text:
    Tribune Company, Appellant, v. Canger Floral Company et al., Defendants Below, H. W. Cline, Trustee, Appellee.
    Gen. No. 41,276.

      Heard in the second division of this court for the first district at the June term, 1940.
    Opinion filed November 28, 1941.
    Kirkland, Fleming, Green, Martin & Ellis, of Chicago, for appellant; Joseph M. Taussig, John M. O’Connor, Jr. and Thomas F. Scully, all of Chicago, of counsel.
    Rappaport & Rappaport and Halfpenny & Hahn, all of Chicago, for appellees.
   Mr. Justice Sullivan

delivered the opinion of the court.

In June 1938, Tribune Company, plaintiff, procured a judgment for $93 and costs against the Canger Floral Company for unpaid advertising. In January 1939, plaintiff procured a judgment for $35.15 and. costs against Ben Mages, also for unpaid advertising. Executions issued and served pursuant to both judgments were returned “no property found.” Plaintiff instituted separate garnishment proceedings against H. W. Cline as garnishee in aid of the respective executions. The garnishee’s answers of “no funds” were contested and the two cases were consolidated in the trial court. After a trial by the court without a jury the issues were found against plaintiff and judgment was entered discharging the garnishee. This appeal followed.

Cline, the garnishee, operated an agency whose business consisted principally of liquidating the assets of financially distressed enterprises among their creditors. The principal defendants, Canger Floral Company and Ben Mages, contacted the garnishee for the purpose of settling their business debts and winding up their respective business enterprises. Pursuant to arrangements made between the principal defendants and Cline, the former separately conveyed to the latter as “trustee” all their assets for distribution among their creditors by written “assignments for the benefit of creditors.” Both of the principal defendants then delivered their assets to Cline, who sold same. The allegation in the garnishee’s answers that he had “no funds” in his possession belonging to the principal defendants is predicated upon the instruments of assignment which he claims completely divested said defendants of all title to or interest in the assets assigned to him by them or in the proceeds realized from the sale of such assets. It was admitted upon the trial that the assets received by the garnishee “trustee” under-the two assignments were sufficient to pay in full the claims arising out of plaintiff’s judgments against the principal defendants and it was further admitted that when Cline was served with the summonses in garnishment he had in his possession sufficient funds realized from the sale of said assets to pay such claims.

Inasmuch as there are some differences in the provisions of the respective assignments it is appropriate to briefly consider them separately.

Under the terms of the instrument by which the defendant Mages sought to accomplish his assignment he purported to transfer all of his assets to the garnishee as “trustee” for distribution to his creditors. His assignment contained the following provision:

“It is understood that no distribution will be made to creditors until all consents are in.”

It also provided:

“. . . and after the payment of necessary and reasonable costs and expenses in the execution of this trust and payment of such claims as may be preferred under and by virtue of the laws of this State, distribute on a pro rata basis the balance of the trust fund to my general creditors as their interests may appear.”

A letter in the following form, bearing the same date as the Mages’ assignment, was mailed to and received by plaintiff:

“The Chicago Association of Credit Men
222 North Bank Drive Chicago
Adjustment Bureau H. W. Cline, Manager.
December 1, 1938
To the Creditors of Ben Mages
d.b.a., Ben Mages Sport Store, 4226 Archer Avenue, Chicago, Illinois.
Gentlemen:
For some time past the above mentioned debtor has been operating at a loss. Realizing that he could not continue and wishing to conserve his remaining assets for the benefit of his creditors he has today executed an assignment to me as Trustee.
There will be a public sale of the assets on the premises Tuesday, December 6, at 11:00 A.M. and, for the purpose of discussing the affairs of the debtor, there will be a meeting of the creditors in this office on Tuesday afternoon, December 6, at 3:00 P.M.
The preliminary statement submitted indicates assets and liabilities as follows:
These figures are subject to check and will be available at the meeting.
So that we may know we have your cooperation in connection with this matter, won’t you please sign and return the enclosed consent form, together with an itemized statement of your account.
Tours very truly,
H. W. Cline,
H. W. Cline,
Trustee.”

Accompanying Cline’s letter was this consent form:

“The undersigned, a creditor of Ben Mages d.b.a. Ben Mages Sport Store, 4226 Archer Avenue, Chicago, Illinois, does hereby consent to the assignment of all the assets of every kind and description of the said Ben Mages, d.b.a. Ben Mages Sport Store to H. W. Cline, as Trustee for the benefit of creditors, and does hereby agree to accept the pro rata share paid on the undersigned claim from the fund derived from the liquidation of the aforesaid assets in full settlement of all claims of every name and nature against the said Ben Mages d.b.a. Ben Mages Sport Store.

The undersigned further authorizes the said H. W. Cline to execute a full release of the annexed account of the said Ben Mages d.b.a. Ben Mages Sport Store after distribution of the proceeds derived from the assets has been made.

The undersigned agrees not to institute proceedings for the collection of the annexed account during the life of this Trusteeship.” (Italics ours.)

Plaintiff did not sign this consent, advising Cline that it considered the assignment invalid as to it. Checks sent by Cline to the creditors of Mages in the course of the liquidation of the assets received by him under Mages’ assignment bore this form of endorsement:

“This check is accepted in accordance with a certain trust agreement to which we have or hereby become a party.”

Plaintiff refused all of such checks and returned same uncanceled to Cline.

Defendant Canger Floral Company by a similar instrument assigned all of its assets to Cline as assignee for the benefit of its creditors. While this defendant’s assignment for the benefit of creditors contained no reference to the obtaining of consents from the creditors, letters inclosing mimeographed consent forms identical in language with those used in connection with the Mages assignment, except that this defendant’s name was substituted as debtor, were mailed to the creditors of the Canger Floral Company, including plaintiff. Cline testified that this was the usual procedure followed where assignments were made to him for the benefit of creditors. Plaintiff did not sign the consent. In the course of the liquidation of the Canger Floral Company assets, Cline, as “trustee,” mailed plaintiff two checks as its pro rata share of the assets of said company. The second check, carrying the notation “final dividend at 3.50 per cent,” bore the following form of endorsement:

“Received of Harry W. Cline, trustee, the amount . of this check as our pro rata of the net proceeds realized from the insolvent estate of Canger Floral Company and in consideration thereof hereby release said insolvent and said trustee from further liability. ” (Italics ours.)

Cline testified that this was the general form of endorsement used by him on dividend checks in his business of liquidating the assets of debtors under assignments made by them for the benefit of their creditors. Plaintiff returned both checks to Cline, advising him that it considered this assignment invalid as to it because of the conditions included in the foregoing form of endorsement.

Plaintiff contends that “the funds in the hands of the garnishee, the assignee under the purported assignment for the benefit of creditors, are subject to garnishment, because these assignments are not valid as to plaintiff for the reason that their purpose and effect is to coerce creditors to accept in full settlement payment of only a fraction of their claims” and that “this violates the law of Illinois, and cannot be achieved either directly or indirectly.”

The law of this State has always sanctioned honest settlements made by debtors with their creditors or for their benefit because settlements of this character, fairly made, tend to expedite the work of the courts and to avoid protracted delay in distribution and unnecessary waste of assets. The validity of common-law assignments for the benefit of creditors as a method of effecting such settlements has long been recognized. (Pogue v. Rowe, 236 Ill. 157.) However, the law is just as well settled that an assignment for the benefit of creditors may be rendered invalid by a debtor annexing thereto conditions onerous to his creditors and favorable to himself.

The applicable principles of law are clearly stated in Danville Auburn Auto Co. v. National Trust & Credit Co., 212 Ill. App. 116, where the court said at pp. 120, 121:

“One of the necessary elements of a voluntary assignment for the benefit of creditors is the implication of a trust and the intervention of a trustee. Conveyances directly to creditors and not upon trusts are not such voluntary assignments. Weber v. Mick, 131 Ill. 520; Walker v. Ross, 150 Ill. 50. The trust agreement in this case provides, in substance, that it is for the benefit of all the creditors who might accede to its terms. In the case of Ramsdell v. Sigerson, 7 Ill. (2 Gilm.) 78, a very similar agreement was under consideration and had a provision therein that the creditors named should release their demands against the debtor without full payment of the same. The same argument was advanced in that case as in this, that the debtor had a right to prefer one or more of his creditors, but the court held: ‘. . . And although the right of a failing debtor to "prefer one or more of his creditors by deed of assignment, if properly executed and without fraud, is fully recognized as law by this court, still, if it contains a condition of release without provision for full payment of the demands of his creditors, it will be considered fraudulent and void in regard to all such creditors as are not parties to it, and will not prevent them from proceeding to judgment and execution, as though no such assignment had been made, as long as the property remains in the possession of the assignors or assignees of such an assignment.’ In the case of Conkling v. Carson, 11 Ill. 503, the trust agreement contained a provision that the creditors accepted the property assigned in full payment of their debts and was for the benefit of all creditors who should thereafter execute or accede to the same, and it was held to be void as against existing creditors who were not parties thereto and it was said: ‘The law does not allow a debtor to impose such harsh and onerous conditions upon his creditors. A debtor in failing circumstances has an undoubted right under the laws of this State to prefer one creditor to another, and to provide for the preference, by assigning his effects; but he is not permitted to say to any of his creditors that they shall not participate in his present estate, unless they will release all right to satisfy the residue of their debts out of his future acquisitions.’ To the same effect also is Howell v. Edgar, 4 Ill. (3 Scam.) 417.

It is apparent that this trust agreement, whether intended as an assignment for the benefit of all the creditors or as a preference to those who executed it or acceded thereto, is void as to those creditors who are not parties thereto.”.

Thus assignments purportedly for the benefit of creditors, which place such creditors upon the choice of taking nothing at all or a fraction of their claims in settlement of the whole, are invalid as to nonconsenting creditors. The garnishee agrees that such is the law but he urges that since in the instant case the onerous conditions were not contained in the debtors’ assignments themselves but were only contained in the consent forms and the forms of endorsement on the checks forwarded to the creditors by him as assignee, the imposition of such conditions cannot be charged against the debtor assignors so as to render their assignments invalid as to plaintiff.

We are impelled to agree with plaintiff that the facts and circumstances in evidence disclose that an obvious attempt has been made here to circumvent the foregoing rules of law by omitting from the assignments themselves a provision for the discharge in full of the creditors’ claims upon their acceptance of their pro rata share of the proceeds of the sale of the assets of the debtors and then inserting such a provision both in the consents and endorsements on the dividend checks mailed to the creditors by the garnishee trustee. It will be noted that “consents” are specifically referred to on the face of the Mages assignment, where it is stated, “It is understood that no distribution will be made to creditors until all consents are in.” It will be further noted that the consents in the Mages case provide that his creditors "agree to accept the pro rata share paid on the undersigned claim from the fund derived from the liquidation of the aforesaid assets in full settlement of all claims of every name and nature against said Ben Mages. ...”

As heretofore shown Cline, after the Canger Floral Company assignment had been made to him, forwarded to the creditors of that company consent forms similar to those sent to the creditors of Mages. No creditor was allowed to participate in the “final dividends” except by indorsing a check bearing this legend: “Received of Harry W. Cline, Trustee, the amount of this check as our pro rata of the net proceeds realized from the insolvent estate of the Canger Floral Company, and, in consideration thereof, hereby release said insolvent and said Trustee from further liability. ’ ’

The law will not permit that to be accomplished indirectly which cannot be done directly. In People v. Union Gas & Electric Co., 254 Ill. 395, the court said at p. 413:

“The law looks to the effect and not to the purpose. Neither will it ‘ sustain a transaction illegal in character, accomplished by indirection, when it could not be done if the methods were direct.’ Dunbar v. American Telephone Co., supra.” [224 Ill. 9.]

We think this rule is applicable here. It has been shown that as to those creditors who do not accede to same an assignment for the benefit of creditors is void which contains a provision that the creditors shall not participate in the debtor’s present estate in the hands of his assignee unless they release all right to satisfy the residue of their claims out of his future acquisitions. To allow such prohibited releases to be obtained through indirection by the assignee by their inclusion in consent forms and endorsements on dividend checks would be to sanction the very thing which the courts of this State refuse to permit debtors themselves to do. Cline, the trustee garnishee, having liquidated the assets of- more than two thousand insolvent debtors pursuant to assignments for the benefit of creditors over a period of twelve years and having used the same consent and check endorsement forms in every such liquidation, it is fair to assume that the principal defendants were familiar with his method of doing business. By the reference to “consents” in the Mages assignment, it seems clear that Mages anticipated that Cline would follow his usual method. That such method was merely a shift or contrivance to circumvent the established law is apparent. Surely conditions which, if contained in assignments for the benefit of creditors, would render same invalid cannot be legally imposed on the creditors by the assignee in behalf and for the benefit of the debtor assignors. In any event the assignments, consent forms and check endorsement forms being part of one and the same transaction, which was the liquidation of the respective principal defendants’ assets, must be considered together and, when so considered, show conclusively that the condition was imposed upon the plaintiff herein that it was required to give said defendants a full release of their debts, if it desired to participate in the distribution of the assets of their insolvent estates.

In our opinion the assignments involved herein are void as to plaintiff, which neither assented to the trusteeship nor agreed to accept dividends, which amounted to only a small fraction of its claims, in full settlement of same and the assignments being invalid as to plaintiff, it has the right to reach the funds in the hands of the garnishee by garnishment proceedings. In so far as the beneficial plaintiff is concerned, the garnishee has funds in his possession belonging to the principal defendants sufficient to pay its claims.

Other points have been urged and considered- but in the view we take of this case we deem further discussion unnecessary.

The judgment of the municipal court of Chicago is reversed and judgment is entered here in favor of plaintiff and against the garnishee for $35.15 and costs in the case of Tribune Co. v. Mages and judgment is also entered here in favor of plaintiff and against the garnishee for $93 and costs in the case of Tribune Co. v. Canger Floral Co.

Judgment reversed and judgments here.

Scanlan, P. J., and Friend, J., concur.


source: Caselaw Access Project

author: Mr. Presiding Justice Burke

license: Public Domain

text:
    Richard C. Hoffman et al., Appellants, v. Alfred P. Schwan et al., Appellees.
    Gen. No. 42,052.

      Heard in the third division of this court for the first district at the October term, 1941.
    Opinion filed December 4, 1941.
    L. A. Mitchell and Royal J. Schmidt, both of Chicago, for appellants.
    Gariepy & Gariepy, of Chicago, for appellees; Fred A. Gariepy, Owen Rall and John Spalding, all of Chicago, of counsel.
   Mr. Presiding Justice Burke

delivered the opinion of the court.

Plaintiffs filed their complaint in the superior court of Cook county, for an injunction restraining the defendants from erecting a building on a tract of land in the City of Evanston. Defendants answered and plaintiffs filed a reply. A decree was entered granting the relief as prayed. Within 30 days defendants preseated a motion, supported by a petition. The court reconsidered the matter, vacated the decree and dismissed the complaint for want of equity. Plaintiffs appealed and ask that the decree be reversed and the cause remanded with directions to enter a decree in accordance with the prayer of the complaint. No testimony was taken. The facts appear from the complaint, the answer, the reply, the amended petition to vacate and the answer thereto. The parties are in substantial agreement as to the facts.

On April 7, 1922, a plat of R Clarence Brown’s Evanston Community Golf Subdivision was recorded in the recorder’s office of Cook county as document No. 7455989. The subdivision contains 50 lots. It is bounded on the west by Asbury avenue, on the east by Ridge boulevard, on the south by an alley and oh the northwest by the Evanston Community Golf Course. This golf course is operated on real estate owned by the Sanitary District of Chicago. The street at the western extremity of the subdivision runs north and south and is known as Asbury avenue. The frontage on Asbury avenue from the alley north to the golf course is approximately 176.82 feet. From the corner of Asbury avenue and the golf course, the northwest boundary of the subdivision runs in a northeasterly direction for approximately 418 feet. The north boundary of the subdivision then runs in an easterly direction approximately 772 feet to Ridge boulevard. The plat shows that Bryant avenue, 66 feet wide (approximately 320 feet east of Asbury avenue), runs in a northerly and southerly direction between the alley and the golf course, and that Colfax street, also 66 feet wide, runs in an easterly and westerly direction between Bryant avenue and Ridge boulevard. Lots 1 to 4 face west on Asbury avenue and run to a depth of 152 feet. Lots 5 to 12 face east on Bryant avenue. Lots 5 to 10 and the south half of lot 11 run to a depth of 152 feet, The north half of lot 11, and lot 12 run to a depth of 132 feet. A 16 foot alley separates the lots facing on Ashnry avenue and the lots facing on Bryant avenue. Lots 13, 14 and 15 face west on Bryant avenue to the north of Colfax street, and lots 16 to 21, inclusive, also face west on Bryant avenue and are to the south of Colfax street. Lots 22 to 31, inclusive, face north on Colfax street, and lots 40 to 50, inclusive, face south on Colfax street. Lots 32 to 36, inclusive, face east on Ridge boulevard to the south of Colfax street and lots 37 to 39, inclusive, face east on Ridge boulevard to the north of Colfax street. Defendants, Alfred P. Sehwan and Grace E. Sehwan, are the owners of lot 1. This lot is a triangular parcel, having a frontage on Asbury avenue of 36.82 feet. It runs to a depth of 152 feet on the south line to a 16 foot alley in the rear. It then extends 136 feet in a northerly direction to the golf course and then extends 158.70 feet in a southwesterly direction on an angle from the juncture of the alley and the golf course to Asbury avenue. It contains 13,135.80 square feet. Lot 1 has been resubdivided with the approval of the City of Evanston, into lots A and B, by a plat recorded November 16, 1939. Sublot B is the south 43 feet of lot 1, and takes up all the frontage on Asbury avenue. Sublot B has an area of 6,505.10 square feet. Sublot A consists of the remainder of lot A and has an area of 6,630.70 square feet. By a warranty deed, recorded on April 7, 1922, Mabel E. Kline, the then owner of all of the 50 lots, except lot 39, conveyed said lots, subject to certain conditions, which by the terms of said instrument were declared to be covenants running with said lots and to be binding as such until January 1, 1950. The deed established a building line restriction of 25 feet on all streets except Ridge boulevard, and a building line restriction of 30 feet on Ridge boulevard. The deed then recited that “no building shall be erected on any of said lots other than a private dwelling house designed to be occupied by one family only, together with barns, garages, and other outbuildings thereon, and no private dwelling shall be erected on any of said lots in said subdivision having a frontage on any street other than Ridge avenue costing less than $5,000.00; and no private dwelling shall be erected on any of said lots having a frontage on Ridge avenue costing less than $7,000.00. ’ ’ The defendants took title to lot 1 by a deed recorded October 22, 1934, in and by the terms of which the conveyance to them was expressly made subject to the restriction contained in the deed from Mabel E. Kline. At the time of the conveyance to the defendants lot 1 was improved with a single family residence. On May 11, 1940, defendants made application to the building commissioner of Evanston for permission to construct a single family residence with garage attached on lot A. Plaintiffs objected to the granting of the permit. Following a hearing before the city council, that body on May 20, 1940, approved the granting of the permit, and on May 23, 1940, the permit was issued. Charlotte E. and Ethel Dieffenbacher own lot 2, having a frontage of 50 feet on Asbury avenue. Richard C. Hoffman and May D. Hoffman, his wife (plaintiffs) own lot 4, with a frontage of 45 feet on Asbury avenue. Lot 2 adjoins lot 1 and lot 4 adjoins the alley, which is the southern boundary of the subdivision. Esther L. Johnson, plaintiff, owns the north 20 feet of lot 6 and the south 20 feet of lot 7. Emma C. Johnson, plaintiff, owns the north 20 feet of lot 8 and the south 20 feet of lot 9. Robert H. Gault and Mary Louise Gault, at the time the complaint was filed owned the north half of lot 10 and all of lot 11, 60 feet. They joined as plaintiffs. Since the suit was filed, the Gaults sold their property to Urban A. Lavery, who has not been made a party to the suit. Since the filing of the suit, Emma C. Johnson died but there has been no suggestion of her death. On or about May 15, 1940, the defendants began the construction of a single family residence upon sublot 1. On May 20, 1940, plaintiffs’ attorneys advised defendants by registered mail that such construction was a violation of the restriction. Nevertheless, defendants continued with such construction until the complaint was filed on June 21, 1940. According to the answer filed on July 25,1940, defendants had expended $3,000 in constructing the building. The amended petition filed February 13,1941, states that defendants had expended $4,500 in constructing the building. The building, when completed, will cost $10,000.

The residence which stood on lot 1 at the time it was purchased by the defendants is now on that part of lot 1 known as sublot B. The area of sublot A is 6,630.70 square feet and of sublot B, 6,505.10 square feet. The area of the other lots in the subdivision, including* those owned by the plaintiffs, is substantially the same as the area of either sublot A or sub-lot B, approximately 7,000 square feet. Lots 2 and 4, owned by plaintiffs Dieffenbacher and Hoffman, front on Asbury avenue. The properties owned by the other plaintiffs front on Bryant avenue and are directly east and southeast of lot 1. The lots on Bryant avenue do not face defendants’ lot, but face east. From the amended petition, filed after the entry of the first decree, it appears that approximately 89 per cent of the owners of property in the subdivision had, since the entry of the decree sought to be vacated, consented to the completion of the structure on sublot A. There are two single family residences on lot 36, located at the corner of Ridge boulevard and Colfax street, which were erected in 1929. Lots 5 to 12, inclusive (facing east on Bryant avenue), have been improved with seven single family residences as follows: lot 5 and the south half of lot 6, frontage 60 feet; north half of lot 6 and south half of lot 7, frontage 40 feet; north half of lot 7 and south half of lot 8, frontage 40 feet; north half of lot 8 and south half of lot 9, frontage 40 feet; north half of lot 9 and south half of lot 10, frontage 40 feet; north half of lot 10 and lot 11, frontage 60 feet; and lot 12, frontage 104.9 feet. These lots are located in the same block as lot 1, but front on the west side of Bryant avenue, three of them being owned by the original plaintiffs. Thus, more than one building, that is, portions of two separate buildings, have been maintained on lots 6, 7, 8, 9 and 10 for many years without objection by any of the owners of property in the subdivision.

Plaintiffs maintain that the words “no building shall be erected on any of said lots other than a private dwelling house designed to be occupied by one family only” prohibit the erection of more than one residence upon defendants’ real estate. Defendants answer by stating that this language and the subsequent acts and conduct of the parties establish that it was not intended, or that it is at least doubtful that it was intended, to prohibit the erection of more than one single family residence on any one lot in the subdivision, and that the trial court properly dismissed the complaint. The deed and the plat were recorded on the same day, April 7, 1922. The deed describes the lots in the plat. We are of the opinion that the restriction was intended to limit one private dwelling house to a lot. The covenant also prohibits the erection of a dwelling house on Eidge boulevard costing less than $7,000 and on any other street costing less than $5,000. Apparently, the intent was to prevent an owner from placing more than one single family residence on a lot as laid out in the plat.

Plaintiffs urge that there is no such breach of the restriction as will bar plaintiffs from the relief asked. Defendants meet this argument by urging that the restriction is enforceable only on equitable principles, and if the construction contended for by the plaintiffs be adopted, then the plaintiffs themselves have violated the restriction or have acquiesced in the violation thereof, and are thus precluded from enforcing it against the defendants. Defendants insist that the plaintiffs are either violating the covenant or have waived violation of it by others. Plaintiffs contend that there is no breach of the covenant on their part and that hence there can be no waiver. The building on lot 5 and the south half of lot 6 was erected in 1922. Three of the remaining buildings facing east on Bryant avenue, were erected in 1923, one was erected in 1924 and one in 1925. The residence on sublot B was erected in 1923; that on lot 2 in 1926 and that on lot 4 in 1927. Plaintiffs assert that the present result of the improvement of the Bryant avenue frontage is that seven residences have been constructed and maintained on lots 5 to 12, inclusive, where the covenant permits eight, and that the actual development shows two houses each with a frontage of 60 feet, four houses with a frontage of 40 feet and one house with a frontage of 104.9 feet. Plaintiffs also point out that the frontages are so divided amongst the various occupants that it is now impossible to erect the eighth house legally permissible without wrecking or moving six of the existing residences. Plaintiffs state that the restriction limits the aggregate number of houses in the 49 lots to 49; that there are now, excluding defendants’ second building, 47 houses maintained on 48 lots; that seven lots on the west side of Bryant avenue have six buildings, two lots 'on Colfax street (24 and 25) have one building; one lot on Ridge boulevard (36) has two buildings; 38 lots (1 to 4 inclusive, 12 to 23 inclusive, 26 to 34 inclusive, 37 and 38 and 40 to 50 inclusive) have 38 buildings; that if lots 24 and 25, now occupied by one building were rearranged to accommodate an additional building, a valid possibility under the covenant, it would mean one more, making a total of 48; that if the buildings now occupying the west side of Bryant avenue, except on lot 12, were rearrangéd so that seven buildings could be maintained, the total would be brought to 49, the maximum number under the covenant; that one lot (35) is vacant; that if a building were constructed on that lot it would bring the total number of houses to 50, and would for the first time violate the aggregate limit fixed by the covenant and then in the portion of the subdivision most remote from the locus under consideration. Plaintiffs lean heavily on the case of Ewertsen v. Gerstenberg, 186 Ill. 344, where the court said,

“We do not mean to say that an easement abandoned in part will be held as abandoned altogether, for where it is abandoned pro tanto only, and a material and beneficial part remains, it will be protected.” Plaintiffs, in urging the applicability of the Ewertsen case to the facts in the case at bar, insist that a “material and beneficial part” of the easement remains. We agree that the doctrine of the Ewertsen case is clearly applicable to the two buildings on lot 36. This lot faces on Bidge boulevard and the western boundary thereof is approximately 674 feet from the eastern boundary of the lots facing east on Bryant avenue, and approximately 842 feet from the eastern boundary of the lots facing west on Asbury avenue. Hence, the lots owned by plaintiffs and defendants are not materially affected by the erection and maintenance of two residences on lot 36. Turning to the effect of the erection and maintenance of buildings allegedly in violation of the covenant in the immediate vicinity of plaintiffs’ property, plaintiffs argue that it cannot be said that the value of the restriction has been destroyed; that the covenant allows and contemplates the aggregate number of 12 buildings on lots 1 to 12; that 11 are now maintained; that the permissible number of buildings can only be reached by wrecking or altering expensive improvements, and that the present conditions are better than those contemplated by the covenant.

Bestrictions upon the use of property imposed as a part of a general plan for the benefit of the several lots, give to the purchasers a right in the nature of an easement, which will be enforced in equity and upon equitable principles against the grantee of a lot. (Curtis v. Rubin, 244 Ill. 88.) At the time the plat was recorded, the subdivider intended that not more than one single family dwelling should be erected and maintained on a lot. That is the language of the deed which was recorded on the same day. In selling that part of the subdivision facing east on Bryant avenue (lots 5 to 12 inclusive) some of the lots were divided so that the owner acquired part of one lot and part of another lot. Thus, Robert H. Gault acquired the north half of lot 10 and all of lot 11; Esther Johnson acquired the north 20 feet of lot 6 and the south 20 feet of lot 7, and Emma C. Johnson acquired the north 20 feet of lot 8 and the south 20 feet of lot 9. Because of the splitting of the lots, portions of two separate buildings have been maintained on lots 6, 7, 8, 9 and 10 without objection by any of the owners of property in the subdivision. It is apparent that buildings have been erected and are being maintained on that part of the subdivision facing east on Bryant avenue' contrary to the covenant that “no building shall be erected on any of said lots other than a private dwelling house designed to be occupied by one family.” We agree that the violation of the covenant as to dwellings facing east on Bryant avenue, is purely technical. The plat contemplated not more than one single family dwelling on each lot. Although the lots facing east on Bryant avenue were divided so that portions of two separate buildings were erected and are being maintained on single lots, yet each such parcel embraces an area at least as great as that contemplated in the warranty deed of April 7, 1922. The residences built and maintained in that part of the subdivision facing east on Bryant avenue violate the letter but not the spirit of the covenant. The area of sublot A of lot 1 is 6630.70 square feet and that of sublot B is 6505.10 square feet. The area of the other lots in the subdivision, including those owned by plaintiffs, is substantially the same as the area of lot A or lot B, approximately 7,000 square feet. The residence being erected on lot A by defendants is to cost $10,000. The requirements of the building code and zoning ordinance of the City of Evanston have been complied with in regard to fire protection, type of construction and setbacks. There is no claim that the completion of the structure will interfere with or impair the right of the property owners in the subdivision to adequate light, air, clear view, safety from fire and other hazards. We are of the opinion that the erection by defendants of the residence on sublot A of lot 1 is a technical violation of the covenant. Although it violates the letter of the covenant, it does not violate its spirit. The owners of the lots in the subdivision, including the plaintiffs, have not heretofore insisted on a literal interpretation of the language of the covenant and we perceive no reason why they should be permitted to do so at this time. All of these owners have recognized that a substantial compliance with the covenant is all that was required or expected. We agree with the contention of the plaintiffs that where there is a clear violation of a covenant, a court of chancery will enjoin such violation, even though there is no showing that the plaintiffs are damaged. We also agree with the plaintiffs that it is no defense to a complaint for an injunction that the defendants went ahead with their plans and expended a large sum of money. In such case the defendants take the risk of being compelled to raze the structure erected in violation of the covenant. , .

Under all the circumstances of this case, we are of the opinion that it would be inequitable to enjoin the defendants from proceeding with the completion of the single family residence now being constructed on sublot A of lot 1. The chancellor was right in dismissing the complaint for want of equity, and the decree of the superior court of Cook county is affirmed.

Decree affirmed.

Hebel and Kiley, JJ., concur.


author: Mr. Justice O’Connor

text:
    J. Frank Friedberg, Appellee, v. Raymond H. Schultz et. al., Appellants.
    Gen. No. 42,090.
    Heard in the first division of this court for the first district at the October term, 1941.
    Opinion filed December 8, 1941.
    Jones, Mulroy & Staub, of Chicago, for appellant; Don Kenneth Jones and Ernest F. Staub, both of Chicago, of counsel.

      Hirsch E. Soble, of Chicago, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

October 9, 1941, plaintiff, the legal owner and registered holder of 3815 participation certificates out of a total of 25,668 certificates in a trust, filed his verified complaint in chancery against the three defendants individually and as trustees under a voting trust agreement dated November 18, 1936, and also against the Knickerbocker Hotel Company, a corporation, praying that the three trustees be temporarily and permanently restrained and enjoined from electing themselves or other persons, as directors or officers of defendant, Knickerbocker Hotel Company, for any period of time later than November 18, 1941. Plaintiff also prayed for other relief which it is unnecessary to refer to in this opinion.

October 10, the day after the complaint was filed, upon notice to defendants, the court entered an order restraining the three trustees “from voting for, or electing, themselves or each or any of them, or other persons, as directors or officers of the defendant corporation, Knickerbocker Hotel Company, for any term or period terminating beyond or later than November 18, 1941.” It is from this order that defendants appeal.

The substance of the allegations of the complaint, so far as it is necessary to state them is that plaintiff is the legal owner and registered holder of more than 14 per cent of the participation certificates issued by virtue of the terms of a certain voting trust agreement dated November 18, 1936, by and between the Knickerbocker Hotel Company, a corporation, the holders of the participation certificates and the three trustees. That the matter grew out of a reorganization proceeding brought under § 77B of the Bankruptcy Act pending in the United States District Court in Chicago; that there were approximately 2200 registered holders of the participation certificates and the suit was brought as a representative one in behalf of them. That the Hotel Company owned the Knickerbocker Hotel, a fourteen-story hotel located on East Walton Place, in Chicago; that after the execution of the voting trust agreement, one of the trustees died and defendant, Judge McDonald, was appointed by the District Judge as a trustee to fill such vacancy; that the three trustees were elected directors of the Hotel Company and one was elected president, one vice-president and the other secretary, and they were acting as such at the time of the filing of the suit; that afterward the number of directors was increased from three to four; that the three defendant trustees, Schultz, Colnon and McDonald, owned and held all of the stock as trustees; that at the time of the execution of the voting trust agreement the by-laws provided the annual shareholders’ meeting of the Hotel Company should be held on the third Monday of March each year and thereafter the annual meetings were to be held November 24, 1937, June 9, 1938, and June 14, 1939. On the latter date the by-laws were amended so that the annual meeting would be held on the second Monday of October each year beginning in 1940; that the voting trust agreement provides: “Unless sooner terminated as herein provided, this Trust Agreement shall terminate on the 18th day of November, 1941, without- notice by or to or action on the part of the Trustees . . . unless at least thirty days prior to said date the Trustees shall, by unanimous vote of the Trustees then acting, vote to extend this Trust Agreement for a further period of not to exceed three" years.” The trust agreement further provided that such extension should not be effective unless it was approved by a majority or more of the owners or holders of record of the participation certificates after specific notice was given and it was alleged that Judge McDonald, as trustee, refused to vote for the extension of the voting' trust agreement and therefore it would terminate on the 18th of November, 1941.

It-is further alleged that defendant “trustees, or a majority of them,” have agreed to retain control and management of the Hotel Company for a period of at least one year from October 13, 1941, at which time the annual shareholders’ meeting was to be held and that “they, or a majority of them,” will then elect themselves and the fourth director who was manager of the Hotel Company for another year and will also elect themselves as officers of the Hotel Company for another year.

The trust agreement which is attached to and made a part of the complaint provides that within 30 days after the termination of the trust agreement, the trustees shall deliver to the holders of record of the participation certificates, upon surrender of such certificates, the number of shares of the capital stock to which such holder is entitled.

Plaintiff’s position is that the certificate holders are entitled to have their property turned over to them by the trustees within 30 days after November 18, 1941, and therefore the three trustees have no right to perpetuate themselves in office as directors and officers beyond that time. On the other side, defendants’ position is as stated in their brief, “Defendants contend that under the provisions of the Illinois Business Corporation Act they, as shareholders, may properly elect the directors of the corporation for a period of one year, even though it is known at the time of the shareholders’ meeting that they will cease to be shareholders before the full year has expired.” In support of this, some of the provisions of the voting trust agreement and § 34 of the Business Corporation Act (§ 34, ch. 32, Ill. Rev. Stat. 1941 [Jones Ill. Stats. Ann. 32.034]) are referred to.

The voting trust agreement provides that the trustees, or any of them, may he directors and officers of the corporation. Section 34 of the Business Corporation Act provides for the number and election of directors of a corporation. The pertinent portion of that section, and on which counsel for defendants rely, is as follows: “At the first annual meeting of shareholders and at each annual meeting thereafter the shareholders shall elect directors to hold office until the next succeeding annual meeting, .... Bach director shall hold office for the term for which he is elected or until his successor shall have been elected and qualified.” After quoting this provision of the statute counsel say: “It is clear from the foregoing statutory provision that directors who are validly elected at a meeting of the shareholders continue to hold office until the next succeeding annual meeting, even though the persons by whom they were elected cease to be shareholders immediately after the election.” We think this argument is not applicable to the case before us. The voting trust agreement expressly provides it shall terminate on the 18th of November, 1941, and that the trustees shall within thirty days after that date turn over the property to the persons entitled thereto. The three trustees who are officers and directors of the hotel are expressly required by the terms of the voting trust agreement to turn over the property to the persons entitled thereto. This would not be accomplished within the meaning of the trust agreement were the directors and officers of the hotel authorized to control the property for a period of about eleven months after it was delivered to the true owners.

Where property is placed in the hands of trustees for a specified period courts are careful not to permit an extension of control of the property by the trustees beyond the period mentioned. Gomez v. Gomez, 31 N. Y. Supp. 206. In that case the court speaking by Mr. Justice Alton B. Parker said: “Courts have been careful not to permit an extension of the control of trustees beyond the happening of the event which measures the trust term. Where, as in this case, the trust instrument provides that at the death of the life beneficiary the trustees shall convey the property held by them in trust to a person designated, or to one to be appointed in a manner provided, it is held that the trust does not continue until such conveyance be made by the trustees, but, on the contrary, that the death operates not only to terminate the trust, but to vest the title to the real estate at once, a formal conveyance by the trustees being wholly unnecessary.” And in Waters v. De Mossin, 164 N. Y. Supp. 82, where there was a voting trust agreement of corporate stock it was held the court would not issue an injunction to prevent a person from withdrawing his stock and controlling it unless the agreement was clearly and unequivocally proven. The court there said: “As has been said, it is a serious matter to deprive a man, against his will, of the beneficial use of Ms property, and the court should not lend itself to an effort to do this, except upon clear and unequivocal evidence that he had agreed to be so deprived. The evidence on that subject submitted by the plaintiffs is neither clear nor unequivocal.”

The order of the superior court of Cook county appealed from is affirmed.

Order affirmed.

McSurely, P. J., and Matchett, J., concur.


author: Opinion by Presiding Justice Wolfe.

text:
    Abingdon Bank and Trust Company of Abingdon, Illinois, Appellee, v. H. C. Bulkeley et al., Appellants.
    Gen. No. 9,676.
    Heard in this court at May term, 1941;
    opinion filed August 7, 1941;
    rehearing denied December 15, 1941.
    Kenworthy, Shallberg & Harper, for certain appellants; S. R. Kenworthy and R. G. Graham, of counsel; Burrel Barash, for appellee.
   Opinion by Presiding Justice Wolfe.

“Not to be published in full.”


author: Opinion by Justice Huffman.

text:
    Christine Doellefield, Appellee, v. Travelers Insurance Company, Appellant.
    Gen. No. 9,632.
    Heard in this court at February term, 1941;
    opinion filed August 14, 1941;
    rehearing denied December 16, 1941.
    C. H. Linscott, for appellant; Lisle W. Menzimer and Hall & Dusher, for appellee.
   Opinion by Justice Huffman.

“Not to be published in full.”


author: Opinion by Presiding Justice Scanlan.

text:
    John Zachotina et al., Appellants, v. Town of Cicero et al., Defendants, Maynard R. Fauble et al., Appellees.
    Gen. No. 41,089.
    Heard in second division, first district, this court at February term, 1940;
    opinion filed November 28, 1941;
    rehearing denied December 10, 1941.
    Edward H. S. Martin, for appellants; Joseph I. Bulger and Charles E. Loy, for appellees; Markman, Donovan & Sullivan and Henry O. Nickel, of counsel.
   Opinion by Presiding Justice Scanlan.

“Not to be published in full.”


text:
    People ex rel. First National Bank of Stevens Point, Wisconsin, Appellee, v. Village of Stickney et al., Appellants.
    Gen. No. 41,210.
    Heard in second division, first district, this court at April term, 1940;
    opinion filed November 28, 1941;
    rehearing denied December 10, 1941.
    Joseph Lustfield, for appellants; Ode L. Rankin, of counsel; Charles J. Michal, for appellee; John T. Murray, of counsel.
   Opinion by Presiding Justice Scanlan.

“Not to be published in full.’’


text:
    Irving-Austin Building Corporation et al., Appellees, v. Village Homebuilders, Inc., et al., Appellants.
    Gen. No. 41,610.

      Heard in second division, first district, this court at February term, 1941;
    opinion filed November 28, 1941.
    Sheehan & Egan and H. P. Robinson, for appellants; Roy J. Egan, of counsel; Healy & Reid, for appellees.
   Opinion by Presiding Justice Scanlan.

“Not to be published in full.”


text:
    Hannah E. Dewes, by Roger E. Appleyard, Her Conservator, Appellee, v. G. Earl Grindle and Anna L. Grindle, Appellants.
    Gen. No. 41,650.

      Heard in second division, first district, this court at April term, 1941;
    opinion filed November 28, 1941;
    rehearing denied December 10, 1941.
    Heber T. Dotson, for appellants; Lawlor & Walsh, for appellee.
   Opinion by Presiding Justice Scanlan.

"Not to be published in full.”


text:
    Gina Granlie and Lillian Granlie, Appellees, v. Ladislav Valha, Appellant.
    Gen. No. 41,724.
    Heard in second division, first district, this court at June term, 1941;
    opinion filed November 28, 1941.
    A. H. Brown, for appellant; George M. Schatz, for appellees.
   Opinion by Presiding Justice Scanlan.

“Not to be published in full.”


text:
    Myrtle Layne, Appellee, v. Prudence Life Insurance Company, Appellant.
    Gen. No. 41,799.
    Heard in second division, first district, this court at June term, 1941;

    opinion filed November 28, 1941.
    Ehler & Austin, for appellant; Casimir R. Wachowski, of counsel; Arnold S. Kabaker, for appellee.
   Opinion by Presiding Justice Scanlan.

“Not to be published in full.”


author: Opinion by Justice Friend.

text:
    Ernest Palmer, Director of Insurance, State of Illinois, as Liquidator of Builders and Manufacturers Casualty Company, Appellee, v. Glen A. Lloyd, Appellant.
    Gen. No. 41,198.

      Heard in second division, first district, this court at April term, 1940;
    opinion filed November 28, 1941;
    rehearing denied December 16, 1941.
    Earl K. Schiek, for appellant; Howard E. De Long, for appellee; E. C. Frank Meier, of counsel.
   Opinion by Justice Friend.

“Not to be published in full.”


author: Opinion by Justice Friend,

text:
    New England Company, Appellee, v. Parking Meter Corporation of America, Appellee. Miller Meters, Inc. and Duncan Meter Corporation, Appellees. Newman S. Price, Appellee, v. Harvey Shaw, Appellant.
    Gen. No. 41,441.
    Heard in second division, first district, this court at October term, 1940;
    opinion filed November 28, 1941.
    Jack E. Dwork and Harry G. Fins, for appellant; Samuel G. Rautbord, for certain appellee; William H. Leitner, of counsel.
   Opinion by Justice Friend,

•‘Not to be published in full.”


author: Opinion by Justice Eriend.

text:
    Kathryn C. Larkin, Individually and as President of D. F. Larkin and Son, Inc., and D. F. Larkin and Son, Inc., Appellees, v. Kenneth G. Enright, Appellant.
    Gen. No. 41,528.
    Heard in second division, first district, this court at October term, 1940;
    opinion filed November 28, 1941.
    Milford H. Olds, for appellant; George L. Pilkington, for appellees.
   Opinion by Justice Eriend.

“Not to be published in full.”


text:
    John Fitzpatrick et al., Appellees, v. Blue Star Auto Stores, Inc., Appellant.
    Gen. No. 41,580.

      Heard in second division, first district, this court at December term, 1940;
    opinion filed November 28, 1941.
    Wilhartz & Hirsch, for appellant; J. S. Greenberg and Albert H. Klee, of counsel; Allen & Darlington, for appellee; Glynn J. Elliott, of counsel.
   Opinion by Justice Friend.

“Not to be published in full.”


author: Opinion by Justice Matchett.

text:
    Henry C. Rossman, Jr., Appellee, v. Landon L. Chapman, Appellant.
    Gen. No. 41,829.
    Heard in first division, first district, this court at June term, 1941;
    opinion filed November 28, 1941.
    Hubbard, Baker & Rice, for appellant; Alvin Glen Hubbard, of counsel; Raymond A. Kinzie, for appellee.
   Opinion by Justice Matchett.

“Not to be published in full.”


author: Opinion by Justice Sullivan.

text:
    Tribune Company, Appellant, v. Frank Rainey, Defendant. Harry S. Greenstein, Trustee, Appellee.
    Gen. No. 41,424.
    Heard in second division, first district, this court at October term, 1940;
    opinion filed November 28, 1941.
    Kirkland, Fleming, Green, Martin & Ellis, for appellant; Joseph M. Taussig, John M. O’Connor, Jr. and Thomas F. Scully, of counsel; Harry S. Greenstein, pro se; Harry F. Brewer, of counsel.
   Opinion by Justice Sullivan.

“Not to be published in full.’’


text:
    People of the State of Illinois, Defendant in Error, v. William J. Ross, Plaintiff in Error.
    Gen. No. 41,711.

      Heard in second division, first district, this court at June term, 1941;
    opinion filed November 28, 1941.
    Cameron Latter and Louis M. March, for plaintiff in error; Thomas J. Courtney, State’s Attorney, for defendant in error; Edward E. Wilson, John T. Gallagher and Melvin S. Rembe, Assistant State’s Attorneys, of counsel.
   Opinion by Justice Sullivan.

“Not to be published in full.”


text:
    People of the State of Illinois ex rel. Carl G. Anderson, Appellee, v. City of Chicago et al., Appellants.
    Gen. No. 41,749.
    Heard in second division, first district, this court at June term, 1941;
    opinion filed November 28, 1941.
    Barnet Hodes, Corporation Counsel, for appellants; James A. Velde, A. A. Pantelis and Charles P. Horan, Assistant Corporation Counsel, of counsel.
    No appearance for appellee.
   Opinion by Justice Sullivan.

“Not to be published in full.”


author: Mr. Justice Fulton

text:
    L. M. Larson, Appellee, v. Albert H. Lybyer, Appellant.
    Gen. No. 9,241.

      Heard in this court at the April term, 1940.
    Opinion filed February 25, 1941.
    Rehearing denied December 26, 1941.
    Walter B. Riley and Wallace M. Mulliken, both of Champaign, for appellant.
    August C. Meyer and John L. Franklin, both of Champaign, for appellee.
   Mr. Justice Fulton

delivered the opinion of the court.

This is an appeal from an order of the circuit court of Champaign county denying appellant’s motion to open a judgment by confession entered against him on several judgment notes.

The complaint of the appellee was filed on August 9, 1939. Attached to the complaint were six original notes upon which a judgment in the sum of $66,444.50 was based. The complaint alleged and the cognovit admitted there was due on the notes the sum of $33,832 as principal, $29,529.30 interest and $3,383.20 attorney’s fees. All of the notes were signed by the appellant, all dated January 28, 1927, due 5 years after date and payable to “Laurence M. Larson and Lillian M. Larson.” All notes bore interest at the rate of 7 per cent from date except note No. 6 which did not bear interest until after maturity. Each note provided for 10 per cent of the principal as attorney’s fees.

The complaint further showed that at the time of entering judgment Laurence M. Larson was dead and that Lillian M. Larson was duly appointed executrix of his estate. Indorsed on the reverse side of each note was the following

“I hereby assign all interest in the within note to L. M. Larson.
“Lillian M. Larson
“Lillian M. Larson, individually and as Executrix of the Last Will and Testament of Laurence M. Larson, deceased.”

It was alleged that L. M. Larson and Lillian M. Larson were one and the same person.

After the judgment was entered the appellant filed his motion to open judgment to stay execution and for leave to plead to the merits, supported by an affidavit and exhibits attached thereto. Subsequently he filed an amendment to the motion and an amendment to the affidavit, and later on filed a second amendment to the motion and a second amendment to the affidavit, leave of'court having been first sought and obtained. Upon a hearing and after considering the same the court denied the motions of the appellant and he has perfected his appeal from that order to this court.

The sole error relied upon by appellant for reversal is that the court erred in denying his motion to open up the judgment and grant him leave to plead to the merits. He argues the following propositions of law in support of said contention.

First. Defects in complaint, cognovit and affidavit apparent on the face thereof.

Second. The appellee had no right to sue.

Third. Want or failure of consideration.

Fourth. That the notes were not intended to be obligatory upon the appellant and were delivered conditionally.

The defects complained of by appellant as apparent on the face of the record are first; that there is no proof of the amount due on the notes in the appellee’s affidavit. If the doctrine adopted in the case of Hinds v. Hopkins, 28 Ill. 344, had not been modified by holdings in subsequent cases, the point might be considered serious. However, in Rising v. Brainard, 36 Ill. 79, the court said, “Before a judgment will be set aside because an affidavit was not filed showing that the defendant was alive and that the debt was due and unpaid, the party making the application is required to show some equitable reason therefor.” The language of the court in Farwell v. Meyer, 35 Ill. 40, and Stewart v. Hibernian Banking Ass’n, 78 Ill. 596, seem to support this later rule.

It is next urged by appellant that all of the notes bear the indorsement of Lillian M. Larson, executrix of the estate of Laurence M. Larson, deceased, and that because there was no proof other than the allegation in the complaint concerning the executrixship of Lillian M. Larson, and no proof of the death of Laurence M. Larson, that the court was without power to enter the judgment. Our courts have held that where the right to sue as an administratrix was not put in issue by a special plea, it was not necessary to make any proof in respect to her appointment or right to sue in her representative capacity. Harte v. Fraser, 104 Ill. App. 201; Union Railway & Transit Co. v. Shacklet, 119 Ill. 232.

Appellant further contends that the warrant of attorney does not authorize a confession by the attorney in fact of a judgment in excess of the amount of the principal interest and attorney’s fees. This point is conceded by appellee and there is reason for believing that the amount of the judgment might be in excess of the actual amount due, but such fact would not invalidate the judgment except as to such excess and the balance of the judgment would remain unimpaired. Ammondson v. Ryan, 111 Ill. 506; Ralph v. Baxter, 66 Ill. 416.

Our Negotiable Instruments Act, section 52, prohibits the negotiation of the moiety of an instrument, the purpose being to prevent a multiplicity of suits, and we think it is clear that the payee of a note cannot indorse a part of the note to some other person, leaving himself the owner of the remaining portion of the instrument, or indorse the whole of said note to several payees when such division of the ownership of said note might divide the cause of action. Where, however, one joint payee indorsed to the other and the ownership of the note is merged in one person and where the maker could only be subjected to one suit we do not believe the section applies.

As to his third and fourth points, appellant insists that he is entitled because of the subject matter set forth in his affidavits, to defend on the ground of failure of consideration, and that the notes were not intended to be obligations upon the appellant, but were delivered conditionally. The sufficiency of the affidavits filed in support of the motion to open up judgment are therefore directly in question.

The affidavit alleges the following facts: that the notes executed by appellant and delivered to Laurence M. Larson and Lillian M. Larson, totaling $33,832, were not his personal obligation but were evidences of and receipts for a certain trust arrangement between the payees of said notes and the appellant; that the said Laurence M. Larson and Lillian M. Larson during the years 1924 and 1925 had many and large investments in real estate and bonds and mortgages secured by real estate in the State of Florida, totaling $31,600. Attached to the affidavit were a number of receipts, all executed by appellant and others showing payment of large sums of money by said payees in various Florida real estate projects.

The affidavit further states that during the years 1926 and 1927 the said investments had depreciated greatly in value, and on January 28, 1927, because the Larsons were unable to pay the assessments being levied from time to time on the purchases of Florida real estate in which they were interested, the said payees requested appellant to take over all of said investments and hold the same as their trustee for the purpose of liquidating the same when he might be able and pay the amounts realized out of the liquidation funds to the payees of said notes; that on January 28,1927, which was also the date of the notes, the said Laurence M. Larson and Lillian M. Larson conveyed all of their right, title and interest in the various investments in Florida; and that as further evidence of the trust arrangement between the said payees of the notes and appellant, two memorandum agreements were entered into by the same parties; that the face amount of the notes together with the interest on said investment was greatly in excess of the actual value of said properties at that time; that the amount of the notes was fixed by agreeing on the original amounts invested by the Larsons, and adding thereto interest at the rate of 7 per cent per annum for all amounts so invested; and that it was agreed the notes were to be paid out of the liquidation of the Florida properties and were not to be the absolute obligation of Albert H. Lybyer, the appellant.

The affidavit also avers that appellant without the solicitation of the payees or either of them delivered as collateral security to further secure the payment of said notes, certain bonds of Urbana-Miami Syndicate of a face value of $32,000, and that it was understood and agreed that the collateral represented by said bonds was in addition to and in excess of the original investment of the said Larsons in Florida lands; that the said Lillian M. Larson still holds all of said bonds as collateral security for the said notes, and that she should in equity credit against the note obligation of appellant, the face amount of said bonds, together with interest, and that the said securities on their face totaled greatly in excess of the face amount of said notes and were more than adequate to discharge said obligations.

The affidavit also states that at no time after the delivery of the notes had the said Laurence M. Larson or Lillian M. Larson ever made any demand or request for payment of interest on said notes, nor did they ever expect or claim to appellant that they were entitled to receive anything other than what might be salvaged by liquidation of the investments assigned to Clara A. Lybyer; that at the time of the execution of the notes and the contracts, the payee Laurence M. Larson well knew that there were large outstanding obligations on account of said investments in the aggregate of more than $30,600; and pursuant to the provisions of the supplementary agreement the appellant did assume, pay and satisfy and discharge all of said obligations and cause the Larsons to be released and discharged from all of said obligations.

Attached to the affidavit together with many other exhibits was a memorandum of agreement dated January 28, 1927, providing for the transfer by the Larsons to Clara A. Lybyer of certain of the Florida investments, and for the execution and delivery by Albert H. Lybyer of notes, payable to the Larsons, aggregating $33,832.

Attached also to the affidavit was the supplementary agreement under the same date providing that the Larsons convey certain Florida real estate to Albert H. Lybyer, and further providing that said Lybyer assume all responsibilities in connection with said properties. Indorsed on the margin of said contract is a notation that such notes were paid and canceled.

In the affidavit of appellant filed with the amended motion to open up judgment it was stated that the various properties transferred on January 28, 1927, valued as of that date, were in fact less than the amounts to become due on the various obligations by $21,012.95, and that the actual amounts realized on the properties as against the amounts paid by appellant on the obligations against said property resulted in a net cash deficit to Albert H. Lybyer in the sum of $3,482.15; that nothing of value from said properties remains in the hands of appellant, except some bonds worth about $240.

The affidavit further stated that Laurence M. Larson knew at the time of the transfer of the Florida properties that they were of no actual cash value as is shown by his letter of January 27, 1927, requesting appellant to make some arrangement to handle the obligations for him, the result of which was this contract of January 28,1927.

The letter referred to was from Laurence M. Larson to Professor Lybyer, dated January 27, 1927, setting forth that if the profits from the Florida real estate would not warrant 7 per cent interest the Larsons would be willing to accept a lower rate. The writer further stated that he would prefer to continue in the venture and hoped to be able to do so, but at the time could find no money with which to make the payments as they came along. The letter also stated, “It seems to me therefore, that some arrangement like the one outlined has become necessary. . Inasmuch as your experience in business affairs is so much greater than ours, you will have the knowledge necessary to draw up the necessary papers and we are very glad to leave that matter to you.”

Because of the apparent friendly relation existing between the maker and the payees of the notes in question, their mutual interest in investments and real estate properties in Florida for a period of years prior to the execution of the notes, and on account of the size of the judgment and the long period of time elapsing between the date of the notes and the date of entering judgment, we have given the affidavits and all the exhibits attached thereto, a careful examination but fail to find facts contained therein which constitute a meritorious defense.

Buie 26 of the Supreme Court states in part: “A motion to open a judgment by confession shall be supported by affidavit in the manner provided by rule 15 for summary judgments, and if the motion and affidavit disclose a prima facie defense on the merits to the whole or a part of the plaintiff’s demand, the court shall set such motion down for hearing. The plaintiff may file counter affidavits. If, at the hearing upon such motion, it shall appear that the defendant has a defense on the merits to the whole or a part of the plaintiff’s demand and that he has been diligent in presenting his motion to open such judgment, the court shall then sustain the motion either as to the whole of the judgment or as to such part thereof as to which a good defense has been shown. . . Rule 15 thus referred to says, in part: “(1) The affidavits in support of a motion for summary judgment shall be made on the personal knowledge, of the affiants ; shall set forth with particularity the facts upon which the plaintiff’s cause of action is based; shall have attached thereto sworn or certified copies of all papers upon which plaintiff relies; shall not consist of conclusions but of such facts as would be admissible in evidence; and shall affirmatively show that the affiant if sworn as a witness, can testify competently thereto. . .

The subject matter of the affidavits in this case are largely conclusions that he has drawn from conversations and documents wholly outside of those which are admissible in evidence. The appellant contends that want of consideration would vitiate the notes and that the affidavit shows that the purported properties transferred at the time of giving the notes were actually of no value; that therefore it is competent to show by parol evidence that there was no consideration. The memorandum agreement and the supplementary agreement, marked Exhibits “A” and “B” and attached to the affidavits purported to show exactly what the agreement was. “A” provides for the purchase of the Larsons’ investments in Florida at a price to be ascertained by adding the total amount of cash advanced by the Larsons towards said properties, plus interest, and the giving of notes by appellant for the agreed sum of $33,832. “B” recited that Lybyer should take and assume certain obligations of L. M. Larson in reference to the Florida properties and should pay the same, and further provided for the transfer to Clara Lybyer of certain other Florida property.

The six notes and the two contracts above mentioned were all executed on the same day and appear to contain a complete statement of the transactions between the parties. The letter attached to the amended affidavit dated the day before the notes, shows that Larson called upon appellant to draw all the necessary papers to complete their arrangement.

There is no complaint on the part of appellant that any part of these contracts was not carried out to the letter, nor is there any contention that representations were made therein or elsewhere that were not true. In the case of Richards v. Betzer, 53 Ill. 466, the court said, “To constitute a failure of consideration to a note there must be a warranty of the property, or a false and fraudulent representation of the thing sold.”

In Leggat v. Sands’ Ale Brewing Co., 60 Ill. 158, the court states, “Where property constitutes the consideration of a note, there can be no failure of the consideration, unless there is a warranty of the soundness or quality of the property, or a knowingly false representation made in regard it.”

In re Estate of Berbecker, 277 Ill. App. 201, the court adopts and approves the following quotation from 3 B. C. L. 496, sec. 142, It is no defense to an action on a note, that the article for which it was given proved to be worthless, where there is no fraud, or failure of title, and no express warranty. Where a party gets all the consideration he voluntarily and knowingly contracts for, he will not be allowed to say that he got no consideration.”

Appellant places reliance on the case of Oertel v. Schroeder, 48 Ill. 133. In that case the plaintiff sold the defendant a quantity of beer which was represented and warranted by plaintiff to be merchantable and saleable and of the value of $8,000, whereas it turned out to be very poor beer and only worth $2,000. In the present case if the Larsons had failed to carry out their agreement as expressed in the two Exhibits “A” and “B” and had failed or refused to deliver or convey the property therein described, there would be a want of consideration, or if appellant contended that the Larsons had represented or warranted to him that the property conveyed was of a certain quality or value, and it turned out to be not of such quality or value, there would have been a total or partial failure of consideration, and parol evidence would have been admissible to show such facts. The affidavits and exhibits filed in this case do not show such a situation to exist.

The appellant further urges that the facts set out in the affidavit show that the notes were conditionally delivered, the condition being: if a sufficient amount were realized on liquidation of the Florida properties and investments to pay the face of the notes together with interest thereon, then the notes should become operative; or if a sufficient amount were realized to pay a portion of the notes, then such a portion of the notes should become operative. A similar situation exists in the case of Handley v. Drum, 237 Ill. App. 587. In that case a note had been given for stock in a corporation and the defendant attempted to prove that there was an oral agreement that the note should be paid only out of dividends declared upon the stock. The court held that such circumstances did not make the delivery of the note but merely its payment conditional, and that parol proof was not admissible to contradict the express terms of the note.

We do not find any factual basis for holding that appellant was acting in a trust capacity.

Believing that appellant has not set forth a meritorious defense by the record in this case, the order of the circuit court of Champaign county denying the motion to open up the judgment is- affirmed.

Affirmed.


author: Mr. Justice Dady

text:
    People of the State of Illinois ex rel. James Valentine et al., Appellees, v. John D. Biggs, Judge of the County Court of Bond County, et al., Appellants.

      Heard in this court at the May term, 1941.
    Opinion filed November 27, 1941.
    Frank E. Trobaugh, of West Frankfort, and Meyer & Meyer, of Greenville, for appellants; MacDonald, Meyer & Meyer and Joe Delaurenti, all of East St. Louis, of counsel.
    F. D. Ashcraft, of Greenville, M. J. Brown and Herbert W. Dey, both of Hillsboro, for appellees.
   Mr. Justice Dady

delivered the opinion of the court.

This is an appeal from an order of the circuit court of Bond county granting a writ of mandamus.

On November 15, 1932, Paul Smith, as administrator de bonis non with the will annexed of a certain estate, filed in the county court of Bond county (hereafter referred to as “probate court”) his final report.

On December 12, 1932, Biggs, as judge of the probate court, indorsed or caused to be indorsed on the back of the report the following: “Approved Dec. 12, 32, John D. Biggs, Judge,” and at the same time made or caused to be made this entry in his judge’s docket: “12-12 32 Proof of Post, and Notice to Heirs Final report approved and Adm. etc. discharged upon filing receipts,” but no formal order covering these proceedings was then entered of record.

On November 4, 1939, James Valentine, E. B. Valentine, and Dorothy Valentine, who' are the relators in this mandamus proceeding, and M. Alice Valentine, guardian for Richard Valentine, filed in the probate court their motion which motion stated that they were heirs and legatees “and/or” devisees of the decedent and by reason thereof interested in the proper administration of said estate; that Smith, as administrator, had not reported on the condition of the estate since November 1932; that distribution had not been made to them of the entire estate; that no order of discharge had been entered in the estate, and that Smith, as administrator, had or should have in his possession property of the value of exceeding $1,000 belonging to the estate. Such motion asked that Smith be cited to show cause why he should not make an accounting to date and that upon a hearing he be ordered to make a full and complete accounting, and for "such other relief” as they might be entitled to. To this motion Smith as administrator, filed his motion to strike, which motion to strike was sustained by an order entered on August 5, 1940, by Biggs, as judge of such probate court.

On April 10, 1940, the relators and M. Alice Valentine, guardian for Richard Valentine, filed in the probate court their motion to expunge from the records of the probate court a certain order “purporting to have been entered” in said court on December 12, 1932, purporting to approve said final report and discharge said administrator “upon filing receipts,” on the ground that said purported order was not entered on December 12, 1932, but was in fact entered on March 18, 1940, nunc pro tuno as of December 12, 1932, by a deputy in the office of the clerk of the probate court at the request of the attorney for the administrator but without any order of the probate court so to do. Smith, as administrator, filed his motion to strike this motion, which motion to strike was sustained by Judge Biggs by an order entered on August 5, 1940.

On August 22, 1940, relators filed their motion in the probate court stating that they were desirous of appealing to the circuit court from the two orders of August 5, 1940, and asking that the court fix the amount, terms and conditions of an appeal bond.

On August 22, 1940, the hearing on this last motion was continued to and set for hearing on August 24, 1940, by the probate court. On August 24, 1940, an order was entered in the probate court continuing such hearing to August 28, 1940, and stating that the court extended the time in which the appeal bond might be fixed and filed to September 9, 1940.

On August 24, 1940, the relators and M. Alice Valentine, guardian for Richard Valentine, by leave of court and pursuant to stipulation of the parties, filed in the probate court another motion entitled “Third amended motion,” moving therein that Smith be cited to appear and account to the court for all property of every kind and description which he had received in the administration of the estate and to show the disposition made of the property so received. This motion alleged, among other things, that no final order of the probate court had been entered approving the final report of the administrator, that no order had ever been entered discharging Smith, as administrator, and that the estate had never been finally settled. The motion prayed that the order of the probate court purporting to have been entered on December 12, 1932, be set aside, that the estate be ordered opened, and that the administrator be cited to appear and make a full and complete accounting of his administration of the estate, and prayed for such other relief in law and in equity as relators were entitled to. To this last motion Smith, as administrator,' on September 14, 1940, filed his answer alleging certain alleged facts and denying that the petitioners were entitled to the relief asked for by their motion. This last motion- and the answer thereto are still pending and undisposed of in the probate court.

On August 28, 1940, the probate court entered an order which stated that such court was of the opinion that the two orders of August 5, 1940, were not final but interlocutory orders, and which order denied the motion “to fix the appeal bond” for said reason.

For the purpose of compelling the county judge to fix the appeal bond so that an appeal could be perfected from the probate court to the circuit court from the orders entered by the probate court on August 5, 1940, the relators filed this mandamus proceeding in the circuit court, making defendants to the action appellants John Biggs, as county judge, Alva C. Nance, as clerk of the county court, and Paul Smith, individually.

The circuit court, after hearing this mandamus suit, entered on May 24, 1941, its final order, which is the order appealed from herein. The circuit court found in such order that the two orders entered by the probate court on August 5, 1940, were final and appealable orders and directed that Biggs, as judge of the probate court, forthwith fix the amount of the appeal bond and the terms and conditions of the same as requested by the relators, so that they might perfect an appeal from such two orders. Such order of the circuit court also ordered that the costs of the mandamus proceeding be taxed against all three defendants.

Before discussing the case on its merits there are certain preliminary motions which we have taken under advisement and which must first be disposed of.

On March 29, 1941, defendants duly filed their notice of this appeal. All parties concede that on March 31, 1941, Biggs resigned as county judge, that within a few days thereafter his resignation was duly accepted by the governor, and that there is as yet no successor. Defendants have moved that this court vacate the judgment of the circuit court and tdismiss the mandamus petition because of the vacancy in the office of county judge caused by the resignation of Biggs. This motion is denied. Under the provisions of section 8, chapter 87 of our statute on mandamus [Jones Ill. Stats. Ann. 109.432], the resignation of Biggs, as county judge, did not have the effect of abating the suit, but his successor when appointed might be made a party thereto, and the writ if allowed to stand might be directed against him. (People ex rel. Adams v. McKibben, 377 Ill. 22.)

Belators have moved to dismiss the appeal by Biggs, county judge, on the ground that he no longer has an appealable interest, and have moved to dismiss the appeal by Paul Smith and Nance the clerk, on the ground that the order appealed from did not direct either of them to do anything other than pay the costs, and that therefore neither of them has an appealable interest.

The rule is that an appeal may be prosecuted by any person, whether a party to the record or not, who is damaged by the judgment, or will be benefited by its reversal, or is competent to release errors. (Lenhart v. Miller, 375 Ill. 346; People ex rel. Pollastrini v. Whealan, 353 Ill. 500; People ex rel. Voss v. O’Connell, 252 Ill. 304.) In ascertaining whether a person has an appealable interest, it is unnecessary to determine whether such person was a necessary party to the suit. (Lenhart v. Miller, supra.)

The petition for a writ of mandamus alleged that Smith was the administrator of the estate of E. S. Valentine, but made him a party defendant only as an individual. Relators’ motion to cite Smith to account filed in the probate court on November 4, 1939, questioned his proper administration of the estate. Smith as an individual was directly interested in the ultimate disposition and outcome of this motion. (Heinrich v. Harrigan, 288 Ill. 170.) He had a similar interest in the motion to expunge the order of December 12, 1932, approving his final report. If the orders of August 5, 1940, were not final and appealable, Smith should not be forced to follow an appeal to the circuit court. Smith has been placed in a position where he must follow an appeal in order to protect his interests, unless he secures a reversal of the mandamus order entered in this case. It is manifest to us that Smith was injured by the order appealed from, and will gain by its reversal. Relators’ contention that Smith cannot appeal because the order complained of does not require him to do anything is without merit. Although in form the order of the trial court was not directed against Smith, except as to costs, nevertheless he was directly interested and injuriously affected thereby and had a right to appeal. (West Side Hospital of Chicago v. Steele, 124 Ill. App. 534; Corn v. Greenberg, 181 Ill. App. 669.) Inasmuch as Smith has an appealable interest and is entitled to a decision of the case on its merits, it is unnecessary for us to pass on the question whether Biggs or Nance has a right to appeal. (See section 81 of the Civil Practice Act, Ill. Rev. Stat. 1941 [Jones Ill. Stats. Ann. 104.081].) The relators’ motion to dismiss the appeal is therefore denied.

The next question presented is whether or not the two orders entered by the probate court on August 5, 1940, are merely interlocutory or are final and appeal-able orders.

On August 24, 1940, relators, by leave of court and pursuant to a stipulation, filed in the probate court their “Third amended motion.” It will be noted this motion was filed before the expiration of the twenty-day period given by the statute for leave to apply to the probate court for an appeal from the orders of August 5, 1940. (Section 330, paragraph 484 of the Probate Act, ch. 3, Ill. Rev. Stat. [Jones Ill. Stats. Ann. 110.581].) The motion set up all of the alleged material facts contained in the former motions and alleged additional facts and asked for all of the relief asked in such former motions. In his answer to the third-amended motion Smith pleaded on the merits and did not contend that the orders of August 5, 1940, were final orders. Smith has at all times contended and now contends that such orders of August 5, 1940, were not final orders, and of course cannot hereafter successfully take a different position. The probate court did not consider them final orders and so stated in the order denying the appeal. The third amended motion is pending and undisposed of and if relators are entitled to any relief, complete relief can be obtained by a hearing on such motion.

Assuming, but not holding, that the two orders of August 5, 1940, would have been final and appealable orders if the relators had not so filed such third amended motion, it is our opinion and we hold that by filing such third amended motion the relators abandoned and are precluded from now asserting any right they may have had to appeal from the two orders of August 5, 1940, and that therefore said two orders were not at the time of the commencement of this man-damns proceeding and are not final and appealable orders. In 4 Corpus Juris Secundum on page 399, it is stated: “As a general rule, if a party, after an order or judgment upon demurrer to pleadings is given against Mm, under leave of court, amends the pleading demurred to, or substitutes another therefor so as to remove the grounds of the demurrer, he acquiesces in the judgment or order upon the demurrer, and will not be permitted to appeal therefrom, or, unless an exception is duly saved, to assign it for error in the appellate court, or to appeal from the conditions imposed; and the same principle applies where a pleading is amended after a ruling on a motion to strike or for a more specific statement.” (See Smith v. Smith, 169 Ill. 623.)

For the reasons indicated it is our opimon that the circuit court erred in awarding the writ, and the judgment of the circuit court is reversed.

jReversed.


author: Mr. Presiding Justice McSurely

text:
    Helen M. Heyl et al., Appellants, v. Northern Trust Company et al., Appellees.
    Gen. No. 41,747.

      Heard in the first division of this court for the first district at the June term, 1941.
    Opinion filed December 22, 1941.
    Rehearing denied January 5, 1942.
    Rosenthal, Hamill, Eldridge & King, of Chicago, for appellants; Sidney L. Robin, Newell A. Clapp and Douglass Pillinger, all of Chicago, of counsel.
    William W. Miller, of Chicago, for appellees.
   Mr. Presiding Justice McSurely

delivered the opinion of the court.

Plaintiffs filed a complaint in chancery, asserting that there was ambiguity in the will of their father, Adolf E. Mayer, deceased, with special reference to the duties of the trustee. The trustee was made party defendant with the grandchildren of Adolf E. Mayer, who are the children of plaintiffs. The principal controverted point was as to the action of the trustee with reference to some real estate in Texas, and especially how the income derived from a sale of oil taken from the land should be divided.

Adolf Mayer died testate February 13,1910, and his will was admitted to probate by the probate court of Cook county, Illinois. After providing for payment of his debts and making several specific devises and bequests, the testator gave all the residue of his estate to the Northern Trust Company of Chicago, as trustee. This trust has heen accepted and the trustee has continuously acted in that capacity. The trustee was directed to pay all the net income of the trust to the testator’s wife for her life, and upon her death to the testator’s three children, Helen, Vera and Adolph, Jr., the plaintiffs in this case. Upon the death of the three children the trust was to terminate and the trust property should be distributed to all of the then surviving grandchildren of the testator.

Pursuant to the will, Mrs. Mayer, the widow, received the net income of the testamentary trust and certain other property. She died June 26, 1922, leaving a will, whose provisions have been carried out.

Subsequent to their father’s death, all of the three children married. Helen Mayer’s name is now Helen M. Heyl; she has two children, both of whom are now adults and are named as defendants, but have defaulted in this case. Vera Mayer’s name is now Vera M. Hankey; she has no children. The third child, Adolph E. Mayer, Jr., has two children: Adolph E. Mayer, III, and Margaret Mary Mayer, who are minors, residing with their father and wholly dependent on him financially. William W. Miller has been appointed guardian ad litem to represent them in this suit and has filed a brief in their behalf.

The trustee received from decedent’s estate four parcels of real estate, including an undivided quarter interest in certain Texas real estate, which is the primary matter of interest in this litigation. By June 1911, the trustee had sold all of the real estate except the interest in the Texas land, and the proceeds of these sales were added to the principal of the trust. Subsequently, in March 1936, the trustee, together with the other owners of the Texas property, entered into an oil lease of this land, granting to the lessee the right to drill and produce oil for a term of five years, or as long thereafter as oil, gas or other minerals should be produced from the property. In addition to a cash consideration for the lease paid to the owners of the property, there was a provision for the payment of royalties to the owners on the oil and gas produced. August 1, 1937, oil and gas were developed from the Texas property.

From this property the trustee received its share of the consideration money paid by the lessee, and also royalties. The pivotal question presented is as to the division of this income. The trustee, after paying expenses, allocated the income on the basis of ascertaining the sum which, with simple interest thereon at the rate of 5 per cent per annum from August 1, 1937 (date of the discovery of oil and gas), would equal the net amount of the moneys received by it from this source. The sum so ascertained was treated as principal and the residue as income. Plaintiffs’ position is that the trustee, after paying all expenses relating to the Texas property, should apportion the net amount of the moneys remaining by ascertaining the sum which, with interest thereon at 5 per cent per annum from February 13, 1911 (which is one year after the death of the testator), and compounded semiannually, would equal such net amount of moneys, and that the sum so ascertained should be treated as principal and the balance as income.

The guardian has filed a cross-appeal, asking that all the proceeds from the sale of oil be credited to principal, but says that if this court should hold that the net proceeds were properly allocated by the trustee between principal and income, then the method of computing by simple interest, from August 1,1937, and not by compound, is correct.

The will of the testator provided: “I hereby authorize and direct my said Trustee, as soon as in its judgment it can be done without sacrifice, to sell and dispose of any real estate which I may own at the time of my decease . . . and to add the proceeds from the sale of said real estate to the moneys and funds comprising the principal of my estate, to be invested as hereinafter set forth.” And: “I further order, direct and empower my said Trustee to sell and dispose of any other real estate that may at any time after my death become a part.of my trust estate, by reason of foreclosure or otherwise, and to add the proceeds of the sale of said real estate to the moneys and funds comprising the principal of my estate to be invested by my said Trustee as hereinabove provided; . . .”

The chancellor decreed that the apportionment should be made by computing the income of the plaintiffs as beginning August 1, 1937 (when oil was discovered), and at simple interest, instead of February 13, 1911, at compound interest. Plaintiffs assert that in so decreeing the chancellor erred. Complaint is also made of the order with reference to the costs and attorneys’ fees.

Plaintiffs cite certain cases holding that where the trustee is under a duty to sell trust property, the net proceeds of the sale, when made, are to be apportioned between the life beneficiaries (plaintiffs in this case) and the remaindermen. This was the rule of apportionment followed by the chancellor in its decree, and this is supported by a number of cases. Edwards v. Edwards, 183 Mass. 581; Furniss v. Cruikshank, 230 N. Y. 495; Love v. Engelke, 368 Ill. 342; See also Restatement of the Law of Trusts, § 241.

It also may be stated that the oil lease of the Texas property of March 1936, entered into by the trustee was a sale by it of a portion of the Texas property. Ohio Oil Co. v. Daughtee, 240 Ill. 361; Triger v. Carter Oil Co., 372 Ill. 182. The guardian ad litem does not seem to dispute this as a general proposition, but cites eases supporting the point that the right to take oil from the land can be sold separately from the land itself. Ohio Oil Co. case. The guardian says that under the provisions of the will there was no duty to sell this Texas land until, in the judgment of the trustee, it could be sold without sacrifice.

The record shows that in 1911 the land could not have been sold for more than $300, which was less than the testator paid for it. A reasonable construction of the provision of the will directing the trustee to sell the real estate is that it does not direct the trustee immediately to sell the Texas property. In fact, the clear implication of the words is to the contrary. Although the trustee was under the duty to sell, it was under no duty to sell until the property could be sold without sacrifice. The lease of the oil rights of March 1936, was for a consideration much larger than that which the testator paid for the land originally. Hence, it could then be sold by the trustee “without sacrifice.”

A further consideration fixing the time when it became the duty of the trustee to sell is that, until the oil was discovered and reduced to possession, the trustee had no title whatever to it. It did not become its property until it had dominion and control by actual possession. It was so held in Ohio Oil Co. v. Indiana, 177 U. S. 190, 208. This is also the law in Illinois, (Bruner v. Hicks, 230 Ill. 536, 542; Triger v. Carter Oil Co., 372 Ill. 182); and in Texas (Bender v. Brooks, 103 Tex. 329, 335). Until this oil was produced from the Texas property on August 1, 1937, the rule of apportionment did not apply, as there was no duty upon the trustee before that time. The chancellor correctly decreed an apportionment as of August 1, 1937.

The suggestion of the guardian that there is no imperative duty to sell the Texas land until, in the judgment of the trustee, it could be sold without sacrifice, is met by the rule above stated, that a grant of the oil for an unlimited duration is a grant of a freehold estate, and in legal effect a sale of a portion of the land. Triger v. Carter Oil Co., 372 Ill. 182.

We do not agree with the contention of plaintiffs that the apportionment of the oil proceeds should be determined by compounding interest semiannually, and the court properly followed Love v. Engelke, 368 Ill. 342, and the Restatement of the Law of Trusts, § 241, by computing the apportionment at simple interest rather than compound interest.

There is some force in the showing that the plaintiffs have acquiesced in the action of the trustee in holding the Texas property until the present time, with the result that the income paid to them is as high or higher than might be expected at the time of the testator.’s death. They have been benefited substantially by the retention of the Texas properties.

We hold that the chancellor properly charged one half of the costs of this proceeding to the principal account and one half to income. As was said in 4 Bogert on Trusts and Trustees, § 805 at page 2335, while the cost of litigation incurred by the trustee is generally placed upon the principal of the trust fund, “. . . the matter is one for the discretion of the court, and apportionment of the expense between life cestui and remaindermen is not uncommon. ’ ’ It should be borne in mind that the trustee did not institute this proceeding, and there is in fact no ambiguity in the language of the will which demanded construction by the courts. The suit was essentially an attempt by the plaintiffs to obtain all the income from the estate, leaving no part of this for their own children, — the testator’s grandchildren. Under such circumstances it would be inequitable to have the grandchildren pay the entire cost of the proceeding, brought solely for the parents’ own benefit.

The decree was proper and is affirmed.

Affirmed.

Matchett and O’Connor, JJ., concur.