text:
    Ethel E. Reams, Administratrix of the Estate of Helen Mildred Reams, Deceased, Appellant, v. Mike Janoski, Appellee.
    Gen. No. 8,427.
    Heard in this court at the October term, 1931.
    Opinion filed August 25, 1932.
    Rehearing denied November 1, 1932.
    Welsh & Welsh, for appellant.
    John H. Page and Hall & Dusher, for appellee.
   Mr. Justice Jett

delivered the opinion of the court.

This suit was instituted by Ethel E. Reams, administratrix of the estate of Helen Mildred Reams, deceased, appellant, hereinafter referred to as plaintiff, against Mike Janoski, appellee, hereinafter called defendant, and William B. Muntz, to recover damages for negligently causing the death of plaintiff’s intestate. Muntz was dismissed as party defendant.

The declaration charges that plaintiff’s intestate on'June 21, 1930, in the City of Rockford, Illinois, was riding as the guest of Mike Janoski, the defendant; that the accident occurred at the intersection of Long-wood and Rural streets; that while deceased was riding in the automobile of the defendant, he so carelessly, improperly and negligently drove and managed the said automobile that by and through said carelessness, negligence and improper conduct of the said defendant, the said automobile of the said defendant collided at the said street intersection in said city on said date, and came together and struck with great force and violence another automobile, being the Buick automobile owned and operated by one Wm. B. Muntz; that as a result of said carelessness, negligence and improper conduct of said defendant deceased was killed.

To the declaration the defendant pleaded the general issue and one special plea. Subsequently defendant pleaded two additional special pleas. To the defendant’s second additional plea as amended the plaintiff filed her second replication which was later amended. A general demurrer was interposed to the plaintiff’s amended second replication, which demurrer was sustained upon a hearing. To this ruling the plaintiff duly excepted and elected to stand by her amended second replication. Thereupon a judgment for costs and that the plaintiff take nothing was entered against plaintiff, to which judgment the plaintiff excepted. From this judgment plaintiff prosecuted this appeal.

The defendant in his second additional plea as amended avers that the negligence, if any, of the defendant was joined by the negligence of a certain Wm. B. Muntz and that the plaintiff executed a written release discharging the said Wm. B. Muntz from all liability arising from the latter’s negligence. The plaintiff in her second amended replication avers facts and circumstances to show that it was not the intention of the plaintiff or of the said Wm. B. Muntz (not a party to the suit) to release the latter but to enter into a covenant not to sue the said Wm. B. Muntz.

Upon this record the question submitted for determination is: Did the trial court err in sustaining the defendant’s demurrer to the plaintiff’s amended second replication to the defendant’s second additional plea as amended?

It is conceded that the facts as averred in defendant’s second additional plea as amended, if proven and not avoided, constitute a complete bar to this action. In his second additional plea as amended the defendant in effect, avers that the negligence of the defendant, as charged in the declaration, was joined by a certain Wm. B. Muntz, and that in consideration of the payment to her, the plaintiff, of $1,750 by the said Wm. B. Muntz the plaintiff released in writing the said Muntz from all liability arising from the joint negligence. The defendant’s plea avers- that he, the defendant, has been released from liability by force of the rule that a release of one joint tort-feasor releases both. The alleged release is set forth as consisting of two documents, a written agreement between the plaintiff and the said Wm. B. Muntz which acknowledged receipt of the payment of the sum of $1,750 and which stated that the plaintiff would later execute a release, and a draft or check payable to the plaintiff and her attorneys in the amount of $1,750, upon which appeared in printing the statement that the indorsement of said draft constituted a release of all liability of the said Wm. B. Muntz from the latter’s negligence in question.

The plaintiff in her amended second replication avers that the instruments constituting the alleged release in the defendant’s second additional plea as amended, do not correctly state the true agreement between her, the plaintiff, and the said Wm. B. Muntz. This pleading avers facts and circumstances to the effect that it was the intention of the plaintiff to enter into a covenant not to sue the said Wm. B. Muntz and not a release. The plaintiff offers in her said replication to prove this intention of herself and the said Wm. B. Muntz by the negotiations and circumstances prior to the execution of the release instruments of the plaintiff and her attorneys on the one side, and the said Muntz and his attorneys on the other. It will be seen, therefore, that the question presented is whether the plaintiff, having executed a writing which purports to release a joint tort-feasor, may by parol evidence show that the writing was intended by the parties to it to have been a covenant not to sue.

It is the contention of the plaintiff that the rule announced in O’Shea v. New York, C. & St. L. R. Co., 105 Fed. 559, is decisive of the question involved in this cause. In the above mentioned case, O’Shea brought suit to recover for injuries received while in the service of the defendant, the New York, C. & St. L. R. Co., owning and operating the railroad known as the "Nickel Plate Railroad.” At the time of the injury the plaintiff was riding upon one of the engines of the Nickel Plate Company which was being run over the tracks of the Chicago, Burlington & Quincy Railroad Company, which latter company erected a tower post in close proximity to the track, and as the engine passed the post the plaintiff was struck thereby and injured. The suit proceeds upon the theory that the Chicago, Burlington & Quincy Railroad Company was primarily responsible, and yet the defendant, the Nickel Plate Railroad Company, was also liable to him for the injury in that it negligently allowed its engine to be operated upon tracks dangerous because of the proximity of the tower post. In addition to the plea of the general issue the defendant filed a further plea setting up that the plaintiff made claim against the Chicago, Burlington & Quincy Railroad Company for the injuries sustained by the alleged joint negligence, and that such claim was duly paid and satisfied by said company (not a party to the suit) and that the plaintiff executed and delivered to that company a release in satisfaction for the claim. The release is set out in haec verba in the plea. Under objection the court allowed parol evidence to be introduced of the negotiations which led up to the written agreement and to the actual agreement said to have been made. On the question of whether such parol evidence was admissible the court in its opinion said: “The oral testimony allowed at the trial, under objection of the defendant in error, clearly establishes that it was not intended by either party to the paper that the sum of $1,200 should be paid to O’Shea in full satisfaction of his injuries, and that it was not intended by either party that the document which O’Shea was to sign should be anything more than a covenant not to sue the Chicago, Burlington & Quincy Bailroad Company, that company being willing to give the sum stated in the paper as a consideration for that covenant. In other words, the paper does not express the actual agreement of the parties. The question then arises whether such oral testimony was admissible. We think that it was. The rule that ‘parol contemporaneous evidence is inadmissible to contradict or vary the terms of a valid written instrument’ was not adopted because the document is under seal. ...” The court then referred to G-reenleaf on evidence, citing section 279 of Vol. 1, of 14th Ed. and continued in its opinion as follows: “But this rule as stated by Mr. Greenleaf on Evidence ‘is applied only in (suits) between the parties to the instrument, as they alone are to blame if the writing contains what was not intended, or omits that which it should have contained. It cannot affect third persons, who, if it were otherwise, might be prejudiced by things recited in the writings, contrary to the truth, through the ignorance, carelessness, or fraud of the parties, and who, therefore, ought not to be precluded from proving the truth, however contradictory to the written statement of others. In a suit between a party and a stranger, neither is concluded by the contract, but either may give evidence differing from it.’ ”

In Gore v. Henrotin, 165 Ill. App. 222, the question involved in the instant case was decided by the court. It appears that Theresa G. Gore, as administratrix of her husband’s estate, sought to recover damages against one of two tort-feasors for negligence resulting in the death of her intestate. A judgment was recovered in the sum of $2,800 against the plaintiff in error. At the time the husband was killed he was a passenger on a car of the defendant, which car was run into by a train of the Grand Trunk Western Railway Company. The declaration averred that the deceased was riding as a passenger at the time of his injury and that he was injured when said street car collided with a train of cars running on the track of the Grand Trunk Western Railway Company. On stipulation of the defendant in error (plaintiff in the court below), and the Grand Trunk Western Railway Company, the suit was dismissed as to the latter. The only defense in the case was that the defendant in error had by contract released the defendant, the Grand Trunk Western Railroad Company and, as a legal result thereof, plaintiff in error was released and discharged. The plaintiff in error insisted that he had a right to prove by the defendant in error that she (the defendant in error) had accepted $2,800 of the said railroad company, or had agreed to do so, in full settlement of her claims for damages against it and had in fact released that company of all claims against it, although the agreements of herself and said company purported to be in writing. The court in recognizing the general rule that parol evidence cannot be introduced to vary or contradict the express terms of a written contract in suits between the parties to the instrument, recognized the exception to the rule and in doing so said:

“The principal error insisted on by plaintiff in error as a ground of reversing the judgment o.f the lower court, is the refusal of the court to permit him to prove by the defendant in error, Mrs. Gore, whom he called as a witness, the conversations and transactions of herself and the Grand Trunk Western Railway Company leading up to the contracts that resulted in the dismissal of the suit as to that Company. He insists that he had a right to prove by her, if he could do so, that she had accepted $2,800 of the said railway company, or had agreed to do so, in full settlement of her claim for damages against it, and had released that company of all claims against it, although the agreements of herself and said company purported to be in writing. In other words, he claims that, as he is neither party nor privy to said contracts, he had a right to introduce oral evidence to prove that the actual contracts were different from the written contracts, or that they did not contain all the contracts made between the parties, and that the railway company was released by her, if such were the facts. The law is well settled that a release to one of several joint tort-feasors is a release to all, and an accord and satisfaction with one of them is a bar to an action against the others. C. & A. Ry. Co. v. Averill, 127 Ill. App. 275, affirmed in 224 Ill. 516; City of Chicago v. Babcock, 143 Ill. 358.
“Both of the cases above cited are cases in which joint tort-feasors were sued, and a written contract with a covenant not to sue- was signed by each plaintiff respectively and delivered to one of the joint tortfeasors. Oral evidence was introduced in each case by the other parties to the suit to prove what the actual contracts were, notwithstanding the contracts between the parties thereto were in writing. But the question of the admissibility of such evidence was not raised in either case. The exact question involved here was raised in the case of O’Shea v. New York, C. & St. L. R. R. Co., 105 Fed. 559; and it was held in that case that either the plaintiff or the contesting defendant may contradict the written contract by parol evidence. Í We think that the O’Shea case states the correct rule of law, and that there is no such privity between joint tort-feasors because both are sued in the same suit or both liable for the same injury, as to conclude the defendant who is not a party to the contract, or the plaintiff, by the express terms of the written contract, and that either plaintiff or such defendant may contradict it by parol evidence.”

In the replication relied upon by the plaintiff is set forth the petition of the plaintiff as administratrix of her intestate which petition asks leave of the probate court to execute a covenant not to sue the said Wm. B. Muntz. This petition, it is averred, was filed following the alleged agreement or conversation in which the plaintiff agreed to accept the sum of $1,750 in return for a covenant not to sue the said Wm. B. Muntz. The order signed by the probate court following the said petition specifically limited the plaintiff as such administratrix “to sign, execute and deliver to Wm. B. Muntz a covenant not to sue in consideration of her, the said administratrix, receiving from said Wm. B. Muntz the sum of $1,750.” The replication further avers that the insurance company carriers for the said Wm. B. Muntz thereafter issued its voucher in the sum of-$1,750 to the plaintiff as such administratrix, which voucher it is averred through error and mistake of the parties carried in printing that the said voucher constituted complete release of the said Wm. B. Muntz from the latter’s negligence causing the death of the plaintiff’s intestate.

The rule contended for by the plaintiff finds support in Reynolds v. Magness, 24 N. C. 26, reported in 1916 A L. R. A. 603, 604, where the court said: “The rule of evidence that, where the parties to a contract have reduced their agreement to writing, parol evidence shall not be received to alter or contradict the written instrument applies to controversies between the parties and those claiming under them. The parties have constituted the written instrument to be the authentic memorial of their contract; and because of this compact, the instrument must be taken, as between them, to speak the truth and the whole truth, in relation to its subject matter. But strangers have not assented to this compact and therefore, are not bound by it. When their rights are concerned they are at liberty to show that the written instrument does not disclose the full or true character of the transaction, and if they be thus at liberty when contending with a party to the transaction, he must be equally free when contending with them." Both must be bound by this conventional law, or neither.”

In C. Lane & Co. v. Western Union Telegraph Co., 149 Ill. App. 562, the plaintiff sought to introduce parol evidence to vary the terms of a written contract executed by itself. The case was an action in assumpsit by the C. Lane &’ Company against the telegraph company for the failure of the latter to deliver within a reasonable time a certain telegram sent by said Lane & Company to a certain Connell Land Company, and in which case the C. Lane & Company by replication averred that prior to the sending of the message in question it had entered into a verbal agreement with the land company that if any loan was guaranteed it should be guaranteed with a party named Hartz and not with the Lane Company. The telegraph company demurred to the replication on the ground that the contract referred to being in writing executed by the plaintiff, C. Lane & Company and Connell Land Company (not a party to the suit) could not be varied by parol evidence. The demurrer was overruled by the court and the .telegraph company abiding thereby damages were assessed and entered against the telegraph company for $450. On this state of facts the Appellate Court said: “The demurrer to the replication was I'-properly overruled. The rule that parol evidence is | not admissible to vary the terms of a written contract can only be invoked by the parties to the contract or those in privity with them.”

The defendant was not a party to the agreement entered into between the plaintiff and Wm. B. Muntz. The question then arises whether the defendant was a stranger to this agreement in the sense in which the term is employed in the rule.

At this point' it might be well to quote from the opinion in O’Shea v. New York, C. & St. L. R. Co., supra. In that case the court in addition to what has been quoted used the following language: “The question then arises whether the defendant in error here was a ‘stranger’ to this agreement in the sense in which the term is employed in the rule. It is true that the subject matter upon which the agreement operated was the joint wrong of the two railway companies, and the defendant in error could avail itself of an accord and satisfaction or release between O’Shea and the Chicago, Burlington and Quincy Railroad Company. To this extent it may be said not to be a stranger to the matter but it was no party to the contract and was not bound by it.”

In vol. 10 R. C. L., page 1020, it is said: “And as, in a contention between a party to an instrument and a stranger to it, the stranger may give testimony by parol differing from the contents of the instrument, so the party to it is not to be at a disadvantage with his opponent, and he, too, in such case, may give the same kind of testimony.”

The rule of law which permits a party to a suit against a stranger to the contract involved to introduce parol evidence to vary the terms of a written contract entered into with another seems to have been recognized by the courts of this State. Since the defendant was not a party to the contract that is set up in his plea, we are of the opinion that the replication filed by the plaintiff was sufficient to permit her to offer evidence in support of her contention. We conclude, therefore, that the trial court was in error in sustaining the defendant’s demurrer to plaintiff’s amended second replication to the defendant’s second additional plea as amended.

The judgment of the circuit court of Winnebago county is reversed and the cause remanded to the trial court with directions to overrule said demurrer to said replication.

Reversed and remanded with directions.


source: Caselaw Access Project

author: Mr. Presiding Justice Wolfe

license: Public Domain

text:
    Josephine Cannon, Appellee, v. George M. Garrett et al., Appellants.
    Gen. No. 8,532.

      Heard in this court at the May term, 1932.
    Opinion filed October 18, 1932.
    Murphy & Kritzer and E. P. Field, for appellants.
    Charles E. Lauder and Frederick H. Lauder, for appellee.
   Mr. Presiding Justice Wolfe

delivered the opinion

of the court.

The record in this case is brought before the court for review by George M. Garrett and Robert L. Wray, as executors of the will of Harvey C. Garrett, deceased. The appellants contend that the chancellor erred in holding that they have failed within a reasonable time to sell the real estate of the testator under the testamentary power ordering and directing them to sell it.

It is urged by the appellants that the decree is an unwarranted interference with their discretion to determine the time of the sale; that the appellee agreed to a postponement of the sale and is estopped to assert that there is an unreasonable delay in the sale of the property. The appellee, Josephine Cannon, maintains that the will does not give the executors any discretion to fix the time of the sale beyond a few days after the death of the life tenant; that the evidence tending to show an estoppel was inadmissible under the Statute of Frauds and Perjuries, Cahill’s St. ch. 59. There are no provisions in the will of Grarrett indicating any intention of the testator as to when the real estate should be sold, excepting those found in the power of sale, which is as follows: “Third: I give, devise and bequeath to my wife Elenor Grarrett five shares of stock in the Media State Bank, and the east half of the Northeast Quarter of Section Thirty-six (36) in Township Nine (9) North, Range Four (4) West, in Henderson County, Illinois, for and during her natural life only.”

“Fifth: Upon the death of my wife Elenor Grarrett, I order and direct my executors hereinafter named to sell and convert the five shares of stock in the Media State Bank, and the E% NE% Sec. 36-9-4, into cash and to divide it equally among my children named in clause fifth of this will, and I hereby empower my said executors to make all necessary deed or deeds of conveyance to convey the said real estate. ” It is quite plain, as the matter is presented to this court, that the appellee is entitled to a sale of the real estate and a division of the proceeds thereof within such time as is reasonable.

Parties to this appeal are far short of any agreement as to when the property should he sold. The testimony is in strong conflict as to whether the parties hereto agreed that the land should be rented from March 1, 1931 to March 31, 1932; also, whether the appellee in 1930 demanded of the executors that the land be sold. The farm was leased from March 1, 1931 to March 1, 1932. The question of whether appellee consented to the leasing is immaterial, as this suit was not started until after the lease expired. The record was filed in this court on April 13,1932. It seems a fruitless undertaking to determine whether the alleged agreement was within the statute of frauds, or, indeed, if its existence is proved by any evidence in the record. The question whether the executors were justified in postponing to March 1, 1932, the sale by reason of the tenancy under the lease, has now become an abstract question. A reversal of the decree on either of these questions would be of no advantage to the parties to this appeal. The matter of costs is disposed of by this decision. Wendell v. City of Peoria, 274 Ill. 613.

We note that the testator in directing the executors to sell the property in question uses the words “upon the death of my wife Elenor Garrett, I order and direct my executors, etc.” Winston, in his Dictionary, defines the word “upon,” when used in this manner, as meaning “at the moment of.” Webster defines it as “noting time.” It is our opinion that the testator, in directing his executors to sell the real estate “upon” the death of his wife, meant that they were to sell it as soon as the necessary preparation and arrangements could be made to properly conduct the sale. If the executors did not sell it after allowing a reasonable time for making such preparation for the sale, then the heirs have the right to petition a court of competent jurisdiction to compel them to comply with the terms of the will. Courts should be careful not to interfere with the discretion vested in executors in carrying out the terms of a will. If the time to sell, and the sale of the property, were left to the discretion of the executors, then the court should be most reluctant to interfere with that discretion.

We are of the opinion that in this case the court did not err in ordering the executors to sell the real estate in question.

Appellee objects to the decree because it directs her either to return or pay for hedge posts and wood, valued at $20, taken by'her from the land in question. She testified that she would make no objection if the court ordered her to return the material. The decree in this respect was correct. The decree ordered the costs of the suit paid out of the proceeds of the sale. There is nothing before us to show that this was an abuse of discretion by the chancellor. Comstock v. Redmond, 252 Ill. 522; First Nat. Bank of Chrisman v. Watson, 277 Ill. 186.

The decree should have directed the executors to proceed to sell the real estate and make report to the court of the sale, with the necessary expenses thereof, so that the court may be apprised of their compliance with the decree. After the report of the sale the net proceeds of the sale should be ordered to be paid to the executors of the last will and testament of Harvey G. Garrett, deceased, for the administration in the county court of Henderson county. Martin v. McCune, 318 Ill. 585; Goodman v. Kopperl, 169 Ill. 136; Reibold v. Reibold, 270 Ill. 136.

The decree of the circuit court of Henderson county is affirmed, excepting so much thereof as remands the case with the mandatory directions to the county court of Henderson county. Bach party to this appeal will pay his own costs of this appeal. The case is remanded to the circuit' court of Henderson county with directions to modify the decree as herein directed.

Reversed and remanded with directions.


text:
    George M. Smith et al., Defendants in Error, v. Elmer Christopher et al. Louie Lauridsen, Plaintiff in Error.
    Gen. No. 8,536.

      Heard in this court at the May term, 1932.
    Opinion filed October 18, 1932.
    Clark, Young & Bull, for plaintiff in error.
    Clyde H. Thompson, for defendants in error.
   Mr. Presiding Justice Wolfe

delivered the opinion of the court.

The only question presented to this court is, Did Sine Lauridsen, daughter of the testator, Jacob M. Smith, during her lifetime take a vested interest in the land and estate of the testator, or in the proceeds thereof % If she did, it is not questioned that her interest therein passed by her last will and testament to her husband, Louie Lauridsen.

The testator’s will was probated in the county court of Livingston county. His widow, Mary Smith, was appointed executrix thereof, and acted as such until her death on the 16th day of November, 1923. Charles L. Romberger, whom the will nominated as executor after the death of the widow, predeceased her. After the death of the widow, a bill was filed in the circuit court of said county, by Sine Lauridsen and other parties interested, requesting that the court appoint Carl Christopher as successor in trust and prayed for an order authorizing and empowering him to sell a farm of which the testator died seized. This farm was disposed of by the seventh clause of the testator’s will and is a residuary clause making disposition of all of the testator’s real estate.

The circuit court appointed Carl Christopher as successor in trust and ordered him to proceed to execute the power of sale given by the will to Charles L. Romberger, and that said Carl Christopher be vested with all the powers said will vested in Charles L. Romberger. This order was entered on April 5, 1924.

The new trustee thus appointed did not sell the real estate of the testator as directed by that order of the court. On March 17, 1931, the circuit court rendered an order on the petition of the guardian of the minor children of Albert J. Smith, a deceased brother of Sine Lauridsen, requiring the trustee to sell the farm. On July 17, 1931, the trustee filed his final report showing that he had sold the farm on the 4th day of May, 1931; that he proposed to pay the share of Sine Lauridsen to her five children. Louie Lauridsen was permitted by the court to file objections to this report on his showing that Sine Lauridsen died on the 9th day of August, 1927, and by her last will and testament bequeathed and devised all her personal and real estate to said Louie Lauridsen, her husband, absolutely and in fee simple.

The causes of objection of Louie Lauridsen to the report were stated to be: That the trustee proposes to divide the share which Sine Lauridsen would have received, if living, among the five children of Sine Lauridsen; that the five shares proposed to be distributed to the five children of Sine Lauridsen should be given to the objector by reason that he is “the sole legatee under the last will and testament of Sine Lauridsen, deceased. ’ ’ The court overruled the objections of Louie Lauridsen to the report and ordered and directed the trustee to pay her children the share which Sine Lauridsen, if living, would have received from the proceeds of the sale of the farm. Louie Lauridsen appears here as a plaintiff in error.

The debts of the testator-, Jacob M. Smith, together with the costs of administering his estate, have been fully paid. The last will and testament of Sine Lauridsen has been admitted to probate in the county court of Livingston county.

The will of Jacob M. Smith bequeathed all his personal property to his widow absolutely. To George M. Smith and Albert J. Smith, two of his sons, he bequeathed $500 each, which was to be paid to them by the executor of his will within six months after testator’s death. All his real estate was devised to the widow during her lifetime.

The seventh clause of the will is as follows: “After the death of my said wife, Mary Smith, I hereby give, devise and bequeath all the rest, residue and remainder of my real property wherever situated unto my said sons, George M. Smith and Albert J. Smith, and my daughters, Sine Lauridsen, of the Township of Dwight, Mata J. Swanson, of the Village of Dwight, Annie G. Smith and Emma C. Smith, both of the Township of Union, all in the County of Livingston and State of Illinois, to be divided in equal parts among them, share and share alike, and in case either of my said sons or daughters should not be living at the time said property is ready for distribution by my executor hereinafter appointed, then I give, devise and bequeath the respective share of such deceased son or daughter to his or her children, to be distributed in equal parts, the child or children of any deceased son or daughter to take the share said son or daughter would have received if living, and if either of my said sons or daughters shall die without issue and before they have received their respective share from my said executor, all my residuary estate shall be divided between the survivors equally share and share alike, or go to the survivor, as the case may be.”

The ninth clause is as follows: “I hereby give to my executor hereinafter appointed, after the death of my said wife, full power and authority to sell and convey in fee simple absolute or otherwise in his discretion all or any portion of my real estate and to execute and deliver all proper deeds and instruments in writing, the same as though I was still living. ’ ’

The tenth clause appointed the widow executrix and by its second paragraph provided as follows: “ After the death of my said wife, I hereby constitute and appoint Charles L. Romberger, of the Village of Dwight, County of Livingston and State of Illinois, my executor of this my last will and testament.”

In his will by the first part of clause seven the testator made a devise of his real estate in equal parts after the death of the widow to his sons and daughters definitely named in the clause, among whom was Sine Lauridsen. Unless the subsequent terms of the will have the effect of modifying or reducing this devise, then clearly such children of the testator took a vested remainder in the real estate upon the death of the testator. However, this conclusion must be based on the determination that the real estate mentioned in clause seven has remained real estate for the purpose of succession and has not been converted into personal property under the doctrine of equitable conversion. It must first be determined if the will shows a clear intent on the part of the testator that the realty should be converted into personalty for the purpose of distribution under the terms of the will.

“The question on whether real estate is to be converted into pers.onal property and distributed as such is to be determined from the intention of the testator. But such intention must clearly appear.” Poulter v. Poulter, 193 Ill. 641.

The fact that the legal title to the real estate and the beneficial interest in the proceeds of the sale of such real estate passed to the same persons by the terms of the will would not of itself prevent a conversion. Wayne v. Fouts, 108 Tenn. 145, 65 S. W. 471. Such persons hold only the naked title to the real estate, and that in trust for the purpose of carrying out the provisions of the will. Baker v. Copenbarger, 15 Ill. 103. The direction in a will to sell the real estate of the testator to work an equitable conversion must be clear and imperative. A mere power of sale, or a discretionary power of sale given to the executor is not deemed imperative in the absence of other provisions of the will so clearly written as to leave no doubt of the intention of the testator to have his real estate converted into personal property. Young v. Sinsabaugh, 342 Ill. 82; Hale v. Hale, 125 Ill. 399. Also that the sale of the land was to be postponed until after the death of the life tenant has no effect itself to prevent a conversion as of the time of the death of the testator. Lash v. Lash, 209 Ill. 595.

As above stated.the intention of the testator is to be ascertained from his will. Pursuing this thought further, we quote from the case of Young v. Sinsabaugh, supra: “An express declaration in the instrument that the land shall be treated as money, although not sold, or that the money shall be treated as land, although not actually laid out in the purchase of it, is not essential. The direction to convert may arise by necessary implication from the nature of the instrument or the language employed. • There must, however, be an expression, in some form, of an absolute intention that the land shall be sold and turned into money, or that the money shall be expended in the purchase of land.”

The ninth clause of the will gave the executor full power and authority to sell all or any portion of the testator’s real estate. Construing the clause literally, the executor is also given power, at his discretion, to convey all or any portion of such real estate in fee simple absolute, or otherwise. “In order to work a conversion while the property remains unchanged in form, there must be a clear and imperative direction to convert it.” Young v. Sinsabaugh, supra. We do not think this clause of the will is in the legal sense an imperative direction to sell the real estate of the testator and convert into money. Young v. Sinsabaugh, supra.

In the seventh clause the real estate of the testator was to be “divided” among his children named therein share and share alike; and should any of them be not living at the time said “property” is ready for “distribution,” then the share of a deceased child was to be “distributed” in equal parts; . . . and if any child dies without issue and before receiving its share from the executor, then all the residuary estate of the testator to be “divided” among the survivors, or go to the survivor. The words ‘1 divide ’ ’ and ‘ ‘ distribute ’ ’ may be used in speaking of the division of real estate. They do not of themselves indicate an intention on the part of the testator to bring about a conversion, absolutely and in all events. If it is doubtful whether the testator intended a conversion, the original char-actor of the property will be retained. Young v. Sinsabaugh, supra; Poulter v. Poulter, supra.

As the words divide and distribute may be used in reference to the division of both real and personal property, we do not feel warranted in saying that the testator by the use of those words clearly shows an intention to convert his real estate, in the absence of •other provisions of his will throwing further light on the use of those words. And this is true although the real estate is not susceptible "of division among the beneficiaries as directed in the will. Poulter v. Poulter, supra; Gammon v. Gammon, 153 Ill. 41.

The will does not in express terms bequeath specific legacies to the children of the testator mentioned in the seventh clause; nor were there express terms of the will that bequeathed the proceeds from the sale of the real estate to such children. The nature of the instrument, or the language employed therein, is not such that it is necessary to state and examine all the criteria which the authorities furnish on the question of conversion. It is sufficient to state that the provisions of the will of Jacob M. Smith are not so clearly written as to leave no doubt of his intention to have his real estate mentioned in clause seven of his will converted into personal property.

In the case of Starr v. Willoughby, 218 Ill. 485, the will in question was similar to the one before us and the court in discussing that case say: “The first clause of paragraph 3 provides, as soon as practicable after the death of William E. Willoughby the real estate in question shall be sold by his executors and the proceeds thereof disposed in the following manner: The sum of $1,500 was to be invested in a home for Mrs. Jane Willoughby, and the balance was to be divided among such of his children ‘as may be living at that time, and surviving descendants of children, in case any of my children may have died leaving children or descendants of children then surviving and living at that time.’ It is clear the words, ‘living at that time’ refer to the time of sale and not to the time of the death of the testator. While it is true that the law favors the vesting of estates, still where it is clear, from a reading of the entire will, that the testator intended to postpone the vesting of an estate until the period of distribution has arrived, that intention will be carried out. Johnson v. Askey, 190 Ill. 58.” This case has been cited with approval in the case of Heitzig v. Goetten, 347 Ill. 619.

In construing wills the intention of the testator must be ascertained from a construction of the whole will in the light of the facts and circumstances surrounding him, and his family, and the intention sought is not what by inference may be presumed to have been in the mind of the testator, but that which he has expressed by the words of his will. It is our opinion that the testator in directing how his property should be divided among his children and grandchildren used the language “to be divided in equal parts among them share and share alike, and in case either of my sons or daughters should not be living at the time said property is ready for distribution by my executor hereinafter appointed, then I give, devise and bequeath the respective share of such deceased son or daughter to his or her children, to be distributed in equal parts, the child or children of any deceased son or daughter to take the share said son or daughter would have received, if living, etc.” The time for the division of the estate has reference to the time of the sale of the property and not to the time of the death of the testator.

In our judgment it was clearly the intention of the testator that when his wife died his children should take his estate, and in the event if any of his children died, then, in that event the child’s share should go to the heirs of his body and the grandchildren of the testator, and this construction given to the two clauses of the will is in accord with the intent of the testator as we view it. To hold otherwise would be to defeat the intentions of the testator.

The judgment of the circuit court of Livingston county should be affirmed.

Affirmed:


author: Mr. Justice Baldwin

text:
    The People of the State of Illinois ex rel. Oscar Nelson, Auditor of Public Accounts of the State of Illinois, Appellee, v. Seward State Bank (C. G. Scott, Intervening Petitioner), Appellant.
    Gen. No. 8,525.

      Heard in this court at the May term, 1932.
    Opinion filed October 18, 1932.
    William D. Knight and Max A. Weston, for appellant.
    Fred E. Carpenter, for appellee.
   Mr. Justice Baldwin

delivered the opinion of the court.

On April 10,1931, the Seward State Bank was closed by resolution of its board of directors. Subsequently the auditor of this State filed his bill of complaint in the circuit court of Winnebago county praying for the dissolution of the bank and the liquidation of its affairs.

A receiver was appointed by the State auditor and later the appointment was approved by the circuit court. This receiver took charge of the affairs of the bank on July 24,1931.

On October 22,1931, C. 0. Scott, the appellant, hereinafter referred to as petitioner, filed with the receiver his verified claim for a preference.

On December 29, 1931, this claim was presented to the circuit court by the petitioner with the request that the court allow his claim as a preference out- of the assets of the said bank.

The court allowed the claim of the intervening petitioner as a general claim but denied a preference. This appeal is brought to reverse the order of the circuit court denying the preference and allowing the claim as a general claim.

The facts substantially are that since October, 1917, the petitioner has been treasurer for Township 26, Range 10 E. of the 4th P. M. in Winnebago county, Illinois, and as such township treasurer kept an account in the Seward State Bank in which the moneys of the said school district were deposited.

On June 30, 1924, the petitioner and Gr. M. Chambers, the cashier of the Seward State Bank, acting under authority of a resolution of the board of directors of such bank, entered into a certain contract as follows: “It is agreed that all funds and moneys hereafter deposited by the school and/or Township treasurer of Township 26 N". Range 10 East of the 4th P. M. Winnebago County, Illinois, .in Seward State Bank shall be and is hereby declared to be deposited as a special fund distinct and apart from all other funds and held in the said bank by it as a special trustee or agent of the said school and/or Township treasurer. This arrangement shall be subject to change only upon the written agreement of both parties.”

On the day following the execution of the agreement the account of the petitioner containing a balance of $24,570.09 was closed and a new account designated “C. G. Scott, Township Treasurer, special trustee account” was opened and on the same day the sum of $28,961.42 was deposited in such new account. On one of the account sheets the account was designated as “special.”

Deposits in this account were made by the appellant from time to time and checks or orders were drawn on the account by the appropriate officers and honored by both the appellant and the bank. At the time the bank closed the appellant had on deposit in this account in said bank the sum of $3,842.38.

On the date of the closing of such bank there was on hand $1,776.94 in cash and cash items and there was due it from other banks $4,436.05.

Several assignments of error, are made by appellant but inasmuch hs they in effect refer to the same matter, we shall discuss them collectively.

The petitioner predicates his claim for preference upon the contract above described, and the effect of this contract is the principal question herein.

It is observed that this account was in all respects identical with the other accounts in the bank and in all respects identical with the original account of the petitioner with such bank, except for the added words upon the ledger sheets, on one sheet “special trustee account” and on another “special.”

A banking institution is a creature of law and is possessed of only such powers and privileges as are authorized by statute. Such an institution (among other things) may receive deposits of money from its various patrons who are each and all creditors of such banking institution to the extent of the balances to their credit in their respective accounts. It is the duty of such bank as the debtor of such creditors (depositors) to keep proper books of account showing the true condition of such accounts at all times. But no particular designation as to such accounts is required, nor is it material, in equity, what designation is given such accounts by such bank, nor that the parties have, by agreement, fixed upon some designation or declaration as to such account. Equity will look to all the facts and circumstances and learn the truth as to all such transactions and from all such facts and circumstances determine the rights and liabilities of the respective parties.

The moneys of this account were not, and do not appear to have been intended to be, kept separate or in any manner distinguishable from the moneys of any other account in such bank. Nor does it appear that the actual handling of the account either by the petitioner or the bank was materially different from that of any other account.

The fact that the account of the petitioner herein was designated ‘ ‘ special trustee account ’ ’ or ‘ ‘ special ’ ’ did not change its true character of an ordinary checking account to an account of another form.

It is urged that under the law of this State, Cahill’s St. ch. 16a, ¶ 1 (sec. 1, chapter 16½, Smith-Hurd’s Revised Statute'1931) banks have the “power to accept and execute trusts.” There can be no doubt on this point but the acceptance of a deposit and crediting the same to the account of the depositor and the honoring of orders thereon does not create a trust and it is not a trust matter within the meaning of such statute. There is no evidence whatever herein to indicate the creation, establishment or existence of a trust.

In Woodhouse v. Crandall, 197 Ill. 104, on page 109 the court in passing upon the question said: “In the case of a general deposit with a hank to the credit of the depositor, the relation created is not that of principal and agent or of trustee and cestui que trust, but is merely that of debtor and creditor. Such deposits belong to the bank and become a part of its general funds, and there is nothing but a liability as debtor to repay according to the customs and usages of the business.”

Thus this depositor occupies the same position as any other depositor of such bank unless the relationship is changed by the contract above described.

By the terms of this contract all moneys “hereafter deposited by the school and/or Township treasurer” were declared to be “deposited as a special fund” . . . and held “by it as a special trustee. ” We take it to be elementary that a mere declaration that a certain fact exists is valueless unless such fact does actually exist, and before one can resort to equity for relief predicated upon some such declaration he must show that the facts or matters declared are in fact existent.

It is the well settled law of this State that the de: posits of a township treasurer in his official capacity are subject to the same rules of law as relate to other depositors and upon the insolvency of the bank with which such deposits are made, he is not entitled to a preference because of such official position.

The question then presents itself: Can one depositor obtain a preference over other depositors by a secret agreement between himself and the bank? The statute of this State gives to banking institutions no authority to enter into secret agreements for the benefit or preference of one depositor over another and any attempt to do so must be held void. Such a practice if countenanced might work a great injustice and inflict financial loss upon the unsecured depositors and would enable large depositors to absorb all or the greater portion of the assets of a bank. The law of this State contemplates fair and' uniform" dealing by banks with all their depositors and any secret agreement to protect one while others are left without security, even though no actual fraudulent intent is apparent, is nevertheless absolutely void and of no effect. (Commercial Banking & Trust Co. v. Citizens’ Trust & Guaranty Co., 153 Ky. 566, 45 L. R. A. [N. S.] 950.)

Banking corporations being creatures of law possess only such powers-as are expressly granted by law or are impliedly granted because necessary to carry out powers expressly granted, and the making of secret agreements for the benefit or protection of one depositor, as herein attempted, does not fall in either class.

Banks publish financial statements showing assets and liabilities and public policy prevents any secret understanding or agreement which would in any manner give one depositor an advantage or preference over another depositor.

We hold that the alleged trust agreement between the appellant and the Seward State Bank is void and of no effect and the order and judgment herein of the circuit court of Winnebago county is hereby affirmed.

Judgment affirmed.


text:
    The People of the State of Illinois ex rel. Oscar Nelson, Auditor of Public Accounts of the State of Illinois, v. Peoples Bank and Trust Company of Rockford, Illinois. American Terrazzo & Tile Company, Appellant, v. Peoples Bank and Trust Company of Rockford, Illinois, Eugene Abegg, Receiver, Appellee.
    Gen. No. 8,537.

      Heard in this court at the May term, 1932.
    Opinion filed October 18, 1932.
    Earl S. Hodges, for appellant.
    Hall & Dusher, for appellee.
   Mr. Justice Baldwin

delivered the opinion of the court.

Prior to June 11, 1931, Tolmie Bros., Inc., of Rockford, Illinois, was indebted to the American Terrazzo & Tile Company for tile work as subcontractor in a sum in excess of $10,000 and on such date delivered to such company its check in the sum of $10,000 drawn upon the Peoples Bank and Trust Company of Rockford, Illinois.

Upon receipt of this check the said company executed a partial waiver of lien and attached the same to the check and placed such check and its waiver of lien with the First National Bank of Springfield, Illinois for collection and remittance. On the same day the First National Bank of Springfield forwarded the check and waiver of lien to the Peoples Bank and Trust Company of Rockford, Illinois, with its instructions to “remit and oblige.” On June 13, 1931, the Peoples Bank and Trust Company honored the check and charged the same to the account of its depositor, Tolmie Bros., Inc., but instead of remitting in cash to the First National Bank of Springfield, Illinois, issued its draft upon the First National Bank of Chicago, Illinois, payable to the order of the First National Bank of Springfield, Illinois, for the said sum of $10,000.

On June 15,1931, the First National Bank of Springfield, Illinois, sent this draft to the First National Bank of Chicago, Illinois, for payment but the same was returned with the notation appearing thereon “drawing account closed,” although there was on deposit in the First National Bank of Chicago, Illinois, to the credit of the Peoples Bank and Trust Company of Rockford, Illinois, an amount in excess of the sum of $10,000.

At the close of the business on June 15, 1931, the Peoples Bank and Trust Company was closed by the auditor of public accounts of the State of Illinois.

The auditor took possession of such bank and on September 4, 1931, a receiver was designated and appointed by him. On September 19, 1931, such appointment was filed and appropriate notices for the filing of claims were given.

This suit was filed in the circuit court of Winnebago county to the October 1931 Term and a decree was entered confirming the appointment of the receiver.

On January 18, 1932, the American Terrazzo & Tile Company, appellant, hereinafter called petitioner, by leave of court, filed its intervening petition in such proceeding in the said court by which it alleged the indebtedness of Tolmie Bros., Inc., the receiving of the said check and all of the facts above set forth and further alleged that the said sum of $10,000 was held by the said Peoples Bank and Trust Company and the receiver thereof as a trust fund for the use and benefit of the appellant and requested a decree directing payment thereof.

The receiver of the bank filed his answer admitting all of the facts alleged in the intervening petition, except he denied that the said sum of $10,000 constituted a trust fund and denied that the petitioner was entitled to a preferential claim therefor against the estate in his hands as such receiver.

This cause was heard by the court by agreement of the parties, upon the verified petition, answer and argument of counsel. The trial court entered a decree denying the preference but allowing the claim of the intervening petitioner as a general claim. It is from this decree that the petitioner herein has prosecuted this appeal.

The only question in this case is whether the bank held such fund in trust for petitioner. If the answer is no, the decree of the trial court must be affirmed, but if the answer is yes, the decree must be reversed.

The petitioner by depositing for collection the check so received with the Springfield National Bank created the relationship of principal and agent. (Waterloo Milling Co. v. Kuenster & Co., 158 Ill. 259; McClure & Taylor v. D. M. Osborne & Co., 86 Ill. App. 465; Aetna Ins. Co. v. Alton City Bank, 25 Ill. 243; Carlinville Nat. Bank v. Wilson, 78 Ill. App. 339.) The petitioner as principal delegated to such bank as its agent the duty to collect the money represented by such check. This bank, following what seems to be a banking custom, sent the check directly to the Peoples Bank and Trust Company with directions that “upon payment of this check kindly remit and oblige.” By the sending of this check directly to the Peoples Bank and Trust Company, such bank, although the debtor of the maker of the check, became, for the purpose of the collection and remittance of the proceeds of such check, a special agent of the petitioner (Krueger v. First Nat. Bank of Chicago, 217 Ill. App. 18; Waterloo Milling Co. v. Kuenster & Co., 158 Ill. 259; Carlinville Nat. Bank v. Wilson, 78 Ill. App. 339) and such special agency continued until such time as the said Peoples Bank and Trust Company had performed its duty of transmitting the proceeds of such check to the First National Bank at Springfield, Illinois.

There can be no doubt that as between its depositor and a bank, the relationship of debtor and creditor exists. The depositor is the creditor of the bank in the amount he has on deposit and the bank is a debtor to such creditor for a like amount. Such relation existed as between Tolmie Bros., Inc., and the Peoples Bank and Trust Company. In this case, however, the petitioner was not and never had been a depositor of this bank and had ho dealings with it whatever, except the presentation of such check through its bank for payment. The relationship of debtor and creditor in its general sense therefore did not exist as between the petitioner and the Peoples Bank and Trust Company.

Of course, anyone who holds the money of another is in a sense a debtor, but a debtor in such sense is not alone sufficient to create the relationship of debtor and creditor. The very substance of such a relationship is the fact that one party extends credit to another and such other accepts the credit.

No such state of facts exists in the case at bar. There was no intention on the part of the petitioner to extend credit to the bank. The check was sent to such bank for “payment and remittance.’’ The acceptance of the check and charging it to the creditors’, Tolmie Bros., Inc., account discharged the duty of payment as between the creditor, Tolmie Bros., Inc., and the bank, but the duty imposed upon such bank “to remit” was not discharged until such service was performed, and the failure of such bank to perform the duty imposed by such special agency “to remit” does not have the effect of altering or changing the relationship' created thereby to that of debtor and creditor.

The check had been forwarded for the sole purpose of “payment and remittance” and no action of the Peoples Bank and Trust Company alone could alter or change such purpose to some other relationship. If, therefore, the relationship is not changed, and we hold that it was not, then do the moneys — the proceeds of such check — constitute a trust fund for the benefit of the petitioner herein? This question was before the court in the case of People v. Iuka State Bank, 229 Ill. App. 4, and it was there held “that when the paper is sent for collection under expressed terms to ‘collect and remit’ then the money when collected is in the hands of the bank a trust fund.” (National Life Ins. Co. v. Mather, 118 Ill. App. 491; People v. Auburn State Bank, 215 Ill. App. 133; Krueger v. First Nat. Bank of Chicago, 217 Ill. App. 18.) Again in the case of People v. Auburn State Bank, supra, it was held “that where a draft is forwarded for collection and remittance, and the collection is made, the proceeds become a trust fund for the benefit of the forwarder. ’ ’ (Goshorn v. Murray, 197 Fed. 407; National Life Ins. Co. v. Mather, supra.)

Thus it must be held that the proceeds of such check was a trust fund in the hands of the Peoples Bank and Trust Company for the use and benefit of the petitioner herein.

It is said on behalf of the receiver herein that the issuance of the draft to the First National Bank of Springfield, Illinois, did not change the relationship of the parties but only changed the evidence of it and in support of it is cited the case of People ex rel. Nelson v. Builders and Merchants Bank and Trust Co., 264 Ill. App. 388, and Clark v. Chicago Title & Trust Co., 186 Ill. 440.

In the Builders and Merchants Bank case the petitioner was and had been a depositor with the bank and as such depositor there existed between him and the bank the relationship of debtor and creditor, petitioner being the creditor of the bank to the amount of the balance of his deposit account and the bank being the debtor to him in a like amount.

Immediately prior to the failure of the bank the petitioner presented a withdrawal slip to the bank for the sum of $4,778.18 and requested and received a cashier’s check for such amount. Two days later the bank failed. The cashier’s check given to the petitioner in that case was deposited by him in another bank but was not paid and it was held in such case that under the circumstances there was merely a change in the form of the evidence of indebtedness, namely, a change from a deposit in the savings account to a cashier’s check. The relationship of debtor and creditor, which had before existed when he was a depositor, was continued when he requested and received the cashier’s check.

Substantially the same facts existed in the case of Clark v. Chicago Title & Trust Co., 186 Ill. 440, and the court reached the same conclusion, quoting and following Clark v. Chicago Title & Trust Co., 85 Ill. App. 293 (pages 295, 296) where the same case was decided in the Appellate Court: “The drawing of the cashier’s check, even if it changed the form of indebtedness, did not change the fact. The Globe Savings Bank was still indebted to the appellant for $3,000 represented by its cashier’s check. There was no change in the nature of the debt. The only change was in the evidence of it. . . . Appellant’s counsel insist that ‘it is not a question of preference. It is a question of title to money — to whom does it belong?’ A creditor is entitled to money due him from any debtor. In a sense the money due belongs to him, but that fact does not change — it establishes — the relation of debtor and creditor, and subjects the parties to the rules of law governing that relation.” It is very apparent that the principle presented in these cases has no application whatever to the case at bar.

It is said by the receiver of the Peoples Bank and Trust Company that there can be no trust without “some res.” This is, perhaps, a correct statement but it has no application to the facts in this case because the Peoples Bank and Trust Company, and afterward the receiver, was in actual.possession of a sum of $10,000 which was the property of the petitioner and not the property of the bank.

The petitioner caused the check to be forwarded to the Peoples Bank and Trust Company “for payment and remittance” — not for other evidence of indebtedness-^-and immediately upon the acceptance of the Tolmie Bros, check, the money — not another check — became the property of and payable to the petitioner and the failure of the Peoples Bank to pay over the money had the effect of allowing the sum of $10,000 not its property to remain in its possession. And the retention of such moneys by the bank constituted the “res” of the trust created. The issuance and delivery of the draft did not constitute payment and was not delivery of the fund in accordance with the directions sent with the check.

' “The modern and more equitable doctrine permits the recovery of a trust fund from one not an innocent purchaser, and into any shape into which it may have been transmuted, provided he can establish the fact that it is his property, or the proceeds of his property, or that his property has gone into it and remains in a mass from which it cannot be distinguished.” (Macy v. Roedenbeck, 227 Fed. 346.)

It is true, as contended by the receiver herein, that the issuance of the check by Tolmie Bros., Inc., did not operate as an assignment of any of its funds in the bank to the appellant and it is provided by statute in this State that “A cheek of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder, unless and until it accepts or certifies the check.” (Cahill’s Illinois Revised Statutes 1931, ch. 98, ¶ 210.)

The acceptance of the Tolmie Bros., Inc., check, however, by the Peoples Bank and Trust Company and charging it to such depositor’s account was more than an assignment. It was a completed act as between itself and Tolmie Bros., Inc., and such completed act operated to transfer title to that sum of the money held by the Peoples Bank and Trust Company for- its depositor, Tolmie Bros., Inc., to such bank in trust for the petitioner herein and the petitioner became immediately entitled to possession of the money. The Peo-, pies Bank as a debtor of Tolmie Bros., Inc., paid that portion of its debt by the acceptance of the check and taking credit therefor by charging same to the account of its depositor. This is true regardless of the fact that the sum of $10,000 may not have been separated from the other moneys held by the bank.

In Macy v. Roedenbeck, 227 Fed. 346, page 355, the court said “That the bank was an agent in making the collection. When it had made the collection, it held it in trust. If it mingled it with its own funds, the trust attached pro tanto to the funds.”

In People v. Auburn State Bank, 215 Ill. App. 133, page 137, the court in quoting Story on Equity Jurisprudence, stated the rule to be: “The general proposition which is maintained both at law and in equity upon this subject is, that if any property in its original state and form is covered with a trust in favor of the principal, no change of that state and form can divest it of such trust or give the agent or trustee converting it, or those who represent him any more valid claim in respect to it than they respectively had before such change. An abuse of a trust can confer no rights on the party abusing it or on those who claim in privity with him. This principle is fully recognized at law, in all cases where it is susceptible of being brought out, as a ground of action or of defense. In courts of equity it is adopted with a universality of application. ’ ’

The petitioner did not at any time authorize or consent to any disposition of this fund by the Peoples Bank and Trust Company other than remittance. The proceeds of the check were to be remitted in accordance with the directions given when the check was forwarded for payment, and under such circumstances the Peoples Bank and Trust Company could not escape its liability by the issuance of its check upon another hank and the receiver of such bank stands in the same position as to the matter as the hank itself. (National Life Ins. Co. v. Mather, supra; Link Belt Mach. Co. v. Hughes, 174 Ill. 155; Union Trust Co. v. Trumbull, 137 Ill. 146.)

We are of the opinion and so hold that the facts in this case clearly establish that this money was held in trust by the Peoples Bank and Trust Company of Rockford, Illinois, for the use and benefit of the appellant and that upon the appointment of a receiver therefor the trust fund so held for the use and benefit of the petitioner passed into the hands of the receiver and that the receiver now holds such fund in trust for the use and benefit of the petitioner.

The decree of the circuit court of Winnebago county is reversed and the cause remanded to the trial court with directions to enter a finding that appellant is entitled to a preferred claim over the general creditors against the moneys of the Peoples Bank and Trust Company of Rockford, Illinois, which passed to the receiver, which was due it from other banks at the time of its failure. (People v. Iuka State Bank, supra.)

Reversed and remanded with directions.


author: Mr. Presiding Justice Eldredge

text:
    Oscar Nelson, Auditor of Public Accounts of the State of Illinois, v. John B. Colegrove & Co. State Bank. Moore-Lowry Flour Mills Company, Appellee, v. Robert G. Earley, Receiver of John B. Colegrove & Co. State Bank, Appellant.
    Gen. No. 8,618.

      Heard in this court at the January term, 1932.
    Opinion filed October 17, 1932.
    Oscar J. Putting, for appellant.
    Hershey & Vogelsang, for appellee.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

In the case of Oscar Nelson, Auditor of Public Accounts, v. John B. Colegrove & Co. State Bank which was instituted for the purpose of the liquidation of said bank on the ground of insolvency and in which appellant was appointed receiver, the Moore-Lowry Flour Mills Company, a corporation organized under the laws of the State of Kansas, filed its intervening petition for the purpose of having its claim against the bank declared to be a preferred one as against the general creditors. The cause was' submitted to the chancellor upon a stipulation of facts.

On September 19, 1929, appellee forwarded to said bank its sight draft on Ellrich Brothers for the sum of $1,566.50 for collection and remittance, together with a bill of lading thereto attached for a carload of flour shipped, to them by appellee. On September 25, 1929, Ellrich Brothers executed their check for the sum of $1,568.10, covering the amount of the sight draft and exchange. .This check was drawn upon said bank and payable to the order of “Yourselves.” Ell-rich Brothers were and had been customers of said bank but on said day the amount of - their deposit therein was but $298.10. The bank accepted the check and delivered the bill of lading to Ellrich Brothers. The check was not charged to the account of Ellrich Brothers in the bank but was carried as a cash item in the assets of the bank. On October 8, 1929, the bank issued a certificate of deposit for said amount payable to appellee which it sent to the latter who immediately deposited the same in the Commerce Trust Company of Kansas City, Missouri, and it passed through the regular banking channels to the John B. Colegrove & Go. State Bank for payment. The certificate of deposit nor any part thereof was ever paid by the latter bank which was closed by the auditor October 11, 1929. From September 25 until October 11,1929, there had been deposited in the bank by Ellrich Brothers the sum of $2,566.36 and at the time the bank closed it had cash assets in the amount of $25,575.19. Between September 25, 1929 and October 11, 1931, $2,582.09 were charged off against the account of Ellrich Brothers on checks issued by them in the usual course of business. Under the above facts the court held that the claim of appellee was entitled to a preference.

It has been held by all the courts of this State which have passed upon the question that where an account has been sent to a bank with instructions simply to collect, the collection of the fund establishes the relation of debtor and creditor only between the parties, but when the paper is sent with express instructions to collect and remit, then the money when collected by the bank becomes a trust fund. People v. Iuka State Bank, 229 Ill. App. 4; Bates v. People ex rel. Nelson, 265 Ill. App. 1.

When the bank accepted the check of Ellrich Brothers and delivered to them the bill of lading and issued the certificate of deposit in question and remitted the same to appellee, its liability to appellee became absolute and cannot be evaded by any system of bookkeeping adopted by the bank in regard to the check executed by Ellrich Brothers. Nor can the contention that appellee accepted the certificate of deposit in payment of its draft on Ellrich Brothers be sustained. Without an express agreement and understanding between appellee and the bank that the certificate of deposit was accepted as payment of the debt, it was not snch payment until the certificate of deposit was paid but was only a means of payment. Leake v. Brown, 43 Ill. 372; Bailey v. Pardridge, 134 Ill. 188; United States Wringer Co. v. Cooney, 214 Ill. 520; Woodburn v. Woodburn, 115 Ill. 427; Brown v. Leckie, 43 Ill. 497; Stevenson v. Earling, 290 Ill. 565.

Under the facts as disclosed by the stipulation a trust was established and the decree of the circuit court is affirmed.

Affirmed.


text:
    August C. Meyer, Receiver for Fisher State Bank, Appellee, v. Charles E. Martin et al., Appellants.
    Gen. No. 8,640.
    Heard in this court at the April term, 1932.
    Opinion filed October 17, 1932.
    Dobbins & Dobbins, for appellants.
    Forrest B. Gore, for appellee; Elmer F. Davies, of counsel.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

On February 18, 1930, Alva G. Martin, a farmer, was indebted to the Fisher State Bank in Champaign county in the principal sum of $1,598 and executed his promissory note payable one year after date with interest at seven per cent per annum, to secure which he also executed a chattel mortgage which covered three mules, one horse, seven cattle, four hogs, one automobile; 18 farm implements and also the following: 800 bushels of corn, 15 tons of straw and three tons of hay: This mortgage contained the following clause: “Also conditioned that the mortgagor may retain possession of the said goods and chattels, and keep and use the same until he shall make default, etc.” Subsequently upon a bill of complaint being filed in the circuit court of Champaign county the Fisher State Bank was found to be insolvent and August C. Meyer was appointed receiver. When the receiver took possession he found among the assets of the bank the note and chattel mortgage in question. On February 26,1931, the receiver started to foreclose this mortgage by posting notices of sale in accordance with the provisions of the statute. Upon the same day L. 0. Sale obtained a judgment against Martin in the circuit court of Champaign county in the sum of $646.41 and the Fisher Farmers Grain and Coal Company also obtained a judgment on that day against Martin for the sum of $450.13 and executions were issued, delivered to the sheriff and served on Martin on that date. On February 27, 1931, the sheriff took possession of the property and asked Martin to act as custodian until the sale which was to be held on March 9, 1931. No levy was made by the judgment creditors upon any of said property. A dispute between the judgment creditors and the receiver of the bank as to who was entitled to the property resulted in a stipulation between the parties whereby it was agreed that the sale might proceed and the rights of the parties should be settled by the court. At the time of the foreclosure proceedings the corn, straw and hay had all been consumed by having been fed to the stock embraced in the mortgage. The other property was sold and realized a net amount of $922.70. Pursuant to the stipulation the receiver filed Ms intervening petition in the bank insolvency suit setting up the facts and asking an adjudication upon the rights of the parties. The cause was referred to the master in chancery who found as a matter of law that the chattel mortgage, in so far as it related to the consumable property, to wit, the corn, straw and hay, was void as to antecedent and subsequent creditors, but was valid as to the nonconsumable property and that the bank was entitled to the proceeds of the sale. The exceptions to the master’s report filed by appellants were overruled by the chancellor who confirmed the findings of the master and entered a decree in conformity therewith, to reverse which this appeal is prosecuted.

The contention of appellants is that a mortgage of chattel property which includes property necessarily consumable in its use, if possession is reserved by the mortgagor with the right to use the same, is fraudulent per se as against antecedent and subsequent creditors. To sustain this contention appellants rely largely upon the case of Talty v. Schoenholz, 323 Ill. 232. It appears from the opinion in the Talty case that the mortgage mentioned therein was similar to that in the case at bar in that it included both consumable and nonconsumable property, and that possession was reserved in the mortgagor with the right to use the same. In that case, as in tMs, the right of , judgment creditors to levy upon the property was involved and most of the consumable property had been consumed so that there was substantially no property on which to levy executions except that which was nonconsumable. The court held in the Talty case: “The chattel mortgage in question contained a provision that until default was made in the payment of the note it should be lawful for the mortgagor to retain the possession of the mortgaged property and use the same. The larger part of the property covered by the mortgage was of such a character that it was consumable by any use thereof which might be made by the mortgagor, and the evidence shows that much of it had been consumed prior to the foreclosure of the mortgage. To render a mortgage valid there must be a bona fide and certain appropriation of the property for the benefit of the creditor, and not a colorable one, in which the creditor has only a contingent interest, dependent upon the good faith of the mortgagor. (Tennessee Nat. Bank v. Ebbert, 9 Heisk. 152.) Based upon Morgan Bros. v. Dayton Coal and Iron Co., 183 S. W. 1019, Morris v. Clark, 62 id. 673, Merchants and Mechanics Savings Bank v. Lovejoy, 55 N. W. 108, First Nat. Bank of Chicago v. Caperton, 22 So. 60, Franzke v. Hitchon, 80 N. W. 931, Robbins v. Parker, 3 Metc. (Mass.) 117, Darwin v. Handley, 3 Yerg. 502, and other cases, the general rule is laid down in 11 Corpus Juris, 567, that a mortgage of property which is consumable in its use is prima facie fraudulent if possession is reserved by the mortgagor, and that it is fraudulent per se if the right to use such property is also reserved.”

Appellee maintains that the Talty case should not control the decision in this case because it in fact simply mentions a rule laid down in Corpus Juris and does not specifically adopt it as a rule of law which should prevail in this State, but while this may be technically true the plain inference is that the rule as announced in Corpus Juris is the one approved by the Supreme Court. It follows that the decree of the circuit court is erroneous and must be reversed and remanded with directions to enter a decree in conformity with this opinion.

Reversed and remanded with directions.


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    In re Oscar Nelson, Auditor of Public Accounts of the State of Illinois, v. John B. Colegrove & Co. State Bank. Charles H. Shamel, Appellant, v. Robert G. Earley, Receiver. John B. Colegrove & Co. State Bank, Appellee.
    Gen. No. 8,650.

      Heard in this court at the April term, 1932.
    Opinion filed October 17, 1932.
    Provine & Williams, for appellant.
    Oscar J. Putting, for appellee.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

On October 10, 1929, the John B. Colegrove & Co. State Bank of Taylo'rville, Illinois, was closed by the auditor of public accounts and subsequently Robert Gr. Earley was appointed receiver thereof. John B. Colegrove was a stockholder and president of the bank and Charles H.' Shamel, appellant, was a stockholder thereof. ; • ■ ■

Appellant filed an intervening petition in which it is alleged that during July and August of the year 1929, Colegrove, then president of the bank, entered into negotiations with the petitioner upon the subject of assisting the bank to obtain money for its current use; that as a result of such negotiations, the petitioner, at the request of John B. Colegrove, loaned to the bank to be used by it as collateral security to a loan or deposit of $10,000 of State funds from the State treasury, certain bonds; that it was agreed that the identical bonds mentioned should be returned to the petitioner, on or before December 1, 1929; that the petitioner was not to receive interest or compensation or consideration of any kind for the loan of the bonds; that an instrument in writing in relation to the loan of the bonds was executed and is attached to the petition; that in pursuance of the agreement, petitioner delivered the bonds to Colegrove as the president of the bank, for its use and said bonds were of the value with accrued interest of approximately $12,000; that Colegrove, as president of the bank, obtained from the State treasurer on the security of the bonds, $10,000 belonging to the State, and used and applied the same in the current business of the bank, and that the bank has enjoyed the entire use and benefit thereof; that all of the funds deposited by said treasurer in said bank were money and property of the State of Illinois, derived from taxation and entitled to priority in the payment of claims and debts against the bank; that subsequently the bank was closed by the auditor of public accounts and a receiver appointed; that the receiver has in his custody and possession said bonds or the proceeds thereof but declines or refuses to return the same to petitioner without the order of the court, although the agreed time for the return of the bonds was long past; that by virtue of the premises, the bonds were held as and constituted an express trust by the bank, from which it derived great benefit, and the bonds, including the interest coupons attached thereto, should be returned to’jletitioner,' and that he should be reimbursed for the expenses incurred by him in connection therewith; that petitioner should be subrogated to the rights of the State of Illinois against the bank; that at the time of the delivery of said bonds to the bank, the petitioner received as collateral security to secure their return, three certain promissory notes each secured by a real estate mortgage, the face value of such notes being-ill,075; that the petitioner is ready and willing and offers to execute reassignments of the notes and mortgages to the bank and to take such other steps necessary to legally affect the transfer, upon the return to the petitioner of his bonds, the interest coupons thereon and his expenses; that petitioner asks the aid of the court in the premises and that the court order the return of the bonds in question, or others of the same name, denomination and value, and that the petitioner might have such other and further relief as equity might require.

The receiver filed an answer in which he denied substantially every material allegation alleged in the intervening petition. The hearing was had before the chancellor. The" proofs are meager and incomplete. Appellant testified that during the months of July and August, 1929, Shamel had several conversations with Colegrove in the bank; that these conversations related to the financial condition of the bank during that period of time; that the first one occurred in July wherein Colegrove told Shamel there had been heavy withdrawals of money from the bank and it needed some ready money, and requested the latter to buy some mortgages to help the bank out, saying in substance, “You are one of the stockholders of the bank, and the rest of us have helped the bank out, and you ought to do something”; that Shamel asked Colegrove what mortgages he wanted to sell and Colegrove named a number of mortgages and that Shamel told him that the property was not worth the money loaned on them and that he would not buy any such mortgages. The next conversation occurred in the forepart of August in which Colegrove again requested Shamel to purchase some other mortgages which Shamel refused to do, stating that they were no better than the former ones offered to him. The next conversation occurred on or about the Slst day of August in which Colegrove told Shamel that he now had good mortgages which he would assign to Shamel if the latter would let him have some bonds which he owned for the purpose of depositing them with the State treasurer so he could get $10,000 of State money as a deposit in the bank which was badly needed to keep the bank open; that Colegrove offered to Shamel at this time certain notes executed by Samuel Peat and wife and a mortgage securing them, certain notes executed by Grace Flesher and a mortgage securing them and certain notes executed by Martha L. Perrine and husband and a mortgage securing the same; that Cole-grove stated that said mortgages and notes were the property of the bank and were all first mortgages and showed the abstracts of the property covered by the Flesher and Peat mortgages; that Shamel asked Cole- • grove for the abstract to the Perrine property but the latter made some excuse and said he would get that abstract and deliver it to the witness later, but that it was good property, a first mortgage, and that Cole-grove would guarantee it; Shamel further testified that he examined the abstracts of title of the land covered by the Flesher' and Peat mortgages and said to Colegrove that while he was familiar with the land in a general way he ought to have time to go and look at it, to which Colegrove replied that he was in a hurry and had to get to Springfield that morning as the State treasurer’s office would close at noon; that at the time of this conversation the bonds owned by Shamel were in a vault in a building next to the bank building and Shamel procured them and took them to the bank. Thereafter the following transactions took place. Oolegrove executed the following note and signed it personally in his own name and not in the name of the bank nor as president of the bank: “$11,550.00 Taylorville, Ill., Aug. 29th 1929 On December 1st 1929 after date, I promise to pay to the order of Charles H. Shamel Eleven Thousand and Five Hundred and Fifty Dollars at the John B. Oolegrove & Co., State Bank, Taylorville, Illinois, for value received, with interest at the rate of seven per cent per annum, after date until paid.

“As collateral security for the payment of this note and any other present or future liabilities of the undersigned, or either or any of us to the holder thereof, whether direct or acquired by assignment, and whether absolute or contingent, the undersigned do (es) hereby assign, pledge and deliver to said holder the following property:

“Mortgage and Notes signed by Samuel Peat & wife dated Oct. 15, 1924 on NW% SW% and Sy2 SW% Sec. 36 Tp. 12 N, B 3 west of 3rd P. M. for amount of $6,700.00.
“Mortgage and Notes signed by Grace Flesher dated Sept 17-1924 on S% NW% Sec. 23 Tp. 13 N, B 1 West of 3rd P. Mi for amount of $4,000.00.
“Mortgage and notes signed by Martha L. Perrine & Husband Dated Mar 1st 1925 on N% NENA SE^A and sy2 sy2 SE% NENA Sec. 10 Tp 14 N, B 2 W of 3rd P. M. for amount of $3,375.00.”

This note also contains the usual provisions and conditions in regard to collateral securities found in notes providing therefor. On the back of the note appears the following:

“The following agreement is made a part of the within described Note I agree on or before Dec. 1st 1929 to Beturn to O. H. Shamel the following identical Bonds which I have borrowed from him $10000.00 Imperial Japanese Government Bonds 6% Series 1954 No. 126695-704 Coupons Feb. 1, 1930 & Thereafter $1,550.00 Liberty Bonds 4% S 1938. Gol903477 for $1,000 — Gk>8732277 for $500.00 and Jo588083 for $50.00. Coupons Oct. 15, 1929 and Thereafter and pay expenses, insurance & etc. from Washington, D. C. to Taylorville & return To There. No coupons to be removed by me from said bonds.
John B. Colegbove”

The note with the indorsement thereon together with the collateral notes, and the mortgages securing them respectively, and also the written assignments of said mortgages were delivered to Shamel and he in return delivered his bonds to Colegrove who deposited them with the State treasurer as security for a deposit of $10,000 made by the latter in the bank. These bonds consisted of 10 Imperial Japanese Government External Loan of 1924, 30-year sinking fund, 6% per cent gold bonds, due February 1, 1954, with February 1, 1930 and subsequent coupons attached of the par value of $1,000 each and three United States Fourth Liberty Loan 4% per cent gold bonds due October 15, 1938, with October, 1929 and subsequent coupons attached of the aggregate value of $1,550. After the closing of the bank the State treasurer sold four of the Japanese Government Bonds and all of the United States Government Liberty Bonds for the sum of $5,786.71 which sum together with certain amounts realized by the State treasurer upon the sale of other bonds deposited by the bank with him made up an aggregate sum of $113.08 in excess of the amount necessary to liquidate the deposit of the State treasurer with the bank, which latter sum of money together with the six remaining Japanese Government Bonds not required to liquidate the account of the State with the bank were returned by the State treasurer to the receiver of said bank who sold the Japanese Government Bonds for the sum of $6,281, which sum the receiver now has in his hands and has kept the same in an interest account upon which he has received two per cent per annum.

Colegrove was not produced as a witness and there is no evidence of the negotiations leading up to the delivery of appellant’s bonds to Colegrove except that of appellant.

The chancellor decreed that as to the amount received by the State treasurer from the sale of the bonds made necessary to liquidate the account of the State treasurer with the bank he should share as a general creditor, but as to the excess amount of $113.08 cash and the sum of $6,281 received by the receiver from the sale of the six Japanese Government Bonds returned to the latter his claim was entitled to preference.

It is contended by appellant, Shamel, (1) that the transaction between him and Colegrove whereby he was induced to turn over to Colegrove the bonds in question for the use of the bank created a trust relationship which was not changed by the appointment of the receiver and that as the transaction was one for the benefit of the bank it was bound thereby ; (2) that the transaction in question was a bailment and not a sale and the bank never became an owner of the bonds; (3) that the bank held said bonds in trust for the reason also that they had been obtained from appellant for the use of the bank, by the fraud and misrepresentation of its president; (4) that as a result of the transaction the bank became the debtor of the State and appellant became a surety for the bank to the State in the same manner as if he had indorsed the note of the bank and thereby became subrogated not only to the claim of the State but to all rights, privileges and priorities of the State itself.

The third and fourth propositions will be disposed of first. The alleged fraud is based upon the fact that appellant testified that Colegrove told him that all the mortgages received by him from Colegrove as collateral security were first mortgages when in fact one of them was a second mortgage; and that all the said mortgages were the property of the bank when in fact another party claims to own or have some interest in two of them. The abstract of the property covered by said alleged second mortgage was not introduced in evidence nor was there any documentary proof showing that it was in fact a second mortgage. There was no substantive evidence that all the mortgages were not in fact first mortgages and no positive proof that said mortgages were not owned by the bank. However, there are no allegations in the intervening petition charging fraud of any kind in regard to the transaction in question between Colegrove and appellant. The court in its decree did not pass upon any question of fraud and there is nothing in the record to show that the issue of fraud was raised or presented before the chancellor and it cannot be raised in this court for the first time.

The' contention that appellant became a surety for the bank to the State and thereby became subrogated to all the right, privileges, and priorities of the State itself cannot be sustained. The State acquires its priority over other creditors by virtue of its sovereign right under the common law (People v. Farmers State & Savings Bank, 338 Ill. 134) but we know of no rule whereby such sovereign right can be delegated or assigned to an individual by subrogation or otherwise.

The remaining contentions of appellant may be embraced in the one proposition whether the qhancellor erred in not finding that the proceeds of the bonds sold by the treasurer, in order to satisfy the bank’s indebtedness to the State, should also be entitled to priority. This is an equitable proceeding and while equity will administer the assets of an insolvent corporation upon the principle that equality is equity and will respect legal rights and liens previously acquired (Atwater v. American Exch. Nat. Bank, 152 Ill. 605), it will also, in order to ascertain and carry out the intention of the parties to a particular transaction, look at their situation and the whole transaction between them. (Frink v. Cole, 5 Gilm. [Ill.] 339.) A court of equity will always attempt to ascertain the real intent and purpose of the parties to a contract, and when discovered will give effect to such intention, and will look to the substance rather than the form of the transaction in reaching a determination of the material questions involved. Appellant and Colegrove were stockholders in the bank. Each knew that it was in a precarious condition financially. It was for the interest of each to keep the bank open and in condition to carry on its business. What was done by both parties was for the interest of the bank and incidentally for themselves. Appellant was a practicing lawyer and well able to protect himself. He knew the purpose for which his bonds were to be used and consequently knew that when they were put up as a guarantee for the payment of the deposit of the State in the bank they could be legally used by the treasurer to fulfill that guarantee. The contract made between Colegrove and appellant was necessarily subject to such a condition although not written therein. Appellant knew the financial condition of the bank and that his bonds or part of them might have to be appropriated by the treasurer to satisfy the deposit of the State therein, and that under such circumstances the return of the bonds to him under the terms of the contract would be an impossibility. His action in turning over these bonds was voluntary and with full knowledge of the use that might be made of them by the treasurer. He was not a stranger to the bank but a stockholder therein and whatever benefit the bank received by obtaining the said deposit from the State treasurer would also be a benefit to him. It was said by the Court of Appeals of Ohio in the case of Ramisch v. Fulton, 41 Ohio App. 443, 180 N. E. 735: “When control of a bank for liquidation purposes is taken by the Superintendent of banks, the question of preference creates in reality a controversy between the depositor claiming a preference and the other depositors who are general creditors, inasmuch as the assets in which all are to participate are diminished to the extent of whatever preferences are allowed. The creation of preferences, generally speaking, should therefore be discouraged except in cases where the right thereto is clearly established. As said in Cavin v. Gleason, 105 N. Y. 256, at page 262, 11 N. E. 504, 506: ‘The equitable doctrine that, as between creditors, equality is equity, admits, so far as we know, of no exception founded on the greater supposed sacredness of one debt, or that it arose out of a violation of duty, or that its loss involves greater apparent hardship in one case than another, unless it appears, in addition, that there is some specific recognized equity founded on some agreement, or the relation of the debt to the assigned property, which entitles the claimant, according to equitable principles, to preferential payment.’ ” We believe the chancellor by his decree has done full equity between the parties to this controversy with one exception. The evidence shows that the appellant has retained possession of the notes and mortgages delivered to him by Colegrove and has brought suits to foreclose said mortgages and has offered in his intervening petition to assign the notes and mortgages to the receiver. This should have been ordered in the decree as it would not be equity to permit him to retain these securities and at the same time obtain a preference for the greater portion of his claim. The receiver, however, has not presented or pressed this point and it is not before us for consideration.

On April 9,1932, appellee filed a motion in this court for leave to assign certain cross errors on the record which motion was granted. These cross errors which this court granted leave to assign are to the effect that the chancellor erred in finding that the transaction involved was between the bank and appellant while the proofs show that it was between Colegrove personally and appellant and therefore no claim should have been allowed in favor of appellant either general or preferred. Buie Three of this court provides: “The appellee shall have the right to assign cross errors within two days after the record is filed in this court, and not afterwards without special leave of the court. The assignment of errors and cross errors must be written upon or attached to the record.” No cross errors have been written upon or attached to the record in this case. The mere granting of leave by a court to do a certain thing is of no avail unless the thing is done. The party procuring such leave may or may not, at his option, take advantage of the privilege granted but if he does not do so, the privilege is abandoned. We cannot therefore consider these cross errors.

The decree of the circuit court is affirmed.

Affirmed.