author: Mr. Presiding Justice John J. Sullivan

text:
    The Guardian Life Insurance Company of America v. Nils Swanson et al. Frank J. Jaros, Appellee, v. The Guardian Life Insurance Company of America, Appellant.
    Gen. No. 38,503.

      Opinion filed July 3, 1936.
    Rehearing denied July 14, 1936.
    Vernon B. Loucks and A. J. Hennings, both of Chicago, for appellant.
    Harold A. Fein, of Chicago, for appellee.
   Mr. Presiding Justice John J. Sullivan

delivered the opinion of the court.

Frank J. Jaros (hereinafter referred to as the petitioner) filed his intervening petition in proceedings brought by the Guardian Life Insurance Company of America, plaintiff, to foreclose a first mortgage trust deed covering certain improved real estate located at Montrose and Winchester avenues, Chicago. The petition' alleged that Jaros is the owner and holder of a note executed by Fred Knapp and Helen Knapp, his wife, in the sum of $2,484, which was secured by a chattel mortgage to one Marie J. Banach conveying 20 electric refrigerators located in the premises sought to be foreclosed, and asked that an order be entered either directing delivery to him of said electric refrig-orators or payment to him of the fair and reasonable value thereof.

Plaintiff filed an answer alleging that the refrigerators were “a part and parcel of the real estate” covered by its trust deed and denying that the petitioner had any right to the possession of said refrigerators or any title to same. The answer of the receiver of the property averred that the refrigerators were part of the real estate.

The order which this appeal seeks to reverse, after finding that the refrigerators in dispute were at no time affixed to or made a part of the building, that they were personal property and that they did not constitute “a part or parcel of the real estate,” decreed that Jaros is entitled to the possession of same.

Plaintiff contends that it was the intention of the parties at the time the electric refrigerators were installed that they should be and become part and parcel of the real estate; that, therefore, they are part of the real estate covered by the trust deed in question ; and that, even if such refrigerators were intended to be personal property, the petitioner, Jaros, has shown no title or right to possession whatever in this case.

The petitioner’s theory is that the refrigerators were personal property at the time of their installation in the building and retained ‘ ‘ such characteristic” ; that plaintiff did not raise as an issue nor disprove the validity of the chattel mortgage under which petitioner claims the right of possession; that plaintiff is estopped from claiming that the refrigerators became fixtures and part of the real estate; and that plaintiff, prior to the submission of this matter to the trial court, acknowledged that the electric refrigerators retained their character as personal property.

Nils Swanson was the owner of the premises in question on January 22, 1930, when he and his wife executed and delivered their trust deed on this property to secure the payment of the first mortgage loan of $101,500 from plaintiff, the negotiations for which were conducted exclusively by Elmer E. Stultz, a realtor, for the owner and by Roy L. Nelson of the Cosmopolitan State Bank for the Guardian Life Insurance Company. Stultz testified that when Nelson came to his office during the negotiations for the loan, he inquired as to Swanson’s attitude as to the installation of electric refrigerators; that he (Stultz) replied: “We contemplate and will put in ice boxes as they are demanded. We don’t want to be forced to put ice boxes in one hundred per cent as maybe some tenants will be satisfied with the ice boxes, but we will put them in according to your requirements”; that electric refrigerators were shortly thereafter installed by Swanson for the renting season as they were needed and demanded in renting the premises, complete installation taking place before the end of the year; and that, while the matter of electric refrigeration was in a more or less experimental stage in 1930, it became a vital factor in renting premises of the character involved even in that year, and is compulsory at the present time to secure desirable tenants for that particular class of property.

It does not appear to whom or when Nils Swanson and his wife conveyed their equity in this property, but it does appear that when they sold the property the electric refrigerators installed by Swanson in 1930 were not transferred separately by bill of sale as personal property to the purchaser of the real estate but were included in the conveyance of the premises by deed.

The record includes a copy of a contract for the exchange of properties, executed September 22, 1933, by one John W. Hudson, beneficiary under a trust held by Phillips State Bank and Trust Company and Fred Knapp and Helen Knapp, Ms wife, under the terms of which Hudson agreed to exchange the property in question “including 20' electric refrigerators, all fully paid for” to the Knapps for Wisconsin farm land. On November 15, 1933, Fred Knapp and Helen Knapp executed the note and chattel mortgage covering* the 20 refrigerators involved to one Marie J. Banach.

The major question presented for our determination is whether the 20 electric refrigerators installed in this bmlding are to be treated as permanent fixtures and part of the real estate or personal property, the possession of which petitioner is entitled to under his chattel mortgage. Each refrigerator, weighing about 262 pounds, stood on its own legs and was unattached to the building except by an electric cord plugged into a wall socket. That the refrigerators are readily removable without injury to the building or- to-themselves is conceded.

While it is true that parties may not by contract make personal property real or personal at will, it has been generally held that such property as refrigerators may, upon installation, be classified as chattels personal or as chattels real, according to the intention. In Commercial Credit Corp. v. Gould, 275 Mass. 48, the court said at p. 52: “This refrigerating equipment, installed as found by the judge, which could ‘be easily removed from the building without any damage whatever to it’ was not real estate as matter of law, but rather was property, the nature of which depended upon the intention of the landowner as manifested by his acts. ’ ’

The established rule in this and most other jurisdictions is that in determining whether articles of personal property installed in or annexed to a building are to be treated as fixtures and part of .the real estate or as movable personal property, the primary test is the intention of the parties at the time of the transaction and installation, and that proof of adaptability and necessity merely bears upon the question of intention. (Thuma v. Granada Hotel Co., 269 Ill. App. 484.)

The petitioner is not in the position of a vendor under a conditional sales contract who has not been paid the purchase price of the articles installed. Nor is he in the position of a chattel mortgagee who received his mortgage from the landowner to secure the purchase price of articles installed or annexed to the building. As against either a prior or subsequent mortgagee of the real estate, both the conditional vendor and holder of the purchase money chattel mortgage have been uniformly held entitled to the possession of the articles sold and not paid for by the owner of the property if they could be removed without any considerable damage. The chattel mortgage under which petitioner claims in this case was not executed until about three years after the refrigerators were purchased, installed and paid for. While prior to and at the time of the execution of his trust deed January 22,1930, to secure his loan from plaintiff, Swanson refused to agree to install the electric refrigerators at a definite time, he did express an intention to do so as and when it became necessary. He did install them in most of the apartments shortly thereafter during the renting season and completely equipped the building with them before the end of that year, paving' for them out of the income from the property. That he considered them fixtures and part of the real estate is attested by the fact that he included them in his deed of the premises to his grantee.

The subsequent chain of title is not disclosed by the record, but petitioner himself introduced in evidence a copy of a contract heretofore referred to for the exchange of this property, in which the grantor named therein agreed to convey the premises, “including 20 electric refrigerators, fully paid for. ’ ’ It was several months after the date of this contract that the grantees named therein executed petitioner’s chattel mortgage.

In our opinion the actual or presumed intention of the Knapps in executing and delivering the chattel mortgage and of the chattel mortgagee in accepting same as security for the note signed by the Knapps should be accorded little weight in determining whether the refrigerators partake of the character of real or personal property. We think that necessity impelled Swanson to purchase and install the refrigerators to secure a desirable class of tenants for his apartments who would ' pay adequate and probably increased rentals, and that his intention is clearly and conclusively shown by the evidence to have been to annex the same as fixtures. It is a matter of common knowledge that electric refrigeration is economically essential in a comparatively modern building of the type in question and that apartments without such equipment are not readily rentable to tenants of the class for which such a building is designed. It is obvious that Swanson’s purpose in installing the refrigerators was to permanently increase the value of the building for occupancy by tenants of the individual apartments. When these refrigerators were installed and paid for by Swanson, no one other than he had any title or claim to them, and it has been held that the real estate mortgagee is entitled to the security of any annexation made by his mortgagor of his own property. (Campbell v. Roddy, 44 N. J. Eq. 244.)

In Fifield v. Farmers’ Nat. Bank, 148 Ill. 163, where certain machines purchased for use in the manufacture of shoes were placed in a shoe factory with the intention that they should remain therein as part of the plant, the court said at pp. 169, 170, 171-172:

“Ewell on Fixtures states" the rule for determining what are to be regarded as fixtures, as follows: ‘First, real or constructive annexation of the thing in question to the realty; second, appropriation or adaptation to the use or purpose of that part of the realty with which it is connected; third, the intention of the party making the annexation to make it a permanent accession to the freehold, this intention being inferred from the nature of the article affixed, the relation and situation of the party making the annexation and the policy of the law in relation thereto, the structure and mode of the annexation and the purpose or use for which the annexation has been made..’ The author also says: ‘Of these tests the clear tendency of modern authority seems to he to give pre-eminence to the question of intention to make the article a permanent accession to the freehold, and the others seem to derive their chief value as evidence of such intention. ’

“The same doctrine was declared in Pierce v. George, 108 Mass. 78. It is there said: ‘Articles placed in a mill by the owner to carry out the obvious purpose for which it was erected, and adapted to that purpose, are generally part of the realty, notwithstanding the fact that they could be removed and used elsewhere. ’ The same rule has been adopted in Maine: Parsons v. Copeland, 38 Me. 537. So in Iowa : Ottumwa Woolen Mill Co. v. Howey, 44 Iowa, 57. Michigan adopts the same rule: Togle v. Palmer, 42 Mich. 314. See, also, Taylor v. Collins, 51 Wis. 123, and Duddy v. Hunt, 67 Md. 44, where the same doctrine is declared.

“In Hill v. Farmers’ Nat. Bank, 97 U. S. 450, the question arose whether machinery in a paper mill was part of the realty and in deciding the case the court, among other things, said: ‘By placing it in the building, in constructing the mill, every part and parcel of it, as between mortgagor and mortgagee, became a fixture, and a part of the freehold. ’

“Sword v. Low, 122 Ill. 487, has been cited, and is relied upon by the appellants. In the case cited an engine and boiler attached to the realty were held to be personal property. But upon an examination of the case it will be found that it was agreed between the vendor and purchaser, when the engine and boiler were sold, that the purchaser should execute and deliver a chattel mortgage on the property to secure the payment of the purchase money.”

In Thomsen v. Cullen, 196 Wis. 581, where the question arose between the mortgagor and the mortgagee as to whether movable flasks necessary to the process of casting contained in a building built for use as a foundry but unattached in any manner to the premises, constituted fixtures, the court said at pp. 598, 599, 600, 601-603:

“Questions of what fixtures pass as real estate arise principally in the' following situations: (1st) between vendor and vendee; (2d) mortgagor and mortgagee; (3rd) landlord and tenant; (4th) owner of life estate and remainderman; (5th) seller under a conditional sales contract as against mortgagee and subsequent vendees and prior mortgagees; (6th) with reference to taxation. Generally speaking the rule is very liberal with respect to the rights of mortgagees and vendees.

. . . It is probable that no branch of the law is in greater confusion than the law of fixtures. Confusion is due in some degree at least to a failure to classify the cases. There is a constant tendency to carry over decisions in one classification and to apply them to cases in other classifications, ignoring the difference in the legal relation of the parties.

“The rule was laid down in Gunderson v. Swarthout, 104 Wis. 186, 80 N. W. 465, where the question arose between a conditional vendor and a purchaser at a foreclosure sale as follows: ‘The test for determining whether articles of machinery are fixtures is: (1) Actual physical annexation to the realty; (2) application or adaptation to the use or purpose to which the realty is devoted; (3) an intention on the part of the person making the annexation to make a permanent accession to the freehold. ’ . . . ‘Where the machinery attached is adapted to the purpose to which the realty is devoted, and is for the permanent use and improvement of the freehold, it is a fixture and a part of the realty; but where it is attached for a mere temporary use, with the present intention of removal, it continues to be personal property. ’

“The doctrine of the Gunderson Case was reaffirmed in State ex rel. Gisholt Machine Co. v. Norsman, 168 Wis. 442, 169 N. W. 429, a carefully considered case where the question arose as to taxation and the rule that is applicable as between vendor and vendee was applied. After reviewing the Wisconsin decisions the court said: . . . ‘It is true that the question of whether property constitutes fixtures is largely one of intent. But where property is adapted to the use to which the realty is devoted the use thereof in such manner furnishes such strong evidence of intent to make it a part of the freehold as not to be overcome by bookkeeping practices.’ (Citing cases.)

“The annexation .referred to may be either (a) actual or (b) constructive. A chattel is said to be constructively annexed when it is a necessary indispensable integral part of the plant with which it is connected.

“A careful review of the cases leads one irresistibly to the conclusion that in recent cases greater weight is given to intention and use than to the matter of mere physical attachment. . . .

‘ ‘Very slight incidents, such as connection by an electric wire, by a leather belt, or other slight physical annexation which might be severed without injury either to the personalty or the realty, are seized upon by many courts as a basis for holding the fixture a part of the realty. It is considered that a rule based upon such slight circumstances is not well grounded. It is considered that what makes a fixture attached by a belt or wire or pipe a part of the realty is the use to which it is put rather than the mere physical attachment. If it is a necessary integral part of the plant, as between mortgagor and mortgagee it is considered realty. A different rule prevails in many instances as between landlord and tenant. As already pointed out in the present case the flasks are an integral indispensable element in the operation of a foundry; they are made upon the premises, designed to be used there when and as needed, and in accordance with the great weight of authority it must be held that the flasks along with the other articles described were a part of the realty and passed to the first mortgagee and that the trial court correctly so held.”

It is clearly apparent that at the time the first mortgage on the real estate was arranged for and the trust deed given that Swanson and plaintiff intended that such electric refrigerators as were installed would, as permanent accessions to the building, become a part of the security for the first mortgage loan, and it is equally clear that Swanson and his successor owner or owners prior to the Knapps treated the refrigerators as part and parcel of the real estate.

Electric refrigerators are now recognized as just as essential equipment as gas or electric ranges in modern apartment buildings, and if the owner of such a building which was incumbered with a first mortgage had paid for and installed electric refrigerators in all the apartments of same 10 years ago, and during said 10 years the refrigerators were included in conveyances of the real estate by a succession of owners who treated them as fixtures and an integral part of the premises, it surely would be inequitable to sanction or permit the sale or mortgage of them as personal property by the next succeeding owner to the detriment of the security of the real estate mortgagee. The foregoing factual situation is comparable to that presented in this cause and we are of the opinion that the court erred in finding that the refrigerators constituted personal property and decreeing that petitioner is entitled to their possession under his chattel mortgage.

Petitioner claims that plaintiff in an unexecuted document drawn by one of its attorneys stated that the refrigerators were personal property, that the Knapps were the owners of and had title to same and that therefore it is now estopped from asserting any claim to the contrary. Without reciting the circumstances under which the instrument was drawn, it is sufficient to state that in no event could it be considered as other than an offer to compromise certain matters in dispute, and as an offer of compromise it has no proper place in the record.

Other points have been urged and considered, but in the view we take of this cause we deem it unnecessary to discuss them.

For the reasons stated herein the order or decree of the circuit court is reversed and the cause remanded with directions to dismiss the intervening petition for want of equity.

Reversed and remanded with directions.

Friend and Scanlan, JJ., concur.


source: Caselaw Access Project

author: Mr. Justice Friend

license: Public Domain

text:
    Continental National Bank and Trust Company, as Trustee Under the Last Will and Testament of William E. Phillips, Deceased, Appellant, v. Charlotte D. Reynolds and Peter F. Reynolds, Appellees.
    Gen. No. 38,252.
    Opinion filed July 3, 1936.
    Edwin Terwilliger, of Chicago, for appellant.
    Denis E. Sullivan, Jr., and Milton M. Hermann, both of Chicago, for appellees; Milton M. Hermann and Joseph Kravitz, of Chicago, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

After plaintiff had obtained judgment by confession on a mortgage note, defendants, on petition, were granted leave to appear and defend and later filed a verified answer. Trial was had before the court without a jury, resulting in findings and judgment in favor of defendants, and an order was entered vacating and setting aside the judgment by confession and dismissing the suit at plaintiff’s costs. This appeal followed.

The essential facts are undisputed. It appears from the record that May 24, 1920, defendants executed a mortgage note for $14,000, due three years thereafter and containing* the following clause:

“And if the time of payment of this note or any part thereof shall hereafter be extended by any agreement made by the legal holder hereof, the liability of the maker hereof shall continue in accordance with the terms of such agreement, with or without notice of such extension.”

The trust deed securing the note contained a covenant to pay the indebtedness and interest as provided in said notes, ‘ ‘ or according to any agreement extending the time of payment thereof.” March 24, 1921, defendants conveyed the mortgaged premises to Ernst B overman and wife by warranty deed which contained a clause whereby the purchaser agreed to assume and pay the mortgage. Thereafter, on January 16, 1923, Boverman and wife conveyed the property to Lipsie and Gflickman, “subject to” the mortgage. It appears that plaintiff never had any dealings with the Bover-mans, and there is no evidence that it had any notice or knowledge of the assumption of the mortgage debt by the Bovermans. When the note became due, May 24, 1923, Lipsie and Gflickman, who were then owners of the equity, signed an instrument in writing-purporting to be an extension agreement, which was introduced in evidence as exhibit “A.” This instrument was signed by them only, was not assented to or signed by the bank, and contained no promise or undertaking whatsoever by the bank. When introduced in evidence the signatures of Lipsie and (Hickman were stamped “cancelled” in large letters across the face of the instrument.

May 24, 1926, Lipsie and (Hickman executed a second extension agreement, introduced in evidence as exhibit “B,” which contained the following provision:

“Now these presents witnesseth, that in consideration of the extension of the time of payment by said Continental & Commercial Trust & Savings Bank of said principal indebtedness evidenced by said note, the undersigned, who have assumed the payment of said principal indebtedness, hereby covenant and agree to pay the Continental & Commercial Trust & Savings Bank, or its order, the sum of $14,000.00, evidenced by the said note, on the 24th day of May, 1931, with interest thereon from the 24th day of May, 1926, at the rate of six per cent per annum, payable semi-annually on the 24th day of November and of May in each year during said extended period.”

The extension agreement also provided that “interest on the principal indebtedness for said extended period is further evidenced by ten interest notes of $420 each.” On the reverse side of the agreement there appeared the following, signed by E. B. McFadden, assistant secretary of the bank:

“In consideration of the execution of the foregoing instrument, Continental & Commercial Trust & Savings Bank has extended the time of payment of the note therein mentioned, as stated in said instrument.

‘ ‘ Continental & Commercial Trust & Savings Bank
By E. B. McFaclden,
Its Assistant Secretary.”

It appears from the record that prior to the execution of this agreement Lipsie had applied to the bank for an extension and on March 9, 1926, received from the bank the following letter:

“We will be pleased to renew the first mortgage real estate loan on the premises owned by yon at 939 Windsor Avenue in the amount of $14,000 for a period of five years without any prepayment on the principal during this time, interest to be at the rate of six per cent, commission one and one-half per cent without any further charges.” When the extension agreement was signed, Lipsie and Glickman paid the bank a consideration of $210 for the extension, and the agreement together with the ten interest notes signed by Lipsie and Glide was attached to the mortgage. Lipsie and Glickman thereafter paid the interest coupons at their respective maturity dates.

May 5, 1931, Lipsie and Glickman executed a third instrument purporting to be an extension agreement, which was introduced in evidence as exhibit “ C. ” This instrument was signed by them alone, recited no consideration and was not executed or consented to by the bank. It contained the following provision:

“Nothing herein contained shall be construed as a novation or as in any way modifying, altering, affecting, releasing or limiting the liability,' whether primary or secondary, of any person for the payment of any sums secured to be paid by said trust deed, but the right of recourse against every such person is hereby expressly reserved.”

In November, 1933, plaintiff filed its bill to foreclose the mortgage. Defendants, although made parties to the proceeding, could not be served with summons, and on final decree they were dismissed from the suit without prejudice to the right of plaintiff to sue at law on their personal liability. The foreclosure suit proceeded to a decree, entered April 23, 1934. The mortgage was executed under the law of 1917, and therefore no sale could be had until July, 1935. Before instituting the present suit plaintiff offered in writing to assign its foreclosure decree to defendants upon payment of the amount due on the note.

The complaint alleges the execution of the note sued on and sets forth the provision hereinbefore quoted relating to the continuing liability of the maker in the event of any extension agreement, with or without notice of such extension. Defendants filed five pleas by way of defense. They first admitted the execution of the note, averred that defendants had conveyed the real estate securing the mortgage to one Boverman by a deed containing a clause whereby the grantee assumed payment of the mortgage, that Boverman then conveyed the property to Lipsie and (Hickman by deed, “subject to the mortgage,” and that they were the owners of the equity on May 24, 1923, when the mortgage note matured; that Lipsie and (Hickman on the latter date executed a certain instrument in writing purporting to be an extension agreement, identified as exhibit “A.” Similar allegations are made with reference to the other instrument in writing* purporting to be an extension agreement, identified as exhibit “C.” The plea further avers that on May 24, 1926, Lipsie and (Hickman executed an extension agreement, identified as exhibit “B,” containing on the reverse side thereof the consent of the Continental & Commercial Trust & Savings Bank to an extension in accordance with the statement contained in the instrument. It is further averred that plaintiff knew or should have known that by the terms of the warranty deed from defendants to Boverman the grantees assumed and agreed to pay the indebtedness, and that by virtue of the assumption clause the grantees became the principal obligors for the payment of the indebtedness by operation of law, and the defendants sureties therefor; that the execution of the' instruments in writing identified as exhibits “A,” “B” and “C” was without the knowledge or consent of defendants, and thereby the terms and conditions of the defendants ’ obligations under the promissory note and trust deed were materially altered and varied and that defendants were thereby discharged.

The second plea made like averments with reference to the transfer of title to Boverman and to Lipsie and Glickman, and alleged that exhibit “A” was executed by Lipsie and Glickman but not by the then holder and owner of the promissory note or by any person other than Lipsie and Glickman, and “that said instrument was unilateral in character, and never became a binding obligation upon the holder or owner of the note.” Similar allegations are made as to exhibit “C.” The second plea further alleges that exhibit “B” was unilateral in character in that it embodied the undertaking and promises of Lipsie and Glickman alone, and never became a binding obligation upon the holder and owner of the note, and- “there being no valid extension agreement,” a cause of action accrued on the note on May 24,1923, the original maturity date, and was barred by the statute of limitations.

The .third plea made substantially the same allegations as the second plea, and averred that defendants were not parties to any of the extensions, and that nothing contained in exhibits “A,” “B” or “C” precluded plaintiff from bringing suit against defendants on the cause of action when it accrued May 24, 1923, and that plaintiff’s failure so to do constituted a bar under the statute of limitations.

The fourth plea alleged that plaintiff had filed its bill to foreclose the trust deed in November, 1933, that the decree of foreclosure was entered in April, 1934, under which no sale could be held until July, 1935, and that by reason of the premises plaintiff had elected to proceed solely against the land and was precluded from maintaining this action.

The fifth plea alleged the same facts relating to the foreclosure proceeding, and averred that the land was the primary fund for the payment of plaintiff’s debt, and that by reason of the fact that a foreclosure sale had not yet been held, plaintiff had not exhausted its remedies, and hence this action was premature.

To sustain the judgment rendered in their favor defendants take the position that a mortgagor who conveys the incumbered premises to one who expressly assumes and agrees to pay the mortgage debt becomes a surety therefor by operation of law, and the execution of an agreement between the mortgagee and grantee, without the consent of the mortgagor, extending the time of payment of the debt, discharges the personal liability of the mortgagor. It is first argued that the execution of three extension agreements without the consent of defendants is not within the terms of the note and trust deed executed by them, and “accordingly, if the three instruments executed by Lipsie and Grlickman are regarded as valid and binding extension agreements, the defendants were released from all liability.” As a basis for this argument, defendants contend that the clause in the note, hereinbefore quoted, providing that if the payment of the note or any part thereof should, after the date of its maturity, be extended by any agreement made by the legal holder of the note, the liability of the maker thereof shall continue in accordance with the terms of such agreement, with or without notice of such extension, authorized but one extension agreement, and no more, and that if several extension agreements were entered into without the consent of defendants the latter were discharged from all liability on the principle that under the law of suretyship a material alteration of the contract made by the principal debtor and his creditor, without the consent of the surety, will discharge the latter from all liability. In order to make this argument available as a defense, defendants are forced to take the inconsistent position of first averring in their plea “that by reason of the non-execution of said instrument by the then holder and owner of the aforesaid promissory note, said instrument was unilateral in character and never became a binding obligation upon the said holder and owner of said promissory note,” and then arguing in their brief that if the three instruments executed by Glickman and Lipsie be regarded as valid and binding extension agreements defendants were released from liability. As applicable to this contention plaintiff advances the proposition that an extension agreement, to discharge a non-consenting surety, must be a contract mutually binding on both creditor and principal debtor, based on a consideration, and be such as to preclude the creditor from suing for a definite period and that a. forbearance or ‘ extension without a binding contract is not sufficient. Several cases so holding are cited to support this contention. (Hide & Leather Nat. Bank v. Alexander, 184 Ill. 416; Field v. Brokaw, 148 Ill. 654, 671; United States Printing Co. v. Linn Co., 170 Ill. App. 250.) However, in view of defendants’ pleas that the first and third extension agreements in point of time, as evidenced by exhibits “A” and “C” were unilateral in character ‘ ‘ and never became a binding obligation upon the holder and owner of said promissory note” by reason of the nonexecution of said instruments by plaintiff, we may assume the concession on the part of defendants that neither of these instruments were valid extensions, and therefore there is in issue only the validity and effect of one extension agreement — the second in point of time, — which was based upon a valid consideration and consented to by plaintiff as owner and holder of the notes. As a result of this conclusion defendants are in the position of conceding, as they must, that the note authorized at least one extension and that there was only one valid and binding extension agreement, and it becomes a moot question whether the language of the note should be construed strictly or not and whether it authorized more than one extension.

Notwithstanding this conclusion we have carefully examined the authorities cited by plaintiff holding in effect that the use of the word “any” in the phrase “any agreement,” etc., was in its usual broad distributive sense, indicating lack of limitation and as the equivalent of, and synonymous with, the words “each” or “every.” In Bonart v. Robito, 141 La. 970 (76 So. 166), the court said that they could not conceive of any reasonable theory on which to hold that the consent, as expressed in the note sued on, authorized the payee to grant the maker only one extension of the final payment, however long, and did not authorize two extensions, however short; that to" maintain such a doctrine would lead to the anomalous conclusion that the indorser would not have been released if the payee had granted to the maker of the note, without notice to the indorser, one extension of the time of payment for one year, but that the indorser would have been released by the granting of two extensions for one month, or one week, or one day each. The court there interpreted the indorser’s consent that time of payment might be extended without notice to mean that the payee and the maker of the note could agree to extend the payment from time to time without notice to the indorser and without releasing the indorser from liability, unless and until at any time after maturity the indorser saw fit to pay the note and become immediately subrogated to the right of action against the maker. Plaintiff cites Webster’s International Dictionary; Bouvier’s Law Dictionary, and numerous cases in Illinois and other States supporting the argument that the word “any” as employed in connection with the note herein is used in its usual sense to indicate the equivalent of “each” or “every.” (People v. VanCleave, 187 Ill. 125,134; People v. Fidelity & Casualty Co., 153 Ill. 25, 36; West Chicago Park Com’rs v. McMullen, 134 Ill. 170,179; State Nat. Bank of Ft. Worth v. Vickery (Tex. Com. App.), 206 S. W. 841.) After a careful consideration of these authorities we have reached the conclusion that “any extension” as here used should not receive the narrow interpretation sought to be placed on the language thus employed, but should rather be interpreted in the ordinary sense of “each” and “every” extension, without limited numbers. If the parties had intended to limit the right of the holder of the note to grant time they could easily have expressed their intention by using other language, such as “an extension,” or “one extension, ’ ’ or have placed a time limit on the authority of the holder to extend.

It logically follows from what we have said that the only valid extension was the second in point of time, as evidenced by exhibit “B,” and since the note contained the express provision that if the time of payment thereof be extended by agreement made by the legal holder thereof, the liability of the maker shall continue in accordance with the terms of such agreement, with or without notice of such extension, defendants’ plea that they had no notice of this second extension is untenable and their entire argument, based upon the assumption that all three agreements were valid, notwithstanding their denial of the validity of the first and third agreements, and the consequent effect of the words “any agreement,” falls of its own weight. We hold, therefore, that of the three extension agreements the second only was valid, and that under the provisions of the note defendants ’ liability, with or without notice of the extension, was not in anywise affected thereby.

The second major defense interposed was that plaintiff’s action is barred by the statute of limitations. As to this defense it is argued that “if the three instruments executed by G-lickman and Lipsie (exhibits ‘A,’ ‘B’ and ‘C’) are not valid and binding- contracts, the plaintiff’s cause of action on the promissory note sued upon was barred by the statute prior to the commencement of this cause.” Thus defendants, after first arguing that the agreements are all valid, notwithstanding their denial of the validity of two of them, now take the position, as their second, ground of defense, that none of the extensions was valid; that the indebtedness therefore became due at maturity in 1923, and since no suit was brought thereon within 10 years the action is barred by the statute. In view of our conclusion as to the validity of the second extension it becomes unnecessary to give further consideration to this argument.

The remaining point urged in defendants’ brief is that the action is barred by an election of remedies and that in any event it is premature. It is argued that prior to the commencement of this cause plaintiff had made an election of remedies by causing a certificate of indebtedness to be issued pursuant to a decree of foreclosure, and while conceding that the remedies of the mortgagee are concurrent and not exclusive in their nature, defendants say “that a point may be reached in the enforcement of any one of these so-called concurrent remedies at which we are bound to regard the mortgagee as having made his irrevocable choice of the remedies available to him. Such a point, we believe, has been reached in this case. ” No authorities are cited to support defendants’ position. The offer of plaintiff to assign to defendants a complete decree of foreclosure, with all costs amounting to $1,100 paid, is sufficient assurance that plaintiff has no intention of collecting its debt twice, and even if it should attempt to collect its debt both out of the land and by judgment against defendants, the latter’s remedy is clearly pointed out in Silberman v. Becklenberg, 279 Ill. App. 250.

Defendants’ obligations under the promissory note were altered only once, by the valid agreement of extension made on May 24, 1926, and by the terms of this note they were not discharged by the alteration because of their prior consent. Their obligation was continued by the express language of the note. The action is not barred by the statute of limitations nor by an election of remedies on the part of plaintiff.

We think the court erred in entering judgment in favor of defendants and against plaintiff for costs, and since there is no dispute as to the facts, most of which were stipulated, it will be unnecessary to remand the cause for a new trial. Accordingly, the judgment of the circuit court is reversed and the judgment by confession, entered August 11, 1934, the amount of which is admitted to be correct, is confirmed.

Judgment of the circuit court reversed, and judgment by confession of August 11, 1934, confirmed.

Sullivan, P. J., and Scanlan, J., concur.


text:
    Adolph Kroch v. B. G. Operating Company et al. Barney Gisnet et al., Appellants, v. B. G. Operating Company et al., Appellees.
    Gen. No. 38,559.
    Opinion filed July 3, 1936.

      Joseph & Burr, of Chicago, for appellants; Maurice E. Burr, of counsel.
    Max M. Korshak, of Chicago, for certain appellee; Lester R, Korshak, of Chicago, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

This is an appeal from an order of the superior court allowing the claim of Adolph Kroch in the sum of $143,266.18, and the claim of Mary Collins and Sadie Bossingham in the sum of $19,467.95, as general creditors of a receivership estate.

January 8, 1932, a creditors’ bill was filed against the B. Gr. Operating Company praying- for the dissolution of the corporation and the distribution pro rata of its assets to creditors of the estate. January 11, 1932, a receiver was appointed, and thereafter an order was entered by the court requiring all creditors to file their claims on or before February 29, 1932. Among the claims filed was that of Adolph Kroch and of Mary Collins and Sadie Bossingham. Kroch’s claim was for $229,399.33, and was based upon a lease for a store located at 208 North Michigan avenue, Chicago, made and entered into on May 25, 1928, and expiring March 31, 1946. All the monthly rentals due under the lease had been paid by the B. G-. Operating Company up to January, 1932, and there had become due to the lessor (claimant Adolph Kroch) on January 1, 1932, the sum of $1,083.34 for the current month. This claim was reduced to judgment and was included in the amount claimed by Kroch against the receivership estate. The balance of Kroch’s claim represented the entire rental provided for in the lease up to March 31, 1946, aggregating $229,399.33.

The claim of Mary Collins and Sadie Bossingham was based upon a lease with the B. Gr. Operating Company for the store premises located at 313 North Chicago street, Joliet, Illinois, executed September 25, 1929, and expiring October 15, 1934. The monthly rentals due under that lease were paid by the B. Gl. Operating Company up to January 1, 1932. When the receiver was appointed in this proceeding there was due only the rental for January, 1932, $216.95 for water bills which had accrued since November, 1928, and $126.95 for repairs made in August, 1931, aggregating $987.95. The claim was filed and allowed in the sum of $19,467.95, the difference representing rent for the balance of the term, subsequent to January, 1932.

It is first urged that in a proceeding based on a creditors ’ bill, praying for the dissolution of a corporation and the distribution of its assets to creditors, a claim for rent accruing subsequent to the appointment of the receiver and for the entire unexpired term of the lease is not provable in the receivership estate. It is a well established rule that a covenant to pay rent does not create a'Aebt until the time stipulated for payment has arrived. It was so held in In re Roth & Appel, 181 Fed. 667, where the court said (p. 669):

“Bent is a sum stipulated to be paid for the use and enjoyment of land. The occupation of the land is the consideration for the rent. If the right to occupy terminate, the obligation to pay ceases. Consequently, a covenant to pay rent creates no debt until the time stipulated for the payment arrives. (Italics ours.) The lessee may be evicted by title paramount' or by acts of the lessor. The destruction or disrepair of the premises may, according to certain statutory provisions, justify the lessee in abandoning them. The lessee may quit the premises with the lessor’s consent. The lessee may assign his term with the approval of the lessor, so as to relieve himself from further obligation upon the lease. In all these cases the lessee is discharged from his covenant to pay rent. The time for payment never arrives. The rent never becomes due. It is not a case of debitum in praesenti solvendum in futuro. On the contrary, the obligation upon the rent covenant is altogether contingent.”

In Towle v. Commissioner of Banks, 246 Mass. 161, it was said (p. 167):

“The installments of rent were not in any sense a debt of the lessee until they were actually due. . . . They were therefore not provable at the date when the commissioner took possession or for a long time thereafter. ’ ’

In Tiffany on Landlord and Tenant (1910) vol. 1, sec. 166, the author says (p. 1010):

‘ ‘ The obligation of the tenant under a lease to make payments of rent as they become due does not constitute a present debt to be paid in the future. ‘Although there be a lease, which may result in a claim for rent, which will constitute a debt, yet no debt accrues until enjoyment (of the land) has been had.’ The obligation to pay rent is contingent upon the lessee’s continued enjoyment of the land, . . .”

In Chicago Title & Trust Co. v. Corporation of the Fine Arts Building, 288 Ill. 142, it was held that a claim for future rent against a decedent’s estate is contingent and not a. present provable claim. The court there propounded the inquiry, “Is this claim for the rentals covering the balance of the term a contingent claim?” and answered it by saying “We. are of the opinion that it is. There are different contingencies in a lease of this character, the happening of which is not within the control of either party to it, which may defeat all right to recover rents. . . .”

To the same effect are the following decisions: Pacific States Corp. v. Rosenshine, 113 Cal. App. 266, 298 Pac. 155; Wilder v. Peabody, 37 Minn. 248; and Stockton v. Mechanics’ & Laborers’ Sav. Bank, 32 N. J. Eq. 163.

Ill their brief and argument counsel for claimants concede this proposition of law, but they counter by saying “we have established the fact that the appellee has abandoned and surrendered the premises, and a liability was created” and “our claim is for damages for a definite breach of contract.”

It is pointed out that proof was offered at the hearing tending to show that Adolph Kroeh sustained a definite money damage by reason of the admitted breach of the lease. This proof consisted of a computation of the rent accruing subsequent to the appointment of the receiver and for the entire unexpired term of the lease, and deducting therefrom the depreciation in the rental value of the demised premises during the term. The net result was $143,266.18 and claimants’ counsel argue that this represents damages for breach of the covenants of the lease and not for future rents. From an examination of the record it appears to us that this theory is an afterthought. The claim itself, the order entered by the court on the claim, and the proceedings had before the master in chancery, where the claim was heard, seem to proceed upon the theory that the claim was for future rents and not for damages. Kroeh’s claim was filed for $229,399.33, after allowing all payments, deductions and set-offs, and is predicated upon a certain store lease covering a term commencing August 10, 1928, and expiring March 1, 1946. The lease called for graduated monthly instal-ments, beginning with payments of $783.42, and increasing to $1,500. The sum provided for in the lease from January, 1932, to the expiration of the term, month for month, equals exactly the amount of Kroeh’s claim. It therefore seems quite apparent that it was Kroeh’s own theory to claim the full amount of the rent to accrue in the future and not for damages for breach of the lease. Moreover, the order appealed from allowing Kroch’s claim was for rent and specifically states “that the said Adolph Kroeh is entitled to a finding herein for unpaid installments of rent.” The master made no finding, nor is there any statement in the court’s order, indicating that the amount allowed Kroeh is for damages for breach of the covenants of the lease. Having, therefore, proceeded upon the theory that his claim was for unpaid instalments of rent, Kroeh cannot here for the first time urge that the court ought to sustain the allowance of his claim for damages based on an anticipatory breach, and since Kroeh’s counsel admit that “the authorities cited and arguments made (by appellants) would be in point had our claim been for rents allowed under the lease which expired in 1946,’’ and that “if Adolph Kroeh had filed his claim for rent for the balance due under the lease, appellants’ cases and arguments would be in point,” we think it follows that the allowance of the claim for the amount of $143,266.18 was clearly erroneous. The claim of Mary Collins and Sadie Bossingham was likewise based on unpaid in-stalments of rent, and the same argument and conclusion is applicable to that claim.

The conclusion thus reached would in our opinion be sufficient to justify a reversal of the order of the superior court allowing’ these two claims, but counsel’s earnest insistence that the superior court- was fully warranted in allowing both claims upon the theory of an anticipatory breach merits consideration. We have carefully noted the argument employed by claimants’ counsel to sustain their contention. We think they lose sight of the distinction usually made between damages awarded for anticipatory breach of executory contracts where goods and merchandise are delivered to be paid for in future instalments, and damages arising out of the anticipatory breach of leaseholds. The doctrine of anticipatory breach, which permits a party to an executory contract to recover for damages at once where the other party repudiates his contract or disables himself from performing before the time for performance, was not part of the early common law, and was first recognized in England in the vear 1853. (Hochester v. DeLaTour, 2 Ellis & Blackburn, 2 B. 678, 6 Eng. Rul. Cas. 576.) It was later adopted by most other jurisdictions in this country, but never extended generally to breaches of leases. While the courts of some States have allowed 'damages for anticipatory breach of leases, the current weight of authority, and the law in this State, is clearly to the contrary. The reason for the distinction between ordinary executory contracts and leaseholds is pointed out in a number of decisions cited by appellants. In In re McAllister-Mohler Co., 46 F. (2d) 91, the court denied a claim for future rents, and in pointing out why the doctrine of anticipatory breach cannot be applicable to leases said (pp. 94, 95):

“This leads to the natural inquiry as to why this rule, which is peculiar to leases, obtains, and the answer would seem to be that a claim for damages for the anticipatory breach of a covenant to pay rent is both illogical and contradictory.

“As is stated by our own Circuit Court of Appeals in the case of In re Neff, 157 F. page 57, 62, 28 L. R. A. (N. S.) 349: ‘The creditor by offering to file his claim [for anticipatory breach of contract] manifests his election to treat the contract as broken. ’ And of course that means the whole contract including the lease, which in turn is equivalent to ejecting the tenant. As a result thereof there can be no claim for future rent.

“To again quote Judge Sanborn: The landlord may repossess himself of the premises or permit the lessee to continue in possession of the property and enforce the collection of the rents, but he cannot do both. A damage claim for an anticipatory breach of a lease clearly contemplates the landlord ‘ doing both. ’ He is taking back his property and at the same time seeking to recover future rentals by filing a claim against the tenants’ estate.

“My conclusion therefore is that at common law the doctrine of anticipatory breach of contract does not apply to leaseholds, . . . ”

The distinction between an ordinary executory contract and a lease was again recognized in Central Trust Co. of Illinois v. Chicago Auditorium Ass’n, 240 U. S. 581, where Mr. Justice Pitney, after citing numerous cases dealing with landlord and tenant relationships, said (p. 590):

“Cases of the latter class are distinguisable because of the 1 diversity' between duties which touch the realty, and the mere personalty. ’ ”

In referring to the foregoing decision, the court in In re Schulte-United, Inc., 2 Fed. Supp. 285, said (p. 286):

“The distinction which the court seemed to have in mind, therefore, was not between promises to pay rent and other promises, but one between leases of real estate and other types of contracts.”

Counsel for appellants cite Williston on Contracts, vol. 3, sec. 1329, as pointing out the inapplicability of the doctrine of anticipatory breach of leases, as follows (p. 2382):

“As independent promises in a bilateral contract are in effect separate unilateral obligations, a rule which forbids enforcement of anticipatory repudiation as a breach in unilateral contracts also forbids- such treatment in case of an independent obligation in a bilateral contract. Therefore, when a tenant repudiates a lease, the landlord cannot at once sue for future rent. ’ ’

It is thus argued that there are several reasons supporting the majority of the cases holding that the doctrine of anticipatory breach does not apply to a lease, the first being the historical basis, namely, that a covenant to pay rent does not create a debt until the time stipulated for payment arrives. Defendants’ counsel point out that the allowance of a claim for damages by reason of a breach of a lease would create an “unexplainable paradox; it would be tantamount to saying, on the one hand, that a lessor is not entitled to his rent until the day it is due; but on the other hand, where a breach occurs, he is entitled to all the rent at once, regardless of the time stipulated for payment.” Another reason is that advanced in In re McAllister-Mohler Co., 46 F. (2d) 91, which holds that upon breach of a lease a landlord may repossess himself of the premises or permit the lessee to continue in possession of the property and enforce the collection of the rents, but he cannot do both, and since a damage claim for an anticipatory breach of a lease contemplates the landlord doing both, such claim will not be allowed. The third reason is that advanced by Prof. Williston, as appears from the quotation herein-before cited.

While, as heretofore stated, the contention made by claimants is not without support, we think that both logic and the clear weight of authority supports the conclusion that the doctrine of anticipatory breach of contracts does not apply to leaseholds. For this additional reason we think the superior court erred in including the unpaid instalments of rent, either as such or as damages for breach of the lease. Accordingly, the order of the superior court will be reversed, and since there is no dispute as to the respective sums that were due when the receiver was appointed in January, 1932, the claims will here be allowed in the following amounts:

The claim of Mary Collins and Sadie Bossingham in the sum of $987.95; the claim of Adolph Kroch in the sum of $1,083.34.

The order of the superior court reversed; claim of Collins and Bossingham allowed in the sum of $987.95; claim of Kroch allowed for $1,083.34.

Sullivan, P. J., and Scanlan, J., concur.


text:
    In re Estate of Harry Schwartz, Deceased. Anna Parmet et al., Appellants, v. William L. O’Con-nell, Appellee.
    Gen. No. 38,584.

      Opinion filed July 3, 1936.
    Sanders, Childs, Bobb & Wescott, of Chicago, for appellants; W. L. Bourland and F. M. Hartman, both of Chicago, of counsel.
    Sims & Stransky, of Chicago, for appellee; Franklin J. Stransky and Edward J. McLaughlin, of Chicago, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

Anna Parmet, formerly Anna Schwartz, and Rose Schwartz as guardian of Delmore and Kenneth Schwartz, minors and legatees under the will of Harry Schwartz, deceased, filed in the probate court objections to a certain item in the executor’s first current account showing payment of $20,413.27 by the executor to the brokerage house of John F. Clarke & Company as the purchase price of securities which the brokers had held for deceased during his lifetime. The probate court having sustained the objections, the executor perfected an appeal from the ruling to the circuit court, where the matter was tried de novo and judgment entered in favor of the executor, overruling the objections. Anna Parmet and Rose Schwartz, hereinafter referred to as the objectors, have prosecuted this appeal.

The facts, so far as they are essential to a consideration of the issues involved, disclose that May 30, 1930, deceased, Harry Schwartz, had a brokerage account with Eastman Dillon & Company, who held as collateral security for his account 500 shares of Paramount Pub-lix Corporation stock and 200 shares of the United Corporation stock. May 19th of that year Schwartz owed on his brokerage account with Eastman Dillon & Company $21,272.08. On that date (May 19, 1930) he directed John F. Clarke & Company, another brokerage house, to pay his debit balance with Eastman Dillon & Company and to receive for his account the aforesaid securities. In compliance with this request, John F. Clarke & Company, on May 22, 1930, paid to Eastman Dillon & Company the debit balance then due, and received from the latter, for the account of Schwartz, the securities hereinbefore mentioned. Later Schwartz received credit on the $21,272.08 for certain credits not shown of record, so that on October 30, 1930, after his death, the balance which remained due ■ amounted to $20,413.17. Schwartz died June 7, 1930, leaving a last will and testament which was admitted to probate, and contained, among other provisions, the following: “First: I desire my executors hereinafter named first to pay all my just debts, funeral expenses and medical expenses.”

The Chicago Trust Company duly qualified as executor July 29, 1930, and October 30, 1930, paid to John F. Clarke & Company out of the funds of the estate the balance remaining due on the moneys theretofore advanced by John F. Clarke & Company to Eastman Dillon & Company, amounting to $20,413.27, and received the stock of Paramount Publix Corporation and United Corporation, which then had a market value in excess of $30,000. Some time thereafter the Central Trust Company was appointed successor executor of the will of Harry Schwartz, deceased, and took over the securities. January 31, 1932, Central Trust Company filed its first current account as executor, covering the period from June 8, 1930, to January 31, 1932, wherein it listed the 500 shares of Paramount Publix Corporation and 200 shares of the United Corporation stock, and set forth payment as of October 30,1930, of the sum of $20,413,27 to John F. Clarke & Company. Anna Schwartz, widow of deceased, and Bose Schwartz as guardian of Kenneth Schwartz, a minor, and formerly as guardian of Delmore Schwartz, now of age, filed the following as their sole and only objection to this item :

The executor completed a contract made in the lifetime of the deceased for the purchase of 500 shares of Paramount Publix Corporation common stock and 200 shares of the United Corporation common stock by the payment of $20,413.27 to John F. Clarke & Company, .without authority to do so under the will, and without securing the direction and order of this court, whereby the estate has suffered great loss . . . .” This objection was sustained by the probate court, whereupon an appeal followed to the circuit court. July 15, 1935, William L. O’Connell, receiver of the Central Bepublic Trust Company, was by order of the circuit court substituted for the Central Bepublic Trust Company.

In both the probate and circuit courts the cause was presented, tried and argued on the basis of the single issue, whether the payment of $20,413.27 made by Chicago Trust Company out of the funds of the estate to John F. Clarke & Company constituted the unauthorized completion of an executory contract made in the lifetime of the deceased for the purchase, of the securities in question, or whether the transaction constituted the payment of a debt created by Schwartz during his lifetime which the executor had the right and authority under the will to pay without first securing the direction and order of the probate court.

When the parties had concluded their arguments in the circuit court the matter was taken under advisement and on July 9,1935, the trial judge announced his decision and held that the act of Chicago Trust Company in paying to John F. Clarke & Company the sum of $20,413.27 did not constitute the completion of an executory contract of deceased, but was the payment of an unconditional debt or obligation of the deceased which the executor had the right to pay under the direction of the testator’s will, without any specific order of the probate court. Thereupon counsel for the objectors for the first time asked leave to file an objection to the executor’s report not theretofore made in the probate court or in the circuit court, setting up negligence of the Central Republic Bank & Trust Company in failing “to sell, within a reasonable period of time, the 500 shares of Paramount Publix Corporation common stock and the 200 shares of United Corporation common stock above mentioned.” The executor’s counsel objected to the additional issue of negligence being raised after the hearing was concluded, and insisted that the trial court limit the issue raised by the objections filed in the probate court. The objection was sustained, and the motion to file an additional objection was denied.

As to the two major grounds urged for reversal, it is first contended that the circuit court erred in refusing to permit the additional objection to be filed. As a basis for this contention it is argued that on appeal from the probate court to the circuit court the cause is tried de novo, and the appeal brings up the whole matter for trial. Several cases are cited to support the objectors’ position, including Barnes v. Earle, 275 Ill. 381; Snyder v. Snyder, 142 Ill. 60; McMahan v. Trautvetter, 305 Ill. 395; and Scanlan v. Kirby, 230 Ill. App. 505. We have examined these citations. They do not sustain counsels’ position, but merely hold that on a trial de novo the circuit court stands in the shoes of the probate court and is clothed with the same powers as the probate court. In the instant proceeding the objectors allowed the cause to be tried in both the probate and circuit courts on the single issue before mentioned, and after the trial judg’e in the circuit court had given the matter his deliberate consideration and determined the sole issue presented to him adversely to objectors, they sought to inject a new and additional issue into the proceeding by means of the amendment. We think the court ruled correctly in refusing to permit the objectors to try the new issue after the court had announced its decision. In Cairo Meal & Cake Co. v. Brigham, 268 Ill. App. 510, it was held that although the trial in the circuit court on appeal from the probate court is a trial de novo, and the circuit court has power to permit a claimant to file an amended claim (citing the case of Johnson v. Kilpatrick, 250 Ill. App. 416), “yet such amended claim may not raise a new cause of action not presented to or passed upon by the probate court. (Elder v. Whittemore, 51 Ill. App. 662; Millard v. Harris, 119 Ill. 185.) If this were not so, a-claimant might file in the probate court a baseless claim and then on appeal try, in the circuit court, issues and claims not presented to the probate court, the only court in which, under the statute, claims against decedents must be filed. ’ ’

In Marer & Co. v. Estate of M. J. Wolford, 273 Ill. App. 305, a claim was filed against an estate based upon the decedent’s liability as director of a corporation. In the circuit court the original claim was amended by striking out that portion of the claim which alleged that deceased was a director, and setting up a different theory for recovery. The Appellate .Court reversed and remanded the cause, and in holding that the circuit court did not have jurisdiction to entertain, on appeal, the new cause of action, said (pp. 317, 318):

“The probate court under our,constitution is the court having original jurisdiction of the settlement of estates, and when appeals are taken from it to the circuit court, that court exercises appellate jurisdiction, and, acting as an appellate court, it can entertain no matter not before the probate court. (Elder v. Whittemore, 51 Ill. App. 662.)

“The trial in the circuit court was a trial de novo, and while that court had power to permit appellant to file an amended claim, yet such amended claim could not raise a new cause of action not presented to or passed upon by the probate court, the only court in which, under the statute, claims against decedents must be filed, . . . ”

From these decisions we conclude that on appeal to the circuit court the latter has jurisdiction to permit amendments to claims filed in the probate court where they do not materially change the cause of action, but cannot permit an entirely new and different issue to be injected into the hearing on appeal. In the instant proceeding only one issue ivas presented to the probate court and to the circuit court on appeal, and that issue was tried by both tribunals. Aside from the rule that a claimant may not materially change the cause of action upon trial in the circuit court on appeal from the probate court, we think that claimants were properly precluded from filing their amended objections in the circuit court under the fundamental rule that a party may not submit a cause to the court upon one theory, and, having failed to prevail therein, seek to inject an entirely new issue into the proceeding by amendment and have the cause tried over. The objectors argue that the consideration of the amendment by the circuit court would not have necessitated any additional testimony on their part. Assuming this to be true, it would undoubtedly have required the executor to introduce additional testimony in defense of the new claim, involving the status of the security market during the depression period, the fluctuations of these securities over a considerable period of time, and the legal aspects of the additional evidence adduced. This would in effect have amounted to a new hearing.

As to the issue upon which the cause was heard and determined in both the probate and circuit courts, the objectors contend that the securities in question were, under the contract made between deceased and John F. Clarke & Company, to be delivered to deceased or bis executor on payment of the balance due on his account with such brokerage house; that the contract at the time of deceased’s death was therefore executory, not executed, and hence the executor had no right under the statutes of this State to complete the contract, except at its own risk, without an order of the probate court; that the payment of $20,413.27 was made to Clarke & Company without such order and without the knowledge or consent of any of the objectors, who did not learn of the transaction until the filing of the first current account in March, 1932, at which time the stocks had greatly depreciated in value. A considerable portion of the objectors’ brief and argument is devoted to establishing the proposition that this was an executory contract, and with that as a premise they argue that the executor was not justified in making payment to Clarke & Company without an antecedent order of the probate court. The authorities are generally to the effect that the usual test as to whether a contract is executed or executory is to determine at whose risk the subject matter of the contract is held prior to the actual delivery to the buyer, and the courts hold that if the risk or loss from injury to or destruction of the property is on the buyer, the contract is executed, and if on the seller, it is executory. (Mark P. Miller Milling Co. v. Butterfield-Elder Implement Co., 32 Idaho 265, 181 Pac. 703, quoting 23 Puling Case Law 1346, sec. 170.) Under this rule the conclusion is clear that after Clarke & Company had paid Eastman Dillon & Co. for the securities in question the risk with reference to the stock rested with Schwartz, for if the value of the stock depreciated or became worthless his obligation to pay the sum which Clarke & Company had advanced at his request for his sole use and benefit remained unaffected.

In arguing the proposition under discussion' the objectors state and reiterate their contention that the executor was not justified in completing the deceased’s contract with the brokerage house by paying the balance due on the account and accepting delivery of the speculative stocks therein without a prior order of court and without prior notice to the legatees or their attorneys of record in the estate proceeding. This argument is based upon the premise that it was an executory contract, whereas it is in fact a completed transaction, since Clarke & Company, at the written request of Harry Schwartz, the deceased, had paid Eastman Dillon & Company, $21,272.08, which Schwartz owed to Eastman Dillon & Company; that Schwartz thereby became the debtor of Clarke & Company for the amount advanced; that the executor, standing in the shoes of the deceased, had the right under the will and the statute to pay the obligation of deceased without prior order of court. Schwartz’s written request of May 19,1930, to Clarke & Company to pay the debit balance then due Eastman Dillon & Company and receive for his account securities in its possession, and compliance with the request by Clarke & Company, ipso facto, constituted a debt for a definite and fixed amount, for which deceased and his estate were primarily liable. Sec. 73, ch. 3, Cahill’s Ill. Rev. St. 1931, provides that if the executor or administrator pays the claim before same is allowed, the court shall require him to establish the validity of such claim by competent evidence before he shall be credited therewith. Under this section of the statute the executor was not obliged to obtain an order of court to satisfy the obligation of deceased, which became its obligation as executor. Moreover, there are numerous decisions holding that an exécutor or administrator has the legal title to the choses in action of the deceased and is charged with the duty of collecting and reducing them to possession, and that if they are subject to pledges, liens or charges created by the decedent in his life, he takes the legal title cum onere. (Pryor v. Davis, 109 Ala. 117,19 So. 440; Houghteling v. Stockbridge, 136 Mich. 544, 99 N. W. 759; Chorn v. Chorn’s Adm’r, 98 Ky. 627, 33 S. W. 1107.)

It is argued by the objectors that Clarke & Company merely acted as Schwartz’s agent in purchasing the stock in question on margin and agreeing to deliver the stock if and when Schwartz paid for the same. There is no evidence in the record indicating that Clarke & Company acted as agent for Schwartz in the transaction, or that they purchased the stock in question and agreed to deliver the same if and when Schwartz paid for it. The evidence rather discloses that Clarke & Company did not purchase the stock, either on margin or otherwise. The record sustains the conclusion that Schwartz, deceased, owed Clarke & Company the sum of $21,272.08 advanced to Eastman Dillon & Company, and thereby became unconditionally liable for the .sum advanced for his use and benefit, regardless of any question relating to the value of the stock.

For the reasons stated we have concluded that this was an executed contract between deceased and Clarke & Company, and that prior to Schwartz’s death there was due and owing from Schwartz to Clarke & Company the sum advanced by them to Eastman Dillon & Company, which became a debt of the estate and one that the executor was authorized, under the provisions of the will and the statute, to pay without a prior order of court.

We find no convincing reason for reversal. The judgment of the circuit court is therefore affirmed.

Affirmed.

Sullivan, P. J., and Scanlan, J., concur.


author: Mr. Justice Scanlan

text:
    United States Fidelity and Guaranty Company, Appellant, v. Albert Sabath, Appellee.
    Gen. No. 38,410.
    Opinion filed July 3, 1936.
    Rehearing denied July 14, 1936.
    William J. Flaherty, of Chicago, for appellant; George H. Mason and Donald H. Haider, both of Chicago, of counsel.
    Charles Hudson, of Chicago, for appellee.
   Mr. Justice Scanlan

delivered the opinion of the court.

An appeal from a judgment, entered upon a finding by the court, in favor of defendant and against plaintiff for costs.

The special count of plaintiff’s amended declaration alleges, in substance, that on January 17, 1928, an attachment suit was pending in the circuit court of the City of St. Louis, Missouri, in which Samuel Stores, Inc. was plaintiff and Millard’s, Inc. was defendant; that certain goods of Millard’s, Inc. had been seized by the sheriff under an attachment writ issued in the suit and to regain possession of the goods it was necessary that Millard’s, Inc. give bond in the sum of $8,500, with surety satisfactory to the sheriff, conditioned upon the forthcoming of the property, etc.; that on the said day Millard’s, Inc. made application in writing to plaintiff to become surety on such a bond, and attached to the application was an indemnity agreement, signed by defendant; that in conformity with the application and in consideration of the indemnity agreement (both set out verbatim) and a premium paid, plaintiff, on January 18, 1928, executed, as surety, a forthcoming bond of Millard’s, Inc. of that date, which- was delivered to the sheriff, accepted by him, and the goods of Millard’s, Inc. were returned to it under the conditions of the bond (the bond is here set forth verbatim); that on April 24,1930, a judgment was rendered in favor of Samuel Stores, Inc. and against Millard’s, Inc. for $3,710.72 and costs; that sections 1297 and 1327 of the Revised Statutes of Missouri (set up verbatim) were then in force; that Millard’s, Inc. did not return the goods to the sheriff, the same were not forthcoming, and the judgment remained unsatisfied; that the value of the goods was at all times greater than the amount of the judgment; that by means of the premises, plaintiff became liable on its bond to pay the judgment, together with 20 per cent of the judgment as damages; that afterward an execution issued on the judgment and was delivered to the sheriff, and the personal property not being forthcoming, plaintiff became liable to pay Samuel Stores, Inc. the amount due upon the execution with interest from April 24, 1930; that at the instance and request of defendant, plaintiff paid $3,350 to Samuel Stores, Inc., for an assignment of the judgment. Defendant pleaded the general issue and filed therewith an affidavit of merits. The material parts of the affidavit are as follows:

“That he verily believes that he has a good and substantial defense to all the plaintiff’s claims except the sum of $20.00 and costs.

“ . . . That the nature of his defense is that the bond set forth in plaintiff’s declaration and upon which said claim is based was not given to secure the payment of such judgment as should be rendered in the cause therein mentioned in St. Louis, but only for the forthcoming of the property released and for the payment of costs, but not of the principal of said judgment ; that the plaintiff, as surety, did not on said bond become liable to pay the said judgment of $3,710.72, interest and costs, to the said Samuel Stores, Inc., as alleged in said declaration, and was not obliged to and did not pay or satisfy the same, but if it paid the said Samuel Stores, Inc., the sum of $3,350.00 and in consideration thereof received a duly executed assignment of said judgment, it paid said sum and received said assignment of its own volition and without any compulsion or legal liability thereto as a purchase of the judgment and not otherwise; that, although the said defendant Millard’s was insolvent and a bankrupt, its estate ivas valuable and paid out twenty cents on the dollar; that the personal property originally attached was taken in said bankrupt proceedings by order of the Court by the Trustee in Bankruptcy; that the laws of Missouri require that when forthcoming bonds are given for the release of property seized on attachment, it is necessary in order to fix a liability on the bondsman that the Court direct the officer to assign to the plaintiff the bonds taken by him for the forthcoming of the property attached; appraise the value of the property; and, thereupon on motion, render judgment in favor of the plaintiff against the obligors on the bond for the value of such property; but this affiant says that in the present case, no such order was entered by the Court; no such appraisement was made and no liability attached to the present plaintiff except as to costs; and that defendant did not become liable to pay the plaintiff therefor, as alleged in Count I in said declaration.” (Italics ours.)

The application for the bond and defendant’s indemnity agreement were drawn on one sheet of paper, and it is agreed that they must be construed together. Their material parts are as follows:

“Application to be Used for
Appeal or Supersedeas Costs
Attachment or Garnishment Removal Release Attachment or Injunction
Garnishment Dissolve Injunction
Replevin Libel
Counter Replevin Release Libel or Stipu-
Intervening Claimant’s lation for Value
Indemnity to Sheriff or Bail
Marshal
and Other Bonds
“United States Fidelity and Guaranty Company Baltimore, Maryland
“1. Name of Applicant Millards, Inc.
2. Occupation Retail Clothing Stores
3. Address 110 S. Dearborn St. Chicago
4. Nature of Bond applied for Release Attachment
5. Penalty $8500.00
6. Title of case The Samuel Stores, Inc. vs.
Applicant
7. Court in which filed Circuit Court
City of St. Louis Case #125164
“Signed, Sealed, and Delivered this 17th day of January 1928.
“Witness: Victor E. Krajci
“Millards, Inc. (Seal)
By Lawrence Neumann (Seal)
V. P.
“Indemnity Agreement

‘ ‘ The Undersigned Hereby Agrees to Indemnify and keep the United States Fidelity and Guaranty Company indemnified and to hold and save it harmless from and against any and all demands, liabilities, charges and expenses of whatever kind or nature, which it may at any time sustain or incur by reason or in consequence of its having executed the above described bond. And thereto he agrees to waive, and does hereby waive, any right to claim any property, including homestead, as exempt, under the constitution or law of any state or states, from levy, execution, sale or other legal process.

“And Further, He Guarantees that the premium on the bond will be paid as above agreed.

“Signed, Sealed, and Delivered this 17th day of January 1928.

“Witness: Victor E. Krajci
“Julius N. Heldman (Seal)
“Albert Sabath (Seal)
“Lawrence Neumann ■ (Seal) ”
(Italics ours.)

The facts'are not disputed and plaintiff’s evidence sustained the material allegations of fact alleged in the said special count. Defendant offered no evidence, but his able and ingenious lawyer argued to the trial court that the words in the application, “Nature of Bond applied for Release Attachment,” contemplate a dissolution bond only; that defendant, in the indemnity agreement, agreed to become indemnitor on “the above described bond,” and that as plaintiff furnished a forthcoming bond defendant is not liable under the indemnity agreement. The trial court stated in his opinion that the question involved in defendant’s contention was not free from doubt, but that it was his duty, under the law, to resolve the doubt in favor of nonliability, and he sustained the contention and the finding and judgment were based upon that ruling.

Lawrence Neumann was the vice president of Millard’s, Inc. Albert Sabath (defendant) and Julius N. Heldman were lawyers, practicing at the Chicago bar. Defendant testified that he “was a very close, personal friend of Mr. Lawrence Newman [Neumann], who was the head of the company,” and that he signed the indemnity• agreement at the latter’s request; that he acted as attorney for Millard’s, Inc. “in some matters,” but that Heldman “represented them in most of their business”; that he (defendant) was an officer of Millard’s, Inc. “as a matter of friendship for Mr. Newman [Neumann].” During Ms examination the following occurred: “The Court: You were not a stockholder of Millard’s, Incorporated? A. I think not. Now, I would not say. I think not. If it was, it was only a qualifying interest, if anything.” Held-man, who did not testify, appears to have had charge of the legal proceedings relating to the forthcoming bond. Defendant testified that Victor E. Krajci had officed with him for 20 years, “is still there”; and that part of his business was insurance. Krajci wrote in the answers to the questions in the application, one of which answers was, “Release Attachment,” witnessed the signing of the application by Neumann (acting for Millard’s, Inc.), and also witnessed the signatures of Heldman, Neumann and defendant to the indemnity agreement. Defendant also testified that it was his best recollection that Krajci brought the application and indemnity agreement to him and asked him to sign the indemnity agreement; that Krajci may have represented him in the negotiations for a settlement between plaintiff and Samuel Stores, Inc. Defendant did not see fit to call Krajci as a witness.

Plaintiff strenuously contends that “the defendant was precluded by his affidavit of defense from urging the defense upon which the trial court found in his favor.” If that point was raised in the trial, undoubtedly, there would be merit in tMs contention. Defendant argues that “the sufficiency of defendant’s affidavit of merits was not questioned in the court below and that question cannot be raised for the first time in the Appellate Court.” The contention of defendant’s counsel was based solely upon his interpretation of the words “Release Attachment.” Defendant did not testify to any facts or circumstances tending to support that interpretation, and for aught that appears in his testimony he may have seen the bond furnished by plaintiff before it was tendered to the sheriff. Indeed, the only reasonable conclusion to be drawn from all the facts and circumstances is that he did. The arguments of counsel are not preserved in the transcript of the evidence and we cannot tell from the record before us whether plaintiff’s counsel made objection to the defense raised. The opinion of the trial court is incorporated in the transcript, but we find nothing therein to indicate that plaintiff had interposed the objection it now urges. It would, therefore, be unfair to the trial court to hold that he erred in considering such defense. However, from a study of the entire record one thing is clear, and that is that the defense was an afterthought, a dernier ressort. In the affidavit of merits, filed nearly six years after the signing of the indemnity agreement, defendant, a lawyer, admitted, under oath, a liability to plaintiff on his indemnity agreement, for $20 and costs. That admission amounts to an acknowledgment that the bond given was the one contemplated by his indemnity agreement and that he was liable as indemnitor. His defense, as stated in his affidavit of merits, was not that the indemnity agreement did not cover the forthcoming bond, but that under the bond given by plaintiff, as surety, the latter was not liable to pay the judgment, but only the costs of the attachment suit, because Samuel Stores, Inc., in the proceeding in the St. Louis court, had not complied with certain conditions imposed by the Missouri statutes. As plaintiff argues: “The defense stated, therefore, went wholly to the legal operation of the bond given, and did not dispute, but admitted, that the bond given was described in and covered by the defendant’s agreement of indemnity.” Undoubtedly, the contention of plaintiff that the affidavit of merits must be considered as an admission, under oath, by defendant, is a meritorious one. The following also indicates that defendant intended to indemnify plaintiff for the giving of a forthcoming bond: Negotiations were conducted to compromise plaintiff’s liability on the bond to Samuel Stores, Inc. which resulted, about September 24, 1930, in the assignment to plaintiff of the judgment in the attachment suit upon the payment by the latter to Samuel Stores, Inc. of $3,350. During the negotiations plaintiff sent the following letter to defendant:

“June 30, 1930
“Registered Mail Return Receipt Requested
“Mr. Albert Sabath, Attorney,
110 South Dearborn Street,
Chicago, Illinois.
“Dear Sir:
“re: Claim — Millard’s Inc., — Local 18569 Samuel Stores, Inc.,

“On or about the 18th day of January, 1928 at your special instance and request, we executed in behalf of Millard’s Inc., and in favor of Samuel Stores, Inc., an Attachment bond in the penalty of $8500.00. At the time of the execution of this bond you agreed among other things to indemnify and to hold and save the undersigned harmless, from and against any and all demands, liabilities, charges and expense of whatever kind or nature, which it may at any time sustain or incur by reason or in consequence of its having executed the above described bond.

“We are now in receipt of advices that a judgment was rendered in favor of Samuel Stores, Inc., on April 21st, 1930 in the amount of $3700.00 with interest at 6% from the given date, and court costs amounting to $81.30, or a total, up to and including today of $3823.87.

“We are bringing this matter to your attention so that you may advise us what action you intend to take in the premises, as the attorney for Samuel Stores, Inc., is threatening to have execution issued at once.

“Please acknowledge receipt of this letter and advise me what your intentions are in the premises.” Defendant did not answer that letter, but he took part in the negotiations for settlement and approved the one made. On September 22, 1930, he addressed to “Samuel Stores, Inc. and Tinsman & Blocki, their attorneys,” the following letter:

11 In connection with the assignment from Samuel Stores, Inc. to United States Fidelity S Guaranty Company of a judgment for -$3700.00 rendered April 21, 1930, in the Circuit Court of the City of St. Louis, Missouri, in suit #125164, in favor of Samuels Stores, Inc. and against Millard’s, Inc., it is my understanding and agreement that no writ of error, or appeal, will be prosecuted from said judgment; and, as a part of said assignment which is in substance a settlement as between ourselves, I undertake to indemnify you against all claims or demands whatsoever which may hereafter be made against you by virtue of any writ of error, or appeal, which may be prosecuted from said judgment and I also agree to indemnify you against any claim or demand which may hereafter be made agáinst you by virtue of the attachment bond which was filed by you in said cause.

“Albert Sabath (Seal) ”
(Italics ours.)

Defendant wrote that letter because Samuel Stores, Inc. and its attorneys were unwilling to make an assignment of the judgment to plaintiff unless defendant ‘ ‘ agreed to it or consented to it. ’ ’ Mr. Hudson, counsel for defendant in the instant case, and an office associate of the latter for many years, represented Millard’s, Inc. in the attachment suit in the circuit court of the City of St. Louis, Missouri.

In the instant case defendant was forced to interpose the anomalous defense that the indemnity agreement contemplated that plaintiff should furnish the more onerous bond only. The statutes of Missouri (sections 1297 and 1321, Missouri R. S. 1929) provide two types of bonds by which a defendant may regain possession of his property seized under attachment. Section 1297 is entitled, “Attached Property Retained By Defendant Before Judgment Or Sale — Bond, Conditions, etc.,” and provides for a bond to the sheriff, to his satisfaction, in double the value of the property, conditioned upon the forthcoming of the property, etc. Section 1321 is entitled, “Attachments, How Dissolved, ’ ’ and provides for a bond to the plaintiff, to be approved by the court, in double the amount of the plaintiff’s claim, and is conditioned for the payment of any judgment which may be'rendered in the suit. Sections 14 and 15 of our Attachments Act (Cahill’s R. S. 1933, ch. 11, secs. 14, 15) are similar, in substance, to sections 1297 and 1321 of the Missouri statutes. Section 14 of our statutes is entitled, “Possession — Forthcoming bond”; and section 15 is entitled, “Bond or recognizance to pay judgment.” The type of bonds contemplated by section 1297 of the Missouri statutes and section 14 of our statutes is usually designated by the text writers as ‘ ‘ forthcoming bonds ’ ’; and the type of bonds contemplated by section 1321 of the Missouri statutes and section 15 of our statutes is usually designated as “dissolution bonds” or “bonds to pay judgments.” A forthcoming bond is conditioned upon the forthcoming of the property to answer such judgment as may be entered, and if the property be forthcoming no liability ensues. In the instant case the sheriff had possession of the goods under the attachment writ, and when the forthcoming bond was furnished he released the actual possession of the goods to Millard’s, Inc., but, under the law, the release was conditional, the lien not being discharged and the suit continuing as one in rem. A dissolution bond binds the obligors to pay any judgment that may

be entered. Upon the giving of such bond the attachment is not released, technically speaking, — it is dissolved, the property is restored to the defendant, and the cause proceeds in personam. A dissolution bond is much more onerous than a forthcoming bond. The application describes the bond applied for as follows:

“Nature of Bond applied for Release Attachment.’’ It will be noticed that in the printed heading to the application for the bond, plaintiff, a bonding company, describes the various bonds that it furnishes, and it uses the words, “Release Attachment” to cover the two types of bonds by which a defendant may regain possession of his property seized under attachment. While in a technical sense the words, “Release Attachment” more accurately describe a forthcoming bond than they do a dissolution bond, nevertheless, in common parlance, both types of bonds procure the release to a defendant of the possession of the property seized, — under section 1297, conditionally; under section 1321, absolutely. The contention of defendant that the words, “Release Attachment” describe only a dissolution bond, is, in our judgment, without merit, especially when the words are interpreted in the light of the admitted facts. In his affidavit of merits defendant states that the purpose of the forthcoming bond furnished by plaintiff was to secure “the forthcoming of the property released.” Millard’s, Inc. desired to regain possession of its goods and it applied for a bond that would effect a release of the goods seized under the writ. The application did not state that a dissolution bond was wanted. Heldman had charge of the proceedings under the forthcoming bond and he talked with defendant about the matter. The application and the indemnity agreement were drawn in defendant’s office. He and Heldman were attorneys for Millard’s, Inc. Defendant, if not Heldman, was an officer of Millard’s, Inc., and the only reasonable conclusion that can be drawn from the facts and circumstances in evidence is that they both knew at the time the kind of bond that was furnished to secure the release of the goods. If they thought that Krajci had used ambiguous words in describing the bond applied for they had full opportunity to remove the ambiguity. There is nothing in the record to show that during the years that elapsed between the restoration of the goods and the trial of the case either questioned in any way the type of bond furnished. While the contention that the bonding company furnished a less onerous bond than the two lawyers contemplated in their indemnity agreement and that therefore they are absolved from liability, is, under the facts, without legal merit, it is not entirely devoid of humor. We are this day filing an opinion in United States Fidelity and Guaranty Company v. Albert Sabath, 286 Ill. App. — (Abst.), wherein it appears that in July, 1928, six months after the signing of the indemnity agreement in the instant case, there was pending an attachment suit, in the circuit court of the City of St. Louis, Missouri, commenced by Pollock Clothing Company, against Millard’s, Inc.; that certain goods of the latter, of the value of $3,150, were seized by the sheriff under the attachment writ; that Millard’s, Inc. regained possession of the goods by furnishing a forthcoming bond executed by plaintiff, and that attached to the application for the bond was an indemnity agreement signed by defendant, Heldman and Neumann and witnessed by Krajci; that in that action Pollock Clothing Company secured a judgment against Millard’s, Inc. but the goods were not forthcoming. In the application, the answer to the question, “Nature of Bond applied for,” is “Release of Attachment.’’ When sued upon the indemnity agreement, Sabath made a like defense to the one that he has interposed in the instant case. We are informed by defendant’s brief that there was still another attachment suit in which plaintiff furnished a forthcoming bond for Millard’s, Inc. upon the execution to it by defendant, Heldman and Neu-mann of an indemnity agreement. If these lawyers had signed the instant indemnity agreement in good faith, honestly intending to live up to the obligations of the same, they would not resort to the subterfuge that the forthcoming bond furnished by plaintiff placed upon them a lesser burden than they intended to assume by their indemnity agreements and that they were therefore absolved from liability. The instant record proves the wisdom of the policy of the law— not always enforced — that attorneys should not be allowed to act as sureties or indemnitors for clients in legal proceedings.

Defendant also contends that plaintiff did not become liable on its forthcoming bond to pay the judgment rendered in the attachment suit, under the Missouri statutes, because “obligors are not liable on a forthcoming bond until there has been an order of the court for the delivery of the property,” and “plaintiff in an attachment suit cannot maintain an action on a forthcoming bond until it is assigned to him,” and defendant argues that there was no evidence to show “when or where the St. Louis court ordered the goods to be forthcoming or for how much they were appraised nor. was there any evidence of an assignment of the bond by the Sheriff to the plaintiff nor an order of the Court to pay the same.” It is a sufficient answer to this contention to say that the payment of $3,350 by plaintiff to Samuel Stores, Inc. was. made with the knowledge, consent and approval of defendant. Mr. Hudson, defendant’s counsel and his long time office associate, represented Millard’s, Inc. in the attachment case in St. Louis, and while defendant did not answer plaintiff’s letter of June 30, 1930, it is evident that he took an active part in that suit. He testified that Krajci may have represented him in the negotiations for a settlement between plaintiff and Samuel Stores, Inc. Mr. Hudson testified that Samuel Stores, Inc. and its attorneys were unwilling to make an assignment of the judgment to plaintiff unless defendant ‘ ‘ agreed to it or consented to it. ’ ’ Plaintiff was unwilling to pay Samuel Stores, Inc. $3,350 for an assignment of the judgment until it was assured that no writ of error or appeal would be prosecuted from the judgment. From defendant’s letter of September 22, 1930, as well as other circumstances, it is evident that all of the interested parties regarded him as a factor in the litigation, and as defendant approved the assignment from Samuel Stores, Inc. to plaintiff, which cost the latter $3,350, he is in no position to now raise the instant points. Even if he were, there is no merit in his contentions.

By anything that we have said in this opinion we did not intend to intimate that had the application contemplated a dissolution bond only, defendant, an in-demnitor, would have been absolved from liability. Whether or not a defendant in a case of that kind ivould have the right to raise such point, where it appears that the bond accomplished the purpose desired by the applicant and the indemnitor, and its terms were less burdensome to the indemnitor than he agreed to assume by his indemnity agreement, is not before us for consideration.

We hold that the trial court erred in finding for defendant, and the judgment of the circuit court of Cook county is reversed and judgment Avill be entered here in favor of plaintiff and against defendant for the sum of $4,317.30, Avhich includes $3,350 principal, and interest thereon at the rate of five per cent per annum from September 24, 1930.

Judgment reversed and judgment here in favor of plaintiff and against defendant for the sum of $4,317.30.

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