author: Mr. Justice Niem'eyer

text:
    Winnetka Trust and Savings Bank v. Practical Refrigerating Engineers Association et al., Appellees. E. S. Libby and A. L. Blatti et al., Appellants.
    Gen. No. 42,959.
    Heard in the first division of this court for the first district at the December term, 1943.
    Opinion filed April 3, 1944.
    Rehearing denied April 17, 1944.
    Zimmerman & Norman, of Chicago, for appellants; Edward A. Zimmerman and William R. Engelhardt, both of Chicago, of counsel.
    Teller, Levit & Silvertrust, of Chicago, for certain appellees; Leon Silvertrust and H. J. Goldberger, both of Chicago, of counsel.
   Mr. Justice Niem'eyer

delivered the opinion of the court.

This appeal involves title to the funds and other property of Chicago Subordinate Chapter No. 1, National Association of Practical Refrigerating Engineers, hereafter referred to as the chapter, an unincorporated association organized in 1919 under a charter issued by the National Association, an unincorporated association organized in 1910. The parties to the controversy are, a very small minority of the members of the chapter who continued to function under the charter, and an exceedingly large majority of the membership which withdrew from the chapter and the National Association November 19, 1941 and became members of an independent organization — the Practical Refrigerating Engineers Association — an Illinois corporation not for profit, incorporated December 6, 1941, hereafter referred to as the corporation.. By a decree, after proceedings had upon the filing of a complaint of interpleader by plaintiff bank, in which the funds involved were deposited by the officers of the corporation, the court found that the funds were the property of the corporation; directed that the clerk of the court, with whom the plaintiff bank had deposited the funds under order of court, pay them to the corporation, and dismissed for want of equity a counterclaim filed on behalf of the chapter and its remaining members for the recovery of other property of the chapter, and an accounting. The appeal is taken on behalf of the chapter and its members, and appellants will be referred to as the chapter. Appellees — the corporation and certain officers and members — will be ' designated as the corporation.

There is no substantial dispute in the evidence. The National Association was organized, according to its constitution, “to further the education and enlightenment of its members in the art and science of refrigerating engineering,” and was empowered to grant charters to chapters upon petition of ten or more men whose qualifications comply with the eligibility requirements of members of the association and who shall have first affiliated themselves in good standing-in the association. The chapter received a charter from the National Association in 1919 and adopted a constitution recognizing the parentage of the National Association and stating- the chapter’s purpose to be “to aid the National Association in carrying out its tenets, as set forth in its preamble.” At the time of the division the chapter had a membership of 237 paid-up members and, in addition to other personal property, a balance of $3,642.98 in its checking account with the plaintiff bank. For more than 15 years the chapter had published a yearly data book which, in addition to information on refrigerating engineering-problems, contained paid advertising which furnished the chapter with an average annual net revenue of approximately $2,000. At the annual convention of the National Association, held in October 1941, the constitution was amended to authorize the president, with the approval of a majority of the board of directors, to suspend a chapter for violation of the constitution or by-laws, or for engaging in any activity which in their opinion is harmful to or threatens the welfare of the association. The by-laws were amended to provide that the National Association, through its national officers, should annually publish the convention papers and selected reference data, together with paid advertising at rates to be established by the board of directors ; that the chapters of the association should cooperate in securing the advertising and, as compensation for their efforts, receive 15 per cent of the gross revenue paid for advertising secured and turned over to the national office, and that “no chapter will publish or will cooperate in the publication of any medium containing paid advertising other than the above. No chapter shall use the name of the N.A.P.R.E. in soliciting advertising, except for the annual publication above mentioned.” Neither the right to make the amendments nor the manner of making them is questioned.

The officers and majority members of the chapter, resenting this action, called a meeting of the chapter, notice of which was given to all members. At this meeting, November 19, 1941, a quorum was present. By a vote of 112 to 15 a resolution was adopted, reciting the above mentioned action of the National Association in respect to paid advertising and the strained relations between the chapter and the association caused thereby, and authorizing and directing the directors of the chapter “to take any and all steps necessary, proper or requisite to surrender Chicago Chapter’s charter and to effectively withdraw and completely sever the membership of Chicago Chapter from any and all affiliation and connection with the N.A.P.R.E.” Another resolution was adopted providing for the appointment of a committee for the purpose of procuring the incorporation of a new organization as a corporation not for profit, and of “transferring all assets and effects of the members of Chicago Chapter to the new organization.” The new organization was incorporated December 6, 1941. On December 5,1941, Taylor and Grrant, purporting to act as president and secretary of the chapter, wrote the National Association advising it of the action taken at the November 19th meeting and stating that the chapter did “hereby and herewith surrender the charter, withdraw and completely sever the membership of the Chicago Chapter No. 1 from any and all connection or affiliation with the National Association of Practical Refrigerating Engineers, the same‘to take effect as of November 19th, 1941.” By letter of January 3, 1942 the National Association acknowledged receipt of the letter of December 5 and stated that the National Association recognized the notification “as merely the individual action of the signers of the notification and such others as may be taking similar individual action”; that it had approved the action of loyal members of the chapter who were carrying on the work and requested each officer or member who had withdrawn from the chapter to promptly deliver all property of the chapter in his possession or control to E. S. Libby, the newly elected president of the chapter. In the meantime, on December 18, 1941, pursuant to resolution adopted by the corporation, Taylor and Petermann, purporting to act as officers of the chapter, transferred the funds in the bank to the credit of the corporation. In addition to these funds, the chapter on November 19, 1941 was possessed of $3,800 in cash, kept in a safety deposit vault, various personal property, including business office equipment, membership records, minute books, books of account and other miscellaneous property, and certain accounts receivable, all of which were turned over to the corporation by the latter’s officers and members, purporting to act as officers of the chapter. All this property, together with the collections made on the accounts receivable, was held by the corporation, its officers and members, at the time of the decree, entered August 25,1943.

March 19, 1942 plaintiff bank filed its complaint setting up the transfer of the checking account from the credit of the chapter to the credit of the corporation, and a balance of $3,932.52 in the account; that E. S. Libby and A. L. Blatti, claiming to act as officers of the chapter, and on behalf of themselves and other persons alleged to be the then members of the chapter, assert that the balance in the checking account belongs to the chapter and its members; that the corporation had presented its check for the amount of the balance and demanded that the check be certified by plaintiff. Plaintiff asks that the claimants to the fund interplead and settle and adjust their demands between themselves. Each of the claimants filed an answer asserting title to the fund on deposit. On December 4, 1942, defendants Libby and Blatti, as officers and members of the chapter, in their own behalf and in behalf of remaining members of the chapter, and of the chapter, filed a counterclaim alleging the facts occurring prior to November 19,1941, substantially as stated herein, and alleging that the $3,800 in the safety deposit box, and other property specifically mentioned, had been converted by the corporation and certain persons — former officers and members of the chapter- — to the use of the corporation and themselves, and praying that the defendants to said counterclaim be required to account as to the property alleged to have been taken.

The principal question involved is the right of a majority, however large, of an unincorporated association organized not for profit, to withdraw from the parent organization and take with them the funds and property accumulated by the subordinate body and intended to be used by it in furthering the purposes of the parent organization.

The corporation says that the National Association and the subordinate chapters are not fraternal benefit associations; that they possess the characteristics of a joint business enterprise, such as a partnership or other unincorporated association. We agree that neither the National Association nor its subordinate chapters is a fraternal benefit association. No sick, disability or death benefits are provided for the members. However, these bodies are not business enterprises created for the pecuniary profit of its members through the ownership of property or the carrying on of business. The purpose of the National Association and subordinate chapters is the promotion of “education and enlightenment of its members in the art and science of refrigerating engineering” through lectures, discussions, papers, etc., pertaining to that particular work. They are clearly organizations not for profit. The constitution and by-laws of the National Association are somewhat loosely drawn, lacking the completeness and particularity generally found in fraternal and mutual benefit associations or business enterprises. Except for the amendment to the constitution in 1941, authorizing the president, with the approval of a majority of the board of directors, to suspend a charter, there are no provisions relating to the withdrawal, termination or suspension of a subordinate chapter. The corporation contends that because of the want of such provisions, all or a majority of the members of a chapter may surrender the charter and take all, or their proportionate share, of its property.

The organization before us is similar in many respects to various religious denominations operating through unincorporated bodies, and should be governed by substantially the same principles of law as control such bodies. In Ferraria v. Vasconcelles, 23 Ill. 456, the court had under consideration the title to church property held in the name of the trustees óf a church which in 1856 upon unanimous action of its members was received into and taken under the custody of thé Old School Presbytery of Sangamon; in 1858 a majority of the church membership voted against remaining in the Presbytery and, taking possession of the church, excluded the minority from using it. In speaking of the alleged right of the majority to thus withdraw from the parent body, the court said (460): ‘ ‘ The defendants have failed to show that there is any provision in the constitution of the Presbyterian Church, as it is organized in this country, which authorizes an individual church to withdraw from the body. Nor was any authority produced to show the existence of such a right. With temporal, as well as ecclesiastical governments, as a general rule, there is no means by which any of the subordinate members of the government, or even the individuals attached to the organization, may, without the consent of the body, sever their connection with the organization. This is true of most of the moral, benevolent, and other associations of this and other countries. And the presumption, in the absence of proof, is that the constitution of the Presbyterian Church as a body, in this country, recognizes no such right. . . . After individuals or organized bodies have entered into a compact or agreement, it requires the assent of the contracting parties to abrogate the agreement, and no reason is perceived, on this principle, why a church which, by compact, has become a portion of the presbytery, should have the voluntary right to withdraw from the organization without mutual consent. No such right has been proved to exist by the usages of the Presbyterian Church. ’ ’ On remandment to the trial court the secessionists sought to prove the right to withdraw under the church law, which was denied. On a second appeal (27 Ill. 237) the Supreme Court held that the evidence should have been received, reaffirmed its former statement on the rights of members withdrawing and said (239): “After a careful review of all the adjudged cases, believed to throw any light on this question, and mature reflection to the extent of the time at our disposal, we are fully convinced that, unless the law of its organization, its government and usages, authorize a withdrawal from the general organization, its consent must be obtained, or those adhering to its tenets and submitting to its authority, in a divided church, will be regarded as composing the church, and entitled to all of its rights and privileges. We therefore see no reason to change or modify the rule there announced.” The.case again came to the Supreme Court (31 Ill. 25), without change in the position stated above. This case has been cited as late as Stallings v. Finney, 287 Ill. 145, and Russian-Serbian Holy Trinity Orthodox Church v. Kulik, 202 Minn. 560. In the Stallings case (p. 149) the court said: “In Christian Church v. Church of Christ, (219 Ill. 503) (a case very much in point here,) the court said: ‘When the members of a religious congregation divide and one faction breaks away from the congregation and forms a new organization, the title to the property of the congregation will remain in that part of the congregation which adheres to the tenets and doctrines originally taught by the congregation to whose use the property was originally dedicated, ’ —citing Ferraria v. Vasconcelles, 23 Ill. 403, and 31 id. 25; Church of Christ v. Christian Church of Hammond, supra. In the case quoted from, the deed was made to the Sand Creek congregation, which congregation was not incorporated. The conveyance was held to be in the nature of a charitable trust, and all the members of the Sand Creek congregation became, by virtue of the execution of said conveyance, beneficiaries in the property then conveyed, —citing Ferraría v. Vasconcelles, supra, and Alden v. St. Peter’s Parish, 158 Ill. 631. It was there held that when a member of a voluntary association withdraws therefrom he forfeits his right or interest in any of the property of the association even though a majority of the members of such association likewise withdraw, and that this is true even though such seceding members have contributed- to the purchase of the property.” Substantially similar holdings in cases relating to secular associations are found in Freundschaft Lodge v. Alchenburger, 235 Ill. 438; McFadden v. Murphy, 149 Mass. 341; Hill v. Rauhan Aarre, 200 Mass. 438; Gorman v. O’Connor, 155 Pa. 239; Henry v. Cox, 25 Ohio App. 487, 159 N. E. 101; Great Council, etc. v: Mohican Tribe, etc., 92 N. J. Eq. 593; Minor v. St. John’s Union Grand Lodge, 62 Tex. Civ. App. 100, 130 S. W. 893, 897, and Schiller Commandery No. 1 v. Jaennichen, 116 Mich. 129.

In the present case the National Association refused to recognize surrender of the charter of the Chicago chapter and treated the action of the majority members of the chapter as individual withdrawals by such members: The chapter to which the majority originally belonged is still functioning under the charter. It is entitled to all the property owned by it when the majority of the members withdrew, and a decree so finding should have been entered.

The chapter insists further that it should have been permitted to file an amendment to its counterclaim asking for an accounting as to the profits made by the corporation through the use of the property of the chapter in the publication of a year or data book, and also through false representations alleged to have been made to' advertisers that they were dealing with the chapter or with an affiliate of the National Association. The proposed amendment is not before us and we are therefore unable to finally pass upon the propriety of the court’s action in denying leave to amend. Ditcher v. Schorik, 207 Ill. 528, 530; Fortier v. Fortier, 320 Ill. App. 626, 629. The chapter cannot recover for breach of the rights of the National Association and, by amendment of the by-laws in 1941, it is prohibited from publishing a data book. On remandment of the case the application to amend the counterclaim may be renewed.

The decree is reversed and the cause is remanded with directions to proceed in accordance with this opinion.

Reversed and remanded with directions.

O’Connor., P. J., and Hatchett, J., concur.


source: Caselaw Access Project

author: Mr. Justice Niemeyer

license: Public Domain

text:
    Irving Berry Phillips, Appellant, v. Agnes Dunne O'Connell, etc., et al., Appellees.
    Gen. No. 42,979.
    Heard in the first division of this, court for the first district at the December term, 1943.
    Opinion filed April 3, 1944.

      Sonnenchein, Berkson, Lautmann, Levinson & Morse, of Chicago, for appellant.
    George A. Bosomburg, for appellees.
   Mr. Justice Niemeyer

delivered the opinion of the court.

The complaint consists of two counts. Count one is in equity, for the foreclosure of a trust deed and entry of a deficiency decree against the signers of an alleged extension agreement. Count two is in law, for judgment on the indebtedness secured by the trust deed.

A decree of foreclosure was entered reserving jurisdiction, in case there should be a deficiency in the proceeds of sale, to determine whether the defendants were personally liable under the alleged extension agreement for any such deficiency; a deficiency resulted; the cause was referred to a special commissioner on the question of the personal liability of the defendants for such deficiency; on the hearing before the trial court, on exceptions to the report of the special commissioner, defendants renewed their motion, made several times before, that count two be transferred to the law side of the court for a trial before a jury. The trial court found that the original makers of the mortgage notes were primarily liable and that the obligation of defendants under the alleged extension agreement was that of guarantors of the payment of the notes. An order was entered transferring to the law side of the court, for a trial by jury, the issues under count two of the complaint, denying plaintiff’s motion for a deficiency decree, striking the special commissioner’s report from the files and reserving jurisdiction on the question of the fees of the special commissioner and the solicitors until the determination and disposition of the issues under count two on the law side of the court. From this order, transferring count two to the law side of the court and denying a deficiency decree, plaintiff appeals, contending that the alleged extension agreement contained an assumption of the mortgage debt, created a direct and primary obligation of defendants and entitled plaintiff to a deficiency decree under count one in equity. Defendants moved to dismiss the appeal on the ground that the two provisions appealed from are interlocutory orders and that plaintiff failed to serve notice on certain other defendants whose interests may be vitally affected by the appeal.

Because of the view taken by us on the motion to dismiss the appeal, it will be unnecessary to discuss the merits of the case. If the complaint had consisted only of count one, we would have no hesitancy in holding that the order denying a deficiency'decree was a final, appealable order. It made a final disposition upon the merits of the equitable issues raised under count one and denied further relief in equity to the plaintiff. Free v. The Successful Merchant, 342 Ill. 27. The finality of the order is not affected by the fact that the court reserved jurisdiction of the question of the special commissioner’s and solicitors’ fees. Rettig v. Zander, 364 Ill. 112, 116; Bennett v.. Weber, 323 Ill. 283, 293; Cowdery v. Northern Trust Co., 321 Ill. App. 243, 267. Plaintiff elected to join with his equitable claim an action at law for the recovery of a personal judgment against the defendants upon the identical indebtedness as to which he sought a deficiency decree in the equity suit. When the order appealed from was entered there was still pending in the proceeding plaintiff’s claim under the law count for the money which the court had denied him under the equity count. Plaintiff contends that under the present practice act he is permitted to appeal from the order denying equitable relief, notwithstanding his claim for relief in the law action is undisposed of. Under section 50 of the Practice Act (Ill. Rev. Stat. 1943, ch. 110, par. 174 [ Jones Ill. Stats. Ann. 104.050]) more than one judgment may be rendered in the same cause, and by sub-par. 2 “Any party aggrieved by any such judgment may have a review thereof as herein provided, even though said cause remains undisposed of as to other parties.” Provisions for appeal are limited to appeals from final judgments, orders and decrees, interlocutory orders concerning injunctions and receivers and, by leave of the reviewing court, from orders granting a new trial. (Secs. 77, 78.) Subparagraph 2, section 50, quoted above, limits appeals from the separate judgments which may be entered in a cause to judgments which dispose of all matters in issue between the parties to the judgment appealed from. The order before us does not dispose of the matters in issue between the parties. In Walters v. Mercantile Nat. Bank of Chicago, 380 Ill. 477, on a complaint to construe several provisions of a will and trust agreement, involving numerous defendants, a decree was entered construing the last paragraph of a certain article of the will and providing “that the remaining questions involved in the construction of said Last Will and Testament should be and they will be disposed of by this Court in a decree to be presented to this Court at a later date.” In dismissing on its own motion an appeal from the decree construing a part of the will, the court said (487): “The applicable provisions of the Civil Practice Act, even if construed to authorize separate decrees to be entered in a case of this! kind, do not make such decrees final until the termination of the litigation by the decision of all the questions and issues raised between all the parties to the suit. (Rogers v. Barton, 375 Ill. 611; McDonald v. Walsh, 367 id. 529.) When the case is thus disposed of any party feeling himself aggrieved may perfect an appeal from any and all orders entered. Until that time, all such orders are interlocutory and cannot be reviewed on appeal.” Plaintiff also argues that the appeal should be allowed as an exception to the general rule that the judgment or decree, to be final and appealable, must dispose of the whole controversy, because enforcement of the order appealed from would result in a great hardship or injustice, and cites McCarthy v. Chicago Title & Trust Co., 264 Ill. App. 423, 431, 432 and other cases. The effect of the order appealed from is to force the plaintiff to try the issues raised on his claim for judgment for the amount of the deficiency before a jury rather than before the court. If this is a hardship it is one created by the plaintiff’s voluntary action in joining his claim at law with his claim in equity. He was free to pursue the different remedies in separate proceedings. Had he done so, an appeal from an adverse ruling in one proceeding would not be affected by the pendency of the other. Having voluntarily created the situation which now confronts him, he cannot claim special privileges of appeal to relieve him from the consequences of his own action.

The appeal is dismissed.

Appeal dismissed.

O’Connob, P. J., and Hatchett, J., concur.


text:
    Mildred K. Smith, Appellant, v. Northern Trust Company et al., Appellees.
    Gen. No. 42,989.

      Heard in the first division of this court for the first district at the February term, 1944.
    Opinion filed April 3, 1944.
    Henry W. Kenoe and Jack Du Bow, both of Chicago, for appellant.
    Edward A. Ribal, of Chicago, for appellees.
   Mr. Justice Niemeyer

delivered the opinion of the court.

Plaintiff appeals from a decree refusing to set aside and hold as void a certain trust agreement as amended, executed by her deceased husband, Elmo V. Smith, conveying to The Northern Trust Company, as trustee, approximately $50,000 in personal property, being substantially all his estate, and holding that plaintiff was not entitled to any portion of the trust fund.

Smith was divorced July 21, 1939, and on July 29, 1939, married plaintiff; he was then receiving a pension from the American Bridge Company, of which he had been general manager, and owned about $50,000 in stocks, bonds and cash; on March 14 following, he executed the trust agreement by which he conveyed to The Northern Trust Company, as trustee, all this personalty, to hold and administer during his lifetime, paying the net income, after deducting necessary costs and expenses of the trust, to himself in reasonable instalments during his natural life, and upon his death to pay over and deliver the trust estate as follows: To defendants William Harlis Smith and Mrs. Catherine Johnsen, his son and daughter, 40 per cent each, and to plaintiff 20 per cent. By this agreement it was further provided that if by reason of Smith’s illness or changed business conditions the income from the trust should be insufficient to maintain him in the standard of living to which he was accustomed, then upon his request the trustee should pay over to him, out of the principal of the trust estate, such funds as the trustee might deem necessary for Smith to maintain such standard of living; that before selling or disposing of any of the securities or investing the cash in the trust estate, or the proceeds of the sale of any of the securities, the trustee should submit to Smith its recommendations with reference to such sale, disposition or investment, and unless Smith notified the trustee within 10 days thereafter of his objection to such sale, disposition or investment, the trustee should be free to carry out its recommendations; that Smith reserved the right to revoke, alter or amend the agreement, in whole or in part. On November 30, 1940, while plaintiff and Smith were temporarily estranged, Smith' altered the trust agreement by eliminating plaintiff from any share in the trust estate and dividing same in equal parts between his son and daughter upon his death. The separation of Smith and plaintiff lasted only two weeks; on their reconciliation they lived together as formerly, bnt plaintiff was not informed of the change in the trust agreement; in March of 1941 Smith, who had a physical deformity and had suffered a stroke in 1938, was under the care of a physician, who diagnosed the case as senile arteriosclerotic dementia and recommended that he be institutionalized; from that time until November 21, 1941 he remained in sanitariums; on September 3,1941 he was adjudicated an incompetent and the First National Bank and Trust Company of Evans-ton was appointed as conservator; he died intestate on December 29, 1941, and the conservator was thereafter appointed administrator of his estate; the only assets coming into the hands of the administrator were about $1,400 in cash; the funeral bill was $800; after payment of costs and attorneys’ fees there will be nothing with which to pay a widow’s award or make other distribution to plaintiff.

April 2, 1942 plaintiff filed her complaint, making The Northern Trust Company, as trustee, and the son and daughter of Smith defendants; the administrator was .subsequently made an additional party defendant. Plaintiff charges that at the time of the execution of the trust agreement and the subsequent amendment, Smith was not of sound mind and memory and was yholly incapable of making any just and proper distribution of his estate; that the son and daughter, through undue influence, falsehood and misrepresentation, induced Smith to execute the trust agreement and the amendment; that the execution and creation of the trust agreement and amendment was a scheme and device employed by Smith to defraud plaintiff of any interest and share in his personal estate and of the benefits of the statutes of the State conferring upon plaintiff her rights as Smith’s surviving widow. The master and the trial court held that the allegations as to mental in'competency and undue influence were not sustained by the evidence. The master held that the amendment to the trust agreement was an attempt to deprive plaintiff of her interest in Smith’s estate while he retained control over same, and was in fraud of plaintiff’s rights. The trial court sustained exceptions to the master’s report on this finding and held the trust agreement and amendment valid and that plaintiff had no interest in the trust estate.

In her reply brief plaintiff states that her position “is based entirely upon the premise that under our statutes a wife’s right to dower and award, while perhaps not protected from an absolute transfer, are protected from the employment of a contrivance by which the husband, retaining control of his personalty during his lifetime, seeks to place it beyond the operations of the statute at his death.” Defendants’ position is that the husband may freely dispose of his personalty by gift, sale or outright destruction, during his lifetime, though he pauperize his wife thereby, but that if he merely confers the indicia of ownership upon another to deceive his wife, “the property meanwhile remaining actually in him, then the transaction is a sham and equity properly stamps it as ‘colorable’ or ‘illusory’ and the widow may have it set aside.” These statements put the parties in substantial agreement as to the law, and the authorities support the position taken.

By our statutes, where a husband leaving descendants dies intestate, the surviving wife is entitled to one third of the personal estate of which the decedent died seized, after all just claims against his estate are fully paid. The surviving wife is endowed of a third part of all real estate of which her deceased husband was seized of an estate of inheritance at any time during the marriage, and upon renunciation of a will, if the deceased leaves a descendant, she is entitled to one third of the personal estate and one third of each parcel of real estate of which the deceased died seized and in which she does not perfect her right to dower in the manner provided by the statute. Probate Act, secs. 11, 16 and 18 (Ill. Rev. Stat. 1943, ch. 3, pars. 162, 168 and 170 [Jones Ill. Stats. Ann. 110.258, 110.264, 110.266]). In In re Estate of Judd, 292 Ill. App. 563, the right of the widow in Illinois to one third of the personal estate of the deceased husband is traced from the ordinance of 1787. As said in Blankenship v. Hall, 233 Ill. 116, 129: ‘ ‘ There has been a manifest desire on the part of the lawmakers of this State to provide for the support of the wife, not only during the lifetime of the husband but also after his death, until, as this court said in In re Taylor’s will, 55 Ill. 252, on page 259: ‘We do not go too far when we say that it has become a sort of common law in this State that this support shall be in all cases one-third of the husband’s real estate for life, and one-third of the personal estate forever, which shall remain after the payment of debts. ’ ” In Padfield v. Padfield, 78 Ill. 16, the court said (18, 19): “It is true that, where a husband still retained the right to control .the property, and resume the same at pleasure, such a gift was held to be in fraud of the rights of his wife. But there, the transfer was only colorable, the title still being in the husband, and, being thus entitled, the wife could claim and recover her share, on the death of the husband. In such a case, the husband still remained the owner, notwithstanding the apparent sale, and hence the wife was entitled to share in such property as in any other. The statute gives her a right to one-third of the personal estate owned by her husband at the time of his death, after the payment of his debts, in case he dies intestate. Hence, when the sale is only colorable, and the property may be resumed by the husband, and he thus dies the owner, the wife may participate in its distribution.” In Newman v. Dore, 275 N. Y. 371, the deceased husband three days before his death executed trust agreements, of which the court said (377, 378): “Under the trust agreements executed a few days before the death of the settlor, he reserved the enjoyment of the entire income as long as he should live, and a right to revoke the trust at his will, and in general the powers granted to the trustees were in terms made ‘subject to the settlor’s control during his life,’ and could be exercised ‘in such manner only as the settlor shall from time to time direct in writing. ’ Thus by the trust agreement which transferred to the trustees the settlor’s entire property, the settlor reserved substantially the same rights to enjoy and control the disposition of the property as he previously had possessed, and the inference is inescapable that the trust agreements were executed by the settlor, as the court has found, ‘with the intention and for the purpose of diminishing his estate and thereby to reduce in amount the share ’ of his wife in his estate upon his death and as a ‘ contrivance to deprive . . . his widow of any rights in and to his property upon his death. ’ They had no other purpose and substantially they had no other effect.” The trust agreements were held void as to the widow and ineffective to prevent her from sharing in the property conveyed under the Decedent Estate Law of New York. The court said further (379, 380): “Since the law gives the wife only an expectant interest in the property of her husband which becomes part of his estate, and since the law does not restrict transfers of property by the husband during his life, it would seem that the only sound test of the validity of a challenged transfer is whether it is real or illusory. That is the test applied in Leonard v. Leonard (supra). The test has been formulated in different ways, but in most jurisdictions the test applied is essentially the test of whether the husband has in good faith divested himself of ownership of his property or has made an illusory transfer. . . . In no jurisdiction has a transfer in trust been upheld where the conveyance is intended only to cover up the fact that the husband is retaining full control of the property though in form, he has parted with it.” In Martin v. Martin, 282 Ky. 411, the surviving wife sought to reach the unexpended part of approximately $30,000 deposited in several banks to the credit of her deceased husband and by him transferred to his sister several weeks before his marriage with plaintiff; it appeared that the sister expended no part of the money for her own uses,' but gave to her brother in his lifetime such sums as he requested. The transfer was held invalid as to the wife, and the court said (419, 420): “It must be conceded that the decided weight of authority is that an absolute bona fide gift of personalty by a man contemplating marriage with a woman, or even by a husband during his life, is not a fraud on the marital right of the wife, or intended wife, even though made with the intention and purpose of depriving her of the right of sharing in such property.. 13 B. C. L. 1081-1085; 30 C. J. 523; Potter Title & Trust Co., Guardian, etc., v. William H. Braum, Ex’r, etc., 294 Pa. 482, 144 A. 401, 64 A. L. R. 463, and cases cited in annotation thereto. This rule is generally stated with the qualification that if a transfer by a husband be colorable merely, that is, a mere device by which the husband does not part with absolute dominion over the property, it will be considered a fraud on the wife’s marital rights, and it is also generally held that a gift causa mortis by a husband to a third person is a fraud on the wife’s marital rights, where the gift is made to prevent her sharing in the property, since the gift does not take effect until the death of the donor.” In analyzing this case defendants say: “The court held the sister was merely acting as a depositary for her brother’s funds to prevent his wife from ever securing for herself any of his money. The transaction was colorable and a violation" of the husband’s moral duty to provide for his wife both before and after his death.” The present case is not unlike the NewmaAi case or the Martin case. Here the trust estate constituted all of the husband’s estate, except his pension; he reserved for himself all of the income from the trust and the right, in event of illness or changed business conditions, to request of the trustee enough of the principal of the trust estate to maintain him in the manner "in which he was accustomed to live; under the terms of the agreement by which the settlor reserved the right to revoke, alter or amend the trust agreement, any request by the settlor for any part of the principal would be equivalent to a command, which the trustee could not disobey except at the risk of having the trust terminated; the trust agreement expressly reserved to the settlor a veto over the sale, disposition or investment of trust assets by the trustee, and the right to revoke, alter or amend the trust agreement gave the settlor power to direct and control any change in the securities or any investment of trust funds; hence, as in the cases heretofore discussed, the transfer of title to the trustee, although absolute in form, was merely colorable and illusory. It was therefore invalid as to plaintiff, who is entitled to a widow’s award and to one third of the estate of her deceased husband, including the trust estate, after payment of all proper expenses of the trust and all just claims.

The decree is reversed and the cause is remanded.

jReversed and remanded.

O’Connor, P. J., and Matchett, J., concur.


author: Justice Hayes.

text:
    Henry R. Velde et al., Trading as Velde Lumber Company, Appellees, v. C. C. Reardon and Marie Reardon, Executors of Estate of William J. Reardon, Deceased, Appellants.
    Gen. No. 9,401.
    Heard in this court at the February term, 1944;
    opinion filed February 29, 1944;
    rehearing denied April 22, 1944.
    N. D. Reardon, for appellants; Ralph Dempsey and Robert B. Horner, of counsel; Dale E. Sutton, for appellees.
   Opinion by

Justice Hayes.

Not to be published in full.


author: Justice Huffman.

text:
    Franklin Life Insurance Company, Appellee, v. Robert B. Edwards et al. (John R. Snively, Appellant.)
    Gen. No. 9,928.
    Heard in this court at the October term, 1943;
    opinion filed February 16, 1944;
    rehearing denied May 2, 1944.
    John R. Snively, pro se; Frank P. North, for appellee.
   Opinion by

Justice Huffman.

Not to be published in fuU.


author: Presiding Justice Culbertson.

text:
    Evelyn Bone, Appellant, v. Publix Great States Theatres, Inc., Appellee.
    Heard in this court at the February term, 1944;
    opinion filed March 16, 1944.
    Whitnel, Browning, Listeman & Walker, for appellant; MeGlynn & MeGlynn, for appellee; Charles M. Whealon, of counsel.
   Opinion by

Presiding Justice Culbertson.

Not to be published in full.


author: Presiding Justice O’Connor.

text:
    Antoinette Janovsky, Appellee, v. Bystra Voda Building and Loan Association, Appellant.
    Gen. No. 42,893.
    Heard in the first division, first district, this court at the October term, 1943;
    opinion filed April 3, 1944.
    Grablowski & Kanak and Harvey L. Cavonder, for appellant; Julius H. Selinger, for appellee.
   Opinion by

Presiding Justice O’Connor.

Not to be published in full.


text:
    J. Kent Greene, Appellant, v. John Toman and United States Fidelity and Guaranty Company, Appellees.
    Gen. No. 42,954.
    Heard in the first division, first district, this court at the December term, 1943;
    opinion filed April 3, 1944.
    J. Kent Greene, pro se; James Todd, for appellees.
   Opinion by

Presiding Justice O’Connor.

Not to be published in full.


text:
    Anna Radwell, Appellee, v. Charles Radwell, Appellant.
    Gen. No. 42,986.
    Heard in the first division, first district, this court at the February term, 1944;
    opinion filed April 3, 1944;
    rehearing denied April 17, 1944.
    Frisch & De Haan, for appellant; George J. Fox and Abel J. De Haan, of counsel; Clarence Kammermann, for appellee.
   Opinion by

Presiding Justice O’Connor.

Not to be published, in. full.


author: Justice Matchett.

text:
    Mary Dowgialowicz, Appellant, v. Keistuto Savings and Loan Association et al., Appellees. Metropolitan State Bank, Plaintiff, v. David J. A. Hayes et al., Defendants. Appeal of Benjamin H. Black and Arthur H. Beermann, and Separate Appeal of Mary Dowgialowicz.
    Gen. No. 42,666.
    Heard in the first division, first district, this court at the June term, 1943;
    opinion filed April 3, 1944.
    Earl J. Walker, for certain appellant; Benson, Fitch & Heinemann, for certain other appellants; John B. Heinemann and Benj. H. Black, of counsel; Clyde C. Fisher, for certain appellees.
   Opinion by

Justice Matchett.

Not to be published in full.


text:
    Chester P. White, Appellee, v. Stenson Brewing Company and John Scarmeas. Appeal of Stenson Brewing Company, Appellant.
    Gen. No. 42,859.
    Heard in the first division, first district, this court at the October term, 1943;
    opinion filed April 3, 1944.
    James J. McKenna, for appellant; Jeremiah Buckley, of counsel; Royal W. Irwin, for appellee.
   Opinion by

Justice Matchett.

Not to be published in full.


text:
    National Supply Company—Midwest, Appellant, v. Jay E. Burns, Appellee.
    Gen. No. 42,891.
    Heard in the first division, first district, this court at the December term, 1943;
    opinion filed April 3, 1944.
    Goldman, Allshouse & Healy, for appellant; Robert G. Dreffein and M. M. Loman, of counsel; Raymond W. Beach, for appellee.
   Opinion by

Justice Matchett.

Not to be published, in full.


author: Justice Niemeyer.

text:
    Arthur L. Whitely, Appellee, v. Arlington Farms, Inc., Appellant.
    Gen. No. 42,896.
    Heard in the first division, first district, this court at the December term, 1943;
    opinion filed April 3, 1944.
    Andrew D. Collins and John Tone Kelly, for appellant; Culver & Mendelson, for appellee; David H. Kraft, of counsel.
   Opinion by

Justice Niemeyer.

Not to be published in full.


author: Mr'. Presiding Justice Dady

text:
    People of the State of Illinois for Use and Benefit of Juanita Morton, Appellee, v. Thomas Woolen, Appellant.
    Gen. No. 9,419.

      Heard in this court at the October term, 1943.
    Opinion filed February 29, 1944.
    Opinion modified by supplemental opinion and rehearing denied May 2, 1944.
    J. W. Templeman, of Springfield, for appellant.
    Ivan J. Hutchens, State’s Attorney, Fred G. Leach, First Assistant State’s Attorney, and Roy B. Foster, Second Assistant State’s Attorney, for appellee; John R. Fitzgerald, of Decatur, of counsel.
   Mr'. Presiding Justice Dady

delivered the opinion of the court.

On a trial before the court without a jury, a trial by jury having been waived by agreement, the defendant was found and adjudged guilty in a bastardy proceeding, and was ordered to pay for the support of the child the sums provided by statute. From such judgment the defendant brings this appeal.

The defendant contends that the complaint was insufficient in this respect only,- — that it did not state that the prosecutrix was ‘‘an unmarried woman,” and in support of such contention cites Maynard v. People, 135 Ill. 416. The Maynard case, decided in 1890, held that under the then statute such a complaint to be sufficient must allege that the prosecutrix was an unmarried woman at the time of the making of the complaint. At the time of such decision the then statute read, “When an unmarried woman who shall be pregnant, . . . shall make complaint to a justice of the peace ... and shall accuse under oath or affirmation a person with being the father of such child . . . .” In 1919 such statute was amended so that the word “unmarried” was elided. (Ill. Rev. Stat. 1943, ch. 17, sec. 1 [Jones Ill. Stats. Ann. 109.151].) Therefore we do not consider the Maynard case in point. The complaint in the present case was in the language of the present statute, and in our opinion is not subject to the criticism complained of. In People v. Dile, 347 Ill. 23, 27, the court said, “In 1919 the word ‘unmarried’ was elided from the Bastardy act, and married women were given the benefit of the act.”

The defendant next contends that the prosecution did not prove its case by a preponderance of the evidence. We do not believe it will serve any useful purpose to give a detailed statement of the evidence. The prosecutrix testified to acts'of sexual intercourse with the defendant at about the time of the conception of the child. The defendant denied any intercourse, but he admitted that he and the prosecutrix first became acquainted a few months before such time, when he was driving to work and picked her up at a stop sign and gave her a ride down town; that several times thereafter he gave her a ride in his automobile and on one occasion, without the knowledge of his wife, he drove the prosecutrix, at her request, one evening to a neighboring city. Some of these rides were about the time of the conception of the child. Defendant also admitted that after the prosecutrix advised him that she was pregnant she went to live at the home of defendant with the approval of defendant’s wife, and thereafter lived in such home for two or three months, without charge, but under a promise by her that she would later permit the defendant and his wife to adopt the baby when it came. We believe there was ample evidence to justify the trial court in finding against the defendant.

The next and last contention of the defendant is that the trial court erred in denying his motion for a new trial based on affidavits filed in support of such motion. The prosecutrix testified that the acts of intercourse took place about November 10 or 12, 1941, and the child was born on August 22, 1942. One of such affidavits was by the defendant and his wife and stated that they were together from about 7:30 p. m. of November 10, 1941, to and including the night of November 12, 1941. The other affidavit was a joint affidavit made by two sisters and a brother-in-law of the defendant in which they stated that on November 10, 1941, from about 7:30 p. m. to 10:00 p. m. and on November 12, 1941, from about 8:00 p. m. to 12:00 p. m. the defendant and his wife were at the home of the affiants. It will be noted that the prosecutrix testified that the particular acts of intercourse occurred “about November 10 or 12, 1941.” It is our opinion that the trial judge was justified in believing and holding that such affidavits did not warrant the granting of a new trial.

The judgment of the county court is affirmed.

Affirmed.

Supplemental Opinion.

A petition for rehearing has been filed in which it is contended that the defendant, by motion, questioned the sufficiency of the complaint, and that the trial court therefore erred in requiring the defendant to go to trial without there having been filed a new complaint stating that the child was born and living.

We have again examined such motion, as well as defendant’s motion in arrest of judgment. Each motion was general, and neither motion called the attention of the trial court to this alleged defect. So far as the record shows this objection was first raised in this court of review. It is our opinion that the defendant is not now in a position to complain of such alleged error. (See People v. Suhling, 231 Ill. App. 256.)

The petition for rehearing is denied.


author: Mr. Justice Hayes

text:
    Meta Winterland and Elmer Winterland, Appellees, v. Henry Winterland et al., Appellants. (Excepting Dietrich Winterland and Rachel Petersen, Appellees.)
    Gen. No. 9,414.
    Heard in this court at the October term, 1943.
    Opinion filed February 29, 1944.
    Rehearing denied May 2, 1944.
    L. Earl Bach and Bracken, Livingston, Murphy & Barger, all of Bloomington, and Thomas M. Barger, Jr., Guardian ad litem, for appellants; William R. Bach and William J. Bach, both of Bloomington, of counsel.
    Costigan, Wollrab & Yoder, of Bloomington, for appellees.
   Mr. Justice Hayes

delivered the opinion of the court.

John Winterland died testate March 25, 1928. His will dated June 22, 1926 had a codicil added to it on July 13, 1927. At the time of his death he left surviving him a widow and eleven children. Under the terms of the original will he devised his life estate to his widow and provided that upon her death or remarriage his executor should sell the real estate and divide the proceeds equally between his then surviving children. The codicil provided that the share which was to go to George Winterland, a son, is devised and bequeathed to another son Henry Winterland, in trust, the income to be paid to George so long as he might live, or until his present wife should have died or has been separated from him by absolute divorce.

The widow of the testator died on December 3, 1935 and the following April the executor sold the real estate which netted $62,100. He made distribution equally between the children, except as to George’s share, which was not paid to him but held by the executor, as trustee, under the terms of the codicil. George’s one-eleventh share amounted to $5,523.54.

George Winterland was married to Meta Winter-land on February 26, 1920, and from that date until the date of George’s death, which occurred on June 7, 1940, he lived with his wife on a farm near Colfax, McLean county, Illinois. To this marriage one son Elmer Winterland was born, who arrived at his majority on December 16, 1941.

Meta Winterland and her son Elmer Winterland filed a complaint in the circuit court of McLean county claiming the share of George Winterland as a surviving widow and child and alleged that the provisions contained in said codicil were void on the ground of being contrary to public policy and public morals of the State of Illinois, because the terms of said codicil tended to induce a separation between George Winter-land and his wife Meta Winterland. Said complaint prayed that the court require a trustee to pay one-third part of said sum to Meta Winterland as widow and two-thirds to Elmer Winterland as heir.

The court below found the equities with the plaintiffs and found them entitled to the relief prayed for, and that the terms of the codicil were void as being contrary to public policy, and that George Winterland was entitled to his full share under the third clause of the original will of his father John Winterland, unrestricted by the provisions of the void codicil.

It is plain from the terms of the codicil that George Winterland conld have had a full one-eleventh share of the proceeds from the sale of his father’s estate by obtaining an absolute divorce from his wife. If he didn’t obtain this divorce, under the terms of the codicil, he could only have the income. This was an inducement to cause a separation and a divorce and under the law of Illinois as stated in the case of Tripp v. Payne, 339 Ill. 178, is contrary to public policy. In that case a provision of the will that the income from the testatrix’ estate shall be withheld from a child of the testatrix so long-as said child continues to be married to his present wife but shall be paid to him should the marriage relationship cease, is void, as inducing a separation between husband and wife.

Appellants cited the case of Ransdell v. Boston, 172 Ill. 439, but it appears that the parties had been separated for several years before the will was executed and that a divorce suit had been pending for sometime prior to the execution of the will, which, of course, is a wholly different situation than presented on the present record.

Appellants also cite the case of Cary v. Slead, 220 Ill. 508. Upon an examination of that case it does not appear that the question of public policy was raised. The case was determined rather on the construction of the language used in the will.

The facts in the present case are so close and similar to those in the Tripp case that the law laid down there is controlling and decisive in the case here. The decision of the lower court is correct.

Complaint is made in regard to the court hearing the testimony of Meta Winterland on the question of how she and her husband got along. Appellants immediately asked leave to introduce evidence to contradict the testimony of Meta Winterland. The court then struck all of her testimony out. There is no error here as the rule is that where a case is tried by a court without a jury, it is presumed that the judge disregarded any incompetent evidence and tried the case upon the proper testimony alone. Pippert v. Schiele, 315 Ill. App. 563; Boening v. North American Union, 155 Ill. App. 528.

Appellants contend the doctrine of estoppel and laches should be a bar to appellees’ cause of action but it appears that Elmer Winterland did not become of legal age until December 16, 1941, while the complaint was filed December 26, 1942. The trustee did not report until June 10, 1938 that he had George’s share in his hands as trustee. Neither the trustee nor any of the parties in interest made any move towards either making a distribution of the funds or applying to a court of competent jurisdiction for direction on what to do under the circumstances until the plaintiffs herein filed, and they have been the most diligent of any of the parties in interest. Under these circumstances it would be inequitable to hold the. plaintiffs barred by estoppel or laches.

For the reasons herein stated the decree of the circuit court of McLean county is hereby affirmed.

Decree affirmed.


text:
    Millikin National Bank of Decatur, Appellant, v. Shellabarger Grain Products Company et al., Appellees.
    Gen. No. 9,418.

      Heard in this court at the October term, 1943.
    Opinion filed February 29, 1944.
    Opinion modified and rehearing denied May 2, 1944.
    Lee Boland and LeForgee, Samuels & Miller, all of Decatur, for appellant.
    Hal M. Stone, of Bloomington, and Emanual Rosenberg, of Decatur, for appellees.
   Mr. Justice Hayes

delivered the opinion of the court.

This action arises out of a series of financial transactions between the Shellabarger Grain Products Co., a corporation, organized to process soy beans and the Millikin National Bank of Decatur, Illinois. In March 1936, the corporation was indebted to the Bank and others, in the aggregate sum of $66,000. The Millikin National Bank held a promissory note for $28,030.30 and the Citizens National Bank of Decatur held one for $7,030.30. These notes were executed in the name of the corporation, matured on March 23, 1938 and were secured by trust deeds on corporation property to David S. Shellabarger. In June 1936, new notes of like amounts executed by the corporation and W. L. Shellabarger were substituted for those in existence, the maturity dates remaining the same. Interest was paid on these notes until June 25,1938 but nothing was paid on their principal. During this period the corporation was in a precarious financial condition and much of its working capital was obtained by credits extended by the Millikin National Bank on warehouse receipts and assignments of accounts receivable. W. L. Shellabarger conferred frequently with the Bank officers concerning the financial affairs of the corporation and on several instances refinancing plans were discussed. Two attempts were made to secure a loan from the Reconstruction Finance Corporation but both were unsuccessful. Thereafter, attempts were made to procure capital loans from Evan Gf. Swanson of Chicago, a friend of Shellabarger. These efforts were also unsuccessful.

In January 1938, Shellabarger commenced negotiations with Spencer Kellogg and Sons, Inc., for the sale of the corporation’s plant and assets. Representatives of Spencer Kellogg visited the plant and on June 13, 1938 Shellabarger went to Buffalo for conferences with the officials of Spencer Kellogg and Sons. At those conferences, terms of sale were agreed upon and the corporation’s plant and assets were sold for $250,000. It was agreed that the Kellogg organization would take over the business as of May 31, 1938 and would advance funds on proper security to supply working capital pending formal transfer of the assets.

Mr. Shellabarger left Buffalo on June 15, 1938 and arrived in Chicago on June 16. While in Chicago, Shellabarger visited Swanson who dictated a letter addressed to Shellabarger Grain Products Company. This letter discussed refinancing plans and stated that if the corporation could “obtain a definite statement or commitment from the owners and holders of said mortgage, good for approximately sixty days, as to what they will accept in cash in full payment therefor, we believe we have one source that may be interested.” On June 17, 1938 Shellabarger had a conference with Mr. McGaughey, president of the Millikin Bank and showed him this letter. McGaughey returned the letter to Shellabarger stating that there was no definite proposition in the letter and nothing to consider. On the same day Shellabarger wrote a letter to the bank offering to take up the corporation notes at a substantial discount. After receipt of this letter McGraughey consulted the board of directors of the bank who refused to consider it. On June 25, 1938, Shellabarger accompanied by his attorney again had a conference with McGraughey and announced that he had some money to take up the corporation’s notes, if a discount could be arranged. He proposed a discount of $8,030.30 and accrued interest which McGraughey immediately discussed with his directors. The proposition was accepted and the notes were paid and canceled.

At no time during these negotiations did the Bank or Mr. McGraughey know about the sale of the assets of the corporation to the Kellogg Company. It is clear from the record that Shellabarger was careful that the Bank should not learn of the sale and he so testified at the trial. On August 24, 1938 the Bank filed this suit against the corporation, Shellabarger and the stockholders of the corporation alleging fraud, misrepresentation and concealment and asking judgment for the balance due on the notes of $8,030.30 and accrued interest. The cause was first tried before the circuit court of Macon county and a verdict for defendants was returned by the jury. This verdict was set aside by the court and a new trial granted. The cause was retried in December 1942 and a verdict for plaintiff was returned. Defendants filed alternate motions for new trial and judgment notwithstanding the verdict. The court overruled the motion for new trial but entered a judgment notwithstanding the verdict against plaintiff for costs. Plaintiff has appealed to this court.

The law is clear in this State that mere passive concealment of pertinent facts during a business transaction does not amount to fraud if only a course of silence is pursued and no confidential relationship exists between the parties. Bundesen v. Lewis, 368 Ill. 623; Graham v. Meyer, 99 N. Y. 611, 1 N. E. 143. If either party desires information he must ask for it. On the other hand where silence is accompanied by deceptive conduct, active concealment results which amounts to fraud. Leonard v. Springer, 197 Ill. 532; Schroeder v. Otto, 240 Ill. App. 567; Crompton v. Beedle, 83 Vt. 287, 75 Atl. 331. We believe that a jury might properly find that the letter from Swanson prepared during Shellabarger’s visit in Chicago for the avowed purpose of obtaining a discount from the bank was used to deceive the Bank and that this deception induced the Bank and its officers to allow the discount. It is important to note that at the time this letter was prepared, the assets of the corporation had already been sold. We do not believe that the effect of this letter need be so circumscribed. A jury might properly find that it became interwoven in the chain of events which resulted in the discount granted eight days later.

Judgment for the defendants here was entered on a motion for judgment notwithstanding a verdict for plaintiff. In considering such a motion, a trial court must determine whether there is any evidence in the record, taken in the aspect most favorable to the contestant which fairly tends to prove the cause of action. Knudson v. Knudson, 382 Ill. 492; Hunt v. Vermilion County Children’s Some, 381 Ill. 29. We believe that the circumstances surrounding the letter referred to above might fairly be considered evidence of fraud. The trial court therefore erred in disturbing the verdict of the jury.

For the reasons stated herein the judgment of the circuit court of Macon county is reversed and cause remanded to that court with directions to vacate and set aside the judgment notwithstanding the verdict, deny the motion therefor and enter judgment for the plaintiff on the verdict of the jury for the amount thereof and costs of suit.

Reversed and remanded with directions.


text:
    Lillian Bell Gregory Knight, Plaintiff, v. Charles A. Gregory et al., Defendants. Belle W. Castle et al., Appellants, v. Hardware State Bank, Appellee. Arthur Rogers and Sybil Rogers, Appellants, v. J. R. Drake, Administrator De Bonis Non of Estate of Sarah Estella Gregory Donovan, Deceased, Appellee.
    Gen. Nos. 9,423, 9,424.
    Heard in this court at the October term, 1943.
    Opinion filed February 29, 1944.
    Rehearing denied May 2, 1944.
    Asa S. Chapman, of Champaign, for appellants.
    White & Ingram, of Sullivan, for certain appellee.

      Robert F. White, of Sullivan, for certain other appellee.
   Mr. Justice Hayes

delivered the opinion of the court.

James A. Gregory died a resident of Moultrie county, Illinois on October 14, 1927 leaving a last will and testament which was duly admitted to probate. This instrument is, in part, as follows: “Second— After the payment of such funeral expenses and debts, I direct my estate, both real and personal, to be divided into five and one-half shares to be distributed as follows, viz: To my son Charles A. Gregory, two shares; to my daughter Estella Donovan one share; to my daughter Lillian B. Knight, one share; to my daughter Ginevra F. Wacaser, one share, and to-my grandson, Gregory Prichard, one half share. The sale and distribution of my estate, after my death, to be left entirely to the judgment of-my son, Charles A. Gregory, in whom I have the utmost confidence, both as to his ability and integrity. ’ ’ On December 9, 1927 Lillian" B. Knight filed a bill in the circuit court of Moultrie county for partition of the testator’s real estate which was dismissed for want of equity. An appeal was taken to the Supreme Court where the above quoted provision of the will was construed by the Supreme Court to have effected an equitable conversion of the real estate into personal property and to have created an active trust with Charles A. Gregory as trustee. The decree of the circuit court of Moultrie county was therefore affirmed. Knight v. Gregory, 333 Ill. 643, 165 N. E. 208.

On May 12, 1937, Mrs. Knight filed a complaint ■ in the circuit court of Moultrie county to construe the will of James A. Gregory, to define the powers of the trustee and to seek the removal of Charles A. Gregory as such trustee. The complaint was later amended and a hearing was had on January 22, 1941 which re-suited in a decree removing Charles A. Gregory as' trustee and ordering a sale of the property at public sale. Charles A. Gregory appealed to the Supreme Court from this decree but the cause was transferred to this court because no freehold was involved. Knight v. Gregory, 378 Ill. 565, 39 N. E. (2d) 40. Upon review in this court, we affirmed the decree of the circuit court. Knight v. Waeaser, 317 Ill. App. 162, 46 N. E. (2d) 176.

On June 5, 1937, after the second complaint by Mrs. Knight had been filed, the Hardware State Bank obtained a judgment against Charles A. Gregory and her amended complaint filed on September 14, 1938 made that Bank a party. On November 27, 1937 Charles A. Gregory executed an assignment of his distributive share of his father’s estate to O. H. Castle of Lake Charles, Louisiana, which assignment was acknowledged before a notary public in Cook county, Illinois, on January 12,1938. This assignment was filed in the office of the clerk of the county court of Moultrie county on January 26, 1939.

Estella Donovan, another of the beneficiaries under the will of James A. Gregory, died December 5, 1931. On December 9,1931 her husband, Za Donovan and her daughter LaVergne Donovan Rogers, who were the sole heirs of Estella Donovan, assigned their interest, as such heirs, in the estate of James A. Gregory to Arthur Rogers and Sybil Rogers. This instrument was filed for record in Moultrie county. On December 18, 1931 letters of administration in the estate of Estella Donovan were issued by the county court of Moultrie county to Charles A. Gregory on his petition. No inventory was filed in this estate but a claim for $627.32 was filed therein by the receiver of the Merchants & Farmers State. Bank who had obtained a judgment against Mrs. Donovan prior to her death. This claim was allowed by the court on February 12, 1938 and was later assigned to J. R. Drake. On January 14,1938 Charles A. Gregory started a second proceedings to administer the estate of Estella Donovan, this time in Cook county and Stanley Davies was appointed administrator by the probate court of that county. Gregory thereupon filed his final report as administrator in Moultrie county and resigned. The county court of Moultrie county appointed Drake, the assignee of the claim of the Merchants & Farmers State Bank as administrator de bonis non but did not approve the final report of Charles A. Gregory. That matter is still pending in the county court there. On January 6, 1940 the estate proceedings in Cook county were closed and Davies was discharged as administrator, the estate being described as a “no asset” estate.

When Mrs. Knight filed her amended complaint in the second proceedings started by her in the circuit court, Arthur Rogers and Sybil Rogers were made parties defendant and at the hearing they were represented by a guardian 'ad litem because they were minors. They have now attained their majority. In the original decree of the circuit court in the second proceeding the court found that the interest of Charles A. Gregory in his father’s estate was subject to the lien of the judgment obtained by the Hardware State Bank, that the interest of Estella Donovan was subject to any claims against her estate and that her share of her father’s estate should be paid to her administrator. On February 10, 1941 the heirs of O. H. Castle filed a petition for leave to intervene and to have the'decree modified, setting up the assignment noted above to O. H. Castle by Charles A. Gregory of his interest in his father’s estate and suggesting the death of O. H. Castle. The court permitted the intervention and modified its decree to reserve for future determination the rights of the Castle heirs, the Hardware State Bank and of all other creditors and assignees of the beneficiaries under James A. Gregory’s will. On the appeal from that decree, we approved the order of the court allowing the Castle heirs to intervene but declined to review their rights or those of tiie Hardware State Bank and the other creditors and assignees because their rights had not yet been determined finally by the circuit court.

After our decision in Knight v. Wacaser, supra, was rendered, the Hardware State Bank filed its answer to the intervening petition of the Castle heirs alleging that the assignment by Charles A. Gregory to O. H. Castle of Gregory’s share in his father’s estate was without consideration, a fraud on creditors, and void. The Castle heirs then filed a motion to strike this answer of the Hardware State Bank and to dismiss the bank as a misjoined party alleging that the Bank’s judgment was not a lien upon the interest of Charles A. Gregory in his father’s estate and that the Bank had no interest in the subject matter of the suit. On July 13, 1943 Arthur Rogers and Sybil Rogers filed a motion, supplemental to their answer claiming a right to share in the distribution of the trust estate of James A. Gregory by virtue of the assignment to them of Estella Donovan’s interest therein by her heirs. J. R. Drake, administrator de bonis non of the estate of Estella Donovan by appointment of the county court of Moultrie county resisted this motion.

On July 23, 1943 the circuit court entered an order denying the motion of the heirs of 0. H. Castle to strike the answer of the Hardware State Bank to their intervening petition and to dismiss the Bank from the suit. On the same day, that court also denied the motion of Arthur Rogers and Sybil Rogers for leave to share in the distribution of the trust estate and ordered that the share of Estella Donovan be paid to the legally appointed administrator of her estate. The heirs of 0. H. Castle have appealed to this court from the order denying their motion and Arthur Rogers and Sybil Rogers have appealed from the order denying' their motion. The two appeals have been consolidated by order of this court.

The Castle heirs contend that the judgment of the Hardware State Bank is not a lien upon the interest of Charles A. Gregory in the funds in the hands of the trustee of his father’s estate and in support of their contention cite section 49 of the Chancery Act (Ill. Rev. Stat. 1943, eh. 22, sec. 49 [Jones Ill. Stats. Ann. 106.12]) which provides in part as follows: “Whenever an execution shall have been issued against the property of a defendant, on a judgment at law or in equity, and shall have been returned unsatisfied . . . , the party suing out such execution may file a complaint against such defendant, and any other person, to compel the discovery of any property . . . belonging to the defendant, and of any property . . . due to him, or held in trust for him, and to prevent . . . the payment or delivery thereof to the defendant, except when such trust has, in good faith, been created by, or the fund so held in trust has proceeded from, some person other than the defendant himself. The court shall have power . . . to prevent such transfer, payment or delivery, and to decree satisfaction of the sum remaining due on such judgments, out of any personal property . . . belonging to the defendant, or held in trust for him, with the exception above stated . . .

This section has been construed to exempt from creditors’ claims the interest of a beneficiary in a spendthrift trust, Potter v. Couch, 141 U. S. 296; Congress Hotel Co. v. Martin, 312 Ill. 318, 143 N. E. 838, and at least that portion of the income from an ordinary trust which is necessary for the maintenance of a beneficiary. Binns v. La Forge, 191 Ill. 598. The issue here, however, is whether section 49 of the Chancery Act extends its protection at the time of distribution of the corpus of the trust. In First Nat. Bank of Lincoln v. Starkey, 190 Ill. App. 532, a creditor of a legatee under a will filed a creditor’s bill against the executors of the will to reach the distributive shares of the legatee. It was there held that the executors were in effect trustees and that section 49 operated to prevent the distributive share of a legatee from being reached in their hands. We believe this decision is applicable here. It would place an intolerable burden upon a trustee to compel'him to decide the rights of creditors with conflicting claims before he could make distribution. Indeed, it would be productive of much litigation. While it may be a hardship to force creditors to pursue trust assets after distribution, especially where the beneficiary has the right to assign them during the lifetime of the trust, nevertheless, a creditor is presumed to know that the trust device affords its assets insulation from involuntary seizure and he must be held to have understood the risk involved when credit was extended. The order of the circuit court in cause number 9424 is therefore erroneous.

Arthur Rogers and Sybil Rogers in their appeal contend that the circuit court erred in ordering distribution of the share of Estella Donovan in her father’s estate to the legally appointed executor of her estate. In support of their position they argue that the share of Estella Donovan in the trust established by her father could not have been subjected to creditors’ claims during her lifetime and that therefore it is not subject to administration for the payment of her debts after her decease. While it is true that section 49 of the Chancery Act would have protected Estella Donovan during her lifetime, — until after distribution was made, it does not necessarily follow that her heirs and their assignees are similarly protected. It should be remembered that Za Donovan and La Vergne Donovan acquired an interest in the trust fund here not by virtue of James A. Gregory’s will but under the provision of the statute of descent in effect at the time of Estella Donovan’s death. That statute provided: “That estates, both real and personal, of residents . . . dying intestate . . . after all just debts

and claims against such estate are fully paid, shall descend to and be distributed in manner following to-wit: . . . .” (111. Eev. Stat. 1929, ch. 39, sec. 1.) It is clear, from this quotation that the right to take property by descent is subject to the condition that all just debts and claims of decedent be fully paid. Thus any assignment that the heirs of Estella Donovan made of the interest they took by descent in the trust established by James A. Gregory was subject to the rights of creditors to have that share when it was distributed and administered for their benefit, pursuant to the provisions of the Probate Act. The circuit court therefore, correctly ordered the share of Estella Donovan in the estate of James A. Gregory paid to her legally appointed administrator.

In view of the phrasing of the order of the circuit court, we do not deem it proper to review the conflicting claims of the two persons appointed by different courts as administrator of the estate of Estella Donovan. We have before us only the two orders of the circuit court of Moultrie county. The orders of the probate court of Cook county and of the county court of Moultrie cotinty obviously cannot be reviewed in this proceeding.

The order of the circuit court in cause number 9424 is therefore reversed and the cause remanded to that court with directions to enter an order in conformity with this opinion. The order of the circuit court of Moultrie county in cause number 9423 is affirmed.

Affirmed in part and reversed in part.