text:
    Chicago Title & Trust Company, Appellee, v. John H. Bickley et al., Defendants. Appeal of Builders Bond & Mortgage Company, Appellant.
    Gen. No. 33,936.

      Opinion filed November 6, 1929.
    Joseph Rosenberg, for appellant; Everett Lewy, of counsel.
    Poppenhusen, Johnston, Thompson & Cole, for appellee; James W. Hyde, Clifton J. O’Harra and Frederick Mayer, of counsel.
   Mr. Justice Holdom

delivered the opinion of the court.

This is an appeal from an interlocutory order of August 9, 1929, appointing a receiver. The trust deed sought to be foreclosed secures the payment of the principal indebtedness of $135,000. The appellant in this, cause, Builders Bond & Mortgage Company, filed its bill in the superior court to foreclose a trust deed securing the principal sum of $20,000, the lien whereof, was subordinate to that of complainant in the instant cause. In the Bond * & Mortgage Company case Neis O. Johnson had theretofore been appointed receiver, as recited in the order. In this appeal the receivership in that case of Neis O. Johnson was extended to the case at bar, as in said order recited. Said order is in the following words:

“It is, therefore, on motion of complainant in this cause,

“Ordered, adjudged and decreed that the receivership of Neis O. Johnson, heretofore appointed as receiver in said case number 489934, be and it is hereby extended to this cáuse, and the said Neis O. Johnson, as receiver in this case of said premises, is ordered' to file in this cause & bond as such receiver; in the usual form, in the penal sum of $10,000, with surety to be approved by this court; and

“In view of the fact that this is an extension of a receivership, .

“It is ordered by the court, upon consideration of the sworn bill of complaint herein and of the provisions of said trust deed, and for good cause shown, that the complainant herein be and it hereby is excused from giving, and shall not be required to give, the bond provided by the statute in case of the appointment of a receiver on motion of a party to the cause. ’ ’

The trust deed in the case at bar pledged the rents, issues and profits of the mortgaged premises with power in case of default to collect the same until the indebtedness secured thereby is paid in full.

The power to appoint a receiver is controlled by ch. 22, ff 55 of Cahill’s 1929 Illinois Statutes, which is in the following words:

“Before any receiver shall be appointed, the party maldng the application shall give bond to the adverse party in such penalty as the court or judge may order, and with security to be approved by the court or judge, conditioned to pay . . . provided that bond need not be required, when for good cause shown, and upon notice and full hearing, the court is of opinion that a receiver ought to be appointed without such bond.”

On this appeal we are not concerned with any other phase of the cause except the question of the validity of the order appointing the receiver appealed from. Our jurisdiction extends only to the validity or not of the order. We have no authority to intermeddle with the disposition of the moneys collected by the receiver, — that is a matter for disposition by the chancellor whenever the parties may move the court for a further order in the cause remaining within its jurisdiction. The cause for every purpose, with the exception of the order sought to be reviewed, remains in the trial court.

The power to appoint a receiver in the case at bar is controlled by the statute which requires that complainant shall in the first instance give bond as therein provided. The appointment of a receiver pendente lite in any case is a drastic order removing the property from the control of the mortgagor before the rights of the parties are determined by a judicial hearing and determination. For this reason courts should proceed with caution and no receiver should be appointed unless and until the statutory requirements have been strictly complied with. The statute requires, as a condition precedent to the appointment of a receiver, that “good cause be shown and upon notice and a full hearing,” and further that the court shall be “of opinion that a receiver ought to be appointed without such bond.” The bond referred to is that of complainant. The whole question, and the only one, before us for solution is, did complainant sufficiently comply with the statute, so that the chancellor was justified in dispensing with the statutory bond in appointing a receiver.

There was no full hearing, and no showing that the trust deed was scant security for the indebtedness secured thereby, and the court failed to set forth in the order of appointment that the court was of the opinion that a receiver should be appointed without bond. Of the foregoing there is no dispute. In this condition of the record can the order of appointment be sustained? The authorities controlling uniformly answer the question in the negative. The attempt of counsel to distinguish these cases from the instant case is a failure.

As it will appear from a reading of the order appealed from not only was there no hearing, but nothing in the order waiving* the giving of a bond by complainant to the effect that it was the opinion of the court that the bond of complainant ought not to be required, and the further fact appears that complainant did not give any bond, as the statute required: furthermore there is no recital of any fact which would justify the court in waiving the statutory bond of complainant. While the argument that the order was inferentially based upon the opinion of the court, and that the court would not have come to the conclusion which it did unless it was of the opinion that the bond should be waived, is good logic, still it does not satisfy the statute. We have no right to indulge in inferences. The fact that the court was of such opinion should have been recited in the order.

The authorities are uniform to the effect that the-order appointing the receiver must contain all the necessary findings of fact showing that the requirements of the statute were complied with, and that such find- ■ ings cannot be dispensed with by reference to any other part of the record. The opinion of the court is an essential requirement to justify the entry of the order appointing a receiver without the preliminary bond required by the statute.

Sherman Park State Bank v. Loop Office Bldg. Corp., 238 Ill. App. 450, supports this doctrine, where it is said:

“It is not enough to recite that the bond is waived ‘upon good and sufficient showing.’ The facts must be shown which would excuse 'the giving of the bond. The specific reason for appointing a receiver without bond must be recited in the order.”

In Watson v. Cudney, 144 Ill. App. 624, this court said:

“To entitle appellee to the appointment of a receiver, he must as a sine qua non to the enforcement of that right, give the bond required by statute, unless it is the opinion of the court that a receiver should be appointed, without bond, and then the court’s opinion must affirmatively appear in the order mailing the appointment.”

And we said in Davis v. Blair, 252 Ill. App. 417: “No facts are set forth, and it is not even recited that the chancellor was of the opinion that the bond should be waived. This form of order has been repeatedly held bad.”

These observations are equally applicable to the instant case.

In Foreman Trust & Savings Bank v. American Sash & Door Co., 254 Ill. App. 607 (Abst.), this court said:

“No such bond was required or given by the complainant in support of its application for a receiver, and nothing appears in the bill showing any good reason why the bond should be waived. The order of the court appointing the receiver fails to disclose that it was entered after a full hearing, nor does it affirmatively appear in the order that the court was of the opinion that the receiver should be appointed without bond because of any good cause shown. , . . Under the circumstances as disclosed by the record, the appointment of the receiver was not in compliance with the statutory requirement and this cannot be dispensed with.”

In view of the decisions herein recited and the firm and fast principle adhered to by our State courts of review complainant’s bond on the appointment of a receiver cannot be dispensed with unless the statute regarding the same is strictly complied with. In the particulars herein set forth it confessedly appears that the statute was not complied with. Adhering, as we do, to the doctrine of the cases herein recited, and many others which might have been cited, the interlocutory order appointing a receiver herein is reversed.

Reversed.

Wilson, P. J., and Ryner, J., concur.


source: Caselaw Access Project

author: Mr. Justice Ryner

license: Public Domain

text:
    Mathias B. Becker, Appellant, v. Charles S. Bird et al., Appellees.
    Gen. No. 33,269.
    Opinion filed November 6, 1929.
    Leo L. Weil and O. W. Middlekauff, for appellant; Altheimer & Mater, of counsel.

      Fischer, Boyden, Kales & Bell, for appellees.
   Mr. Justice Ryner

delivered the opinion of the court.

The sole question presented by this appeal is whether the superior court of Cook county committed reversible error in sustaining the general and special demurrer of the defendants Bird & Son, Inc. and Ernest Recldtt.to the complainant’s second amended bill of complaint filed July 3, 1928, and in dismissing the bill, for failure of the complainant to bring before the court necessary parties.

The bill is not abstracted. It is set out in haec veri)a and, with the attached exhibits, occupies 45 pages of the abstract. It alleges, in substance, that for a number of years the complainant has been engaged in the City of Chicago in the manufacture, sale and application of design asphalt roll roofing, and the manufacture for use and sale of machinery for the manufacture' of such roofing; that he is president and managing director of the Elaborated Ready Roofing Company, an Illinois corporation engaged in the same business and that all of the stock in the company is held by the complainant and members of his family; that Charles S. Bird, now deceased, was engaged in like business at East Walpole, Massachusetts; that Bird & Son, Inc., a Massachusetts corporation, is the largest manufacturer of design asphalt roll roofing in the United States and that the majority of its stock is owned by the estate of Charles S. Bird and members of his family.

It is further alleged that there had been protracted litigation, concerning certain patents, in which Charles S. Bird was the plaintiff and the complainant and the Elaborated Ready Roofing Company were the defendants, and that, for the purpose of adjusting their differences, the parties, on May 14, 1919, entered into a written agreement, a copy of which is attached to the bill as Exhibit “B.” This document reads as follows:

“Exhibit ‘B.’

Agreement.

“This contract executed the 14th day of May, 1919, between Charles S. Bird, of E. Walpole, Mass., party of the first part, and Mathias B. Becker of Chicago, Ill., and Elaborated Beady Booting Company, an Illinois corporation, having its regular place of business at Chicago, witnesseth that—

“Whereas, said Bird is the owner of United States patents Nos. 1,036,427 dated August 20th, 1912 and 1,181,827, dated May 2nd, 1916 for design roofing and “Whereas, said Bird brought suit on said patents in the U. S. District Court for the Western District of New York against said parties of the second part and Elaborated Booting Company of Buffalo, N. Y., in which suit it was held that said patents were valid and said patent 1,181,827 infringed by the defendants, an injunction having now issued in said case and an accounting being now in progress; and “Whereas, the parties desire to terminate said litigation and

“Whereas, said Becker is the owner of United States patents 1,024,549, dated April 30th, 1912; 1,024,550 dated April 30th, 1912; 1,157,664, dated October 26th, 1915; 1,157,665 dated October 26th, 1915; 1,174,960 dated March 14th, 1916, and 1,222,594 dated April 17th, 1917, all relating to designed roofing products, apparatus or processes.

“Now Therefore, in consideration of the premises and of $1.00, and other valuable considerations by each party to the other in hand paid, receipt whereof is hereby acknowledged, the parties mutually covenant and agree as follows:

“1. Said Becker will convey forthwith to said Bird, all of said patents and patent rights now owned by him and all other patents or applications for patent, of the "United States or Canada relating to design roofing products, machinery or apparatus now owned by said Becker, together with all claims and rights of action for past infringement thereof.

“2. Upon the execution and delivery of such assignment said Bird and said Elaborated Ready Roofing Company will execute a license agreement in the form hereto annexed and marked Exhibit A, and a final decree shall be entered in said suit conforming to the terms of the interlocutory decree now on file, but providing for the payment of no damages, profits or costs, and the bond now on file in said case shall be cancelled.

“3. The royalties paid to said Bird by said Elaborated Ready Roofing Company under said license, and all royalties which may in future be received by said Bird for licenses for future use of said Bird and Becker patents, or any of them shall constitute a royalty fund, to be disposed of as follows: Out of said royalty fund there shall first be paid any expenses involved in connection with the grant or enforcement of said licenses and any expenses of litigation on said patents or any of them; From said royalty fund there shall also be paid any sum or sums, whether they are of royalty payments or purchase price which Bird may pay to any other person or persons in order to acquire patents or licenses underpatents in order to strengthen the patent situation to which this agreement relates or to settle claims for infringement connected with said patent situation. If such patents are acquired and royalties collected thereunder such royalties shall be added to the royalty fund. Subject to said deductions said royalty fund shall be divided between said Bird and said Becker in the ratio of 66%% to Bird and 33%% to said Becker. Said Bird agrees to consult with said Becker prior to making agreements for royalty payments to others, purchase of other patents or licenses, or other steps taken pursuant to this clause.

“4. Said Bird shall keep accurate records of all receipts and disbursements of said royalty fund, which records shall at all times be open to inspection by said Becker or his duly accredited representatives and quarterly statements thereof shall be rendered by said Bird, with payment of balances due on the tenth day of January, April, July and October of each year.

“5. The sum of $3,166.30 now due to said Becker from certain licensees under said Becker patents (Amalgamated Roofing Co., Patent Vulcanite Co., and McHenry Millhouse Co.), or such other sums as may be now due from said licensees, shall be paid over to said Bird.

“6. Before any share in said royalty fund shall be payable to said Becker, the sum of $35,000, shall first be paid out of said fund to said Bird.

“7. Said Beckef will supply to Bird & Son, Inc., a machine of the kind now in use by said Becker for printing roofing, free of charge. Bird & Son, Inc., shall not be required to pay any royalties on account of the use of said patents or any of them unless said Bird & Son, Inc. shall use the machinery of said Becker. Said Bird & Son, Inc., shall have a six months period to try said machine and during said period shall pay royalty of fifteen cents per square into said royalty fund on all design roofing manufactured on said machine, or on similar machines which may hereafter be acquired by said Bird & Son, Inc. and at the termination of said period should said Bird & Son, Inc., use said Becker machine or similar machines, said Bird & Son, Inc. shall pay a royalty of 15 cents a square on all design roofing of any character manufactured by said Bird '& Son, Inc. into said royalty fund. ” 4

“8. Any future inventions relating to design roofing processes and machines or products which may be made by said Becker or said Bird shall fall within the scope of this agreement, such inventions, if made by Becker to be assigned to said Bird, and all future patents or rights purchased from royalty funds from others or obtained by either of the parties, involving design roofing processes, machinery or products; and the expenses of patent applications on any such inventions to be paid out of the royalty fund. Any such invention made by either party shall be promptly communicated to the other party.

“9. Said Becker and said Elaborated Ready Roofing Co. hereby guarantee that said Bird shall receive out of said royalty fund at least $20,000 (less any sums which Bird may receive under Article 5 hereof) within two years from the date hereof and agrees to pay any additional sum necessary to make up that amount two years from the date hereof.

“10. Said Becker shall have the exclusive right to manufacture and sell machines for printing roofing under his machines patents above enumerated, said machines to be sold only to persons or corporations who may be licensed under said Bird and Becker patents, and to be sold at a uniform price to all licensees, in no case to exceed $1,500 for a single machine, and $2,000, on a double machine. If said Becker shall not wish or shall not be able to supply such licensees with such machines as they may require, such licensees shall have the right to procure them elsewhere.

“11. In the event of a termination of the license agreement to be executed under Article 2 hereof for breach of covenant by said Bird, all patents and inventions which shall have been assigned to said Bird by said Becker shall thereupon be reassigned to said Becker.

“12. Upon the carrying out of clause 1 and 2 hereof, said Bird will release said Becker, said Elaborated Ready Roofing Co., said Elaborated Roofing Co., of Buffalo, said Patent Vulcanite Company, said Amalgamated Roofing Company, said McHenry Millhouse Company and all their customers from any liability for infringement prior to the date hereof of said Bird patents on account of the manufacture, use or sale of roofing manufactured and sold by said companies or any of them.

“13. Any disputes arising between the parties hereto shall be submitted to arbitration by three arbitrators, one to be selected by the party of the first part, one by the party of the second part and the third by these two. The award of a majority of the three arbitrators shall be final.

“14. This agreement shall be binding upon and shall enure to the benefit of the parties, their legal representatives and assigns.

“In witness whereof the parties have hereunto subscribed this instrument on the date first above written.

(Signed) Charles S. Bird

By Philip R. Allen, Atty.

(Signed) Mathias B. Becker

. Elaborated Ready Roofing Co.

By M. B. Becker, Pres.”

The bill then alleges performance on the part of the complainant and that Bird proceeded, under the provisions of the contract to execute licenses to various parties to manufacture roofing under the patents mentioned in the agreement. The names of the licensees are given but they do not include Bird & Son, Inc. In fact it is admitted in the bill that the complainant does not know whether this company ever executed a royalty agreement or ever agreed to pay any royalties to Charles S. Bird.

Charles S. Bird died, a resident of East Walpole, Massachusetts, on October 9,1927. He left a will which was admitted to probate in the probate court of Norfolk county, in the State of Massachusetts. Pursuant to the nomination contained in the will, that court appointed three persons as executors and trustees. They are designated as parties to the bill but in the prayer the complainant says that he asks no relief against them “unless and until they shall enter their appearance in this court and-submit themselves to” its jurisdiction. This they did not do. Bird & Son, Inc. entered its appearance and demurred to the second, amended bill of complaint. Charles S. Bird was never served with process and his appearance was at no time entered in the cause.

There are many charges made in the bill of fraud on the part of Bird and Bird & Son, Inc. and of a conspiracy between them to injure the complainant but they are mere conclusions of the pleader and without supporting facts. The only facts set forth, designed to establish a liability of the corporation, Bird .& Son, Inc. are that “Commencing May 14, 1919, the said Bird & Son, Inc., conspiring with Charles- S. Bird, to defraud your orator, without the knowledge of your orator, have performed all acts in reference to the administration of the agreement known as Exhibit .‘B.’ The executives, bookkeepers, cashiers and employees of Bird & Son, Inc., have taken care of all the correspondence with Elaborated Ready Roofing Co., and the other licensees, have made out all of the reports of monies received and monies paid out of said.license fund created by the contract known as Exhibit ‘B,’ and during all of that time the salary and wages paid the said executives, bookkeepers, cashiers and employees of Bird & Son, Inc., have been paid out of the funds of Bird & Son, Inc. The above described employees of Bird & Son, Inc., employed auditors who examined and audited the books of account of Elaborated Ready Roofing Co., and the other licensees annually at the expense of the royalty fund provided for in Exhibit ‘B.’ Said auditors, as employees of Bird & Son, Inc., obtained from Elaborated Ready Roofing Co., and the other licensees the names and addresses of the customers and purchasers of design asphalt roll roofing, and the amount of design asphalt roll roofing purchased by each customer. Ever since May 14,1919, being the date that the contract Exhibit B’ was executed, the defendant Charles S. Bird has signed no checks, no letters, no reports, conducted no negotiations with licensees, but has intrusted the executive management of the administration of the royalties and trust funds created by said contract Exhibit ‘B’ to an attorney in fact, Philip R. Allen, and during all of that time, from May 14, 1919, up to the date of the filing of this Bill the said Philip R. Allen has at the same time been the General Manager and General Superintendent and has had the entire executive management of the affairs of Bird & Son, Inc. ’ ’; and that: ‘ ‘ Charles S. Bird as owner of the controlling interest in the corporation known as Bird & Son, Inc., conspiring as an officer of Bird & Son, Inc., and for the purpose of defrauding your orator ever since the signing of the contract known as Exhibit B’ has permitted Bird & Son, Inc., to sell said design asphalt roll roofing at the same price as all the licensees under the agreement known as Exhibit ‘A,’ and that the 15 cent royalty due under the contract known as Exhibit ‘B’ was not paid over by Bird & Son, Inc., to Charles S. Bird as trustee as provided by the terms of the contract known as Exhibit B,’ and the said Bird & Son, Inc., have ever since May 14, 1919, retained and still retain the 15 cent per square that is due to Charles S. Bird as trustee and to your orator under the terms of the agreement known as Exhibit ‘B’ and further that: “In compliance with the said Section 7 of Exhibit ‘B’ above quoted and pursuant to express orders received from Bird & Son, Inc., following the provisions in the contract ExhibitB,’ your orator manufactured two machines of the kind which were in use May 14, 1919, by your orator for the printing of roofing; that the said Bird & Son, Inc., having knowledge of Exhibit ‘B,’ ordered certain alterations to be made in said machines and ordered said machines to be delivered, one to the Canadian plant of the said Bird & Son, Inc., and the other to the East Walpole, Massachusetts, plant. In compliance with said orders your orator loaded said machines on freight cars and prepared to deliver same to said Bird & Son, Inc., free of charge, but the said Bird & Son, Inc., conspiring by its officers with said Charles S. Bird to defraud your orator and escape the payment of royalties, refused to accept said machines so manufactured and constructed by your orator but immediately proceeded to manufacture and construct machines similar to the kind that was in use by your orator on May 14, 1919, for the printing or roofing; and the said Bird & Son, Inc., have purchased machines similar to the machines manufactured by your orator and have manufactured design asphalt roll roofing on said machines ever since May 14, 1919, and have not paid fifteen cents ($0.15) a square on all design roofing manufactured by Bird S Son, Inc., to Charles S. Bird; and said Charles S. Bird, conspiring as aforesaid, has not demanded of Bird & Son, Inc., nor have his executors, that it pay royalty in said royalty fund arid said Charles S. Bird, nor his executors have made no effort to collect any royalties from Bird & Son, Inc., although often requested by your orator so to do. Said Bird & Son, Inc., under the terms of Exhibit ‘B’ are indebted to said royalty fund in a sum in excess of four hundred thousand dollars ($400,000).”

The bill might be sufficient to require an accounting from Charles S. Bird if he were alive and served with process. AH of the complainant’s dealings were with him and he was the one who personally obligated himself to perform the contract of May 14,1919. But Bird & Son, Inc. did not sign that or any other agreement so far as'the bill discloses. There is no allegation that the company ever agreed to be bound by any contract executed by Bird or that it did any act which would directly obligate itself to the complainant. The fact that Bird and his family owned a majority of the stock of the company is of no significance because there is no charge that the corporation was not legally organized or that it was used as a cloak for fraud. Likewise no liability on the part of' the corporation was created because Bird saw fit to enlist the services of its officers and employees in the matter of correspondence, the auditing of books, and the performance of other administrative acts in connection with the contract.

Even if Bird & Son, Inc. incurred any obligation to pay royalties by virtue of having ordered from Becker, machines which it did not use, but used machines of similar design, it became indebted, not to the complainant, but to Charles S. Bird. In fact this is the position taken by the complainant. The bill contains numerous charges against Bird and his executors of dereliction of duty on their part to collect, or attempt to collect, from the corporation, royalties due Bird in his lifetime and, after his death, to his estate.

It is exceedingly doubtful whether the complainant would be entitled to any relief against Bird & Son, Inc. even if all necessary parties were before the court. It is clear that all of the transactions of the complainant were had with Bird as an individual, and that he in his lifetime, and now his estate, are the parties bound to account to the complainant if the allegations of the bill be well founded.

It is well settled that the trial court could not acquire jurisdiction to enter a valid decree against the representatives of the estate of Charles S. Bird. Elting v. First Nat. Bank of Biggsville, 173 Ill. 368. That being so, Bird & Son, Inc. should not be required to account to the complainant and then be subjected to the hazard of a second accounting to the representatives of the estate of Bird.

For the foregoing reasons, the decree of the superior court of Cook county, dismissing the second amended bill of complaint, is affirmed.

Affirmed.

Wilson, P. J., and Holdom, J., concur.


text:
    Rudolph Levin, Appellee, v. Louis Z. Goldberg et al., Defendants. Appeal of Trustee System Reinco Company, Appellant.
    Gen. No. 33,290.
    Opinion filed November 6, 1929.

      Edward C. Wurtele, for appellant; Norman A. Beck, of counsel.
    William B. Berger, for Abraham L. Himelblau, Receiver.
   Mr. Justice Ryner

delivered the opinion of the court.

The complainant, on December 29, 1927, filed his bill in chancery, in. the circuit court of Cook county, to foreclose a junior mortgage. The bill was in the usual form, charging certain defaults and praying for a foreclosure and the appointment of a receiver. A receiver was appointed, without the complainant complying with the statutory requirements, but no question is raised about the propriety of his appointment. The sole question presented by this appeal is whether the trial court erred in ordering the Trustee System Reinco Company, in a summary proceeding, to pay to the receiver the sum of $1,001.07 representing rents which were due and collected prior to the receiver’s appointment.

The appellant, Trustee System Reinco Company, contends that the receiver had no greater right to these monies than if they had been collected and retained by the owner of the property. The appellee concedes that if the monies in question had come to the hands of the owner neither the receiver nor the mortgagee would have any valid claim to them. But, he contends that, even if the Trustee System Reinco Company was the duly authorized agent of the owner, the receiver was entitled to the monies because they had not yet been turned over to the owner at the timé of the receiver’s appointment. He makes the further point that the proof failed to show any authority from the owner to the Trustee System Reinco Company to collect the rents and out of them to retain commissions and reimburse itself for proper disbursements mad© in connection with the management of the property.

Bearing upon the latter point the bill contains an allegation as follows:

“Your orator further represents that subsequent to the execution of the trust deed herein sought to be foreclosed, the defendant, Louis Z. Goldberg, did enter into a certain agreement with the Trustee System Reinco Company, formerly Trusco Agency Service Company, which said agreement is in words and figures the following.”
The agreement, which contained ample authority for the Trustee System Reinco Company to retain the monies in question as against the owner is then set out in haec verba. It is signed, “Louis Z. Goldberg, (Seal)
By A. Goldberg.”

The bill further alleged that the Trustee System Reinco Company had collected rents from the premises in question, under the agreement set out in the bill, which it retained, claiming certain interest therein, and praying that these rents be ordered paid to the receiver.

The bill was sworn „o by an agent of the complainant as being true in substance and in fact. .

Despite these allegations in the bill of complaint'the court, upon a petition of the receiver and answer of the Trustee System Reinco Company, setting up and relying upon the agreement between itseli and the owner and further stating that it had collected no rentals subsequent to several weeks prior to the appointment of the receiver, ordered the Trustee System Reinco Company to pay to the receiver the monies in question. What occurred, other than the entry of the order, upon this hearing, is not disclosed by the record. The bill was not amended by eliminating the .allegations, above referred to, or changing them in any respect.

The provision in a trust deed, pledging the rents, issues and profits is for the sole purpose of providing a secondary fund or security to protect the mortgagee against loss in the event that upon foreclosure and sale there is a deficiency. Until the' mortgagee takes possession or procures the appointment of a receiver he has no better claim to the rents than a stranger. Until he takes such action the owner may permit any person whether duly authorized in writing or otherwise to collect the rents and retain, from the amounts collected, commissions and disbursements. It is his money and he may do with it as he pleases.

The chancellor found that the sum of $1,001.07, according to the books and statements of the Trustee System Eeinco Company, consisted of two items, i. e., a loan to Abe Goldberg of $550 and commissions amounting to $451.07. He refused to allow either item and denied the petition of the Trustee System Eeinco Company for an order upon the receiver to return to it the entire amount. Upon the hearing he declined to admit in evidence the agreement until proof was made of authority on the part of A. Goldberg to execute it on behalf of the owner, Louis Goldberg. Proof in this respect not being forthcoming objection to the admission in evidence of the document was sustained. This ruling was made despite the sworn allegation of the bill that the owner entered into the agreement with Trustee System Eeinco Company and that the monies in question consisted of rents collected under it. A witness for the petitioner, whose testimony was uncontradicted, stated that the loan of $550 to A. Goldberg was for the purpose of making a payment upon the second mortgage upon the property being foreclosed.

A strong inference arises, from the pleadings and all the facts and circumstances appearing in the record, that the owner had knowledge of and consented to the collection of the rents and the disposition made of them by the Trustee System Eeinco Company. So far as the record discloses he did not appear in the cause to contest the company’s claim or to testify on behalf of the receiver.

The receiver was appointed on December 30, 1927. The order, without any finding that the Trustee System Reinco Company had collected any rents from the property, ordered the company to pay over to the receiver all monies on hand on account of rents collected by it. This formed the basis for the subsequent proceedings. It appears that the last collections of rent by the company were made on December 10, 1927, and for that month, no collections of rent in advance having been made.

Neither the receiver nor the .mortgagee, under the trust deed or any law, had any valid claim to the rents in question. If the agreement relied upon by the Trustee System Reinco Company was recognized by the owner as binding upon him then the company was authorized to act as it did. If the company acted without the knowledge or authority of the owner, it became liable to account to him as an agent de son tort, and to no one else. Even if the company was wholly without right to collect the rents and disburse the monies so collected, that would not confer a right upon either the receiver or the mortgagee which did not otherwise exist.

For the foregoing reasons, the order of the circuit court of Cook county, entered on November 19, 1928, denying .the petition of the Trustee System Reinco Company for a return óf the sum of $1,001.07 theretofore paid to the receiver pursuant to order of court, is reversed and the cause is remanded with directions to that court to enter an order directing the receiver to pay over and return said sum of $1,001.07 to said Trustee System Reinco Company.

Order reversed and cause remanded with directions.

Wilson, P. J., and Holdom, J., concur.


author: Mr. Presiding Justice Boggs

text:
    Charles F. Selby and A. H. Nelson, Trading as Selby-Nelson Engineering Company, Appellees, v. Village of Winfield, Appellant.
    Gen. No. 8,007.

      Opinion filed October 19, 1929.
    Tenney, Harding, Sherman & Rogers and William R. Friedrich, for appellant; S. Ashley Guthrie, of counsel.
    Hadley & Weaver, for appellees; Harry G. Weaver, of counsel.
   Mr. Presiding Justice Boggs

delivered the opinion of the court.

An action in assumpsit was instituted by appellees against appellant in the circuit court of DuPage county to recover the amount alleged to be owing appellees on the following contract:

“This Agreemeht made this 13th day of January A. D. 1927, by and between the Selby-Nelson Eng. Co. of Wheaton, Illinois, party of the first part, and the Village of Winfield (by its President) a municipal corporation of the State of Illinois, party of the second part.
“Withesseth:
“That Whereas, the party of first part are civil engineers skilled in the making of surveys, estimates, maps, plans, profiles, and detailed drawings and in the supervising the construction of municipal, civil and sanitary engineering work, and
“Whereas, the party of the second part desires to obtain the services of a skilled and competent engineering firm to assist in the carrying out of a certain municipal improvement in the Village of Winfield, Illinois, contemplating the laying of water mains and other necessary appurtenances pertaining thereto within the limits of said Village.
“Therefore This Agreemeht Withesseth:
“1. That in consideration of the covenants and agreements hereinafter mentioned, to be performed by the parties, and of the payments hereinafter agreed to be made, it is mutually agreed as follows:
“2. The party of the First part will make the necessary surveys, estimates, profiles, maps, plans, working drawings and specifications, will attend, by their authorized representative, such meetings of the Board of Local Improvements as may be necessary,from time to time, will prepare and furnish sufficient sets of typewritten specifications for the improvement contemplated, advise the proper authorities as to the best and most suitable kinds and materials of construction, will carry out their instructions, and secure the approval of the State Board of Health on matters requiring such approval; will prepare forms for.bidding, sheets and contracts; will attend lettings and protect the interests of the party of the Second part.
“3. During the construction the party of the First part will furnish such engineering and inspection services as may be necessary to properly supervise and direct the work, give lines and grades,' insure proper construction and rigid compliance with the letter, and, spirit of the plans and specifications.
“4. The party of the First part will by authorized representative make such visits as may be" necessary from time to time during the progress of construction,> will prepare monthly and final estimates, and will, if requested by the proper official, assist in the final ad-. ‘ judication upon the completion of the work..
“5. Party of the Second part will in consideration of the services hereinbefore mentioned, ■ make ■ pay-, ment's to the party of-the First part) as follows: • “First: Upon the confirmation of the-assessments, by the County Court, a sum equal to: two-.and one-half (2%) per cent of the total estimated cost-of-the-improvement. ■ • , -
“Second: Monthly, after the beginning of construction work, a sum equal to two and one-half (2%)-per cent of the estimated value of the work performed- by the contractor during the previous month, -the final payment to be made within thirty days, after the-, time for completion specified, shall be such that the total payments shall equal five (5) per cent of the total cost of the improvement. -
“6. It is mutually agreed that this contract shall be effective from the date of its execution; by the parties hereto, until completion of the construction work contemplated herein, and all the payments herein-before described have been made to the party of the First part.
“In Witness Whereof the party of the First part has set its hand and seal this 13 day of January A. D.
1927, and the party of the Second part has caused this contract to be signed by its President, and attested by its Clerk.
“Selby-Nelson Eng. Co.,
Party of the First part.
By Chas. F. Selby.
Village of Winfield,
Party of the Second part.
By O. C. Atkinson, its President.
(corporate seal)
“Attest:
Mathias E. Mueller, its Clerk.”

Shortly after the signing of the above instrument, appellees entered upon the performance of their duties thereunder, and laid out a tentative scheme or plan for said work. The plans as finally amended were adopted by the board of local improvements of appellant village. An ordinance was prepared and presented to the village board with a recommendation that the same be passed. The total cost of the improvement as estimated by appellees was $60,000. Before the ordinance was acted on by said village board, an election was held and five new members were elected. The village board passed a resolution to the effect that the plans, etc., submitted were not “efficient and proper from an engineering standpoint,” and that the purported agreement entered into with appellees be “cancelled” and the services of appellees be “dispensed with and discontinued.” After the election of the new village board in May, 1927, appellees wrote to said board, stating that they were ready to proceed with the work to be done under the purported contract, and that they would hold themselves in readiness to perform thereunder. In the latter part of June, 1927, appellant notified appellees that their services were dispensed with, whereupon suit was brought as above set forth.

The pleadings and assignment of errors in this case are exceedingly prolix. However, it will not be necessary for us to go into a discussion of the rulings of the court on the pleadings, in passing on the questions necessary for a determination of said cause.

One of the principal grounds relied on for a reversal is that the authority of Oliver C. Atkinson, president of said village board, to execute said contract, is not shown by the evidence.

Appellees insist that the verified plea of the general issue is not sufficient to raise this question.

“Where an instrument purports to be executed by an agent, the authority of the agent is a material part of the execution, ... To require proof of the execution is to require proof of the authority to execute the instrument, and if the execution is denied by a verified plea, the authority of the agent constitutes an essential part of the plaintiff’s proof.” City of Chicago v. Peck, 196 Ill. 260-262. To the same effect are: Board of Supervisors of Schuyler County v. People, 25 Ill. 181-184; Schuyler County v. Missouri Bridge & Iron Co., 256 Ill. 348-352; Walsh v. Marvel, 130 Ill. App. 305-308; Illinois Nat. Bank v. Town of Bois d’Arc, 243 Ill. App. 587-594. In City of Chicago v. English, 180 Ill. 476, cited by counsel for appellees in support of their contention, the court at page 479 holds: “Where an instrument is executed by an agent, the plea puts ih issue the authority of the agent to do the act.” This decision is not in conflict with the above authorities.

It therefore follows that the verified general issue is sufficient to raise said question, and that proof of such authority must be made.

Inasmuch as the purported contract undertakes to involve appellant village in a money liability, such liability must have been authorized by a recorded yea and nay vote of the members of said board, in a regular or called session. Sec. 13, art. 3, ch. 24, ff 44, Ca-hill’s St.; Barr v. Village of Auburn, 89 Ill. 361-362; People v. Chicago & E. I. Ry. Co., 314 Ill. 352-357; Crawford v. Board of Education Dist. No. 88, 215 Ill. App. 198-201; Arnold v. Village of Ina, 244 Ill. App. 239-240. Appellees practically conceded that there is no such record, but undertook, by oral testimony, to show that said contract was from time to time discussed by the members of the village board, and that it was executed with their knowledge and approval.

“Where a collection of individuals, designated in a manner provided by law, are created a body to whose care public affairs are committed, the body so created is powerless to act, except together as a body, and where a record of its proceedings is required to be kept, such record is the only lawful evidence of its action, and it cannot be changed by parol proof.” People v. Board of Sup’rs Madison County, 125 Ill. 334-344; People v. Carr, 231 Ill. 502-506; People v. Warren, 231 Ill. 518-521; City of Belleville v. Miller, 257 Ill. 244-246; People v. Toledo, St. L. & W. R. Co., 270 Ill. 472-476; People v. Chicago & E. I. Ry. Co., supra, 412; Arnold v. Village of Ina, supra, 240.

If there is a statute prescribing the method by which an officer or agent can bind a municipal corporation by contract, such method must be followed, and there is no implied contract or liability of such municipal corporation. Tamm v. Lavalle, 92 Ill. 263-271; Roemheld v. City of Chicago, 231 Ill. 467—471; Arnold v. Village of Ina, supra, 240.

It therefore follows as a logical conclusion, that said contract was signed by said village president without authority, and that appellant was not bound thereby.

It is- insisted that, even though it be conceded that Atkinson had authority to execute said contract, ap- ■ pellant was not bound thereby, for the reason that, at the time said contract was signed, no appropriation had been made to cover the amounts to be paid appellees as sUjCh engineers.

Appellees conceded that there was no such appropriation, and offered oral testimony to the effect that there wás a tacit understanding with the members of said board, that the amount contracted for was to be paid out of the special assessment to be- levied in connection with the installation of said water system. This testimony was admitted over the objections of appellant.

Oral testimony is not admissible to enlarge or vary the terms of a written contract. American Nat. Bank v. Holsen, 331 Ill. 622-630; Davis v. Fidelity Fire Ins. Co., 208 Ill. 375-382; Hunter v. Gates, 227 Ill. App. 105-107. If it be conceded that appellees had the right to show out of what fund their compensation was to be paid, such showing must have been made from the records of said board. People v. Chicago & E. I. R. Co., supra, 412; Arnold v. Village of Ina, supra, 240. In People v. Chicago & E. I. R. Co., 306 Ill. 402, the court at page 412 says:

“It is contended on the part of the appellee that the requirement of the consent of the majority of the members of the board of town auditors refers to the individuals who constitute the board, and does not require the official action of the board. The power to authorize the levy of an additional tax is one which it is not to be presumed the legislature would, if it could, confer upon individuals in their private capacity. The act of consenting to the levy of the additional tax is official in its nature. It requires the official action of the board by a majority of its members, and those members must act in their official capacity, at an official meeting, and the action of such meeting can be shown only by the record which the town clerk is required to keep.”

To the same effect are: People v. Board of Sup’rs Madison County, supra; People v. Carr, supra; People v. Warren, supra; City of Belleville v. Miller, supra; People v. Toledo, St. L. & W. R. Co., supra. The court therefore erred in admitting said oral testimony.

Section 4 of article 7, Cahill’s St. ch. 24, U 95, provides among other things:

“No contract shall be hereafter made by the city council or board of trustees, or any committee or member thereof; and no expense shall be incurred by any of the officers or departments of the corporation, whether the object of the expenditure shall have been ordered by the city council or board of trustees or not, unless an appropriation shall have been previously made concerning such expense.”

Section 208 of division 1 of the Criminal Code, Ca-hill’s St. ch. 38, T! 436, provides:

“Every person holding any public office (whether State, county or municipal), trust or employment, who shall be guilty of any palpable omission of duty, or who shall be guilty of diverting any public money from the use or purpose for which it may have been appropriated or set apart by or under authority of law, or who shall be guilty of contracting, directly or indirectly, for the expenditure of a greater sum or amount of money than may have been, at the time of making the contracts, appropriated or set apart by , law or authorized by law to be contracted for or expended upon the subject-matter of the contracts, or who shall be guilty of wilful and corrupt oppression, malfeasance or partiality, where no special provision shall have been made for the punishment thereof, shall be fined not exceeding $10,000, and may be removed from his office, trust or employment,” ■ ■

A contract expressly prohibited by a valid statute' is void. This proposition has no exception, for the law cannot at the same time prohibit a contract and enforce it. The prohibition of the legislature cannot be disregarded by the courts. Botkin v. Osborne, 39 Ill. 1.01; Wells v. People, 71 Ill. 532; Board of Education of Galesburg v. Arnold, 112 Ill. 11; Penn v. Bornman, 102 Ill. 523; Cincinnati Mut. Health Assur. Co. v. Rosenthal, 55 Ill. 85; De Kam v. City of Streator, 316 Ill. 123-129.

Counsel for appellees, in their brief and argument, state the proposition that “where a village has entered into a legal and binding contract with engineers, for services to be performed in connection with a local improvement, and where the engineers are to be paid out of the funds realized from special assessments, if the village voluntarily abandons the special assessment proceeding, the engineer may, by electing to keep the contract in force and effect, and by being ready, able and willing to continue with the contract, recover the full contract price.”

Appellees’ position is not tenable. It is based on the erroneous assumption that a valid contract was entered into. Even if there had been such contract, we would not be warranted in holding the village liable for an abandonment thereof, for the reason that we would be compelled to hold that such contract bound appellant to adopt and pass an ordinance for the construction of said work, and that, failing so to do, it had abandoned its contract; in other words, that a city or village could, by contract, take away or limit its legislative powers.

In the passage of ordinances providing for local improvements, a city council or village board is clothed with power to determine what local improvement is required, its nature and character, when it shall be made, and the manner of its construction. These are matters conferred to the discretion of such bodies, and that discretion, when honestly and reasonably exercised, cannot be reviewed in the courts. Walker v. City of Chicago, 202 Ill. 531-538; English v. City of Danville, 150 Ill. 92; Ton v. City of Chicago, 216 Ill. 331-334; People v. Omen, 290 Ill. 59-63.

A legislative body” cannot part with its powers -by any proceedings, so as not to be able to continue to exercise such powers. It has no authority, even by contract, to control and embarrass its legislative powers and duties. City of Danville v. Danville Water Co., 178 Ill. 299-312, citing Greenhood on Public Policy, p. 317; Cooley’s Const. Lim., 206; 15 Am. & Eng. Encyc. of Law, 1045; 1 Dillon on Mun. Corp., sec. 443. See also Board of Education of Alton Community v. Alton Water Co., 314 Ill. 466-470; Wabash R. Co. v. City of Defiance, 167 U. S. 88-97-98-100.

Everyone is presumed to know the extent of the powers of a municipal corporation, and it cannot be estopped to aver its incapacity, which would amount to conferring power to do unauthorized acts, simply because it has done them and received the consideration stipulated for. Stevens v. St. Mary’s Training School, 144 Ill. 336; Hope v. City of Alton, 214 Ill. 102; May v. City of Chicago, 222 Ill. 595; People v. Parker, 231 Ill. 478; Eastern Illinois State Normal School v. City of Charleston, 271 Ill. 602; De Kam v. City of Streator, supra, 132.

In the De Kam case, supra, a bill had been filed by certain taxpayers on behalf of themselves and other taxpayers, to restrain the City of Streator from paying the amount alleged to be due for certain engineering services contracted for by said city, without an appropriation first having been made to cover the same. The court held no right of recovery was shown. An examination of the opinion in that case will disclose that it is peculiarly applicable here, and that it disposes of practically all of the propositions contended for by appellees. Under that decision, appellees have no right of recovery.

It might be observed that certain of the counts of appellees’ declaration were framed on the theory, of a quantum meruit liability. No evidence was offered under said counts, and counsel for appellees, in their .brief and argument, state that they are not seeking a recovery thereunder, but for the contract price of 5 per cent of the estimated cost of said improvement.

Other errors were assigned on the record, but under our holding as above set forth, it is not necessary to discuss the same. No right of recovery is shown in this case. We therefore hold that the court erred in directing a verdict for appellee, and in not directing a verdict in favor of appellant.

Judgment reversed with finding of facts.

. We find as ultimate facts, to be incorporated as a . part of the judgment in this case, that the instrument . sued on was signed on behalf of appellant village by O. C. Atkinson, president of the village board, without authority from said board; that said instrument was not a valid and binding contract as against appellant, and that; even if said instrument were valid, there was no appropriation on which to base the same.


author: Mr. Presiding Justice Eldredge

text:
    Clifton M. Warner, Appellee, v. Winifred W. Rogers, Trustee of the Last Will and Testament of Clifton H. Moore, Deceased, Appellant.
    Gen. No. 8,283.

      Opinion filed October 23, 1929.
    Herrick & Herrick, for appellant.
    Frank K. Lemon and Louis O. Williams, for appellee.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

Clifton M. Warner, appellee, one of the trustees appointed by the circuit court of DeWitt county under the last will and testament of Clifton H. Moore, deceased, filed a report of his acts as “managing” trustee in said court for the year 1926. This report purports to be presented on behalf of all of the trustees, to wit, Clifton M. Warner, John Warner, Winifred W. Rogers and Frances W. Crist, but is sworn to only by appellee who makes his affidavit in the capacity of “managing” trustee of the estate. Winifred W. Rogers, one of the cotrustees and appellant, did not in fact sign said report but on the contrary filed 279 objections thereto all of which upon a very full hearing thereon were overruled by the chancellor and the report approved. This appeal is brought to reverse the decree overruling said objections-and approving the report.

Clifton H. Moore died testate in April, 1901. By the terms of his will, Vespasian Warner and Arthur Moore were appointed executors thereof and also testamentary trustees. Arthur Moore died in November, 1901, and Vespasian Warner, the surviving trustee, continued to execute the trust until March 31, 1925, at which time he also died. After providing for certain small legacies and annuities to other persons, the testator bequeathed the income from the bulk of his estate to the four surviving grandchildren of Vespasian Warner, deceased, to wit, John Warner, Clifton M. Warner, Frances Warner Crist and Winifred Warner Rogers, heretofore mentioned. By the will it is further provided that 21 years after the death of the survivor of the life tenants, all the real estate is to be sold and all the trust property divided per stirpes among the then heirs of said Clifton H. Moore. While a small portion of the real estate in the trust consisted of a few city lots, by far the greatest portion thereof was represented by farm lands, of which there were 14,401 acres in Illinois, 5,516 acres in Iowa, 12,700 acres in Kansas, 680 in Missouri and 2,640 in Nebraska. These agricultural lands represented sev- . eral hundred farms most of which were rented on a crop-share basis with cash rent for pasture lands.

After the death of Vespasian Warner, the surviving trustees appointed by the will, Clifton M. Warner, appellee, and John Warner filed a bill for the appointment of trustees. While this bill was pending the said four grandchildren of the testator and the cestuis que trustent under the will, including appellant and appellee, entered into a written stipulation or agreement wherein it is provided that all four of them should be appointed temporary trustees of the trust estate by the court pending the appointment of permanent trustees and that appellee “shall be the active managing trustee and shall have direct charge of and control over the property which is the corpus' of said trust, subject to the order and direction of. his cotrustees, and also the order and direction of said circuit court.” The agreement further provided that appellee as such managing trustee shall cause to be kept full and accurate records-and accounts of all transactions of the trust business and that the same shall be open tó-ins spection of any of the trustees at any reasonable time during business hours. The stipulation also .contains provisions in regard to the compensation of - appellee as such managing trustee and several other provisions not necessary to mention. The sixth and eighth clauses, however, are important and are as follows: . “6..That the office -expense, salaries and employes and all rea-: sonable and necessary expense- of operating said trust estate shall be paid by the said Clifton M-. Warner, as such managing trustee, subject to the consent of his cotrustees, from the funds accruing in said trust estate ;• and it is expressly stipulated and agreed that the said Clifton M. Warner is not to be held personally liable or responsible for any necessary expense of' operating or managing said trust estate; provided further that' at the request of any trustee the said circuit court shall fix the amount of office expenses and like expenses to be incurred by the manager; and that the amount to be expended for. repairs and improvements, except repairs of a small, temporary and urgent nature, shall be agreed upon before being- incurred by the said trustees, and in the event of disagreement the matter may be submitted-on the petition of any trustee to said circuit court for its determination with, the right of appeal to any party.” “8. The trustees shall mutually consult with each other and endeavor to work in peace and harmony; any trustee shall be at liberty at any time to apply to said circuit court for guidance and instruction, or the determination of. any business-policy connected with said trust estate or the management or operation thereof. ’ ’ After this stipulation was entered into, the bill filed by John and Clifton Warner for the appointment of trustees was amended and the stipulation above referred to set out therein, and thereupon the court entered a decree appointing the said four cestuis que trustent trustees, and appellee as managing trustee, and embraces substantially all the terms and conditions of the stipulation. This decree was entered at the May term 1925 of said court.

After the entrance of this decree appellee, as managing trustee, assumed to manage the estate, collected the income and profits thereof, made numerous repairs and improvements thereon, and after deducting the expenses of the administration and the repairs, paid to the parties entitled thereto their respective shares of the net income. None of the cestuis que trustent object to the report of appellee except appellant and her objection thereto is solely upon the ground that she as a cotrustee never gave her consent to any of the repairs made by appellee nor were they authorized by the court, therefore they were unauthorized and her share of the income as a cestui que trust has been diminished. She bases her contention upon that rule in the law of trusts that in the case of cotrustees, the office is a joint one, and where .the administration of a trust is vested in cotrustees, that all form, as it were, but one collective trustee, and therefore must execute the duties of the office in their joint capacity. If any cotrustee refuse or be incapable to join, it is not competent for the others to proceed without him, but the administration of the trust must in that case devolve upon the court. Coleman v. Connolly, 242 Ill. 574; Dingman v. Boyle, 285 Ill. 144; Pennsylvania Co. v. Bauerle, 143 Ill. 459; Anonymous v. Gelpcke (N. Y.), 5 Hun. 245; Donovan v. Miller, 137 Md. 555, 112 Atl. 926; Sinclair v. Jackson, 8 Cowan 543; Lewin on Trusts, 258-259; Perry on Trusts, sec. 411; Hillon. Trusts, 305; Busse v. Schenck (N. Y.), 12 Daly’s Rep. 12.

We concede that the above rule is a basic principle in equity but the difficulty in the case at bar is the application thereof to the facts as they appear in the record.

We are first confronted with the unusual situation of the trustees themselves being also. the cestuis que trustent. In other words they are the trustees of the estate for the use of themselves and thus maintain a dual capacity. The stipulation executed by the parties was entered into in their capacity as cestuis que trustent and the decree that was subsequently entered embodying the terms of the stipulation was by their consent as cestuis que trustent. That a cestui que trust, who is sui juris, has a general control over his share of the income derived from the trust, can approve of the acts of the trustee or trustees, or by his own acts estop himself from disapproving the same, cannot be doubted. The cestuis que trustent in this case, including appellee, had the right as such, to enter into the stipulation or agreement between themselves above mentioned as to the general management of the estate and are bound by the decree entered by their consent embodying such agreement.

Appellant does not claim that appellee was guilty of any fraud in the management of the property nor that any of the repairs or improvements made by him on the various properties were not necessary and essential for the preservation of the corpus of the trust estate, but rests her -objections solely on the grounds that appellee neither obtained her consent to them nor procured orders from the court permitting them. Appellant resided at Newport, Rhode Island, and during the time most of these improvements were made, she was in Europe traveling from place to place mald-ng it impossible for appellee to consult with her. She went to Europe in May, 1926, and did not return until November of that year. Mrs. Crist lived in California, and John Warner at Clinton, Illinois. Appellee frequently consulted with his cotrustee, John Warner, who gave his consent to all the improvements made. Mrs. Crist filed no objections to the report, and it will be presumed from her silence that she approves of the same. On June 6, 1925, appellant executed under seal and acknowledged the following power of attorney which was duly recorded in the recorder’s office of DeWitt county:

“Know All Men by These Presents, That I, Winifred W. Rogers of the City of Clinton, DeWitt County, Illinois, temporarily residing at the City of Newport in the State of Rhode Island, have made, constituted and appointed, and by these presents do make, constitute and appoint Lott R. Herrick of the City of Parmer City in the County of DeWitt and State of Illinois, my true and lawful attorney, for me, and in my name, place and stead to ask, demand, due for, collect, receive and give receipts, and full acquittance and discharge for all moneys, debts, demands of any kind, or other property of any character, now due me or which shall become due, owing or belonging to me from the Trust Estate created under and by virtue of the last Will and Testament of Clifton H. Moore, deceased, or from the estate of my father, Vespasian Warner, who is now deceased; also to enter my personal appearance in any suit at law, -or in equity, or special statutory action, in any court, when the same concerns said Trust Estate or the Estate of my said father, or any part thereof; and to accept for me, as fully as I could at the doing thereof, any notice or notices arising out of, or concerning any such suit at law, or in equity or special statutory action; to enter into and to carry to conclusion any stipulations, agreements, or understanding whatsoever with the trustees, or managing trustee, of said trust estate, or with the executors of the last Will and Testament of said Vespasian Warner, deceased, concerning, "or in any wise appertaining to said Trust Estate, or to the Estate or the last Will and Testament of said Vespasian Warner, deceased, and, for that purpose, to enter into and upon contracts or agreements, by parol or in writing, of any nature or kind whatsoever; and to execute any and all instruments of writing under seal, or deeds, including the execution, acknowledgment and delivery of the same, so long as the same is pertaining to said trust estate or to the estate, or last Will and Testament of said Vespasian Warner, deceased; giving and granting unto my said attorney full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully, to all intents and purposes, as I might or could do if personally present at the' doing thereof, with full power of substitution and revocation, hereby ratifying and confirming all that my said Attorney, or his substitute shall lawfully do or cause to be done by virtue hereof.
“In Testimony Whereof, I have hereunto set my hand and seal this 6th day of June, A. D. 1925.
(seal)
Winifred W. Rogers.”

• Before she departed for Europe, appellee attempted to obtain her consent to many of the repairs that were made and she repeatedly told him to consult her attorney in fact in regard to such matters and obtain his consent thereto. The evidence further shows that she visited a number of the properties in the vicinity of Clinton in company with appellee and when he pointed out and suggested the repairs necessary to be made on such properties she neither consented nor refused to consent to the same.

By the terms of the stipulation and the decree of the court, appellee had authority from appellant to make such repairs and improvements as were of a small, temporary and urgent nature. A great many .of the items objected to certainly came within the definition of small and urgent, and the evidence conclusively shows, there being none to the contrary, that all the repairs and improvements made were urgent and necessary to the preservation of the different properties on which they were made. These facts are conceded. In some instances the amounts expended in repairs exceeded the incomes derived from the properties on which they were made. It is a matter of common knowledge that for a number of years incomes from agricultural pursuits have not kept pace with those of the majority of other industries and some of the amounts necessary to be expended for the preservation of such properties may seem to have been disproportionate to the respective incomes derived therefrom. Yet, substantially all the repairs made were of a permanent character which necessarily enhanced the value of the particular property on which they were made and which were necessary to preserve its usefulness, and eventually the beneficiaries will derive a larger profit therefrom on account thereof.

The trustees owed a duty to the remaindermen to so manage the trust estate as to prevent waste. Also, in different places in the will of the testator, the following provisions appear:

“All my other and improved lands and lots in Illinois and Iowa my Executors are to use themselves or rent as best they can for my Estate and after paying taxes .and improvements the sum remaining is to be equally divided yearly and paid along as the same comes in equally to my son Arthur Moore and to my daughter Winifred Moore Warner subject to the legacies and annuities hereinbefore named.”

“And I request my son and my son-in-law, my Executors to continue the management of my Estate in .about' the manner it is now done with any improvements they may make in handling the same.”

“And .my desire is-that they will be kind and fair with all their tenants, not using their power to injure tenants, only when it is necessary to get -rid of a bad one, and keep the farms up and improvements in good order. ’ ’

It was clearly the intention of the testator to impose upon his executors and trustees the duty of keeping the farms in proper repair and as he expresses it, “keep the farms up and improvements in good order.” It has been held that where a trustee has incurred expenses which the court can clearly and satisfactorily see were necessary, he will be allowed them in the same manner as if leave had been granted on petitions before incurring them. Hatton v. Weems (Md.), 12 Gill. & J. 83; Williams v. Smith, 10 R. I. 280; Brandon v. Brandon (N. Y.), 50 Howard Prac. 328.

Appellee refused to recognize the power of attorney executed by appellant in which she attempted to transfer to an attorney all her duties as trustee. A trustee in whom is vested discretionary powers involving personal confidence can not delegate his powers and duties and shift his responsibility to other persons by contract or otherwise. Chicago Title and Trust Co. v. Zinser, 264 Ill. 31, 35; Spengler v. Kuhn, 212 Ill. 186; Binns v. LaForge, 191 Ill. 598; Taylor v. Hopkins, 40 Ill. 442.

The only persons interested in the income of the estate were appellant, appellee, Mrs. Crist and John . ■ Warner in so far as it is involved in this controversy. These parties were cotrustees and also cestuis que trustent. Having such a dual capacity, they had a fight to agree among themselves that appellee should manage the estate upon the conditions imposed in the . stipulation. The law imposed upon them as trustees to make such repairs and improvements as were necessary to preserve ■ the estate. The will of Clifton H. Moore, deceased," specifically directed that they should make such improvements and repairs. The court below found that the repairs and improvements made by appellee as managing trustee were essential and necessary for the preservation of the corpus of the estate. It is true that under the stipulation it was the duty of appellee before making such repairs and improvements which were not of a small, temporary and urgent nature, when he was unable to procure the consent of appellant thereto, to have first obtained an order of the court for leave to do so but the fact that the court approved the report, conclusively shows that if such leave had been requested, it would have been granted and under the facts as they specifically appear in this particular case, we do not believe that in equity and good conscience appellee should be penalized for not having done so.

The decree of the circuit court is affirmed.

Affirmed.


author: Mr. Presiding Justice

text:
    Anne Shortal, Appellee, v. School Directors of District No. 27, County of Jersey and State of Illinois, Appellants.
    Gen. No. 8,314.
    Opinion filed October 23, 1929.
    O. H. Richards and Chapman & Du Hadway, for appellants; Jack McDonald, of counsel.

      Sumner & Reardon, for appellee.
   Mr. Presiding Justice

Eldredgé delivered the opin-r ion of the court.

Appellee recovered a judgment for the sum of $370 in the county court of Jersey county in an action of assumpsit brought to recover a balance claimed by her due as her salary as a school-teacher under an alleged contract with appellant. A jury was waived and the case was tried before the court.

Appellee taught the Union School in said district during the school year commencing in the fall of 1926 and ending May 5, 1927, at.a salary of $90 per month. The last day of school was celebrated with a picnic and two members of the board of directors, Clendenny, the clerk; and Scribner, the president, were in attendance. Greenwalt, the other member of the board, was not present. The witness Carr was also present. "While Carr, Scribner, Clendenny, and appellee were talking together, Carr asked Clendenny and Scribner why they did not hire appellee to teach for the following year commencing in the fall of 1927 and ending in the spring of 1928. Clendenny remarked that it would be satisfactory to him, and he and Scribner decided to go to Greenwalt’s home and interview him in reference to the matter. "When they arrived there they" learned that Greenwalt was at the farm of one Krause helping the latter shell corn, to which place they proceeded, and Clendenny said to :Greenwalt, “We came up here to see about employing our old teacher back.” Greenwalt replied in substance that there was some opposition to re-employment of appellee and that he would have nothitig to do with it; that he did .not want to hire a teacher that the community was not all satisfied with, but if Clendenny and Scribner wanted to hire her it was all right with him. Scribner stated in substance that $90 was too much money for that school as all the larger pupils were leaving and they ought to get a cheaper teacher. Thereupon Greenwalt suggested that Clendenny and Scribner go back to her and maybe they could “jew” her down. When Scribner and Clendenny were about to leave, Clendenny said to Greenwalt, “What-will you do?”, whereupon the latter replied, “I won’t do anything. Whatever you and Truman (Scribner) do will be all right with me.” Scribner then replied, “That won’t do at all. The three of us ought to have a say. ’ ’ • Scribner and Clendenny went back to the picnic and appellee testified that she was informed by. them that she had been reemployed. That night Clendenny, the clerk, wrote in the minute book as follows: “May 5, 1927, Truman Scribner and Logan Clendenny after having met Ed. Greenwalt at George Krause’s on the day of the school picnic, May 5, 1927, re-employed Mrs. Anne Shortal to teach for the year 1927-1928 at $90.00 per mo. Logan Clendenny, Clerk.”

On August 22, 1927, the directors met in a regular meeting and employed another person as teacher of the school. When the school opened in September, both appellee and the Other teacher were present and each attempted to act as teacher of the school, but appellee was informed by the directors that the other teacher was the one who should have charge of the school. Appellee procured another school at a salary of $50 per month, and this is suit for the purpose of collecting what she claims to have lost by the refusal of appellant to fulfill its alleged contract with her.

It is the contention of appellant that no legal contract was ever made with appellee for her re-employjnent as teacher of the school. It is provided by section 111, chapter 122, Cahill’s Bev. St., If 119, as follows: “The directors shall hold regular meetings at such times as they may, designate and special meetings at the call of the president or any two members. No official business shall be transacted by the directors except at a regular or a special meeting.” Section 112 provides: “The clerk shall keep in a punctual, orderly and reliable manner, a record' of the official acts of the board which shall be signed by the president and the clerk, and submitted to the township treasurer for his . inspection and approval on the first Mondays of April and October, and at such other times as the treasurer may require. On all questions involving the expenditure of money, the yeas and nays shall be taken- and entered on the records of the proceedings of the board.” The 7th paragraph of section 114 provides that it shall be the duty of the board to appoint all teachers and fix the amount of their salaries.

The meeting of the directors at Krause’s farm cannot under the most liberal construction be deemed either a regular or a special meeting thereof. There is no evidence to show that it was a regular meeting and the evidence conclusively shows that it was not a special meeting called in the manner provided by • the statute. It has been repeatedly held by the courts of this State that business attempted to be transacted at casual meetings of the members of school boards and similar bodies ha,s no legal significance or validity. One of the earliest cases involving this question is that of School Directors v. Jennings, 10 Ill. App. 643, where it was held: “We are inclined to the opinion, therefore, that under the law as it existed at the date of the contract sued on in this case, the directors had no power to employ a teacher, except at a regular or special meeting of the board, and unless it is shown that the plaintiff was appointed at such a meeting, the contract of the directors with her was entered into without authority of law and is incapable of enforcement.”

The above case has been followed in a long line of decisions. Board of Education v. School Directors, 213 Ill. App. 91; Crawford v. Board of Education, 215 Ill. App. 198; Board of Education v. Barracks, 235 Ill. App. 35; Kimmel v. Board of Education, 244 Ill. App. 257; Scanlan v. Board of Directors, 245 Ill. App. 357; National Bank of Decatur v. Board of Education, 205 Ill. App. 57; Routson v. Slater, 202 Ill. App. 487.

The evidence in this case does not show that any contract was ever entered into by the appellant and appellee, and as the case was tried before the court without a jury, the judgment of the county court of Jersey county is reversed without remanding, with the following finding of fact to be recorded in the judgment in this case:

The court finds as a fact from the evidence that no contract of hiring was entered into by appellant and appellee.

Reversed with finding of fact.


text:
    Samuel Gasen, Appellee, v. Firemen’s Insurance Company, Appellant.
    Gen. No. 8,324.

      Opinion filed October 23, 1929.
    Silber, Isaacs, Silber & Woley and Truman A. Snell, for appellant; Samuel Levin, of counsel.
    Knotts & Knotts, for appellee.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

In an action of. assumpsit appellee recovered a judgment against appellant for sum of $1,500 on a policy of insurance.

The first part of the declaration is as follows: “The plaintiff complains of defendant of a plea of trespass on the case on promises,'and alleges: ■■

“That the defendant on or about the 13th day of November, 1926, made its policy of insurance and delivered the same to the plaintiff, and for the consideration therein expressed promised..the plaintiff, in the terms of said policy and .the conditions -thereto annexed, a photostatic copy of said policy and the conditions thereto annexed being attached hereto, marked Exhibit A and incorporated herein, the original of Exhibit A being ready to be produced in. court by this plaintiff. And the plaintiff avers that at -the time of the making of the said policy, and from thence until the happening of the loss and damage hereinafter mentioned, he had an interest in the said property to the amount of the said sum so by the defendant insured thereon as shown more fully by Exhibit A aforesaid.”

The balance of the declaration consists of negative averments with several references to “Exhibit A.” Not one single provision or condition of the policy is set forth in the declaration, but attached to the declaration is a copy of the policy marked “Exhibit A.” On the trial appellant objected to, the admission of the policy in evidence on the ground that it was not based upon the declaration in the case, that it is attached to the declaration as an exhibit, and not admissible thereunder and that neither the policy nor the substance thereof is set out in the declaration.

It has been uniformly held in this State that copies of papers or documents attached to declarations in actions at law form no parts of the declarations and cannot be made so by references thereto. Bogardus v. Trial, 1 Scam. 63; Harlow v. Boswell, 15 Ill. 56; Stratton v. Henderson, 26 Ill. 68; Humphrey v. Phillips, 57 Ill. 132; Hippach v. First Nat. Bank of Rushville, Nebraska, 169 Ill. 515; Boyles v. Chytraus, 175 Ill. 370; Chicago Portrait Co. v. Chicago Crayon Co., 118 Ill: App. 98; McKinstry v. Bras, 180 Ill. App. 648; Inter Ocean Newspaper Co. v. West Hammond, 189 Ill. App. 110; Shultz v. Miller-Hamilton, 189 Ill. App. 396; Ogren v. Rockford Star Printing Co., 237 Ill. App. 349.

We will comment on but a few of the above cases. In Hippach v. First Nat. Bank of Rushville, Nebraska, supra, the action was at law based upon a decree in chancery and the court held that a copy of the decree, if filed, would not have formed a part of the declaration, and so not being a part of the pleading it was not a part of the record proper. In Chicago Portrait Co. v. Chicago Crayon Co., supra, the declaration attempted to make a contract a part thereof by filing it therewith, and the court held that this was contrary to all rules of good pleading and that common-law pleading cannot be done by exhibits. In Jones v. City of Chicago, 167 Ill. App. 175, the court held that while it is a common practice in equity to make exhibits a part of the pleading, it is not permissible under common-law pleading prevailing in this State, citing numerous authorities, among which is the case of Gunton v. Hughes, 181 Ill. 132, where the’ court in passing upon the ruling on a demurrer held: “To overrule it here would unsettle rules of pleading long established, and introduce confusion and uncertainty where none now exist. The distinctions between common law and equity pleading are well defined and well understood by the legal profession and cannot be ignored.” In the case of McKinstry v. Bras, supra, the court said that it would not look to the copy of a policy filed to support a declaration as it is the well established practice in this State that a paper cannot be made .a part of the declaration by attaching it as an exhibit or by referring to it. In Shultz v. Miller-Hamilton, supra, the court held that a count in a declaration was defective because it undertook to make the contract and other agreements in question parts of the pleading by referring to them as attached exhibits, and that while this is a familiar practice in chancery, it is not recognized either at common law or under our modified form of practice. In Inter Ocean Newspaper Co. v. West Hammond, supra, it was held that a count in a declaration merely referring to a certain exhibit thereto attached, did not add to the strength! of the count, change its character or modify it.

Counsel for appellee practically concede that the declaration is a- departure from the established form of common-law pleading but insist that it is but an irregularity of form and not of substance and could be taken advantage of only by special demurrer and also that the verdict cures the defect. They are in error in this contention as the defect is not one of form, but one of substance. No contract is set up in the declaration either in verbatim or in substance and as the court cannot look to the exhibit to determine what the contract was, the declaration states no cause of action whatever and cannot be aided by the verdict.

It is only when a declaration states a good cause of action, though defectively, that the defects will be cured by the verdict. From what we have said, it will be unnecessary to pass upon the other errors assigned.

The judgment of the circuit court is reversed and the cause remanded.

Reversed and remanded.


author: Mr. Justice Niehaus

text:
    Town of Hutton, Plaintiff in Error, v. A. S. Ingram, Defendant in Error.
    Gen. No. 8,313.

      Opinion filed October 23, 1929.
    Chas. C. Lee, for plaintiff in error.
    T. N. Cofer, for defendant in error.
   Mr. Justice Niehaus

delivered the opinion of the court.

In this case a writ of error was prosecuted from a judgment rendered in the circuit court of Coles county against the plaintiff in error, town of Hutton, for the sum of $750 and costs, in favor of the defendant in error, A. S. Ingram. The judgment which was entered is as follows:

“This day comes the parties to this suit, by their attorneys respectively, and it appearing to the court that due personal service'has been had on the defendant at least ten days before the first day of the present term.xjrnd by agreement judgments hereby allowed the plaintiff and against the defendant in the sum of $750.00 and costs.”

The judgment is apparently based upon the jurisdictional fact, that due personal, service had been had upon the plaintiff in error; and upon the further fact of an agreement of the parties by their attorneys. The record discloses that due personal service, however, was not had upon the plaintiff in error. This is shown by the return of the sheriff on the summons which was issued in the cause; and which is as follows:

“State of Illinois, Coles County, ss. I have duly served the within by reading the same to the within named William H. Hutton, for Town of Hutton and at the same time delivering to each of them a true copy thereof this 8th day of April, 1927. S. B. Moore, Sheriff, by Smith Gwin.”

The statute requires that “all process shall be served by leaving a copy of the writ or summons with the supervisor” or town clerk. Cahill’s St. ch. 139, ft 44, § 1; ch. 110, fí 10, § 10; art. 5, sec. 1, ch. 139, SmithHurd Rev. Stat.; sec. 10, ch. 110, Smith-Hurd Rev. Stat. It does not appear from the return that either the supervisor or the town clerk of the town of Hutton were served as required by the statute. '

The record does not disclose any authority from the town of Hutton to Charles Wallace, who appeared for the town to defend the case as attorney, to compromise or settle the alleged claim or to consent to an allows anee of a judgment for the sum of $750 against the town of Hutton. No such authority could be implied from the fact that he was employed as attorney for the town of Hutton and filed a plea in defense of the plaintiff’s claim. An attorney employed to defend a suit, has no authority to compromise or give up any right of his client; nor to consent to a judgment against his client. Swinfen v. Swinfen, 24 Beav. 549; People v. Lamborn, 1 Scam. 123; Wadhams v. Gay, 73 Ill. 415. The authority to provide for the disposition of suits at law or in equity, in all controversies between the town and any other town, or any individual or corporation, in which the town is interested is vested by statute in the electors of the town, at the annual town meeting. Cahill’s St. ch. 139, f 39, subd. 4; sec. 3 art. 4, ch. 139, Smith-Hurd Rev. Stat.

No right of recovery against the town is shown by the declaration in the case, which consists of four counts. In the first count the right of recovery is based upon the averment, that the town of Hutton acting by and through its commissioner of highways and proper officers employed the plaintiff to furnish certain material and perform certain labor in and about improving certain highways in said town by constructing certain bridges. In the second count it is alleged that the town of Hutton acting by and through its commissioner of highways and other officers entered into a contract with the plaintiff to furnish the material and labor in and about constructing a bridge known as the Garner bridge along the public highways of said town. In the third count it is alleged that the defendant by and "through its commissioner of highways and other officers entered into a contract with plaintiff to furnish . the materials and perform the labor in and about constructing a wall and support to what is known as the Lee bridge. And in the fourth count it is alleged that the defendant by and through its commissioner of highways and other officers met and settled their accounts, and then and there agreed that there was justly due the plaintiff the sum of $750.

With reference to these allegations in the declaration it may be pointed out that there is no statutory authority under which the commissioner of highways or any officers of the town could legally bind the town of Hutton by contract for labor and material to improve the highways of the town or by constructing bridges therein; nor is there any authority in the statute by which the commissioner of highways together with other officers can settle accounts for furnishing materials and labor or improving highways and constructing bridges, and thereby creating a legal liability against a town. People v. Baltimore & O. R. Co., 322 Ill. 623.

For the reasons stated, the judgment was erroneously entered against the plaintiff in error and is therefore reversed, and the cause remanded.

Reversed and remanded.


text:
    U. S. Grant Hotel Company, Appellee, v. Louis S. Kehias, Appellant.
    Gen. No. 8,320.

      Opinion filed October 23, 1929.
    L. G. Griffith and R. J. Monroe, for appellant.
    Raymond G. Real, for appellee.
   Mr. Justice Niehaus

delivered the opinion of the court. •

In order to provide a new and modern hotel in the City of Mattoon, the association of commerce of that city took steps to interest the business men and residents of that city, for the purpose of raising the necessary funds for the project. The plan finally adopted was to procure subscriptions to the capital stock of the hotel company to be incorporated thereafter when the subscriptions procured would be sufficient in amount to carry the enterprise into effect. The appellant, Louis S. Kehias, was one of the subscribers to the stock of the corporation to be formed and entered into a written contract for that purpose for four shares of stock. The contract recites that

“Whereas, the Association of Commerce of Mattoon, Illinois, through its Board of Directors and other Members, have taken steps to secure agreements for purchase of stock, for the purpose of creating a fund to provide a new and modern hotel in Mattoon, Illinois, said enterprise to be duly incorporated under the laws of the State of Illinois;

“Now, Therefore, in consideration of the premises aforesaid mentioned and in consideration of similar subscriptions made by others and of the mutual promises and agreements herein contained and the benefits and advantages resulting to each of us, respectively, I hereby subscribe for 4 shares of 6 per cent preferred stock of said corporation of the par value of One Hundred Dollars ($100) per share, and in consideration therefor and for value received, I promise to pay to the order of Fred Grant, Treasurer of the Mattoon Hotel Building Fund, the principal sum of Four Hundred Dollars; said sum to be payable at Central Trust Bank, Mattoon, Illinois, at the time and in the amounts hereinafter set forth, to wit, Ten Per Cent (10 per cent) July 15, 1927; Twenty Per Cent (20 per cent) Jan. 1,1928; Ten Per Cent (10 per cent) Sept. 1,1927; Twenty Per Cent (20 per cent) Mar. 1, 1928; Twenty Per Cent (20 per cent) Nov. 1,1927; Twenty Per Cent (20 per cent) May 1, 1928.

“I further hereby subscribe for one share of fully paid, nonassessable common stock of no par value for every two shares of preferred stock bought and paid for, and hereby promisé and agree to pay for said common stock at the rate of Five Dollars ($5.00) per share, payment for same to be made in full on or before May 1, 1928.

“It is further mutually agreed as follows:

“(1) That the certificates of such shares of nontaxable preferred stock, fully paid and nonassessable, and also the certificates of such shares of common stock, shall be retained and held as collateral security for the payment of this note, or any installment thereof, until the note shall be fully paid, at which time said certificates are to be delivered to me.

“ (2) In the event of my failui'e to make any of the payments aforesaid within thirty days from due date, then the whole amount remaining unpaid shall immediately become due and payable.

“(3) The proposed Hotel Corporation of Mattoon, Illinois, shall have the option of retiring, by lot, the preferred stock at One Hundred and Five Dollars per share.

“(4) It is understood that -no payments shall be called for under this subscription until an amount sufficient to assure the erection of the hotel has been subscribed and the minimum amount necessary to validate this subscription shall be understood to be sixty per cent (60 per cent) of the total investment finally agreed upon.”

The appellee is the Hotel Company, which was incorporated pursuant to the plan referred to and which was contemplated by appellant’s subscription contract; and it was duly organized and incorporated when the subscriptions for its stock had reached the sum of $120,000. A hotel was thereafter erected in the City of Mattoon at a cost of $170,623.92.

The evidence shows that the appellant paid $40 on his stock subscription to the appellee company after it was organized, but after that refused to make any further payment; thereupon this suit was instituted in the city court of Mattoon to enforce the payment of the balance alleged to be due. There was a trial by the court, which resulted in a finding and judgment in favor of the appellee company for $370 against the appellant. This appeal is prosecuted from the judgment.

Several contentions are made for reversal of the judgment. It is argued, that inasmuch as the contract provides for payment of the stock subscription “to the order of Fred Grant, Treasurer of the MattoonHotel Building Fund,” the suit should have been brought in the name of Fred Grant,, and could not therefore be legally sustained against the appellant. It is clear from the evidence however, and the contract, that Fred Grant has no personal or pecuniary interest in the subscription, and that the subscription was in fact for the stock of the appellee company; and that Grant was merely the agent of the appellee company which was to be subsequently incorporated and come into legal existence. A corporation is the proper party to sue for the subscription money due and unpaid, for the capital stock which was subscribed for; and the appellant himself recognized his legal obligation and the appellee company’s right to exact payment for the stock by paying a part of the subscription due under his contract.- It is well settled that subscriptions for the capital stock of corporations to be formed in the future are valid. Richelieu Hotel Co. v. International Military Encampment Co., 140 Ill. 248; Merchants Bldg. Imp. Co. v. Chicago Exchange Bldg. Co., 210 Ill. 26. And where the subscription contract is for stock of a corporation to be organized in the future for the purpose of fostering a public or quasi-public enterprise, it should be liberally construed. Merchants Bldg. Imp. Co. v. Chicago Exchange Bldg. Co., supra.

It is further contended that no previous demand for payment was made by the appellee company, and that such previous demand is necessary before a suit could properly be brought upon the contract. No previous demand for payment was necessary in this case to exact payment under the contract because the contract itself fixes the dates the instalments should become due and payable. And the appellant recognized the fact, that the instalments were due and payable to the appellee company, as well as his obligation to pay them by making a partial payment thereon. Rockford Metal Specialty Co. v. Wester, 234 Ill. App. 260. It is also contended that under clause four of the additional agreements which were made a part of the subscription contract, no payments from appellant could be called for unless a minimum of 60 per cent of the total investment contemplated had been subscribed; and that there should be included in the total investment referred to in said clause'the sum of $36,344.19, which the appellee company concluded to expend after the erection of the hotel building, for equipment and furnishings of the hotel in order to secure a leasing of the same after the hotel had been erected. It may be said in reference to the latter contention that the clear inference from the evidence is, that necessity of the purchase of hotel furnishings and equipment were not thought of or in contemplation at the time of the execution of the contract as a part of the hotel investment; and this was not expected to be paid for out of the amounts realized from the stock subscriptions; and it is also apparent from the language of the fourth clause of itself, which clearly indicates, that the term “total investment” refers only to “an amount sufficient to assure the erection of the hotel.” Inasmuch as the evidence shows, that the minimum of 60 per cent of •the stock subscription for the cost of the erection of the hotel was fully secured, we conclude that this point is not well taken.-

We find no reversible error in the record, and the judgment is therefore affirmed.

Judgment affirmed.