author: Mr. Justice Wilson

text:
    Cleveland, Cincinnati, Chicago & St. Louis Railway Company, Appellant, v. The Edgewater Coal Company, Appellee.
    Gen. No. 36,363.
    Opinion filed October 25, 1933.
    Sidney C. Murray and Bertrand Walker, for appellant ; L. Beers-Jones and J. B. Kneipple, of counsel.
    Campbell, Clithero & Fischer, for appellee; Carlton L. Fischer, of counsel.
   Mr. Justice Wilson

delivered the opinion of the court.

This was an action brought by the plaintiff, Cleveland, Cincinnati, Chicago & St. Louis By. Co., a common carrier, to recover freight charges erroneously refunded to the defendant, The Edgewater Coal Co. The cause was submitted to the court without a jury, resulting in a finding* in favor of the defendant and judgment on the finding*. From that judgment an appeal was prayed and allowed to this court.

The statement of claim alleges that between the dates of November 18,1921 and January 12,1923, certain carloads of coal were transported by the plaintiff over its own and connecting lines and delivered to the defendant at Bdgewater Station, Illinois; that the defendant paid the lawful freight charges thereon but subsequently demanded refunds of certain portions of the freight charges which were erroneously refunded between the dates of November 12, 1924 and November 19, 1924. The dates are important inasmuch as the defendant pleaded the statute of limitations as well as filing an affidavit of merits.

Plaintiff’s action is based upon the claim that the refunds were made by the plaintiff to the defendant under a mistake. The action is brought in assumpsit for money paid under a mistake of fact and it is insisted that the statute of limitations in force in this State governs. This Limitations Act (Cahill’s Eev. St. ch. 83, If 16) in force in this State provides:

“Actions on unwritten contracts, expressed or implied, or on awards of arbitration, or to recover damages for an injury done to property, real or personal, or to recover the possession of personal property or damages for the detention or conversion thereof, and all civil actions not otherwise provided for, shall be commenced within five years next after the cause of action accrued.”

Defendant takes the position that the rates are fixed and established by the Interstate Commerce Commission and that plaintiff’s action is barred by the Act of February 28, 1920, U. S. Code Ann. Title 49, sec. 16, subsection 3-a p. 7, which provides that actions for the recovery of charges, by a carrier, or any part thereof shall be begun within three years after the cause of action accrues.

There seems to be a conflict in the authorities as to whether the right of action arises under and is governed by the Interstate Commerce Act, or whether it is a common law action for money paid under a mistake of fact. If the federal enactment is controlling, the statute of limitations would bar the action. If, however, it is a common law action in assumpsit, the State statute would govern.

Plaintiff cites the case of Galveston, H. & S. A. Ry. Co. v. Lykes Bros., 294 Fed. 968, in which it was held that the action was one for money paid under mistake of fact. The court in Michigan Cent. R. Co. v. I. M. Partridge Lumber Co., 17 F. (2d) 657, also held that such was the law. The court in the latter opinion said:

“It was due solely to the mistake of the plaintiff, and the obligation to repay did not arise out of the express contract for transportation, but solely out of an implied contract that the defendant would repay to the plaintiff money which belonged to it, and to which the defendant was not entitled.” (Citing Galveston, H. & S. A. Ry. Co. v. Lykes Bros. (D. C.), 294 Fed. 968.) That case was reversed on appeal and the decision found in T. M. Partridge Lumber Co. v. Michigan Cent. R. Co., 26 F. (2d) 615. The reviewing court in its opinion held that the trial court was correct in holding that the State statute applied, but reversed the cause on the ground that it was not a federal action or proceeding arising under the law regulating commerce; that, therefore, the trial court should have dismissed the action for want of jurisdiction. This opinion, however, was by a divided court and the minority opinion took the position that it was an action under the Interstate Commerce Act and, consequently, barred by the statute of limitations, as provided under sec. 8584 of the Compiled Statutes.

Bush v. Carloading & Distributing Co., 210 Ill. App. 399 (abst.), cited by plaintiff, permitted a recovery for a refund claimed by the shipper and allowed by the carrier, but the question of the statute of limitations does not appear to have been raised. The court in its opinion did say, however, that:

‘ ‘ The only rates which a common carrier may collect or a shipper pay are regulated by the Interstate Commerce act and the law will not permit any different rate as a basis of settlement, through any device whatever. The only question for determination is as to what is the actual tariff rate, and the amount cannot be altered by alleged mistakes or misapprehensions of either party. Texas & Pacific Ry. Co. v. Mugg, 202 U. S. 242. There are numerous cases asserting this principle.”

Davis v. Naugle Pole & Tie Co., 238 Ill. App. 214, was an action in the State court in which the plaintiff was permitted to recover refunds on freight charges erroneously granted. We are not aided, however, by this opinion as to the interpretation of the Limitations Act of the Interstate Commerce Commission. The court, however, did recognize the fact that the rates were fixed by the Interstate Commerce Commission and that it was the purpose of the Commission Act to fix reasonable rates from which neither party could deviate.

The purpose of the Interstate Commerce Act, with its power to regulate charges of carriers, was intended to prevent discrimination in favor of shippers. It was the intention of the act to safeguard the small shipper from favors granted to those with more extended dealings with the carrier. The rates are fixed according to the length of the haul, the number of movements of the shipment over connecting carriers and switching requirements. All the various movements that enter into the transportation of the article from the source of origin to the consignee are considered and the tariffs established by the Interstate Commerce Commission.

In the case at bar there is in our opinion nothing which could be construed to amount to a mistake of fact. All the facts entering into the shipment in question were known and the error, if any, in the refund by the plaintiff to defendant in this cause, was purely an error of computation. Not only was it the duty of the carrier to make a refund in case of an overcharge, but it was compulsory. The act which created this duty also provided for the limitation. There being no mistake of fact, the action must be predicated upon the Interstate Commerce Tariff and, therefore, controlled by its limitations. We cannot conceive of a position where the right was created by a federal enactment and the limitation governed by a State provision. In the case of Pennsylvania R. Co. v. Carolina Portland Cement Co., 16 F. (2d) 760, the Circuit Court of Appeals in its opinion, said:

“(4) The cause of action is one created by statute, which fixes a time within which action must be brought as an essential element of the right to sue, and in such cases-it is well settled that a declaration or complaint which shows on its face that the action was not brought within the time prescribed is demurrable.” To the same effect see Wight v. Zemurray, 150 La. 929; Michigan Cent. R. Co. v. I. M. Partridge Lumber Co., 17 F. (2d) 657.

In the case of Illinois Glass Co. v. Chicago Telephone Co., 234 Ill. 535, it appears that the Telephone Company filed its schedule of rates under an ordinance of the City of Chicago and the plaintiff in that case paid an amount in excess of the amount fixed by the ordinance and then brought suit to recover. The Supreme Court of this State held' that there was neither fraud, misrepresentation, nor mistake in fact nor were the payments made on a consideration which subsequently failed. It was admitted that an overpayment was made. The Supreme Court in its opinion, said: “It has been a universally recognized rule that money voluntarily paid under a claim of right to the payment and with knowledge of the facts by the person making the payment cannot be recovered back on the ground that the claim was illegal. ’ ’ Again: “Although the defendant could not legally require payment of more than $125 per year for the business telephone and the plaintiff was not legally bound to pay more, a larger sum was voluntarily paid without fraud, mistake of fact or other ground for annulling the contract. ’ ’

In the case of Sando v. Smith, 237 Ill. App. 570, the court in its opinion, said: ‘1 The general rule is further to the effect that a payment made with a full knowledge of the facts and circumstances and in ignorance only of legal rights cannot be recovered back and proof that the one making the payment was in fact under no legal obligation to pay and that the other had no right to receive the payment is of no consequence and will not entitle the one making the payment to sue for a recovery of the money, unless the payment was compulsory to the extent of depriving him of the exercise of his free will. Illinois Glass Co. v. Chicago Tel. Co., 234 Ill. 535.”

In our opinion the mistake, if any, was a mistake of law. The facts were all known to both parties. The rate was fixed by the Interstate Commerce Commission and both parties acted with all the facts and circumstances before them. The right of the plaintiff to ■recover the refund was granted by the Interstate Commerce Act and at the same time the plaintiff, seeking to recover under that act, was also bound -by the act with regard to the limitation within which the action should be brought. It was an action based on a statute and not a common law right.

For the reasons stated in this opinion, the judgment of the municipal court is affirmed.

Judgment affirmed.

Hall, P. J., and Hebel, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    Hyman Epstein, Appellant, v. Israel Choldenko et al., Appellees.
    Gen. No. 36,384.
    Opinion filed October 25, 1933.
    Shulman, Shulman & Abrams, for appellant; Meyer Abrams and Julius E. Epstein, of counsel.
    Ignatz Spitz, for Second Security Bank of Chicago, as successor-trustee and intervening petitioner; Millard R. Elmes and William V. Barnett, of counsel.
   Mr. Justice Wilson

delivered the opinion of the court.

The complainant filed his bill in which he charged that he was the owner of two bonds, of the value of $500 each, secured by a trust deed conveying the premises at 3558-60 Cortland street, Chicago, to the Chicago Lawn State Bank in trust as security for an indebtedness of $37,500 and recorded in the recorder’s office of Cook county. The bill further charges that a default "was made in the payment of the semiannual interest on August 15, 1931, and that subsequently the Chicago Lawn State Bank, trustee, closed its doors and ceased to function as a banking institution, and that Irwin T. Gilruth was appointed as its receiver and was in possession of all the bank’s assets; that more than 30 days have elapsed since a vacancy in the trusteeship occurred and that a majority of the bondholders have failed to appoint a new trustee, in accordance with the trust deed, and, therefore, complainant prays that a trustee be appointed, and, in the event 60 days shall expire from the day of default, that the new trustee so appointed may join with complainant in a bill to foreclose. The bill also asks for the appointment of a receiver during the pendency of the suit. The mortgagors, the owners, the receiver Gilruth; the trustee and bond owners were made parties defendant to the bill.

October 16, 1931, an amendment to the bill of complaint was filed, charging that 60 days had elapsed since the default and therefore complainant elected to declare the whole amount due. An intervening petition was filed in said cause by leave of court, from which it appears that upon the 26th day of October, 1931, Gilruth, the then authorized and acting receiver of the Chicago Lawn State Bank, did tender his resignation as trustee. This resignation, in accordance with the terms of the trust deed, was duly recorded in the office of the recorder of deeds of Cook county. These facts are admitted by the answer of the complainant to the petition of the respondent. The petition further charges that on the 28th day of October, and after the resignation of the said Gilruth as receiver and trustee, there being a vacancy in the office of trustee in question, the bondholders being a majority in the number and amount of the bonds issued, in writing appointed the Second Security Bank of Chicago successor-trustee the intervenor in this action, which appointment was accepted and recorded in the office of the recorder of deeds.

The cause came on for hearing before the chancellor of the circuit court on April 23, 1932, on the bill of complaint, the intervening petition of the Second Security Bank of Chicago, the answer of the complainant to the intervening petition and the answer to the bill of complaint and the amendments thereto, and an order was entered dismissing the bill of complaint and denying complainant’s motion for a successor-trustee and for a receiver.

It is insisted that the bill stated a meritorious cause of action and that it was error to enter a decree for want of equity when there were issues raised by the bill and answer.

On the other hand it is contended on behalf of the defendants, parties to the bill of complaint, as shown by the bill and the intervening petition and answer thereto, that there was no vacancy as trustee at the time of the filing of the bill nor at any time thereafter ■ which would entitle complainant to the appointment of a trustee.

The trust deed by its terms provides as follows:

“The trustee herein or its successors in trust may resign or discharge itself or themselves and from the trust hereby created by resignation in writing filed in the Recorder’s office of said county, and in case of a vacancy in the office of Trustee or otherwise, a successor or successors may be appointed by the holder or holders of a majority of the bonds then outstanding by an instrument in writing duly signed and acknowledged by them, which said instrument shall be recorded in the office of the Recorder of Cook County, Illinois; or in case said holder or holders do not agree in the appointment of a new Trustee within thirty (30) days after such vacancy shall occur, then the holder or holders of any of said bonds may apply to the Circuit Court of Cook County for the appointment of a new Trustee or Trustees upon such notice as such court shall prescribe to be given in such manner or upon or to such party or parties, person or persons as such court shall direct, or upon such notice as shall be in accordance with the rules and provisions of the court, and such Trustee or Trustees so appointed by such majority in interest of said bondholder or bondholders or by such court, shall, on its, his or their acceptance of its, his or their appointment thereby and thereupon become and be vested with all the powers, rights, estates and interests granted or conferred upon said party of the second part herein by these presents and without any further assurance or conveyance whatsoever ; . . . ”

Chapter 16a, If 11, Callaghan’s Illinois Statutes Annotated, as amended by laws of 1929, and submitted to the people and adopted November 4, 1930, contains the following provision:

“Such receiver shall have authority to sue and defend in his own name with respect to the affairs, assets, claims, debts and choses in action of such bank. He shall also have the authority and it shall be his duty, under the direction of the Auditor, to surrender to customers of such banks their private papers and valuables left with said bank for safekeeping upon satisfactory proof of ownership. As soon as can reasonably be done, he shall resign on behalf of said bank all trusteeships, guardianships, conservatorships and all appointments as executor and administrator, making in each case a proper accounting on behalf of said bank. He shall have the power and authority to redeem or take down collateral hypothecated by said bank to secure its notes or other evidences of indebtedness whenever the Auditor deems it to the best interest of the creditors of said bank so to do, and to do such other things and take such other steps from time to time under the direction and approval of the Auditor as may reasonably appear to be necessary to conserve the trust estate and secure the best interests of the creditors of said bank.” This chapter is entitled, “Banks” and relates to the duties of a receiver of a bank when appointed and it appears to have been the purpose of the enactment to clothe the receiver with the power of doing those things and assuming those duties which originally belonged to the bank before the receivership proceedings. This section expressly provides that as soon as can be reasonably done, he shall resign on behalf of said bank, all trusteeships, guardianships, conservatorships and all appointments as executor and administrator. The entity of the bank still remained, however, until final dissolution. Banks, 3 R. C. L. sec. 279, p. 650.

The bill of complaint expressly charges that Irwin T. Grilruth was the receiver of the Chicago Lawn State Bank which had ceased to function as an institution and had been closed by the auditor of public accounts in accordance with the Banking Act of this State. The bill does not charge that this receiver had resigned from his trusteeship, as provided by the statute, but it is expressly charged in the petition filed in the proceedings, that at the time of the filing of the bill and up to October 26, at which time the amendment to the bill had been filed, Grilruth was still the acting and qualified receiver of the Chicago Lawn State Bank. If, in accordance with the act entitled “Banks,” he was clothed with the duties of trusteeship, which by law he was compelled to resign within a reasonable time after his appointment, the bank still retaining its entity, then there was no vacancy in the trusteeship and the bill was premature. The election held by the majority of the bondholders on October 28, after his resignation, however, was a legal, valid election of a new trustee, which was in accordance with the law and duly recorded with the recorder of deeds.of Cook county. Such being the fact, the bill was premature and was properly dismissed.

The complainant was the owner of two bonds. The election of a trustee by the majority, represented the choice of the bondholders holding $27,700 out of the total bond issue. Even aside from the strict legal construction of the Banking Act as applied to the facts shown by the pleadings in this cause, the equities were with the defendants.

For the reasons stated in this opinion, the decree, of the circuit court dismissing the bill for want of equity is affirmed.

Decree affirmed.

Hall, P. J., and Hebel, J., concur.


text:
    Langendorf Clothing Company, Plaintiff in Error, v. V. J. Fara, Defendant in Error.
    Gen. No. 36,430.

      Opinion filed October 25, 1933.
    Charles H. Kaplan and Stephen F. Riordan, for plaintiff in error; Clyde C. Fisher, of counsel.

      No appearance for defendant in error.
   Mr. Justice Wilson

delivered the opinion of the court.'

This action was brought by Langendorf Clothing Co., against Fara to recover damages for the loss of a box of clothing which was being conveyed by the defendant under a cartage contract.

From the facts it appears that the truck of the defendant in which the goods were being conveyed was stolen and the goods of the plaintiff lost. Plaintiff proved the delivery of the goods to the defendant, their loss and the damages sustained.

Sam Langendorf, secretary and treasurer of the Langendorf Clothing Company, testified that the defendant had conveyed merchandise for plaintiff, previous to the time in question upon numerous occasions and that he had a conversation with Fara, the cartage contractor, in which he told Fara that he was afraid of a holdup and that the driver was never to leave the truck while hauling goods for the plaintiff. Langendorf testified further that Fara was told that they did not like the driver Whitey. Fara replied that the driver Louie would be back in a few days and would, thereafter, be in charge of plaintiff’s merchandise. Langendorf further testified that he told Fara that the driver was to go directly to the freight house with the goods so that they could be shipped from that point. He also testified that he .told Fara that he carried insurance but it was necessary for the goods to be conveyed in the manner in which he had outlined.

Fara testified in his own behalf and denied Langendorf had told him to haul all of the goods to the freight house and not to the junction; that there was never any objection to delivering freight to the junction instead of directly to the freight house. Fara also testified that previous to this robbery he had told the Langendorf Company that he did not want their business as he did not wish to assume the responsibility, but that Langendorf said: “Suppose I insure it and you will not be liable for anything?” To which Fara testified he replied that if Langendorf felt that way about it it would be all right as then he would not have to worry about the goods.

Louie, the driver for defendant, testified that he talked with Langendorf at the time the clothing was delivered to him and was told that the clothing was insured ; that the plaintiff refused to send a man with him on the trip and that he told Langendorf that he was taking the goods to the junction and not to the freight house and was told that was all right because they were insured. The witness further testified that he told Langendorf it was 11:30 a. m. and the junction closed at noon and he could not reach there before then; that he would have to have his lunch at 12 o ’clock, whereupon Langendorf told him to go ahead with the cases. The witness further testified that Langendorf had always provided a man to go along with him to remain on the truck upon all previous occasions when he had received goods from the plaintiff to be delivered to the railroad.

From the evidence it appears that the goods were delivered to Louie, the driver for the defendant, the man whom the plaintiff insisted should be in charge of the delivery. This driver stopped at the place of business of the plaintiff about 11:30 o’clock in the morning, picked up a cáse of clothing* and started on his trip. He had five or six different freight stops but could not make his destination before 12 o’clock, at which time the junction where freight was received was closed. The driver thereupon stopped his truck in front of a restaurant for about 15 minutes, during* which time he had something to eat. When he came out the truck was gone. According to the police report the theft occurred near Ogden and Western avenues in Chicago.

Plaintiff insists that even though the testimony of the defendant Fara were true, namely, that plaintiff had agreed to carry insurance and absolve the defendant from responsibility, nevertheless, the defendant cannot waive his own negligence and that his duty as bailee for hire was still that of a bailee and required him to exercise that care of the bailment which the law required. It is also insisted that under the rules laid down in More v. Fisher, 245 Ill. App. 567, and Erickson v. Graham & Daniel Co., 227 Ill. App. 390, that it was negligence to leave the truck in a congested retail section of a large city.

The statement of claim filed by the plaintiff charges that the defendant was a common carrier. There is, however, no evidence in the record proving this to be a fact. A common carrier is one who holds himself out to the public as a carrier of goods for any person or corporation who desires to use such service. A private carrier is one who does not hold himself out to the public but one who carries goods under a special or private arrangement. Unlike the common carrier he is not an insurer unless he has made himself so by a special contract and he is, therefore, like any other ordinary bailee, liable for loss of, or damage to, the goods only when it is due to his negligence. Doble on Bailments and Carriers, 1914 Ed., Part II, ch. IX, sec. 106; Rathbun v. Ocean Accident & Guarantee Corp., Ltd., 299 Ill. 562.

Counsel for plaintiff has treated the subject as that of the liability of a private carrier, but insists that the defendant cannot absolve himself from his own negligence even as a private carrier. Under the old common law rule, a bailee was not liable for theft, acts of God or the public enemy or where the goods were taken by violence. This rule, however, has been modified, but the bailee is still not liable for theft unless this occurred through his own negligence. Ruling Case Law, Vol. 3, section 23 (Bailments), lays down the following rule:

“23. What Constitutes Ordinary Care. — As has been heretofore suggested, where the relation of bailor and bailee for hire or mutual benefit subsists, it devolves on the bailee to use ordinary care and diligence in the safeguarding of the bailor’s property. If it is lost through a failure to observe such duty, he is answerable, but of course he is not responsible for any losses not occasioned by the ordinary negligence of himself or his servants; he will not, therefore, be liable for any loss by thieves, or for any taking from him or his servants by force, or where the owner accompanies the goods to take care of them and is himself negligent. Ordinary care means such care as ordinarily prudent men, as a class, would exercise in caring for their own property under like circumstances, or, as it has been sometimes expressed, when applied to such bailees as make a business of keeping property for hire, as depositaries or warehousemen, that degree of care and diligence which may reasonably be expected from ordinarily prudent persons under similar circumstances, or that which business men, experienced and faithful in the particular department, are accustomed to exercise when in the discharge of their duties.” See also McKnight v. Batrick (Mo. App.), 49 S. W. (2d) 277.

What constitutes ordinary care depends upon a number of questions. In a case similar to the one before us a jury would have a right to consider the value of the goods, the length of the haul, the character of the neighborhood where the theft occurred, the manner in which the goods were being conveyed, the price paid for the service, and all the facts and circumstances bearing upon that question. 6 Corpus Juris (Bailments), sec. 58, p. 1119.

In the case of a mutual bailment, the parties have a right to make arrangements between themselves as to the manner in which the bailee shall perform. The Supreme Court of this State in the case of Jacobs v. Grossman, 310 Ill. 247, in its opinion, says:

“Whatever may be the right of the parties in a bailment for the mutual benefit of the bailor and the bailee, it is unquestionably the law that the parties may increase or diminish these rights by stipulations contained in the contract of bailment. (30 Cyc. 1167; St. Losky v. Davidson, 6 Cal. 643.) ”

In considering the question of negligence, therefore, the jury had a right to consider and weigh the testimony of the driver of defendant to the effect that he was alone with the truck and that he was taking the goods to the junction and not to the freight depot and that the junction would be closed at noon and that it would be necessary for him to eat his lunch, and that this was known to the bailor. This would, necessarily, result in the leaving of the truck in the street for a short period of time during the conveyance of the goods in question. The jury in arriving at its verdict had a right to consider the question as to whether or not plaintiff consented to this arrangement, if they believed the testimony of the driver, namely, that under the circumstances Langendorf told him to go ahead.

An examination of the case of Erickson v. Graham & Daniel Co., 227 Ill. App. 390, discloses that the truck of the defendant was parked at 310 South State street and that this was a very busy retail section in the City of Chicago. This court in that case affirmed a judgment in favor of the plaintiff and it was not necessary to the decision to find that the parking of the truck in question was hig’hly imprudent. In that case it appears that the court relied upon Siegel v. Eisner, 138 N. Y. S. 174, as its authority and we find upon examination that that was a decision of the municipal court of New York City, which was a court of first instance.

From an examination of the case of More v. Fisher, 245 Ill. App. 567, we find that the case was tried in the first instance by a court without a jury and that as the evidence was uncontradicted, the Appellate Court undertook to do that which it found the trial court should have done and reversed the case with a finding of fact. In that case goods were delivered to the bailee, a cleaner and dyer, for the purpose of having the goods taken to the defendant’s place of business and after service performed were to be redelivered to the plaintiff.

In the case at bar the question as to whether or not the defendant was guilty of negligence, under all of the circumstances, was one of fact for the jury. By its verdict the jury found the defendant was not guilty of the negligence charged but that he was exercising that degree of care which was required of the defendant as bailee. In this connection it had the right and probably did consider the special private arrangements between the parties, under which the defendant was to be absolved from any loss by reason of theft. We are unwilling to say as a matter of law that the mere fact of the delivery of goods by the plaintiff to defendant and their loss by theft was negligence which would necessitate a recovery. It is not unusual for drivers of trucks to leave their machines for a short time while they make deliveries of goods. The question being one of fact for the jury which it has resolved in favor of the defendant, and the testimony being conflicting, we are unable to substitute our opinion for that of the trial court and the jury who heard and saw the witnesses and were in a better position to pass upon their credibility than would this court on review.

It is insisted that certain portions of the instructions to the jury were erroneous. The record, however, fails to disclose any objections taken at the time. The instruction to the jury was delivered orally by the court under Buie 8 of the municipal court which was in force at the time of the trial. It has been held that such an oral instruction is proper. Morton v. Pusey, 237 Ill. 26. It is also the rule that an oral charge given by the court is not subject to review on appeal in the absence of objections or. exception. Scott v. Chicago Binder & File Co., 170 Ill. App. 391. This court is, therefore, precluded from considering this alleged error.

We see no reason for disturbing the verdict and the judgment of the municipal court is, therefore, affirmed.

Judgment affirmed.

Hall, P. J., and Hebel, J., concur.


text:
    Cody Trust Company, Appellant, v. Adam A. Dittmar and Laura B. Dittmar, Appellees.
    Gen. No. 36,462.

      Opinion filed October 25, 1933.
    Defrees, Buckingham, Jones & Hoffman, for appellant ; Vincent O’Brien and Alfred E. Williston, of counsel.
    Robert H. Stoll and Walter A. Brendecke, for appellees.
   Mr. Justice Wilson

delivered the opinion of the court.

Cody Trust Company, a corporation, as trustee in a trust deed in the nature of a mortgage brought its action in forcible entry and detainer under the provisions of clause 6, paragraph 2 of the Forcible Entry and Detainer Statute, Cahill ’s' St. ch. 57, ft 2, after a written demand for possession and after default by the mortgagors in payment of a portion of the indebtedness before any suit or foreclosure on the notes or other proceedings were instituted. The judgment was in favor of the defendant.

The only question involved is whether or not a mortgagee or a trustee in a trust deed can maintain forcible entry and detainer in the first instance to obtain possession of the mortgaged premises. The question appears to be one of first instance and no authorities by the Supreme Court of this State directly in point have been cited.

The Supreme Court, of this State in the case of Rohrer v. Deatherage, 336 Ill. 450, lays down the following rule: “In this State a mortgagor is the legal owner of the mortgaged premises against all persons except the mortgagee and his assigns. (Williams v. Williams, 270 Ill. 552; City of Chicago v. Sullivan Machinery Co., 269 id. 58; Seaman v. Bisbee, 163 id. 91; Barrett v. Hinckley, 124 id. 32; Emory v. Keighan, 88 id. 482; Hall v. Lance, 25 id. 277.) While a mortgage conveys a title as between the mortgagor and the mortgagee, it is only a qualified title as security for the creditor during the existence of the debt, and the mortgagor is regarded as the owner of the land for all beneficial purposes, subject only to the rights of the mortgagee. (Theiner v. Speckin, 290 Ill. 181; Fitch v. Pinckard, 4 Scam. 69.) After condition broken, however, the mortgagee is, as between him and the mortgagor, the owner of the fee. ’ ’

It is the contention of the plaintiff that after default the fee is in itself, as mortgagee, and its right to forcible entry and detainer immediately attaches, as it is entitled immediately to the right of possession. The Supreme Court has recognized the right to possession on condition broken in Rohrer v. Deatherage, supra. In that opinion it said: “Upon default in the condition of the mortgage the mortgagee has the right to possession against the mortgagor, his grantee, lessee or anyone claiming under him by any right. In such case the mortgagee has several remedies which he may pursue to enforce the payment of his debt. -He may sue the mortgagor in assumpsit for a judgment upon the personal obligation; he may sue in equity for the foreclosure of the mortgage; or he may recover the possession of the mortgaged property by an action of ejectment: These remedies are concurrent or successive, as the mortgagee may deem proper, and he may pursue any two or all three of the remedies simultaneously. (Bradley v. Lightcap, 202 Ill. 154; Fish v. Glover, 154 id. 86; Harper v. Ely, 70 id. 581; Rogers v. Meyers, 68 id. 92; Carroll v. Ballance, 26 id. 9; Vansant v. Allmon, 23 id. 26.)”

It will be noticed, however, that the Supreme Court has enumerated the manner in which the mortgagee may come into possession of the mortgaged premises, but has failed to include the action of forcible entry and detainer as one of these methods of procedure. It is insisted that the reason that the action for forcible entry and detainer is not enumerated as one of the remedies by the Supreme Court, is because this particular remedy was not called to its attention. It is significant, however, that an action for forcible entry and detainer is brought for the purpose of repossessing real estate which was originally in the possession of the plaintiff.

“An action of forcible entry and detainer is strictly possessory in its nature, and, unless otherwise expressly provided by statute, a person who has never been in possession of land cannot maintain the action to obtain possession; and if he has any title or interest in the land he must, as has been stated, seek to establish it in some other form of action. Generally speaking, in order to maintain the action, it must appear that plaintiff was in peaceful and exclusive possession of the premises in controversy at the time of the acts complained of, and that he had been forcibly ousted or that possession was peaceably obtained and forcibly withheld by defendant. To sustain plaintiff’s right to restitution all that need be shown is that plaintiff was in the actual possession of the property and was forcibly dispossessed by defendant.” 26 Corpus Juris, Forcible Entry and Detainer, sec. 43, p. 816.

The Forcible Entry and Detainer Act, Cahill’s Ill. Rev. St. 1933, ch. 57, ¶ 2, provides:

“The person entitled to the possession of lands or tenements may be restored thereto in the manner hereafter provided;” From this provision it appears that the Forcible Entry and Detainer Act was intended to provide a means of securing possession for some party who had previously been in possession. The clauses 1 to 5 inclusive of paragraph 2 relate to the right to repossession by a party who had previously • been in possession. The 6th clause, however, appears for the first time to provide for possession by forcible entry and detainer for those who were not originally possessed of the land. This clause reads as follows:

“Sixth — When lands or tenements have been conveyed by any grantor in possession, or sold under the ■ judgment or decree o.f any court in this .State, or by virtue of any sale in any mortgage or deed of trust contained, and the grantor in possession, or party to such judgment or decree or to such mortgage or deed of trust, after the expiration of the time of redemption, when redemption is allowed by law, refuses or neglects to surrender possession thereof after demand in writing by the person entitled thereto, or his agent. ’ ’

In the case of Knox v. Hunter, 150 Ill. App. 392, it appears that an action was brought in forcible entry and detainer to obtain possession of real estate under what appeared to be a trust deed or mortgage on the premises. After quoting clause 6 of paragraph 2 of the Forcible Entry and Detainer Act, as herein set forth, the court in its opinion in that case, said:

“Sloan had never been in possession, neither had Harper. These lands had not been sold under any judgment or decree. We held in Aurner v. Pierce, 106 Ill. App. 206, that forcible detainer could not be maintained where the party suing had never been in possession, the language of the first part of section 2 being that the person entitled to possession ‘may be restored thereto. ’ ” .

The action of forcible entry and detainer being a special statutory proceeding, summary in its nature, it follows that the statute conferring jurisdiction must be strictly construed. French v. Willer, 126 Ill. 611.

The property involved in this proceeding was not sold under the judgment or decree of any court in this State nor by virtue of any foreclosure sale in any mortgage or deed of trust contained. Consequently, the right, if any right there is in the plaintiff, would be in the provision that forcible entry and detainer may lie when lands or tenements have been conveyed by any grantor in possession. We do not believe that a trust deed comes within the meaning of this provision, but rather that it applies to a straight grant or conveyance by deed and failure to deliver possession in conformity with said deed or conveyance. Peters v. Balke, 170 Ill. 304. Particularly are we impressed with this interpretation because of the fact that in the same clause 6 of paragraph 2 of the act it is provided that, upon a foreclosure of a mortgage or trust deed and after sale and after the expiration of the time of redemption, the action will lie upon demand by the person entitled to possession under the foreclosure proceedings. It is also a well established principle that there are no equitable defenses permissible in an action for forcible entry and detainer, but such defenses are cognizable only in a court of equity. Peters v. Balke, supra; Gardner v. Cohn, 95 Ill. App. 26; Kepley v. Luke, 106 Ill. 395.

Our attention has been called to West Side Trust v. Savings Bank v. Gerstein, 270 Ill. App. 250, a very recent case decided by the Appellate Court of this District, First Division, in which it was held that after condition broken a trustee in a trust deed could maintain an action under section 2 or 4 of the Forcible Entry and Detainer Act. This appears to be based upon the proposition that the trustee becomes the' legal holder and entitled to possession. In that case the trustee sought to obtain possession from a tenant in possession under lease from the original owner. We are of the opinion, however, that the court overlooked the proposition that forcible entry and detainer is an original action to repossess, rather than an action to obtain possession and that clauses two and four cited in that opinion under section 2 of the Forcible Entry and Detainer Act, clearly are provisions for the repossession of property where the plaintiff at one time had possession and possession unlawfully withheld. In the cause at bar plaintiff seeks to recover under the sixth clause of section 2 of the act which provides that a grantee in a deed may obtain possession. In an action of this kind the question involved is one of possession and not necessarily one of title. We are unable to agree with the reasoning contained in the case of West Side Trust & Savings Bank v. Gerstein, 270 Ill. App. 250, cited.

While it was unnecessary to the decision of the case, the decision in the case of Vinje v. Pagels, 222 Ill. App. 310, recognized the rule as laid down in Knox v. Hunter, 150 Ill. App. 392. We are of the opinion, therefore, that a mortgagee or a trustee in a trust deed on default or condition broken is not entitled to the benefit of the Forcible Entry and Detainer Act in seeking to obtain possession of the real estate covered by the mortgage or trust deed.

For the reasons stated, the judgment of the municipal court is affirmed.

Judgment affirmed.

Hall, P. J., and Hebel, J., concur.


text:
    The People of the State of Illinois, Appellee, v. Claude Summers, Appellant.
    Gen. No. 36,512.
    Opinion filed October 25, 1933.
    Benjamin C. Bachrach and Wilbert F. Crowley. for appellant.
    Thomas J. Courtney, State’s Attorney, for appellee; Edward E. Wilson, Grenville Beardsley and Albert Woll, Assistant State’s Attorneys, of counsel.
   Mr. Justice Wilson

delivered the opinion of the court.

This is an appeal from a judgment and order of the criminal court finding that the defendant Claude Summers is now insane and committing the defendant to the Illinois Asylum for Insane Criminals at Chester, Illinois, until he shall have recovered or otherwise be discharged by due process of law.

It is the contention of the defendant that the order of commitment should have directed that the defendant' be confined in such other hospital or institution other than the Illinois Asylum for Insane Criminals at Chester, as the court in its discretion should deem proper. This court is asked to vacate the order of commitment heretofore entered and remand the cause with directions to enter a proper order committing the defendant to confinement, in an institution for noncriminal insane persons.

It is important in the consideration of the question to keep in mind that the defendant in this proceeding has not as yet been found guilty of the crime charged in the indictment against him, nor has he been tried upon any charge whatsoever, so far as this record discloses.

October 30,1930, in a proceeding in the county court of Cook county the defendant was found to be insane and ordered to be committed to Chicago State Hospital at Dunning, Illinois, and this order was carried out.

May 13, 1932, the Cook county grand jury returned an indictment for robbery, charging that the defendant prior to his commitment as an insane person had committed said crime on February 5, 1930.

November 4, 1932, the State’s attorney of Cook county filed a written petition alleging that the defendant had recovered his sanity and requesting the court to impanel a jury to inquire into his sanity, preliminary to his being tried under the indictment. This issue was tried before a jury who found that the defendant was, at the time of the impaneling of the jury, insane and now is insane and a lunatic. As already stated, it is contended that the order of commitment should have directed that he be returned t'o the institution at Dunning, Illinois or some other State institution for the noncriminal insane and with this contention of the defendant we are inclined to agree.

The Illinois Asylum for Insane Criminals was provided for by an act of the legislature approved June 1, 1889, and was intended as a place for the criminal insane. Cahill’s Ill. Rev. St. 1931, ch. 23, ¶ 134, provides :

‘ ‘ That there be and is hereby created and established an asylum for the proper care, custody and treatment of insane criminals, to be known as the Illinois Asylum for Insane Criminals. ...”

Section 6 of the same act found in Cahill’s St. 1931, ch. 23, (f139, provides: “. . . wardens of . . . their respective institutions (shall) proceed to transfer to said asylum for insane criminals all convict insane that may be in their respective institutions, all discharged convict insane, and all insane that shall have been sent to said hospitals under the mittimus of any of the several courts of this State.”

Section 9 of the same act found in Cahill’s St. 1931, ch. 23, Ü142, provides:

“The managing officer or the medical superintendent . . . may make application to the Department of Public Welfare, for an order of transfer of any or all criminal insane or mentally deficient persons . . . who have been guilty, previous to admission to the said institutions, of an act of homicide, ...”

From a reading of the sections quoted, it would appear that it was the purpose of the enactment to provide for the transfer of those who had previously been found guilty of crime and not those who had been found insane but -not guilty of crime. i

The case of People v. Scott, 326 Ill. 327, was a case where the defendant had been found guilty and thereafter a petition in regard to his sanity presented to the court alleging that the defendant Scott had become insane after the entry of judgment against him in the criminal court. The same situation arose in the case of People v. Geary, 298 Ill. 236.

In the case of People v. Johnson, 298 Ill. 52, the defendant was found guilty by a jury and subsequently a motion was filed to vacate the judgment on the ground that the defendant was insane at the time of the trial.

These cases cited by the People are all cases where the defendants had been adjudged guilty of crimes and therefore came under the classification of criminals, and, if insane, they belonged to that class enumerated in the statute as insane criminals. These cases have no application in our opinion to the facts arising under the proceeding before us. The presumption of innocence still existed in so far as the defendant in this case was concerned and there was no finding against him and no plea of guilty to the indictment and he, therefore, was, so far as the public was concerned, entitled to incarceration in another institution other than the institution known as the Illinois Asylum for Insane Criminals at Chester.

Since this appeal was perfected, however, the Act of 1889 has been amended by an act approved June 30, 1933 and in effect July 1, 1933, which provided for the institution of the Illinois Security Hospital on the premises now occupied by the Illinois Asylum for Insane Criminals. Section 2 of this act as found in Cahill’s Ill. Rev. St. 1933, ch. 23, ¶ 140, provides as follows :

“Within the Illinois Security Hospital as thus instituted, there shall be confined the following classes of persons:

“ (a) Every male person who, charged with the commission of a crime, cannot be put upon trial because adjudged lunatic or insane.”

We are not called upon to pass upon the meaning of this enactment but from a cursory examination of the amendment it appears to have been enacted to supply the power lacking under the statute in effect at the time this order was entered, namely, to transfer persons to the State Institution for Insane Criminals before trial.

For the reasons stated in this opinion the judgment order of the criminal court is reversed and the cause is remanded with directions to that court to enter an order committing the defendant to a place of confinement provided by law for noncriminal insane persons as prayed for in this appeal.

Reversed and remanded with directions.

Hall, P. J., and Hebel, J., concur.


author: Mr. Presiding Justice Wolfe

text:
    The People of the State of Illinois, Defendant in Error, v. Frank LeRoy Lawson and Henry Fritzinger, Plaintiffs in Error.
    Gen. No. 8,651.
    Opinion filed September 20, 1933.
    Rehearing denied November 9, 1933.
    George W. Sprenger, for plaintiffs in error.
    Oscar E. Carlstrom, Attorney General, J. J. Neiger, Assistant Attorney General, and R. O. Hanson, State’s Attorney, for defendant in error.
   Mr. Presiding Justice Wolfe

delivered the opinion of the court.

This case was transferred from the Supreme Court of this State to this court. The facts are fully set forth, in the Supreme Court opinion, in volume 351 Ill. 507, which is as follows':

‘‘ The facts in this case as stated substantially in the brief of the plaintiff in error are as follows: Frank LeRoy Lawson was indicted in the circuit court of LaSalle county, jointly with Sam Wade, on the charge of robbery while armed with a deadly weapon. They were tried at the March term, 1925, were convicted and sentenced to imprisonment in the penitentiary at Joliet. They sued out a writ of error, which was made a supersedeas upon their giving bail fixed at $20,000. Lawson gave bail in this amount with Henry Fritzinger and others as sureties. The judgment was affirmed and a rehearing denied at the October term, 1928, of this court. Lawson failed to comply with the conditions of his recognizance but made default at the October term of the circuit court, and the sureties also made default. A scire facias was issued, returnable to the January term, 1929, and was returned by the sheriff that defendants were not found. The defendants by their counsel entered a special and limited appearance and made a motion to dismiss the scire facias and quash the return, alleging that the court had no jurisdiction of the subject matter for the reason that the bail bond was taken by and made to the warden of the penitentiary, and therefore the circuit court of LaSalle county had no jurisdiction of the subject matter. This motion was overruled, the defendants were defaulted, and a judgment was entered awarding execution for the amount of the recognizance.- Thereupon a. writ of error was sued out of the Appellate Court, which affirmed the judgment. A petition for a writ of certiorari was presented to the Supreme Court and denied. After the denial of the writ of certiorari a motion was made by Fritzinger on April 13, 1931, to vacate the judgment entered at the January term, 1929, and set aside the forfeiture, offering to pay the costs and showing that Lawson had been apprehended and was then imprisoned and serving his sentence in the Joliet penitentiary. The reason alleged for the motion was that the judgment was void because the statute under which the recognizance was given was unconstitutional and deprived the defendant of his property without due process of law. The present writ of error was then sued out to the June term, 1932, and the errors assigned are, that the circuit court erred because the statute under which the supersedeas bond was given is unconstitutional for the reason that it is in violation of the State and Federal constitutions and deprives the plaintiff in error of his property without due process of law, and that the court erred in not vacating the judgment of forfeiture, for the reason that prior to the hearing of the motion for that purpose the principal, Lawson, had been surrendered to the custody of the warden of the penitentiary.

“This cause must be transferred to the Appellate Court. Such constitutional objections, if any, as were made or might have been made to the judgment of the circuit court in the proceedings for the forfeiture of the recognizance were waived by the plaintiff in error when he sued out a writ of error from the Appellate Court to review the judgment rendered at the June term, 1929. The Practice act requires all cases in which a constitutional question is involved to be taken on error or appeal to the Supreme Court, and if it be taken to the Appellate Court and errors are assigned of which that court has jurisdiction, the party taking the appeal or suing out the writ of error is held to have waived the constitutional questions.' (Citation of authorities omitted.) The question of the constitutionality of the statute under which the recognizance was given was involved in the judgment of the January term, 1929, and could have been raised upon a writ of error from or an appeal to this court but under the authorities cited was waived by prosecuting the writ of error to the Appellate Court. The present writ of error brings before us only the judgment at the March term, 1931, denying the motion to vacate the judgment of the January term, 1929, and not the latter judgment. The doctrine of res adjudícala applies to this writ of error. That doctrine applies to all questions of fact or law which might have been presented and decided in the former suit, whether they were in fact presented or not, including constitutional as well as all other questions. (Citations omitted.)

“The only other contention made by plaintiff in error by his motion was that the circuit court should vacate that judgment because of the fact that the principal in the bail bond, prior to the time of the hearing of that motion and prior to any sale of property in connection with the judgment of January 22,1929, had died. (Had surrendered to the warden of the penitentiary.) We express no opinion on the merits of this latter contention of plaintiff in error, as this court has no jurisdiction to consider and pass on that question.

“The cause is therefore transferred to the Appellate Court for the Second District.”

The only question for this court to decide is, Did the trial court abuse its discretion by not setting aside and in refusing to vacate the judgment because of the fact that the principal in the bail bond had surrendered to the warden of the penitentiary and at the time of the hearing was serving his sentence in that institution? In the case of Hangsleben v. People, 89 Ill. 164, it was held that a surety in a recognizance may be discharged upon the payment of costs on surrendering their principal at any time before default upon the bond or recognizance. The surrender must be made before the judgment of forfeiture is entered, unless it is prevented by an act of God. A plea that the surety in the recognizance surrendered their principal after their forfeiture thereof and before the issuing of the scire facias thereon is bad on demurrer.

The record in this case does not disclose that the plaintiff in error made any effort to apprehend Lawson, either before or after the judgment was entered in this case. The setting aside of the defaults in this case was a matter within the sound discretion of the trial court, and unless it is properly shown that discretion has been abused, this court should not disturb the ruling of the lower court. Gallagher v. People, 91 Ill. 590.

We are of the opinion that the trial court did not abuse its discretion in refusing to set aside and vacate the judgment and the judgment of the circuit court of LaSalle county is hereby affirmed.

Judgment affirmed.


author: Mr. Justice Huffman

text:
    Frank J. Smith et al., Plaintiffs in Error, v. Gus H. Bunge et al., Defendants in Error.
    Gen. No. 8,639.

      Opinion filed September 20, 1933.
    Rehearing denied November 9, 1933.
    Charles Hudson and Chilton P. Wilson, for plaintiffs in error.
    Frederick C. Harbour and Max Murdock, for defendant in error Downers Grove Investment Company.
    C. A. Carlson, Charles W. Hadley and Harvey T. Fletcher, for other defendants in error.
    Gustav H. Bunge, pro se.

   Mr. Justice Huffman

delivered the opinion of the court.

Bill of complaint was filed in this case by certain minority stockholders of the Downers Grove Investment Company, an Illinois corporation. It was directed against Gus H. Bunge, Mrs. F. M. Bunge, George H. Bunge, Mrs. George H. Bunge, Ernest E. Bunge, Charles Williston, C. J. Dunham, Burke Storage Company, Mason Real Estate Improvement Company, and the Downers Grove Investment Company. The bill alleges that the Downers Grove Investment Company, hereinafter termed the Investment Company, was organized under the laws of the State of Illinois, to act as agent for others in the purchase, sale, renting and management of real estate, in operating insurance agencies, lending money on real estate mortgages or industrial or railroad bonds, or public service corporations or municipal or quasi municipal bonds, and dealing in such securities, and for no other purpose. Plaintiffs in error charge Gus H. Bunge, as president, and George H. Bunge, his son, Ernest E. Bunge, his brother, Charles Williston, and C. J. Dunham, as directors, with gross mismanagement of the Investment Company, in that defendants in error permitted Gus H. Bunge, George H. Bunge, Mason Beal Estate Improvement Company (which is owned by Gus H. Bunge), and the Burke Storage Company (of which Gus H. Bunge is president and large stockholder) to withdraw large amounts of money from the funds of the Investment Company, for their own personal" use and for the use of the said Beal Estate Company and the said Storage Company; that such withdrawals were fraudulent and illegal, and not authorized either by statute or the charter of the Investment Company, and that the said defendants in error have refused to collect such accounts and indebtedness arising by way of such advancements. The bill further charges that due to this conduct of the defendants in error, the Investment Company has no funds with which to pay its debts and has no cash resources unless such accounts can be collected. The bill charges the defendant directors with conduct constituting gross and fraudulent mismanagement of the Investment Company, whereby it was in imminent danger of insolvency, if not already insolvent. It asks for an accounting between the Investment Company and the defendants in error; and for the appointment of a receiver to take charge of the affairs of the Investment Company to collect money due it from defendants in error; and for general relief.

Motion" was made in this court by defendant in error, Burke Storage Company, that this suit be dismissed as to it; which motion was taken for consideration with the entire cause, and the motion has been denied. Defendant in error, Gus H. Bunge, filed his motion to strike the brief and argument of plaintiffs in error because of scandalous and impertinent matter, which motion was taken with the case. "While some of the statements contained in the brief and argument of plaintiffs in error might well have been omitted, and served no good purpose, yet, they are not deemed a sufficient violation of the rules of this court to warrant the granting of the motion.

The evidence shows that Gus H. Bunge organized the Investment Company and has been its president and in control of its affairs during its entire corporate existence. It appears that this corporation is without authority to buy and deal in real estate, and that it did not have authority to lend money except upon such securities as above set out in its charter. After the original organization of the Investment Company, the capitalization was increased in the amount of $100,000, by the issuance of 850 shares of the par value of $100 per share and 1,500 shares of the par value of $10 per share. Both the $100 stock and $10 stock, had the same voting power. Gus H. Bunge became a subscriber to 1,001 shares of the $10 stock, George H. Bunge to 374 shares of the $10 stock, and Gordon Bunge to 10 shares of such stock, making a total of 1,385 shares out of the 1,500. The balance of this stock went to divers other parties.

Gus II. Bunge was the owner of the Bunge subdivision in Downers Grove, and it appears that he and his family organized the Mason Real Estate Improvement Company to take title to his real estate holdings in said subdivision. He and his family are the sole owners of the corporation designated as the Mason Real Estate Improvement Company and constitute the officers and directors thereof. Gus H. Bunge mortgaged the said subdivision to the Investment Company for the sum of $35,000, and neither the principal or interest has been paid. Gus H. Bunge’s private residence in Downers Grove is commonly referred to in this case as the “Big House.” He conveyed this property to the Mason Real Estate Improvement Company, which company in turn conveyed it to the Investment Company for the consideration of $23,879.18, in November, 1929. Gus H. Bunge was president of both companies at that time. He continued to occupy this residence property after these transactions. On August 12, 1930, Gus H. Bunge directed V. J. Morton, then secretary of the Investment Company, to issue to his son, George H. Bunge, certificates for 855% shares of stock in the Investment Company, also a deed for the “Big House,” a deed for premises described as the “Topé House” and a deed for another tract described as the “Corner Lot”; and accept for the Investment Company in consideration of same, a conveyance of Gus H. Bunge’s equity rights in a property called Bunge’s Tivoli Theatre & Hotel Building, which building was then under mortgage for $200,000, and which was to be accepted by the Investment Company subject to the said mortgage. When Gus H. Bunge handed this memorandum to Morton with directions to carry out the same, Morton refused to do so unless authorized by the board of directors, and subsequently thereto, resigned as secretary without carrying out such instructions for Gus H. Bunge. It also appears in this transaction that Gus H. Bunge was to be credited on his personal account on the books of the Investment Company, with a credit of $55,000. The values that Mr. Bunge placed upon the credits and transfers that were to be made to him and to his said son, upon said memorandum, totaled $240,050.

It appears that following the resignation of the secretary Morton, the “Big House” was conveyed by a deed from the Investment Company to George H. Bunge, son of Gus Bunge; that the deed was executed by Gus H. Bunge on behalf of the Investment Company and acknowledged before Gordon C. Bunge, as notary public. It appears that this act was not authorized by the board of directors and that no consideration was paid by George H. Bunge for the conveyance.

After the mortgage of Bunge’s subdivision to the Investment Company for $35,000 was made, the equity of redemption in said property was conveyed through the Mason Real Estate Company to the Investment Company for the price of $38,115.97; and soon after this occurred, 11 lots in the subdivision were conveyed by the Investment Company to the Lord Lumber Company in payment of an account owed it by Gus H. Bunge individually, for materials furnished, in the building known as Bunge’s Tivoli Theatre and Hotel. The consideration for the 11 lots was $18,315.50. It appears that this amount was charged against Gus H. Bunge upon the books of the Investment Company, but not paid, and that later, the same was charged off under the designation “suspense account.”

íhe Mason Real Estate Company also sold to the Investment Company the so-called “Tope House,” for $2,500, subject to a mortgage of $4,500, which mortgage loan the Investment Company had previously made to Gus H. Bunge. It appears that this “Tope House” was afterwards conveyed back to George H. Bunge without consideration, and that he held the same when the bill of complaint was filed herein.

The Mason Real Estate Company was incorporated for $100,000, of which Gus H. Bunge subscribed to $75,000, George H. Bunge, his son, to $23,500, and Gordon C. Bunge, his nephew, $500, making $99,000 of the capital stock of the company within the Bunge family. Two days after the said company was chartered, the aboye $35,000 loan was made by the Investment Company. The Mason Real Estate Company had no other oEce than that of Gus H. Bunge and the Investment Company.

Gus H. Bunge was president, manager, and director of the Burke Storage Company, and during such time the Storage Company borrowed from the Investment Company $75,000, of which no part of the principal or interest has been paid. The notes and bonds for this loan were pledged by the Investment Company and it has had to pay the interest thereon. In addition to this the Investment Company, at the instance of Gus H. Bunge, was caused to advance to the Burke Storage Company on its unsecured notes at one time, the sum of $15,000 and at another time the sum of $1,750, and at another time the sum of $4,558.53 on open account; all of which notes and open account have been pledged as security by the Investment Company.

It appears that one Angelo Masouris owed Gus H. Bunge $1,050 rent; that he owed the Burke Storage Company $1,504.85; that he owed on a real estate contract he had made with Gus H. Bunge, the sum of $1,675; and that in addition to these amounts he owed a note for $1,000, in which Gus H. Bunge was interested. Gus H. Bunge had the Investment Company buy from the said Masouris an $8,400 note, with which the foregoing accounts were paid. The above note was sold by Masouris to the Investment Company at par, plus accrued interest, and was signed by the Downers Grove Restaurant Company, Inc., by John Bahas and John Papas, as president and secretary, and purported to be secured by chattel mortgage on the furniture in said restaurant. This note was not paid and the furniture was sold at public auction by Gus H. Bunge and brought the total sum of $465.

Mr. Gus H. Bunge also mortgaged a property on Wabash avenue in the City of Chicago to the Investment Company for $10,000 of which the sum of $8,000 remains unpaid. It appears that Ernest E. Bunge, a director and brother of Gus Bunge, borrowed from the Investment Company $3,500 upon land in the State of Minnesota, which loan is past due and unpaid, and which security has been pledged by the Investment Company.

When the “Big House” was conveyed to the Investment Company, it was conveyed subject to a mortgage of $10,Q00, which the Investment Company had previously loaned thereon to Gus H. Bunge. Including the amount of the mortgage, the consideration of the above transaction was fixed at $23,870.18, which sum was credited to the Mason Beal Estate Company and drawn out. The ‘1 suspense account” of $18,315.50, appearing on the books of the Investment Company on account of the transfer by it of certain lots in Bunge’s addition, to the Lord Lumber Company, to settle an account of Gus H. Bunge’s with said Lumber Company for materials used in the Tivoli Theatre and Hotel Building, was recommended by the auditor to be charged back on the books of the Investment Company against Gus H. Bunge. The matter was referred to a committee, which committee did not report prior to the bringing of this action.

It appears that Gus H. Bunge on December 20, 1930, had an overdraft with the Investment Company of $25,686.46; that both E. E. Bunge and George H. Bunge are indebted to the Investment Company; that the Mason Beal Estate Company and Burke Storage Company are likewise indebted in large sums; the Mason Beal Estate Company on December 30, 1930, owed by open account the sum of $22,834.52; that the Burke Storage Company has never paid any of the principal or interest on its $75,000 loan.

It further appears that the Investment Company has no securities except such as are pledged as collateral for its own borrowings; that it was obliged to borrow $2,000 to pay upon the mortgage on its own office building; and that at the time of bringing this suit, the Investment Company had no available assets other than the open accounts against Gus H. Bunge, the Mason Real Estate Company, the Burke Storage Company, George H. Bunge and E. E. Bunge.

Mr. Gus H. Bunge, E. E. Bunge, his brother, and . George H. Bunge had so many personal and individual transactions with the Investment Company that to undertake to go into the same in any further detail would extend this opinion beyond reasonable limits.

Plaintiffs in error urge that the defendant directors are guilty of gross mismanagement of corporate affairs of the Investment Company and of fraudulent conduct in the handling thereof; that the Investment Company had no power to purchase and deal in real estate under its charter; that the long series of transactions and conveyances and reconveyances were fraudulent and ultra vires; and as minority stockholders brought their bill seeking relief against such alleged misconduct and praying for a receiver for the Investment Company, and that an accounting may be had of the acts and doings of the company and the defendants in error.

When Gus H. Bunge handed the memorandum to Morton, secretary of the Investment Company, on August 12, 1930, to make certain transfers of property to his son, George H. Bunge, said transfers amounted to $185,050, which together with a personal credit of $55,000, that was to be given to Gus H. Bunge, made the total of $240,050; and these transfers were to be made in consideration of Gus H. Bunge conveying his equity in the Tivoli Theatre & Hotel Building to the Investment Company. At that time Gus H. Bunge wrote and signed the following letter: “August 12, 1930. Downers Grove Investment Co., Downers Grove, Illinois. Gentlemen: I have conveyed to you the real property described in the deed attached herewith and yas recorded in the Recorder’s Office of Du Page County, Illinois, on August 11, 1930, as document 301,321 in Book 254 of Deeds, page 183, in payment and discharge of- any and all obligations which may be due and owing to the said Downers Grove Investment Co., by me, now or hereafter, with express understanding and agreement that if such obligations are fully paid and discharged by me, or some one for me, within Five (5) years from the date hereof, then the said Downers Grove Investment Company, shall, and agrees to convey the premises to whomsoever the undersigned or my son George H. Bunge may in writing direct, (signed G. H. Bunge.) ” Provision is made at the bottom of this letter for the secretary to sign as follows: “Consented to: Downers Grove Investment Company, by-Secretary.” It appears that the name of Y. J. Morton had been written above the title of secretary and stricken out. At the time the above letter was written the said Theatre and Hotel Building had a $200,000 mortgage against it, which mortgage is now in process of foreclosure. It will be observed that Gus H. Bunge undertakes to convey his equity by the terms of this letter, “in payment and discharge of any and all obligations which may be due and owing to the said Downers Grove Investment Co., by me, now or hereafter, . . . ” It could hardly be presumed that even though there might be a present consideration for such transfer, it could also be in full settlement of all obligations, which might be due and owing both now and hereafter.

The amounts of money paid out by the Investment Company on account of the “Big House,” the Mason Real Estate Company, the Lord Lumber Company, the “Tope House,” the Masouris note, the Burke Storage Company, the Wabash avenue property in Chicago, the Minnesota farm, George H. Bunge real estate, and Gus H. Bunge open account, total the sum of $187,031.31. The deed executed by Gus H. Bunge and wife to the Investment Company to the Tivoli Theatre & Hotel property, as it appears in the record, merely describes the lots so conveyed, names the consideration therefor at the sum of $100 and other valuable consideration, and makes said deed subject to all existing leases and to a first mortgage in the sum of $250,000, and to all taxes and assessments. (The said mortgage indebtedness was referred to in the evidence as $200,000.)

The defendants in error made no denial of any of the acts and transactions complained of by plaintiffs in error. Only two witnesses were called by defendants in error, Mr. Cus H. Bunge and Charles Hudson. Their testimony is very brief and is in no way directed toward any of the acts complained of. Defendants in error assume the position that the decree should be affirmed because the bill of complaint is not predicated or based upon insolvency, and the question of insolvency not being the matter to be judicially determined, that a receiver could not be had. We understand the rule to be that the directors of a corporation are regarded as trustees for the stockholders, and that it is unlawful for them to act in opposition to the interest of the stockholders, or place themselves in a position where their individual interests would interfere with their acting for the best interests of all the stockholders ; and that this rule applies to all persons acting in any fiduciary capacity. In its general sense, the rule embraces every relation in which there may be any possible conflict between the duty to the person upon whose account the trustee is acting, and his owh individual interest.

The directors without the sanction of the stockholders have no power to contract for the corporation with themselves or for the benefit of themselves; and it cannot be said that the directors of a corporation, owning and controlling a majority of the stock shall be permitted to cause their unlawful acts to be ratified by calling a stockholders’ meeting which they control as effectually as they do the board of directors, and then causing a majority of the stock to be voted in favor of such ratification. Klein v. Independent Brewing Ass’n, 231 Ill. 594.

The interests of buyer and seller are inconsistent and the directors of a corporation being trustees of its business and property for the collective body of stockholders are subject to the general rule in regard to trusts and trustees in that they cannot in their dealings with corporate property use their relation toward the corporation for their own personal gain. It is their duty to administer the corporate affairs for the common benefit of all the stockholders. The stockholders are entitled to the utmost fidelity on the part of the directors, and it is a breach of duty for the directors to place themselves in a position where their personal interests would prevent them from acting for the best interests of those whom they represent. Dixmoor Golf Club v. Evans, 325 Ill. 612; Gilman, C. & S. R Co. v. Kelly, 77 Ill. 426; Hagerman v. Schulte, 349 Ill. 11.

We understand that courts of chancery have no general power to appoint receivers of corporations except where expressly authorized by statute, as the State or sovereign does not furnish public agencies for the purpose of carrying on private enterprises; but there are exceptions to this general rule. A stockholder may invoke and set in motion the powers of a court of equity to appoint a receiver where the corporation is fraudulently mismanaged by the officers, whereby it is in imminent danger of insolvency or has been rendered insolvent by reason of such mismanagement. Blanchard Bro. & Lane v. Gay Co., 289 Ill. 413. This rule is recognized in Steenrod v. Gross Co., 334 Ill. 362, 368.

Where it appears that there is fraud or gross mismanagement or wrongful and fraudulent conduct on the part of the directors of a corporation, it is a general principle of equity that such misconduct should not be suffered to pass without a remedy, and equity has inherent jurisdiction to appoint a receiver where the circumstances justify it. We do not understand that insolvency is necessary in all cases for the appointment of a receiver. The particular facts of each case should be controlling and if it appears that the directors are guilty of such wrongful waste and dissipation of corporate assets as to constitute fraud and to threaten immediate insolvency and bring about irreparable injury to the stockholders, then a receiver is proper. Where the misconduct is so gross or fraudulent as to threaten corporate security and is attended with such waste and dissipation of corporate assets as to impair corporate solvency and jeopardize the substantial rights of the stockholders in the corporate assets, then such conditions warrant the appointment of a receiver. Under such circumstances, it becomes the duty of the court to see that the property of the corporation is preserved in order to afford the stockholders relief from irreparable loss and injury. 8 Fletcher Cyc. Corporations, sec. 5246. When the mismanagement is evidenced by or accompanied with conversion, misappropriation, or diversion of corporate funds by the officers, a receiver is properly appointed, even though the corporation is solvent, because such conduct is prohibitive to the continuation of solvency, and insolvency becomes imminent and a steadily approaching condition. There is no good reason why a receiver should not be appointed under such circumstances, when in the opinion of the court they clearly appear from the evidence.

The record in this case is large, consisting of nearly 900 pages of pleadings, testimony and exhibits. A statement made in review herein must be limited to such portions as we believe necessary to an understanding of the issues involved, and to a decision of the case. We have examined carefully the evidence presented and we are compelled to the conclusion that it supports the contention of plaintiffs in error; and that if insolvency has not already overtaken the Investment Company, it is imminent and immediate under the kind of corporate management administered by defendants in error. We cannot agree with contention of counsel, that their irregular acts and conduct, which they make no attempt to explain, were merely honest mistakes of judgment. They go beyond this and constitute such acts and conduct as could not occur except where the directors of the corporation committing such acts owned and controlled a majority of the stock. The evidence in this case shows that the acts and conduct of the defendants in error have been wrongful and fraudulent toward the plaintiffs in error, and that they have produced a condition whereby the plaintiffs in error will suffer irreparable loss and injury if defendants in error are permitted to continue in such conduct of the corporate affairs of the Investment Company.

The trial court erred in its judgment and decree in denying relief to plaintiffs in error for the appointment of a receiver for the Investment Company, and in denying an accounting. The decree is therefore reversed and the cause remanded to the circuit court with directions to that court to enter a decree granting the appointment of a receiver for the Downers Grove Investment Company, and an order for accounting in said case as between the said Downers Grove Investment Company and the other defendants in error, with reference to all of their acts and transactions with the said Downers Grove Investment Company and of all transactions between it, by and through any of its officers, and the defendants in error and each of them; and to refer same to a master to take such accounting of all the acts and doings complained of by the plaintiffs in error regarding the conduct and management of the said Downers Grove Investment Company and the dealings and transactions between it and the other defendants in error, and each of them; ordering the parties hereto, respectively, for the better discovery of the matters aforesaid, to produce before the master, and to leave with him when directed by the circuit court, all books, records, papers and writings in their custody or under their control, relating thereto; and'to be examined upon oath and interrogatories as the master shall direct touching the accounts; and that the master or either of the parties be at liberty to apply to the circuit court of Du Page county for further directions, and that the consideration of costs and of all other matters not herein expressly determined or provided for, be reserved by the said circuit court until after the master shall have made his report.

Reversed and remanded with directions.