author: Mr. Justice Ryner

text:
    Mary Dausch, Appellee, v. Harry B. Barker et al., Appellants.
    Gen. No. 33,299.
    Opinion filed November 6, 1929.
    Rehearing denied December 13, 1929.

      Albert Sabath, for certain appellant; Charles Hudson, of counsel.
    John H. Hoglund, H. Clay Calhoun and Herbert S. Rand, for appellee.
   Mr. Justice Ryner

delivered the opinion of the court.

This is an appeal by the defendant, Harry B. Barker, from an order of distribution in a partition proceeding. The transcript of record consists of copies of the decree of partition, entered in the circuit court of Cook county on April 13, 1927, the order of affirmance of that decree by the Supreme Court of the State, the master’s .report under an order of re-reference after a report of sale had been approved, together with the' testimony relating to solicitors ’ fees, the order directing the master to hold out of the proceeds of sale the ” sum of $8,376.35, representing the total of certain judgments, until the further order of court, the exceptions of the defendant Barker, to the master’s report," and the order of distribution.

The decree of partition found that the complainant and the defendant were tenants in common of the real estate described in the bill of complaint, that partition should be had, and that certain judgments constituted liens upon the interest of the defendant, Barker. An appeal was taken to the Supreme Court of this State, where the decree was in all respects affirmed. No question was raised or considered in the Supreme Court respecting the findings in the decree that the judgments constituted liens upon the interest of Barker, or as to the effect of the findings.

The trial court found that there were eight judgments entered in the municipal court of Chicago against Fred Linick, from whom Barker acquired his title, which constituted liens upon the interest of Barker. The court found the holders of the judgmeats, that dates and amounts of the judgments to be as follows:

“Name Date Amount
Erie Amusement Co.......Feb. 4, 1920 $ 520.00
Harry R. Woolf...........Feb. 27, 1920 400.00
Julius C. Birck............Apr. 19, 1920 825.00
Mary H. End.............Oct. 11, 1920 87.50
Hotel La Salle Co.........Oct. 20, 1920 251.85
The Tribune Co...........June 7, 1921 1043.30
Leon A. Berezniak........Apr. 28, 1922 1474.80
Stony Island Trust and
Savings Bank...........Nov. 15, 1922 1677.12”

In adjudicating the rights and interests of the parties to the proceeding the decree provided as follows:

“It is therefore ordered, adjudged and decreed that the complainant, Mary Dauseh, and the defendant, Harry B. Barker are each entitled to a one-half part of said premises, in fee simple, each half part, however, being subject to the lien of the three trust deeds hereinbefore set forth and referred to and the one-half part thereof of „the said Harry B. Barker being also subject to the liens of the judgments and decree against Fred Linick hereinbefore set forth.”

The original decree of partition was entered on April 13, 1927. The order of the Supreme Court affirming the decree was filed in the circuit court on March 8, 1928. The property was sold on April 30, 1928. The order of distribution was entered on October 16,1928. Although the decree of sale is not contained in the record, we infer from the proceedings had that the property was sold free and clear of the liens of the judgments. The order of distribution directed the master to pay the amounts of all of the judgments out of Barker’s share of the proceeds of the sale.

During the pendency of the appeal to the Supreme Court and within seven years after the rendition of her judgment, Mary H. End, one of the judgment creditors, levied upon the interest of Barker. The Hotel La Salle, another judgment creditor, redeemed. These proceedings were had under the provisions of the statute of 1917, Cahill’s St. ch. 77, If 18, note, relating to judgments and executions. No sale of the property-was had, but the judgments of both parties were ordered to be paid out of Barker’s share of the proceeds of sale. Inasmuch as no question is raised on this appeal about the right of the court to order payment of these two judgments, it may be assumed that they have been paid and satisfied. None of the other judgment creditors redeemed.

.The appellant says that the liens of the remaining six judgments have been extinguished because of the failure of the holders of the judgments to make successive redemptions pursuant to the statute of 1917, Ca-hill’s St. ch. 77, if 21, note. The contention is not sound. The right of redemption is a statutory one and in nowise dependent upon the existence or nonexistence of a lien. Neither End nor the Hotel La Salle caused the property to be sold. Instead, their judgments were ordered paid and satisfied out of Barker’s share of the proceeds of sale. After payment of the judgments the holders of them had no right to proceed further under their levies or certificates of levy. Their rights to so proceed had terminated. The legal situation was the same as if the defendant, “or any person interested in the real estate through or under” him, had, under section 18 of the statute of 1917, paid the amount stated to be due in the certificate of levy, with interest, to the officer who issued the certificate. The certificate would, by the terms of the statute, become null and void. The judgments were ordered paid out of monies belonging to the defendant, Barker, and the payment should be given the same legal effect as if he had paid the money directly to the officer issuing the certificate of levy.

It is also urged by the appellant that the court erred in directing the master to pay four of the judgments out of Barker’s share of the proceeds of sale, for the reason that, at the time the order of distribution was entered, more than seven years had elapsed from the dates of entry of the judgments without the holders having levied upon the property in question or having-redeemed from the levy made by the judgment creditor, Mary H. End. The appellant having failed to have incorporated in the transcript, of the record a copy of the decree of sale, we are unadvised as to whether it contained any provision that the judgments be paid out of the proceeds of sale. We have before us only a praecipe record, consisting of the decree of partition, the master’s report, and the order of distribution. If the decree of sale contained anything favorable to the judgment creditors they should have proceeded, under section 81 of the Practice Act, Ca-hill’s St. ch. 110, jf 81, to have a copy of it incorporated in the transcript of record, or made a motion to have this court order the clerk of the trial court to certify the decree as an additional part of the record. The judgment creditors not having availed themselves of this privilege we shall consider the case on the record before us. This is the practice advocated by the Supreme Court of this State. Weil v. Mulvaney, 262 Ill. 195.

The briefs contain no authority directly in point. The defendant, Barker, contends that the decree of partition did not have the effect of enlarging any rights possessed by the judgment creditors. On behalf of the latter it is urged that the judgment liens became merged in the decree and that they were not obliged to levy within the seven year period.

In the case of Spencer v. Wiley, 149 Ill. 56, not cited in the briefs, the Supreme Court of this State announced a principle of law which we consider applicable to the facts in the present case. The proceedings in that case are not fully set forth but sufficient appears to disclose that the commissioners in a partition proceeding had made partition of the property involved and that the court entered a decree confirming their report. The decree, among other things, pror vided as follows: “And the court further finds that . . . said last described tract belonging to Sarah Wiley ... is subject to the following liens and incumbrances: First, a trust deed from said Benjamin B. Wiley to Daniel L. Shorey, trustee, dated April 19, 1873, to secure the sum of $11,090, represented by one note of said Wiley, payable to the order of Gideon L. Spencer, 'maturing on or before the 27th day of June, 1875, with interest thereon at the rate of six per cent per annum after maturity, which said note is now the property of said Gideon L. Spencer, and on which there is due the sum of $17,097.08, — which said last named trust deed and debt is a first lien upon said premises last described, subject to the following tax liens thereon.”

On April 30, 1890, the holder of the mortgage instituted foreclosure proceedings, setting up the findings in the partition proceedings, above set forth, and piaying for a foreclosure against the lands set off to Sarah Wiley. A plea of the statute of limitations was successfully interposed. A decree was entered dismissing the bill of complaint which was affirmed by the Appellate and Supreme Courts of this State. The Supreme Court quoted section 24 of the partition statute, Cahill’s St. ch. 106, 24, which then read and now reads as follows:

“A person having a mortgage, attachment or other lien on the share of a part owner shall be concluded by the judgment in partition so far as it respects the partition and the assignment of the shares, but his lien shall remain in full force upon the part assigned to or left for such part owner,”

The court then went on to say:

“It seems too clear for argument that section 15 does not give the court power to enter a money judgment or decree in favor of one party to the suit against another, — that is to say the court could not, under that section, enter a judgment or decree against the maker of the note described in the mortgage, and enforce its payment by execution or otherwise. The action is for no such purpose. The proceeding is for the purpose of severing the interests in common, and the power of the court to ascertain and declare the right, title and interest of the mortgagee is in no sense a power to enforce the collection of his debt. The debt may not be, and often is not, due for years after the partition. The jurisdiction over the parties to the mortgage is for the purpose, only, of enabling it to make partition of the mortgaged property fairly and equitably between the owners. Under that section it is not made the duty of the court to ascertain the amount due on a debt secured by mortgage. It may ascertain and declare that the mortgagee has a valid mortgage upon the interest of one of the tenants in common, and give judgment accordingly. By that judgment, whether it declares the amount then due on the debt or not, the relation of debtor and creditor, between the parties to the mortgage, is not changed, but, under the provisions of section 24, the mortgagee’s lien remains in full force upon the part assigned or left for the mortgagor. If, upon the coming in of the report of the commissioners, it is found necessary to sell the land, the court may ascertain the amount due on the mortgage debt, and order it paid out of the distributive share of the mortgagor in the proceeds of the sale. But that may be done even after the sale. No sale being ordered in the proceeding in question, finding the amount due was wholly unnecessary and of no effect whatever.

“Again, no attempt was made in that proceeding to render a judgment or enter a decree for the mortgage debt. The order .upon which this bill is based does no more than declare that the interest set off to Sarah Wiley is subject to an incumbrance, and then describes that incumbrance. It was not intended to affect the indebtedness as to its maturity or duration. It has no more effect on a right of action to recover that indebtedness than if it had been made before the $11,090 note became due. In that case no one would claim that the mortgage could be foreclosed immediately upon rendering the decree, and with no greater reason can it be said that the right was thereby extended beyond the period of limitation.”

In the instant case, the amounts of the judgments 'were fixed and the judgments declared to constitute liens upon Barker’s interest in the premises, in the decree for partition, before it was determined that the premises were not susceptible of actual partition. The decree contained no provision that the judgments should be paid out of the proceeds of sale. In Spencer v. Wiley, supra, actual partition had been made when the court found the mortgage to be a lien upon the lands set off to one of the parties to the partition suit. The court in effect held that the mortgage lien did not merge in the decree in the partition suit. We perceive no reason why the same rule should not apply to the present case.

For the foregoing reasons, the order of distribution of the circuit court of Cook county is reversed in so far as it orders payment of the judgments held by Erie Amusement Company, Harry B. Woolf, Julius C. Birck and the Tribune Company. In all other respects the order of distribution is affirmed.

Order reversed in part-and affirmed in part.

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

Additional Opinion on Denial oe' Petition eor Rehearing ,

The petition for rehearing are denied and the opinion of this court heretofore filed herein on November 6, 1929, is modified by filing an additional opinion in words and figures as follows:

Upon the application of the defendant, Harry B. Barker, for a rehearing, it has been called to our attention that the order of distribution, appealed from, does not direct the master in chancery to pay the End and Hotel La Salle judgments out of the proceeds of sale. The opinion, rendered in the cause, is modified by striking from it all statements and assumptions that the order of distribution provided for the payment of these judgments. Since the rendition of the opinion, a copy of the decree of sale and a copy of the order, approving the master’s report of sale, have been certified to us. The decree of sale provides that.the property should be sold free and clear of all liens, except the lien for the general taxes for the year 1928, special assessments and the liens created by three certain trust deeds. This being true, we are not impressed with counsels’ assurance that the judgment creditors, in question, relied upon their levies. So far as the record discloses, there have been in the hands of the master in chancery, ever since the sale, sufficient funds, retained from the proceeds of sale, to pay and satisfy these judgments. Furthermore, the property having been sold free and clear of all judgment hens, the Hotel La Salle, being a party to the suit, was barred from proceeding to a sale under its levy. It has been divested of its lien and of any right to proceed against the property for the purpose of enforcing the hen it ■ once had. With the exception of the modification above noted, the original opinion of this court is, in all-respects, approved and confirmed.

Petitions for rehearing denied and additional opinion 'filed.


source: Caselaw Access Project

author: Mr. Presiding Justice Barry

license: Public Domain

text:
    Susan A. Jones, Appellee, v. Loaleen Mutual Benefit Association, Appellant.

      Opinion filed July 26, 1929.
    Smith & Smith and Hal G. Gallimore, for appellant.
    White & Quindry, for appellee.
   Mr. Presiding Justice Barry

delivered the opinion of the court.

On May 25, 1926, the Loaleen Mutual Benefit Association issued a benefit certificate for $1,000 to appellee’s husband 'in which she was named as the beneficiary. Insured died February 12, 1928, and this suit was brought to recover the insurance. A jury having been waived the court found the issues in favor of appellee and rendered judgment for $1,000.

Appellant contends that it is not liable because it never issued the certificate.- The insurer was organized under section 29 of the General Corporation Act of 1872, Cahill’s St. ch. 32, If 159. In 1927 that statute was so amended that the insurer could only retain its corporate existence for six months after July 1, 1927, and for the sole purpose of winding up its business or reincorporating under some act, the enforcement of which comes "within the jurisdiction of the Department of Trade and Commerce.

In 1927 the legislature passed another act for the incorporation of mutual benefit associations on the assessment plan, intended to benefit the widows, orphans, heirs and devisees of the deceased members, etc. Cahill’s St. ch. 73, H 435 (1). That statute authorized organization of such corporations but provided: “The maximum amounts of benefits it is intended to pay and which shall not be in excess of the following: For persons becoming members between the ages of one (1) and five (5) years, the sum of $200.00; for persons becoming members between the ages of six (6) and nine (9) years, the sum of $500.00; for persons becoming members between the ages of ten (10) and fifty-five (55) years, the sum of $1,000.00; for persons becoming members between the ages of fifty-six (56) and sixty-five (65) years, the sum of $800.00; and for persons becoming members between the ages of sixty-six (66) and seventy (70) years, the sum of $500.00.” That provision is contained in section 2 of said act and pertains to the organization of a new corporation.

Section 15 of the same act, Cahill’s St. ch. 73, if 435 (15), provides that any existing domestic corporation transacting business under section 29 of the Corporation Act of 1872 may reincorporate under the new act of 1927 by filing a declaration with the Director of Trade and Commerce of its desire so to do. That section providing for reincorporation says nothing whatever about existing benefit certificates. No attempt is made by the legislature to disturb such certificates, nor is any authority granted to the insurer or the reincorporated corporation to reduce the liability of the insurer on existing benefit certificates.

On November 18, 1927, the directors of the insurer corporation filed their declaration, under section 15 of the act of 1927, with the Director of Trade and Commerce expressing their desire to reincorporate under its existing corporate name and a reincorporation was duly effected. Appellant is the reincorporated corporation.

The third paragraph of the declaration filed with the Director of Trade and Commerce for the purpose of reincorporation reads as follows: “3. All of the assets of the existing corporation, herein referred to as the corporation, shall be transferred to the reincorporated association, herein referred to as the association, and the association shall assume all the liabilities of the corporation. Likewise all of the members of the association shall, ipso facto, become members of the association and the association shall issue to each of such members a certificate of membership, the purpose of the provisions of this section being to effect the continuation of the corporation in so far as is possible.” The fourth paragraph contains the following provisions: “The maximum amount of benefits to be paid under its certificates of membership are as follows: All persons becoming members between ages one (1) year inclusive, to five (5) years inclusive, shall be $200.00.. Ages six (6) years to nine (9) years inclusive, shall be $500.00. All persons becoming members between the ages of ten (10) years and fifty (50) years inclusive, shall be $1,000.00 maximum. All persons becoming members between the ages of fifty-one (51) years and sixty-six (66) years inclusive, shall be $500.00 maximum. All persons becoming members between the ages of sixty-six (66) years and seventy (70) years inclusive, shall be $250.00 maximum.” It is a well-settled rule of law that a statute should not be so construed as to give it retroactive effect unless it contains language clearly showing that the legislature intended that it should have such effect. It will be observed that the statutory limitation as to the amounts for which certificates may issue is confined to persons “becoming members.” There is no reference to existing insurance contracts. The same is true with reference to the amounts for which certificates may be issued under paragraph 4 of the declaration filed with the Director of Trade and Commerce.

Appellee’s husband became a member and the certificate was issued to him long before the passage of the act of 1927. He did not “become a member” after the new law became effective.

We are of the opinion that it would be doing violence to the intention of the legislature as expressed in the act of 1927 to hold that appellant was thereby authorized to reduce its liability on the existing insurance contract from $1,000 to $500. In the case at bar appellant contends that it is not liable at all on the certificate sued on; that its only liability in any event does not exceed $500 in accordance with paragraph 4 of the declaration aforesaid.

A company, taking advantage of a statute permitting a corporation organized under a former statute to re. incorporate under a statute superseding it, does not thereby become a new corporation; its identity' is unchanged and its liabilities continue. 10 Cyc. 288. The mere reincorporation or amendment of the corporate charter will not affect the identity of the corporation, or relieve it from its previous liability. 15 A. L. R. 1132, note. The same general principle was recognized in Livingston County Agricultural Society v. Hunter, 110 Ill. 155; Acorn Lumber Co. v. Friedlander Box Co., 240 Ill. App. 425; Chicago Smelting & Refining Corp. v. Sullivan, 246 Ill. App. 538.

In our opinion the legislature'intended that if an existing corporation under the act of 1872 desired to reincorporate under the act of 1927 it might do so and, having reincorporated, its liability under existing insurance contracts should continue but that as to all - -new business the policies issued should be in accordance with the limited liability fixed by the act of 1927. Such a construction is more consonant with reason and justice than the one contended for by appellant. Appellant so construed the law in its declaration for .reincorporation. It there declared that it took over all of the assets and that it assumed all the liabilities ; that all of the members, ipso facto, became members of the reincorporated association. It now says that the third paragraph of the .declaration was forced upon it by the Director of Trade and Commerce but we find nothing in the record to support that contention. So far as the record shows, the declaration was voluntarily made for the purpose of reincorporation.

The certificate sued on provides that upon satisfactory evidence of the death of the insured appellant will pay to appellee $1,000, but that if one full contribution amounts to less than $1,000 then it will only pay an amount equal to one dollar per member. The amount which was prima facie due on the certificate was $1,000. Appellant offered no evidence that one full assessment would not produce that amount. In the state of the record appellee was entitled to recover $1,000. Metropolitan Safety Fund Accident Ass’n v. Windover, 137 Ill. 417; Covenant Mut. Life Ass’n v. Kentner, 188 Ill. 431; Maloney v. North American Union, 177 Ill. App. 658.

In our opinion appellant has failed to point out any reversible error and the judgment will be affirmed.

Affirmed.


author: Mr. Justice Wolfe

text:
    Franklin County Building & Loan Association, Defendant in Error, v. D. W. Blood et al., Plaintiffs in Error.

      Opinion filed July 26, 1929.
    D. F. Moore, for plaintiffs in error.

      Moses Pulverman and Frank E. Trobaugh, for defendant in error; Tilman B. Cantrell, of counsel.
   Mr. Justice Wolfe

delivered the opinion of the court.

The Franklin County Building & Loan Association filed a bill to foreclose a mortgage, to the May term, A. D. 1927, of the circuit court of Franklin county. The amended bill alleges that the complainant was a building and loan association organized under the laws of 1879 and amendments thereto. The bill further alleges that on the 12th day of November, A. D. 1921, D. W. Blood became a member -of said association and subscribed for twelve shares of the capital stock; that certificates of stock were issued to him for said shares, that on the same day he became indebted to complainant in the sum of $1,200 for money loaned to him, and to secure the same pledged his stock and executed the note and mortgage involved in this suif. The bill further avers that the by-laws of the complainant provide that monthly instalments be paid on stock with premium and interest on each share; that neglect to pay said instalments when due subjected the defendant to pay a fine on each share of stock, and neglect to pay such instalments for six months subjected the stock to forfeiture by resolution of complainant’s board of directors.

The bill further alleges that the complainant is the legal and equitable holder and owner of the note and mortgage and entitled to all the benefits of the same; that it is expressly stipulated in said mortgage that in case default should be made in the payment of said obligations according to the tenor and effect of said mortgage, or for the nonpayment of taxes, etc., the whole of such amount should become due and the complainant upon the resolution of its board of directors might foreclose said mortgage.

The bill further alleges that for a consideration of $50 the said D. W. Blood conveyed the said premises to the defendant, T. I. Galloway, but that Galloway did not assume or agree to pay said mortgage; that default has been made in the payment of the instalments, as provided in said writing, for more than six months and default has been made in payment of taxes and insurance ; that the complainant, by a resolution of its board of directors duly adopted, has elected to forfeit the stock and mature the debt and bring this suit to foreclose the mortgage.

The defendants D. W. Blood and Grace O. Blood were defaulted. The defendants T. I. Galloway and Jennie Galloway filed two pleas and an answer to the bill. The first plea avers that the complainant at and before the commencement of the suit and since that time has not been either an actual or artificial person and at that time had no legal entity; that the certificate of complete organization of said association was issued May 24,1917, and was not filed for record in the office of the circuit clerk and recorder until the 21st day of December, 1921; that at the time of the organization of said association the City of Benton, where said association was located, was a city of more than 5,000 inhabitants and only 200 shares "of the capital stock was subscribed for, before the said certificate was issued; that said association did not organize and proceed to do business until after the statute of 1879 was repealed.

The second plea averred that on account of the facts as stated in plea No. 1, the Building & Loan Association was not a legal entity and had no authority to become the mortgagee or payee in the note and mortgage.

The answer filed denied in substance all of the material allegations of the bill and demanded strict proof of the same; denied that the complainant was the legal or equitable owner of the note or mortgage or entitled to any of the benefits of same. The answer avers that the loan is usurious and is not made in compliance with the statute of the State of Illinois, nor in compliance with the by-laws of the complainant.

To these pleas and answer the complainant filed a replication. The cause was heard in open court before the chancellor who found that the allegations in the amended bill were true as therein stated and the equities therein were with the complainant, and found that the amount due from defendants to the complainant was $1,372.25, including attorneys’ fees, costs, etc., and ordered the property sold to satisfy this decree. From this decree the defendants, T. I. Galloway and Jennie Galloway, bring the case to this court for review.

It is first contended that the complainant Building & Loan Association is not a legal entity. The gist of their argument and the substance of the two special pleas, as well as the facts set up in the answer, is that because of the fact that the charter of the complainant association was isued May 24, 1917, but not recorded until December 21, 1921, thereby the charter elapsed and became null.and void and that the acts of the corporation thereunder were and are a nullity; that it is not and never was a legal entity to which a note and mortgage could be made, or in which the right of action thereunder became vested. It is also urged by plaintiffs in error that the certificate under which the association was organized was defective in that only 200 shares of the capital stock were subscribed when the statute required that 500 shares should be subscribed. The plaintiffs in error rely upon the cases of People v. Mackey, 255 Ill. 144, and Africani Purchase & Loan Ass’n v. Carroll, 267 Ill. 380, as sustaining the conten-tion that the Franklin County Building & Loan Association’s failure to file its certificate of incorporation within two years from its date was fatal to the legal existence of the corporation and therefore any acts done by the supposed corporation would be a nullity. In a later case of Hall v. Woods, 325 Ill. 114, the former cases are overruled and it expressly holds that the failure of a corporation to file its final certificate of organization within two years after its date was not subject to collateral attack in a suit between a corporation and individual litigant, and-cites Bushnell v. Consolidated Ice Machine Co., 138 Ill. 67; Marshall v. Keach, 227 Ill. 35; and Inter-Ocean Newspaper Co. v. Robertson, 296 Ill. 92. It is our opinion that the at-, tempt of the plaintiffs in error in this case, to raise this question, is a collateral attack, and cannot be sustained.

It is alleged in the pleas of the plaintiffs in error that the City of Benton in 1917 had a population of more than 5,000 inhabitants, therefore there must be at least 500 shares of stock subscribed before the Building & Loan Association could function properly; that the evidence shows that there were only 200 shares actually subscribed and, therefore, the charter of the Building & Loan Association was void ab initio.

The only evidence offered to support this plea was a certificate of the Secretary of State which the Department of Commerce had published to the effect that the population of the City of Benton according to the census of 1920 was 7,201. The certificate shows on its face that there had been no official census of 1920 which had been filed in the Secretary of State’s office. The plaintiffs in error reason that because no cities in southern Illinois during the time from 1910 to 1920 made any extraordinary gains in population that they were justified in assuming that because the population of the City of Benton in 1920 was 7,201 that, therefore, they have established the fact that in 1917 the population exceeded 5,000. The burden of proof was on the plaintiffs in error to establish the population of the City of Benton in 1917, and we think from the evidence in this case that they failed to establish the fact that the population was more than 5,000 in 1917.

The statute, Cahill’s St. ch. 32, H378, provides: “That whenever five hundred shares or more of the • capital stock shall be subscribed in cities, towns or villages of fewer than five thousand inhabitants; and one thousand shares or more in cities, towns or villages of five thousand inhabitants or more, the commissioners shall convene a meeting of the subscribers,” etc. The burden of proof being upon the plaintiffs in error to establish the population of the City of Benton at the, time of the organization of this company, and they having failed to show that it was more than 5,000, we are of the opinion that the court properly ruled that the subscribing of the 200 shares of capital stock was a compliance with the statute. It was recognized as being so by the Auditor and Attorney General of the State, who approved the report of the commissioners and issued a certificate of the organization. This question also arises on a collateral attack on the organization and legal existence of this association- and cannot be made in this character of suit. Hall v. Woods, supra.

It is also contended by the plaintiffs in error that the act of the legislature in regard to building and loan associations (the act of 1879) was repealed by the act of 1919, Cahill’s St. ch. 32, fl 375 et seq., and that the defendant in error did not reorganize under the law of 1919, and, therefore, if the association had been legally organized under the former act, it ceased to be a corporation and a legal entity. We cannot agree with this contention as we think the statute does not require that this be done.

Objection is made to the introduction of practically, all of the evidence in the case. Without passing upon each of the separate objections, we are of. the opinion there is no reversible ■ error in the admission of the oral evidence, and the exhibits were properly admitted. The evidence shows that Mr. Harry Stotler had been president of this Building & Loan Association since it was organized; that since the year 1918 it has had a president and other officers of the ordinary building and loan association and has a board of directors and stockholders; that it had maintained a place of business in Benton, Illinois, had made loans, and sold stock; that it had made its annual reports to the State Auditor which had been approved; that at all times since its organization and commencement of business it had functioned as a building and loan association. The evidence further shows that at the time of the hearing of this suit that there were about 400 loans on real estate. This evidence is in no way contradicted.

The case of Marshall v. Keach, 227 Ill. 35, is a case very similar to this case at bar. The court in the Marshall case says: “This court has held that to create a de facto corporation there must be a law under which said corporation may be created, together with user under the law. . . . We have also held that where there was an honest attempt of the corporators to organize a corporation under the laws of the State, and all the necessary steps had been taken except that the final certificate had not been recorded by the recorder of deeds, and that thereafter the necessary officers had been elected, who had proceeded to the transaction of business as a corporate body, these facts would establish a corporation de facto. ... A corporation is a de facto one where the law authorizes such corporation and where the company had made an effort to organize under that law and is transacting business in the corporate name.”

The case further holds that: “A de facto corporation, as long as it exists, is a reality. It has a substantial legal existence. . . . This court has stated that it is the settled law that neither the eligibility of the directors of a de facto corporation nor the rightfulness of its existence could he inquired into collaterally. ... It has been held by this court that proof of the existence of a corporation de facto is sufficient on a plea of nul tiel corporation. . . . The introduction of the charter of a corporation, with the proof of the exercise under it of the franchises and powers thereby granted, ¿s sufficient to establish the existence of a corporation de facto.” In this case there was an effort made to comply with the statute. It proceeded to or- ■ ganize and do business*" The only thing that was lacking was the filing of the certificate with the recorder within two years. Without regard to whether the complainant corporation was a de jure corporation or not, we are of the opinion that the evidence clearly establishes the fact'that this Building & Loan Association was a de facto corporation, and that it has a legal existence and is not open to a collateral attack.

It is also contended by plaintiffs in error that the evidence does not establish the fact that the complainant was the owner of the note and mortgage sued on at the commencement of this suit. We are of the opinion that the chancellor properly found that the defendant in error was the owner of the instrument sued on at the time of the commencement of the suit. The reasons for this opinion we do not deem it necessary to repeat as we think our reason for holding that the Building &

Loan Association was a legal entity disposes of the questions as raised in this assignment of error; and further that the evidence is sufficient to establish that fact.

It is next contended that the chancellor erred in not allowing the defense of usury. T. I. Galloway, one of the plaintiffs in error, admits that he paid only $50 for this property. The deed from the Bloods to Galloway was admitted in evidence, and on its face it shows that Galloway knew there was a mortgage on said premises from the Bloods to the Building & Loan Association, and it is stated in said deed that Galloway did not assume nor agree to pay the mortgage. The Bloods testified that the deed had been changed and the word “not” was not in the deed at the time they signed it, but had been placed in there after it had been delivered to Galloway. This, we do not deem important as the evidence clearly establishes the fact that Galloway had knowledge of the mortgage on these premises at the time he accepted the deed.

Where property that is subject to a mortgage is conveyed, it need not be expressly stated in the deed that the mortgage deed is a part of the consideration, if it can be reasonably inferred that the incumbrance is a part of the consideration for the purchase price. Whether it is so agreed in express terms is not material. The legal effect is the same. Galloway purchased this property subject to the incumbrance with full knowledge thereof, and it in no way concerns him as to whether the contract was tainted with usury as between Blood and the Building & Loan Association. Essley v. Sloan, 116 Ill. 391; Hibernian Banking Ass’n v. Davis, 295 Ill. 537; Free Home Building, Loan & Homestead Ass’n v. Edwards, 223 Ill. 126, 132.

It is the contention of the plaintiffs in error that the defense of usury is sustained by the evidence for the reason that the by-laws of the complainant at the time the loan was made provided for a premium of 4 per cent, and after the loan was made, without the consent of the Bloods, or the defendant Galloway, the premium was raised from 4 per cent to 6 per cent. The evidence does not sustain this contention, but shows that this was done prior to the time of making the loan in question.

Plaintiffs in error admit that it is legal for the Building & Loan Association to charge a premium for their loans but insist the premium must be a lump sum and cannot be made in monthly payments. They cite no Illinois authorities to sustain this contention. In the case of Home Building & Loan Ass’n v. McKay, 217 Ill. 557, the note secured in the mortgage bore interest at the rate of 7 per cent per annum but a premium in addition thereto was contracted for to be paid monthly and the premium and interest exceeded the legal rate of interest. The court held in that case that if the association had complied with the provisions of the statute controlling the making of loans by such associations they could legally contract for greater compensation by way of interest and premium for the use of their money than the legal rate fixed by the general interest laws of the State, without being guilty of usury. The chancellor properly found that the defense of usury had not been established.

On the trial of the case the defendant in error introduced in evidence the statutory validating act of 1925, Cahill’s St. ch. 32, H1i 420 (1), 420 (2), also the validating ácts of 1927, Cahill’s St. ch. 32, HU 420 (5)-420' (11), purporting to validate acts of building and loan associations such as the defendant in error. Plaintiffs in error concede the validity of these statutes but claim they can have no application to this case; that they are retroactive and that the defendant Galloway has vested rights that the legislature by these curative acts could not take away from him. The only right that Galloway has in this land or subject matter of the suit is that he paid $50 to the Bloods for the property that is indisputably worth between $1,100 and $1,200. It is the contention that this is such a vested right that has intervened between the making and delivery of this mortgage and the final hearing of the case that the legislature could not divest him of this vested right. The only case cited by the plaintiffs in error in sustaining this contention is the case of Steger v. Traveling Men’s Building & Loan Ass’n, 208 Ill. 236. In that case the mortgage in question had been acknowledged before an officer of the building and loan association; the courts held that this was not a valid acknowledgment and the note and mortgage not a valid lien upon the properties and could not be enforced in a court of equity. The legislature passed a statute in 1903 legalizing such mortgages so taken. In the Steger case between the time of the giving of the mortgage and the time the validating act was passed the owners of the property had given another mortgage on the same; a judgment creditor also had a lien on the property for his debt. The court held that inasmuch as innocent third parties had a lien on the premises, that as to them the validating act had no effect; they had a vested right in said property of which the validating act could not deprive them. The court held that as between the mortgagor and the building and loan association or an assignee of the property that the validating act would not impair their contract and make it unenforceable.

It is also contended by plaintiffs in error the validating acts of 1927 were passed to take effect after their suit was commenced and therefore they cannot be held to validate this suit because of the vested rights of the plaintiffs in error. In the case of People v. Militzer, 272 Ill. 387, in the election of April, 1914, to organize a school district, the women voted at such election and later the law was held unconstitutional by the Supreme Court. In April, 1915, the legislature passed a validating act legalizing such elections and abating all pending suits. The act was held to apply to pending litigation.

In the case of People v. Peltier, 275 Ill. 217, another high school case when the women voted, the court, discussing the validating act of 1915, say: “Appellants had no vested rights in the matter, and this proceeding was instituted with the full knowledge that it was in the power of the legislature by a curative act to ratify and render legal and binding the election held. The act was approved and became effective before the final determination of the cause.” Vance v. Rankin, 194 Ill. 625; People v. Madison, 280 Ill. 96.

We are of the opinion that all of these curative acts were properly admitted in evidence and any defects in the organization, of filing of the charter or of the over-issuing of stock that might have existed, were properly legalized by these curative acts. It is settled in this State by numerous decisions that the legislature can by a validating act legalize any act done or attempted to be done by a corporation where the legislature may have authorized such an act originally. People v. Millard, 307 Ill. 556.

It is the contention of the Building & Loan Association that the G-alloways are estopped to deny the validity of the note and mortgage and the proper or-; ganization of the association. The defendants filed pleas challenging the legality and existence of this Building & Loan Association. The complainant filed a replication to those pleas and by doing so admitted this as a sufficient defense if the averments of the pleas were established. It cannot now be heard to say that the defendants are estopped from making this defense. An estoppel to be available must be pleaded.

We find no reversible error in this case, and the decree of the circuit court of Franklin county is hereby affirmed.

Affirmed.


text:
    George S. Martin, Defendant in Error, v. Carl Starr et al., Plaintiffs in Error.

      Opinion filed October 31, 1929.
    Geers & Geers and J. F. Beck, for plaintiffs in error.
    Keefe, Bandy & Listeman, for defendant in error.
   Mr. Presiding Justice Barry

delivered the opinion of the court.

This action was brought to recover for the death of Mabel Martin who was killed in an automobile collision. The suit was brought against Carl Starr and his father, Lester Starr. The trial resulted in a verdict and judgment for $5,000.

Lester Starr and his wife were divorced in 1912 and their son Carl has lived with his mother at Alton for about twelve years. Lester Starr has lived in Mt. Vernon for several years and for the past five or six years Carl has spent the summer vacations at his father’s home. On August 22, 1928, the date of the collision, Carl was not quite 17 years of age. His father owned a Buick car and during the summers of 1927 and 1928 Carl frequently drove that car for his own pleasure and that of his boy friends. At times he drove the car when the father was with him. The evidence discloses that Carl drove the car so frequently for his own pleasure that it is a fair and reasonable inference that he drove the car with the knowledge and consent of his father. It is also a reasonable inference, from the evidence, that the father kept the car for the pleasure of his family.

On the day in question Carl took the car for a pleasure drive, picked up three boys, about his own age, and drove north from Alton on the hard road toward Godfrey. At the same time Mrs. Martin approached the hard road from the east on Mulberry Street in the outskirts of Godfrey. She was driving a Chevrolet car •and before driving onto the hard road came to a stop. There is a conflict in the evidence as to the distance the Buick car was from the intersection at the time she stopped. The evidence on the part of defendant in error is to the effect that the Buick car was several hundred feet south of the intersection, while that on the part of plaintiffs in error is that it was about 140 feet south. There is also a conflict in the evidence as to whéther the collision occurred while Mrs. Martin was crossing and turning south on the hard road, or whether it occurred after she had completely turned and after her car was entirely on the west side of the black line. There is also a conflict in the evidence as to the speed of the Buick car just before and at the time of the collision. On one side the speed is shown to have been from 50 to 70 miles an hour, while the boys in the Buick car say they were not going more than 35 miles an hour. One witness testified that it looked like two of the boys in the car were scuffling, but that is denied. There is also a conflict in the evidence as to whether the Buick car as it approached the point of collision was zigzagging back and forth from one side of the road to the other. Some of the witnesses testified that there were indications on the hard road that the collision occurred 20 or 30 feet south of the intersection. Some of them say that the collision occurred on the west side of the black line. Following the collision the Buick car left the pavement on the west side of the road, crossed a little ditch about ten inches deep, went up a two-foot embankment onto the sidewalk and ran about 100 to 125 feet before it stopped.

We are of the opinion that the questions of negligence and contributory negligence were questions of fact for the jury and that we would not be warranted in disturbing the verdict in that regard.

It is contended that plaintiffs in error were not jointly liable. When a father provides a car for the pleasure of his family and permits a child to operate it for that purpose, such child is the agent in the furtherance of that business while operating the car for its own pleasure. We so held in Toms v. Ketterer, 237 Ill. App. 135 and certiorari was denied by the Supreme Court. About the same time the Supreme Court held that a father was liable under such circumstances; Gates v. Matter, 316 Ill. 313.

In such cases the father’s liability arises under the doctrine of respondeat superior. We are aware of the fact that there is a conflict in the decisions as to whether the master and servant, or a principal and agent, may be sued jointly for an injury occasioned by the servant or the agent when the master or principal is not personally guilty of any negligence. The great weight of authority, as well as sound reasoning, is to- the effect that a master and servant may be joined in an action in which damages are claimed on account of the negligence of the servant, the master being held liable on the doctrine of respondeat superior. This will be seen from Barran v. Adanich, 251 Ill. App. 481 and the many cases therein cited. We so held in Richardson v. Moore, 254 Ill. App. 511.

It is argued that the judgment should be reversed because Carl Starr was a minor and. no guardian ad litem was appointed to represent him. The record discloses that he was represented by the same counsel who appeared on behalf of his father. They filed the general issue for the minor. A judgment against a minor for whom no guardian ad litem is appointed is not void, but only voidable. The question may be raised and advantage taken on error or appeal; Thurston v. Tubbs, 250 Ill. 540-542. In the case at bar separate motions for a new trial were filed on behalf of each of the plaintiffs in error. Bach motion was in writing and specific points or grounds were stated, but the error in proceeding with the trial without the appointment of a guardian ad litem for the minor defendant was not mentioned.

The rule is well settled that if the grounds of a- motion for a new trial are specified in writing, all grounds for new trial not set forth in such written grounds are waived; Yarber v. Chicago & A. R. Co., 235 Ill. 589. The question has not been properly preserved and the judgment cannot be reversed because of the failure to appoint a guardian ad litem.

After the motions for new trial were overruled and judgment rendered on the verdict, the minor filed a motion in the nature of a writ of error coram nobis to set aside and vacate the judgment for error in fact. The alleged error is the failure of the court to appoint a guardian ad litem. This alleged error of fact was known to the court because the age of the minor was averred in the declaration, and plaintiffs in error called the mother of Carl Starr to prove by her that he was 17 years old on December 31, 1928. A motion under section 89 of the Practice Act, Cahill’s St. ch. 110, if 89, to set aside a judgment for an error of fact must set up and rely upon such fact or facts as do not appear upon the record and are unknown to. the court, and which, if known, would have precluded the rendition of the judgment; People v. Noonan, 276 Ill. 430. The motion amounts to a declaration in the new suit to reverse or recall the judgment it is intended to correct, and such suit is independent of the proceeding in which the judgment sought to be set aside was rendered; Harris v. Chicago House Wrecking Co., 314 Ill. 500.,

The fact that Carl Starr was a minor and that no guardian ad litem was appointed was known to the court before judgment was rendered. That being true a motion in the nature of a writ of error coram nobis will not lie. There is nothing upon which to predicate such a motion. It was simply an error of law on the part of the court and should for that reason be taken to a higher tribunal for reversal, instead of making application to the court itself. We so held in Mitchell v. Eareckson, 250 Ill. App. 508, in which we cited the authorities in support of our conclusion.

The criticism on the giving of instructions is as follows: “Plaintiff’s instructions numbered two and three incorporated the language of Cahill’s St. ch. 95a, ff 23, as to speed. Under the authorities cited in Point VII of our brief, the giving of these instructions constituted reversible error. Plaintiff’s' instruction numbered four is predicated upon the family purpose doctrine, and since that doctrine is inapplicable under the facts in this case, the giving of the instruction was erroneous.” The authorities cited in Point,VII of the brief is Stamas v. Waskow, 250 Ill. App. 364.

While an instruction in the language of the statute was held to be reversible error in the case cited, other cases are mentioned therein wherein it was held that the giving of such an instruction was not reversible error. In the following cases instructions in the language of the statute were held not to be reversible error; Stansfield v. Wood, 231 Ill. App. 586; Ehrenheim v. Yellow Cab Co., 239 Ill. App. 403; Johnson v. Duke, 247 Ill. App. 372; Leideck v. City of Chicago, 248 Ill. App. 545.

No argument is presented in support of the contention that the giving of the second and third instructions was erroneous. If counsel thought that under the pleadings and the evidence the giving of such instructions was error, they should have pointed out their, reasons in support of their contention. It is quite evident that under the decisions such instructions may or may not be reversible error. We have already held that the family purpose doctrine is applicable to this case and for that reason the objection to the fourth instruction cannot be sustained.

The second and third instructions contained the term “prima facie evidence” and it may be that this is one of the objections that counsel had in mind but failed to express. In Johnson v. Pendergast, 308 Ill. 255, the court said that the failure to comply with the requirement of an ordinance would in law be prima facie evidence of negligence, and that the instruction given was right in saying so. In this case the court also said that it was doubtful whether the ordinary juror would understand the legal meaning of the term prima, facie. That statement has been so frequently cited by the courts in later decisions that many trial courts and members of the bar seem to be of the opinion that the term should never be used. ’ The judge who wrote the opinion in the Johnson case, supra, also wrote the opinion in Chicago & A. R. Co. v. Esten, 178 Ill. 192. In the latter case an instruction in the language of the statute making the fact of the communication of fire from a locomotive prima facie evidence of negligence was given on behalf of the plaintiff. It was contended that the term “prima facie” should have been so modified and -explained that the average juror would comprehend and understand what was meant by it. The court said: “Webster’s dictionary 'contains the term as English, and it is probably as well understood as a large share of the words and terms used, so that it cannot be said to be the introduction of a foreign language into an instruction.”

In Leideck v. City of Chicago, 248 Ill. App. 545, the court shows that the term “prima facie” has been regarded as English for more than 500 years.

No reversible error having been pointed out, the judgment is affirmed.

- Affirmed.


text:
    Herrin Supply Company et al., Appellees, v. Freeman Coal Mining Company, Appellant.

      Opinion filed November 7, 1929.
    Charles E. Feirich, for appellant.
    Leon A. Colp, for appellees.
   Mr. Presiding Justice Barry

delivered the opinion of the court.

Appellees filed a bill in which they averred that they are creditors of appellant; that appellant is heavily in debt and is insolvent and has ceased doing business. None of appellees are judgment creditors. The prayer of the bill is that a receiver be appointed to take charge of all of the property and assets of appellant; that he be given authority to sue in all courts and do all things necessary to the conduct and management of appellant’s business and property until such time as the lawful stockholders, as shall be determined by the Supreme Court, shall elect officers and directors of said company and until such officers and directors qualify and are able to conduct, manage and control the business and affairs in'such a way as to protect the creditors of the company from loss and waste of its assets. Or in the event such stockholders refuse or neglect to elect officers and directors or in case such officers and directors so chosen fail or refuse to so manage, conduct or control the business, property and affairs of the company in such manner as to protect the property and assets from loss and waste, then upon a final hearing, the business of the Freeman Company be closed up and the receiver do all things necessary to the closing up of its business and affairs.

This appeal is from ah order appointing a receiver. Courts of equity can appoint receivers of corporations only when expressly authorized by statute. They have no general power to make such appointments; Burton v. Freeman Coal Mining Co., 254 Ill. App. 213. The only power given to courts of equity by a statute to appoint a receiver in a case of this kind is section 54 of the Corporations Act, Cahill’s St. ch. 32, 54. That section provides that courts of equity'shall have full power, on good cause shown, to dissolve or'close up the business of any corporation, to appoint a receiver therefor who shall have authority, etc.

The “good cause” for dissolving a corporation and appointing a receiver is necessarily a legal cause, for which the State may by law resume the franchise .granted. It cannot be presumed that the legislature intended, by the language of this section, to- authorize a decree forfeiting the corporate franchise for causes for which the State might not procure judgment of forfeiture at law; Wheeler v. Pullman Iron & Steel Co., 143 Ill. 197; People v. Weigley, 155 Ill. 491-504; Bixler v. Summerfield, 195 Ill. 147-152; Abbott v. Loving, 303 Ill. 154-167.

is quite apparent from the averments and the prayer of the bill, that the ultimate relief sought is a dissolution of the corporation. This is evident from the prayer that the business of the Freeman Company be closed up and the receiver do all things necessary to the closing up of its business and affairs. In Steenrod v. Gross Co., 334 Ill. 362 the court said: “The relief sought by the bill in this case was the settlement of the affairs of the corporation, the application of its assets to the payment of its debts, and, after the payment of its debts, the winding up of its affairs and the distribution of its assets among its stockholders. The appointment of a receiver was a mere incident to that relief to enable the court to take possession of the property and business of the company and finally wind up its affairs. The court had no general equity powers in the case. It was without jurisdiction, under the statute, to grant the ultimate relief prayed by the bill, had no power to appoint the receiver and order him to take possession and control of the assets, and being wholly without jurisdiction in the case its orders were void.”

We are of the opinion that the same situation exists in the case at bar. The bill does not aver that the appellant was doing or refraining from doing any act which would subject it to a,forfeiture of its charter or corporate power. In the absence of such a showing, the court was without jurisdiction to grant the ultimate relief — the closing up of appellant’s business and affairs, as prayed in the bill. The order appointing the receiver is void and the judgment is reversed.

Reversed.


author: Mr. Presiding Justice

text:
    Julius Friedman, Appellee, v. Joseph Peekler, Appellant.
    Gen. No. 33,956.

      Opinion filed November 27, 1929.
    Morton Jacobson and William A. Rogan, for appellant ; William C. Burns and B. Hamlin Petty, of counsel.
    Campbell & Fischer and Latham Castle,, for appellee; John G. Campbell and Herman A. Fischer, Jr., of counsel.
   Mr. Presiding Justice

Wilson delivered the opinion of the court.

This is an interlocutory appeal prosecuted by Joseph Peckler, defendant, to reverse an order entered . by the chancellor of the circuit court of Cook county on motion of complainant, Julius Friedman, administrator of the estate of Ben Manfield, restraining the said defendant from prosecuting his action at law in the municipal court of Chicago, and from collecting or attempting to collect, a certain policy of insurance issued by the Mystic Workers, upon the life of Ben Man-field, deceased. The order was based upon an amended and supplemental bill of complaint, subscribed and sworn to by the said Julius Friedman, and upon the giving of a bond by the complainant, and after notice to the defendants.

The amended and supplemental bill of complaint charges that on the 16th day of April, 1929, Ben Man-field, a resident of the State of Illinois, died intestate, leaving certain heirs; that subsequently complainant was appointed administrator of the estate of the said Manfield and qualified as such; that the said Ben Man-field prior to his death had taken out a certain policy of insurance in the Modern Woodmen of America and also a certain policy of insurance in the Mystic Workers; that the original beneficiaries named in said policies of insurance died and that thereupon a certain agreement was entered into between the said Manfield and the defendant Peekler, which agreement was in writing and attached to the amended and supplemental bill of complaint, wherein it was provided that the said Peekler was to be named as beneficiary of said insurance under an express agreement that he would receive the proceeds of said insurance as trustee for the benefit of the estate of the deceased; charges further that the said Peekler has repeatedly stated that he did not intend to carry out the terms of the agreement and the trust, but would convert the proceeds of the insurance policies to his own use; charges further that the said defendant Peekler attempted to collect the insurance policies and will do so unless restrained- by the court, and that he is in impecunious circumstances and financially irresponsible, so that a judgment against him would be of no avail.

The injunctional order was entered August 15, 1929. August 26, 1929, the defendant Peekler filed a general and special demurrer to this amended and supplemental bill of complaint. August 26, 1929, the same day upon which the general and special demurrers were filed by the defendant Peekler, the appeal bond in this proceeding was filed and approved.

The brief does not contain the points relied upon for reversal but, under the heading, “Brief of Points” which is, in fact, the authorities relied upon in the argument in support of the motion to reverse, counsel proceeds to argue the matter upon the merits of the amended and supplemental bill.

No error is predicated upon the failure of the complainant to give bond nor upon the insufficiency of the notice. Under the heading, “Brief of Points,” we find the following:

I. Amended and supplemental bill of complaint discloses upon its face that complainant was not entitled to an injunction.

II. Complainant was prohibited from collecting the proceeds of the benefit "certificate, both by the by-laws of the Mystic Workers and the statutes of the State of Illinois.

III. The change of beneficiary should have been made in accordance with the terms of the policies and the by-laws of the insurance societies.

. IV. The burden is upon the complainant to support the order and the decree by a sufficient showing.

V. If the complainant cannot have any ultimate relief on the hearing, he can have no interlocutory injunction.

VI. The verification was insufficient.

VII. The allegations of the amended and supplemental bill are upon information and belief.

' VIII. The contract is in violation of a statute of the State of Illinois.

Counsel have evidently misapprehended the purpose of a temporary restraining order and in their brief have attempted to argue the merits of the cause in the same manner as if presented on a demurrer to the amended and supplemental bill, of complaint. The purpose of a temporary injunction, when issued by a court-of first instance is to preserve the matters in statu quo until that court has had an opportunity to 'consider the cause upon its merits'; or upon demurrers presented and argued. An interlocutory appeal was not intended as a short cut to an appeal tribunal, in order to dispose of a cause upon its merits, without giving the trial court an opportunity to first consider it. If the defendant to a bill which, among other things, prayed for a temporary restraining order, confidently believed that the bill was bad, he could file his demurrer as was done in this case and stand by it in the event he was unsuccessful in the trial court and assume the responsibility of his own position. If we should pass upon the merits of the bill upon the appeal from the interlocutory injunction, it would still leave his demurrer undisposed of in the trial court without requiring him to elect as to whether he would stand by his demurrer or answer the bill.

This court very recently in the case of McDougall Co. v. Woods, 247 Ill. App. 170, had occasion to pass upon this proposition. The court in its opinion in that case said:

“Defendant argues that the bill states no cause of action; that chancery has no jurisdiction over the defendant and like matters, all of which questions are raised by the demurrer filed.

“In appeals from interlocutory orders it is not our province to determine the rights of the parties in the subject matter of the litigation, but simply to determine from the averments of the bill whether the party probably is entitled to the relief sought. Where such an order is improvidently granted without notice, in a case where notice should have been given, or where the statute requires a bond as a condition precedent and none has been given, the interlocutory orders so improvidently granted will be reversed without reference to the merits of the cause.

#*#*#*«*

“The statute permitting appeals from interlocutory orders was not intended primarily to provide for a review by this court of the rulings of the trial court on demurrers or to secure from this court its judgment on demurrers before the trial court has ruled thereon. A bill, when first filed, is frequently demurrable, especially bills for injunctions which are usually hurriedly prepared, but which may be made good by proper amendments which the first court has power to allow. We have no such power. The primary purpose of the statute is to permit a review of the exercise of the discretion lodged in the chancellor with the purpose of determining whether the interlocutory order probably was necessary to maintain the status quo and preserve the equitable rights of the parties.

“We do not feel called upon to pass upon the demurrability of the bill or the merits of the cause. It is enough to say at present that the bill presents circumstances which lead to a belief that probably the plaintiff will be entitled to relief. ’ ’

To the same effect see also Railton v. People, 83 Ill. App. 396; Love v. Love, 145 Ill. App. 150; Love v. Atchison, T. & S. F. Ry. Co., 185 Fed. 321; High on Injunctions, 4th Ed., sec. 1696; 32 Corpus Juris, p. 20.

The trial court is not required to examine minutely the bill of complaint prior to the entry of an interlocutory decree for an injunction, as the entry of such order is justly within the discretion of that court if-, in its opinion, it is necessary to hold the matters in statu quo until a more complete hearing can be had upon the bill. Courts of review are not inclined to interfere with this discretion, where it appears that the requirements of the statute on the granting of such interlocutory orders have been complied with by the giving of notice and bond on the part of the complainant.

High on Injunctions, vol. 2, 4th Ed., sec. 1696, says: “ § 1696. Appellate courts averse to interfering with action of court below; exception to rule. It is, however, worthy of note that even in those states where the right of appeal is recognized from an order of a court of original jurisdiction granting or refusing an interlocutory injunction, courts of review or of appellate jurisdiction interfere with extreme reluctance with the action of the inferior court. Treating the power of granting interlocutory injunctions as resting in a sound judicial discretion, the courts of appellate jurisdiction are averse to any interference with the exercise of that discretion. And to such an extent is this aversion manifest, that it may be stated as a general rule prevailing in states where appeals are allowed from orders granting or refusing injunctions in limine, that the appellate or revisory tribunal will not interfere with or control the action of the court below in such matters unless it has been guilty of a clear abuse of that discretion; and by abuse of discretion within the meaning of the rule is meant an error in law committed' by the court. . .

From a reading of the amended and supplemental bill, it is apparent that the circuit court has jurisdiction of the subject-matter, namely, a trust, if it is a trust, and further that the court has jurisdiction of the parties. It is not within the province of this court on this appeal to consider the merits of the controversy between the parties in order to express an opinion as to its probable outcome. Upon the hearing on the demurrers, general and special, filed herein by the defendant, a proper occasion will arise upon which the matter can be presented to this court for full consideration, if the. defendant so desires.

For the reasons stated in this opinion, the order of the circuit court granting a temporary injunction is affirmed.

Order affirmed.

Ryner and Holdom, JJ., concur.


author: Mr. Presiding Justice Eldredge

text:
    Trustees of Schools, Township 24, Range 5, McLean County, Appellant, v. Lester Martin, Appellee.
    Gen. No. 8,316.
    Opinion filed October 23, 1929.
    Rehearing denied January 10, 1930.
    A. E. and R. C. DeMange, for appellant.
    Adlai H, Rust, for appellee.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

On April 30, 1924, the term of one J. J. Barnes as treasurer of Township 24, north, range 5, east of the third principal meridian, McLean county, Illinois, expired and he failed to turn over $19,000 which had come into his hands as treasurer, to his successor in office. Lester Martin, appellee, was at that time State’s Attorney for said county. Pursuant to his duty as State’s Attorney he brought suits upon the official bonds of said Barnes to recover the amount of the default on behalf of the trustees of schools of said township. The term of office of appellee as State’s Attorney expired December 1,1924 and before the suits could be brought to trial. Appellee, however, continued to act as attorney for appellant, successfully prosecuted the suits and collected the judgments. He retained out of the money collected $2,000 as a reasonable attorney fee for the services he performed since the termination of his office as State’s Attorney. The present action is brought to recover the $2,000 so retained by him. A jury was waived, a trial had before the court who found the issues joined in favor of appellee and judgment was rendered accordingly.

There is very little conflict in the evidence and the facts as shown by the manifest weight thereof, are substantially as follows: during the month of December, 1924, after the term of office of appellee as State’s Attorney had expired, Mrs. Dement, county superintendent of schools, requested appellee to come to her office; Mr. Elton Bane, one of the school trustees, was present when appellee arrived; Mrs. Dement asked Mr. Elton Bane, who was president of the board, if he did not think appellee ought to finish those cases because he knew all about them and the difficulties they had had to meet and the new State’s Attorney would not know anything about them, to which Mr. Bane replied: “Yes, I guess so.” Appellee said that it was up to the trustees, if they wanted him to. Elton Bane, as president of the board had taken the principal charge of the matter. No other trustees were present during the conversation. No contract was made at any regular or special meeting of the board. The basis of the claim of appellee for fees is the conversation above-mentioned and for services performed under the quantum meruit.

There is no question but that the services were well and successfully performed and that the amount of fees claimed is reasonable. The issue is whether any contract for fees, either expressed or implied, arose from the facts and circumstances shown by the record in this case.

Section 33, ch. 122, jf 33, Cahill’s Eev. St., provides for the organization of the trustees and also: “It shall be the duty of the president to preside at all meetings of the board and to sign the proceedings thereof when recorded.”

Section 34 is as follows: “It shall be the duty of the trustees of. schools to hold regular semiannual meetings on the first Mondays of April and October. Special meetings may be called at any time by the president or by two members. Two members shall constitute a quorum for the transaction of business.” It has been uniformly held in this State that a corporation of this character can only bind itself when the officers act officially in a regular or special meeting and when such official acts are evidenced by the record of the board. This rule is founded upon sound public policy and is to prevent the evil of individual members of such boards binding the same by casual agreements. The statute specifically provides that it shall take two members to constitute a quorum for the transaction of business, and by clear implication, the business of the board can only be transacted at some regular or special meeting thereof. In the case of Shortal v. School Directors, 255 Ill. App. 89, decided,by this court at this term we have cited numerous cases which are more or less applicable to the case at bar.

Other reasons have been presented by appellant for the reversal of the judgment which we do not deem necessary to discuss.

The judgment of the circuit court .must be reversed and as the case was tried before the court without a jury, it is ordered that judgment be entered herein in this court in favor of appellant and against appellee in the sum of $2,000 with interest thereon from September 28, 1926 to October 23, 1929 at the rate of 5 per cent per annum, and costs, and that execution issue therefor.

Judgment reversed and judgment entered for plaintiff.


text:
    Charles Fray, Appellee, v. National Fire Insurance Company of Hartford, Appellant.
    Gen. No. 8,330.

      Opinion filed October 23, 1929.
    Rehearing denied January 10, 1930.
    Carl S. Reed and Hicks & Folonie, for appellant.
    Herrick & Herrick, for appellee.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

Appellee recovered a verdict and judgment for the sum of $1,500 on a policy of fire insurance for the loss by fire of a certain building and store, office furniture and fixtures therein, located at Mansfield, Piatt county.

The policy, among other things, contained a provision that it should be void if the interest of the insurer was other than unconditional and sole ownership. As evidence of title, appellee introduced a warranty deed executed May 15, 1923, by A. J. Vaughn and wife, and Curtis C. Curl and wife to William Kersten and Cecil Kersten, of the premises in question. Also a quitclaim deed from William Kersten and Cecil Kersten executed March 9, 1926, conveying the same premises to appellee. William and Cecil Kersten also on March 9, 1926, executed a bill of sale to appellee, conveying all the restaurant and confectionery furniture, fixtures and stock on hand and all personal property used in the above confectionery and restaurant business located in the building on said premises. On said date of March 9,1926, appellee and William and Cecil Kersten executed a declaration of trust wherein, after referring to the quitclaim deed of the real estate and the bill "of sale of the personal property, is as follows:

“It is therefore understood and agreed, by the parties hereto, that in consideration of the conveyance and transfer of the real estate and personal property above described, the said first party herein, C. L. Fray, agrees to purchase of the hereinafter described creditors, who now hold accounts and claims against the said William Kersten, valid claims which they now have, who are willing to accept the same at the sum of twenty-five cents on the dollar for their respective claims, and said creditors being described as follows (naming them):

“The said first party will sell the real and personal property conveyed to him above described at the best obtainable price and on the best terms that he can obtain which, in his judgment, are for the best interests of the second parties, William Kersten and Cecil Kersten; that he will keep the premises insured for a reasonable sum and keep up any necessary repairs and pay the taxes on said premises and property; that he will dispose of and sell the said premises and personal property and may sell it altogether or in separate parts at the best obtainable price and terms according to his best judgment for the realizatipn of the most moneys possible from said premises and property.

“The first party may lease said premises and personal property either one or both, pending or until able to sell said premises at a price and terms satisfactory to first party.

“Said first party will keep an accurate account of all receipts and expenditures in connection with said property and after deducting the costs and expenses of caring for said property, including insurance and the amount of the lien of the first mortgage upon said real estate and after deducting the amount of money, together with the interest on the same advanced for the ■ payment of creditors above set out and listed, which may care to sell their claims for the sum of twenty-five .cents on the dollar, said first party shall apply any surplus or remaining amount toward liquidation and payment of the indebtedness now due from. William Kersten to the State Bank of Mansfield and W. H. Firke.

“In consideration of the premises, said second parties agree to renew the indebtedness to the said State Bank of Mansfield and W. H. Firke, as may be desired or required.

‘ ‘ The first party herein shall consult and confer with the said William Kersten in the matter of the sale or leasing of the said property or. any of it, and shall confer with said William Kersten as to any sale or other disposal or" renting of said premises, with a view to co-operating as to what may be best for the interests of Mr. Kersten. The judgment of the first party herein shall, however, be final in reference to any action taken by him in connection with said property.”

It is strenuously insisted that this declaration of trust impresses the original conveyances with the character of mortgages and that appellee was not, under the terms of the policy, an unconditional and sole owner of the property destroyed by the fire. The contention cannot be sustained. The conveyances mentioned above are absolute on their face. The grantors therein owed no debt to appellee and there is no defeasance clause in either of them. By the terms of the trust agreement, appellee was given the power to sell in fee simple. He could not convey title unless he was in possession of the title. This same question was passed upon in the case of Security Ins. Co. of New Haven v. Kuhn, 207 Ill. 166, wherein the court held: “The title of a trustee is commensurate with the powers given and the duties imposed upon the trustee, and in this case such powers and duties could not be exercised unless the plaintiff took a fee simple title. She could not sell and convey the fee unless she had the fee. She was not invested with a mere power over the fee, but took a fee simple title by the devise. (Kirkland v. Cox, 94 Ill. 400; Preachers’ Aid Society v. England, 106 id. 125; Green v. Grant, 143 id. 61; King v. King, 168 id. 273; Lawrence v. Lawrence, 181 id. 248.) There was a future contingency in the unconsumed portion of the trust property existing at the death of the plaintiff, which might be in the form of real or personal property. That interest was limited upon the death of the plaintiff or the uncertain event of her re-marriage, and to dubious or uncertain persons who should be living and able to take the property at her death. It cannot be known who, if any, will be the surviving child or children, or the issue or descendant of any such child, to receive the future contingent interest. No one has a present vested estate or insurable interest except the plaintiff. In the action at law she must be regarded as the sole and unconditional owner in fee simple, although the property in her hands or the proceeds of the insurance are impressed with a trust which a court of equity will compel her to execute.”

The above case was later followed and approved in the case of Budelman v. American Ins. Co., 297 Ill. 222. When the legal title of the property rests in a trustee, no one has an insurable interest in the property except the trustee.

It is also contended that appellee cannot recover because he made no proofs of loss as required by one of the conditions of the policy. The facts which are undisputed show very clearly that the proofs of loss were waived. It has been frequently held that an agent of an insurance company, who has the power to solicit insurance, receive and forward applications, receive and deliver policies and collect premiums, even though his agency be confined to the territory in which he operates, is a general agent of the company. Phenix Ins. Co. v. Stocks, 149 Ill. 319; Hancock Mut. Life Ins. Co. v. Schlink, 175 Ill. 284; Milwaukee Mech. Ins. Co. v. Schallman, 188 Ill. 213; Citizens’ Ins. Co. v. Stoddard, 197 Ill. 330; Hodges v. Commercial Union Assur. Co., 246 Ill. App. 634.

The fire occurred October 3, 1927, and there was a total loss. Appellant’s agent at Mansfield who wrote ' the policy and collected the premiums was the firm of Vaughn and Curl. On the same day as the fire, appellee had a conversation with Curl who testified substantially as follows: “Fray came to my office that morning between 8 and 9 o’clock and wanted to know about the loss, and I told him that I had the paper, and the loss report, which I made out, and mailed the original to the company and kept the copy. He asked me what he had to do and I told him he had nothing to do until I reported to the company, and the company could send proof of loss or send an adjuster, and he said, Then I will have to wait until the papers come, or the man, or the adjuster would come, ’ and I told him there would be nothing that he could do until one or the other came. J. L. Foster, the adjuster, came October 13 and we went down to the building and looked it over and then went back to the office. Foster said there was an error in the report of the loss, as it designated Fray as trustee, and the policy was to him individually; and Foster said he would have to investigate as to how this error came about. I called Mr. Fray down to talk to him and Fray went back to the bank and got the contract and they talked about it, and Foster told Fray he would have to report that to the company and as soon as he got the report from the company he would come back and adjust the loss or settle the loss. He said he did not know what way the draft would have to be made out. He also said he would have to have a report from the fire marshal, and that when they got the fire marshal’s report they would be able to settle for the loss. I had talks with Fray about the matter once or twice during the sixty-day period, and told him I had heard nothing from the Insurance Company. I told him I could not do anything until that would come, but from information we had from the company that they were going to take care of the loss. ’ ’ Appellee testified substantially to the same facts and there is no question from the evidence but what appellee was led to believe from the local agent of appellant and from its adjuster, Foster, that the company would settle the loss as soon as they ascertained to whom the money should be paid. The facts in this case clearly prove a waiver of proofs of loss by appellant. Citizens’ Ins. Co. v. Stoddard, 197 Ill. 330.

"What we have said above disposes of the other errors assigned except as to the form of the judgment. The judgment is not abstracted and for this reason the error might be ignored, and would be except that it might eventually deprive appellee of the benefit of his judgment.

The record shows the alleged judgment to be as follows: “Now the defendant moves the court for arrest of judgment and after due consideration said motion is by the court overruled and judgment is by the court entered herein against the defendant for the sum of $1,500 and for cost of this suit. ” It does not show that any judgment was rendered on the verdict, nor in whose favor, and lacks all the essential elements of a legal judgment.

The judgment of the circuit court of Piatt county is reversed and the cause remanded with directions to enter a proper judgment in favor of the plaintiff and against defendant in the sum of $1,500 and costs.

It is ordered that the costs in this court be and they are hereby taxed against appellant.

Reversed and remanded with directions.