
    Heard in this court at October term, 1939;
    opinion filed February 14, 1940.
    Irving Shutts and H. Howard Sehluntz, for appellants; Edward A. Nadellioffer and Albert H. Kruse-mark, for appellees.
   Opinion by

Presiding Justice Wolfe.

“Not to be published in full.”


text:
    Review Printing and Stationery Company, Appellee, v. Harold Andrew Camlin, Executor of the Estate of John H. Camlin, Deceased, et al., Appellants.
    Gen. No. 9,502.
    Heard in this court at October term, 1939;
    opinion filed February 14, 1940.
    Frank E. Maynard, for certain appellants; Hall & Dusher, for certain other appellants; Welsh & Welsh and Vail, Mills & Armstrong, for appellee.
   Opinion by

Presiding Justice Wolfe.

“Not to be published in full.”


author: Justice Dove.

text:
    Herman J. Schachtrup, Appellee, v. The Union Automobile Indemnity Association, Appellant.
    Gen. No. 9,480.
    Heard in this court at October term, 1939;
    opinion filed February 14, 1940.
    Victor P. Michel and Stone & Taylor, for appellant; Charles F. Short, Jr., of counsel; E. T. O’Connor, John F. Dougherty and Thomas S. Hession, Jr., for appellee.
   Opinion by

Justice Dove.

‘‘Not to be published in full.”


author: Mr. Presiding Justice Denis E. Sullivan

text:
    Live Stock National Bank of Chicago, Administrator of Estate of Ignatius Philips, Deceased, Appellee, v. Guy A. Richardson et al., Defendants, and City of Chicago, Appellant.
    Gen. No. 40,543.

      Heard in the third division of this court for the first district at the December term, 1938.
    Original opinion filed October 25, 1939.
    Rehearing opinion filed February 14, 1940.
    Barnet Hodes, Corporation Counsel, for appellant; Alexander J. Resa, Lionel J. Berc and L. Louis Karton, Assistant Corporation Counsel, of counsel.
    Philip Rosenthal, of Chicago, for appellee; Morris S. Telechansky, of Chicago, of counsel.
   Mr. Presiding Justice Denis E. Sullivan

delivered the opinion of the court.

Defendant city of Chicago brings this appeal from a judgment for $3,500 entered in the circuit court in favor of plaintiff, Live Stock National Bank of Chicago, administrator of the estate of Ignatius Philips, deceased, and against said defendant. The other defendants, receivers of the street car company, were found not guilty by the verdict of the jury.

It appears that the accident which caused the death of Ignatius Philips, occurred on November 17, 1934, shortly after midnight. Philips and two of his fellow workmen, Daily and McSherry, were all employed by a newspaper publisher. McSherry and Daily went into a tavern at 79th street and Eberhardt avenue about 9 o’clock on said evening and saw Philips standing by the bar. Daily and McSherry each drank three glasses of beer, Philips had none. From there they drove to 89th street where Daily had some business to transact. Upon their return from said errand they went into a tavern where Philips had two beers and the others had three each. Philips offered to drive them home and they left at about 12:30 o ’clock in his Ford coupe, all three sitting in the front seat. They proceeded west on 87th street at a speed of 25 to 30 miles an hour and Philips was driving. The lights on the car were burning. It was dark outside.

It further appears that as the automobile reached Eggleston avenue, where there is a curve, the automobile went onto the street car tracks and as it hit said tracks the heads of both Philips and Daily struck the steering wheel, thereby rendering them unconscious. The automobile went over the tracks and jumped the curb. The door of the automobile burst open and Philips was thrown out of the automobile, his head hitting the pavement. The automobile went off the concrete pavement at a point east of Eggleston avenue. McSherry brought the automobile to a stop under the viaduct.

Philips died as a result of the accident and left surviving him his mother, Mrs. Rose Philips, a widow, his brother Richmond and a brother Hamilton. The deceased had been working for the newspaper for about eight months prior to his death, receiving about $65 a month and out of his earnings he contributed $10 a week to the support of his home.

Plaintiff’s theory of the case is in substance that the city was in possession and control of that portion of 87th street in which the dangerous and unsafe condition existed in the street; that the city was negligent in permitting that portion of the street east of Eggleston avenue in between the concrete slabs to remain unpaved and to allow a depression to a depth of eight inches adjacent to the surface of the pavement of the street; that the city was negligent in not properly placing signals to give warning of the said depression; that the city was negligent in not placing signals to warn traffic of the curve or turn at Eggles-ton avenue and was negligent in not properly lighting the street where the curve and the depression existed.

Defendant’s theory of the case is that it is not liable because the death of plaintiff’s intestate occurred on a State-aid highway over which the city had no control or jurisdiction; that the duty to maintain and the actual maintenance of the said street was in the State; that the city had no authority to erect signs or warning signals on a State-aid highway and that the city was not negligent in permitting the street car rails to be exposed in an unpaved section of the street.

Plaintiff offered in evidence an ordinance of the city of Chicago granting to the Cook county highway department permission to improve as State-aid roads, certain streets including 87th street at the point of the accident in question. Said ordinance (Council Proceedings 1932-1933) contains the following provision:

“Section 2. That the permission hereby granted is so granted upon the condition that plans for each of the improvements of the streets heretofore designated shall be filed with and shall meet the approval of the commissioner of public works of the City of Chicago.”

So, we must first determine whether 87th street, being in the city of Chicago, is controlled by the city. Defendant contends that 87th street was a part of the State highway plan and known as Eoute No. 171.

The evidence shows that 87th street at the scene of the accident was a street in the city of Chicago. The street and flicker lights were maintained and controlled by the city of Chicago and the police on duty reported any “outages” of the flicker lights to the police station of the city of Chicago or to the company who maintained the lights for the city of Chicago. The city of Chicago police patrolled 87th street at the scene of the accident and it was part of one of the police districts of the city of Chicago. Testimony was introduced to show that the parkway in between the concrete slabs was not owned or maintained by the State, and the tracks of the Chicago Surface Lines were laid in the parkway under the supervision and control of the city of Chicago; that there was a curve in the street about 100 feet west of Eggleston avenue which was barely perceptible. Continuing in a straight line along 87th street east and west, there was an open hole directly in line with the eastbound traffic, 6 to 8 inches deep and about 117 feet long and about 31 feet wide and located in this depression are the rails of the street car tracks, the south rail of which was 6 feet from the edge of the eastbound slab.

The evidence further shows there is no light in the parkway between the eastbound concrete slab and the service drive at Eggleston avenue overlooking the curve, nor is there any warning signal of any kind as one approaches Eggleston avenue from the west as a warning of this curve ahead.

Much time is taken up by both sides in debating the question as to whether or not the city is liable for a State-owned road. While the city claims that 87th street is in the control of the State, we fail to find any evidence conclusive of that fact. Two witnesses testified that it was a State-aid road. The proper way for the city to have proved that would have been from records. Certainly, there must be some official record kept which would show wherein the management, control and care is now vested if it has been ceded to the State as contended. The necessity for such proof is mentioned in the case of People v. Chicago & A. R. Co., 273 Ill. 452, when the court at p. 455, said: “The action of the highway commissioners can only be shown from the record. If a meeting was held and no action taken this fact could be shown by the record, or if no meeting was held that fact could be put in evidence by testimony that the records did not show any such meeting. The absence of such a meeting cannot be proved by the testimony of the town clerk that no special meeting of the highway commissioners was held for the purpose of certifying the amount to be levied.”

Again in the case of Village of Brookfield v. Ricker, 295 Ill. 316, at p. 319, it was said: “The action of the county board of highway commissioners or other public authorities of the county or State can only be properly shown by the records kept by those authorities.”

In chapter 121, par. 297, sec. 7, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 120.224], it is provided as follows : “Whenever any part or portion of any highway which is a part of the State highway system and lies and. is situated within the limits of any city, village or incorporated town is taken over, the Department of Public Works and Buildings shall have exclusive jurisdiction and control over only that part of such highway which the State has constructed, or which the local authority has constructed and which has been taken over by the State, and for the maintenance of which the State is responsible, including the hard-surfaced slab, shoulders and drainage ditches.”

Paragraph 298, sec. 8 [Jones Ill. Stats. Ann. 120.225], provides:

“When a part or portion of the highway shall have been taken over it shall thereafter be constructed,' re-constructed, repaired, improved and maintained by the State in accordance with the provisions of this Act.”

It is contended that the original 87th street was owned and controlled by the city of Chicago and no competent or convincing evidence has been put in the record showing when, where or how the care, maintenance and control of this street was transferred to the State of Illinois. That being true, we are forced to the conclusion that this street is still controlled by the city of Chicago.

The evidence shows that the place where the acci- ' dent occurred was not sufficiently lighted; that Eggles-ton avenue turned at this point and there was no signal warning or other provision made to prevent an automobile from being driven oft the concrete, in which event it would strike the rail which was exposed and naturally deflect such automobile. In addition to that there was a depression in the street pavement. We are of the opinion that the jury was justified in finding that the maintenance and control of the street was vested in the city of Chicago and that said city did not exercise reasonable care in the maintenance and control of said street, and is responsible for the damages resulting therefrom. The city is required to use reasonable care to maintain its streets in a safe condition.

As this entire case is based on a question of fact, it is not necessary that we prolong this opinion by citing many authorities as to the law relating to such facts.

For the reasons herein given the judgment of the circuit court is affirmed.

Judgment affirmed.

Hebel and Burke, JJ., concur.

On Rehearing.

This cause now comes before us on a petition for rehearing which was allowed on December 13, 1939, with answer thereto filed on December 22, 1939, and this court having considered said documents, as well as the briefs, abstract and record in said cause, we have decided to adhere to the decision as set forth in our former opinion heretofore filed in said cause.

Therefore, for the reasons herein given, the judgment of the circuit court is hereby affirmed.

Judgment affirmed.

Hebel and Burke, JJ., concur.


text:
    Edward O. Tudor, as Successor Trustee, Appellee, v. Russell Firebaugh, Individually and as Alleged Trustee, et al., Defendants. John T. Brown et al., Constituting the Consolidated Bondholders’ Committee, Appellants.
    Gen. No. 40,644.

      Heard in the third division of this court for the first district at the April term, 1939.
    Opinion filed February 14, 1940.
    Whitty & McGah and Abrams, Sherman & Lewis, all of Chicago, for appellants; Lohis A. Sherman and Irving S. Abrams, of counsel.

      Arthur Abraham, of Chicago, for certain appellee.
    David F. Matchett, Jr., of Chicago, for certain other appellee.
   Mr. Presiding Justice Denis E. Sullivan

delivered the opinion of the court.

On August 20, 1934, E. Bay Grant, claiming to be the successor trustee to Bussell Firebaugh, filed his suit for an accounting against Bussell Firebaugh, alleging in said complaint that on November 4, 1931, a decree of foreclosure was entered on trust deed recorded as document No. 10,102,408, and that at the sale Bussell Firebaugh, as trustee under the terms of said trust deed, bid in for said property without the production of any bonds or the payment of any money; that a master’s certificate of sale was issued to said Bussell Firebaugh and that subsequent thereto a master’s deed was issued to. said Bussell Firebaugh as trustee for and on behalf of all bondholders secured by said trust deed recorded as document No. 10,102,408, as aforesaid; that said Bussell Firebaugh had failed to account for money collected in connection with the premises involved herein.

It further appears that during the pendency of this suit, on December 7, 1934, E. Bay Grant resigned as successor trustee, and in accordance with the provisions of said trust deed the Consolidated Bondholders’ Committee who were holders of the bonds in excess of 51 per cent of the total outstanding bonds secured by said trust deed, appointed Edward O. Tudor as successor trustee, which appointment was confirmed by the court by decree entered January 17, 1935; that the decree recites that the court “retains jurisdiction for the purpose of further instructing the Successor Trustee in the administration of his trust. ’ ’

It further appears that on January 21, 1935, Bussell Firebaugh conveyed and quitclaimed all right, title and interest in said premises involved herein which he acquired as trustee to Edward 0. Tudor, as successor trustee; that subsequently on April 29, 1936, Edward 0. Tudor, successor trustee, filed a petition in this accounting proceeding (which we gather is the instant case), alleging that he is the duly qualified and acting-successor trustee; that various questions have arisen in connection with the administration of the trust, and praying that the court instruct him with respect to his rights, powers and duties, and that the court may determine a plan for exchange of bonds for certificates of beneficial interest in the trust. To this petition the Consolidated Bondholders’ Committee, on April 30, 1936, filed their answer setting forth that they hold a majority of the bonds secured by the trust deed and that the court should instruct the trustee as' to his powers in connection with said trust.

It further appears that on May 16, 1936, the court entered an order referring- the petition and answer to a master in chancery, where the said petition lay in a state of somnolence and no attempt was made to present the master’s report or take any action in connection with the matter until the 30th day of September, 1938, being 2% years after the filing of the petition and not until the filing- of a suit for partition by one of the owners and holders of the bonds secured by this trust deed.

It further appears that on September 30, 1938, Tudor, the plaintiff, presented to the court the master’s report on said petition, together with the decree confirming the same. The Consolidated Bondholders’ Committee objected to the entry of the decree, and asked leave to file exceptions, which prayer the court denied and entered a decree confirming the master’s report.

In appellant’s brief it is not stated whether or not they appeared before the master and filed objections. On September 30, 1938, Edward 0. Tudor presented to the court the master’s report on said petition and the decree confirming same. Said decree contained the following provisions:

1. That Edward 0. Tudor, as successor trustee, has acquired title to the premises involved.

2. That the said Edward 0. Tudor shall hold said premises in trust for a period not to exceed fifteen (15) years from the date of the decree.

3. That the interests of the bondholders shall constitute a beneficial interest in the income only and that they shall have no legal or equitable claim to the property.

4. That the trustee shall issue certificates of beneficial interest to all bondholders in the form provided in the decree.

5. Appointing John W. Guskay, John T. Brown and William A. Kessler as trust managers.

6. Providing that the trustee or trust managers cannot be removed by a majority of the bondholders, except for cause.

7. Fixing fees in the sum of $2,500 for attorney for Edward 0. Tudor, successor trustee, for services in perfecting title and for representing him in these proceedings to construe the trust.

8. Fixing fees in the sum of $2,000 to Consolidated Bondholders ’ Committee.

.9. Fixing fees in the sum of $500 to Edward O. Tudor, successor trustee, for services in connection with these proceedings and for the issuance of certificates of beneficial interest.

10. Fixing fees in the sum of $750 to William S. Stahl, for services in connection with this proceeding.

11. Fixing master’s fees in the sum of $750.

12. Authorizing the successor trustee to execute a first mortgage in a sum sufficient to pay all fees, costs and taxes.

The position of the plaintiff appellee is:

1. Interveners having by their pleadings admitted the necessity and propriety of Tudor’s petition for the construction of the trust, having appeared and testified in favor of the petition, having worked out and presented the very plan of reorganization adopted, having failed to object to the master’s report, cannot now be heard to object to the decree of September 30, 1938.

2. The decree of January 17, 1935, to which the interveners were personally parties and to which all of the bondholders were parties by representation, specifically determines that the bondholders have no right to partition.

3. The court of equity has ample powers to construe the terms of the trust in question and to provide a fair and equitable plan of reorganization for the benefit of all bondholders.

4. The plan of reorganization worked out by the committee themselves and propounded by the court was in fact a fair and equitable plan of reorganization and constituted a proper construction of the trust under which the premises in question are held.

5. Fees were properly allowed under the terms of the trust deed for the construction of the trust.

6. Since all bondholders had a right to appear the proposed exchange of securities was not in violation of the Federal Securities Act of 1933.

From a reading of the pleadings and evidence in this case, it appears there are more officials in connection with this foreclosure than we have been privileged to encounter in any former suit. There is a trustee, a successor trustee, a successor to the successor trustee and in addition thereto there is also a Consolidated Bondholders’ Committee composed of seven members. Also there are four members of a certain Bondholders’ Protective Committee. In addition to that there are four persons named as members of the Bond & Mortgage Bondholders’ Committee and also four persons are named as members of the Bondholders’ Protective Committee. Three persons are named as trust managers. Counsel for these various persons and. groups, as well as the master in chancery, are asking for fees aggregating $6,500 as a prior lien on the property and further asking that the property involved be taken from the bondholders and that the lien of the bondholders be decreed as personal property, and further asking* that some of the persons named be appointed for a term of 15 years to look after the property, and that a provision be made as to fees to be paid during that period.

The evidence, upon which the allowance of fees was made, does not set forth a statement as to the time consumed by claimants in performing the work for which they now seek to be paid. This court has no way of knowing whether the time spent in such alleged work required a day, a week, a month, or a year. In fixing fees of any kind one of the requisites is that the court be furnished competent evidence as to the amount of time consumed in performing said services. It was error to allow these fees based on the evidence submitted. Otterbeck v. Larson, 197 Ill. App. 310.

From the record before us the plan of reorganization does not set forth the number of nondepositing* bondholders nor does it state their interest, neither does it show that they received a notice of the proposed plan, or that the bondholders whom it is claimed are represented by a committee, received such notice. The difficulty with this situation, as we view it, is that no plan of reorganization was complete or submitted at the time of the original foreclosure and sale.

In First Nat. Bank of Chicago v. Bryn Mawr Beach Bldg. Corp., 365 Ill. 409, which was one of the first reorganization cases to be passed upon by our Supreme Court, it was said:

“In these eases it has been recognized that where large properties, as to which rights and relations are complicated, are sold at foreclosure sale, such sale, disconnected with a plan of re-organization, is likely to prove disastrous, as it rarely obtains for the property any approach to a fair price and often enables a financially strong group to gain by combined action and unfair advantage over those who do not have the means to protect the sale. And so these courts of equity have withheld the sale of the mortgaged property under the protection of possession by a trustee or receiver appointed by the court or acting' under the terms of the trust deed, until such time as a sale might be had as a step in the re-organization of the concern. For this purpose the court takes jurisdiction to consider the fairness of the plan proposed. This, as we understand it, has been the underlying purpose of the exercise of equitable jurisdiction in cases of this character. First Nat. Bank v. Flersham, 290 U. S. 504.”

Care should be exercised by the chancellor in passing upon and deciding the various questions which arise when reorganization plans are presented for consideration. In the original foreclosure in the instant case, no money was paid nor were any bonds offered as part of the purchase price, but in some way which is not explained, the title was vested in the trustee as an individual, so that the nondepositing' bondholder could not receive any part of the proceeds of said sale as there were no proceeds.

As this court said in the First Nat. Bank of Chicago v. Bryn Mawr Beach Bldg. Corp., supra:

“Appellants say the trust deed does not provide for a re-organization plan; that their rights are contract rights, and they are entitled to have the property sold at the highest bid and the proceeds distributed, and that under the plan proposed their contract rights are violated, for they are to be either forced into an unconscionable plan or ‘frozen out.’ Certainly, there can be no violation of contract rights arising out of an assumption of jurisdiction of the re-organization plan by a court of equity. No one is required to join the depositing committee. The sale has been decreed, and all who do not desire to join the plan may take their share of the proceeds in cash. If the plan is unfair or appellants are in danger of being ‘frozen out,’ a court of equity should extend its aid to those who, by reason of their numbers and widely scattered abodes, are unable to protect themselves against an unconscionable plan or a scheme to prevent the sale of the property at a fair price.”

There appears to be no reason why the lien of the bondholders-should have been decreed to be personal property. It is claimed that the court had no authority to change the “contract rights” of the bondholders to personal property. Without passing upon the latter question, it is sufficient to say that the necessity for such a decree does not appear. At the time of the entry of the decree the bondholders’ committee appeared and objected to the entry of the decree and asked to be heard, which request was denied. This was error. Particularly in cases of this kind, we think sufficient latitude and time should be extended to all counsel so that the court may hear what they have to say when it comes to a disposition of their property.

It further appears that the depositing bondholders, consisting of some 51 per cent of the entire issue, were objecting to the plan, and as was said in the case of First Nat. Bank of Chicago v. Bryn Mawr Beach Bldg. Corp., 365 Ill. 409: “The court is concerned with the fairness of the bid as to those bondholders who have not adopted the plan. In this it must be borne in mind, however, that non-depositing bondholders are not to be aided in an effort to create a maneuvering value for their bonds or give them a nuisance value by attempting to obstruct re-organization.”

No evidence was offered as to the income of this property, past or present, nor is it shown what the expenses have been in the past regarding operation of the building. The decree directs that the trustee perfect the title, although the master has allowed the sum of $2,500 to the attorney for the trustee for services in perfecting the title and for representing him in these proceedings to construe the trust. Reliance is made by appellee upon the provisions of the decree which was entered in 1935, which was a bill for an accounting against Firebaugh and E. Ray Grant and which resulted in the court appointing Tudor as trustee. In that decree the court made the following reservation :

“That this Court retains jurisdiction of the Successor Trustee and of the premises above described and of the parties hereto for the purpose of further instructing the Successor Trustee in the administration of his trust.” And the court made the further finding: “. . . but that the interest of the holders of said bonds and interest coupons shall consist solely of an interest in and to the proceeds from the administration or disposition of said premises, and shall constitute solely personal property, and the holders of said bonds and interest coupons shall have and do have no right, title or interest in or to said premises above described or any part thereof.”

We are unable to see how the court could retain jurisdiction for the purpose of passing upon a plan of reorganization, as was attempted in the instant case. Nor do we see how the court would have a right to change certain interests in real estate into personal property affecting all the bondholders whose bonds under the law as cestui que trustents in the original trust deed, gave them an interest in the real estate. It is not part of the function of a court to instruct trustees, except where a trustee may apply to the court when there is some doubt as to his power or as to the rights or duties of the parties. There is no showing here that there is any ambiguity as to the powers and duties of the trustee.

In speaking of a trustee’s right to apply to the court for assistance, in the case of Warner v. Mettler, 260 Ill. 416, the court at p. 421, said: “He must be honestly in doubt as to the proper construction of the instrument under which he is acting, or as to the disposition of the funds in his hands, or the course of action that he ought to take in any particular case, in order to authorize his application to a court of equity for aid and direction.”

In the case of Chicago Title & Trust Co. v. Chief Wash Co., 368 Ill. 146, the court at p. 153 said: “To determine this question a review of the pertinent provisions of the trust deed is essential since a trust itself constitutes the charter of the trustee’s powers and duties. From it he derives the rule of his conduct, and it not only prescribes the extent and limit of his authority, but also furnishes the measure of his obligations. (3 Pomeroy’s Eq. Jur. (4th ed.) sec. 1062.)”

We have been unable to find anything which tends to show that the trustee or the owners of these bonds contemplated changing the real estate into personal property as the decree provides.

The trustee purchased the property without producing any bonds or making any cash payment for the benefit of all bondholders and the Consolidated Bondholders’ Committee representing 51 per cent of the bonds, objected to the. entry of the decree. By this plan, creating the trust for 15 years, the dissenting bondholders could not take their share of the value of the property and were prevented from reducing their interests to cash. We do not think the court should at the request of the trustee and without the knowledge of the bondholders, or without such authority being contained in the original trust deed, by which the bondholders could avail themselves of their rights, enter another decree to liquidate the property by petition. By the terms of the decree the bondholders could not remove the trustee until after the 15-year period had expired, and further provides that the trustee may be removed for cause only, and deprives the court of jurisdiction to change' the provisions if not found equitable or satisfactory.

As to the authority of the trustee to borrow $6,500 in order to pay the costs and fees, this does not seem to be equitable or fair, nor should such amount be chargeable against these nondepositing bondholders who have not been notified of this proceeding. The bondholders have received nothing during the past 15 years. Nothing appears in the record to show the value of the property.

We have not been advised nor have we been able to discover just how this trustee could borrow money upon this estate. We have not been able to find anything in the trust deed authorizing it, which trust deed is the charter of his powers, and such powers cannot exceed the limits placed therein.

In the case of Wahl v. Schmidt, 307 Ill. 331, the court at p. 339, said:

“A trustee cannot create a lien on the trust estate in favor of a creditor, or charge the trust estate even by his contract, without express authority given by the instrument creating the trust. ’ ’

In the case of Austin v. Parker, 317 Ill. 348, the court at p. 353, said:

“A trustee cannot create a lien on the trust estate in favor of a creditor, or charge the trust estate even by his contract, without express authority by the instrument creating the trust.”

And in Chicago Title & Trust Co. v. Robin, 361 Ill. 261, there was no express provision in the deed authorizing the trustee to bid at the sale for and on behalf of all bondholders, and it sought to compel the trustee to bid at the sale for and on behalf of all the bondholders. The court in limiting the powers of the trustee to the language of the trust deed said on pp. 266, 267: ‘ ‘ The trust deed and bonds constitute a contract between the bondholders themselves, between them as a class and the Robins and the trustee, for they were made at approximately the same time as a part of one transaction. The general rule is that they should be construed together as a single instrument. (Oswianza v. Wengler & Mandell, 358 Ill. 302; . . . The language of the contract, by implication, does not clothe the trustee with power, under the guise of a right, duty or obligation, to bid, as a necessary or incidental act, in order that it may carry out the express objects of the contract. The powers granted to a trustee in a deed of trust are not liberally construed and their exercise must be consonant with the terms of that instrument. . . . This court does not have the power to import into a contract other or additional provisions. To do so would be making a new contract for the parties. (Burt v. Garden City Sand Co., 237 Ill. 473.) We cannot construe a contract along the line of what we might believe would be a better contract for the parties to make, as equity vests no wide discretion in the chancellor such as would permit him to disturb contract rights of property. (Merchants Loan and Trust Co. v. Chicago Railways Co., 158 Fed. 923, C. C. A. 7th, 1907.) A contract right is a property right. (Kneeland v. American Loan and Trust Co., 136 U. S. 89, 34 L. ed. 379.) Since the rights, duties and obligations of the trustee were contained and defined solely in the trust deed, its duty as trustee was simply to sell the property to satisfy the debt. Darst v. Bates, 95 Ill. 493.”

In referring to all the bondholders, the decree found: “. . . and would therefore, be detrimental to the interests of the owners and holders of said bonds and/or interest coupons; that the interests of all such owners and holders of said bonds and interest coupons in nowise conflicts with the interests of E. Ray Grant, Successor Trustee under said Trust Deed;

19

We do not see how a trustee can faithfully represent the interests of the cestui que trustents, if by the terms of said decree the interests of the trustee shall be superior to the rights of the bondholders, and at the same time it is required by the terms of the decree to protect the interests of the trustee.

In addition to what we have said, we are unable to find the basis upon which the decree finds:

-“(12) . . . that the proceedings brought herein were brought on behalf of each and every owner and holder of the said bonds and/or interest coupons, and as representative of their respective interests, ...” The decree further states:
“(14). And now comes the following named persons, to-wit:
John W. Guskay
William Kessler
John Brown
Charles Schutt
Louis Nelson
Francis McGovern
“comprising a certain consolidated bondholders’ committee, and submit in evidence before this court bonds secured by said trust deed described, said bonds comprising the aggregate principal sum in excess of fifty-one per centum (51%) of the total outstanding bonds secured by said trust deed, and the Court having heard the evidence, and arguments of counsel, and being fully advised, finds that said persons are in fact the holders and owners of said bonds.”

Does the word “committee” mean that they are agents for some undisclosed principal Í The paragraph just quoted finds that the six persons named therein are the owners and holders of the btinds.

Later on in the decree it is stated:

“(21). The Court further finds, and it is ordered, adjudged and deoreed that the entire legal, equitable and beneficial title in and to the premises above described is vested in the Successor Trustee above named and appointed, free and clear of the claim of Bussell Firebaugh, and of every other person whatsoever in and to said premises.”

As before stated, just how the rights and interests of the unknown bondholders could, without their knowledge or consent, be changed to personal property, is not apparent. Nor, have any cases been cited by either counsel wherein the character of the' subject-matter of the litigation has been changed from real estate to personal property. No attempt was made at this time and, evidently, it was not in the minds of the parties at the time of the execution of the trust deed, or at the time of the foreclosure of said trust deed, that anything like a reorganization plan should be submitted to the court for its consideration.

Other questions have been raised, but inasmuch as this case will have to be reversed and the cause remanded, we shall not pass upon them at this time.

In considering reorganization plans, with the manifold questions involved, in order that the parties in interest receive proper allowances and their problems have every consideration, a full hearing should be given to each interested party. We do not believe such ivas done in the instant case.

In conclusion we might add that Ave do not believe,

First, that the court had jurisdiction upon a petition to consider a plan of reorganization as shown by the present pleadings and evidence;

Second, that there is any power vested in the court whereby the court could change real estate into personal property without sufficient reason therefor; [The evidence does not relate to this subject.]

Third, that the fees mentioned are not supported by any evidence which would justify a court in allowing them; and

Fourth, that the plan as outlined is not fair nor have Ave sufficient data as a basis upon which to approve the same.

It may readily be seen in the instant case that the bondholders came into court to assert a right and they now find, after many years of waiting for such rights to be determined, that the entire matter is postponed for a possible 15 years without notice in some instances to them and without any opportunity on their part to be heard. When an application was made to the court for an opportunity to be heard, this was denied.

For the reasons herein given the decree of the circuit court is reversed and the cause is remanded.

Decree reversed and cause remanded,.

Hebel, J., concurs.

Burke, J., dissenting: The views expressed in the dissenting opinion in Tudor v. Firebaugh, 303 Ill. App. 467, are applicable to the case at bar.