text:
    Fred W. Patterson, Appellee, v. Fitzpatrick McElroy Company et al., Defendants, on Appeal of Roderick Morange, Appellant.
    Gen. No. 31,871.
    1. Corporations — consideration for transfer of stock. Where the owner of a certificate of stock transfers it to a stockbroker to protect his purchase on margin of other stock, and the broker sells the stock to another customer and applies the purchase price on an amount owing the latter customer, there is a consideration for both transfers of the stock.
    2. Corporations — assignment of stock certificate by blank indorsement. Where the owner of a certificate of stock in pledging it with a stockbroker as margin indorses his name under a blank assignment and blank power of attorney to transfer the stock, and the broker sells and transfers the certificate to a third person, held that the assignment complied with the provision of the Uniform Stock Transfer Act, Cahill’s St. ch. 32, ¶ 229, 248-250, and that the bona fides of the purchaser was not open to question under Cahill’s St. eh. 32, ¶ 235, 236, although the purchaser wrote his name in the blank spaces in the assignment and power of attorney without authority from the original owner.
    3. Corporations — origin of Uniform Stock Transfer Act. The Uniform Stock Transfer Act, Cahill’s St. ch. 32, ¶ 329 et seq., is a mere codification of common-law principles.
    4. Evidence — presumptions of law' existing in sister State. In the absence of proof as to the laws of Delaware it will be presumed that the common law prevails in that State.

      Appeal by defendant from the Circuit Court of Cook county; the Hon. Francis S. Wilson, Judge, presiding.
    Heard in the second division of this court for the first district at the March term, 1927.
    Affirmed.
    Opinion filed December 27, 1927.
    Rosenberg & Zimmerman, for appellant; Benjamin Nelson, of counsel.
    Leesman, Roemer & Schnell, for appellee.
   Mr. Presiding Justice Barnes

delivered the opinion of the court.

Appellee filed his bill of complaint against Fitzpatrick McElroy Company, a corporation organized under the laws of the State of Delaware, and the West Englewood Trust & Savings Bank, the transfer agent and registrar of said company, to compel the transfer to appellee on said company’s books of a certificate for 32 shares of said company’s preferred stock standing in the name of appellant Boderick Morange, and to decree that appellee be the owner of said certificate, and for an accounting for the dividends that had accrued and were payable on said shares from the time he acquired said certificate.

Said defendant company and said bank filed their joint answer averring that the controversy is entirely between complainant and defendant Morange, and that they are ready and willing to abide by the decree of court and to comply therewith.

Appellant Morange became a party to the cause on his own motion and filed an answer denying appellee was a bona fide purchaser of the certificate for a valuable consideration, or that the certificate was transferred by him to Ruhny Borsh & Company (hereinafter referred to) for a valuable consideration, and averred that the latter company had no authority to sell or assign the same, and no title thereto or interest therein. Appellant also filed a cross-bill malting sub stantially the same averments and claiming that he is, and since its issuance has been, the owner of said certificate and the stock" represented thereby, and asking that complainant be required to surrender said certificate to cross complainant.

From a decree granting the relief prayed for in the bill this appeal is taken.

The controlling facts are not in dispute. The certificate of stock in question was issued and stood on the books of Fitzpatrick McElroy Company in the name of appellant. In February, 1925, he bought 150 shares of Sinclair stock from the brokerage firm of Euhny Borsk & Company on margins, paying only a part of the purchase price. The stock having declined lie later in the month concluded to pay in full for 50 of said shares and sent the certificate in question to see if the brokerage firm could use it to that end. The firm reported that it could borrow from its bank $2,100 thereon. Thereupon on February 27 he indorsed the certificate underneath a blank assignment and blank power of attorney to transfer the stock on the books, and delivered it to the firm.

Appellee Patterson also had a stock account with said brokerage firm which he directed closed and on which he had a profit of over $5,000. On February 27 he called on the firm to get a check for such balance and was told that the signature of an absent member of the firm who would return the following Monday was necessary. At the same time he was offered and induced to purchase the certificate of stock in question at its par value of $3,200 and to have it charged against his credit. On delivery of the certificate to him he wrote his name in the blank space for the name of the assignee and in the blank space for the name of the attorney to make the transfer. The next day appellant ordered his account closed. About- March 7 appellee presented his certificate for transfer on the books of the Fitzpatrick McElroy Company. The company refused to make the transfer because in the meantime appellant had objected thereto. Shortly afterwards both appellant and appellee learned that the brokerage firm had failed and closed its offices. Neither of them received any further statement of his account from said firm, and the record does not disclose the status of either at the time the firm discontinued business.

The findings in the decree accord with this statement of facts and present the question whether title to the certificate passed to appellee.

That there was a consideration both for the transfer from appellant to the brokerage firm and for the transfer from the latter to appellee is hardly open to question. It is urged, however, that there was not sufficient proof to support a transfer of appellant’s title under the Uniform Stock Transfer Act. (Cahill’s St. 1927, ch. 32, ¶¶ 229-253 inc.) The argument hinges on the statutory definitions of terms employed in section 1 of said act. (Par. 229 id.) So far as applicable, section 1 reads:

“Title to a certificate and to the shares represented thereby can be transferred only:
“(a) By delivery of the certificate indorsed either in blank or to a specified person by the person appearing by the certificate to be the owner of the shares represented thereby. ’ ’

The definitions referred to are found in sections 20, 21 and 22, which read:

“ § 20. A certificate is indorsed when an assignment or a power of attorney to sell, assign, or transfer the certificate or the shares represented thereby is -written on the certificate and signed by the person appearing by the certificate to .be the owner of the., shares rpresented [represented] thereby, or when the signature of such person is written, without more upon the back of the certificate. In any of such cases a certificate is indorsed, though it has not been delivered.
“§ 21. The person to whom a certificate was originally issued is the person appearing by the certificate to be the owner thereof, and of the shares represented thereby, until and unless he indorses the certificate to another specified person, and thereupon such other specified person is the person appearing by the certificate to be the owner thereof until and unless he also indorses the certificate to another specified person. Subsequent special indorsements may be made with like effect.
“§22. * * * ‘Certificate’ means a certificate of stock in a. corporation organized under the laws of this State or of another state whose laws are consistent with this Act.
“ ‘Delivery’ means voluntary transfer of possession from one person to another. * *

That there was a “delivery” according to the definition thereof both from appellant to the broker and from the broker to appellee, and that appellant is the person to whom the certificate was originally issued and appeared thereby to be the owner thereof at the time of his alleged indorsement, are not questioned. But it is urged that because the name of Patterson as so filled in was no part of the assignment of the certificate by appellant to the brokerage firm it was not assigned to appellee by his. authorization and therefore he is still the owner of said certificate, and that the assignment under which appellee claims was not in compliance with the requirements of said transfer act, and that appellee is not a bona fide holder of the certificate within the meaning of said act, but occupies the position of an assignee of an ordinary instrument or chose in action, which is subject to all defenses that may have been made against said brokerage firm.

Most., if not all of these contentions, are fully answered, we think, in McCarthy v. Crawford, 238 Ill. 38, where like points were raised upon similar facts except that the instrument there in question was a receiver’s receipt of an indebtedness much in the form of a certificate of stock. The principles, however, upon which the case was decided were those held applicable to a certificate of stock. On the back of said receipt was a like printed form of assignment and power of attorney to transfer on the books of the company for which the receiver was appointed, and an indorsement by the person to whom it was issued without filling up the blanks left for the names of a transferee and attorney. Such assignment was referred to, however, and regarded as an assignment in blank, as was the certificate of stock in Otis v. Gardner, 105 Ill. 436, where the effect of a transfer by a like indorsement was considered. It was held in the Crawford case that such an indorsement and delivery to a broker, whatever the owner’s motive, clothed the broker with the indicia of ownership, and that the transfer on the books was a matter in which the indorser was not concerned but was for the protection and convenience of the transferee and the issuer of the certificate. It was there said:

“The law has been generally established that as between the parties the transfer of stock by delivery of the certificate, with power of attorney or endorsed in blank, passes title without transfer on the books of the company, even when the by-laws of the company provide to the contrary. (Authorities). Such blank transfer on the back of the certificate, to which the holder has affixed his name, is a good assignment and the party to whom it is delivered is authorized to fill it up.- It may be filled up with the name of a remote transferee, and the name to be inserted concerns only the purchaser. (Authorities).”

We find nothing in the Uniform Stock Transfer Act inconsistent with this statement of the law as it existed before its passage. Section 1 of the act expressly states that title to a certificate may be transferred by delivery thereof indorsed in blank, and such an indorsement was made in this case. To be sure, the owner may specify the transferee if he chooses, but if he does not, we find nothing in the act which precludes the right of a transferee to insert his name as such in the blank form over the indorsement. As held in the Crawford case, such a specification of the transferee is a matter which concerns only such transferee and the company on whose books the transfer is sought to be made. With respect to these formalities or requirements the Uniform Stock Transfer Act is a mere codification of common-law principles.

The principles upon which both the cases of McCarthy v. Crawford and Otis v. Gardner rest, are that where “one of two or more persons must suffer loss, upon him whose conduct made it possible for loss to occur should the consequences ultimately rest, ’ ’ and that by such indorsement and delivery by the owner the holder or assignee would be presumed to make any legitimate use of the certificate that the original owner might make and the indorser would be estopped from claiming that the transfer was not for value. “Such an estoppel generally arises from the fact that the owner has delivered his certificate to a third person indorsed in blank.” (Fletcher Cyclopedia Corporations, vol. 11, §3853; Casey v. Kastel, 119 N. Y. Misc. 116, 195 N. Y. Supp. 848.) It has been held in some jurisdictions that the mere delivery of the certificate with intent to transfer the shares represented thereby was sufficient without any indorsement or written assignment, but in the absence of an agreement to that effect, the Uniform Stock Transfer Act contemplates either a written indorsement in blank, such as was made here, or an indorsement to a specific person. (Sections 1 and 9; Fletcher Cyclopedia Corporations, vol. 6, § 3786.)

On the above state of facts, therefore, it cannot reasonably be said that the assignment was not in compliance with the requirements of the Uniform Stock Transfer Act, or that the bona fides of complainant is open to question under sections 7 and 8 of the act, Cahill’s St. ch. 32, ¶¶ 235, 236. While it does not appear that the brokerage firm used the certificate for the purpose contemplated by appellant, there is nothing to indicate any notice to complainant of that fact or that he was put on inquiry with regard thereto.

It is also contended that because there was no proof of the laws of the State of Delaware under which the Fitzpatrick MeBlroy Company was organized, as alleged in the bill, the court could not say that the certificate in question is a “certificate” within the meaning of said act; that it was incumbent upon appellee to allege and prove the laws of the State of Delaware pertaining to corporations before it could take notice of the requirement that they be “consistent with this act.” In the absence of proof as to the laws of Delaware it will be presumed that the common law prevails in that State. (Woodbury v. United States Casualty Co., 284 Ill. 227; Opp v. Pryor, 294 Ill. 538, 541.) If, as we have already said with-reference to the points under consideration, the Uniform Stock Transfer Act is a mere codification of common-law principles, then in absence of proof on the subject the laws of the State of Delaware are presumptively consistent with said act. We find nothing, therefore, in the facts or findings of the decree to which the statutory definitions referred to do not conform, and as the original defendants stand neutral in the case and ready to comply with the decree we think it should be affirmed.

Affirmed.

Gridley' and Scanlan, JJ., concur.


source: Caselaw Access Project

author: Mr. Presiding Justice Barnes

license: Public Domain

text:
    Charles Harris, Appellee, v. M. Montag, on Appeal of K. & S. Sales Company, Garnishee, Appellant.
    Gen. No. 31,917.
    1. Garnishment — burden to prove nature of debt. The burden of proof is on the plaintiff in garnishment to establish a garnishable debt.
    2. Garnishment — burden to show exemption. The burden is on a garnishee to show, as against proof of a garnishable debt, the right to any reduction therefrom for exemptions of salary of an employee under Cahill’s St. ch. 62, ¶ 14.
    3. Garnishment — exemption of salary of employee. Under Cahill’s St. ch. 62, ¶ 14, wages or salary earned by an employee are not exempt from garnishment unless the employee is the head of a family and residing with the same.
    4. Garnishment — exemption of wages earned after service of writ. Where an employee is not the head of a family and does not reside with the same, his employer must, when garnisheed, answer under Cahill’s St. ch. 62, ¶ 5, for any wages or salary earned between the dates of service and answer.
    5. Garnishment — contingent credits in employee’s commission account. Where a garnishee credits an employee with commissions subject to deduction for losses which may occur from confiscations and uncollectible accounts, if such losses are undeterminable before the date of answering the interrogatories, such credits constitute under the contract a contingent liability and are not subject to garnishment.
    6. Garnishment — burden on plaintiff to remove contingency from debt garnished. Where a garnishee credits an employee with commissions subject to deduction for losses which may occur from confiscations and uncollectible accounts, the burden is on the plaintiff to furnish proof by which the losses can be determined.
    7. Garnishment — estoppel of employer crediting employee’s account with commissions. A garnishee charging collections made by an employee to the employee’s commission account as commissions earned, held estopped from claiming that the employee was not entitled to retain such money on the ground that the collections were unauthorized.
    8. Garnishment — right of garnishee to set off contingent liability of employee to him. Where a garnishee credits an employee with commissions contingently subject to losses, the employer cannot set off an overdraft payment as being subject to the losses, where the losses are not determinable at the time of garnishment.

      Appeal by garnishee from the Superior Court of Cook county; the Hon. John J. Sullivan, Judge, presiding.
    Heard in the second division of this court for the first district at the March term, 1927.
    Affirmed.
    Opinion filed December 27, 1927.
    Sonnenschein, Berkson, Lautmann & Levinson, for appellant; Henry S. Moser, of counsel.
    Bernstein, Zolla & Bernstein, for appellee; Louis M. Kaplan, of counsel.
   Mr. Presiding Justice Barnes

delivered the opinion of the court.

This is an attachment suit brought against defendant Montag in which appellant was summoned as garnishee. A judgment was entered against each. That against the garnishee is appealed from.

The garnishee was served December 3, 1923, filed its formal answer. January 11, 1924, and an answer to the interrogatories March 11, 1924, pursuant to rule of court. Each answer denies that the garnishee had, at the time of the service of the writ or at any time since, any property of said Montag in its possession or charge. The defense is also made that Montag is an employee of the garnishee and that it is not liable to answer for any money not earned by him at the time of service of the writ, and that the court was without jurisdiction to enter judgment against it because there was not a compliance with the exemption statute as to making a demand and leaving and filing a copy thereof as required by section 14 of the Garnishment Act, Cahill’s St. ch. 62,¶ 14.

The answer was traversed and after a hearing on the issues raised and submission of the case with propositions of law to the court it found that the garnishee was indebted to the judgment debtor in the sum of $2,000, and entered judgment against it therefor.

Assuming the burden of establishing a debt that was garnishable, as it was required to do (Manowsky v. Conroy, 33 Ill. App. 141), plaintiff introduced two letters from the garnishee to Montag, showing that Mon-tag was an employee on a commission basis, and also the garnishee’s ledger sheets showing the commission account covering the period between the date of service and the answer to the interrogatories.

The first letter, dated September 1, 1923, reads:

“In connection with our new commission arrangement (20% of the remittance instead of 50% of the gross profits) wish to advise that your commissions will be due and payable as follows:
“Fifty per cent of said commissions to be paid by us at the time remittances are received from your customers, the remaining fifty per cent to be paid to you one year after date of the remittances on which said commissions are payable.
“It is understood * * * that your compensation is payable only in commissions as hereinbefore set forth, and that any advancements made by us to you are to be charged against your commissions.”

The other letter, dated October 18,1923, modifies the contract to “20% of the remittance and bonus feature,” the plan to start as of October 1, “all remittances received prior to that time to be handled on the old basis” of a “50-50 commission plan.” After explaining the bonus plan, which allowed Montag 5 per cent for every $500 worth of commissions earned, it continues:

“In connection with the above arrangement, you will not be obliged to stand any losses resulting from any so called ‘bad breaks.’
“You will receive your full 20% commission on all remittances received from your accounts, regardless of profit or loss taken thereon, excepting losses resulting from confiscations and uncollectable accounts, that is, all accounts over four months old which will be charged to profit and loss and your commission account will be debited 50% of the cost of the assortment. When subsequent remittances are received from delinquent accounts proper credits will be given you.”

After introducing such evidence and testimony by the garnishee’s vice president explanatory of the status of Montag’s commission account as shown on such sheets, plaintiff rested.

For the purpose of estimating the liabilities for possible losses chargeable to Montag under the contract the garnishee introduced evidence of the selling price and cost of merchandise sold and shipped, and evidenee explanatory of the ledger sheets, and also Montag’s “sample account” showing charges against him for samples of merchandise delivered to him by the garnishee and credits therefor when returned, which discloses a debit balance in said account of $778.40 against Montag on March 11, 1924.

While the burden of proof was on plaintiff, as before stated, to establish a garnishable debt, the burden was on the garnishee to show as against any proof thereof the right to any reduction therefrom for exemptions under section 14 of the (Garnishment Act, Cahill’s St. ch. 62, ¶ 14. To establish such right it was necessary to prove that Montag was the head of a family and residing therewith. There was no such proof.

Appellant construes said section as not requiring a garnishee to answer for wages or salary earned by the employee subsequent to the service of the writ, regardless of whether he is the head of a family and residing with the same, citing as authorities to support the proposition Davis v. Siegel, Cooper & Co., 80 Ill. App. 278; Mutual Service Corp. v. Hugren, 225 Ill. App. 216; First Nat. Bank of Knightstown v. Hosier, 234 Ill. App. 605.

Whether or not an employee working under a contract for commissions may be said to come within the provisions of said section need not be considered in view of the absence of proof that Montag was the head of a family and residing with the same, as he must be to be entitled to exemptions.

It was only with reference to one so entitled that the court held in the Davis case, supra, that unearned wages after the date of service of the garnishee- were not subject to garnishment, and the statute now so provides. This is true also with respect to the cases of Bliss v. Smith, 78 Ill. 359, and Hoffman v. Fitswilliam (& Sons, 81 Ill. 521, relied on in the Hugren and Hosier cases, supra, as excluding any wage earner from the application of section 5 of the act, Cahill’s St. ch. 62, ¶ 5, which requires any person summoned as a garnishee to answer for any indebtedness due and owing up to the date of answer, which we interpret as including the date of answering interrogatories. Young v. First Nat. Bank of Cairo, 51 Ill. 73; Hanover Fire Ins. Co. v. Connor, 20 Ill. App. 297.

It was held in the Hugren and Hosier cases, decided in 1922, that under a liberal construction of the statute and on grounds of public policy the garnishee need not in any case answer as to the earnings of “the wage earner” after the service of the writ, and, apparently, regardless of whether he comes within the exemption provision of the act or not. The particular clause of section 14, Cahill’s St. ch. 62, ¶ 14, on which the ruling was based, and which is found in the second paragraph of the section, then read:

“No employer so served with-garnishment shall in any case be liable to answer for any amount not earned by the wage earner at the time of the service of the writ of garnishment.”

In 1923 the statute was amended and substituted for the quoted provision the following: .

“No employer so served with garnishment shall in any case be liable to answer for any amount not earned by such employe at the time of the service of the writ of garnishment. ’ ’

The exemption clause is in the first paragraph of the section. Before amendment it read:

“The wages for the sérvices of a wage earner who is head of a family and residing with the same to the amount of fifteen (15) dollars per week shall be exempt from garnishment. All above the sum of fifteen (15) dollars per week shall be liable to garnishment.”

As amended in 1923, it reads:

“The wages or salary for services of an employe who is the head of a family and residing with the same to the amount of fifteen dollars per week, shall be exempt from garnishment. All above said exempt amount shall be liable to garnishment.”

In the second paragraph (which contains the clause in question) wherever the word “employe” appears it is qualified by the word “such,” thus unmistakably referring back to the ‘1 employe ’ ’ mentioned in the first paragraph, namely, one who is head of a family and residing with the same, as its antecedent.

Before the amendment of 1923 it was held in effect in Howard Co. v. Miller, 123 Ill. App. 483, and Heffernan for use of Rittenhouse & Embree Co. v. Breen & Kennedy, 207 Ill. App. 344, that there must be a claim of exemption under the statute to release the garnishee from answering for wages earned after service of the writ.

Because of such conflict of authorities on the subject, the legislature may be presumed to have passed the amendment of 1923 to remove all doubt that where a wage earner or employee oh a salary was not entitled to exemptions under the first paragraph of section 14, Cahill’s St. ch. 62, ¶ 14, his employer must, when garnisheed, answer under section 5 of said act, Cahill’s St. ch. 62, ¶ 5, for any wages or salary earned between the dates of service and answer. The unequivocal language of the amendment clearly discloses such intent, and throughout the entire section points clearly to only “such employe” as is mentioned in the first paragraph thereof, namely, one who is the head of a family and residing with the same. Montag not having been shown to be such, the garnishee cannot be released from answering for money earned or credits given to him subsequent to the service of the writ up to March 11, the time of answering the interrogatories.

As the policy of the law (which rests wholly upon the intendments of the statute itself) is to enable an .employee to reserve from garnishment a part of his wages for support of his family, and does not extend to one not residing with his family, it is inconsistent to hold that it is within its policy to protect one not the head of a family, or that the act may be extended on the theory of liberal construction to include any one rendering services for wages or a salary.

But it is urged by appellant that under the terms of the contract as modified by the letter of October 18, a part of the credits given to Montag on the garnishee’s books are uncertain and contingent and, therefore, not subject to garnishment.

It appears from said commission account that on December 3, 1923, the date of the service, Montag had a credit of $10,166.78 and a debit charge of $6,319.91, leaving a balance to his credit of $3,846.87. Under the contract, as apparently conceded, only one-half of Montag’s commissions on his sales was due him at the time of remittances therefor. That half appears by such charges to have been paid, and the other half was subject to deductions for losses resulting from confiscations and uncollectible accounts. If such losses were undeterminable before March 11, such credits constituted under the contract a contingent liability and were not subject to garnishment. (Pressed Steel Equipment Co. v. Thornburgh Pressteel Co., 228 Ill. App. 1.) At any rate there ivas no proof by which the losses were or could be determined. The burden was oh plaintiff to furnish it. And, too, as the record leaves it uncertain whether all of said credits arose under said contract, the burden also rested on plaintiff after introducing such contract and the commission account thereunder to remove any such uncertainty. It was bound to establish an absolute indebtedness. The same contingencies characterize the balance of credits as shown oii March 11, the date of answering the interrogatories.

But it appears from the commission account, in spite of such contingencies, that after the service of the writ and before March 11, the garnishee charged Montag’s commission account with an unexplained check for $200 on December 6, 1923, and at subsequent dates with moneys amounting to $3,026.41, collected by Montag from his customers and retained by him, a total of $3,226:41. Appellant argues that such collections were not authorized and were made in violation of its instructions. But in view of its retention of Montag in its employ long after its knowledge of such practice and its continuous recognition thereof from a time long prior to the date of the contract, it is estopped from claiming that he was not entitled to retain such moneys. It must be deemed to have acquiesced in the practice and to have recognized Mon-tag’s right to the collections as commissions earned, else they would not have been charged to his commission account, or the practice would have been stopped. Such charges, therefore, cannot be regarded otherwise than in the light of voluntary payments, towards Montag’s commissions in disregard of appellant’s statutory obligation to withhold such payments after garnishment and before answer. (Paisley for use of Hooper v. Park Fireproof Storage Co., 222 Ill. App. 96; Hudson for use of Topp v. Hudson Motor Co. of Illinois, 238 Ill. App. 391.) As there is nothing in the evidence that warrants treating these payments either as advancements or a set-off the garnishee must be held to have recognized them as an indebtedness at the time they were charged to the commission account.

There are a few other items of payment by check but they are explained as having been given for traveling expenses.

But while as against such recognized indebtedness of $3,226.41, as aforesaid, appellant is entitled to a set-off of $778.40, the balance due it from Montag as shown by said “sample account,” there still remains a balance greater than the judgment of $2,000, the full amount claimed as damages.

Appellant also claims the right to set off what it terms “an overdraft” by Montag at the time of service of the garnishee because Montag’s total debits on December 3, 1923, exceeded one-half of his entire credits at that date. The theory, as we understand it, is that if the losses for which Montag was chargeable exceeded his book credits at time of an adjustment of the account, he would be liable to return moneys paid him on remittances. But if so, not until an adjustment was had could it be determined whether at the time of garnishment he was overdrawn. That not being determinable at the time of garnishment the garnishee is in no better position to assert a claim for “overdraft” than is the garnishor to reach the contingent credits on which the claim depends.

In view of. our conclusions we need not discuss alleged errors in the rulings of the court on the propositions of law submitted. Accordingly the judgment will be affirmed.

Affirmed.

G-ridley and Scanlan, JJ., concur.


author: Mr. Justice Gridley

text:
    Euna S. Jennings et al., Complainants and Appellants, v. Edward R. Hills et al., Defendants and Appellees.
    Gen. No. 31,619.
    1. Wills — savings effected by purchase of remainder interest as intestate property. Where property is devised in trust to pay certain annuities, with distribution to be made, after the death of the last annuitant, one-half to the then living descendants of the testator and the other half to charitable corporations, and the widow and other heirs purchase with their personal funds the vested rights of the corporations in the property and future accumulations, held any saving effected by the purchase did not become intestate property for distribution.
    2. Wills — compromise agreement to sustain contested will. Where there is a contest over the validity of a will, and there are also family disputes and differences, and a compromise agreement is made between all the beneficiaries of the will whereby a decree should be entered to sustain the will and pay certain beneficiaries money in consideration of their releasing their rights under the will, such a compromise agreement is favored by a court of equity.
    3. Former adjudication — decree in compromise of will contest and family disputes as bar to subsequent attempt to have funds declared intestate property. Where property is devised in trust to pay certain annuities, with distribution to be made, after the death of the last annuitant, one-half to the then living descendants of the testator and the other half to charitable corporations, and there is a contest of the will, and family disputes, and heirs purchase the vested rights of the charitable corporations with their own funds, and the entire matter is embodied in a compromise agreement which is confirmed by a decree, held, in a subsequent bill to have any savings effected by the purchase of the charitable remainder • to be declared intestate property, that the question was res adjudicata by the first decree.
    4. Former adjudication — unborn persons bound by decree against ancestors. Decree confirming compromise agreement of heirs and beneficiaries of testator held binding, not only upon minors at the time of entry, but also upon all persons who had since come into being, having interests identical in character or of the same class.

      5. Annuities — right of testamentary annuitants to increased payment. Testamentary trustees will not be required to increase annuities created by the will merely because the cost of living has greatly increased since the testator’s death, especially where it is not shown that any of the annuitants are in want, and where an increase of the annuities would decrease the amount to be received at the end of the trust by the testator’s descendants, which would be contrary" to the testamentary intent.
    6. Trusts — payment of solicitors’ fees out of estate funds. Where a testamentary trust is created and a bill of complaint does not involve the construction of an ambiguous will and is in the nature of an attack upon the fund in an effort to reduce it, and the services of the solicitors for complainants are not rendered for the advantage of the estate, held proper to refuse to allow the solicitors’ fees of the unsuccessful complainants to be paid out of the estate funds.
    Appeal by plaintiffs from the Circuit Court of Cook county; the Hon. Ira Byner, Judge, presiding.
    Heard in the second division of this court for the first district at the December term, 1926.
    Affirmed.
    Opinion filed December 27, 1927.
    Statement by the Court. This is an appeal by complainants from a decree of the circuit court, entered October 18, 1926, wherein the court, refusing to follow certain of the master’s recommendations, dismissed complainants ’ bill as amended for want of equity. The appeal was taken originally to the Supreme Court, but, on December 9, 1926, it was ordered transferred to this Appellate Court.
    The prayer of the original bill, filed May 4, 1923, was only that a decree be entered increasing the annuities mentioned in the will of Jonathan Clark, deceased, so as to enable complainants “to live in the station of life to which they were born, and in which said Jonathan Clark would desire them to live.” Before the cause was at issue the bill was amended by the additional prayer: “That said estate in the hands of said trustees be partitioned and that one-half of the estate be distributed to the heirs of Jonathan Clark, the testator, and for an accounting of the rents and profits received by said trustees.”
    Neither at the time of this amendment, nor subsequently, were any new allegations pertinent to the additional prayer added to the bill, but complainants contended on the hearing before the master that, the evidence showed that, because of certain transactions and a certain compromise agreement completed by two court decrees, entered respectively in said circuit court on July 29th and November 16th, 1908, a large “saving” resulted to the estate which became “intestate” property and should now be distributed to complainants, as heirs of the testator. The defendants on the contrary contended that there was no saving; that, if there was, it was not intestate property; and, further, that said decrees are res adjudicaba of the qiiestions.
    The master found that by the transactions and settlement there was “saved to the estate of Jonathan Clark, deceased, the sum of $653,747.05,” which “became intestate property, and should descend accordingly.” The court, upon exceptions, disagreed with the master and held that these findings “were not in accordance with the law or the evidence.” The court found that the 1908 decrees were entered in certain consolidated causes; that all persons, who are parties to the present cause, were parties to the consolidated causes or properly represented therein, and that all matters now in issue were in those causes “finally adjudged and'determined”; that it has not been shown that when the 1908 decrees were entered there was then, or is now, “any sum whatever which was or is intestate property, or otherwise subject to distribution”; that on the, contrary the entire fund in the trustees’ hands is in fact, and was then found to be, held by them “to be distributed at the termination of said trust as fixed by the will, and not otherwise”; that, by the former transactions and decrees, three charitable corporations, legatees under thé will, were paid sums of money, and all their interests in the trust property satisfied and released; that the bargain was not one between the corporations and the trustees, but that on the contrary the sums of money paid “were furnished by the widow and heirs of Jonathan Clark from their personal funds, and did not constitute any part of the trust estate”; and that the purchase “has not been shown to be unlawful or prejudicial to the interests of the present complainants.”
    On the question whether the annuities given to complainants by the will should be increased, the master found that complainants “have failed to prove that they are entitled under the law to any increase,” and the court sustained that finding.
    The complainants (except Emmaretta Clark Kauffman, a daughter) are the grandchildren of the testator. The defendants, besides the trustees, are J. Yates Clark, individually, a son of the testator, Caroline Patterson and her adopted son, Edgar C. Patterson, and nine (9) great-grandchildren of the testator, who, being minors, are represented by William B. T. Ewen, Esq., guardian ad litem.

    Jonathan Clark died February 5, 1902, at the age of 78 years. His will and codicil thereto, both made in 1900, were admitted to probate in the probate court of Cook county on March 28, 1902, and letters testamentary issued to Edwin F. Bayley, Caroline Patterson and George T. Clark, the executors named in the will. He left him surviving as his only heirs-at-law Alice Clark, his widow, Fred W. Clark, George T. Clark and J. Yates Clark, three sons, and Eunice Clark Smith and Emmaretta Clark Kauffman, two daughters. When the present bill was filed only two of these heirs were living. Mrs. Smith died in 1906, Alice Clark, the widow, in 1911, Fred W. Clark in 1916, and George T. Clark in 1918.
    In the second article of the. will the testator gave to his wife all household furniture, etc., and also the use of the home and all appurtenances so long as she should live; It is stated that he had previously secured to her a considerable income by a conveyance in trust of property of the value of about $50,000, In the third article it is stated;

      “Having given much care and thought during many years past to the selection of real estate and the erection of substantial buildings, with the purpose of rendering my estate productive of a certain and increasing revenue from rentals, and believing that it will be for the best interests of the beneficiaries named in this will that the property be held by the trustees, undivided,.as long as possible, I give, devise and bequeath all the property of every kind, real, personal and mixed, which I-may own at the time of my death (excepting that mentioned in article second of this will), to said Edwin F. Bayley, Caroline Patterson and George T. Clark, as Trustees; to have and to hold the same to them and their successors in trust, for and during the life of the last survivor of my wife and my five children now living and hereinafter named, and for and during twenty years from the time of the death of such last survivor, upon the following trusts.”
    Then follow directions to the trustees to hold, manage and lease the properties, to collect the rents, income and profits, to pay all ground rents, mortgages and debts and the necessary expenses of the trustees and a reasonable compensation for their services, to pay to Caroline Patterson for her services both as executrix and as trustee, so long as she shall live and act as such, $1,500 per annum, etc.
    Then follqw directions for the payment out of the net income of certain annuities, viz: To pay, quarterly, $3,000 per annum each to the widow and the five children, and upon the death of any of the children to continue to pay the annual sum to the child or children of the deceased child until the trust period shall end; also to pay, quarterly, $600 per annum to each of the testator’s grandchildren, born or to be born, so long as such grandchild shall live and until the trust period shall end; and also to pay to Caroline Patterson $600 per annum, payable quarterly, so long as she shall live. In connection with this last-mentioned an-rarity it is stated that she has been in the testator’s employ for many years and that the provision is intended “as a recognition of her faithful and valuable services.” By the codicil to the will this $600 annuity, upon her death, is directed to be paid to her adopted son, Edgar C. Patterson, so long as he shall live and until the trust- period shall end. There also are directions for the payment of other annuities to persons who died prior to the filing of the present bill, and that “the surplus” of the net income, not required for the purposes mentioned, may be invested by the trustees from time to time, “either in erection of buildings upon any lands I may hold under ground leases, or may own in fee at the time of my death, or in the alteration, enlargement or improvement of any building owned by me, or in repairing or rebuilding any such buildings as may from time to time be destroyed or damaged by fire or otherwise, or in the purchase of the fee simple title to any of the lands of which I may at the time of my death hold a ground lease, or in safe interest bearing securities.” No power of sale is given, to the trustees. In the fourth article it is provided:
    “At the end of said period of twenty years, from the death of the last survivor of my wife and said five children of mine hereinbefore named said trust estate and all of the property and accumulations then remaining in the hands or control of said Trustees, or their successors, not hereinbefore otherwise disposed of, shall be conveyed and distributed by said trustees, or their successors, as follows: One-half thereof to all of my descendants then living, in equal shares; to have and to hold the same to them, their heirs and assigns forever; the other half thereof to the following charitable corporations or their successors, in equal shares, to-wit: THE OLD PEOPLE’S HOME OF THE CITY OF CHICAGO, now located at No. 3850 Indiana Avenue, in Chicago; THE FOUNDLINGS HOME, now located at 114 South Wood Street, in Chicago, and THE SCHOOL OF AGRICULTURE AND MANUAL TRAINING FOR BOYS, now located at Glenwood, Illinois, said Charitable corporations to have the right to use the income of the property which shall be transferred to them respectively, under the provisions hereof, from year to year, for the purposes of their organizations respectively; but the principal to be kept invested in productive property, or income bearing securities, by the directors or managers of said corporations respectively. My reason for limiting the amount to be paid to my descendants, at the termination of said trust period, to one-half of said trust estate is that I desire to provide a fund for each of such descendants then living sufficient only to enable him, or her to carry on some legitimate business, and not to provide for his or her support in idleness. I have selected said three charitable corporations as beneficiaries hereunder for the reason that I am in sympathy with their purposes, and desire that half of said trust estate existing at the end of said trust period shall perpetually assist in carrying out such purpose.”
    Following the death of Jonathan Clark much litigation ensued. After the three executors named in the will had applied to the probate court for the issuance of letters to them, objections were filed by the widow and two of the children to Caroline Patterson qualifying as an executor, They claimed that she was not a fit person to serve in that capacity, because of alleged illicit sexual relations had between her and the testator during his lifetime, and because of feelings of hostility existing between her and members of the Clark family. The probate court allowed her to qualify, upon her giving a bond. On appeal to the circuit court this order was confirmed, as it was subsequently in April,. 1905, by the Supreme Court on further appeal. (Clark v. Patterson, 214 Ill. 533.) In apt time the widow renounced the will and elected to take her statutory-share. In July, 1903, some of the heirs filed a bill in the circuit court, No. 240,613, to set aside the will upon various grounds. The widow filed a bill to recover her dower, and also another bill against the executors and trustees to recover about $30,000, claimed to have been taken by the testator from a trust fund for her benefit. George T. Clark, as executor, filed a bill against Caroline Patterson to recover certain moneys claimed to belong to the estate. In May, 1906, the widow applied to the probate court for an order requiring the executors to set apart and pay to her one-third of all the personal property. In December, 1906, after a hearing, that court found that she was entitled to the one-third and that, to enable her to receive it, it was necessary that the leaseholds owned bv the testator at the time of his death be sold at public sale, and ordered that the executors make the sales, from which order an appeal was pending. At that time all of the above-mentioned causes (except that concerning the right of Caroline Patterson to act. as an executor), and much other litigation affecting the estate, were pending and undetermined. At that time, also, much testimony by depositions had been taken in the suit to set aside the will, but much more was necessary to be taken before there could be a trial on the issues. Some of the parties interested in sustaining the will, including the three charitable corporations, were-fearful that it might be set aside.-. ■ Furthermore, no part of the annuities had been paid, and the accrued ■ sums aggregated nearly $150,000. ■ The sums, accrued and to accrue, might be lost to the annuitants if the will was set aside.
    The major portion of the estate consisted of leaser holds, 17 in number, originally running for 99 years, improved with buildings, and all located in Chicago. Two of them, on .South Canal' street, had been condemned for the terminal station grounds, of. the Chicago & Northwestern Railroad Company but the money, about $55,000, had not yet been paid. They were parts of the personal estate of the testator. (Zimmermann v. Dawson, 294 Ill. 380.) They had been valued in the executors’ inventory at $428,000. There was other personal property, in the form of chattels and securities, valued at slightly less than $100,000. ' There was also real estate held in fee, valued at $53,598, which had only produced income enough to pay current charges and cost of maintenance. Under ordinary conditions the value of the leaseholds would continue to depreciate as the years passed. The expectancy of life of the youngest child of the testator, as computed by the regular tables, was 31 years. As- the will provided for final distribution-to be made 20 years after the death of the last survivor of the widow and the five children, it was probable that such distribution would not be made for 51 years. At the expiration of that time the ground lease having the shortest period to run would have remaining 21 years of life, and at the end of the 21 years it, of course, would cease to exist and the capital represented by it would become extinguished. In like manner, the other leaseholds would cease to exist as capital at the expiration of their terms. It appeared clear that, after the lapse of 51 years of the terms the ground - leases, their value under ordinary conditions would have greatly depreciated.
    Early in the year 1907, negotiations were had between all interested parties looking to a possible compromise settlement, whereby the following things, inter alia, might be accomplished, viz, the dismissal of all pending litigation including the suit to-set aside the will, the conveyance to the widow of certain leaseholds and other property in settlement of her claims, the” resignation of Caroline Patterson as one of the executors ‘ and one of the trustees, the payment of all accrued annuities, and the purchase from the three charitable corporations of all their interests and rights in the property of the testator under the will — the settlement, if made, to be confirmed by a decree of a court of equity. Because of the uncertainty (if the suit to set aside the will were dismissed) as to how much the charitable corporations might receive from the estate at the end of the trust period (probably 51 years hence), they had taken the position that they would not agree to any settlement unless they could in some way immediately be paid money in consideration of their releasing all their interests in the testator’s property. The widow and the other heirs tentatively agreed to purchase, out of their own funds, these interests and rights, in consideration of their release and other considerations. The difficulty was to determine or agree upon the then value in money of these interests and rights. The widow and other heirs finally offered to pay the three corporations $120,000, $40,000 to each, and the offer was accepted. And all parties further agreed that two propositions of settlement, known as Nos. 2 and 3, should be submitted to a court of equity for it to decide which, if. either, should be approved and confirmed.
    Accordingly, in May, 1907, the widow and three of the testator’s children, as complainants, filed a bill in the circuit court, No. 279,244, against the executors and trustees and all other interested parties, as defendants. In the bill, the then situation and the tentative agreements of settlement, as embodied in propositions Nos. 2 and 3, were set forth in considerable detail. The bill prayed in substance that, after all parties in interest were brought into court and after a hearing, the court determine which of the proposed agreements, if either, be the more fair and just and-for the best interests of all parties concerned, not only those in esse but those unborn, and as a compromise and settlement of family disputes and for the purpose of avoiding public.scandal and notoriety, and that the court by a decree make the compromise agreement effectual. Answers were filed and the cause was referred to a master, who, after a hearing, made a report recommending that the agreement, as stated in proposition No. 3, be approved and consummated.
    The essential terms and elements of said proposition No. 3 were (a) that all pending suits, including the" one to set aside the will, should be dismissed; (b) that Caroline Patterson should resign as- executor and as trustee; (c) that, for the widow’s share in the estate and her dower rights, there should be set apart and vested in her (1) a certain leasehold-on State street, (2) the “Brother Jonathan” leasehold, (3) the leaseholds on South Canal street, or the $55,000 to be paid therefor as condemnation money, (4) certain lands and buildings known as the “Florida property,” and (5) a certain judgment of $7,000 which the executors had recovered; (d) that the three charitable corporations each be paid, by the widow and the other heirs, the sum of $40,000, in full settlement of all their interests and rights in the testator’s property, the. corporations each to execute and deliver -to the trustees a release and satisfaction thereof; (e) that, in consideration of the payments by the widow and heirs to the corporations, there be set apart and vested in the widow, in addition to the property above mentioned as being set apart to her, a certain other leasehold on State street known as the “Follies’ Theatre”; and (f) that all accrued annuities be paid to the respective annuitants, as well as those accruing thereafter, out of the net income of the estate.
    ■ The chancery cause,'No..279,244, was ordered consolidated with cause No. 240,613' (which involved the-validity of the will), and on July 29,1908, a .decree was-entered in the consolidated causes; In the decree the court made many findings substantially in accord with the facts as hereinabove stated, detailed at length the terms and elements of the proposed compromise agreément, agreed with the master’s recommendations, and ordered and adjudged (1) that “the said compromise agreement * * * be and the same is hereby approved, ratified and confirmed, not only as between the adult parties to this cause, but in respect to the minors who are interested in said will and the trusts thereunder, and also all those persons who shall come into being hereafter, and who shall have or acquire interests in said trust property under said will, either during the continuance of the trust or at the period of distribution,” and (2) that the agreement be carried into effect under the supervision of the master, etc., who is to make a further report, for the court’s approval, how the decree shall have been carried into effect. The master made such further report and, on November 16, .1908, the court entered a further decree, approving and confirming the acts and doings of the master in carrying into effect said July, 1908, decree, etc.
    In said July, 1908, decree, the court found, inter alia, that the interests of all beneficiaries named in the will are “in danger” by reason of said suit to set aside the will; that its trial will cause scandal, reflecting upon the honor of the testator and indirectly upon the Clark family; that much other vexatious litigation is pending; that the executors and trustees have been unable to act harmoniously together; that if the 17 leaseholds (exclusive of those condemned) be sold, in order to provide funds for the satisfaction of the widow’s claims, it is evident that the “scheme of the will of the testator” cannot be carried out, since it is contemplated therein that his entire estate, including accumulations, not necessary to pay the annuities, expenses, etc., shall remain in trust until the end of the trust period; that if said leaseholds be sold for the purpose mentioned, the major assets of the estate will then be converted into cash, and the proceeds, less the amount paid to the widow, will have to be invested in interest bearing securities, but at such a rate as will greatly decrease the income of the estate; that if the will be set aside none of the beneficiaries, including the three charitable corporations, will receive “any of the bounty intended by the testator”; that “there is every reason known to the law for making and establishing a compromise agreement”; that all the heirs and parties interested in the testator’s property, except minors, have agreed upon the terms of the compromise agreement, and that the guardian ad litem for the minors has advised the court that it is for their best interests; that two of the three trustees have assented thereto; and that the same can be made effectual to amicably settle and terminate all pending litigation, and the disputes and differences now existing, and “to fix and make certain the rights and interests of the several beneficiaries.”
    And the court found, as other elements of said compromise agreement (in addition to those herein-above stated), that the claim of Caroline Patterson for disbursements and the claim of her attorney for fees and disbursements, aggregating over $22,000, be paid out of the assets of the estate; that all income which had been received by the trustees since March 1, 1907, out of those leaseholds which were to become vested in the widow should be paid to her; and that this money, as well as all moneys to be received by her as the proceeds of the condemnation of the leaseholds on .South Canal street, or from any other source, and also all moneys to be paid to the living children of the testator, or to the adult children of his deceased daughter, Eunice Smith, “are to be treated as pledged for the payment” to said three charitable corporations of said sums of $40,000 each. '
    And the court further found in said July, 1908, decree that, inasmuch as it is to be entered as well in cause No. 240,613 (the one to set aside the will) as in cause No. 279,244, said decree, when carried fully into "effect, “shall operate as an affirmance in all respects of the documents admitted to probate as the will of said Jonathan Clark”; and that the trust property, not assigned and transferred to Alice Clark, widow, “is hereby established and confirmed in the trustees under said will.”
    Frederick A. Brown, for appellants; James Hamilton Lewis and Wm. G. Worthey, of counsel.
    Cutting, Moore & Sidley, for defendant trustees; N. G. Moore, of counsel.
    William R. T. Ewen, guardian ad litem, for minor defendants, appellees.
   Mr. Justice Gridley

delivered the opinion of the court.

The main contention of appellants’ counsel is that the circuit court erred in dismissing complainants’ amended bill for want of equity, because, by virtue of the transactions and decrees of 1908, the three charitable corporations in consideration of their releases each received $40,000, and there resulted a large ‘1 saving” to the estate ($653,747.05, as found by the master) which became intestate property and should be distributed accordingly.

When said 1908 decrees were entered the probable termination of the trust under the will of Jonathan Clark was about 51 years thereafter. When that time arrived, as provided in the will, one-half of the property in the hands of the trustees, including accumulations, was to be distributed to his then living descendants, and the other half to the three charitable corporations. And, as we understand counsels’ argument, it is that, as at the expiration of the trust period the living descendants were limited to receiving only one half of the property, and as the total sum ($120,000) received by said corporations was paid out of the funds of the estate, and as said sum was much less than half of the value of the testator’s property in 1908, after talcing into account the property set apart to the widow in settlement of her claims, and other proper deductions, the difference (whatever it may be found to have been) between said half of the value of said property and said sum of $120,000 became intestate property and should now be distributed.

We cannot agree with the contention or argument, and, after reviewing the provisions of the will, the .1908 decrees and the evidence, we are of the opinion that the decree, dismissing complainants’ bill for want of equity, was warranted under the law and the evidence. And we think that the court’s findings in the decree, also, were warranted. Some of these, findings are, substantially, that the 1908 transactions and decrees did not result in any saving which became intestate property or otherwise subject to distribution; that, if there was a saving, it, under the terms of the will, could only be distributed at the expiration of the trust period to the then living descendants of the testator; that the widow and the other heirs, by paying $120,000 from their personal funds to the .three corporations, purchased the then vested rights and interests of the corporations in the testator’s property and future accumulations ; that the bargain was not one between the corporations and the trustees; that no showing has been made that the purchase was unlawful or prejudicial to the interests of any of the present complainants ; ánd that, in any event, the 1908 decrees are res adjudicaba of all these questions.

To support their contention appellants ’ counsel place great reliance upon the case of Dunham v. Estate of Stephens, 190 Ill. App. 554, decided by the third district. That case involved the question whether the difference between the amount certain legatees would have received under a will, and the amount for which they sold and assigned, their legacies, became intestate property and descended to the testator’s heirs-at-law. The court held that, as the amount paid to said legatees for their interests under the will came from the funds' of the estate, and as a large sum thereby was saved to the estate, the money so saved “became intestate estate and should descend accordingly.” But the facts, upon which the court’s holding was based, differ materially from those in the present case, where, instead of the estate acquiring the interests of the settling legatees, those interests were purchased out of funds belonging to other beneficiaries under the will, and subject to the general trust provisions of the will. In the present case, there was a pending contest over the validity of the will, and also family disputes and differences, and a bargain or compromise agreement was made between all the beneficiaries of the will whereby a decree should be entered sustaining the will, and certain beneficiaries should receive money in consideration of their releasing all their rights and interests under the will. Such compromise agreements are favored by courts of equity. (Cole v. Cole, 292 Ill. 154, 165; Hall v. Hall, 125 Ill. 95, 101; McDole v. Kingsley, 163 Ill. 433, 437.) Furthermore, in the present case, it appears that the bargain (including the other elements of the entire settlement transaction) was confirmed by a decree of a court of equity in July, 1908, and that the bargain, and the entire compromise settlement as agreed to by all parties in interest, was consummated shortly thereafter. In the opinion of the court in the Dunham, case it appears that the agreement in that case “contains no intimation that any person is to secure the benefit of the assignment of the legacies” of those beneficiaries who settled. In the present case it is otherwise. Under the terms of the will of Jonathan Clark, a trust for accumulation, so to speak, was intended and provided for. As stated in the will, he believed it would be for the best interests of the named beneficiaries that his property be held by the trustees “undivided, as long as possible.” He directed that the trust should not terminate until 20 years after the death of the last survivor of his widow and five children. He further directed that the “surplus” of the net income of the property, after paying the expenses, annuities, etc., “may he invested by said trustees from time to time, * * * either in erection of buildings upon any lands I may hold under ground leases, * * * or in repairing or rebuilding any of such buildings, * * * or in the purchase of the fee simple title to any of the lands of which I may hold a ground lease, or in safe, interest bearing securities.” In the July, 1908, decree, the terms and elements of the compromise agreement were fully set forth. In addition to those terms and elements, which we have mentioned above in our statement of the case, were the following, as found in said decree: “The said compromise agreement further contemplates and indudes the provision that when the same shall have been carried into full effect by grants, assignments, releases and payments, * * * all the remainder of the said property not conveyed or assigned to Alice Clark shall remain in the hands of the trustees * * * subject to the trusts of said will in all respects. (Except in respect to such trusts as are by the will created for charitable uses, which charitable trusts are hereby adjudged to be wholly extinguished so far as concerns the trustees under said will and the other beneficiaries thereunder, by and upon the payment to said charitable corporations of said sum of $40,000 each, as herein provided), said property so remaining in the hands of said trustees under said will to be dealt with as in said will directed, during the entire period of said trust, but that the entire trust property as it then is shall be distributed at the expiration of said trust as required by the terms of said will among the then descendants of Jonathan Clark, but none of any of said corporate legatees, or their successors, or persons claiming under them, * * *.”

It thus appears that in. the compromise agreement in the present case, confirmed by said decree, it was agreed between all the parties, including the present complainants, that, if there was any “saving” by virtue of said transactions, it was to be treated as a part of the remainder or residue of the testator’s estate and should be distributed at the expiration of the trust period among the then living descendants of the testator.

In the reply brief of complainants’ counsel are repeated statements to the effect that the money which was paid to the three charitable corporations belonged “to the estate”; that the widow and other heirs of the testator did not purchase out of their own funds the interests of said corporations under the will; that “the trustees merely traded property for money with which to purchase the charities’ interests,” and that “the money was provided by the exchanging of the Follies’ Theatre property with the heirs for the money the heirs were to receive.” We shall not discuss these statements further than to say that in our opinion they are not supported by the evidence, and are contrary to the findings in said July, 1908, decree, and to the order of the probate court, entered when the estate in that court was settled and the executors discharged.

And we are of the opinion that the decree in the present case was correct for the further reason that the former decree of July, 1908, supplemented by the November, 1908, decree, are res ad judicata of the questions under discussion, and a bar to the maintenance of said bill, which is in the nature of a collateral attack upon said decrees, from which no appeal was prosecuted and which stand in full force and effect. (Swiggart v. Harber, 4 Scam. (Ill.) 364, 371; Miller v. Rowan, 251 Ill. 344, 348; Matthews v. Boner, 292 Ill. 592, 595; Beck v. Lash, 303 Ill. 549, 556.) If any of the parties to said consolidated causes, Nos. 279,244 and 240,613,. at the time the July, 1908, decree was entered, thought that as a result of the transactions and compromise agreement there was any intestate property to be distributed they should then have raised the point, and, not having done so, are in no position to do so now under the present bill. “The doctrine of res adjudicata extends not only to every matter that was actually determined in the former suit, but to every other matter which might have been raised and determined in it.” (South Park Com’rs v. Montgomery Ward & Co., 248 Ill. 299, 312; Godschalck v. Weber, 247 Ill. 269, 274; Tinker v. Babcock, 204 Ill. 571, 575.) And said decrees are binding not only upon those parties who were minors at the time they" were entered, but also upon all persons who have since come into being, having interests identical in character or of the same class. (Hopkins v. Patton, 257 Ill. 346, 349; Weborpals v. Jenny, 300 Ill. 145, 155.)

Much of the brief of counsel for the defendant trustees presents contentions and arguments showing that the master’s finding (that, because of said transactions and decrees of 1908, there was a net “saving” of $653,747.05) was wholly unwarranted under the then existing elements and conditions as disclosed from the evidence, but, in view of our holdings, we deem it unnecessary to discuss those contentions or arguments, or the counter ones advanced by complainants ’ counsel.

As to the further contention of complainants’ connsel that both master and court were wrong in finding that “complainants have failed to prove that they are entitled under the law to any increase in the amount of the annuities received by them,” the same is not urged strongly by counsel in their brief, nor was it in the oral argument of the case. Complainants ’ contention that they are entitled to an increase in the amounts of the annuities, over and above those named by the testator, is based upon the fact that the cost of living has increased greatly since the testator’s death in 1902. But this fact cannot justify the court in virtually making another will than that made by the testator, especially as the evidence does not disclose that any of the present annuitants are in want or that there is any necessity for increasing the annuities. (Johns v. Johns, 172 Ill. 472, 485; Cary v. Cary, 309 Ill. 330, 335.) Furthermore, .if the court should increase the amounts of the annuities received by the present annuitants, it would decrease the amounts to be received at the expiration of the trust period by the then living descendants of the testator, and this would not be justified under the terms of the will and the evident intention of the testator. (Ruggles v. Tyson, 104 Wis. 500, 520; In re Ryder, 11 Paige Ch. 185, 187.) Counsel admit that they can find “no case on all fours” sustaining their contention.

And we do not think that the chancellor erred in refusing to allow to complainants the solicitors’ fees of their counsel to be paid out of the funds of the estate. Their bill did not involve a construction of an ambiguous will, and the services rendered by their solicitors were not rendered for the advantage of the estate in the trustees’ hands. The bill was rather an attack upon the fund in an effort to reduce it. It did not purport to aid the trustees in their administration of the trust or in their complying with the will of the testator. (Wilson v. Clayburgh, 215 Ill. 506, 507; Haines v. Hay, 169 Ill. 93, 97; Billings v. Warren, 216 Ill. 281, 288; Board of Administration v. Stead, 259 Ill. 194, 210.)

The decree of the circuit court, dismissing complainants’ bill for want of equity, should be affirmed, and it is so ordered.

Affirmed.

Barnes, P. J., and Scanlan, J., concur.


text:
    L. M. Snite, trading as Local Loan Company, Appellee, v. Chicago & Eastern Illinois Railway Company, Appellant.
    Gen. No. 31,680.
    1. Assignments — effect of two assignments of wages. Under Cahill’s St. ch. 74, ¶ 30, relating to the assignment of wages, only 50 per cent of the wages can be recovered by the assignee although the employee has made two assignments to him of 50 per cent each.
    2. Statutes — consideration of legislative intent. It is a fundamental rule in the construction of a statute that effect should be given to the legislative intent.
    Appeal by defendant from the Municipal Court of Chicago; the Hon. Theodore P. Ehler, Judge, presiding.
    Heard in the second division of this court for the first district at the March term, 1927.
    Reversed.
    Opinion filed December 27, 1927.
    Edward W. Rawlins and Don C. Wray, for appellant;H. T. Dick, of counsel.
    No appearance for appellee.
   Mr. Justice Gridley

delivered the opinion of the court.

In a fourth-class action in contract, No. 1,181,468, based upon certain provisions of an act entitled, “An Act to license and regulate the business of making-loans in sums of three hundred dollars ($300) or less,” etc., approved June 14, 1917 (Cahill’s St. 1927, ch. 74, p. 1533), and commenced in the municipal court on May 3, 1926, there was a finding and judgment on December 23, 1926, against defendant for $35.87, and this appeal followed. Plaintiff has not appeared or filed a brief in this Appellate Court. It is provided in section 4 of the act, Cahill’s St. ch. 74, ¶ 30, as. follows:

“No assignment of any salary or any wages, earned or to be earned, given to secure any loan made under this Act, shall be valid, unless in writing signed by the borrower; nor shall such assignment be valid unless given to secure an existing debt or one contracted simultaneously with its execution.
“Under such assignment or order for the payment of future salary or wages given as security for a loan made under this Act, a sum of fifty (50) per centum of the borrower’s salary or wages shall be collectible by the licensee from the time that a copy thereof, verified by the oath of the licensee, or his agent, together with a verified statement of the amount unpaid upon such loan, has been served upon the employer.”

On the trial it appeared from plaintiff’s evidence that on August 30, 1925, F. E. Slanker, one of defendant’s employees, signed and delivered his promissory note of that date for $125, payable to plaintiff’s order in monthly instalments of $10 each on the 30th day of each and every month, with interest thereon at the rate of 3% per cent per month; that on the same day Slanker signed and delivered to plaintiff, as assignee, his written assignment of “fifty (50) per cent of all salary and wages, * * *, earned or to be earned by me within five years from date hereof in the employ of Chicago and Eastern Illinois Railway Company, * * that in said assignment it is stated that Slanker authorizes and directs his said employer to pay the salary and wages to said assignee; that he constitutes said assignee his attorney to take all necessary legal proceedings for the recovery of the same in his name, etc.; that he releases and discharges his said employer from all liability to him on account of any moneys paid by it, etc.; and that “This assignment is executed and delivered as security for a loan of $125 made to me this day by said assignees becoming due in monthly installments of $10 each,” etc.; that on the reverse side of a copy of said assignment introduced in evidence is a certain affidavit, signed and verified by an agent of said assignee on February 8, 1926, and also a notice to said employer (defendant) signed by said assignee (plaintiff) by said agent; that in said affidavit it is stated that said copy of the assignment is a true one and that “there is now due and unpaid on the loan secured by said assignment the sum of $105 of principal, with interest thereon at the rate of 3% per cent per month from January 25, 1926”; that in said notice defendant is directed to “hold all moneys now or hereafter in your hands which would otherwise be payable to' said F. E. Blanker, subject to my order”; and that on February 9,1926, the copy of said assignment, together with said affidavit and notice, were duly served upon defendant.

On the trial also it was stipulated and agreed between the parties as follows:

“That at the time the notice of assignment, dated August 30, 1925, * * * was served on this defendant, the plaintiff simultaneously served on it a notice of another and additional assignment of wages, dated August 4, 1925, executed by the same employee, F. E. Blanker, upon which last referred to assignment plaintiff brought suit against this defendant, in this court, and in which suit, known as No. 1181467, said plaintiff recovered a judgment in this court on December 23, 1926, for the sum of $35.87, and costs, which judgment was this day paid and satisfied.
.“-That at the time said notices of assignments were and each of them was served, and at the time said two suits were, and each of them was started, the defendant held as wages the sum of $71.74, and no more, due to and earned by said F. E. Blanker during the period from February 1st to February 15th, 1926, inclusive; that since February 15, 1926, said F. E. Blanker has not earned or received, or since February 8, 1926, been paid any wages or other sum by this defendant ; that this defendant now holds as wages due said F.'E. Blanker the sum of $35.87 and no more, being one-half of said wages earned by said F. E. Blanker in the period aforesaid, which sum said F. E. Blanker claims is due and owing to him.”

Defendant’s counsel, in their printed brief and argument here filed, state that upon the trial plaintiff took the position that, because there were two assignments instead of one, he was entitled to recover the entire wages due to Blanker, while defendant contended, and now contends, that under the act in question, regardless of the number of assignments, only 50 per cent of the wages can be recovered by the assignee — the other 50 per cent belonging to the employee.

The constitutionality of the act in question was upheld in People v. Stokes, 281 Ill. 159. In distinguishing the act from another previous act (held unconstitutional in Massie v. Cessna, 239 Ill. 352) our Supreme Court said (p. 172): “In this instance the statute under consideration obviates the objections there pointed out by limiting the amount of wages or salary which may be assigned to a sum not exceeding $300 amd not to exceed fifty per cent of the salary earned per month, and in that way protects the small-salaried person, equally with the wage earner, * * *V” After reviewing the act, and in view of the above holding, we are of the opinion that one of the purposes that the legislature had in mind was the protection of the small wage earner or the small-salaried person from, so to speak, his own improvidence, and that to this end it was provided that only “fifty (50) per centum of the borower’s salary or wages” should be collectible by an assignee. It is a fundamental rule that in the construction of a statute effect should be given to the legislative intent. (People ex rel. Duckwitz v. Brown, 306 Ill. 245, 249; People ex rel. Brodersen v. McEldowney, 308 Ill. 575, 577.) To allow the entire salary or wages of an employee to be collectible by an assignee, where two assignments instead of one have been made, would, we think, nullify the plain purpose of the act in question. It appears from the present record that defendant held wages, belonging to its employee, Slanker, amounting to $71.74; that plaintiff obtained judgment against defendant for 50 per cent thereof, or $35.87, in another suit and that that judgment has been paid and satisfied. The present judgment is for the other 50 per cent of said amount in defendant’s hands. As we read the statute this other 50 per- cent rightfully belongs to Slanker, and is not collectible, by judgment or otherwise, by plaintiff by virtue of said assignments.

Accordingly, the judgment of the municipal court in the instant case against defendant for $35.87 is reversed.

Reversed,

Babnes, P. J., and Scanlan, J., concur.


author: Mr. Justice Scanlan

text:
    The Covenant Club of Chicago, Appellant, v. John R. Thompson et al., Appellees.
    Gen. No. 31,774.
    1. Abatement and revival — abatement for death of party in tort action not based on damage to real or personal pi-operty. An action for damages by a landowner against the landlord and tenants of adjoining property, because of the interference with the work of constructing a building on plaintiff’s land and the extra expense incident thereto as the result of the flow of sewage and water from adjoining premises, is not an action to recover damages to real or personal property, and the death of the landlord abates the cause of action as to him, but it survives as to the surviving defendants.
    ■2. Appeal and error — reversal of judgment against several defendants for error as to one. A judgment against plaintiff entered on a directed verdict for the defendants in an action of tort will be reversed where the judgment is erroneous as to one of the defendants, although the action has abated as to such defendant from his death pending the appeal, although plaintiff alleged a joint liability of the tortfeasors and failed to prove the same, and although only nominal damages might have been recovered against the deceased party.
    3. Appeal and error — effect of abatement of action of tort against one of several defendants. The abatement of an action of tort against one of several defendants by his death pending an appeal by plaintiff from a judgment on a directed verdict for all the defendants does not require that the appeal should be considered as if the deceased party were not a party to the suit in the lower court.
    Appeal by plaintiff from the Superior Court of Cook county; the Hon, William N. Gemmill, Judge, presiding.
    Heard in the second division of this court for the first district at the March term, 1927.
    Reversed and remanded.
    Opinion filed December 27, 1927.
    Rehearing denied January 13, 1928.
    Joseph F. Grossman, for appellant.
    Mayer, Meyer, Austrian & Platt, for appellee John R. Thompson Co.
    Ryan, Condon & Livingston, for appellee Grant Hotel Co.
    Cloyes & Klingler, for appellee Maria Marx.
   Mr. Justice Scanlan

delivered the opinion of the court.

The Covenant Club of Chicago, a corporation, plaintiff, in the superior court of Cook county, sued John R. Thompson, John R. Thompson Company, a corporation, The Grant Hotel Company, a corporation, and Maria Marx, defendants, in trespass on the- case. There was a trial before the court with a jury and at the conclusion of the evidence for the plaintiff the trial judge, on motion of all of the defendants, instructed the jury to find all of the defendants not guilty. Judgment was entered on the verdict and this appeal followed,

In 1923 the plaintiff was possessed of the premises known as Nos. 10 to 20, inclusive, North Dearborn street, Chicago. The defendant John it. Thompson was possessed of the premises located at the northwest corner of Dearborn and Madison streets. They were L shaped and adjoined those of the plaintiff on the south and west and were improved with a seven or eight-story building known as The Grant Hotel. The defendants John R. Thompson Company, The Grant Hotel Company and Maria Marx wern tenants of the defendant Thompson. The defendant The Grant Hotel Company occupied all of the upper floors of the building, a small part of the ground floor fronting on Dearborn street, and the boiler room and room for baggage in the basement. The stores on the ground floor fronting on Madison street were occupied by the defendant John R. Thompson Company and several other tenants. The defendant Maria Marx occupied the eastern portion of the basement immediately south of and adjoining plaintiff’s premises.

At the time in question a contractor employed by the plaintiff to erect a building on plaintiff’s premises was excavating the soil and digging wells for caissons. The plaintiff claimed that the defendants maintained a defective system of drains for sewage and waste water and that they permitted sewage and waste water to be diverted from the premises of the defendants and to flow and to be cast upon the land of the plaintiff and into the caisson wells and excavations, and that the plaintiff was obliged to and did lay out and expend large sums of money for pumping and draining the sewage and waste water and that the work of construction was greatly delayed and the plaintiff thereby damaged.

On June 18,1927, while this appeal was pending, the defendant John R. Thompson died, and his death has been suggested in this court and has been made a matter of record. No motion has been made by the plaintiff or any of the defendants to substitute the personal representatives of that defendant. In the brief of the defendant John It. Thompson Company it is argued that the cause of action has abated as to the defendant John R. Thompson because of his death. The counsel for the plaintiff, in its reply brief, contends that the cause of action has not abated;„ that under section 123 of the Administration Act, Cahill’s St. ch. 3, ¶ 125, actions for the recovery of damages for injuries to real or personal property survive. ■

The plaintiff in the first count of the declaration alleges that “it was engaged in erecting a building on its land above described, and was digging wells upon this land for caissons as a foundation for said building, and was excavating said land for the basement of said building, of which the defendants had knowledge or notice. * * * That defendants wrongfully and carelessly caused or permitted the sewage and water from the said premises and said appurtenances of defendants to be diverted and cast upon the land of the plaintiff and into the caisson wells and excavations then in process of work, and the plaintiff was thereby obliged to and did lay out and expend large sums of money for pumping and draining said sewage and water, and the work of construction was thereby greatly delayed.- To the damage of plaintiff in the sum of Twenty Thousand ($20,000) Dollars.” In the second, third and fourth counts are allegations substantially the same as those just quoted. In its declaration the plaintiff does not seek to recover damages because of any injury to the realty. It seeks compensation for the delay in the work of construction as the result of the sewage and waste water that flowed upon its land and the expense incident thereto. The theory of fact of the plaintiff upon the trial was that the water and sewage leaked out of a broken, cracked, disconnected, obstructed and clogged system of drains, and flowed upon the land of the plaintiff and delayed the work of construction, and caused the plaintiff to be put to extra expense. No evidence was introduced tending to show damages to the plaintiff because of any injury to the realty. In the brief of the plaintiff filed in this court before the death of John R. Thompson, counsel plainly takes the position that the suit is one for damages because of the interference with the work of construction of the building and the extra expense incident thereto.

It is very clear that this is not an action to recover damages for injury to real property. And, under the ruling in Jones v. Barmm, 217 Ill. 381, it is not-an action to recover damages for injury to personal property. In our judgment, the death of the defendant John R. Thompson abates the cause of action as to him but it survives, under the statute, as to the surviving defendants.

The plaintiff contends, inter alia, that it made out a prima facie case of liability against the defendant John R. Thompson and that the trial court erred in granting the motion of all of the defendants to instruct the jury to find all of the defendants not guilty and in entering judgment on the verdict. After a careful examination of the evidence we have reached the conclusion that this contention is a meritorious one. The judgment was against the plaintiff and in favor of all of the defendants. It is a unit as to all of the defendants and if erroneous as to one it is erroneous as to all. It cannot be reversed as to one and affirmed as to others. (Seymour v. O. S. Richardson Fueling Co., 205 Ill. 77.)

The fact that the present action now abates as to the defendant John R. Thompson does not mean that this appeal should be considered as if he were not a party to the suit in the court below. The plaintiff contends that the trial court erred in entering the judgment against the plaintiff and in favor of all of the defendants, and it has a right to have this question determined by this court on this appeal, notwithstanding the death of the defendant Thompson.

In the view that we take of the case, it is unnecessary for us to decide whether the plaintiff made out a prima facie case as to any of the other defendants.

It is argued that even if John R Thompson was otherwise liable, the judgment must be affirmed because the plaintiff alleged a joint liability on the part of the defendants and failed to prove the same. There is no merit in this contention, “In an action of tort under a declaration charging two or more defendants with jointly injuring a plaintiff there may be a verdict and recovery against one, only, of the defendants, the rule in this regard being different in actions of tort from what it is in actions upon contract.” (Linguist v. Hodges, 248 Ill. 491, 495.)

The trial court, in deciding the motion of the defendants to instruct the jury, stated that he would have felt bound to submit the question of the alleged negligence of the defendants to the jury for decision, and he based his ruling solely on the ground that the plaintiff was obliged to prove that it had sustained actual damages and that it had failed in this regard. The defendants contend that the trial court was justified in his ruling in the matter of damages and they argue that there is an absence of evidence in the instant case as to the extent of the pecuniary loss of the plaintiff; that the law requires such amounts to be specially proved; that where the circumstances of the case are such as to make the amount of damages difficult of exact ascertainment, it is nevertheless incumbent on the plaintiff to afford the jury some tangible means of arriving at the amount of damages and that the plaintiff failed in that regard. It is a sufficient answer to this contention to say that in any event if the plaintiff made out a prima facie case of negligence against the defendant John R. Thompson it would have been entitled to nominal damages as to him.

For the reasons stated, the judgment- of the superior court of Cook county is reversed and the cause is remanded.

Reversed and remanded.

Barnes, P. J., and G-ridley, J., concur.