text:
    In re Estate of Paul Beelow. Frank T. Hines, as Administrator of Veterans’ Affairs, Appellee, v. Marie Franz, Appellant.
    Gen. No. 38,599.
    Opinion filed July 3, 1936.
    Vincent G. Ponic, of Chicago, for appellant; John I. Mayer, of Chicago, of counsel.
    H. R. Pool and M. W. Russell, for appellee.
   Mr. Justice Scanlan

delivered the opinion of the court.

Marie Franz, conservatrix of the estate of Paul Beelow, a distracted World War veteran, filed, in the probate court of Cook county, her current account covering the period from May 27, 1932, to October 27, 1933. In that account she asked the court to credit her with the following item:

‘ ‘ Total of amount taken from estate through wrongful appropriation by the then attorney of Marie Franz, conservatrix, on June 8, 1933 (as more fully set forth in supplementary affidavit of Marie Franz hereto attached): $5700.00”

The supplementary affidavit is as follows:

“State of Illinois County of Cook

“Marie Franz, being first duly sworn deposes and says that she is of lawful age and resides at 3109 North Lotus Avenue, Chicago, Illinois; that she is now and ever since May 27, 1930, has been the legally appointed and duly qualified and acting conservatrix of the estate of Paul Beelow, C-249, 413, a distracted person, under appointment by the Probate Court of Cook County, Illinois; that she is a sister of said Paul Beelow; that she has prepared and filed with the Probate Court and with the Chief Attorney of the Veterans Administration her annual accounts and reports from year to year; that one John F. Grote, 4600 Fullerton Avenue, Chicago, Illinois, was her attorney in the preparation of her accounts and their presentation to the Probate Court of Cook County, Illinois, for allowance ; that said Grote acted in that capacity with reference to report for the period of May 27, 1932, to May 27, 1933; that your affiant and said attorney, John F. Grote, contemplated having said account settled by the Probate Court at 2:00 o’clock P. M. on Thursday, June 8, 1933; that about one week prior to said date Attorney Grote telephoned your affiant to meet him in the vault of the State Safe Deposit Company on June 8, 1933, at 1:30 P. M. for the purpose of taking the securities belonging to the estate from the vault for presentation to the Court as part of the proceeding in proving up the current account and report. Your affiant went to the Company mentioned, as directed, arriving there about 12:50 P. M. on June 8, 1933. I signed the usual request for admission to the safety deposit box. Mr. Milburn Anderson, an employee of the Globe Indemnity Company, surety on my bond, who was also present, also signed such request. Thereupon, the attendant at the bank opened the box. The said Surety Company has joint control over this safety deposit box. The safety deposit compartment having been opened by the attendant thereupon drew out the box and handed it to Mr. Grote who opened the lid and took therefrom five envelopes containing the following property and securities belonging to this estate:

U. S. 4th Liberty Loan Bonds.......$5700.00
First Mortgage of................. 9000.00
First Mortgage of................. 4000.00
Certain other insurance papers, the exact import of which affiant does not know,

and placed them in his brief case. Thereupon the three of us, Mr. John F. Grote, Mr. Milburn Anderson, and your affiant left the vault and went out on the sidewalk in front of the building and proceeded down LaSalle Street, toward the City Hall about a block away. After reaching the first corner, Mr. Milburn Anderson left the party, stating that it was necessary for him to go and interview someone and that he would rejoin us in the courtroom. Your affiant and Attorney Grote proceeded directly to the court room of Judge Weiss. Mr. Grote carried the brief case containing the securities all the while. When Mr. Grote and your affiant came to the door of Judge Weiss’ courtroom, Mr. Grote said to your affiant, ‘You go in and sit down while I go after the docket. ’ When he left he took the brief case with him. After about ten or fifteen minutes lie came back into Judge Weiss’ court room and after placing the docket on the table came over to where your affiant was sitting on a bench and placed the brief case beside her. At that time your affiant noticed that one of the buckles was opened. As he did so, he said to your affiant, ‘you stay right here while I go and get the file.’ Thereupon he left Judge Weiss’ court room. About twenty minutes later Mr. Milburn Anderson came into the room. He did not say anything but seeing Mr. Grote was absent he went away again and was absent about one-half hour. At the end of that time Mr. Anderson returned and asked me where Mr. Grote was. I told him Mr. Grote has gone out and not yet returned. Then Mr. Anderson went away a second time and stayed away about twenty minutes, at the end of which period he again returned and asked if I knew what had happened to Mr. Grote, that he must have forgotten the report, or words to that effect. I told him that Mr. Grote had not returned as yet. Thereupon Mr. Anderson left again and stated that he had to go back to the office. Tour affiant sat in the courtroom until the Judge asked her whom she was waiting for. Tour affiant answered that she was waiting for Attorney Grote. This was about four o’clock in the afternoon. Thereupon Judge Weiss asked your affiant why she did not go out and look for him; that perhaps he had forgotten about the report. In response, your affiant told him that there were valuables in the brief case and that she did not want to go walking about with it; that the docket was lying on the table and that accordingly Mr. Grote would have to come back. Then the Judge said, ‘All right, then you may wait,’ or words to that effect. Then your affiant sat there until the Judge left the room at about 4:45 P. M. whereupon your affiant went into an adjoining room and telephoned Mr. Anderson. I told Mr. Anderson that Mr. Grote had not returned and asked Mr. Anderson to come over to get me to take the valuables back to the vault. He said that the vault was closed and that I should take a cab and come over to his office and that ‘We will keep them in our safe for the night. ’ We were talking about the bonds and securities at the time. When your affiant arrived in Mr. Anderson’s office, both he and your affiant commenced checking up what was in the brief case. We found the bonds missing and that there were only four envelopes of the original five in the brief case. The four envelopes in question were placed by Mr. Anderson in a safe in his office temporarily. Thereupon, Mr. Anderson started out to look for Mr. Grote. Your affiant went with him and the two of us engaged a taxi cab and proceeded to Milwaukee Avenue and Fullerton Street where your affiant left the cab with the understanding that Mr. Anderson was going on to 4600 Fullerton Avenue, Chicago, Illinois, which is the address of Mr. Grote’s office. About 7:30 P. M. on June 8, 1933, Mr. Anderson telephoned me that he had not heard anything of Mr. Grote but that he had reported it to the police. Mr. Anderson also stated that he telephoned the office of Mr. Grote at 4600 Fullerton Avenue and the first time he received no answer. Thereupon he telephoned an oil station which appears to adjoin Mr. Grote’s office, whereupon Mr. Anderson was informed by the attendant at the oil station that Mr. Grote had not been seen since noon on June 8, 1933. Mr. Grote has an extension telephone from his office to the oil station mentioned, according to information received by your affiant from Mr. Anderson.

“The four envelopes mentioned herein - containing the securities which were placed temporarily in the vault in the office of Mr. Milburn Anderson were on June 9, 1933, returned to the vault of the State Safe Deposit Company from which they were removed at 1:45 P. M. on June 8, 1933, as heretofore said. ...” In objections to the approval of the $5,700 item filed by the Administrator of Veterans’ Affairs, it is alleged that the Globe Indemnity Company was a surety on the bond of the conservatrix and had joint control over the assets belonging to the estate; that the con-servatrix could not disburse, move or in any way handle the assets belonging to the estate without the joint concurrence and approval of the said company; that the loss of the bonds from the estate occurred through the fault, neglect and improper management of the estate by the conservatrix, and that the entire item in question should be disallowed and stricken from the account.

At the conclusion of the hearing in the probate court the court held that the conservatrix was personally liable to the estate “for the sum of $5700.00 in the form of cash for and in lieu of the United States Government bonds which were lost from this estate through the alleged misappropriation thereof by attorney John F. Grote on or about June 8, 1933. . . . That said conservatrix be and she hereby is held personally liable to the within estate for interest on said sum at the rate provided for in said bonds respectively from the date interest was last credited to the estate on said bonds to June 8, 1933, and with interest at the legal rate per annum from and after June 8, 1933.” The conservatrix appealed from the order of the probate court and the matter was tried de novo in the circuit court.

In the circuit court the conservatrix testified, in substance, to the same state of facts as were averred in her affidavit in the probate court, and in addition she testified that she had been conservatrix for five years prior to the time in question and had submitted current accounts yearly to the probate court; that on each occasion Attorney Grote and she had followed the same procedure in reference to obtaining the securities and taking- them to the probate court; that the mother of the conservatrix had acted as conservatrix of Paul Beelow for twelve years and upon her death the witness became the conservatrix; that Grote acted as- the attorney for the mother in the administration of the estate and also acted as attorney for the mother in the latter’s personal legal matters; that the witness knew Grote well and trusted him because his honesty and integrity had never been questioned. The president. of A. Holinger & Company, mortgage bankers, testified that Grote was an attorney, duly licensed to practice law in the State of Illinois; that he had known Grote for many years, and that the latter had “a very good reputation for honesty and integrity”; that Grote had handled “a lot of business” for him; that Grote owned real estate. Mo evidence was introduced by the Administrator of Veterans’ Affairs.

The trial judge, in deciding the case, stated that the conservatrix should have kept the securities in her possession when she arrived at the probate court even though she had an attorney; “that it was somewhat negligent on her part to turn those securities over to the attorney as she did. She should have kept those under her control at all times and never trusted her attorney. While in this case she did select an attorney, I think, -whom she thought to be reputable, she is responsible; . . . that she was negligent in entrusting the securities to her attorney”; that she should have carried the securities from the vault. The trial court held, upon motion of the Administrator of Veterans’ Affairs, that when the conservatrix obtained her bond from the indemnity company she entered into a joint control agreement with the Globe Indemnity Company and thereby became a guarantor of the funds. The trial court thereupon entered an order that the conservatrix was adjudged personally liable to the estate for the sum of $5,700, together with interest on that sum at the legal rate from the date interest was last credited to the estate on the bonds,' and “that if any or all of the said bonds are recovered by said conservatrix, the said bonds or any of them may be shown as assets of said estate in the next account of conservatrix and in lieu of the said sum of $5700.00, together with interest as aforesaid and, in the amount of the bonds so recovered; otherwise, the said con-servatrix shall be charged with cash on hand in said sum of $5700.00, together with interest there.on as aforesaid.” The conservatrix has appealed from that order.

The law bearing upon the question of the care required by a conservator is well settled. He must act with the highest degree of fidelity and with the utmost good faith, but he is held to the exercise of only that degree of skill, care and diligence which an ordinarily prudent man bestows on his own similar private affairs. If his acts will stand the test of that rule he cannot be held liable for any loss that may be sustained by the estate.

“The statute and the rules of this court require a good moral character as a condition precedent to a license as an attorney. ■ This includes at least common honesty.” (People ex rel. Healy v. Macauley, 230 Ill. 208, 213. See also People v. Gilmore, 345 Ill. 28, 46.)

“Attorneys are officers of this court and their conduct as such is subject to supervision by it. They are, in effect, a part of the judicial system of the State. (In re Day, supra [181 Ill. 73] ; People v. Czarnecki, supra [268 Ill. 278]; Ex parte Secombe, 19 How. 9; Ex parte Wall, 107 U. S. 265.) ” (People v. Peoples Stock Yards Bank, 344 Ill. 462, 470.)

“When a license is granted to one to practice law by this court he assumes grave responsibilities, which only those worthy of trust and confidence • and possessed of absolute fidelity and honesty should bear. Confidences are reposed in them; interests of great magnitude, and even the life, liberty and character of their fellow-men, are entrusted to their care. (People v. Ford, 54 Ill. 520.) A license granted by this court to practice is a guaranty that, so far as this court is advised, the person holding such license is a fit and proper person to assume the responsibilities, to enjoy and safe-keep the confidences of others, and to aid and assist them in the care and management of their legal business and affairs. (People v. Shirley, 214 Ill. 142; People v. Payson, 215 id. 476.) In maintaining this high standard both the people and the courts are alike interested, (People v. Palmer, 61 Ill. 255,) and to the extent that this court has guaranteed the fitness of one to assume these responsibilities it possesses the inherent power to recall its certificate whenever it is clearly proven that the bearer is no longer worthy of being entrusted with those trusts and confidences the license indicated he was worthy to assume. ’ ’ (People v. Gorman, 346 Ill. 432, 444.)

The honesty of the conservatrix is not questioned. That she did not act negligently in retaining G-rote as her attorney in the matter of the estate is not disputed. After a careful examination of all the facts and circumstances we hold that the conservatrix was not negligent in the performance of her duties at the time in question. It would be a strange doctrine, if it were the law, that a conservatrix would be guilty of negligence in the performance of her duties if she intrusted to her attorney the temporary possession of securities at a time when the parties were in the probate court to present her account to the court, which proceeding would require the exhibition of the securities to "the court. Such a rule would amount to a serious and unwarranted reflection by the courts on the integrity of its officers, members of an ancient and honorable profession. It is not the law that a conservator must regard his lawyer with suspicion and deal with him at arm’s length. From the very nature of the relationship, a client at times must intrust to his lawyer, temporarily at least, the possession of securities. It is undoubtedly true that a conservator, under certain circumstances, would be guilty of negligence in permitting his lawyer to have the possession of securities belonging to the estate.

The Administrator of Veterans’ Affairs contends that the judgment of the circuit court may be sustained upon the theory that “the conservatrix is personally liable for the loss of the bonds to the estate because in delegating joint control over .the cash and securities of the estate she became a guarantor of the funds of the estate.’’ Assuming that the joint control doctrine relied upon in the contention prevails in Illinois, it has no application to the facts of the instant case.

Upon the oral argument counsel for both parties informed the court that after the judgment was entered in the circuit court Attorney Grote was arrested in a sister state, all of the bonds, but not the interest coupons, were recovered and restored to the estate, and that Grote has been convicted and sent to the penitentiary for his criminal conduct in the premises.

The judgment of the circuit court of Cook county is reversed and the cause is remanded to that court with directions to allow the item in question in the account of the conservatrix.

It will be the duty of the probate court to make the proper adjustments in the account of the conservatrix, made necessary by the return of the bonds.

Judgment reversed and cause remanded to the circuit court of Cook county ivith directions.

Sullivan, P. J., and Friend, J,, concur,


source: Caselaw Access Project

author: Mr. Presiding Justice Huffman

license: Public Domain

text:
    James H. McQueeny, Trading as McQueeny’s Investigating Agency, Appellee, v. County of Whiteside, Appellant.
    Gen. No. 9,030.

      Opinion filed April 13, 1936.
    Rehearing denied July 7, 1936.
    L. L. Winn, State’s Attorney, and Robert W. Besse, of Sterling, for appellant.
    Lee D. Mathias, of Chicago, for appellee.
   Mr. Presiding Justice Huffman

delivered the opinion of the court.

This was an action of assumpsit brought by appellee against appellant to recover compensation for services rendered and expenses incurred in an investigation of violations of the Illinois .Prohibition Law in appellant county. The jury returned a verdict in favor of appel-lee in the sum of $4,150. Judgment was entered upon the verdict and appellant prosecutes this appeal therefrom.

There are over 700 pages in the record, which renders any detailed discussion of the evidence impracticable. Appellant assigns so many points for reversal that any attempted discussion of them separately would extend this opinion beyond all reasonable lengths. Appellant takes the position that the county board of supervisors had no power to make the alleged contract; that it was ultra vires; that the employment of such services must be upon a time basis; that the acceptance of the services would not render appellant liable; that only the county board has authority to bind the county; that a committee of the board of super-o visors has no authority to act unless same is bestowed by resolution of the board; that the county officers could not bind the county by acts outside the scope of their authority; and that the Illinois Prohibition Act set up a complete machinery for its enforcement. The foregoing are in substance the contentions of appellant. They result in two questions: First,- did the county board have the power to make the contract; and second, if so, was the contract made.

It appears that the conditions existing in appellant county during the years 1930 to 1932, with respect to violations of the Illinois Prohibition Act, were bad; that the law was not being enforced to the satisfaction of certain persons, and that a meeting was held at a church in Bock Falls, at which the sheriff and a deputy and several of the supervisors were present; that a committee was appointed; that following this meeting, a pastor of one of the local churches suggested that the board of supervisors appoint a special State’s attorney for the purpose of prosecuting violations of the Prohibition Law; that pressure was brought upon the county board as well as the sheriff’s office to procure assistance in getting evidence against violators of the Prohibition Act. The sheriff got into communication with appellee with respect to furnishing the necessary investigators to investigate and secure evidence of violations of the Prohibition Law in appellant county. The county board at a meeting held on December 11, 1930, passed a resolution wherein it avowed its unlimited support of the officers of said county together with all necessary assistance, but with a whereas that “proper assistance cannot be given where there is a lack of co-operation and misunderstanding.” This resolution contained the provision that the board would not honor any expenses accruing such as for detective work, when such expense accrued without the consent of the committee on county officers of the said board. It then authorized the county officers committee to act for the board during* times between sessions. It will be borne in mind that public meetings were being held concerning the violation of the liquor law in that county, and that the county board passed the above resolution in response thereto. Following* these matters, the sheriff advised appellee that it had been decided to retain appellee agency to secure evidence in said county against “bootleggers,” and that the rate of $10 per day for each investigator, with necessary expenses, was satisfactory. Pursuant to the foregoing, appellee agency entered said county with a large number of investigators. An extensive campaign was inaugurated and waged against violators of the Prohibition Law. The county board appointed a special prosecuting attorney to take care- of such cases. When the campaign came to a close the county was indebted to appellee ag’ency in the sum of $8,260 for investigations at $10 per day, and the additional sum of $5,945.76 for expenses of such investigators and investigations. This made a total of $14,205.76. Appellee had received payment on this amount of $2,350, which left a balance claimed due of $11,855.76. It is apparent from the record that the campaign did not prove a financial success for appellant county. We are of the opinion from the record that had the campaign proved a financial success, this suit would not have arisen. It appears that the chairman of the board of supervisors with respect to the foregoing matters stated: “I called Sheriff Whitney and the finance and county officers committee into conference. We were obliged to act on a case of this kind in secret, for it is obvious to have done otherwise would have been to tip off every law breaker concerned. We are responsible for the employment of detective service.’’ Secrecy is characteristic of matters of this kind, and there was nothing unusual in the manner in which the chairman of the board stated the matter ivas handled.

Appellee agency was located in the City of Chicago. It was chargeable with knowledge that the law provided that work of this kind should be upon a daily' basis, instead of conditioned upon conviction secured, a practice which had grown into a deplorable state. It is not unusual, under circumstances such as exist in this case, that no individual member wished to accept the responsibility for the action of the board, or the assumption of a full knowledge of the details connected therewith. Sec. 1 of the Act on Detectives and Investigators, passed in 1929, Ill. State Bar Stats. 1935, ch. 38, ¶ 771 (sec. 608-A, Smith-Hurd 1935) provides that no county shall employ any detective or investigator of the commission of any crime, on a compensation basis other than that of time, and in no event shall compensation to such persons be contingent on the success of the investigation or prosecution. This section not only recognizes the power and authority of a county to employ detectives and investigators, for the investigation of the commission of crime, but it also specifies upon what basis they shall be employed. The record discloses that appellee agency was employed upon such a basis. Par. 27 of the Illinois Prohibition Act, Cahill’s Ill. St. 1931, ch. 43, sec. 26, provided for the enforcement of such act and made it the duty of the county boards to lend every possible assistance to the State’s attorney, sheriff and other officials in the enforcement of the act. This is substantially what appellant signified its intention to do by the resolution adopted, and by its subsequent conduct.

It is the duty of a county to pay the expenses of the local administration of justice. This duty arises as well from our general system of county organization as from express statutes. Although the powers, duties and liabilities of political divisions of the State, unless restrained by constitutional limitations, are under the control of the general assembly (People v. City of Chicago, 351 Ill. 396, 400), yet the only reasonable interpretation and import that can be given to the above mentioned sections of statute is that it was and is the legislative intent that county boards may employ detectives and special investigators for the purpose of the investigation of crimes, the apprehension of the offenders, and the bringing of them to trial, as a part of the duty of counties in the administration of justice therein.

Since the county board of supervisors is the medium through which county affairs are conducted, it follows of necessity that the contractual power is vested in such board. The county board, being thus intrusted with the business affairs of the county, in the transaction thereof, may appoint a committee to act as its agent. Barnard & Co. v. County of Sangamon, 190 Ill. 116. It has been said that the entire board of supervisors need not be kept in constant session during1 the progress of a protracted investigation, and that they might act by and through a committee. Gillett v. Board of Supervisors of Logan County, 67 Ill. 256, 259.

It appears that the county board gave authority to its county officers committee to act for it in this behalf, and that by virtue of such authority, the committee entered into contract with the plaintiff. We are of the opinion the county board had authority to make the contract. Certain of the board members met with the people of the community in public meetings at the church, and subsequently thereto the board passed its resolution pledging its unlimited support to the officers of the county against violators of the Prohibition Law, authorized its county officers committee to act for it between meetings, appointed an assistant State’s attorney for the purpose of prosecuting such violations of the Prohibition Law as might be reported by appel-lee agency’s investigators. The board received reports, either in meeting or through its committee, of the progress of the work. They were kept advised through the sheriff’s office of what was taking place. They must be held chargeable with knowledge of their own acts. It is hardly possible that they could have done all of the above things without having some plan of action in mind and some intent of how they were going to carry it out. We are of the opinion from the record that appellant at all times, by and through its county board or through a committee acting therefor, was cognizant of what was going on and that the same was taking place at the instance of the county board. ‘ ‘ The rule that the principal shall be bound by the acts of an agent within the apparent scope of his authority in the business confided to him, is indispensable to justice and to meet the common conditions and exigencies of business. To permit a principal to repudiate an agency which he has led others to believe existed, would be inconsistent both with morals and public policy, and invite fraud and imposition upon persons dealing with him in good faith.” Barnard & Co. v. County of Sangamon, supra, p. 119.

We believe the foregoing covers the objections urged by appellant to the judgment of the court. No errors are argued as to instructions. Appellant complains because the total amount received from fines resulting from such investigations only aggregated $2,649.55. This fact cannot be considered in determining whether the contract of employment is binding upon appellant. This method of contract is no longer sanctioned, and the above statute of 1929 terminated such practice. We have discovered no errors of law existing in the record pointed out by appellant. On the questions of fact, the cause was submitted to a jury of appellant county. We are not disposed to disturb the verdict of the jury thereon. We are of the opinion as above stated, that the county board had ample power to make such a contract, and that it mig’ht do so through its authorized committee or agent; that it possessed the power as a necessary incident to its duty to see that public justice was carried out within its political limits ; and that in addition to this, the above sections of statute recognize this power in the county board to employ detectives and investigators in the investiga-t-ion and prosecution of crime.

The judgment of the circuit court of Whiteside county is therefore affirmed.

Judgment affirmed.


author: Mr. Justice Wolfe

text:
    Vera B. Thorne, Administratrix of the Estate of Charles Barningham, Deceased, Appellee, v. Ruth Oberg et al. Union Loan and Savings Association, Appellant.
    Gen. No. 9,023.

      Opinion filed April 13, 1936.
    Rehearing denied July 7, 1936.
    Welsh & Welsh, of Rockford, for appellant; C. K. Welsh, of counsel.
    Smith & Menzimer, of Rockford, for appellee; Lisle W. Menzimer, of counsel.
   Mr. Justice Wolfe

delivei'ed the opinion of the court.

This is a suit brought by Vera B. Thorne, as ad-ministratrix of the estate of Charles Barningham, deceased, to foreclose a trust deed. • The defendants to the bill are Ruth Oberg (formerly Ruth Anderson), Richard Linquist, Elin Linquist, Union Loan and Savings Association, Ernest C. Stoekburger, who is the trustee named in the trust deed, and John A. Bowman, the successor as trustee to Stoekburger. The chancellor sustained exceptions to the master’s report of facts and conclusions of law, and rendered a decree finding that the trust deed is a first lien on the real estate described in the trust deed.

The decree ordered the defendant Ruth Oberg to pay to the complainant, within a specified time, $4,143.67, which is the amount of the principal and interest due and payable on the note secured by the trust deed. In default of payment, the court directed that the real estate be sold by the master at public auction in satisfaction of the debt. The court further held that a mortgage owned by the defendant Union Loan and Savings Association was not an incumbrance on the real estate and that the said association had no interest in and to the real estate. The Union Loan and Savings Association, alone, has appealed from the decree and it will be herein referred to as the defendant. Vera B. Thorne, the administratrix, will be referred to as the complainant.

The defendant assigns as error that the chancellor erred in finding that the trust deed is a lien on the real estate. The property consists of a lot with a dwelling thereon located in Bockford, Winnebago county, Illinois. The trust deed, and the note secured thereby, were executed by the owner of the title to the real estate after such owner had entered into a contract for a deed with the defendants Bichard Linguist and his wife Elin Linguist. The Linguists immediately took possession of and occupied the real estate without interruption, during the time the different transactions which are a matter of controversy between the complainant and the defendant took place. The note was made payable to “myself,” and indorsed by the maker and payable to the bearer thereof. Subseguent to the occupancy of the premises by the Linguists, under their contract of purchase, the note was sold to the decedent, Charles Barningham, by Stockburger who was the trustee named in the trust deed. It is conceded that Charles Barningham at the time of his death was the owner and holder of the note for value. The trust deed in the hands of Barningham was subject to all the rights and interests in the real estate which were granted to the Linguists in their contract of purchase. (Doolittle v. Cook, 75 Ill. 354; Bullard v. Turner, 357 Ill. 279.) They had no actual notice of the existence of the trust deed nor that Barningham claimed any rights in the real estate, until over three years after they received their deed from their vendor.

The above statement is sufficient to indicate the basis of facts on which counsel for the defendant rely for their contention which they state as follows: “When a vendee under an executory contract has made the agreed payments therein and is entitled to a deed, or has paid the contract to a balance when, under the terms of the contract, the vendee is entitled to pay the balance of the purchase price by the execution and delivery of a mortgage to the vendor, the vendee is entitled to a deed clear of any lien, right or title of any subsequent purchaser or encumbrancer of the vendor. ’ ’ Counsel for the complainant agree with the contention of the defendant in so far as it states a general proposition of law, but they contend that the specific facts in this case militate against the general proposition formulated by the defendant.

It is contended by the complainant that certain terms of the contract of sale placed a duty on the Linguists to make inquiry whether the trust deed had been placed on record subsequent to the execution of the contract and that they should have taken their deed, subject to the trust deed; that the complainant should sustain no loss arising out of the neglect of the Linguists to perform this duty. Under this contention the complainant relies on the doctrine of estoppel by contract. It is also contended by the complainant that Stockburger was the agent of the defendant, and his failure to pay the note secured by the trust deed from the money given to him by the defendant when the mortgage was executed must fall on the defendant. The whole record is before this court for review. We must consider the effect of the notice, if any, to the defendant that Charles Barningkam held the trust deed, in the nature of an equitable mortgage, before it accepted its mortgage from the Linguists.

It appears that the defendant Stockburger for many years before bringing this suit was engaged in the real estate and mortgage brokerage business in the City of Rockford. He had in his employ during the years 1924 to 1928, in his bookkeeping department, the defendant Ruth Oberg, then Ruth Anderson. Mr. Sheldon, the bookkeeper (now deceased) was not a witness in the case. Stockburger apparently was not available as a witness, and at the time of the hearing was a bankrupt.

On May 1, 1924, Stockburger became the owner of the real estate which is the subject matter of this litigation; however, he caused the title to the real estate to be placed in the name of Ruth Anderson. On June 1,1924, Ruth Anderson, no doubt under the direction of Stockburger, entered into the contract of sale of the real estate with the defendants, Richard Lin-quist and Elin Linguist. The purchase price of the real estate, it appears from the contract, was $5,300. At the time of the signing of the contract, Stockburger received as part of the purchase price $1,400, or its equivalent. Under the terms of the contract the Linguists were to pay $35 each month until the balance of the purchase price was paid, “Except as hereinafter mentioned”- — Quoting from the contract. “Upon completion of the monthly payment and the performance of the terms of the contract by the Linguists to be performed, the real estate was to be conveyed to the Linguists, in fee simple, clear of all incumbrances whatever, except as hereinafter noted, by good and sufficient warranty deed.”

The complainant and the defendant do not agree upon the force and effect of the following paragraph of the contract, and which is also the exception above mentioned in the contract: “At any time during the existence of this contract, said second party hereto (The Linguists) upon request of said first party hereto, (Ruth Anderson) agree to join in the execution of a trust deed on said premises in an amount not to exceed three thousand ($3,000.00) dollars, or in any renewal thereof; it being understood, however, that any expense connected with the same shall be borne by said first party hereto. It is mutually understood and agreed that when the balance due on this contract shall have been reduced to the amount of said trust deed, said second party hereto is to deliver deed subject to said trust deed, said second party hereto assuming and agreeing to pay said trust deed in completion of the purchase price of said premises.” The other terms of the contract are in the usual form of such agreements and they are not pertinent to the matter under consideration.

On October 17, 1924, Ruth Anderson executed her promissory note for $3,000, payable to “myself” five years after its date. This note was secured by the trust deed now held by the complainant and in process of foreclosure. The Linquists were in possession and occupancy of the real estate when the trust deed was made and the trust deed was recorded after the execution and delivery of the contract of purchase. Independent of the contract, the Linquists had no notice of the existence of the trust deed at any time which required them to protect the interests of the holder of the trust deed note. Excluding from consideration the paragraph quoted from the contract, it must be conceded that the Linquists were not under any duty to see to it that the trust deed note was paid before accepting a deed clear of the trust deed. (Doolittle v. Cook, supra.) We do not understand that the complainant contends otherwise. Under the same circumstances, and barring the above terms of the contract, the Linquists were permitted to mortgage the real estate to the defendant and to make payments on their mortgage to the defendant without incurring any liability to the holder of the trust deed note. We cannot hold that the Linquists were deprived of that rigid unless it clearly appears from the contract that they have placed themselves in a position where they cannot claim such right against the complainant. Mills v. Graves, 38 Ill. 455; Quaschneck v. Blodgett, 32 N. D. 603, 156 N. W. 216.

The Linquists were in fact the owners of the real estate under their contract of purchase with the owner, or their vendor. (Smith v. Price, 42 Ill. 399.) As between the owner, or the vendor, and Charles Barningham, the trust deed was valid and binding on the vendor’s interest in the real estate. But Barningham only acquired a lien on the vendor’s rights. (Doolittle v. Cook, supra.) The fact that the Linquists, under the terms of the contract, agreed to join in the execution of a trust deed to the amount of $3,000, during the existence of the contract, and thereby mortgage their interest in the real estate, did not increase any interest mortgaged by the vendor by the trust deed.

The Linquists were not requested to join in the execution of the trust deed. While they were bound by their agreement to join in the execution of a deed, if requested, and thereby bind their interest in the real estate, as granted to them by the contract, we do not consider it a fair and reasonable construction of the contract that the Linquists were bound to anticipate to their peril that their vendor would alone mortgage his rights under the contract. The Linquists had the right under their contract to pay the vendor $35 per month as partial payments of the purchase price of the real estate until the balance due was reduced to $3,000, regardless of a lien created by a trust deed executed alone by the vendor on his rights or a lien, on the real estate created by a joint deed of the vendor and the Linquists. The debt to be secured by a joint trust deed was the unpaid purchase price of $3,000, and not the debt of the vendor. The Linquists had a right to know whether they became obligated to pay their debt of $3,000 to some third person under the terms of the contract providing that upon request of the vendor they would join in a trust deed with the vendor securing their debt of $3,000 due from them to the vendor. The matter of notice or information to the Linquists that some person other than the vendor, their creditor, had succeeded to the vendor’s rights under the contract and might claim an interest in the $3,000 was of great importance to the Linquists. (27 R. C. L. sec. 469.) This information they were to receive by the request of the vendor to join in a note and trust deed thus apprizing them of the person to whom they would have become obligated to pay the note of $3,000, and on what terms. The Linquists, under the terms of the contract, were to assume a note and trust deed which they and the vendor had placed on the real estate, but not the debt of the vendor.

We are also of the opinion that the contract was a warning to third persons that the rights of the Lin-quists under the contract and their interest in the real estate as vendees would not be bound by a trust deed executed by the vendor alone while the contract remained executory.

The rights of the Linquists to mortgage the real estate, upon receiving a deed, with knowledge on their part of the trust deed, is not involved in this case. This construction of the contract disposes of the question as to whether the Linquists were under any duty or obligation to ascertain whether thé vendor had given a trust deed on his rights as such vendor. There is no evidence that Charles Barningham relied upon the terms of the contract when he purchased the note secured by the trust deed, and the doctrine of equitable estoppel is not applicable. The contract was not made for the benefit of Barningham. It is indeed difficult to understand how the construction of the contract is material under the issues of the case, except under the doctrine of equitable estoppel — that is, that Barningham had relied on the recitals of the contract and changed his position to his prejudice as a result thereof. (Mills v. Graves, supra.)

As required by their contract, the Linguists made monthly payments to Stockburger until October 1, 1928, which reduced the balance under the contract to $3,000. It seems that the Linguists before October 29, 1928, had had some understanding with Stockburger about obtaining their deed and placing a mortgage on the real estate for $3,000, which was to be used in full payment of the balance due on the contract. It further appears that the defendant is a building and loan association with its principal office in Freeport. Loans made by the defendant are payable in monthly instal-ments as is usual on loans of such associations. The evidence shows that Stockburger in his office in Rockford prepared applications for loans made by the defendant on real estate in Rockford; that he collected payments for dues and interest on such loans of the defendant and credited them in pass books of the borrowers. Some time in August, an application for a loan of $3,000 was ápproved by the defendant. The application was sent to the defendant by Stockburger. On November 5, 1928, or a few days before that date, the Linguists came to the office of Stockburger and received a warranty deed to the real estate executed by the defendant Ruth Oberg. The deed did not state that the real estate was incumbered by a trust deed or other lien. The Linguists at the same time executed their note and mortgage to the defendant for $3,000. Stockburger had received from the defendant its check for $3,000 on the application for the loan. Stockburger credited the account of the Linguists with the $3,000 and their account under the contract was closed. No ■part of the $3,000 was paid by Stockburger to Barn-ingham or the complainant. Stockburger paid to Barningham the interest on the trust deed note until April 17, 1931. Stockburger, for and on behalf of the defendant, also collected from the Linguists monthly payments on their mortgaged indebtedness to the defendant.

Stockburger’s record of the note secured by the trust deed bears the following notation: “Asked Barningham for the papers 10/1/28, but if he comes in don’t pay him up. We will let him hold the papers and pay him interest.” There is no evidence in the record whether Stockburger had any dealings with Barningham after the deed and mortgage were executed, except that he paid interest on the trust deed note until April 17, 1931. It does, however, appear from the record that on November 5,1928, Stockburger placed on file in the office of the recorder of deeds of Winnebago county a release of the trust deed. A few minutes after the release deed was filed, Stockburger placed on file with the said recorder the mortgage of the defendant. It is admitted by the defendant that the release is not valid against the trust deed of the complainant. We also add that the Linguists unaware of the existence of the trust deed, paid to the defendant in partial discharge tif the mortgage in monthly payments, the total amount of $1,216.75. That they should lose this amount is beyond all conscience.

We have come to the conclusion that when the Linguists executed their mortgage to the defendant and delivered it to Stockburger, the agent of the defendant, and he applied the $3,000 secured by the mortgage in full payment of the balance due on the purchase price owed by the Linguists for the real estate, the Linguists became the bona fide purchasers of the real estate without notice of the trust deed now held by the complainant. Having bound themselves by the mortgage to pay the defendant $3,000, and Stockburger having received the $3,000, the Linguists were entitled to receive, and did receive, from Ruth Oberg their deed to the real estate clear of the trust deed. They had the right to sell or mortgage the real estate, being bona fide purchasers without notice. The defendant occupies the position of a purchaser or grantee from a grantor who obtained title in good faith for value and without notice of the equity of the decedent Charles Barningham undér his trust deed. (Pierce v. Faunce, 47 Me. 507.) The law is “That a purchaser from a grantor who obtained title in good faith and for value, without notice of prior equities, will be protected against equities, although he had notice thereof himself.” English v. Lindley, 194 Ill. 181; 66 C. J. 1188; 27 R. C. L. sec. 449, title, “Vendor and Purchaser”; 63 A. L. R. 1357; Eich v. Czervonko, 330 Ill. 455.

The decree of the circuit court of Winnebago county is hereby reversed and the cause remanded to the circuit court of Winnebago county with directions to enter an order finding that the defendants Richard Linquist and Elin Linquist, as joint tenants, hold the said real estate free of any lien or claim thereon of the trust deed now held by the complainant; and that-the mortgage held by the- defendant on said real estate is not secondary or subordinate to any claim or lien on said real estate made or claimed by the complainant under or by virtue of said trust deed now held by the complainant.

Decree reversed and cause remanded with directions.


text:
    Maurice F. Lord, Appellee, v. Fred G. Adamson and W. E. Gillette, Appellants.
    Gen. No. 9,054.
    Opinion filed April 13, 1936.
    Rehearing denied July 6, 1936.
    John K. Newhall and David B. Givler, both of Aurora, for appellants.
    Maurice F. Lord, of Aurora, pro se; Lord & Parker and Gilbert L. Wood, of Aurora, of counsel.
   Mr. Justice Wolfe

delivered the opinion of the court."

The Kishwaukee Special Drainage District of DeKalb County, Illinois, is a district organized under an Act of the General Assembly of the State of Illinois. The purpose of the district is to provide drainage for agricultural and sanitary purposes. On October 1, 1923, the commissioners of said district levied a special assessment of $18,000, to make repairs on the open ditches and to pay the necessary expenses connected therewith. On the same date, in anticipation of the collection of deferred instalments of said assessment, the commissioners also authorized the issuance of bonds, which are commonly designated as drainage bonds, in the aggregate of $16,200. The bonds were dated October 15, 1923, and bear interest at the rate of six per cent per annum, payable annually on July 1, in each year. On October 25, 1923, the district authorized the commissioners to sell the entire issue of bonds to the W. W. Armstrong Company, a bonding house in Aurora, and received therefor $15,740.99. The Armstrong Bonding Company in turn sold these bonds to its customers including Fred G. Adamson, who on November 23, purchased $5,000 face value thereof, and to W. E. Gillette who on November 24, 1923, purchased $5,000 the face value thereof. Other customers of the Armstrong Company purchased the remainder of the bonds. The drainage district paid the matured interest on the bonds to July 1, 1924, and thereafter defaulted in payment of both principal and interest, and the default has continued.

Mr. Maurice Lord, the appellee in this case, is an attorney at law in Kane county, Illinois. At the suggestion of W.' W. Armstrong Company, Mr. Lord started various suits to collect what was due upon the bonds. It is not disputed in this case that Mr. Lord successfully prosecuted the various suits and finally succeeded in collecting all that was due, both principal and interest upon the bonds. It is not contended that the fee Mr. Lord charg*ed for his services is unreasonable; therefore, we deem it unnecessary to set forth in detail the various proceedings that Mr. Lord successfully prosecuted. The appellee succeeded in collecting for the bondholders the total sum of $18,782.18, which included the amount of bonds, plus the penalties and accumulated interest.

This money was paid to Mr. Lord, and a dispute arose among the bondholders as to who was entitled to the proceedings of this judgment. Mr. Lord filed a proceeding in the circuit court of Kane county in the nature of a bill of interpleader, asking directions as to the distribution of the funds on hand, and claimed a lien for reasonable attorney’s fees for the service he had rendered in the collection of this amount. The court ordered him to pay to the circuit clerk of Kane county all the money except $2,500 belonging to the bondholders, and allowed him" to retain $2,500 to be 'applied on his attorney’s fees. The depositing of the money with the clerk was not to have any effect on the lien that he claimed on the funds that was due him for his attorney fee.

The appellants, Adamson and Gillette, filed their answers to the bill of interpleader, in which each denied that they had ever employed Maurice F. Lord, as their attorney to collect what was due on their bonds, or ever authorized any one else to employ him as their attorney, and each denied that they had, by any act, ratified or confirmed his employment to collect the bonds, and denied that he had any lien on the proceeds from their bonds.

The case was heard before the court who allowed the appellee an attorney’s fee of $5,788.11, which included the attorney’s fees, expenses and money advanced on account of the litigation. The balance was ordered paid to the different bondholders in proportion to the number of bonds each held. From this order the appellants, Adamson and Gillette, have effected an appeal to this court.

The appellee has made a motion to dismiss the appeal because the record shows that the appellants, Adamson and Gillette, have each accepted from the clerk of the court the full amount that was ordered paid to them, and therefore, they have released all errors as shown by the record. The appellants have filed objections to this motion, both by motion and in their printed brief.

The distributing part of the order that the court signed is as follows: “It is therefore ordered, adjudged and decreed, 1. That plaintiff and Charles F. Farmiloe, as Clerk of this Court, and Merchants National Bank of Aurora, make payments out of said fund deposited as above stated in the amounts and to the persons designated as follows:

To Maurice F. Lord, the sum of............$ 3,289.41
To Fred G. Adamson, the sum of........... 3,936.63
To W. E. Gillette, the sum of.............. 1,115.48
To D. A. Hartsburg, the sum of............ 365.77
To W. L. Slaker, the sum of............... 243.85
To Eloise Schoeberlien, the sum of......... 4,895.16
To Lawrence Stern & Company, the sum of.. 2,413.89
To Merchants National Bank of Aurora as trustee fees, the sum of................. 10.00
To Maurice F. Lord, for filing costs advanced herein, the sum of...................... 10.00
total .................$16,280.19”

Paragraph 2 of the same order is as follows: “That upon completing the payments above detailed, said persons, together with said Merchants National Bank and all parties to this proceeding shall be discharged and acquitted from further accountability for said fund.” On page 53 of the record in this case is the following*: “Certificate of the Clerk in re decree of July 22,1935.” “I, Charles F. Farmiloe, Clerk of the Circuit Court in and for the County of Kane, State of Illinois, do hereby certify that pursuant to the directions contained in the decree of this court entered in the above entitled cause on the 22nd day of July A. D. 1935, the following payments have been made to the parties named in said decree in the manner designated in said decree, to-wit: ’ ’ Then follows a list of the payments which are identically the same as contained in the decree, which shows that Fred G-. Adamson received the sum of - $3,936.63, and W. E. Gillette, $1,115.48.

The appellants state that the acceptance of the money as ordered by the court is not a release of errors, and they have cited numerous cases which they claim supports this contention. The appellee has cited numerous cases, which in our opinion sustains his contention that the appellants have by their action released any and all errors in the case. In the case of Langher v. Glos, 276 Ill. 342, our Supreme Court in discussing a case in which the appellee contended that the appellants had accepted the benefits of the decree and therefore released any and all errors, use this language: “The argument is made that the correctness of the decree setting aside the tax deeds is not questioned but only the amount of reimbursement to the appellant, and that the acceptance of a part of this amount, which was actually and admittedly due, ought not to preclude the appellant from insisting on his claim that the amount awarded was insufficient and prosecuting a writ of error to correct the decree in this particular. The decree is single and all its parts are dependent one upon the other. The setting aside of the deeds depended upon the payment of the amount found by the decree to be due to the defendants, and the payment of the reimbursement was the consideration of setting aside the tax deeds. The decree must stand or be reversed as a whole.” (Gridley v. Wood, 305 Ill. 376; Scott v. Scott, 304 Ill. 267; Holt v. Rees, 46 Ill. 181; Kerner v. Thompson, 282 Ill. App. 403.) The appellants voluntarily accepted the benefits of the decree and by so doing released any and all errors in the decree.

The appellants seriously insist that the appellee is not in a position to raise this question because the same is not properly presented. Bule 31 of our printed rules provides as follows: ‘1 Time of pleading in the Appellate Court. In all cases in this court where the defendant in error desires to plead and not join in error, he shall file his plea in the office of the clerk at least five days before his brief would be due under Buie 7, had he joined in error, and the issue thereon must be made up within said five days, or such further time as may be allowed by the court.” The appellee filed his printed brief on February 5,1936, and at the same time filed a motion to dismiss the appeal because the record shows that the appellants voluntarily accepted all the benefits of the decree which they seek to review in this court, and by such acceptance they have released any and all errors in the decree. Where the record shows that the appellants have accepted the benefits of the decree of the lower court, it is not necessary to raise the same by plea of release of errors, but the same may be raised by motion. This same question was presented to our Supreme Court in the ease of King v. King, 215 Ill. 100, and the court in disposing of the case on page 116, have this to say: “It appears also from the order, entered by the court below on December 23, 1899, approving the master’s report of distribution of the proceeds of the sale, that $961.21 out of such proceeds were paid to the plaintiff in error, as the balance of the amount realized from the sale of her life estate, after paying of the costs and the amount due upon the mortgage. The receipt of plaintiff in error over her own signature for this sum of $961.21 is attached to the report so approved. ‘Where a party accepts the benefit of a decree, he cannot afterwards prosecute error to reverse it; such- acceptance- operates as an estoppel and may be treated as a release of errors.’ (Moore v. Williams, 132 Ill. 591; Morgan v. Ladd, 2 Gilm. 414; Thomas v. Negus, id. 700; Holt v. Reid, 46 Ill. 181; Corwin v. Shoup, 76 Ill. 246.) While it is true as a general rule that, in an Appellate Court, matter, operating as release of errors, must be set up in a plea to the assignment of errors, yet in the present case such a plea cannot be regarded as necessary, because the plaintiff in error assigns, as one of the errors of which she complains, that the court below erred ‘in making the order, entered December 23, 1899, approving the proceedings and distribution by the master therein approved. ’ The assignment of errors itself upon its face brings before this court the order of the court below, approving the master’s report, which shows that the plaintiff in error accepted the $961.21. The payment of the money to the plaintiff in error, and its acceptance by her, are thus shown upon the face of the record, and attention is called to it by the plaintiff in error in her assignment of errors. The fact of such payment and acceptance could not be more clearly presented to the court had a plea of a release of errors been filed. ’ ’

It is our conclusion that the appellee properly raised this question by motion, and that the record conclusively shows the appellants have accepted the full benefits of the decree and have thereby released all errors in the decree. The motion of the appellee to dismiss the joint and several appeal of the appellants is hereby sustained and the appeal dismissed.

Motion sustained and appeal dismissed.


author: Mr. Justice Stone

text:
    In re Fred C. Gillham, Deceased. Country Club Real Estate Improvement Company, Appellant, v. Estate of Fred C. Gillham, Appellee.
    Opinion filed May 13, 1936.
    Rehearing denied June 29, 1936.
    McMillen, McMillen & Garman, of Decatur, and Warnock, Wiilliamson & Burroughs, of Edwardsville, for appellant.

      J. F. Beck, of Edwardsville, for appellee; June C. Smith, of Centralia, of counsel.
   Mr. Justice Stone

delivered the opinion of the court.

This is an appeal from a judgment of the circuit court of Madison county denying the claim of appellant against the Estate of Fred C. Gillham, deceased, upon a note in the sum of $2,500 executed by the said Fred C. Gillham and payable to appellant. The case came to the court below on appeal from the probate court where the claim had also been denied.

The note was given pursuant to a subscription agreement executed by Fred C. Gillham and 50 other persons late in the year 1927. The important provisions follow: “I the undersigned hereby agree with the corporation hereinafter mentioned and with each and all of the others who subscribe to a like contract, to take 30 shares of stock at the par value of $100.00 each of the capital stock of a corporation to be organized under the laws of the State of Illinois under the name of Country Club Beal Estate Improvement Company, or other appropriate name, and I do further agree to pay the par amount of said shares of stock to said corporation upon the incorporation thereof as follows: $500.00 in cash and the balance with my note with interest at 6% after January 1, 1929, payable in such installments from time to time as shall be determined by the directors thereof.

“The purpose of said corporation to be organized shall be to purchase, improve, and lay out as a residential park following the general plan of the blue print submitted herewith, the property commonly known as the Country Club of Decatur, Illinois, with possession not later than January 1, 1929, free and clear of incumbrances and material defects of title except as to special assessments for local improvements, said premises to be subdivided into approximately 85 lots which shall be fairly appraised on an average valuation of $3500.00 per lot more or less.

“And I further agree to select one of said lots and the said corporation shall accept my said stock in payment thereof, and I will pay the difference for any such lot appraised for more than $3000.00, and said corporation shall give credit for the differences on my said note for any lot selected of less value than $3000.00. . . .

11 This subscription shall not be binding until the subscription shall amount in the aggregate to $150,000.00, and further unless the premises mentioned can be purchased for not more than $2000.00 per acre.

“Application for incorporation may be signed by any three or more of the subscribers and subscription shall be deemed to be accepted by said corporation immediately upon the filing and recording of the Certificate of Incorporation thereof in the manner prescribed by law. ...

“It being further understood that immediately upon the incorporation of said company that said corporation and its duly authorized officers and directors shall work out the practical manner, following the general plan heretofore mentioned, of accomplishing the purpose herein, and the sale of any of the building sites not originally disposed of.”

The contract further recites that the obligation of subscribers is several, not joint.

The charter of the corporation was issued December 19, 1927, and recorded December 20, 1927. The company had an authorized capital of $50,000 of which $25,500 was proposed to be issued, at once. About 10 days after the incorporation of the company, Fred C. Gillham paid the $500, and on February 23, 1928, he gave the note which is the subject of this suit. Fred O. Gillham died,- testate, on March 3,1930, without having paid his note, and without having selected a lot, and without having received any stock. It does not appear that he ever questioned his liability.

There were subscriptions to the amount of $150,000. The corporation proceeded to distribute the lots in accordance with the general plan. It appears that the issue of stock was in a large number of cases eliminated, and lots were conveyed to the subscribers on the payment of their subscriptions.

The defenses to the claim were: that the subscription called for an issue of stock to the amount of $150,000 when the corporation, as subsequently organized, was not authorized to issue stock in excess of $50,000 and was therefore void; that the note was taken in payment of the stock contrary to the statute (Cahill’s Illinois Rev. Stat. 1931, ch. 32, ¶ 28); and that the contract was void in that it contemplated a purchase by the corporation of its own stock. All of the positions taken by the executor depend upon these three propositions.

The first contention is based upon the principle that a subscriber is not bound by his subscription agreement where the corporation, as formed, is materially different from that contemplated by the agreement. Appellee cites Mahan v. Wood, 44 Cal. 462; Newport Cotton Mill Co. v. Mims, 103 Tenn. 465 ; Baker v. Fort Worth Board of Trade, 8 Tex. Civ. App. 560; Norwich Lock Mfg. Co. v. Hockaday, 89 Va. 557. In the case of Mahan v. Wood, supra, the shares were to be sold at a higher price than that contemplated by the agreement. In Newport Cotton Mill Co. v. Mims, supra, the subscriber contracted for shares which would give him an ownership of l/60th of the corporation, and in the corporation as formed he would be given shares amounting to an interest of l/70th. In Baker v. Forth Worth Board of Trade, supra, the subscription contract called for a $50,000 corporation to establish a board of trade. The corporation was formed with a $100,000 capitalization for the purpose of entering the real estate mortgage business. In Norwich Lock Mfg. Co. v. Hochaday, supra, the full amount of the proposed subscription was not signed, the factory was not placed in. the town contemplated, and the corporate purpose was changed from that stated in the agreement.

The language of the court in the case of Mahan v. Wood, supra, states well the proper approach to this subject. The court says: “We do not see how the name which the association adopted, or the number of shares into which it divided its capital stock, could have been very material to the defendant. The shares represented lots or subdivisions of the land, and there is no pretense that the land as a whole, was any other, or that the lots were any smaller or less valuable than the defendant had reason from the representations of the plaintiff, to expect. ’ ’ In Banet v. Alton & Sangamon R. Co., 13 Ill. 504, the court, in deciding that a particular change of route in the railroad from that proposed was not material, said (p. 512): “The corporation must remain substantially the same, and be designed to accomplish the same general purposes, and subserve the same general interests. But such amendments of the charter as may be considered useful to the public, and beneficial to the corporation, and which will not divert its property to new and different purposes, may be made without absolving the subscribers from their agreements. ’ ’ And again (p. 513): “The alteration in the present case is not of such a radical character as to exonerate the stockholders from the payment of their subscriptions. The general features and objects of the corporation continue unchanged. The termini of the road remain the same; the only change consisting in a deviation from an intermediate point. The work is still designed to accommodate the same line of travel and transportation, and to promote the same general interests. The length of the road is reduced, and the cost of construction diminished.”

In the instant case the agreement contemplated the use of a corporation as a vehicle for the execution of a plan to purchase and subdivide a particular tract of land. There has been no variation from that plan except as to the amount of stock which may legally be issued and outstanding at any given time. There is no variance in the cost of the project, except in so far as the promoters effected a saving to the subscribers in fees and taxes by the use of a corporation with a smaller authorized capital stock. There is now, and there has been at all times, sufficient stock available to fulfill this contract, and there are now, and, at all times have been, lots to be selected. They are the lots that were contemplated. The subscription agreement as hereinbefore set forth directs the execution of the general purposes of the agreement in a practical manner following the general plan outlined in the agreement. The agreement'shows that the subscribers contemplated that minor changes in the plan might be made in working out the detail of a practical plan for acquiring and subdividing the property. We do not think it can be said that Fred C. G-illham was harmed in any way by the aforesaid change in the plan. It is therefore unnecessary to consider the question of es-toppel presented by his payment of $500 after the charter was recorded.

The statute which forbids the acceptance of a note in payment for stock (Cahill’s Illinois Rev. Stats. 1931, ch. 32, jf 28) is directed against the issue of stock. It does not forbid the substitution of a note for a subscription contract as evidence of indebtedness. No stock was issued to Fred C. Gillham and it does not appear that any stock was issued until the money was paid. But it is contended thap there was an agreement to accept the note in payment of the stock and cases are cited (United States v. Leach, 191 Ill. App. 346, 351; Morrison v. Smith, 81 Ill. 221, 223) to the effect that the giving and acceptance of a promissory note upon the settlement of a pre-existing indebtedness is prima facie evidence of the satisfaction of snch indebtedness. Appellant cites Cheltenham Stone & Gravel Co. v. Gates Iron Works, 124 Ill. 624, 627; Walsh v. Lennon, 98 Ill. 27, 31; McHenry v. Croft, 163 Ill. App. 426; Schuman v. Arsht, 249 Ill. App. 562; and Illinois-Indiana Fair Ass’n v. Phillips, 328 Ill. 368, on 376, to the effect that a note is not to be taken in payment of an account unless there is an express agreement to so take it. The application of these general presumptions is not safe without a consideration of the facts involved in the cases. In some the question is whether the note settles the amount of the obligation, and in others the question is whether the note of a third person is to be taken as a conditional payment or as a final payment of an account. Here the object of the parties might have been to secure a direct obligation to the corporation which would be easier to handle than a subscription agreement. The agreement does not say that stock is to be issued in return for the note. It is a general rule that the law prefers a construction of a contract which will make it legal to one which will render it illeg’al. Crittenden v. French, 21 Ill. 598; Hirschberg v. Cusack Co., 206 Ill. App. 629. In so far as the subsequent acts of the corporation show anything with respect to the agreement, they show that it was not the intention to issue stock in return for the notes.

In respect to the third contention it has been held that the purchase by a corporation of its own stock is illegal. This has not been an arbitrary rule in Illinois. The general purpose of the rule is to protect creditors. It has been held that such purchases must be author^ ized by the board of directors. Brown v. Fire Ins. Co. of Chicago, 274 Ill. App. 414, 420. It has also been held that there may be an estoppel to raise this question. Here the purchase by the corporation of its own stock is an essential part of the plan. No creditor is involved. Fred C. G-illham, knowing the provision, made a substantial payment on the stock. We think, if the plan were questionable for lack of a resolution of the directors in this case, Fred C. G-illham would be estopped to raise this question.

The foregoing are the only defenses presented for our consideration. We do not think they are sufficient. The judgment of the circuit court of Madison county is reversed and the cause remanded to said court for further proceeding in harmony with the views herein expressed.

Reversed mid remanded.


text:
    Carol Johnson, a Minor, by Gunnard Johnson, His Father and Next Friend, Plaintiff in Error, v. The Swords Company et al., Defendants in Error.
    Gen. No. 9,070.

      Opinion filed September 3, 1936.
    J. E. Goembel and B. J. Knight, both of Rockford, for plaintiff in error; Perley T. Lupton, of Decatur, of counsel.
    C. H. Linscott, of Rockford, for defendants in error.
   Mr. Presiding Justice Huffman

delivered the opinion of the court.

Plaintiff in error brought suit by his father as next friend, against defendants in error, for damages for personal injuries alleged to have been received by the negligent operation of a motor truck belonging to defendants in error. Defendants in error offered no evidence. The jury returned a verdict in favor of the defendants in error. Judgment was enter'ed on the verdict. Plaintiff in error prosecutes this appeal therefrom.

Only one point is urged for reversal, and that is the refusal of the trial court to permit the father of plaintiff to testify regarding certain conversations had by him with the driver of the truck, and certain alleged statements made by the driver in response thereto. The only eyewitness to the accident who testified was one Ernest Frank. He lived in the city of Bockford, and was upon the sidewalk near the place where the accident occurred. He was a witness for plaintiff in error. He states that he saw the right rear wheel of the truck run over the boy’s leg; and that the truck stopped within a distance of about a foot. The boy sustained a broken leg.

The father, at the time of the accident was in the dining- room of his residence, which was near by. Upon hearing the commotion, he went to the back door of his house and there met a young man coming upon the porch at the rear of the dwelling. The father left the house at the back, and upon going out into the yard, saw a man holding his son. A statement was made to him by someone present, for him to get his car. He went to his garage and backed his car out. At that time his wife was in the yard and was holding the boy. The driver of the truck was standing by the wife. It was the driver whom the father first saw holding the boy. At this time the father engaged the truck driver in conversation, -asking him questions, in response to which questions it is claimed the driver made certain statements regarding the accident. Plaintiff in error offered these statements as a part of the res gestae. The court heard the offer and the respective attorneys, in the absence of the jury, and denied plaintiff in error the right to introduce the testimony offered. It is from the ruling of the court in this respect and in this respect only, that plaintiff in error complains in this appeal.

The general rule is that for declarations to be admissible in evidence as part of the res gestae, they must be made in connection with an act proven. The rule also is, that the res gestae generally remains with the locus in quo, and does not follow the parties about after the principal act is completed. Chicago & E. I. R. Co. v. Chancellor, 165 Ill. 438, 443. In this case it is said: “Whether or not such act or declarations will be so considered, must depend upon the circumstances of each case.” (p. 444.)

Usually the interval between the statement and the exciting cause of which it is deemed a natural and, to a certain extent, an inevitable form of expression, is brief. If it has ceased to be spontaneous, it then falls back into the general class of narratives, and thus becomes improper. Whether the circumstances under which a declaration was made are such as to make it reasonably probable that it was spontaneous, presents a preliminary question for the determination of the trial court. The burden is upon the proponent to show the essential fact. The question of admissibility is one of administration, each case being properly decided upon its own facts. And in this regard the trial court should be clothed with a reasonable degree of latitude, since the application of the principle depends on the circumstances of the particular case.

The plaintiff in error cites the case of Lowden v. Wilson, 233 Ill. 340, as authority for the introduction of the evidence offered. This case recognizes the rule that statements made by an agent may be admissible in evidence against the principal, if they are a part of the res gestae. But such rule is subject to the qualification, that the statements sought to be introduced must constitute a part of the res gestae and be made at the time the transaction in question was being conducted (p. 348 of opinion). Plaintiff in error further cites the case of Quincy Horse Ry. & Carrying Co. v. Gnuse, 137 Ill. 264. Here the statements of the driver of the car, sought to be introduced, were made when the car had just stopped and while the boy was still under the car. They were properly held to be a part of the res gestae (p. 269 of opinion).

Under the authorities as announced in Chicago & E. I. R. Co. v. Chancellor, supra; Chicago West Division Ry. Co. v. Decker, 128 Ill. 545, 547, 548; Cooke Co. v. Miller Brewing Co., 316 Ill. 46, 51, and Boyd v. West Chicago St. R. Co., 112 Ill. App. 50, 51, we are of the opinion that the trial court did not commit error in its ruling with respect to the testimony offered.

The judgment is therefore affirmed.

Judgment affirmed.


text:
    Nicholas Wermes, Appellee, v. Fred J. McCowan et al., Appellants.
    Gen. No. 9,075.

      Opinion filed September 3, 1936.
    Mighell, Allen & Latham and William F. Fowler, of Aurora, for certain appellants; Everett Jordan and Fred T. Dean, both of Aurora, of counsel.
    Kames & Feldott, of Aurora, for appellee; Joseph J. Feldott and D. J. Peppers, of Aurora, of counsel.
   Mr. Presiding Justice Huffman

delivered the opinion of the court.

Fred J. McGowan and wife entered into contract with Christ Seidel and wife to purchase an improved lot in the city of Aurora, for the sum of $12,100. McGowan and wife made payments to Seidel under the above purchase agreement until they had reduced it to the sum of $3,995. During the above period of time, Seidel and wife purchased some land from appellee. To secure appellee to the extent of $1,200 upon the purchase price of such land, Seidel and wife executed to appellee a mortgage on the lot upon which McGowan and wife had the purchase agreement. In order to keep the record straight, Seidel and wife had McGowan and wife sign the mortgage on this lot.

On January 28, 1931, appellant Elmer Gr. Magill, secured a judgment against McGowan and wife, upon which judgment the sum of $438.75 remained due at the time of the decree herein. On January 31, 1931, appellant Boyston & Company secured a judgment against McGowan and wife upon which the sum of $966.25 remained due at the time of the decree herein. During the year 1931, McGowan and wife were delinquent in making their payments to Seidel and wife on the lot under the contract of sale. They were desirous of completing the entire balance of the purchase price. In addition to this, Seidel was wanting the money in order that he might discharge his debt to appellee.

McGowan and wife made arrangements with appel-lee to advance $3,000 for them to Seidel and wife toward payment of the $3,995 then remaining due upon said lot. They had enough cash from other sources to complete the purchase price. Pursuant to the above situation, the parties all met at the office of the attorney on Aug. 8, 1931. Those present were the attorney and his secretary, the appellee, McGowan and wife, Seidel and wife, and Mr. McGowan’s mother. At this meeting, appellee advanced the $3,000, which was paid to Seidel and wife, and McGowan and wife advanced enough additional cash to complete payment of the purchase price upon the lot. At this time McGowan and wife executed to appellee their notes for $3,000, secured by trust deed upon said lot. The entire transaction took place in the presence of all the above named persons, and at the one meeting.

On March 21, 1935, appellee filed his bill to foreclose against the lot under the above trust deed. Appellants Magill and Boyston & Company answered, setting up their respective judgments and claiming the same to be prior liens to appellee’s lien against said lot. Appellee took the position that his mortgage was a purchase money mortgage and therefore not subject to the liens of the said judgment creditors. The matter of appellants’ judgments was stipulated between the parties. The court heard the cause. Oral testimony was offered on behalf of appellee only. The court found the issues with appellee and decreed that the judgment liens of the appellants Magill and Royston & Company were subordinate to appellee’s, but prior to all other liens. Said judgment creditors have prosecuted this appeal from the above decree.

Appellants urged three reasons why appellee’s mortgage should not be considered as a purchase money mortgage. They first urge the deed and mortgage were not simultaneous acts; second, that their judgments were liens on McGowan’s equitable interest and rights under the sales contract; and third, that the money advanced by appellee was used to pay a pre-existing indebtedness. We will discuss the above positions of appellants, in the order named.

Appellants state that they consider the best case in this State in support of their position that the acts were not simultaneous, to be that of Small v. Stagg, 95 Ill. 39. In this case the court in discussing the deed to the property and the trust deed claimed to have been given to secure purchase money, makes the following statement: “The two were separate and distinct acts, and there is no testimony in the record from which it can be presumed that the three parties intended to have the two transactions bear any relation whatever to each other. ’ ’ (p. 44.) Under such circumstances certainly no claim to a purchase money mortgage could be maintained. In the above case the rule is recognized, “that where a person purchases a tract of land and secures a deed therefor, and at the same time executes a mortgage on the property to secure the purchase money, an existing judgment against the mortgagor does not become a lien as against the mortgage.” (p. 44.) In Harrow v. Grogan, 219 Ill. 288, at p. 291, it is said: “that where, on the purchase of land, a deed is executed by the vendor and a mortgage on the land purchased is executed by the purchaser, and both conveyances are acknowledged and recorded at the same time, the presumption is that they were executed simultaneously and that the mortgage was intended to secure the purchase money.” It is further stated that the court would presume, from the fact that a deed and mortgage were made on the same land and on the same day, that the mortgage was a purchase money mortgage. It is recognized in the above case, p. 292, that the presumption that a mortgage executed by the vendee on the same day upon which the land is conveyed, is a purchase money mortgage, is subject to rebuttal. However, nothing appears in the record in this case to rebut the presumption that appellee’s mortgage is a purchase money mortgage. It was made and executed at the same time and place as the deed to the lot. In addition to the presumption prevailing, is the testimony of the witnesses for appellee, whose testimony stands undisputed, and supports his contention that his mortgage is a purchase money mortgage.

With reference to appellants’ second point urged, that their judgments were liens on McGowan’s equitable interest in the lot under the contract of sale, there is no dispute. However, their rights under their liens would have been no greater than McGowan’s rights under the sales contract. The only interest or right that McGowan had under such contract was the equitable right to enforce the same providing he had performed it on his part. Thus we see that appellants under such a lien, would find the same subject to the payment of the unpaid purchase price upon said lot. Until payment of the purchase price, it is manifest that specific performance could not be had. Therefore appellants’ rights are in no way injured or impaired. Hayes v. Carey, 287 Ill. 274, 277.

With reference to the third point urged by appellants, that the $1,200 previously advanced by appellee to Seidel and wife, was a pre-existing debt of McGowan and wife, and therefore the money advanced by appel-lee on the date of the delivery of the deed and mortgage, was advanced for a. pre-existing indebtedness, we cannot agree. This position is not supported by the evidence; but on the contrary, the evidence refutes such a claim, and clearly establishes the fact that the $1,200 was due from Seidel and wife to appellee upon the purchase price of land bought by them from appellee, and although McGowan and wife were caused to sign the mortgage with Seidel and wife, that no part of the debt was that of McGowan and wife.

The rule that a mortgage given at the time of the purchase of real estate, to secure the payment of purchase money, or the balance thereof, has preference over judgments and other debts of the mortgagor, to the extent of the land purchased, is announced in Curtis v. Root, 20 Ill. 53; Roane v. Baker, 120 Ill. 308, 314; Harrow v. Grogan, supra, and such other cases in this State as deal with this subject. It is stated in Curtis v. Root, supra, at p. 58, that, “In point of right and principle, it can make no difference whether the mortgage is given to the vendor for the purchase money, or to another who actually advances the means to pay the purchase money to the vendor. ’ ’

Some States provide by statute with reference to the above rights of a mortgagee of a purchase money mortgage. In other States, such precedence is given to purchase money mortgages without the aid of any statute. Among the latter group is this State. We consider the true test as to when a mortgage is a purchase money mortgage, is not whether it is executed to the vendor, but whether the proceeds are to be used to apply on the purchase price. The rule as generally stated is that, to give a purchase money mortgage a precedence, it must have been executed simultaneously, or at the same time, with the deed of purchase. The reason usually assigned for this doctrine is the technical one of the mere transitory seisin of the mortgagor, rather than the superior equity which the mortgagee has, to be paid the purchase money of the land before it shall be subjected to other claims against the purchaser. However, it is evident, both upon principle and authority, that what is meant by this statement of the rule is not that the two acts — -the execution of deed of purchase and the execution of the mortgage — should be literally simultaneous. This would be impossible. Some lapse of time must necessarily intervene between the two acts. We believe that an examination of the cases will show the real test is not whether the deed and mortgage were in fact executed at the same instant, but whether they were parts of one continuous transaction, and so intended to be by the parties, so that the two instruments should be given contemporaneous operation in order to promote and carry out the intention of the parties.

We thus find the various authorities on the question of purchase money mortgages falling into two groups: The one, based upon the position that the execution of the deed and the mortgage being simultaneous acts, the title to the land does not for a single moment, rest in the purchaser, but merely passes through his hands and vests in the mortgagee without stopping in the purchaser, and that during such instantaneous passage, the judgment lien cannot attach to the title; while the other, is disposed to consider the superior equity which the mortgagee might be said to have for the purchase money which he has advanced. This state has apparently adopted the theory of transitory seisin. However, under either position the result is the same, and purchase money mortgages given precedence over existing judgments against the mortgagor.

It was stipulated that appellant Magill had $438.75 due him on his judgment, at time of trial of this case. The court so found by its decree. However, the attorneys who prepared the decree inadvertently caused this sum to be written as $187.25 in that portion of the decree providing for the payment of his lien. To this extent, the decree is in error.- That part of the decree of the trial court providing how the master shall make disbursements from the proceeds of the sale, which reads: “that out of any balance he pay to the defendants Elmer G. Magill, the sum of One Hundred Eighty Seven & 25/100 Dollars, together with legal interest thereon from the date of this decree . . . ”; is modified and amended to read as follows: ‘ that out. of any balance he pay to the defendants Elmer G-. Magill the sum of Four Hundred Thirty Eight & 75/100 Dollars, together with legal interest thereon from the date of this decree to the date of sale. ’ ’

The decree as modified and amended is hereby affirmed.

Decree modified and amended, and affirmed as amended.


text:
    In re Alleged Dependency of Patricia Ann Tilton. Rosa-bel Tilton and Carl Tilton, Plaintiffs in Error.
    Gen. No. 9,078.
    Opinion filed September 3, 1936.
    George T. Liddell, of Rockford, for plaintiffs in error.

      Robert E. Nash, State’s Attorney, A. B. Louison and Max A. Weston, Assistant State’s Attorneys, for defendant in error.
   Mr. Presiding Justice Huffman

delivered the opinion of the court.

This was a petition filed by plaintiffs in error in the county court of Winnebago county, praying that the court vacate a former decree of dependency with reference to a minor child, and restore such child to the custody of said petitioners. The petitioners were parents by adoption of Patricia Ann Tilton, a minor.

On June 6, 1933, a petition was filed in said court against said plaintiffs in error, setting forth that the child was a dependent child, as provided by the terms of the Juvenile Court Act, Ill. State Bar. Stats. 1935, ch. 23, ¶[ 319 et seq.; sec. 190 et seq., ch. 23, Smith-Hurd 1935. Upon the hearing under this petition the court found that the child was then of the age of four years, and a dependent child within the meaning of the act, further finding, “that said parents have wholly neglected, failed and refused, and do neglect, fail and refuse to properly care for said child, and that they and each of them are unfit, improper guardians of said child, and are wholly unable and unwilling to care for, protect, train, educate, control and discipline said child, by reason whereof it has become and is dependent.” This was a finding to the effect that the plaintiffs in error were not proper persons to have custody of the child, and that it did not have proper parental care or guardianship within the meaning of the act. The child at that time was committed to the Rockford Children’s Home, according to the provisions of the act.

On April 25, 1935, the plaintiffs in error filed their petition in this proceeding in the county court under section 9c of the act, Ill. State Bar Stats. 1935, ch. 23, ¶[ 330, praying that the decree of dependency as previously entered be vacated, and for the restoration of the child to their custody. Plaintiffs in error demanded a trial by a jury of six in the manner provided by sec. 2 of the act. The court denied their demand for jury, to which ruling they excepted. The cause was heard before the court, testimony introduced, and the petition for restoration of the child to the custody of the plaintiffs in error was denied. Plaintiffs in error rely upon but one point for reversal, and that is the refusal of the court to grant their demand for trial by jury.

Section 2 of the act provides that the county and circuit courts shall have original jurisdiction in all cases coming within the terms of the act, and that in all trials thereunder, any person interested may demand a jury of six. This section was under consideration in the case of Lindsay v. Lindsay, 257 Ill. 328, 334, wherein the court construed the section to mean that a trial by a jury of six may be had upon the demand of any person interested. It was as necessary to determine the fitness of plaintiffs in error in this proceeding, as proper persons to have the care and custody of the child, as it was to determine their fitness under the original petition filed. This resolved itself into a question of fact. We are of the opinion that it is contemplated by section 2 of the act that such questions of fact, upon the motion of any person-interested or upon the court’s own motion, shall be tried by a jury of six.

For the reason above assigned, the judgment and decree of the trial court is reversed and this cause remanded.

Reversed and remanded.


text:
    John Welter and Frances Welter, Appellants, v. George R. Eaton and Maude C. Eaton, Appellees.
    Gen. No. 9,086.
    Opinion filed September 3, 1936.
    James Sorna, of Chicago, for appellants.
    Runyard & Behanna, of Waukegan, for appellees.
   Mr. Presiding Justice Huffman

delivered the opinion of the court.

Appellants were the owners of two lots located in a subdivision known as Lake Marie Highlands. The plat of said subdivision was recorded under date of July 22, 1929, in book “T” of the Plat Records, at pp. 90 and 91, in the office of the recorder of deeds, in Lake county, Illinois, as document No. 340431, duly certified to by the surveyor, acknowledged by the owners, and approved by the chairman of the committee on subdivisions and plats, of the county board of Lake county.

Appellants instituted this action' against appellees, praying for a mandatory injunction to compel appel-lees to remove certain fences which they had erected upon and across the streets of said subdivision, and for a temporary writ restraining appellees from the building of any additional fences across the streets thereof. The bill further prayed that upon a final hearing appel-lees be perpetually enjoined from obstructing the streets of said subdivision by the erection of fences upon and across the same. A temporary writ issued as prayed. When the matter came on for final hearing before the chancellor, he entered a decree dismissing appellants’ bill of complaint for want of equity, and dissolved the temporary injunction. Appellants prosecute this appeal from the above decree.

Appellants urge a perpetual easement in the lands comprised by the streets shown on said plat, and that such easement was appurtenant to each lot located therein — relying on such cases as Marshall v. Pfeiffer, 314 Ill. 286; Thompson v. Maloney, 199 Ill. 276, and Stevenson v. Lewis, 244 Ill. 147. Appellees admit the building of the fences, and in support of their position rely upon such cases as Koehler v. Century of Progress, 354 Ill. 347, and Hartshorn v. Bierbom, 312 Ill. 275.

We are of the opinion that a freehold is involved whenever the right of recovery in a suit depends upon the existence of a perpetual easement in lands and the rights thereby acquired. As stated in Village of Harlem v. Suburban R. Co., 198 Ill. 337, at p. 339: “A perpetual easement in lands, or any interest in lands in the nature of such easement, when created by grant, or by any proceeding which is in law equivalent to a grant, constitutes a freehold.” To the same effect are Buck- len v. City of Chicago, 166 Ill. 451, and Lobdell v. City of Chicago, 227 Ill. 218, 239. The case of Hamilton v. Semet Solvay Co., 227 Ill. 501, is a case wherein the facts are very similar to the facts in the case at bar. The trial court in that case dismissed the bill of complaint for want of equity. The complainant below prosecuted an appeal to the Appellate Court. The appeal was dismissed on the ground that it involved a freehold (p. 502). The case was thereafter reviewed by the Supreme Court on writ of error.

Due to the fact that a freehold is involved in this proceeding, by virtue of sec. 86 of the Practice Act, Ill. State Bar Stats. 1935, ch. 110, ¶ 214 (sec. 210, ch. 110, Smith-Hurd 1935), this cause is ordered transferred to the Supreme Court.

Cause transferred.