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    Warren C. Winget et al. v. The Quincy Building and Homestead Association.

      Filed at Springfield

      April 5, 1889.

    1. Building associations—act of 1879—constitutionality—special law regulating interest. The 10th section of the Building Association act of 1872 is not in conflict with the provisions of section 22 of article 4 of the constitution, which prohibits the General Assembly from passing any local or special laws regulating interest on money.
    2. Same—regulations in respect to loans—validity. Buies of a building association organized under the act of 1872, that no loans shall be made except to members; that loans shall be put up at auction, and struck off to the members bidding the highest premium; that every share of stock shall be subject to a lien for the payment of unpaid installments and other charges incurred thereon; and that no stockholder shall withdraw from the association whose stock is held in pledge for security, are authorized by the statute, and are therefore legal and valid.
    3. So a by-law providing that when the shares of stock of any series upon which a loan should be granted should reach the matured value of $100 each, the value of the stock should be credited to the account of the borrowing member, is valid, and warranted by the act. By this mode the loan is satisfied and discharged, and the stock so credited is cancelled, and reverts to the association.

      á. Same—fraud—representations to induce member to take a loan. A building association, by its circulars, set out the advantages of its financial scheme to men of small income. The representations were mostly laudatory, and in many respects the expression of opinion, but none of them, as to any material fact, were shown to be untrue. The party seeking to rescind his contractual relation with the association, on the ground that he was misled, and thereby defrauded, by becoming a member, had a copy of the charter and by-laws of the association, in which the rights and obligations of members, etc., were fully stated. His failure to realize the contemplated benefits represented was owing to his own imprudence and neglect: Held, not such a fraud as to justify a rescission of the contract with the association.
    5. Estoppel—to question validity of corporation. A party who has contracted with a corporation de facto, as such, can not be permitted, after having received the benefits of his contract, to allege any defect in the organization of such corporation, as affecting its capacity to enforce such contract, but all such objections, if valid, are available only on behalf of the sovereign power of the State. This rule applies when the corporation is organized under a law alleged to be unconstitutional.
    Appeal from the Appellate Court for the Third District;— heard in that court on appeal from the Circuit Court of Adams county; the Hon. William Marsh, Judge, presiding.
    This was a bill in chancery, brought by Warren C. Winget and Sarah M. Winget, his wife, against the Quincy Building and Homestead Association and William S. Flack, surviving trustee, to enjoin the sale of certain premises under the powers of sale contained in two deeds of trust executed by the complainants. The Quincy Building and Homestead Association is a corporation organized under the provisions of the “Act to enable associations of persons to become a body corporate to raise funds to be loaned only among their members,” approved April 4, 1872.
    Said act, after prescribing the mode in which corporations might be organized for the purposes therein specified, provided, among other things not material here, that such corporations should make no loans except to their own members; that their shares of stock should be for $100 each, and that subscriptions therefor should be made payable to the corporation at such time or times as should be provided by the charter and bylaws, but that no periodical payment should exceed two dollars on each share; that every share of stock should be subject to a lien for the payment of unpaid installments and other charges incurred thereon under the provisions of the charter and bylaws, and that the by-laws might prescribe the form and manner of enforcing such lien; that new shares of stock might be issued in lieu of the shares withdrawn or forfeited, and that the stock might be issued in one or in successive series, in such amount as the board of directors might determine; that any shareholder wishing to withdraw from the corporation should have power to do so by giving thirty days notice of his intention so to do, and that he should be entitled to receive the amount paid by him and such interest thereon as the by-laws might determine, less all fines and other charges, but that no stockholder should be entitled to withdraw whose stock was held in pledge for security.
    It was further provided that the money in the treasury, if over $100, should be offered for loan in open meeting at the meetings of the board of directors, and that the stockholder who should bid the highest premium for the preference or priority of loan should be entitled to receive a loan of $100 for each share of stock held by him, and that good and ample security should be given by the borrower for the repayment of the loan; that in case of non-payment of installments of interest by a borrowing stockholder for the space of six months, payment of principal and interest, without deducting the premium paid or interest thereon, might be enforced by proceeding against the securities according to law; that a borrower might repay a loan at any time, and in ease of such repayment before the expiration of the eighth year after the organization of the corporation, there should be refunded to him one-eighth of the premium paid for every year of said eight years then unexpired. It was also provided that no premium, fines or interest on such premium that might accrue to the corporation according to the provisions of said act should be deemed usurious, and that the same might be collected as any other debts of like amount might be collected by law in this State. Laws of 1872, page 173.
    The Quincy Building Association was organized in April, 1874, its object, as declared by its charter, being, the accumulation of a fund by monthly contributions, fines, premium on loans and interest on investments, sufficient to enable the stockholders to build or purchase for themselves dwelling houses or improve real estate, or make such other investments as they might deem advantageous. A charter and by-laws were adopted in pursuance of which the stock of the corporation was divided into series, that issued for each year constituting a separate series, and it was further provided by the charter and by-laws that each stockholder, at the time of subscribing for stock, should sign his name to the charter, and that no member should own more than fifty shares in his own right; that the stock should be paid for in monthly installments of fifty cents per share, and that in default of payment of an installment at maturity, the stockholder should pay a fine of ten cents on a dollar or fraction of a dollar remaining unpaid, and that if the default in the payment of installments should continue six months, the stock should be forfeited, and the stockholder be entitled to receive the amount of installments previously paid in, after the deduction of all fines, and without the allowance of any interest; and that the payment of installments should-continue until, with accumulated profits, the stock belonging to the series should be worth $100 per share.
    It was also provided that each stockholder should he entitled to receive, for each share of stock held by him, a loan of not more than $100, such loan to be disposed of to the highest bidder for priority of right, in open meeting at stated meetings of the board of directors, interest to be paid at the rate of one-half per cent per month on the entire loan including the premium ; that the repayment of such loan should be secured by bond and mortgage on real estate, clear of incumbrance, and that every share of stock upon which a loan should be effected should he transferred to the association as collateral security; that any stockholder might withdraw from the association upon giving thirty days notice of his intention so to do, and that he should then he entitled to receive the amount paid in by him and six per cent interest thereon, less all fines and other charges, but that no stockholder should be entitled to withdraw whose stock was held in pledge for security; that when the shares of stock of any series, upon which a loan should have been granted should reach the matured value of $100 each, the amount or value of such stock should he credited to the account of the borrower owning the same, and that the loan should be declared to he fully paid and satisfied and the stock cancelled.
    On and for some time prior to the 3d day of May, 1876, the complainants were the owners as tenants in common of a certain lot of land in the city of Quincy with certain buildings thereon, and claimed by them as their homestead. Complainant Warren C. Winget was desirous of obtaining a loan of money from said association on the security of said lot, and in order to become a stockholder so as to be qualified to apply for such loan, he purchased and procured an assignment to himself from another stockholder of sixteen shares of stock of the second series, upon which installments to the amount of $88 had been paid. The certificate of stock thus purchased was surrendered to the association, and a new certificate for sixteen shares was issued by the association to him. Winget thereupon made an application in writing to the association for a loan and appeared at a stated meeting of the board of directors and became a bidder for priority of right. His bid, which was thirty-eight per' cent premium,was successful, and he thereby became entitled to a loan of $1600, less the premium bid, being the net sum of $992. The association thereupon paid oxer to him said sum of $992, and he assigned to the association his sixteen shares of stock as collateral security for said loan, and also executed his promissory note, bearing date May 3, 1876, by which he promised to pay to the association, said sum of $1600, eight years after date, with interest at the rate of one-half per cent per month, payable monthly, and also all monthly dues and fines on his sixteen shares of the capital stock of the association, his wife signing the note with him as his surety. To secure said note, said Winget and wife, on the same day, executed a deed of trust, by which they conveyed said lot to Bufus L. Miller, as trustee, and to William S. Flack, his successor in trust, with power of sale in case of default for six months in the payment of the moneys mentioned in said promissory note or any portion thereof. At the time of making the loan, the association delivered to Winget a pass-book, in which it afterwards entered credits for all moneys paid by Winget as such payments were made, and which contained a printed copy of the charter and by-laws of the association. This pass-book remained in his possession down to the commencement of this suit/
    On the 6th day of November, 1878, Winget desiring to obtain a further loan on the same property, subscribed for four shares of stock of the fifth series and became a successful bidder for a priority at thirty-one per cent premium, and received from the association the net sum of $276, and assigned to the association as collateral security for said loan said four shares of stock and executed to the association his note for $400, of like tenor with his former note, his wife also signing it as surety, and both joined in executing a second deed of trust on said lot to the same trustees, with like power of sale.
    Winget, though frequently in default, so as to subject himself to the payment of fines, paid the installments on both certificates of stock, the interest on both notes, and the several fines incurred, down to February, 1882. The amounts paid by him on account of the first loan were as follows, viz: installments on the sixteen shares of stock $640, interest on the $1600 note $560, and fines $62.40. The amounts paid on account of the second loan were as follows, viz: installments on the four shares of stock $88, interest on the $400 note $78, and fines $12.70. The total amount of payments, including fines, was $1441.10. In February, 1882, he ceased making payments and sought to withdraw from the association, but he was not permitted to do so except upon terms which he was not willing to accept. After his payments had become more than six months in arrears, on application of the association, Flack, the successor in trust, Miller the trustee being dead, advertised said lot for sale under the powers in said deeds of trust, to pay the balance claimed by the association to be still due on said notes and deeds of trust. The balance claimed to be due on the two notes and for which the sale was advertised was $1082.55.
    One of the principal grounds for relief alleged in the bill is, that complainants were induced to accept said loans and execute said deeds of trust through mistake and misunderstanding caused by false, and fraudulent representations by said association, its officers and agents. The evidence in relation to the representations alleged is to a considerable degree conflicting. Said representations consisted in part of certain printed statements and circulars issued and distributed by the association, and in part of oral statements claimed to have been made by the officers and agents of the association to the complainants at or prior to the execution of the deeds of trust. Of the former, a printed circular was produced and identified, and those portions of it which were deemed material were read in evidence and are as follows:
    “Within the past few years Building Associations have been organized in the west, and naturally they are new, and the people are as yet unacquainted with the work and the benefits they accomplish. The name Building Association is a misnomer. Strictly speaking they are mutual savings and loan associations, loaning the money invested by their members to their members only.
    “The Quincy Building and Homestead Association organized in May, 1874, has been before the people of Quincy for the past nine years, and has been the means of assisting a large number of workingmen to gain them a home by means of monthly payments equal to paying rent. And you will ask how is this done ?
    “The association issues a series of stock on the first Tuesday of June annually, each share of stock being of the value of $100 when par. Any person can subscribe from one to fifty shares of stock, and by paying on each share the sum of fifty cents monthly, will realize the full value of $100. You will ask, how can fifty cents paid monthly, say for nine years, which would be $54, realize $100? It is done in this way: The money which is paid monthly is loaned to the members and the interest received on their loans is also paid monthly, hence the association compounds the interest twelve times per year, besides fines which are collected from delinquent members. Every one knows what results can be obtained by the loan and re-loan of money during a series of years. The profits are equally divided among the shareholders without preference. The expense of management is small, the directors giving their time, and the secretary and treasurer are only paid a nominal salary. Now by what means can a home be secured?
    “The association is in itself a philanthropic institution, and being of itself purely mutual, invites the laborer, mechanic, clerk and tradesman to share and assist each other in procuring a home. This association does not build houses, but helps those who help themselves in procuring one for them, the object being to loan to worthy mechanics, laborers and others sufficient money in the erection of a house, and to protect all its members, it is necessary that the association require security of all borrowers. Suppose you own a lot but have not the requisite amount of money necessary to build a house. The association will loan a sufficient amount to do so; or perhaps you have neither a lot or sufficient money to purchase one, but still it may be your desire to have your own house. You can do this by subscribing for stock and paying thereon until it is worth say $200. You can then withdraw the same from the association and with that money apply it in the purchase of a lot; or you can borrow from the association that amount by pledging the stock as security, or you can borrow a larger amount by giving the property as security, and with the surplus build your house. The association always takes into consideration the value of your stock when making a loan.
    “Besides this, many worthy persons can not borrow from money loaners or brokers a sufficient sum to enable them to build or purchase a house, as they require nearly double the amount as security, besides not loaning for a longer period than two or three years, a period of time not sufficient for a laboring man with a limited income to repay the loan, and they will not receive part of the principal to convenience the borrower and to lessen his interest before the note has matured. Many people have a mortgage on their property which not alone has proved burdensome to them, but with a small income have found it impossible to repay it, and are obliged to make new loans when the old ones have become due, so as not to lose their property. To those this association offers a welcome, for by taking stock in this association and borrowing thereon, they can in a few years, by small monthly payments, rid themselves of a burden which has been to them a source of anxiety. The record of this association for the past nine years speaks for itself. Hundreds of men have been and are now aided in the procurement of a home, and who, without the aid of the association, would now have no home of their own, but would be still paying rent.
    “Every one knows what good influences are brought to bear in a community where the laboring classes are thrifty. Where every man has his own home a better class of citizens are always to be found. All that many of our laboring men are in need of is encouragement to become thrifty and to become their own landlords. In this the Quincy Building and Homestead Association now offers an opportunity. If at present you have not enough means to begin a purchase of a home, you may make an effort to save a few dollars a month for a beginning. Take shares in the association, as many as your income may permit you, and you will find in a short time that you will have a nucleus to buy a home; but if at any time you find that you are unable to meet your payments, you have the privilege to withdraw your stock. The association will return you the money you have paid at any time with six per cent interest thereon for the time invested. So you will then find yourself a gainer by having saved so much.
    “To a great number of persons the ordinary method of paying so much a month is the easiest and most natural way of investing. They know their income, and they know what they can save out of it, and in a short space of time they find themselves possessed of a considerable amount which they very likely would not have, had they not invested small sums.
    “Practically and in brief, the system operates to assist men ■ of small means or small income to secure homes for themselves and their families, by paying small sums into a common treasury, to be loaned in such manner that principal and interest may be paid monthly instead of rent. The plan is simple. The theory is financially sound, and experience has demonstrated the material advantages which may be derived from these corporate societies. Thus every member is both stockholder and depositor, and contributes to the management, to the capital stock and to the profits, while enjoying the use of the society’s money.
    “But in addition to the pecuniary benefits reaped from organizations of this kind, there are doubtless influences exerted upon their membership of even greater importance, both to the individual and to society. Men possess an instinctive desire to advance in life which governs all their actions, and needs only to receive the right direction. Given an opportunity to make small beginnings in thrift, and in proportion as men acquire habits of temperance and economy and begin to accumulate money or property, they become possessed with the dignity of citizenship, have new respect for themselves and the rights of others, and become identified through self interest with law, order and public stability.
    “Such opportunities the Building and Loan Associations offer to the classes most in need of them. Capitalists can not monopolize them or divert them from their legitimate channels. All possible safeguards are thrown around them by the State laws, which specify the details of management, the limits of salaries and expenses, and place the control directly in the hands of the membership.”
    Another circular entitled “The Workingman’s Way to Wealth,” was inserted in, a pamphlet containing the charter and by-laws of the association, and in that circular, the advantages of the system of loan and homestead associations provided for by the act of 1872, and especially those offered by the defendant association, were set forth as follows:
    “It admits each individual member to a full, free and unrestricted voice in the management of associations formed under it, and a constant oversight of its operations and affairs.
    “It is entirely mutual and equal in distributing its benefits, giving to all its members their equal portion of all its profits and gains.

      “It is much more liberal in its return of profits and gains -than any other plan of saving and accumulating from small sums of money, having no preferred class to share its profits, and no necessity for expensive banking houses and clerk hire, and it is the only plan by which the workingman can become his own capitalist, and create a source of wealth from which he can supply all reasonable demands without the aid or interference of the outside capitalist. In short, it is a system ‘of the people, by the people and for the people.’
    “Every one owning stock in this association is entitled to a loan of $100 for each and every share he may own, which is a permanent loan, provided for by the charter and by-laws of this association, thus enabling the workingman to anticipate his wants and provide for his family immediately, a task requiring long years of labor and saving under any other plan.
    “Every stockholder, should he desire to withdraw, is assured by the charter of the repayment of the amount he pays into the association and legal interest.
    “There is no separate class, and no advantage gained by one member over any other member. ”
    In addition to these printed statements, evidence was given tending to show that the officers and agents of the association, made various statements and representations touching the advantages of being a stockholder in and a borrower from the association. The oral representations of which complaint is made, as collected and grouped together by counsel for the complainants in his brief, were as follows: “That it was cheaper to obtain a loan through the association than elsewhere ; that it could be had at less than legal rates, and that he could pay it back in small amounts, which would render it easier for him than to pay it in a gross sum; that he would receive back in cash the discount or' bonus he might bid and give notes for in excess of the money actually paid him, when his stock came to par; that complainants could pay off the loan at any time they wished to do so, by repaying the money actually received and six per cent interest on it; that all the gains and profits of the association would be equally divided among all the stockholders without preference, when the stock in a given series in which the member held stock became par; that it was his duty to join the association and to obtain the money he wanted from it; that it was the easiest and best way for a poor man to obtain a home for his family.”
    The complainants’ evidence tends to show that certain representations of the character above indicated were made to the complainants by Morton the secretary of the association, Miller its attorney and Nichols an assistant in the secretary’s office. At the time the bill was filed Morton and Miller were dead, but Nichols was called as a witness and he directly disputed the complainants’ testimony as to the representations claimed to have been made by him or in his presence.
    The master found that the evidence as to the oral representations alleged in the bill was conflicting and unsatisfactory; that contradiction of the complainants’ testimony in relation to the statements of Morton and Miller was impossible as they were dead, but that he was unable to find from the evidence that Morton, Miller or Nichols made the statements attributed to them except so far as such statements corresponded with the printed statements and circulars issued by the association and offered, in evidence.
    The master found however that Winget became a member of the association and a borrower, and that he and his wife executed and delivered to the association the notes and deeds of trust in controversy, relying upon and putting faith in the representations made by the association, through its officers and agents, and through its printed publications and circulars, that it would be better and cheaper to take a loan from the association than to borrow elsewhere; that all the profits of the association would be shared equally by all the members; that it was a philanthropic and benevolent institution to aid mechanics and poor men to gain a home, and that its funds were to be loaned only among its members, and that said representations were false and untrue.
    The court thereupon entered a decree confirming the master’s findings above set forth, and rescinding and vacating Winget’s said certificates of stock in said association, and the contracts between him and the association which resulted in the association issuing to him and his accepting said certificates of stock, on the ground that Winget was induced to become a member of .said association and take stock therein by false and fraudulent representations; and decreeing that the complainants were entitled to an accounting with said association upon the basis of the repayment by the complainants to the association of the moneys actually advanced by the association to Winget, with interest thereon at the rate of six per cent per annum, and crediting the complainants with all moneys paid by them or either of them to the association as installments of the shares of stock, interest or fines. The court thereupon stated the account between the parties from the evidence reported by the master,'and it appearing from such statement of the account that the complainants had more than paid said moneys loaned by the association to Winget and interest thereon as aforesaid, a decree was entered perpetually restraining the association from further attempting to enforce said deeds of trust, and ordering said deeds of trust and notes to be surrendered up for cancellation, and also directing that all the costs of the suit be taxed against said association. On appeal to the Appellate Court this decree was reversed and the cause remanded with directions to dismiss the bill for want of equity. By a further appeal the record is brought to this court for review.
    Mr. George W. Fogg, for the appellants:
    A false representation of any material fact, made by one party, and the other, in ignorance of the truth, and in good faith, relies upon such false representation, and is thereby induced to enter into a contract to his injury, will vitiate and avoid the contract, and if the injured party offers to rescind, and invokes the aid of a court of chancery, relief will be granted, and the parties restored to their original status. Baker v. Rockabrand, 118 Ill. 365.
    Though the mistake may not be material, if it be such that the minds of the parties never met upon a material point, and the parties can not be put in statu quo, equity will rescind the agreement. 1 Story’s Eq. Jur. sec. 138, note 3, secs. 142, 193, 185, and note.
    As to what is such a suggestio falsi, in contemplation of a court of equity, see 1 Story’s Eq. Jur. secs. 187-190.
    It is the suppression or misunderstanding of a material fact, and not the intent to defraud, that gives a court of equity the right to rescind and abrogate the agreement of the parties. 1 Story’s Eq. Jur. secs. 193, 193a.
    The general rule is, that an act done or contract made under a mistake, or in ignorance of a material fact, is voidable in equity. 1 Story’s Eq. Jur. sec. 140.
    No matter what may be the form of a fraudulent transaction, nor however plausible it may be upon its face, a court of equity, with its utmost acuteness, will seek to discover the real motive or intention of the parties. Hale v. Bryant, 109 Ill. 34.
    It is not necessary that the false representation should have been the sole or even the predominant motive. It is enough if it had material influence upon the plaintiff, although combined with other motives. Safford v. Grout, 120 Mass. 20; Matthews v. Bliss, 22 Pa. 48; Hough v. Richardson, 3 Story, 659; Pollock’s Pr. of Con. 500.
    Corporations are bound, to the same extent as are individuals, to a careful adherence to truth in their dealings, and they can not, by false representations, involve others in onerous engagements, and then defeat those expectations which their conduct has occasioned. Zabriske v. Railroad Co. 23 How. 381; Moran v. Miami County, 2 Black. 722.

      A stockholder drawn into taking shares in a corporation by the misrepresentation of its officers, can not he held to his contract, and the same doctrine applies to all the agents of a corporation. 1 Story’s Eq. .Tur. secs. 193, 193a; Pollock’s Pr. of Con. 503-505.
    That the loan in this ease is usurious, see Fitzsimmons v. Baum, 44 Pa. St. 32; Ernest v. Harkins, 100 id. 551; Evans v. Rigby, 13 S. & R. 218; 46 Ga. 166; 41 id. 451; 54 id. 474; 69 Am. Dec. 161; Delano v. Rood, 1 Gilm. 690; Hunter v. Hatch, 45 Ill. 178; Loveland v. Ritter, 50 id. 54; Columbia Building Association, 78 Am. Dec. 463.
    Messrs. Emmons & Wells, for the appellee:
    A party seeking to avoid his contract for fraud must be free from negligence, (Wharton on Evidence, sec. 932,) and the evidence of the fraud must be clear and strong. Fawcett v. Celoveer, 109 Mass. 79; Walker v. Hough, 59 Ill. 375.
    A knowledge of the falsity of the representation must rest, with the party charged with the making of it, and he must use some means to deceive or circumvent. Douglass v. Littler, 58 Ill. 342; Sims v. Kline, Brew. 302.
    If the acts of the officers of the association were mere assurances or expressions of an opinion, and not a misrepresentation of fact, however mistaken their belief has proven to be, there is no ground for holding such acts to he fraudulent. 2 Law and Eq. Rep. 401.
    The false representation of an officer is not that of the company, even if made at the office. To become the act of the company, it must be contained in a report of the company adopted at a regular meeting. Bedfield on Railways, p. 592, see. 12; In re Royal British Bank, 3 L. S. (N. S.) 843.
    Fraud, like any other fact, must be proven, and should not be inferred from mere expressions of opinion as to the merits of building associations. But representations false in fact, if innocently made by a party believing in the truth of what he said, will afford no ground for relief. The concurrence of fraudulent intents and false representations, and damage resulting therefrom, constitute the ground of action. Lamm v. Homestead Association, 49 Md. 233.
    It is now well settled that there can be no fraud without dishonest intention. Therefore, however false may be the representations of one party to another to induce him to make a contract, there is no ground for avoiding it as obtained by fraud, if the party making the representations honestly believed them to be true, although other remedies are sometimes available for damages. Cooper v. Lovering, 106 Mass. 78.
    If the representations were honestly made, then they must relate to the substance of the whole consideration, in order to be relieved; otherwise, if the representations are fraudulently made. Street v. Blay, 2 B. & Ad. 456.
    Ordinarily, statements of a general character, made by either of the parties pending a negotiation for the sale of property, relating to its value, will not afford any ground for avoiding the sale, although false, and made with a fraudulent intent. Dillman v. Nadlehoffer, 119 Ill. 567; Smoke Consuming Co. v. Lyford, 123 id. 300.
    Dealer’s talk, although false, is not actionable. Kimball v. Bangs, 144 Mass. 321.
    Fraud must be proved, and proved as it is alleged. Kerr on Fraud and Mistake, 382, 383.
   Mr. Justice Bailey

delivered the opinion of the Court:

One of the grounds upon which the complainants seek to be relieved from the legal consequences of Winget’s membership in the Quincy Building and Homestead Association, and from the obligations created by the notes and deeds of trust executed by them to said association is, that the association has no valid legal existence. In support of this contention they insist that the act of 1872 under which said association was organized is unconstitutional and void, because the entire scope of the act, as is claimed, is not sufficiently expressed in the title. On this point it is sufficient to say, that whatever may be the ■fact in relation to the valid legal existence of said association as a corporation, the complainants are not in a position in which they can be permitted to challenge its validity. A party who has contracted with a corporation de facto as such, can not be permitted, after having received the benefits of his contract, to allege any defect in the organization of such corporation, as affecting its capacity to enforce such contract, but all such objections, if valid, are available only on behalf of the sovereign power of the State. 2 Morawetz on Corporations, sec. 750, and authorities cited in note. And this rule applies even where the corporation is organized under a law alleged to be unconstitutional. Friedland v. Pennsylvania Central Ins. Co. 94 Pa. St. 504; McCarthy v. Lavasche, 89 Ill. 270; Dows v. Naper, 91 id. 44; Morawetz on Corporations, secs. 759, 760.

It is also contended that the loans of money for which said notes and deeds of trust were given are usurious. It is claimed that the rate of interest reserved was in excess of that allowed by the general interest laws of the State, and that the tenth section of the' act of 1872 is in conflict with the provisions of section 22, article 4, of the Constitution which prohibits the General Assembly from passing any local or special laws regulating the rate of interest on money. The questions here raised were fully considered by this court in Holmes v. Smythe, 100 Ill. 413, and it was there held that the said section of the act of 1872 was not within the prohibition of the Constitution, and that the transaction under consideration in that case, which in all its material aspects was precisely similar to those now before us, was not usurious. As we held in Freeman v. Ottawa Building, Homestead and Savings Association, 114 Ill. 182, these questions are no longer open to discussion.

The principal controversy arises upon the charges of fraud and misrepresentation whereby, as it is claimed, Winget was induced to become a member of said association and to apply to it for said loan of money, and whereby Winget and wife were induced to execute to the association their notes and deeds of trust as security for said loans. The evidence bearing upon these charges is quite voluminous and to a considerable degree conflicting, but after having given it patient consideration, we are disposed to concur with the decision of the Appellate Court that said charges are not sustained.

The form of organization of the association, and the general scheme upon which its business is conducted, are, so far as we are able to perceive, in strict accordance with the provisions of the act of 1872, and they must therefore be held to be fully authorized by l&w. Thus, the rules that no loans should be made except to members; that loans should he put up at auction and struck off to the members who should bid the highest premium; that every share of stock should he subject to a lien for the payment of unpaid installments and other charges incurred thereon under the provisions of the charter and by-laws, and that no stockholder should withdraw from the association whose stock was held in pledge for security, are all based directly upon the act. The by-law providing that when the shares of stock of any series upon which a loan should be granted should reach the matured value of $100 each, the value of the stock should be credited to the account of the borrowing member, thus satisfying and discharging the loan, and that the stock so credited should thereupon he can-celled and revert to the association, furnished a mode of satisfying loans and adjusting the accounts between the association and its borrowing members which was entirely consistent with and warranted by the provisions of the act.

Most if not all the representations complained of were made with reference to and in laudation of the financial scheme, authorized by said act and adopted and put in practice by the association. The evidence in relation to the representations alleged to have been made orally is conflicting, and we are of the opinion that the master was correct in pronouncing it unsatisfactory, and in declining to find that any of the representations imputed to the officers and agents of the association were in fact made, except so far as they corresponded in substance with those contained in the printed circulars issued by the association. It remains to be seen whether said circulars contained misrepresentations of such character as should call for a rescission of the contractual relations between the parties.

There can be no doubt that the association, by said circulars, presented the advantages to laboring men and others having small incomes, of its financial scheme, in a somewhat roseate light, and that opinions were expressed which, when subjected to the test of experience, have proved to be fallacious., But we are unable to find in said circulars any statement or representation of any material fact which is shown by the evidence to be essentially untrue. Besides, Winget, at the time he became a member of the association, or before, was furnished with a printed copy of the charter and by-laws of the association, in which the rights and obligations of members, and the principles upon which loans of money were made and secured were fully-stated. He had thus in his own hands the means of ascertaining and judging for himself as to the desirability of membership in the association, and as to the advisability of seeking to obtain from it loans of money. The first loan was obtained May 3, 1876, and after an interval of a little more than two years and a half, during which he must be deemed to have had sufficient opportunity to investigate the soundness and honesty of the financial methods adopted by the association, and the truthfulness of its representations, he applied for and obtained a further loan upon like terms and giving the same kind of security as before. It is difficult to see how, under these circumstances, even if the circulars should be found to contain statements of fact which were false and misleading, the complainants could be permitted to rescind their contracts on the ground of fraud.

The alleged misrepresentations upon which chief reliance is placed are, that it would be better and cheaper for Winget to obtain a loan from the association than to borrow elsewhere, and, that all the profits of the association would be shared equally by all the members. The first of these representations would seem to be a matter of opinion rather than the statement of a fact; but waiving that consideration, its failure to prove true in the case of Winget’s loans results from two causes, first, the large premiums bid by him for the loans, and second, the frequent fines incurred by him by reason of his failure to pay his installments at maturity. It is needless to say that the fines which he had to pay were the result of his own negligence, and should not enter into the computation in testing the truthfulness of the representation. The premium's bid and paid were very large, the first being thirty-eight and the second thirty-one per cent of the amount of the proposed loan, and such premiums being paid by him voluntarily and with his eyes open, their effect upon the general result was a matter for which he was responsible equally with the association. If it be said that, under the circumstances, the loans could be obtained only by paying the premiums bid, it need only be replied that he was under no coercion, and was not compelled to take the loans if the rates of premium were bid up to a figure which would make them too expensive.

It is demonstrable that if Winget had incurred no fines and had paid no premiums or but small ones, the loans would have been more advantageous than if made at the then usual rate of interest. Thus, if no premium had been paid and the stock had become par in eight or nine years, which the evidence shows was the usual period, the loans would have been almost or quite without interest. The payments in eight years would aggregate only ninety-six and in nine years only one hundred and eight per cent of the face of the loans, and as the stock would then equal in value the principal of the loan, the indebtedness would be cancelled by a credit of the par value of the stock and no further payments would be required. That this result was impossible in Winget’s case was due solely to the large premiums bid and the numerous fines incurred.

We are unable to see that the representation that the profits of the association would be shared equally by all the members was in any degree untruthful. All the profits arising out of the funds belonging to a particular series of stock were accumulated and held until that series of stock became par, and then all members holding stock in that series were alike entitled to a credit to the amount of the par value of their stock. If the stockholder was not also a borrower, the par value of his stock was paid to him in cash. If he was a borrower the same amount was applied to the cancellation of his loan.

After fully considering the case, we are satisfied with the conclusion reached by the Appellate Court, and the judgment of that court will therefore be affirmed.

Judgment affirmed.


source: Caselaw Access Project

author: Mr. Chief Justice Craig

license: Public Domain

text:
    Gustavus C. Pearson v. James Sanderson.

      Filed at Springfield

      April 5, 1889.

    1. Abbitbation and awabd—whether so considered—action of appraisers of improvements, under a lease—notice to the parties. Where a lease for a term of years provides that at the end of the term each party shall select an appraiser to value the permanent improvements put upon the premises, and in case they can not agree, the appraisers thus chosen shall select a third, and that the lessor shall pay the lessee the amount of such appraisal by any two of the appraisers, the action of the appraisers under such appointment is not an arbitration and award, so as to require notice to the parties of the time and place of the appraisers’ meeting and action. In such case no statement of the parties or evidence is contemplated. The appraisers are required to examine the improvements, and act on their own judgment.
    2. Landlord and tenant—purchase of improvements by a lessor— upon appraised value, wader the lease. A lease of property for a term of years provided that on the expiration of the term without a pinchase by the lessor of improvements which might be put upon the premises by the lessee, one appraiser should' be chosen by each of the parties thereto, who should appraise the then cash value of the permanent improvements made by the lessee and remaining upon the leased premises, and that in the event of the two appraisers failing to agree upon values they should select a third person, and that the valuation fixed by any two of the three appraisers should determine the amount to be paid the lessee by the lessor, after giving the latter credit and paying all liens due him from the lessee for money advanced, unpaid rent and other indebtedness due or to become due from the lessee to the lessor. The parties each selected an appraiser, who, being unable to agree, selected a third one. Two of the three made an appraisement: Held, in an action by the lessee against the lessor, to recover the appraised value, that the court properly instructed the jury that the defendant was liable for such valuation of all the permanent improvements put on the premises and remaining thereon at the end of the term.
    3. Interest—whether allowable—sum fixed by appraisers under terms of a lease. In such case, the sum found by the appraisers for the value of the improvements was a debt evidenced by the terms of the lease, and, as such, would draw six per cent interest from the date of the appraisement.
    Writ of Error to the Appellate Court for the Third District ;—heard in that court on writ of error to the Circuit Court of Vermilion county; the Hon. C. B. Smith, Judge, presiding.
    Mr. J. B. Mann, for the plaintiff in error;
    The so-called appraisers were, in fact, arbitrators, and their action should have been governed by the rules affecting arbitrators. If they were such, the court will so treat them, and define their duties accordingly. Van Courtland v. Underhill, 17 Johns. 405; Layman v. Young, 31 Pa. St. 306.
    This court has decided that where there is nothing for appraisers to do but to fix the price to be paid for a definitely determined article, they are not arbitrators, in the legal sense. (Norton v. Gale, 95 Ill. 533; Stose v. Heissler, 120 id. 435.) But the appraisers in the case at bar had necessarily to decide many more questions than the mere value of property. Before any award could possibly be made by them, it was imperatively necessary that they should agree upon the following matters: First, what improvements were made on the leased premises by appellee; second, were such improvements permanent; third, were such improvements authorized by the terms of the lease; fourth, what was the fair cash value of such improvements, and, as an incident thereto, what value did they add to the premises.
    The rule requiring notice of the hearing is without exception, and if there has been no such notice there can not be a legal hearing or a valid award. Morse on Arb. and Award, 118.
    The trial court erred in instructing the jury that the plaintiff in error was liable for all the improvements placed upon the premises by the defendant in error. The value of no improvements whatever, except the mill building and dwelling house, could be properly recovered.
    The court also erred in instructing the jury that the defendant in error was entitled to interest on the award. There is no evidence as to any date when plaintiff in error was notified of the award. There is no proof that a copy was given him. Defendant in error says he told plaintiff in error, after the appraisement was made, that he, defendant in error, had done all he could, and the appraisers had done all they could, and he left them to complete it. This is all the proof of a demand there is in this entire record. The jury allowed interest from the date of the award.
    Mr. F. Bookwaltee, for the defendant in error:
    An arbitration is defined to be the investigation and determination of matter or matters of difference between contending parties, by one or more unofficial persons chosen by the parties, and called arbitrators. 3 Blackstone’s Com. (Sharswood’s ed.) 16; Norton v. Gale, 95 Ill. 533.

      That the matter in question was not on arbitration, and not to be governed by the rules regulating arbitrators, has been conclusively settled in this State by a long line of decisions. Illinois and Michigan Canal v. Lynch, 5 Glim. 521; McAvoy v. Long, 13 Ill. 147; Railroad Co. v. Spurck, 24 id. 587; Snell v. Brown, 71 id. 133; Korf v. Lull, 70 id. 420; Norton v. Gale, 95 id. 535.
    The finding of the appraisers can only be attacked for fraud or mistake. McAuley v. Carter, 22 Ill. 53; Downey v. O’Donnell, 92 id. 559.
    No notice is necessary to the parties, because they are bound to take notice of the acts of the appraisers. McAuley v. Carter, 22 Ill. 53; Norton v. Gale, 95 id. 533.
    The finding of the appraisers draws interest at the rate of six per cent per annum, from the time of their finding. See Downey v. O’Donnell, 92 Ill. 559.
   Mr. Chief Justice Craig

delivered the opinion of the Court:

This was an action brought by James Sanderson, against Gustavus C. Pearson, to recover the amount of an appraisement which had been awarded the plaintiff for permanent improvements placed by him on certain premises leased of the defendant.

Under the contract set out in the declaration, certain premises in Danville, Illinois, were leased by Pearson to Sanderson for five years, from April 1,1881, upon which the latter was authorized to erect a corn and feed mill and dwelling house. The lease, among others, contained the following provision: “At the expiration of five years, in case of non-renewal of this or the making of a new lease, or at the period that this lease shall be determined by forfeiture, by agreement, or in case of death of lessee, in case said lessor has not already purchased said improvements, one appraiser, who shall be a householder and citizen of Danville, shall be chosen by each, (lessor and lessee,) which appraisers shall determine the then cash value of the permanent improvements made by said lessee, and remaining upon the said premises leased, provided the lessee may first remove the engine, boiler machinery, if free from liens in favor of lessor. In the event of the appraisers failing to agree upon values, a third person shall be chosen by them, (the appraisers,) who shall be a resident and householder of Danville. The valuation decided upon by two of the three appraisers shall determine the amount that shall be paid by lessor to lessee for said improvements, after giving lessor credit, and paying all liens due him from lessee for money advanced, unpaid rent, or other indebtedness due or to become due from lessee to lessor.”

It is also averred in the declaration, that plaintiff entered into possession of said premises and occupied the same under said agreement, for five years, and made the following.permanent improvements, viz.: One house and kitchen, one mill building, one barn and shed, one well and cistern at the house, filling yard, one out-house, partition fence and shrubbery; and that said lease was not renewed, and that defendant did not purchase the permanent improvements made upon said premises; that on April 2, 1886, plaintiff chose Henry Brand as his appraiser, and defendant chose John Beard, and that they failed to agree, and that on July 1, 1886, they chose Magnus Yeager, and that the three could not agree, but that Yeager and Brand did, on July T, 1886, appraise, determine and fix the fair cash value of said permanent improvements so left on said premises, at their value on April 1, 1886, and made a written finding, in which plaintiff was allowed $1640 therefor.

To the declaration the defendant pleaded the general issue and several special pleas. The defense set up and relied upon in the special pleas, in substance, was, that the appraisers were arbitrators, and as the rules governing arbitrators were not observed, especially in giving notice of the time and place of meeting, the action of the appraisers was not binding on the defendant.

If the proceeding which resulted in an appraisement in favor of the plaintiff for the sum of $1640 was an award, and should be governed and controlled by the rules that govern arbitrations and awards, the validity of the appraisement might well be doubted. But the proceeding, as we understand it, was not an arbitration. It was a mere appraisement of the value of certain permanent improvements placed upon the premises by the plaintiff, which appraisement, under the terms of the lease, was to be paid by the defendant. Norton v. Gale, 95 Ill. 533, is an authority in point. It was there held, that where the parties to a lease provide for rent to be paid yearly, at six per cent on the appraised value of the demised premises, to be ascertained by the selection of property holders, this is not a submission to arbitration, and no notice to the parties is necessary before making the appraisement, unless the lease so requires; and the finding of the appraisers, when selected, will be conclusive upon the parties, except for fraud. The decision in the case cited was approved, where a similar question arose, in Stose v. Heissler, 120 Ill. 436. No distinction can be drawn between the cases cited and the one under consideration.In the Norton case, the appraisers were selected to appraise the value of leased premises, the value, when fixed, to form the basis for the payment of rent at a specified per cent, while here the appraisers are selected to determine the value of certain permanent improvements placed on the leased premises. In neither case was it contemplated that evidence or the statement of the parties should be heard, but the appraisers were merely to examine the property, and use their own judgment in determining value. There was no dispute to be settled or trial to be had, as is the case where there is an arbitration and award. Where a proceeding is an arbitration, it is necessary that a time and place should be fixed for a hearing,—that the parties should receive notice, in order that they might appear and introduce their evidence, and make their statements before the arbitrators. But nothing of the kind is required in a case of this character. No evidence is to be heard. The appraisers ascertain such facts as may have a bearing on the value of the improvements, in their own way, and act upon their own judgment.

It is also claimed that the court erred in instructing the jury that the defendant was liable for all the improvements placed upon the premises. The contract provided that the appraisers shall determine the cash value of the permanent improvements made by the lessee and remaining upon the premises leased, and the construction placed upon the contract by the court was, that the defendant was liable for the permanent improvements. We think the construction placed upon the lease was warranted by its terms. The court instructed the jury that plaintiff was entitled to recover the amount fixed upon by the appraisers, with six per cent interest from the time defendant was notified of the amount which had been agreed upon, and it is insisted that interest could not be recovered.

Section 2, chapter 74, of the statute, provides that interest may be recovered at the rate of six per cent upon all moneys after they become due, on any bond, bill, promissory note or other instrument of writing. The lease executed by the parties, as has been seen, provided that the valuation decided upon by the appraisers should determine the amount that should be paid by lessor to lessee for said improvements. Under this clause of the lease, when the appraisers fixed upon the amount which the lessee was entitled to receive under its terms, then the amount became due by the terms of the lease. The lease was an instrument of writing, within the meaning of the statute, supra, and as interest may be recovered on money due on an instrument of writing, we are of opinion that interest was properly allowed.

The judgment of the Appellate Court will be affirmed.

Judgment affirmed.

Mr. Justice Wilkin took no part in this case.


text:
    James Bozarth et al. v. William Largent.

      Filed at Springfield

      April 5, 1889.

    1. Estate of husband in wife’s land—at common law—of the estate during coverture—and estate by the curtesy—Married Woman’s act of 1861. At the common law, a husband held, in right of his wife, all her lands in possession, and owned the rents and profits thereof absolutely. The birth of issue was not necessary to this right of the husband, which continued during the joint lives of the husband and wife. It was called an estate during coverture, or the husband’s freehold estate jure uxoris.

    2. This estate of the husband in his wife’s lands differed from curtesy initiate in its being a vested estate in possession, while the latter is a contingent future estate, dependent upon the birth of issue. It was held in right of the wife, and was not added to or diminished when curtesy initiate arose. Subject to the husband’s beneficial enjoyment during coverture, the ownership remained in the wife, and on dissolution of the marriage the property was discharged from such estate of the husband.
    3. Where there was marriage, seizin of the wife and birth of issue capable of inheriting, the husband, by the common law, took an estate in the wife’s lands during coverture. This was an estate of tenancy by the curtesy initiate, which would become consummate upon the death of the wife in the lifetime of the tenant. Upon the death of the wife, a tenant by the curtesy was seized of an estate of freehold, which was subject to alienation, and was liable to be taken on execution for his debts.
    4. The effect of the Married Woman’s act of 1861 was to abrogate the husband’s estate in his wife’s lands, or the estate he would have had at common law during the coverture, when the marriage took place after that act took effect, and, consequently, during the coverture he would have no estate therein liable to execution or attachment. This act did away with the estate he would have had, at common law, growing out of the marital relation.
    5. The general effect of statutes of this kind is to destroy the marital rights of the husband in his wife’s estate, but a statute may exempt her property from his debts without in anyway destroying his rights therein. Unless tenancy by the curtesy is destroyed by the statute by express words or necessary implication, or by the wife’s disposition of her property by virtue of her power over it, the husband will be held to have an estate by the curtesy at her death.

      6. The purpose and effect of the Married Woman’s act of 1861 were to secure to the wife the control of her separate property during coverture, during which time the husband’s common law rights in her property are suspended. It did not destroy the estate of curtesy, but after the passage of that act, and prior to the passage of the act of 1874, the husband, on his wife’s death, leaving issue of the marriage, took a life estate in her land as tenant by the curtesy.
    7. Where a marriage took place in 1863, the wife having lands inherited from her father, and she died in 1868, leaving issue of the marriage, it was held, that on her death the husband took a life estate in her land, which was subject to sale on execution against him.
    8. Redemption by judgment creditor—validity of original sale essential—and herein, of the effect of mere errors or irregularities. If a foreclosure sale of land is void for any cause, a judgment creditor redeeming therefrom will acquire no title under his purchase, for the reason that his rights, like those of the first purchaser, are dependent upon a valid judgment or decree and sale.
    9. But where the trial court had jurisdiction of the subject matter and of the parties, mere errors and irregularities can not be taken advantage of to defeat a sale made under a decree in the cause, or to defeat a sale made on a redemption by a judgment creditor.
    10. Same—sale of lands en masse—as affecting the right of redemption—and the mode. Although distinct tracts of land be sold en masse on decree of foreclosure, this will not render the sale void. At most it will be a ground for setting the sale aside, on proper application made in apt time. It can not be urged to defeat the sale in an action of ejectment.
    11. But where several tracts of land are sold en masse on a decree of foreclosure, neither the original owner nor his judgment creditor can redeem a part of the lands so sold, but must redeem the whole. If the tracts are sold separately, either one may redeem any tract so sold. The judgment creditor’s right to redeem is no greater or more extensive than that of his debtor.
    12. Same—'^who may question the regularity of a redemption by judgment creditor. After the expiration of twelve months from the sale, the right of the judgment debtor is gone, and he no longer has any interest in the premises, and can not take advantage of irregularities in making redemption by his judgment creditor, and his acquisition of title by virtue of a sale under such redemption. If the purchaser at the first sale makes no objection to the validity of the redemption, and receives the redemption money, the redemption will be complete, and the original debtor can not object that the sale on redemption was en masse, even if it could have been made in any other way.

      13. Where the estate of a life tenant by the curtesy is sold on a de■cree of foreclosure against him, his heirs (the remainder-men) can not object to a sale on redemption because the redemption was made in the name of a judgment creditor of the life tenant after he has assigned his judgment, instead of being made in the name of the assignee.
    14. Same—time of making the deed—in case of purchase by redeeming ■creditor—the statute construed. On a redemption by a judgment creditor, the statute provides that the redeeming creditor shall be deemed as having bid at the sale the amount of the redemption money paid by him, with interest thereon, and costs, and that if no greater amount is bid the premises shall be struck off to such judgment creditor, and the ■officer shall “forthwith” execute a deed of the x>remises to him: Held, that the word “forthwith” is not mandatory, but directory, only, and that a deed made thereafter, even after the sheriff who made the sale goes out of office, is good and valid to pass the title.
    15. Iitoeing OF title—to a mortgagee—of an es'ate by the curtesy. A husband and wife in 1868 executed their mortgage on the lands of the latter, the former having no present estate in the premises. The mortgage contained covenants of good right to convey, seizin in fee, and of general warranty. The wife shortly afterward died, leaving issue of the marriage, so that the husband succeeded to an estate as tenant by the curtesy for life : Held, that under the covenants in the mortgage his life estate inured to the benefit of the mortgagee, and passed under a sale under a decree of foreclosure of the mortgage.
    16. Appeal—what questions involved—claim of homestead, in respect to which there was no evidence. In an action of ejectment to recover land sold under a decree of foreclosure, no proof was offered at the trial tending to show that the premises when sold, or when the mortgage was given, were occupied by the mortgagors, or either of them, as a homestead, nor was it shown they were so occupied at any time : Held, on error, that the question of a homestead right, to defeat the sale, was not presented for adjudication, and could not be considered.
    17. Sebvioe op pbocess—in chancery—sufficiency of return. Summons in a suit to foreclose a mortgage was properly issued, and made returnable to the next term. The return of service was: “Executed this writ by reading the same to the within A, B, C and D, and by delivering to each a true copy hereof, this 10th day of April, 1872,” and it was properly signed by the sheriff, and the service was in apt time: Held, that the return showed a good service, and that the fact of the reading of the summons did no harm, and might be disregarded.
    Weit op Ebbob to the Circuit Court of Tazewell county; the Hon. N. W. G-been, Judge, presiding.

      This was an action of ejectment, brought by James Bozarth, Mary L. Bozarth and Ida B. Cook, the heirs-at-law of Louisa Bozarth, deceased, against William Largent, for the recovery-in fee of the east half of the south-west quarter of section 17, and the west half of the south-west quarter of the south-west quarter of section 8, all in town 23 north, range 2, west of the-third principal meridian, in Tazewell county. General issue-was filed, and a trial had, resulting in a finding and judgment for defendant. Plaintiffs below prosecute this writ of error.
    The facts are as follows: Louisa Bozarth, now deceased, being the owner in fee of said lands, which she had inherited from her father, was on August 19, 1863, married to Asa. Bozarth. They lived together as husband and wife until November 1,1868, when she died intestate, leaving her husband, who is still living, and the plaintiffs, her children and only heirs-at-law, surviving her. On March 5, 1868, she and her husband executed their mortgage upon the lands in controversy, and other lands of her husband, to Anna B. Cohrs, to secure the payment of $2500, evidenced by the note of Asa Bozarth, the husband, payable two years after date, with ten per cent interest, payable annually, and containing a clause that in default of the payment of the annual interest, the principal should become due. The mortgage was in the usual form, and contained a release of all homestead rights, and the wife acknowledged the release of all her rights of homestead, but. the husband did not acknowledge the release of homestead, his acknowledgment being simply that he acknowledged the mortgage to be his free act and deed, for the uses and purposes therein set forth.
    On March 27, 1873, Mary 0. Mans, the assignee of said note and mortgage, filed her bill in the circuit court of Tazewell county, against the said Asa Bozarth and the plaintiffs, and others, for the foreclosure of said mortgage. Summons was duly served on all the defendants, and a guardian ad litem
      was appointed for James, Ida B. and Mary Bozarth, (the plaintiffs,) they being then minors, who answered. At the May term, 1873, a decree was entered foreclosing said mortgage, and finding due thereon the sum of $2973.75, and a solicitor’s fee of $125 provided for in the mortgage, and ordering a sale of the premises, etc. Sale was made under said decree July 12, 1873, to William Don Maus, for the sum of $3048.84. The sale was made en masse, the master having failed to obtain bids on the several tracts when separately offered. Certificate of purchase was made and recorded the same day.
    At the May term, 1874, of the McLean circuit court, Albert Welch recovered a judgment against the said Asa Bozarth, John Bozarth and Elihu Bozarth, for $1250.50 and costs. Execution was issued to the sheriff of McLean county, and returned August 19,1874, when Welch assigned the judgment to George W. Thompson. On the same day, an alias execution issued to the sheriff of Tazewell county, which came to that officer’s hands August 20, 1874, and was levied on all the land sold under the foreclosure decree, and a certificate of levy was filed and recorded August 31, 1874. On October 10, 1874, a certificate of redemption from the sale under the decree of July 12, 1873, was executed by the sheriff of Tazewell county, and recorded on the same day. On October 31, 1874, the land was sold en masse by the sheriff to Welch for redemption money and costs. On January 14, 1875, after the term of office of the sheriff had expired, he made and delivered to Welch a deed for the premises, dating the same as of the day of sale. On the same day, Pratt, the then sheriff, also executed a deed to Welch for the lands on the same sale. Welch and wife, by their deed of December 1,1875, conveyed the land to John Bozarth, and he, on May 22,1882, conveyed the same to William Largent, defendant in error, who went into possession of the same.

      Mr. B. S. Prettyman, for the plaintiffs in error:
    Since the Married Woman’s act of 1861, as respects the wife’s separate estate, the husband stands before the law as a stranger. Patten v. Patten, 75 Ill. 451; Tomlinson v. Matthews, 98 id. 178.
    The act of 1861 expressly provides that her property “shall be exempt from execution or attachment for the debts of her husband, ” not during coverture only, but without limit of time, or provision of exception in case of her death, or of her conveying it by mortgage with his concurrence, or of the vesting of the fee in her children through her death. It was to be exempt from execution or debts of the husband, as and for a like purpose as a homestead is exempt, against which curtesy can not prevail. Loeb v. McMahon, 89 Ill. 490.
    A father devising property to his married daughter, and desiring that no part of it should be liable to the payment of the debts of the husband, such husband is excluded from any estate by curtesy therein; and property so devised is not liable for his debts on execution, even if the estate by curtesy had not been abolished. Monroe v. Van Meter, 100 Ill. 348.
    But if the estate by curtesy does exist, in law, since 1861, in cases arising under that act, it is clearly so modified as to strip the husband of the use and control, during the marriage, of all of the wife’s separate property, and make it exempt from seizure and sale under execution against him, or for his debts, not only during coverture, but after her death. The purpose of the law was to protect any honest provision, in real or personal property, which friends or relatives, from their means, might make for or give to the wife, to prevent her suffering for or to supply her with the necessaries of life, or to aid her in supporting and educating her children. For this purpose the law has made her separate property exempt from sale under execution for her husband’s debts. For such purposes it is, and long has been, the policy of the law to exempt property from execution, as, of household goods to the head of the family, liberal allowances to the widow, and by the provisions of the Homestead law. Thus restricted or “modified” by the act of 1861, the estate by curtesy, if not destroyed, had most, if not all, of its rights, powers and privileges then eliminated from it.
    The wife and husband both waiving the homestead on the face of the mortgage, and the wife, but not the husband, waiving the homestead in the acknowledgment, is not a good waiver as to either.
    This mortgage, as to the plaintiffs and their right of homestead, is void, (Richards v. Greene, 73 Ill. 54, Best v. Gholson, 89 id. 465, Asher v. Mitchell, 92 id. 490,) and its reception as evidence, against complainant’s objection, for incompetence, was erroneous. Rev. Stat. 1874, chap. 41, secs. 1, 5.
    Any person may redeem lands sold by a master or sheriff, and if the purchaser accepts the redemption money, the sale and certificate of purchase are rendered thenceforth void; and when land sold belonged in fee to a deceased person, by the redemption it is then and thereby vested in fee in the heirs of such person, at law. (Turney v. Young, 22 Ill. 255.) And if the levy and sale in this case, relied on by defendant, were designed to be made on an estate by curtesy in the land in question, as belonging to Asa Bozarth, it was then without such title in him, and was contrary to law as to any dower-interest, because dower can not be levied on and sold legally until it is assigned. Blain v. Harrison, 11 Ill. 384.
    After the assignment of the judgment the right to redeem was in the assignee.
    Mr. William Don Maus, and Mr. T. N. Green, for the defendants in error:
    The Married Woman’s act of 1861 did not, by express terms or by implication, abrogate the estate of tenancy by the curtesy. Cole v. Van Riper, 44 Ill. 65; Clark v. Thompson, 47 id. 26; Beach v. Miller, 51 id. 209; Noble v. McFarland, 51 id. 226; Armstrong v. Wilson, 60 id. 226; Monroe v. Van Meter, 100 id. 348; Lucas v. Lucas, 103 id. 121. And the contrary view is not sustained by plaintiff’s citation of Rose v. Sanderson, 38 Ill. 248, Farrell v. Patterson, 43 id. 57, Tomlinson v. Matthews, 98 id. 178, Patten v. Patten, 75 id. 447, and Loeb v. McMahon, 89 id. 489.
    The estate by the curtesy vested in real estate acquired by the wife, after the act of 1861 became a law, at the death of the wife. Monroe v. Van Meter, 100 Ill. 348.
   Mr. Justice Shops

delivered the opinion of the Court:

At the common law, a husband held, in right of his wife, all her lands in possession, and owned the rents and profits thereof absolutely. (1- Washburn on Beal Prop. 276; Tiedeman on Beal Prop. sec. 90; Haralson v. Bridges, 14 Ill. 37; Clapp v. Inhabitants of Stoughton, 10 Pick. 463; Decker v. Livingston, 15 Johns. 479.) The birth of issue was not necessary to this right of the husband, which continued during the joint lives of the husband and wife. It was called, an estate during coverture, or the husband’s freehold estate jwre uxoris. (Kibbie v. Williams, 58 Ill. 30; Butterfield v. Beall, 3 Ind. 203; Montgomery v. Tate, 12 id. 615; Croft v. Wilbar, 7 Allen, 248.) It differed from curtesy initiate, in its being a vested estate in possession, while the latter is a contingent future estate, dependent upon the birth of issue. (Wright's case, 2 Md. 429.) It is held in right of the wife, and was not added to or diminished when curtesy initiate arose. Subject,to the husband’s beneficial enjoyment during coverture, the ownership remained in the wife, and on dissolution of the marriage was discharged from such estate of the husband. (Stewart on Husband and Wife, sec. 146.) Where there was marriage, seizin of the wife and birth of issue capable of inheriting, the husband, by the common law, took an estate in the wife’s land during coverture. This was an estate of tenancy by the curtesy initiate, and which would become consummate upon the death of the wife in the lifetime of the tenant. Upon the death of the wife, a tenant by the curtesy was seized of an estate of freehold, which was subject to alienation, and was liable to be taken ■on execution for his debts. Tiedeman on Beal Prop. sec. 101; Howey v. Goings, 13 Ill. 95; Jacobs v. Rice, 33 id. 369; Cole v. Van Riper, 44 id. 58; Beach v. Miller, 51 id. 206; Lang v. Hitchcock, 99 id. 550.

The act of 1861, known as the Married Woman’s act, provides : “That all the property, both real and personal, belonging to any married woman as her sole and separate property, •or which any woman hereafter married owns at the time of' her marriage, or which any married woman, during coverture, acquires in good faith from any person other than her husband, by descent, devise or otherwise, together with all the rents, issues, increase and profits thereof, shall, notwithstanding her marriage, be and remain, during coverture, her sole and separate property, under her sole control, and be held, owned, possessed and enjoyed by her the same as though she was sole and unmarried, and shall not be subject to the disposal, control or interference of her husband, and shall be exempt from execution or attachment for the debts of her husband.”

In this case, Louisa Bozarth, who was the common source ■of title, was the owner of the land in controversy, as it is conceded, at the time of her marriage, August 19, 1863, to Asa Bozarth. The marriage having taken place after the act of 1861 took effect, and the wife being then the owner of the land in question, it was not, during her coverture, subject to the control, interference or disposal of her husband, or liable for his debts or other obligations. The effect of the statute was to abrogate the husband’s estate in her lands, or the estate he would have had at common law during the coverture, and, consequently, during that period he had no estate therein liable to execution or attachment. The act did away with the estate he would have had at common law, growing out of the marital relation, and it therefore follows, if the wife had been living at the time of the redemption and sale by the creditor of her husband, that proceeding would not have divested any right of herself or husband, or conferred any right upon the purchaser.

The question, however, remains, whether Asa Bozarth, the husband, on the death of his wife, in 1868, acquired an estate in her land as tenant by the curtesy. We have already seen that the property of a married woman, under the act of 1861, notwithstanding her marriage, was to be and remain, during coverture, her sole and separate property, and was not subject to the husband’s control or liable for his debts. The general effect of statutes of this kind is to destroy the marital rights of the husband in his wife’s estate; but a statute may exempt her property from his debts without in any way destroying his rights therein. Unless tenancy by the curtesy is destroyed by the statute by express words or necessary implication, or by the wife’s disposition of her property, by virtue of her power-over it, he will be held to have an estate by the curtesy at her death. The prevailing opinion seems to be, that while separate property acts do suspend, during coverture, all the rights of a husband, or his creditors, in statutory separate property, they do not destroy curtesy, or prevent its vesting on her death, unless such an event is clearly excluded by the statute,—as, where the statute not only provides that the property of the wife shall be hers, etc., but also defines her husband’s interest therein, if she dies intestate, in which case curtesy is excluded. Where she has power to alienate or charge her property, she may thereby defeat curtesy, but the statute must .contain express words to enable her to convey alone; and, also, when she has power of disposition of the property by will, she may thereby defeat curtesy. Stewart on Husband and Wife, sees. 243-161; In the matter of Winne, 2 Lans. (N. Y.) 21; Hatfield v. Sneden, 54 N. Y. 380; Noble v. McFarland, 51 Ill. 226; Freeman v. Hartman, 45 id. 57; Cole v. Van Riper, supra.

It will be seen that the Married Woman’s act of 1861 does not attempt to define the husband’s rights in his wife’s property after her decease, nor does it give her any power of disposal of her separate property, independent of the husband. The purpose and effect of the statute were to secure to the wife the control of her separate property during coverture. During that period the husband’s common law rights in her property are suspended. We are of opinion that this act did not have the effect of destroying the estate of curtesy, but that after the passage of that act, and prior to the passage of the act of 1874, the husband, on his wife’s death, leaving issue of the marriage, took a life estate in her land as tenant by the curtesy. After the passage of the act under consideration, the estate by the curtesy in the lands of the wife did not vest in the husband until the death of the wife, (Lucas v. Lucas, 103 Ill. 121, Beach v. Miller, 51 id. 206,) but upon her death such estate became consummate, and vested in the husband in all respects-as at common law. (Noble v. McFarland, 51 Ill. 226; Shortall v. Hinckley, 41 id. 219; Gay v. Gay, 123 id. 221; Castner v. Walrod, 83 id. 171.) It follows, that we are of opinion that upon the death of the wife in 1868, leaving issue surviving, the husband, Asa Bozarth, became seized of a freehold interest in the lands in controversy, as tenant by the curtesy, and which was subject to seizure and sale on execution against him.

The validity of the sale of the premises under the decree of foreclosure, and the redemption upon the execution issued upon the judgment in favor of Welch, and against the said Asa Bozarth, and the sale thereunder, is questioned by the plaintiffs in error. If the foreclosure sale was void for any cause, the judgment creditor redeeming therefrom acquired no title under his purchase, for the reason that his rights, like the purchaser at the sale under the decree of foreclosure, are dependent upon a valid judgment or decree, and sale. Johnson v. Baker, 38 Ill. 99; Mulvey v. Carpenter, 78 id. 580; Keeling v. Head, 3 Head. 592.

It is objected that there was no sufficient service of summons upon the plaintiffs in error, who were defendants in the foreclosure suit. The return to the summons therein is as follows: “Executed this writ by reading the same to the within named Asa Bozarth, James Bozarth, Ida Bell Bozarth and Mary Bozarth, and by delivering to each a true copy hereof on the 10th day of April, 1873,” and properly signed by the sheriff. The process was returnable to the May term, 1873. The service was in apt time. The fact that the summons was read to the defendants did no harm, and that part of the return may be disregarded. It is apparent that the circuit court had, therefore, jurisdiction of the subject matter and of the parties, and mere errors or irregularities, if any, can not be taken advantage of in this collateral proceeding.

It is objected that the mortgaged premises were improperly sold en masse. If this be conceded, it would not render the sale void. At most, it would only be grounds for setting the sale aside, on proper application to the court in apt time. It, however, appears that the land was offered by the master in separate parcels, and receiving no bids therefor, it was then offered and sold en masse. We are not prepared to say that the action of the master was not warranted.

It is next objected that all the lands sold under the decree were redeemed en masse, and so sold to Welch under the execution. A judgment creditor’s right of redemption is no greater or more extensive than that of the original debtor. He can not redeem in a case where the original owner can not redeem within the time allowed by law for redemption by the debtor. In Hawkins v. Vineyard, 14 Ill. 26, a quarter section of land had been sold, of which the debtor otyned only sixty-five acres, and it was held that he could not redeem the sixty-five acres, but that he must redeem the whole or none. A person can not redeem an undivided share of land by paying his proportional share of the debt, and a part owner must redeem the whole. (Durley v. Davis, 69 Ill. 133.) A purchaser of a part of mortgaged land can not redeem that part by paying his proportion of the debt. (Meacham v. Steele, 93 Ill. 135.) When the purchaser at a master’s sale of an entire tract of land afterwards assigns an undivided interest in such purchase, there can be no legal redemption of such undivided interest by a judgment creditor. Groves v. Maghee, 72 Ill. 526; Titsworth v. Stout, 49 id. 78.

Section 25, chapter 77, of the Revised Statutes, provides: “Any person entitled to redeem, may redeem the whole or any part of the premises sold, in like distinct parcels or quantities in which the same was sold,” etc. If the several mortgaged tracts had been sold separately, redemption might have been made of any one or more of the tracts. In such case the amount that each tract sold for would furnish the basis for determining the amount to be paid in order to redeem; but as the several parcels of land were sold together, and for a gross sum, neither the debtor nor his judgment creditor could redeem without paying the full amount for which the same sold, with interest. The law gives the debtor twelve months in which to redeem, after which time any judgment creditor of the debtor may also redeem within fifteen months from the date of the sale; but in so doing, the creditor will possess no greater right than his debtor had within the time limited for redemption by him. After the expiration of twelve months from the sale, the right of redemption of the judgment debtor is gone. He no longer has any interest in the premises, and can not take advantage of mere irregularities in making redemption by his judgment creditor, and his acquisition of title by virtue of a sale in pursuance of such redemption. The purchaser at the foreclosure sale makes no objection to the validity of the redemption, and having accepted the money the redemption was conrplete. The title of Asa Bozarth being gone by his failure to redeem within the time allowed by law, he was not injured by a sale en masse on the execution, if, indeed, the sale could have been otherwise made.

There is no force in the objection that the redemption should have been made in the name of Thompson, assignee of Welch, the judgment creditor. (Sweezy v. Chandler, 11 Ill. 445.) It in no way concerns the plaintiffs in error whether, redemption was made in the name of the plaintiff in the judgment against Asa Bozarth or in the name of his assignee.

No proof was made or offered at the trial tending to show that the premises, when sold under the decree of foreclosure, or when the mortgage was given, were occupied by the mortgagors, or either of them, as a homestead. Nor does it appear that they were at any time so occupied. Therefore, the question of the right of homestead was not presented for adjudication, and can not be considered in this court. It may, however, be observed, that the mortgage was executed and acknowledged before the act of 1872, relating to conveyances, took effect, and the cases cited by counsel were determined under the provisions of that act.

It is claimed that only the title of Louisa Bozarth passed by the sale under the decree of foreclosure, and therefore a creditor of her husband could not redeem from that sale. This contention is not well grounded. While the husband, as we have seen, at the time of the execution of the mortgage had no estate in the land, it was necessary to the execution of a valid mortgage, or conveyance of his wife’s estate therein, that he should join in the mortgage or conveyance, which he did. The mortgage was in the usual form, and contained covenants of both the husband and wife, of good right to convey, seizin in fee, and of general warranty, and was sufficient to pass not only the estate of the wife, but also all the estate, right and interest of the husband in the property which he then had or might subsequently acquire. If he had no estate by the curtesy initiate, or otherwise, during the life of the wife, upon her death he took an estate for life in this land as tenant by the curtesy, which, under the covenants of the mortgage, inured to the benefit of the mortgagee. Gochenour v. Mowry, 33 Ill. 331.

The sheriff’s deed was dated October 31,1874,—the date of the sale upon the redemption,—but was in fact executed January 14,1875, after the term of office of the sheriff had expired. Section 21 of the act relating to judgments, etc., provides, that the redeeming judgment creditor shall be considered as having bid at the sale the amount of the redemption money paid by him, with interest thereon, and the costs of the redemption and sale; “and if no greater amount is bid at such sale, the premises shall be struck off to such person making such redemption, and the officers shall forthwith execute a deed of the premises to him, and no other redemption shall be allowed.” It is urged that the provision of the statute requiring the deed to be made “forthwith” is mandatory, and that a failure in this respect would render the sale void. We are not prepared to so hold. The purchaser is entitled to a deed forthwith in such ease, but the failure of the sheriff to make the deed immediately after the sale will not render the redemption and sale invalid. This provision of the statute must be regarded as directory, only.

•It is lastly objected, that Beeves, the sheriff, had no authority to make the deed after his term of office had expired. Section 30, of the act relating to judgments, etc., provides: “The deed shall be executed by the sheriff, master in chancery, or other officer who made such sale, or by his successor in office,” etc. Freeman, in his work on Executions, (section 327,) says: “The officer who made the sale, whether he continues in office or not, is, in ordinary circumstances, and in the absence of statutory provisions to the contrary, the proper person to make a conveyance. * * * When the term of the officer who made the sale terminates, his power to make the conveyance continues. In fact, unless the new sheriff is specially authorized by statute, he seems to have no authority whatever to make a conveyance based on a sale made by his predecessor.” We are of opinion that the deed made by the retiring sheriff, under our statute, was valid. If this is so, it will be unneces- , sary to determine whether the deed made by his successor in office is good or not. In any event, under the section of the statute quoted, by one deed or the other the title acquired under the redemption sale passed to the grantee in said deeds.

The plaintiffs claimed an estate in fee in the land in controversy, with a present right of possession. Their father having a life estate in the property, which has passed by virtue of the foreclosure sale, the redemption and sale thereunder, and the deeds in pursuance thereof to the defendant, they are not entitled to recover of the defendant the possession of said lands during the continuance of such estate. Until the termination of that life estate by the death of the life tenant, their right to a recovery must be postponed.

Some questions are raised as to the effect of the proceedings before mentioned, upon the fee to the land, which are not now before us for consideration, and no adjudication is made in respect thereof.

The judgment of the circuit court will be affirmed.

Judgment affirmed.