author: Mr. Justice Dove

text:
    Commercial Credit Company, Appellee, v. Walter Maxey, Trading as Maxey Service Station, Appellant.
    Gen. No. 9,105.

      Opinion filed February 8, 1937.
    Rehearing denied March 24, 1937.
    Frank E. Maynard, of Rockford, for appellant.
    Welsh and Welsh, of Rockford, for appellee; R. T. Welsh, of counsel.
   Mr. Justice Dove

delivered the opinion of the" court.

The Commercial Credit Company filed its complaint in the circuit court of Winnebago county, in which it alleged that on April 19, 1935, Walter Maxey purchased from Noeske Brothers of Freeport a Plymouth automobile for $617.60 of which amount he paid in cash $117.60 and executed his note and conditional sales contract for the balance of $500, due July 19, 1935; that thereafter, for a valuable consideration, the plaintiff became the owner of said note and contract and is now the owner thereof, and avers that the defendant has failed to pay said note or to surrender-possession of the automobile and prays judgment for the immediate possession of the car and for damages for the wrongful detention thereof. The answer of the defendant admitted the execution of the note and conditional sales contract but avers that the same, with all accrued interest thereon, has been paid; that the defendant is not and was not indebted to the plaintiff and that he has possession of the note. The defendant also filed a counterclaim, in which he alleged that he purchased the automobile in question and paid a part of the purchase price in cash and the balance by executing, on April 19, 1935, his note and conditional sales contract for $500; that he paid said note and the plaintiff surrendered and delivered the same to him, but notwithstanding’ its payment, the plaintiff, so the counterclaim avers, wrongfully took the automobile from him on August 6, 1935, and he has been deprived of its use and has been compelled to hire an attorney to defend this suit and has thereby been damaged in the sum of $500 and prays judgment for that amount. The plaintiff answered this counterclaim denying the payment and surrender of the note. Subsequently the plaintiff amended his complaint by averring* that the defendant has possession of said note and received possession of the same on or about May 7, 1936, by mistake. Thereafter the issues made by the pleadings were submitted to a jury for determination and at the conclusion of all the evidence, the jury, in obedience to a peremptory instruction, returned a verdict finding the issues for, and the right of possession of the automobile in, the plaintiff. Upon this verdict judgment was rendered and this appeal is prosecuted by the defendant to reverse that judgment.

The evidence discloses that on April 17,1935, Noeske Brothers, automobile dealers in Freeport, Illinois, purchased of appellee six automobiles, including* the Plymouth car in question in this case, the consideration therefor being $3,509.30. Noeske Brothers executed their conditional sales contract therefor, which was in the customary form known as the “floor plan” and by its terms appellee reserved title until the cars therein described were sold. By the terms of this contract Noeske Brothers had the right to display the cars for sale purposes only and the balance due appellee on the car in question from Noeske Brothers to the plaintiff was stated to be $577.60. On April 19,1935, appellant, Maxey, was in Freeport and Noeske Brothers sold the car in question to him. At that time appellant was engaged in selling Plymouth and De Soto automobiles at Polo, Illinois and was doing business as Maxey Service Station. In payment therefor, appellant executed and Noeske Brothers received from him two instruments, one a conditional sales contract and the other a note. Both were dated April 19, 1935, and the note was for the sum of $500 and payable to Noeske Brothers at the office of the appellee at Milwaukee, Wisconsin, and was due July 19,1935. Maxey received the car on the same day, April 19, 1935, and Noeske Brothers indorsed both the note and sales contract to appellee and sent them to appellee at Milwaukee. The conditional sales agreement was signed “Maxey Service Station by Walter Maxey” and by “Noeske Brothers by Charles E. Noeske” and it and the note were received by appellee at its Milwaukee office.

The evidence on behalf of appellee discloses that the transaction of appellee with Noeske Brothers was set up on the records of appellee in its Milwaukee office and when the conditional sale contract of appellant was received at appellee’s office in Milwaukee it was placed in the same file under Noeske Brothers’ name and the note was forwarded by the Milwaukee office of appellee to its Baltimore office. On April 24, 1935, Noeske Brothers sent its four checks to appellee at its Milwaukee office, among them being one check for $577.60. Accompanying these checks was a letter stating that the several checks were in payment of the amount due on four of the cars covered by their contract, one of which is the car in question in this case. This check was for the correct amount but a clerk in appellee’s office, finding appellant’s contract in the file, which disclosed that $500 was due thereon, placed the excess of $77.60 to the credit of Noeske Brothers in the Reserve Adjustment Account and appellee’s office in Milwaukee wrote to its Baltimore office requesting that appellant’s note of $500 be sent to the Milwaukee office which was done and upon its receipt on or about May 4, 1935, it was stamped paid and mailed to appellant at Polo, Illinois.

Appellant testified that he never received the note by mail but that on July 9, 1935, two strangers drove into his service station in a black Ford V-8 and one of them got out, told appellant his name and said he was from the financial department of the Commercial Credit Company and had come to get appellant to sign up new financial statements and receipt what payment he wanted to make on his note; that he, appellant, then told the men that he would pay it all if they had the note with them, and on the following day about 10:30 in the morning the same men returned in the saíne car, one man got out of the car, had a brief case with him and from the brief case took out a wallet and from the wallet took the note, which was at that time stamped paid. Appellant was handed the note, examined it, satisfied himself that it was his note and gave to the stranger six $50 bills and ten $20 bills which he had carried since early morning in an envelope between his undershirt and shirt and retained the note. Appellant further testified that the man to whom he paid the $500 was 35 or 40 years of age, about five feet eleven inches or six feet tall, fairly heavy, weighing about 180 pounds, black hair, broad face, brown eyes, wearing amber tortoise rim glasses, a sailor straw hat and a summer cream color woolen suit carrying a dark tan brief case in his hand. Appellant did not recall his name, had never seen him previous to the evening before, had never seen him since, did not inquire where he lived, knew the car had an Illinois license plate but did not remember the number, did not ask for any credentials, saw none, did not see or receive his conditional sales contract and made no inquiry to ascertain whether Noe she Brothers, the indorsers on the note, had paid it or not.

The evidence further discloses that the district representative of appellee went to appellant’s service station on August 6, 1935, and advised appellant of the error in mailing to him the note from appellee’s Milwaukee office and told him that he was there to collect the $500 or repossess the car; that appellant said he had the note and had paid it, would not pay it again and would not give the car up; that shortly thereafter appellee’s representative found the car unlocked in front of appellant’s home and drove it to Rockford and placed it in the garage of the Craig Motor Company. The abstract furnished by appellant does not disclose when the complaint was filed but the additional abstract discloses the return on the writ of replevin and it is dated August 6, 1935, and is to the effect that appellant was duly served on that day and that the writ of replevin was executed that day by the sheriff by replevying the automobile in question.

Counsel for appellant contend that the record in this case presents for determination a moot question only; that replevin is a possessory action and that one of the essential elements of a replevin suit is that the property sought to be replevied must be in the actual or constructive possession of the defendant at the time the suit is started; that the evidence discloses that prior to bringing this action the plaintiff took the automobile in question under the provisions of its conditional sales contract and then, while in possession of it, instituted this suit. We do not think, upon this record, appellant is in any position to raise this question. While it does appear that the representative of appellee found the car unlocked in front of appellant’s home and drove it to Rockford, it does not appear that it was not turned over to the representative of appellee at this place by the sheriff after the service of the writ. Furthermore, this question was not, so far as the record discloses, presented to the trial court. Appellant answered the complaint, went to trial upon the issues made by the pleadings and should not be permitted to question in this court for the first time the return of the sheriff upon the writ of replevin.

It is next insisted by counsel for appellant that the evidence presented a question of fact for the jury to pass upon and that the trial court erred in directing á verdict, at the close of all the evidence, for appellee. The defense interposed by appellant was that he, as maker of the note involved herein, in good faith paid the same before maturity to one who was in possession thereof and his counsel insists that the law will protect him in so doing; that when it is shown that a person has possession of a negotiable instrument, his authority to collect the same will be implied. In support of his contention, counsel cite Siekmann v. Stanton, 251 Ill. App. 442; Michaelson v. Doonan, 259 Ill. App. 337; Cassem v. Heustis, 201 Ill. 208; Short v. Weisenborn, 193 Ill. App. 183, and several other cases. The Siekmann case, supra, was a proceeding to foreclose a mortgage executed July 26, 1906, which was given to secure a note of $5,000 due three years after date. The defense interposed was that on May 26, 1919, the mortgagor and maker of the note paid the principal and interest then due to Henry T. Renshaw, at the direction and with the knowledge and consent of the holder of the note and mortgage. The evidence disclosed that the makers did pay Renshaw, but Renshaw never paid it to Mrs. Siekmann and that Renshaw never had possession of the note and mortgage at the time the payment was made or after the making and delivery thereof in 1906. The court, after reviewing the facts, held that the maker was not only guilty of negligence in making- the payment to Renshaw, but was not warranted in assuming that he was acting within the apparent scope of his authority to collect the entire principal in one payment. The holding in this case does not, in our opinion, support appellant’s contention that a maker of a note not due may rightfully pay the same to anyone who may have possession of the note. Michaelson v. Doonan, supra, and the other cases cited by counsel for appellant, announce the general rule to be that when a note is found in the possession of the maker, the presumption of payment arises because ordinarily the owner of a note retains it until it is paid so where it is found in the possession of the maker after it is due, the presumption is that the owner has been paid and upon being paid surrendered the evidence of his indebtedness. A presumption is an inference which common sense, enlightened by human knowledge and experience, draws from the connection, relation and coincidence of facts and circumstances with each other, 22 C. J. 82, and this presumption that a debt has been discharged because the instrument evidencing the indebtedness is in the possession of the maker is a presumption of' fact and like other presumptions of fact may be rebutted by evidence and when so rebutted the presumption disappears. In Crocker v. Thompson, 3 Metc. (Mass.) 224, Chief Justice Shaw said: “In general it may be admitted that the production, by the mortgagor or those claiming under him, of a note secured by mortgage, will raise a presumption in the absence of all other proof, that it has been paid. But this is a presumption of fact, not of law, and it will be rebutted by any other evidence. If the possession and production of the note • can be satisfactorily accounted for, upon any other hypothesis than that of payment of it to the holder, it will rebut such presumption.” In Sutphen v. Cushman, 35 Ill. 186 the court said: “Ordinarily a note found in the hands of the maker will, from that circumstance, be presumed to have been paid, for the reason that the surrender of a note to the maker is usually consequent upon, or coincident with, its payment: but, if other circumstances are proved which are inconsistent with that hypothesis, the presumption is at once rebutted. ’ ’

In Teeter v. Poe, 48 Ill. App. 158, the court said that unexplained possession of a promissory note constitutes prima facie evidence of its payment, but where the evidence shows the circumstances, manner and means of obtaining it, the presumption or inference of payment must come from them and not from the mere fact of possession and if these show it was wrongfully delivered by a party to whom the payee had intrusted it for another and different purpose, such possession is no evidence of payment. The author of the article on Bills and Notes in 8 C. J. 1014, par. 1319, says that payment of a note will be presumed from possession, after maturity, by the maker but payment will not be inferred from possession by the maker before maturity.

The evidence of appellant is that he paid this note and received possession thereof July 10, 1935. He knew it belonged to appellee. He relied upon the statements of the person who had it in his possession and upon the fact that such person had possession of his unmatured note. Appellant testified he would have paid it to any one in whose possession the note may have been at the time he paid it. This note, which appellant testified he examined on July 10th, 1935, prior to paying $500 therefor, was an ordinary judgment note, and, omitting the warrant of attorney therein, appeared as follows:

No. 450-3322

“P-A-I-D Polo, Illinois Date April 9th, 1935

........1935

“Commercial Credit Co., Inc.

Per..........

“Ninety days after date, for value received, I, we, jointly and severally promise to pay to the order of Noeske Bros. Five hundred dollars ($500.00) At the office of Commercial Credit office at Milwaukee, Wis. with interest after maturity at the highest legal contract rate.

“Signed Maxey Service Station (Seal)

Buyer

Walter Maxey (Seal) ”

On the reverse side appears:

“Without Recourse

“For value received, pay to the order of Commercial Credit Company Signed: Noeske Bros. (Seal)

Dealer

By Chas. E. Noeske (Seal) ”

The uncontradicted evidence is that the party who had possession of this note at this time and from whom appellant received it was not the agent or representative of appellee and his possession of the note was wrongful and appellee never received the money so paid by appellant or any part thereof.

“Where a note is payable to the order of a person, payment to a person holding the same without indorsement, and who is not the owner or agent of the owner is insufficient.” 8 C. J. 603, sec. 839. Where, however, a note is payable to bearer or is indorsed in blank, its actual possession is prima facie evidence of the possessor’s authority to. receive payment thereon and the note will be discharged by payment to him in good faith unless the maker has notice to the contrary, and hence payment to a thief or to a finder of such a note in its actual possession is binding. 8 C. J. 602, sec. 838. The maker of a note has no right to pay the same before maturity without the consent of the holder, although, of course, such payment is valid as between the parties. 8 C. J. 603, sec. 840. In Lochenmeyer v. Fogarty, 112 Ill. 572, it was held that the maker of a note is not discharged when he pays a note payable to a guardian after the death of the guardian, it appearing that the payment was made to the attorney for the guardian with whom the note had been left for safekeeping. In the course of its opinion the court said: “It is a plain proposition if the notes had been paid to a person authorized to receive payment, the indebtedness would have been extinguished. It is also equally plain that payment of a note to a person who has no authority to receive the money does not extinguish the debt.” In Fortune v. Stockton, 182 Ill. 454, it was said: “The just rule of the law is, that a person shall not be bound by the act of another who assumes to act for him and in his behalf, where he has neither authorized the assumed agent to do the act nor conferred apparent authority upon him. Where one assumes to act for another, that fact is notice to those who deal with him that there must be a delegation of authority from the principal and they are bound to ascertain its existence and extent. In ascertaining such authority of the ag'ent, a third party may rely upon the apparent authority which the alleged principal holds the agent out as having, because to permit the principal to repudiate the authority in such a case' would be to enable him to commit a fraud on other parties. . . . It is practically the universal custom to take up and cancel notes when they are paid and for one who is authorized to collect, to have possession of the notes and be able to surrender them. . . . Where an agent has possession of a note that is due, it may be inferred that he has authority to receive payment of it, but such an authority could not be inferred from that fact in a case like this, where the paper was not due.”

In the instant case the only inference of authority to receive payment of this note arose from the fact that the person who said he was a representative of appellee had possession of appellant’s note. The note, however, lacked 10 days of being due and appellant, therefore, was not warranted in assuming that the possessor thereof was authorized to receive the principal sum. “If payment was made to a third person the burden is on the defendant to show that such person was authorized to receive payment or that the money reached the holder’s hands.” 8 C. J. 1012. Under the foregoing authorities, it is our opinion that the possession of the note by appellant imposed upon appellee, upon the trial of the issues made by the pleadings, the burden of going forward with the evidence to show that the possession of the note by the maker was the result of a mistake or that he acquired it without authority from the rightful holder and owner and that the rightful holder had not received the money paid. This appellee did and there being no countervailing evidence there was no disputed question of fact for the jury to pass upon and the trial court, at the close of all the evidence properly directed a verdict for appellee.

Counsel finally argue that the evidence discloses that mistake after mistake was made by appellee in its Milwaukee office; that this note left appellee’s office through no error on the part of appellant and he therefore seeks to invoke the familiar rule of law which holds that where one of two innocent persons must suffer loss, then the one who makes the loss possible by his negligence must stand the loss. Counsel also advances two theories as to how appellant came into possession of this note. One is that appellee mailed this note to Noeske Bros, at Freeport instead of to Maxey at Polo and that then someone took it to Maxey and received payment from him. The other theory of counsel is that after the note came into appellee’s office at Milwaukee, after having been requisitioned from the Baltimore office, then somebody knowing the note had not been paid saw an opportunity to get the note and collect $500 from Maxey and that someone in a tussle with someone else grabbed the note and took it to Maxey and got $500 for it. Neither of these theories is supported in any way by any evidence found in this record. It is true that appellee did make a mistake in its records and stamped the note paid when in fact it was not paid and it made a mistake when it permitted appellant’s note to leave its possession, but the uncontradicted evidence is that these mistakes were in fact made and a consideration of the evidence of F. L. McDevitt, office manager of appellee’s Milwaukee office, Katherine Farley, supervising bookkeeper in this office and Ruth Lupton, stenographer in the same office, all found in this record, discloses just how the several mistakes were made and in our opinion the doctrine, announced by those cases which hold that where one of two innocent parties must lose by reason of the mistake of one, that then the loss must fall upon the one who makes it possible for the mistake to occur, is not applicable to the facts as disclosed by this record.

The judgment of the trial court is affirmed.

Judgment affirmed.


source: Caselaw Access Project

author: Mr. Presiding Justice Matchett

license: Public Domain

text:
    Edward J. Barrett, Auditor of Public Accounts of the State of Illinois, Appellant, v. Henry C. Reuter et al., Appellees.
    Gen. No. 39,044.

      Opinion filed March 15, 1937.
    Castle, Williams & McCarthy and Sheehan & Egan, all of Chicago, for appellant; Emmett J. McCarthy, Robert Raymond Hanley and William H. Hailes, all of Chicago, of counsel.
    Litsinger, Healy, Reid & Bye, of Chicago, for appellees ; Daniel M. Healy, of counsel.
   Mr. Presiding Justice Matchett

delivered the opinion of the court.

I. January 17, 1934, the plaintiff as auditor of public accounts filed a bill to foreclose a trust deed executed and delivered by defendants, Henry C. Reuter and Anna Reuter, his wife, and Louis Gf. Reuter and Helena Reuter, his wife, on May 1, 1929, to the West Englewood Trust and Savings Bank, to secure 130 first mortgage notes in the aggregate principal sum of $70,000. The bill contains the usual averments as to ownership of the plaintiff, default by defendants, etc., and the usual prayer for foreclosure and general relief.

The averment as to ownership is that the plaintiff obtained the securities through a deposit made by the West Englewood Trust and Savings Bank pursuant to the provisions of section 6 of the Trust Companies Act (see Ill. State Bar Stats. 1935, ch. 32, Tf 350, p. 929; Jones Ill. Stats. Ann. 135.25). Defendants answered denying the equity of the bill and also filed an amended answer with a counterclaim to which they made defendant William L. O’Connell, receiver of the West Englewood Trust and Savings Bank, a party. The cause was put at issue and" referred to a master who took the evidence and filed his report October 23, 1935.

The master found that some time after its incorporation the West Englewood Trust and Savings Bank deposited with the auditor of public accounts $200,000 in securities pursuant to the provisions of section 6 of the Trust Companies Act, and received from the auditor an amended certificate authorizing it to conduct the business of a trust company in Illinois. He also found execution by the defendants and delivery of the notes and trust deed to the bank on May 1, 1929; that about the same time the bank was requested by the auditor to increase its deposit of securities to $500,000 in order to continue in the business of a trust company; that on June 3,1929, it made such additional deposit, including among the securities so deposited these notes and mortgage of the defendants; $10,000 of the principal amount of these notes was subsequently paid. The rest of the notes remained with the auditor until the West Englewood Trust and Savings Bank was closed by the auditor on June 9,1931.

Prior to May 1, 1929, defendants Henry C. Renter and Louis Gr. Reuter, who were copartners, opened a commercial checking account with the bank, and when it closed there was a balance to the credit of their account in the amount of $59,835.39. At the time the bank closed it was heavily indebted to general depositors and also to a large number of its trusts.

The master found the equities to be with the plaintiffs, recommended a decree of foreclosure, and that the counterclaim by which defendants prayed that the balance of their deposit be allowed as a set-off against the amount found to be due under the terms of the note and the trust deed should be dismissed. Objections filed by defendants were overruled. These stood as exceptions upon their hearing before the chancellor. The exceptions were based solely upon the law alleged to be applicable to the facts as found by the master. The chancellor sustained the exceptions and entered a decree granting the relief prayed in the counterclaim and dismissed the bill of complaint for want of equity. From that decree the auditor has perfected this appeal.

II. The holding of the court in substance was that the auditor was not the legal owner of the mortgage indebtedness; that the delivery of the notes and mortgage by the bank to the auditor was unauthorized under section 6 of the Trust Companies Act, and the defendants were, therefore, entitled to set off their account at the bank. The question of whether the Trust Companies Act was constitutional was argued before the chancellor, but the decree makes no finding upon that issue. On the contrary it finds “that the Trust Companies Act is not applicable to banks.”

Upon the assumption that a constitutional question was involved, the record was originally filed in the Supreme Court. That court, on motion of plaintiff, transferred the cause to this court.

The defendants here contend that the Trust Companies Act is not applicable to banking corporations. They say that section 1 of the Banking Act (Ill. State Bar Stats. 1935, ch. 16a, ff 1, p. 157; Jones Ill. Stats. Ann. 10.01) grants to banking corporations unlimited power to accept and execute trusts. They rely on the express language of section 1, — “and such banks or banking associations shall have the power to loan money on personal and real estate security, and to accept and execute trusts.” Defendants point out that section 1 of the Banking Act is the only part of that act in which the subject of trusts is directly mentioned. Nowhere in the act, it is said, is the deposit of securities with the auditor required or authorized. Moreover, it is urged that such a deposit is in violation of the word and spirit of the act in that it creates a preference in favor of one class of depositors over another, and takes away from general depositors the security of the capital and surplus of the bank.

As illustrative, defendants assume that the Trust Companies Act was never enacted. It would then, they say, be obvious that banks would have full power to accept and execute trusts without the deposit with any official of any securities. In such case it is said, setting apart a distinct fund for the benefit of one class of “depositors” would deprive others of security which they would have a right to rely on. Defendants further suppose a case of the organization of a bank with capital of $200,000 which secures deposits of $500,000, then determines to do a trust business and deposits $200,000 with the auditor of public accounts, it would thereby wipe out its entire capital so far as its depositors are concerned.

Defendants also say that the courts of this State have never held that the Trust Companies Act is applicable to a banking corporation; that the questions, first, of whether a bank must qualify under this act before accepting and executing trusts, or, secondly, whether if it does so qualify it has the right or authority to deposit assets of the bank for the benefit of such trusts, have never been passed on by the courts of this State in any particular case. This is said to be true of In re National Bank of Ottawa, 273 Ill. App. 545; Wedesweiler v. Brundage, 297 Ill. 228; Gits v. Foreman, 360 Ill. 461; Tietke v. Union Bank of Chicago, 259 Ill. App. 341; Valulis v. Phillip State Bank & Trust Co., 266 Ill. App. 78; People ex rel. Nelson v. Citizens Trust & Savings Bank, 272 Ill. App. 444.

Defendants admit that there is in these cases dictum to the effect that the law is applicable to banks; language from which such a conclusion might be derived ; assumptions that such is the law, but nowhere in a case where it was necessary to a decision has it been expressly so held.

Defendants also contend a bank has no implied authority to make such a deposit, and they cite Texas & Pacific Ry. Co. v. Pottorff, 291 U. S. 245, 78 L. Ed. 777; City of Marion v. Sneeden, 291 U. S. 262; People ex rel. Nelson v. Wiersema State Bank, 361 Ill. 75; People ex rel. Nelson v. Citizens State Bank, 275 Ill. App. 159, and People v. Seward State Bank, 268 Ill. App. 32, and say that assuming the Trust Companies Act requires the deposit by banks of these securities would be to hold directly contrary to the principle announced in these cases that a bank may not make a special deposit of its assets in favor of any one particular class of creditors.

Defendants further argue that so construed the Trust Companies Act would amount to an amendment of the Banking Act in a material respect and would have no force unless voted upon by the people, as required by section 5 of article XI of the Constitution. They appeal to the language of section 6 of the Trust Companies Act to the effect that “each company in all cities and towns of 100,000 inhabitants or more, before accepting any such appointment (as trustee, etc.) of deposit, shall deposit with the Auditor of Public Accounts the sum of $200,000 . . . 'said deposits to be for the benefit of the creditors of said company.” They say that this section does not mention banks, and that for reasons already pointed out it should not be applied to banks, and that if it be held that the provision applies to banks at all, it means that before the bank is qualified to accept trusts it must deposit securities with the auditor which are no part of the capital or deposits of the bank. Such a construction, they say, would remove all the objections made by the courts in the decisions quoted by them and require that securities should be deposited which were no part of the capital or deposits of the bank, as they say was held in People ex rel. Nelson v. Citizens State Bank, 275 Ill. App. 159, where it was decided that a bank which became a depositary for State funds must give security therefor where required to deposit such assets as the bank could procure outside of and apart from its own assets. This, it is said, was a well considered case based upon Commercial Bank & Trust Co. v. Citizens Trust & Guaranty Co., 153 Ky. 566, 45 L. R. A. (N. S.) 950, which is also approved in People v. Seward State Bank, 268 Ill. App. 32. The principle is that when a legislative act is susceptible of dual construction, the one which secures equality and equity should be adopted in preference to another which makes possible the perpetration of fraud.

Moreover, it is pointed out that section 6 of the Trust Companies Act does not expressly state that the securities shall be deposited for the benefit of any particular creditors less than all, but on the contrary provides that “said deposits to be for the benefit of the creditors of said company.”

Finally it is urged that if said section 6 of the Trust Companies Act is construed otherwise it would amount to an amendment of the Banking Act and is, therefore, void in that it was never submitted to a vote of the people, as required by section 5 of article XI of the Constitution of Illinois, which provides in substance that no act authorizing or creating associations with banking powers, or amendments thereto, shall go into force unless submitted to a vote of the people. The Banking Act itself, it is pointed out, was submitted to such vote. So, it is said, were the amendments thereto, and such amendments as were not submitted were declared by the courts to be of no effect. To this point defendants cite People v. Gould, 345 Ill. 288; McQueen v. Randall, 353 Ill. 231; Golden v. Cervenka, 278 Ill. 409, and Sykes v. People, 132 Ill. 32.

Such is a summary of the reasons given by defendants for their contention that the court properly sustained the exceptions as to the findings of the master, and allowed the set-off. We will now give consideration thereto.

III. The unquestioned finding of fact is that when the bank closed it was indebted under various trusts to the amount of $448,069.15, which the claimants alleged were secured by securities deposited with the auditor. The trial court nevertheless held, as defendants now insist, that the Trust Companies Act was not applicable to banking corporations, and this is the controlling question in the case. This construction of the act, as plaintiff points out, plainly ignores four different provisions of the statute. In the first place, section 1 of the Trust Companies Act specifically provides that deposits shall be made by “any corporation now or hereafter authorized by law to accept or execute trusts.” Plainly, this language is broad enough to include a banking corporation; but if this were doubtful, section 6 of the same act contains language which would make the intention apparent. It reads:

“No corporation authorised to accept and execute trusts shall, either directly or indirectly throug’h any officer, agent or employee of such corporation, accept or execute any trust concerning property located wholly or in part in this State without complying with the provisions of this Act and all amendments thereto.”

As further indicating the same legislative intention is section 11 of the General Banking Act, which requires that in case of insolvency of the bank, positions of trust held by it, such as executorship, guardianship and receivership, shall be relinquished. It is also a necessary inference from proviso 6 of the Trust Companies Act which in substance provides that nothing therein contained shall prohibit “a corporation organized under the General Banking Act of this State from taking conveyance of and holding title to real estate as trustee under the mortgage deed of trust given to secure payment of a loan made by the bank or made through the bank as agent for the lender.” If anything were needed to add to the weight of these plain provisions of the statute, it is found in the fact that for more than 50 years such has been the continuous contemporaneous construction placed upon these statutes by the Department of Government of the State to which is intrusted the execution thereof. As was said by the Supreme Court in People v. Fidelity & Casualty Co., 153 Ill. 25:

“In construing statutes, the rule that contemporaneous exposition is strongest in the law is to be regarded. (Phoebe v. Jay, Breese, 268; Isaacs v. Steel, 3 Scam. 97; Russell v. Rumsey, 35 Ill. 362.) Where the execution of statutes is confided to a particular department of the government, the court will regard, and in doubtful cases adopt, the construction acted on by such department. (Mathews v. Shores, 24 Ill. 28; Isaacs v. Steel, supra.) And if the construction is doubtful, long continued action upon a particular construction may reduce the uncertainty to a fixed rule. Comstock v. Cover, 35 Ill. 470.”

Although by section 1 of the Banking Act the power given to banking corporations to execute trusts is, as the parties here now seem to agree, unlimited in its nature, the legislature of the State has seen fit to restrict that power by the provisions of the Trust Companies Act, and that intention is manifest by the exception from these limitations of a certain number of such trust powers, as provided by section 6 of the act. While we recognize the fact that the cases upon which plaintiff relies are all distinguishable, the applicability of the Trust Companies Act to banking corporations is not denied in any of them; and particularly in People ex rel. Nelson v. Citizens Trust & Savings Bank, 272 Ill. App. 444, this court assumed such applicability and its decision is directly based upon the assumption of such applicability. As plaintiff points out, the absence of a decision directly in point, considering the time which has elapsed since the enactment of these statutes, can be accounted for only on the theory that the point has not heretofore been considered worth litigating.

IV. In support of their contention that a banking corporation does not have implied power to comply with section 6 of the Trust Companies Act, defendants have cited a number of cases such as Texas & Pacific Ry. Co. v. Pottorff, 291 U. S. 245, 78 L. Ed. 777; People ex rel. Nelson v. Wiersema State Bank, 361 Ill. 75; Knass v. Madison and Kedzie State Bank, 354 Ill. 554; City of Marion v. Sneeden, 291 U. S. 262, all of which hold in substance that it is beyond the powers of a banking corporation, either state or national, to pledge its assets in order to secure private depositors. The rule announced in these cases is unquestioned. But they are not in point here for the reason that in no one of them was the pledge made pursuant to a statutory authority or direction. Thus in the Wiersema case the court said: “There is nothing in the language granting the power to do a general banking business indicating that the legislature meant to include any powers other than those usually understood as embraced within the term. We therefore cannot say that the public policy of this State, as declared by the constitution and legislative enactments, approves a general pledge of assets by a bank to secure deposits.”

Plaintiff points out that the real question is whether it is reasonably necessary for a bank to comply with section 6 of the Trust Companies Act in order to exercise the power given to it to accept and execute trusts. The answer, they say, is found in the same section of the Trust Companies Act which contains an express prohibition against the execution of trusts in this State by corporations which have not qualified under that section. This provision we have already quoted, and we agree with plaintiff’s contention that in view of tfie limited trust functions a bank may perform without conforming with the Trust Companies Act it would seem that compliance with it is reasonably necessary if the bank is to attain the full benefit of the powers which the legislature intended to grant to it.

V. As to the contention of defendants that even assuming that the Trust Companies Act applies to banks, the deposit of securities must be made out of assets which are no part of the required capital, surplus and reserve with which the bank begins business, and that irrespective of what part of the assets of the bank may be deposited, such assets when deposited must be held for the benefit of all creditors of the corporation and not for the benefit alone of trust claimants or creditors of the trust company, the answer of the plaintiff seems to us convincing. It is, in the first place, that there is no evidence in this case that this security deposited by the West Englewood Trust and Savings Bank was not made out of its surplus. Defendants say it was not, but there is nothing in the record supporting their assertion. Section 6 of the Trust Companies Act provides that securities deposited shall consist “of bonds of the United States or bonds of the Home Owners’ Loan Corporation or municipal bonds of this State, . . . or in mortgagees on improved and productive real estate in this State, being first liens thereon, and the real estate being worth at least twice the amount loaned thereon.”

There does not appear in the act any further specifications as to the character or origin of the securities that are to be deposited. However, the auditor with whom these securities were deposited is, by section 11 of the Banking Act, specifically charged with the duty to see to it that the capital stock of a banking corporation remains unimpaired. The presumption is that the auditor performed his duties in that regard.

As to the contention that the clause of the Trust Companies Act, “said deposits to be for the benefit of the creditors of said company, ’ ’ means that the securities are to be held for the benefit of all creditors of the bank or trust company, we think it is apparent that such a construction would require us to ignore the apparent purpose which the Trust Companies Act was intended to accomplish. It would also prevent a uniform application of the act to all corporations doing a trust business. Under such a construction of the act, the creditors of a trust company engaged only in doing a trust business would acquire better protection than creditors of a corporation doing a trust business and a banking business as well. The Supreme Court has recently held that this was not the intention of the legislature in the enactment of the law. People ex rel. Barrett v. Cairo-Alexander County Bank, 363 Ill. 589.

But this theory, even if accepted, would not entitle defendant to the set-off allowed in this case. It would be necessary to further assume that the proceeds of the deposited securities should be distributed pro rata among all the creditors of the bank without regard to various preferred classes.

VI. Nor can we agree with the contention of defendants that the Trust Companies Act, if so construed, is inapplicable to banking corporations for the reason that it was never submitted to a vote of the people as provided by section 5 of article V of the Constitution. On this record we are called upon to construe the act rather than to decide a constitutional question. We hold the language of these acts to be free from ambiguity. The language of statutes when unambiguous and plain leaves no room for statutory construction. The language here is plain and the im tention manifest. Sup v. Cervenka, 331 Ill. 459. The Trust Companies Act and the General Banking Act of 1887 were enacted at the same session of the legislature (see Laws of 1887, page 89). The rule applicable to the construction of such statutes has been laid down by the Supreme Court in Hoyne v. Danisch, 264 Ill. 467, where the court said: “Statutes enacted at the same session of the legislature should receive a construction, if possible, which would give effect to each. Bach is-supposed to speak the minds of the same set of lawmakers, and the words used in each should be qualified and restricted, if necessary, so as to give validity and effect to both acts. The presumption is that different acts passed at the same session of the legislature'are not intended to destroy each other, unless the acts in express terms so state.”

However, even accepting defendants’ mode of construction we cannot accept their argument upon the constitutional question. Section 5 of article XI of the Constitution of 1870 provides, “no act of the General Assembly authorizing or creating corporations or associations with banking* powers . . . nor amendments thereto . . . shall go into effect or in any manner be in force” unless submitted to a vote of the people. It will be noticed that the prohibition is not directed against any act which affects banks but only against an act or amendment which authorizes or creates corporations with banking powers. This section of the constitution was construed in People v. Gould, 345 Ill. 288, where the validity of an act making it a crime to receive deposits knowing the bank to be insolvent was questioned as unconstitutional because it had not been submitted to a referendum. The court held the law to be valid, saying in part: ‘ ‘ The section refers to- the manner of organization of banking corporations, the privileges granted to them, the duties and obligations imposed upon them, the supervision, regulation and control of them by the Auditor, and not to the general rules of commercial law, the law of negotiable instruments, and the great mass of substantive law to which the Banking act makes no reference.”

In the same manner and for the same reason an act with relation to the buying and selling of foreign exchange or transfer of money to foreign countries (Ill. State Bar Stats. 1935, ch. 17b, M1-7, pp. 188, 189; Jones Ill. Stats. Ann. 10.43-10.49) was challenged as being contrary to this provision of the constitution in Italia America Shipping Corp. v. Nelson, 323 Ill. 427, 430. The court said: “The basis for this contention seems to be that the powers of banking corporations are increased or enlarged by reason of their exception from the provisions of the act. While the passage of this act may have a tendency to increase the amount of business done by banking corporations by reason of its restrictions upon other corporations, the act does not increase or enlarge the powers of banking corporations, for the reason that prior to the passage of the act it was within the "scope of the ordinary functions of a bank to deal in foreign exchange and money. Wedesweiler v. Brundage, 297 Ill. 228.”

So with reference to the act of July 8, 1931, defined as “an act defining the relationship between banks and their depositors with respect to the deposit and collection of checks and other instruments payable in money,” approved July 8, 1931. (See Session Laws of 1931, p. 671) known as the Bank Collection Code. It was contended in McQueen v. Randall, 353 Ill. 231, that this statute constituted an amendment to the Banking Act and should, therefore, have been submitted to a vote of the people. But the court again said, following the reasoning in the Gould case, that the act did not increase, subtract from or diminish, or in any way affect a right, duty, power or privilege of any incorporated bank or banking association; that it was not, therefore, an amendment to the Banking Act and no reason existed for submitting the act to a vote of the people. In the later case of People ex rel. Nelson v. Dennhardt, 354 Ill. 450, where the same contention was again raised, the Supreme Court adhered to its decision, although in the later case of People ex rel. Barrett v. Union Bank & Trust Co., 362 Ill. 164, the act was held invalid, not upon constitutional ground but for the reason that it was held to be in conflict with the Federal statute which requires ratable distribution of the assets of insolvent national bantes. U. S. C. A. Title 12, Banks and Banking, sec. 194.

As plaintiff points out, the real question is whether the provision of the Trust Companies Act affects banks with respect to their powers in such manner as to constitute an amendment to the Banking Act, thus bringing the act within the prohibition of section 5, article XI of the Constitution. If it does not, it would have been improper to have submitted it to a referendum. People ex rel. Thomson v. Barnett, 344 Ill. 62. Defendant relies upon People v. Gould, 345 Ill. 288; McQueen v. Randall, 353 Ill. 231; Golden v. Cervenka, 278 Ill. 409; Sykes v. People, 132 Ill. 32. In the Sykes case it was held that a law changing the name of a bank which had been fixed by the act created such an amendment and must, therefore, be submitted to a vote. In the Golden case the question did not actually arise in the case but was referred to in the opinion as an additional reason why a provision in the General Corporation Act as to the liability of stockholders of a corporation was inapplicable to a banking corporation. People v. Gould and McQueen v. Randall we have already considered. However, the defendants expressly disclaim any intention to contend that the Trust Companies Act is unconstitutional. The question is only collaterally involved in this appeal. This court has already indicated its opinion that the statute is constitutional in People ex rel. Nelson v. Citizens Trust & Savings Bank, 272 Ill. App. 444. In that case we said: “Had we the power to pass upon the constitutionality of the act we would find no difficulty in holding against appellant’s contention. Section 5 of Article XI of the Constitution requires to be submitted to the people only those acts of the general assembly which (a) authorize or create corporations or associations with banking powers, and (b) acts of the assembly which amend statutes described in (a). The Trust Companies Act applies to banks only as they operate as trust companies, or, to put it in another way, when they function as trust companies, but it does not regulaté them in respect to their general banking business. This important act was enacted in 1887 and its constitutionality has never been questioned. In Meister v. Carbaugh, 310 Ill. 486, 488, the court said:

“ ‘We have often said that “when a statute has long been treated as constitutional and important rights have become established thereunder, the courts may thereafter refuse to consider its constitutionality. ” ’ ”

In the recent case of People ex rel. Barrett v. First State Bank & Trust Co., 364 Ill. 294, in a case where the validity of section 4 of the Bank Depositors’ Protection Act was attacked upon this constitutional ground, the Supreme Court said: “This section of the act has nothing to do with the organization of corporations or associations with banking powers nor with any act of the G-eneral Assembly amending existing laws on that subject. It is not an act creating corporations or associations with banking powers but is penal in its nature. Various sections of this act have previously been before this court for consideration, and it has been uniformly held that they do not constitute an amendment to the Banking act and so do not come within the constitutional provision for determination by a vote of the people. Hoffman v. Sears Community State Bank, 356 Ill. 598; McQueen v. Randall, 353 id. 231; People v. Gould, 345 id. 288.”

We hold the act is not unconstitutional for the reason urged.

VII. Plaintiff, however, further contends that the question of whether defendant was entitled to set-off does not depend upon the assumption that the Trust Companies Act applies to banks. The auditor contends that even assuming that tlm deposit of securities was ultra vires the bank, since the record discloses that Henry C. Reuter, one of the partners, was a di- . rector of the bank from June 14, 1930, until the bank closed June 9, 1931, attended the directors’ meeting and knew his securities were deposited with the auditor of public accounts, was present when a letter from the auditor was read calling attention to the condition of the bank, and on the same date, February 9, 1931, addressed a letter to the auditor assuring him that steps were being taken to correct the depreciation of the bank’s assets, he must have known that his securities were deposited with the auditor under section 6 of the Trust Companies Act, must have acquiesced therein, and as plaintiff contends, is now estopped from contending as against the auditor that the deposit was not lawful and authorized. There is authority supporting this contention. Babcock v. Farwell, 245 Ill. 14, 40; Santos v. National Bank of Glens Falls, 130 Misc. 348, 223 N. Y. Supp. 817; Bird v. Lake Mabel Development Corp., 112 Fla. 494, 150 So. 797; Fletcher, Cyclopedia of Private Corp., Vol. 7, sec. 3453. However, in view of the conclusion at which we have arrived on other phases of the case, it is not necessary to discuss this contention at length. We hold that the court erred in sustaining the exceptions to the report of the master, and for that error the decree is reversed and the cause remanded with directions to the trial court to overrule the exceptions of defendants to the master’s report and to enter a decree as by him recommended.

Reversed and remanded with directions.

O’Connor and McSurely, JJ., concur.


author: Mr. Justice McSurely

text:
    Charles H. Albers, Appellant, v. Nellye Holsman and Continental Illinois National Bank & Trust Company of Chicago, Executors of the Estate of Hyman Holsman, Deceased, Appellees.
    Gen. No. 39,226.
    Opinion filed March 15, 1937.
    Markman, Donovan & Sullivan, of Chicago, for appellant; John A. O’Neil, of Chicago, of counsel.
    James Rosenthal and Sidney Levy, both of Chicago, for appellees; James J. Lawrence, of Chicago, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

In June, 1926, H. Holsman, with a number of other individuals, signed an instrument guaranteeing the prompt payment of indebtedness of Temple Mizpah to the extent of $10,000, with interest; he died in August, 1934, and on October 29, 1934, William L. O’Connell, receiver of the Devon Trust and Savings Bank, a corporation, filed a claim in the probate court of Cook county against the Holsman estate; subsequently an amended claim was filed; the probate court disallowed the claim; the death of William L. O’Connell having been suggested and Charles H. Albers having been appointed his successor, the cause was continued in the name of Albers, receiver, as claimant; the claimant appealed from the order of the probate court to the circuit court, where, after hearing, the claim was disallowed, and the claimant appeals to this court.

Apparently both the probate court and the circuit court accepted defendants ’ view that the original claim filed in the probate court was void as stating no cause of action, and that the amendment was filed more than one year after granting letters testamentary and did not relate back to the date of filing the original claim.

In the original claim filed in the probate court the claimant asserted that there was attached to the claim “a copy of the note upon which his claim is based and that he has no other claim against said estate”; there are various indorsements on the back of the claim indicating that there was an amount owing of $12,689.82; attached to the claim was not a “note” as stated in the claim, but the guaranty signed by H. Holsman and others, guaranteeing the payment of the indebtedness of Temple Mizpah.

No regular pleadings are required in presenting claims in the probate court. In allowance of claims against estates the probate court looks to the substance of the claim and not to mere matters of form. Trego v. Cunningham, 188 Ill. App. 70, 79. On inspection the court could have readily seen that the instrument upon which the claim was based was a guaranty and that the word “note” in the body of the claim was merely a misnomer — a clerical error. In the old case of Smith v. Webb, 16 Ill. 105, the plaintiff misnamed the instrument sued on, calling it a “note” instead of a covenant or agreement; a demurrer was overruled, the court saying that the defendant was not misled or injured by the mistake.

The brief for defendant seems to concede that this clerical error is not vital but asserts that the claim sets forth no cause of action because the guaranty runs to the Broadway National Bank of Chicago and not to the Devon Trust and Savings Bank or to its receiver, and that the claim fails to set forth any right by which the receiver of the Devon bank could institute suit on the guaranty. To this claimant replies that it was necessary to state in the claim only the ultimate fact and that the circumstances tending to prove this have no place in the statement of claim, citing Lavis v. Wisconsin Cent. R. Co., 54 Ill. App. 636, 642. It would seem that as long as the claimant asserted in his claim that the Holsman estate was indebted to him upon the guaranty attached, the executors were given sufficient notice of the nature of the claim. Undoubtedly, upon the hearing it would be incumbent upon the claimant to prove his right to recover on the guaranty. Rule 11 of the probate court of Cook county provides that if claims filed against an estate are founded upon a written instrument a copy shall be attached to the claim. The claimant followed this rule.

But however this may be, we are of the opinion that the amendment which was subsequently filed, although after the year following the granting of letters testamentary, properly stated a claim against the estate, and that it stated the same canse of action stated in the original claim and related back to that claim. Ch. 110, par. 174, snbpar. 2 (Ill. State Bar Stats. 1935; Jones Ill. Stats. Ann. 104.046) provides that an amended pleading shall not be barred by lapse of time if the time limited had not expired when the original pleading was filed and if it shall appear that the original and amended pleadings assert the same cause of action. Zister v. Pollack, 262 Ill. App. 170; Willett v. Baltimore & O. S. W. R. Co., 284 Ill. App. 307.

In the amended claim filed March 6, 1936, it was stated that the claim was against the Holsman estate for money due upon the contract of guaranty given to the Broadway National Bank of Chicago; that the indebtedness of Temple Mizpah to Broadway National Bank was subsequently assigned with the guaranty to the Devon Trust and Savings Bank, of which William L. O’Connell was acting receiver; that the indebtedness secured by the guaranty was represented by a promissory note signed by Temple Mizpah for $12,500. It is clear that both the original and the amended claim related to and were based upon the same cause of action. The claimant and the amount claimed were the same in both the original and amended claim; a copy of the guaranty upon which the claim was based was attached to both the original and the amended claim; the only difference between the two claims is that in the first claim the word “note” appears instead of the word “guaranty,” and the amended claim sets out more fully the right of the receiver of the Devon bank to prosecute the claim. Cases involving similar facts in which it has been held that the amended claim related back to the first claim filed are Carter v. Pierce, 114 Ill. App. 589; Trustees of Old School Presbyterian Church of Kansas v. Estate of Paxton, 180 Ill. App. 658, and Johnson v. Devine, 192 Ill. App. 453. Cases cited by counsel for the estate can be easily distinguished. In In re Estate of Whipple, 285 Ill. App. 491, the claimant first filed a claim for moneys due on certain interest coupon notes, and after the expiration of the year filed an amended claim for the amount due on the principal note; the court held that a note for principal and another for interest must be construed as constituting different causes of action. In the instant case there can be -no doubt but that both claims are based upon the same guaranty.

Defendant asserts that the amended claim is insufficient in failing to allege that the claimant is the actual bona fide owner of the guaranty and how and when he acquired title thereto. We again revert, in answer, to what we have said concerning the informality of pleadings in the probate court. We do not understand that the present Practice Act has changed the practice which obtains in the probate courts.

Upon the hearing in the circuit court it was shown by the testimony of several witnesses that the note and guaranty in question were sold and assigned by the Broadway National Bank of Chicago to the Devon Trust and Savings Bank under an agreement whereby all the assets of the Broadway bank were sold and transferred to the Devon bank. No evidence to the contrary was offered.

The right of an assignee of a note and guaranty to bring suit was involved in Peoples Nat. Bank v. Cosden, 283 Ill. App. 31; there the plaintiff was the assignee of a note and guaranty, the guaranty signed by defendant, Cosden, and running to the Kaw Steel Construction Company; defendant argued that this was a special guaranty and not assignable; the court held that the guaranty was given as security for the payment of merchandise and that the assignment of the note and guaranty to the plaintiff merely assigned the right to recover for moneys then due, the court saying that although a contract may not be assignable, nevertheless the moneys which have become due under it may be assigned, citing cases. Stern v. Gelder, 224 Ill. App. 89, involved a similar question; the court held the money having become due the guaranty had ripened into a cause of action upon which plaintiff, the assignee, could maintain an action in his own name. It follows that the receiver of the Devon bank could maintain an action against the Holsman estate although the guaranty was given to the Broadway National Bank.

Defendant says that the claim cannot be prosecuted against Holsman’s estate because a suit was instituted in the municipal court of Chicago against Hyman Hols-man when alive and the other guarantors. Claimant could not substitute as defendant in the municipal court, the executors of the Holsman estate, for the reason that a judgment against living defendants and the executors would be for the payment of a sum with execution, whereas a judgment against the executors must be paid in due course of administration of the estate. Witteman Co. v. Goeke, 200 Ill. App. 108, 114; Stevens v. Catlin, 152 Ill. 56. A claim may be filed and allowed against the estate of a person who was jointly liable on an indebtedness for the full amount. Poiset v. Townsend, 166 Ill. App. 384, 388.

For the reasons above indicated the judgment of the circuit court is reversed and the cause remanded to that court with directions to reverse the order of the probate court which disallowed the claim, and for such further proceedings as may be necessary consistent with what is held in this opinion.

Reversed and remanded with directions.

Hatchett, P. J., and O’Connor, J., concur.


text:
    In re Estate of George Glauner, Deceased. Walter A. Olsen and Fred B. Houghton, Administrators De Bonis Non with the Will Annexed, Appellees, v. Hartford Accident and Indemnity Company, Appellant.
    Gen. No. 39,291.
    Opinion filed March 15, 1937.
    Rehearing denied March 29, 1937.
    Willard R. Matheny and Louis A. Langille, all of Chicago, for appellant.
    Walter A. Olsen and Fred B. Houghton, all of Chicago, for appellees.
   Mr. Justice McSurely

delivered the opinion of the court.

The administrators de bonis non in the estate of George Glauner, deceased, filed a petition in the probate court alleging a deficiency in the accounts of Phillip E. Miller, former executor, and asked for an order that the Hartford Accident and Indemnity Company, a corporation, as surety on his bond, be directed to pay the shortage; answer was filed by the surety and after hearing the court denied the petitioners’ prayer; appeal was had to the circuit court, which ordered that the defendant pay to the petitioners $2,153.24 with interest and costs, and defendant appeals to this court.

In the administrators’ petition it was alleged that Miller, former executor, was insolvent; that there was a shortage of $2,153.24 in his accounts and that defendant was surety on his bond; defendant in its answer alleged that when the estate was opened, joint control over the estate was established between the executor, Miller, and the defendant whereby the funds of the estate could'be withdrawn only by their joint action; that as consideration for their cancellation of the joint control the beneficiaries, Berthold and Emil Glauner, executed and delivered a specific indemnity agreement whereby they agreed to save the defendant harmless ' from any loss arising under the executor’s bond; that there were no claims against the estate and that the sole beneficiaries are Berthold and Emil Glauner, who signed the indemnity agreement; that it would be a useless act to require defendant to pay the estate the amount of the shortage and then reimburse itself under this indemnity agreement from Berthold and Emil Glauner.

The question for determination is whether the indemnity agreement is a bar to the relief sought by the administrators. It is conceded that Berthold and Emil are the sole distributees in the estate under the will, that all claims and bequests have been paid and that any moneys paid into the estate would go by way of distribution to them. It is not controverted that the defendant executed and delivered its executor’s bond for Miller on September 6,1928; that at this time what is termed a joint control agreement was signed by both and notice was given on September 10th to the State Bank of Chicago, inclosing this joint agreement to the effect that all moneys deposited by the executor to the account of the estate and in a deposit box rented by the executor were to be under the joint control of the executor and the defendant, and that all checks, drafts or other legal orders drawn by the executor against the funds must be honored only when consented to by the defendant or its authorized representative, and entry to the safety deposit box could be had by the executor only when accompanied by an authorized representative of defendant.

Some time thereafter the executor, Miller, asked the agent of defendant if it would release this joint control and was told by the agent that this would be done provided Berthold and Emil executed and gave to defendant an indemnity agreement; Miller promised to obtain this, and a form of indemnity agreement was delivered to him to secure their signatures; Berthold Glauner lived in Detroit, Michigan, and Emil Glauner lived in Brooklyn, New York; the document was forwarded to them and they with Miller executed it and it was delivered to defendant who thereupon, on September 14th advised the bank in writing that it had released joint control and that Mr. Miller should have access to the safety box without the presence of a representative of defendant.

The administrators contend that this indemnity agreement was procured by the fraud of Miller, because in his letter sent to Berthold Glauner inclosing the indemnity agreement for signature, it was said that this was necessary because of the “non-payment of the costs” which Miller said he would advance and later repay himself from money coming into the estate. We do not see how this representation could be called a fraudulent statement inducing the Glauners to sign the agreement. The agreement was received by them in the mail; both are able to read and write the English language, are of mature years and experienced in business. If they were uncertain as to its meaning they could readily have consulted counsel. After the preamble, in the very first provision, the Glauners agreed to indemnify and save harmless the surety on its bond from and against any and all demands, liability, loss, cost, damage or expense of whatever nature or kind which the surety may at any time incur or sustain by reason of executing the executor’s bond, and that they will pay over and reimburse and make good to the surety all sums and amounts of money which the surety shall pay or become liable for under such bond.

Where a party is in possession of his mental faculties and has the opportunity of ascertaining the truth of representations made and does not avail himself of the means of knowledge, he cannot be heard to say that he was deceived by misrepresentations. Dickinson v. Dickinson, 305 Ill. 521, 527.

The main point in argument by the administrators is that there was no consideration for the indemnity agreement. The evidence shows that both the Glauners desired to have the executor make a substantial payment to them out of the estate prior to the statutory period of one year after death. While the evidence is circumstantial there are substantial reasons for concluding that Berthold, Emil, and the executor, Miller, wished to terminate any control of the estate funds by the defendant. After the termination of the joint control and the execution of the indemnity agreement each of the Glauners was paid $2,000 by the executor. Berth-old Glauner, in answer to an inquiry as to how he came to get this $2,000 from the estate, replied that Miller had told him to write a letter that he needed the money and have his brother write a similar letter at the same time; such a letter was written November 2,1928; Emil Glauner was not in Chicago after September 1, and Berthold Glauner was not in Chicago after this date until sometime after November 28th, so that this conversation, in which the Glauners asked the executor to advance money from the estate before they would normally be entitled to receive it, must have occurred prior to the time when defendant released joint control.

It is also in evidence that the Glauners were expeditious in executing and forwarding the indemnity agreement. It was first sent to Berthold in Detroit and then by him to his brother Emil in Brooklyn by special delivery, with the request that Emil return it after execution by special delivery, and then Berthold forwarded it to Chicago by special delivery.

The trial court in announcing its opinion said: ‘ ‘ The Glauners wanted something. Everything would have been all right if they did not want $2,000 apiece. The money would have been there because they would have had joint control. Now, if the Glauners had done no affirmative act of their own the money would have been there and the bonds would have been there.” We think this finding was justified, and that one of the considerations for their signing the indemnity agreement was the desire of the Glauners to obtain early payment on account of their share in the estate.

Many other points are made in the briefs of counsel, but we hold Berthold and Emil Glauner to their agreement to make good to the surety all sums and amounts of money the surety may become liable for by virtue of its bond.

It follows, therefore, that if the defendant should pay into the estate the amount of the shortage of the executor, this amount would be distributed equally between Berthold and Emil Q-launer, and the defendant would then be compelled to proceed against them to recover back the money they have agreed by the indemnity agreement to repay. This would be requiring a useless thing and this is not favored by the courts. Beattie v. Whipple, 154 Ill. 273.

Under the circumstances the situation leads to the conclusion that the administrators are not the real parties in interest in this litigation; that the real parties are the Qlauners; the interest of the administrators is purely abstract and of no value to the Qlauners, as they are obligated to repay to the defendant.

The administrators have filed a cross appeal claiming a larger amount of interest than allowed by the order of the circuit court. As we are holding that the entire judgment order of the circuit court must be reversed, this disposes of the cross appeal.

For the reasons indicated the judgment order of the circuit court is reversed and the cause is remanded with directions to dismiss the supplemental petition of the administrators.

Reversed and remanded with directions.

Matchett, P. J., and O’Connor, J., concur.