text:
    James H. Carter et al. v. Frederick Rodewald et al.

      Filed at Mt. Vernon January 22, 1884.

    1. Return of service—sufficiency. A return to a chancery summons was as follows: “I have duly served the within by reading the same, and delivering a true copy thereof to the within named C D, as I am therein commanded. April 18, 1878”: Held,, as showing a valid service, and that the return sufficiently showed that a copy of the writ was delivered, and that the date referred to the time of service, and not to the date of the return.
    2. Summons—description of court. A summons in chancery, the caption of which was, “State of Illinois, Alexander county, ss.,” commanded the defendant to appear “before the circuit court of said Alexander,” omitting the word “county.” The subsequent words were, “at the next term thereof, to be holden in the city of Cairo, in said Alexander county, on,” etc.: Held, that the omission of the word "county” was a mere clerical omission, and of no consequence.

      3. Ebbob—party can not urge error as to one not objecting. On a bill to enjoin the collection of faxes against a railroad company whose property was in the hands of a receiver, a decree was made enjoining the collection of the taxes, and also the receiver from paying the same: Held, that the collector enjoined could not assign for error the decree against the receiver.
    4. Beceiveb—conflict of jurisdiction. After the appointment of a receiver of an insolvent railway company by the United States Circuit Court, at the suit of certain bondholders, and possession taken by such receiver, the bondholders of the company secured by deed of trust on the real estate of the company filed a bill in the circuit court of the State to enjoin the collection of the personal property tax of the corporation by the sale of the mortgaged property, and to enjoin the receiver from paying the same out of assets in his hands: Held, that the fact that the property sought to be made liable for the taxes was in the possession of the United States court, by the receiver, could not affect the jurisdiction of the State court as to the subject matter, and that permission to sue the receiver in the State court might be presumed from the fact of no objection being made.
    5. Chancebt—when party may sue in his own behalf and that of others. The holder of a portion of bonds secured by deed of trust given by a railway company, in order to protect the mortgaged property or fund securing his and others’ bonds, may file a bill in his own behalf and in behalf of all other holders of such bonds, his interest and that of the others being identical and inseparable.
    6. Pbactice—default—presumption in favor of ruling below. On the same day a rule was entered requiring the defendants to answer a bill by a future day, it appeared by entry of record the defendants were defaulted, the decree, however, finding that “the defendants having each failed to answer complainants’ bill, as by the rule of the court they were required to do, ” etc.: Held, that as every presumption is in favor of the regularity of the proceedings of a court, it would be taken that the- decree asserted the fact, and the inconsistency in dates be regarded as a clerical error.
    7. Lien bob taxes—personal property tax as a lien on real property. A tax on personal property, as, on the capital stock Of a corporation, does not become a lien on real estate until the collector shall select for that- purpose some particular tract or lots of real property, and charge the tax against the same in his application for judgment.
    8. Injunction—to prevent seizure of property not liable to tax. A person who obtains a lien on property prior in time to that of a tax assessed against the owner, is entitled to have enjoined the seizure of such property for the tax.
    • Weit of Eeeoe to the Circuit Court of Alexander county; the Hon. David J. Bakes, Judge, presiding.

      - Mr. A. G. Damron, Mr. L. M. Bradley, Mr. W. Y. Choisser, and Mr. P. A. Pearce, for the plaintiffs in error:
    The return of service as to Burnett is defective. It should have a service of the “within writ.” A statement that he “served the within, ” is not good. The return should show what was served, and when it was served. The return is dated, but not the date of the service. Carter is commanded to appear “before the circuit court of said Alexander,”—not Alexander county. Hochlander v. Hochlander, 73 Ill. 618; Dick v. Moore, 85 id. 66; Practice act, sec. 4.
    The Federal court alone had cognizance of the matter. High on Receivers, sec. 48. See, also, Richards v. People, 81 Ill. 551.
    The court had no jurisdiction over any bondholder except Rodewald, and yet the decree is in his favor and in favor of all other bondholders.
    When the decree was entered defendants were not in default, as the time they were required to answer had not expired. ■ This was error. Pratt v. Grimes, 35 Ill. 164; Clark v. Ewing, 87 id. 344.
    The whole property was bound for the payment of the tax, and the bondholders were as much interested in shielding the rolling stock from taxation as the real estate. ’ Taxes on personal property may be properly charged upon real estate. Revenue act, secs. 255, 183; Schaffer v. People, 60 Ill. 179.
    A court of equityrwill not take jurisdiction to restrain the collection of a tax for mere irregularity. Vieley v. Thompson, 44 Ill. 13.
    The general doctrine as to when equity will interpose, is stated in Du Page County v. Jenks, 65 Ill. 286; Lemont v. Singer da Talcott Stone Co. 98 id. 102; Munson v. Milter, 66 id. 380; Union Trust Co. v. Weber, 96 id. 346.
    • The remedy, if any, was at law, and defence could have been made in the county court. Revenue act, sec. 190;
      Archer v. Terre Haute R. R. Co. 102 Ill. 493; Foss v. Chicago, 56 id. 359; Pease v. Chicago, 21 id. 500.
    Messrs. Greene, Burnett & Humphrey, for the defendants in error:
    The summons, with the return thereon as to Burnett, was filed with the clerk October 22, 1877. The service and return must have been made before that time. Rivard v. Gardner, 39 Ill. 127; Banks v. Banks, 31 id. 162; Reddick v. State Bank, 27 id. 145; Timmerman v. Phelps, id. 496; Coursen v. Hixon, 78 id. 339.
    Before this tax became any lien the railroad company had been divested of the property, and the tax warrants subsequently issued could not attach as liens upon the same as against prior liens and rights of 'creditors. Ream v. Stone, 102 Ill. 359; Binkert v. Wabash Ry. Co. 98 id. 205; Gaar, Scott & Co. v. Hurd, 92 id. 315.
    The suit was properly brought by complainant for himself and on behalf of all other bondholders, their interests being identical and inseparable. Story’s Eq. PI. secs. 97-115.
    As every presumption is in favor of the regularity of the proceedings of a court, it will be taken that the decree finding that the defendants failed to answer as required by the rule, is true, and this court will treat the inconsistency in the dates shown, as a clerical error, and disregard it.
    The jurisdiction of a court of equity in a case of this class is very manifest. Hickey v. Forrestal, 49 Ill. 255; Ohling v. Luitjens, 32 id. 33.
   Mr. Chief Justice Sheldon

delivered the opinion of the Court:

This was a bill in chancery to restrain the-collectors of taxes of certain counties from taking any steps for the purpose of charging the capital stock tax for the year 1873, assessed against the Cairo and Yineennes Bailroad Company upon the road-bed, right of way, railroad track and real estate of said railroad company, and to enjoin the receivers of said company from paying such tax. The defendants failing to make answer to the bill, a decyee pro confesso was entered against them, in accordance with the prayer of the bill. The collectors of taxes sued out this writ of error.

The first error assigned is as to supposed defects in the service of process. The return of service upon the defendant Burnett is:

“I have duly served the within by reading the same, and delivering a true copy thereof to the within named George E. Burnett, as I am therein commanded.
“April 18, 1878. James H. Pease, Coroner.”

It is objected that the return does not show a copy of what was delivered, or the time of service,—that the date appearing is that of the return, not of the service. The return being indorsed on the summons, stating that the within was delivered, is a statement that the summons was delivered. The date which appears refers with sufficient certainty to the time of service, and is to be taken as that, and not the time of the return. Chic, and St. Louis R. R. Co. v. Holbrook, 92 Ill. 299.

It is objected that the defendant Carter is commanded to" appear “before the circuit court of said Alexander,”—not Alexander county. This is a mere clerical omission, of no consequence. The caption of the writ is, “State of Illinois, Alexander county, ss.,” and the words which follow, commanding the defendant “to appear before the circuit court of said Alexander, at the next term thereof, to be holden in the cit/of Cairo, in said Alexander county, on,” etc., inform the defendant of what the omission was, and that it was the circuit court of Alexander county before which he was to appear.

In a suit in the United States Circuit Court for the Southern . District of Illinois, there had been appointed two persons receivers of the railroad, and it is alleged to be error that the State court took jurisdiction of the receivers, and decreed a perpetual injunction against them,—that the United States court alone had cognizance of the matter. The receivers are. not parties to the writ of error, and as they are not complaining of the decree, the court is not called upon to review it as against them. But if it were, we should find no error. The object of the bill was to enjoin the collection of taxes assessed by the authorities of the State, and the fact that the property sought to be made liable for the taxes was in the possession of the United States court, by the receivers, could not affect the jurisdiction of the State court as to the subject matter. The receivers might have objected to being sued in the State court, but did not. The receivers might be sued in the State court, with the permission of the court appointing them, and no objection having been made, such permission may well be presumed.

It is objected that the court had no jurisdiction over any bondholder except the complainant Bodewald, and yet that the decree-is in his favor and in favor of all other bondholders— that the other bondholders should have been made defendants, as unknown bondholders. The only ground for this objection is that the complainant Bodewald states-, in his bill, that he brings the suit on his own behalf, as a bondholder, and on behalf of all other bondholders of mortgage bonds of the railroad company, which the property in question had been mortgaged to secure. The decree is not in terms in favor of all the bondholders. The relief prayed and granted was such as would have been granted, if at all, in behalf of complainant suing alone. His interest extending to the entire property threatened, entitled him to the protection of the -court in that regard, and to ail the relief granted, independent of the other bondholders; and the interest of all the bondholders was so identical and inseparable, that he was entitled to sue in behalf of all, as well as in his own behalf. It is- a common form of suit in such cases.

Another assignment of error is, that on May 20, 1878, a rule was entered upon the defendants to answer the bill by the following Wednesday morning, and that on the same day the rule was entered the defendants were defaulted. It is true that the transcript of the proceedings does so show, but the decree itself finds that “the defendants having each failed to answer complainants’ bill, as by the rule of the court they were required to do, and each of said defendants being three times solemnly called, came not, but made default. ” As every presumption is in favor of the regularity of the proceedings of the court, we may take the fact to be as asserted by the decree, that the defendants had failed to answer, as required by the rule, and regard the inconsistency in the dates as a clerical error.

As respects the merits of the ease, the mortgage or deed of trust of the railroad property, to secure the payment of the bonds of the company, was made in 1871. All the bonds had been sold on the market prior to January 1, 1873. The capital stock tax in question was assessed in the year 1873. This capital stock tax is a personal property tax, and although, by section 255 of the Revenue act, real property is made liable for taxes on personal property, it is provided that the tax on personal property shall not be charged against real property, except in case of removals, or where the tax can not be made out of the personal property. Section 183 of the act provides how the tax on personal property shall be charged against real property; that the collector of taxes shall select for that purpose some particular tract or lots of real property owned by the person from whom the personal property tax is due, and in his advertisement for judgment against and sale of lands delinquent for taxes, shall designate the particular tract or lots of real property against which such personal property tax is charged, and in'the list filed for such judgment the same shall be shown, and that the court shall give judgment against such tract or lots of real property for such personal property tax.

A tax on personal property does not become a lien on real estate until the collector of taxes shall select for that purpose some particular tract or lots of real property, and charge the tax against the same, as above named. Belleville Nail Co. v. The People, 98 Ill. 399; Ream et al. v. Stone et al. 102 id. 359; Parsons v. East St. Louis Gas Light Co., post, p. 380. And see Binkert v. Wabash Ry. Co. 98 id. 206; Cooper v. Corbin, 105 id. 225. The corporation against whom the personal property tax was assessed had parted with all interest in this real estate in which the bondholders were interested. The decree finds that the equity of redemption was of no value whatever, and that the property was no longer in the possession of the corporation, but was in the hands of the court by its receivers. There was nothing against which this tax could be charged, except property belonging exclusively to the bondholders, or held for their benefit. Their interest having been acquired long before the tax was assessed, the bondholders, we think, were entitled to the relief granted, to prevent making the threatened charge against the property of this personal property tax, and thereby clouding the title and impairing the security.

As to the suggestion that the remedy was at law, and not in chancery, this court has frequently held that one who obtains a lien on personal property prior in time to a tax assessed against the former owner, is entitled to have enjoined the seizure of such property for the tax. Ream v. Stone, 102 Ill. 359; Binkert v. Wabash Ry. Co. 98 id. 205; Cooper v. Corbin, 105 id. 225.

As to the decreeing of costs against the defendants, that being a matter resting in the discretion of the circuit court, under the statute, we do not see proper to interfere with the exercise of such discretion. •

The decree will be affirmed.

Decree affirmed.


source: Caselaw Access Project

author: Mr. Justice Mulkey

license: Public Domain

text:
    Amos Thompson v. Sophia Meisser.

      Filed at Mt. Vernon January 22, 1884.

    1. Stockholder’s liability for debts of the corporation—in what manner discharged. Under a statutory provision making tbe stockholders of a private corporation individually responsible for an amount equal to the amount of stock held by them, respectively, in case of the failure of the corporation to make payment of any debt, etc., the stockholders are in effect made partners, and are consequently jointly and severally liable to the creditors of the corporation who are not also stockholders themselves, to the amount of stock held by them, respectively.
    2. As a corollary it follows that one stockholder can not maintain an action at law on such individual liability against a fellow-stockholder, any more than one partner can sue his co-partner at law on a claim against the firm which he may have purchased.
    3. In an action by an outside creditor of a corporation to enforce the individual liability of a stockholder, the latter can not set off a debt due from the corporation to himself.
    4. A stockholder who is individually liable to the amount of his stock in favor of creditors of his corporation, may discharge such liability by the payment, in good faith, of the amount of the same to any creditor who is not also a stockholder. But he can not discharge himself by buying up debts owing by the corporation equal in amount to his liability, at a discount. In such case, if he retains such indebtedness so purchased by him, he can only claim a discharge for the actual sum paid by him for the same.
    5. After the insolvency of a bank, a stockholder who was personally liable for the indebtedness of the corporation to the amount of $1000, (the amount of stock held by him,) purchased certificates of deposit issued by the bank to the amount of $3200 on their face, for fifteen cents on the dollar, of which he sold all but $1000. On this latter sum another stockholder confess,ed judgment, and the first named party entered satisfaction of such judgment without any actual payment, and for the purpose of enabling the other to avoid his liability to creditors. On suit by an outside creditor of the bank against the first named stockholder, he pleaded payment of $1000 to another creditor in discharge, and on the trial produced the certificates of deposit upon which he had taken a confession of judgment: Held, that this showed no discharge of any part of his liability.

      Appeal from the Appellate Court for the Fourth District; —heard in that court on appeal from the Circuit Court of St. Clair county; the Hon. William H. Snyder, Judge, presiding.
    Mr. Charles W. Thomas, for the appellant:-
    The Appellate Court holds that a stockholder of a corporation is not entitled to the same protection as other creditors as to indebtedness due him from the corporation, and cites the following cases as sustaining that position: Bailey v. Bancker, 3 Hill. 188; Weber v. Frickey, 47 Md. 200; Beers v. Waterbury, 8 Bosw. 399 ; Thayer v. Union Tool Co. 4 Gray, 75; Richardson v. Abendroth, 43 Barb. 165.
    The third of these eases follows the first, and contains no argument or reason to support this holding. Richardson v. Abendroth follows the first case cited, without any additional reasoning, and one of the four judges put his judgment upon a different ground, and one dissented. Weber v. Frickey will be found to be rather against than in support of the position. This leaves only the cases of Bailey v. Bancker, and Thayer v. Union Tool Co., as authority to sustain the views of the Appellate Court, and neither of them, when carefully examined, sustains that position. In both eases the statute made the stockholders jointly, as well as severally, liable at law, while the statute in this case makes the stockholders severally liable, by the use of the word “ individually. ” See Thompson on Liability of Stockholders, sec. 36; McCarthy v. Lavasche, 89 Ill. 287; Aspinwall v. Lucchi, 57 N. Y. 331.
    Where a stockholder takes up, cancels and destroys an amount of deposits due from the bank equal to the amount of his individual liability, he has complied with his obligation under the statute, and is discharged. Jones v. Wiltberger, 42 Ga. 575; Boyd v. Hall, 56 id. 563; Briggs v. Penniman, 8 Cow. 386.

      In New York, the case of Bailey v. Bancker is in effect overruled hy Mathes v. Neidig, 72 N. Y. 200, as well as all other cases based on that case.
    Mr. W. C. Kueffnee, for the appellee:
    This court, in discussing the position of stockholders under similar statutes, has treated them as co-partners in respect to their liability. (Fuller v. Ledden, 87 Ill. 312; McCarthy v. Lavasche, 89 id. 270; Wincock v. Turpin, 96 id. 143.) Similar views have been expressed in other States, and in holding that one stockholder can not sue. another at law. Beers v. Waterbury, 8 Bosw. 397; Bailey v. Bancker, 2 Hill, 190; Richardson v. Abendroth, 43 Barb. 165; Thayer v. Union Tool Co. 4 Gray, 80; Weber v. Frickey, 47 Md. 200; Meisser v. Thompson, 9 Bradw. 309.
    This court has decided in a suit under this very charter that a stockholder can not, in a suit against him to enforce his individual liability, plead as a set-off an indebtedness of the corporation to himself. Buchanan v. Meisser, 105 Ill. 639.
    The charter declares that the stockholders shall be “responsible for an amount equal to the stock held by them, respectively. ” By the construction contended for by appellant, he might escape by the payment of a mere nominal sum, if by operating on the fears or necessities of creditors he could induce them to give an amount of claims equal to the stock. If the stockholder can be allowed at all for claims bought by him, they should be cancelled, and he should only be allowed for the sum actually paid to take them up.
   Mr. Justice Mulkey

delivered the opinion of the Court:

This action was brought by Sophia Meisser, the appellee, in the circuit court of St. Clair county, against Amos Thompson, •the appellant, as a stockholder in the People’s Bank of Belle-ville, to recover the amount of a deposit made by her in said bank on the 20th of June, 1877, for the sum of $955. The cause was tried in the City Court of East St. Louis, to which it had been removed by change of venue, resulting in a judgment in her favor for $955 debt, and $45 damages and costs, which, on appeal to -the Appellate Court for the Fourth District, was affirmed, and Thompson has appealed to this court.

The provision in the bank’s charter upon which the individual liability of the stockholders is founded, and upon which this suit was brought, is as follows: “ Whenever default shall be made in the payment of any debt or liability contracted by said corporation, the stockholders shall be held individually responsible for an amount equal to the amount of the stock held by them, respectively. ” This provision of the charter, if not in the precise terms, is in substance and effect to be found in the charters of numerous banking and business corporations in this and other States of the Union, and has frequently, here and elsewhere, been the subject of judicial discussion, and without stopping to review the cases, it may be confidently asserted the following propositions are established by a decided weight of authority:

First—The stockholders, with respect to their personal liability under a provision of this kind, are, in effect, partners, aHd are consequently jointly and severally liable to the creditors of the corporation, exclusive of the stockholders themselves, to the amount of stock held by them, respectively.

Second—As a corollary of this proposition, one stockholder can not maintain an action at law on such personal liability against a fellow-stockholder, any more than one partner can sue his co-partner at law on a claim against the partnership which he has purchased from a creditor of the firm, for it is an elementary principle the law will not permit one to recover, in an action at law, on a demand which he himself is equally bound with the defendant to pay.

Third—It further results from the proposition first stated, that in an action by an outside creditor of the corporation to enforce this personal liability against a stockholder, the latter can not set off a debt due from the corporation to himself. Buchanan v. Meisser, 105 Ill. 638; Wincock v. Turpin, 96 id. 143; McCarthy v. Lavasche, 89 id. 270; Fuller v. Ledden, 87 id. 310; Thayer v. Union Tool Co. 4 Gray, 80; Sawyer v. Hoag, 17 Wall. 610; Weber v. Frickey, 47 Md. 200; Beers v. Waterbury, 8 Bosw. (N. Y.) 397; Meisser v. Thompson, 9 Bradw. 368.

That the defendant was originally liable to plaintiff for the amount of her claim is confessed by the pleadings, but it is claimed that by reason of the facts hereinafter stated such liability has since been discharged.

Something less than a year after the making of this deposit the bank became insolvent, and made a voluntary assignment of all its effects to one Joseph Penn, for the benefit of creditors, the deed of assignment bearing date April 22, 1878. At the time of the deposit, as well as of the assignment for the benefit of creditors, the defendant was a stockholder in the bank, being the owner of ten shares of the bank stock, of the par value of $100 each, and of the aggregate value of $1000. A short time after the failure of the bank the defendant purchased of one Isaac Phillips, an outside creditor, bank-deposit certificates amounting in the aggregate, at their face value, to $3200, for which he paid fifteen cents on the dollar. Thotúpson retained $1000 in these certificates, and sold to other parties the residue. Kraft, Heinzleman and Maus were also stockholders in the bank, and were severally owners of stock therein to the amount of $1000, and they also severally held bank-deposit certificates, purchased from outside creditors of the bank, amounting to $1000 dollars. Such being the condition of affairs, the parties, with a view of relieving themselves from this personal liability under the charter, mutually agreed between themselves that Thompson should confess a judgment in favor of Heinzleman for the amount of deposit certificates held by the latter; that Heinzleman should confess a like judgment in favor of Maus for the $1000 in certificates held by him; that Maus should confess a similar judgment in favor of Kraft for the amount of his certificates, and to complete the circle, that Kraft should confess a judgment in favor of Thompson for the $1000 in certificates held by him, and judgments were accordingly- confessed in the St. Clair circuit court, in conformity with this arrangement. It further appears, on the same day these judgments were rendered, Kraft, in pursuance of an understanding to that effect, procured $1000 from a convenient bank, and paid the same to Thompson, in satisfaction of the- latter’s judgment, Thompson passed the money over to ITeinzleman, Heinzleman on to Maus, and Maus back to Kraft, and fhe latter back to the bank. All this was done with the view of showing an actual payment and satisfaction of these several judgments, and satisfaction was accordingly entered upon the record in each case, and such is the condition' of these judgments, we presume, at the present time.

On the trial, which was had before the court without a jury, the defendant offered in evidence the certificates of deposit which were the foundation of his suit against Kraft, and whereon the latter confessed a judgment in Thompson’s favor, as above stated, the same having been taken from the files in that case. They were offered, as is claimed by counsel, for the purpose of proving, under appellant’s ninth amended plea, that he had paid to a creditor of the bank, other than a stockholder, an amount equal to his individual liability under the charter. This evidence was heard against the objections of the plaintiff. Nevertheless, the court, upon the whole case, refused to hold as law the following proposition, namely: “If Thompson, before this suit was brought, purchased of a creditor of the bank who was not a stockholder therein, for the purpose of cancelling and paying his (Thompson’s) double liability as a stockholder of the bank, a certificate of deposit of the bank for an amount equal to tlie amount of his stock, and has produced the same on trial hereof for cancellation, the plaintiff can not recover, ”—and the appellant insists this was error. We do not think so. The facts relied on for the purpose of showing such a payment, in our judgment prove just the contrary, and hence there was no evidence on which to base the proposition. We have no doubt the law permits a stockholder to relieve himself of this individual liability by in good faith paying the amount of such liability to any outside creditor of the corporation who has'a right to demand of him such payment. But no such a case as that is presented by this record. It is true an attempt has been made by appellant to show such a payment by bringing into court and offering in evidence deposit certificates bought by him of Phillips, at fifteen cents on the dollar, to the amount of $1000. But it further appears these very certificates were brought from the files of court in the old suit between appellant and Kraft, wherein the latter confessed a judgment in appellant’s favor on these same certificates, and this judgment, as we have already seen, was on the day of its rendition entered satisfied by appellant. The parties may have been, and probably were, mistaken as to the legal effect of the transaction, but they fully understood what they were doing, and must therefore ghide the consequences of their acts. It is not claimed there was any mistake of fact, but even if there had been, it could not be corrected in this proceeding. The parties were, doubtless, seeking to obtain an advantage over the outside creditors of the bank, who had a right to rely on their personal liability as stockholders, and if, by a misapprehension of the legal effect of the measures adopted for that purpose, a loss has been sustained, tliey have no one to blame for it but themselves.

It is clear when appellant recovered a judgment against Kraft for the amount of these certificates, the indebtedness represented by them became merged in the judgment, and the certificates themselves became functus officio. The debt having thus become one of record, when the appellant voluntarily discharged it by the entry of satisfaction, that was an end of it. For reasons already stated, it is clear if Kraft had defended, Thompson could not have recovered, for so long as the certificates were to be regarded as existing obligations against the stockholders, under the individual lia-‘ bility clause in the charter Thompson was as much bound to pay them as Kraft. But the failure of the latter to make this defence did not at all change the legal effect of the judgment or its subsequent satisfaction, and Kraft and Thompson both are now estopped from attributing to either any other legal effect than that which the law ascribes to it. It is true appellant claims that in buying these certificates it was with a view of discharging his double, liability as a stockholder,, though he admits, at the same time, he sold most of them to others, and that he sued and recovered a judgment against a fellow-stockholder on the others. Yet, whatever may have been intended, it is clear the appellant can not, by mere verbal statements as a witness, qualify, or in any manner limit, the effect of the legal proceedings with respect to said certificates. .

But outside of all this, we do not think stockholders can discharge themselves from this statutory liability except by paying the full amount of it, where the whole of it is required to meet the demands of outside creditors. This liability constitutes a fund to satisfy their claims, and so long as any of such claims exist, those of the stockholders who have not actually paid the full amount of their liability are bound to respond. It is clear one partner is not permitted to make a profit not shared in by the other partners, by buying up the firm’s debts at a discount. So, as all the stockholders are in effect partners with respect to the fund arising from their individual liability under the charter, on the same principle, one stockholder can not obtain an advantage over his fellow-stockholders by buying in the claims of outside, creditors of the corporation at a discount. Of course, the outside creditor thus selling would be bound by his bargain, but the rights of the other outside creditors, not parties to the transaction, could not be affected by it, except so far as the common fund arising from this individual liability of the stockholders was diminished by actual payment. This common fund is open to all the outside creditors alike, and each one has the simple right to use it in payment of his own claim so long as any of it remains for that purpose, and it therefore follows he can not, by any contract or agreement with a particular stockholder, affect this common right of other creditors. If he does not see proper to appropriate enough of the common fund to pay his entire claim, that is his own lookout. Until he does so, the claims of the others attach to what remains. Had appellant held the deposit certificates purchased by him, or any part of them, as evidence of his having discharged, in whole or in part, this personal liability, it would have been a good defence to this suit, to the extent of the money actually and in good faith paid' out by him for that purpose; but instead of that, he sues another stockholder for the full amount of the certificates, and gets a judgment therefor, which the record shows was satisfied by actual payment, and this must be accepted as an end of the matter, so far as the parties to this suit are concerned. This ife the only construction of the provision of the statute in question which will place the fund thereby intended to be provided for the outside creditors exclusively, completely beyond control of the stockholders. The latter, knowing their individual liability can only be discharged by actual payment so long as there are any outside creditors whose claims are unsatisfied, will have the strongest possible inducement to see that the affairs of the corporation are managed with prudence and economy. On the other hand, if it be once understood that upon the insolvency of the corporation the stockholders may go upon the market, among its panic-stricken creditors, and purchase their claims against the company at a mere nominal price, and thereby relieve themselves of their individual liability, what advantage would the statute be to the outside creditors ? And what special interest would the stockholders have to see the affairs of the corporation economically and honestly conducted? The present case affords a sufficient answer to these questions.

We are aware that authorities are to be found not in accord with what is here said, but the general principles affecting the question, as shown by the cases already cited, necessarily lead to this result. Besides, we must reserve the right to construe our own statute, and in doing so we have adopted that construction which, in our judgment, will best effectuate the legislative intent, and such as is demanded by a wise public policy.

The conclusion reached by the lower courts being in accord with our own, the judgment of the Appellate Court is therefore affirmed.

Judgment affirmed.


author: Mr. Justice Walker

text:
    Wabash, St. Louis and Pacific Railway Company v. John W. McCleave.

      Filed at Mt. Vernon January 22, 1884.

    1. Taxation—town taxes are in no sense county taxes. Town taxes levied for township purp'oses are not county taxes, within the meaning of section 8, article 9, of the constitution, prohibiting comity authorities from assessing taxes the aggregate of which shall exceed seventy-five cents on the one hundred dollars of valuation, except for the payment of indebtedness existing at the adoption of that instrument, etc. Such towns are municipal corporations, and taxes levied by them are for corporate purposes.
    2. Same—town taxes not levied by county board. Where the proper authorities of towns, townships, districts, and incorporated cities and villages, certify, in proper time, to tlie county clerk the several amounts required by tbem to be raised by taxation, it is made the duty of the county clerk to ascertain the rate per cent, and extend the same upon the tax books. No action of the county board is necessary to authorize such levy, and any order of such board neither adds to nor takes from the duty of the clerk to extend such taxes.
    3. Same—of municipal corporations. Organized townships under the Township Organization law have power, under the constitution and the law, to levy and collect taxes for various corporate purposes. The legislature is, by section 9, article 9, of the constitution, authorized to confer upon any and_ all municipal corporations authority to levy and collect taxes for all corporate purposes; and even if this section of the constitution had not been adopted, the legislature would have ample power to authorize the levy and collection of such taxes. These constitutional provisions are only limitations on the legislative power.
    Appeal from the Circuit Court of Lawrence county; the Hon. William C. Jones, Judge, presiding.
    Mr. Samuel B. Wheeler, for the appellant.
    Mr. K. P. Snyder, for the appellee.
   Mr. Justice Walker

delivered the opinion of the Court:

Appellant filed a bill in the Lawrence circuit court, against appellee, as county treasurer, to enjoin taxes that had been levied and extended against the property of the company. It is alleged in the bill that the board of supervisors exceeded their power in levying more than the law authorized for county purposes. Appellee answered, denying that body exceeded its power, and insisted that the supervisors levied no more than is warranted by the constitution and law. A hearing was had, and the circuit court dissolved the temporary injunction and dismissed the bill. On suggestions of damages being filed, and on hearing the proofs, the court decreed that appellant pay to appellee $60, as a reasonable attorney’s fee, and complainant brings the record to this court and assigns errors.

; It appears that the board of supervisors levied sixty-four cents on the one hundred dollars of valuation of the property for county purposes, and levied a town tax on the property of each of these towns through which appellant’s road was located, for town purposes: Por the town of Dennison, $300,—w’hieh was ten and one-half cents on each one hundred dollars of valuation; for the town of Lawrence, $250,— which was seven and six one-hundredths cents on the one 'hundred dollars of the assessed value of property in the town; for the town of Bond, fourteen cents on each one hundred dollars of valuation of property in that town; a road and bridge tax for the town of Dennison of $800,—being twenty-eight cents on the one hundred dollars of valuation of the property in that town; for the town of Lawrence, thirty cents on each one hundred dollars of valuation; for the town of Bond, $150,—being twenty-five cents on each one hundred dollars of valuation; and forty cents on the same valuation in the town of Bond, for special bridge purposes, for the year 1882. It is not disputed that there is statutory authority for the levy of these taxes, but it is urged, with apparent earnestness, that these taxes are county taxes, and are prohibited by the constitution because they exceed the amount authorized to be levied. The portion of the constitution referred to as prohibiting the levy is section 8, article 9, and reads: “County authorities shall never assess taxes the aggregate of which shall exceed seventy-five cents on the one hundred dollars valuation, except for the payment of indebtedness existing at the adoption of this constitution, unless authorized by a vote of the people of the county.” There is no claim that the county -was indebted, nor does the levy reach, as specified by the order, that amount by eleven cents on the one hundred dollars. We are unable to appreciate the argument that the town taxes are for county purposes. The towns are muhicipal corporations; under the Township Organization law, and these taxes were levied for corporate purposes.

But appellant urges that the law does not authorize the levy of taxes for organized townships—that the law authorizing the levy and collection of taxes for towns refers to incorporated villages. To show that there is not the slightest ground for this objection, we have but to turn to almost any section of the Township Organization law to see that such townships are called “towns.” This point is destitute of the slightest force. The last clause of section 9, article 9, of the constitution, recognizes the power of the legislature to authorize these bodies to levy and collect taxes for municipal purposes. This is the entire section:

“The General Assembly may vest the corporate authorities of cities, towns and villages with power to make local improvements by special assessment, or by special taxation of contiguous property, or otherwise. For all other corporate purposes all municipal corporations may be vested with authority to assess and collect taxes, but such taxes shall be uniform in respect to persons and property within the jurisdiction of the body imposing the same. ”

This is conclusive of the question. Even if this section had not been adopted, the legislature would have had ample power to authorize their levy and collection. Section 8 of that article is only a limitation on the legislative power to authorize the levy of county taxes, and we have seen the taxes complained of are in no sense county taxes. As well claim the State taxes are for county purposes. The one is no more dissimilar to a county tax than the other. When collected the}1' are paid to town officers and expended for town purposes. The county does not receive or spend them.

The 122d section of the Eevenue law provides that the proper authorities of towns, townships, districts, and incorporated cities and villages, shall, annually, on or before the second Tuesday in August, certify to the county clerk the several amounts which they severally require to be raised by taxation. And the 127th section requires the county clerk to ■ estimate and determine the rate per cent on the valuation of property in the several towns, townships, districts, and incorporated cities and villages, that will produce therein the several amounts required by the county board, or certified to them according to law, and the 128th section requires the county clerk to extend them on the collector’s books. Thus it is seen that it was not necessary that the board of super- ■ visors should have made any levy of these municipal taxes. These sections impose the duty on the county clerk without any action on the part of the board. The order of the board in reference to these local taxes added nothing to nor did it detract anything from their validity. So, if anything more ' was needed to show these were not county taxes, this is conclusive of that question, as they are not levied by the board. They are levied by the town authorities, by filing their certificate of the amount required with the county clerk. That is the levy and authority for the clerk to extend them. The fact that the county board made an order in form levying these local taxes, had no legal effect whatever. It, no doubt, showed of record the amount of taxes levied by the authorities of the towns, etc.,'but nothing more. ■ \

We perceive no error in this record, and the decree of the circuit court is affirmed.

Decree affirmed.


author: Mr. Justice Scholeield

text:
    Lydia A. McKean et al. v. S. S. Vick.

      Filed at Mt. Vernon January 22, 1884.

    1. Administbatob’s SAmi—limitatioT^-laches. It is the settled doctrine of this court that a delay, when not satisfactorily explained, for seven years- after the grant of letters of administration, in presenting a petition by the administrator for an order to sell real estate to pay debts, is such laches as will bar any relief under it.
    2. The fact that one of the lots sought to be sold had been assigned to the widow as a part of her dower, and had been and was continuously occupied by her as a homestead, and is still so occupied, is no satisfactory excuse for a delay of nearly thirteen years in making such application.
    3. Same—where there is already a decree for the sale. A petition of an administrator for leave to sell real estate to pay debts, filed nearly thirteen years after grant of letters, alleged as an excuse for the delay that the real estate belonged to the decedent and two others, as partners, and that about three years after the grant of letters a decree was rendered in favor of the two surviving partners, against the widow and heirs of the deceased, finding that the firm was indebted beyond its personal property, choses in action, etc., and directing such partners to sell and convey such real estate, and apply the proceeds first to the payment of the balance due on the partnership debts, and the remainder, if any, to the administrator of the estate, and that three attempts were made to sell the property, all of which proved abortive. It was held, it not appearing that the partnership debts had yet been paid, there was no occasion for another decree to sell the land, since all the administrator could reach would be the amount remaining after satisfying the partnership indebtedness.
    4. Decbee—finding of fads contrary to evidence-preserved. Where the evidence in a petition by an administrator for leave to sell real estate to pay debts, is- preserved in the record by a bill of exceptions or certificate, and it does not sustain a recital in the decree of the facts found, the recital goes for naught.
    5. Tabtnebship—duty of surviving partner in settling up. It is the duty of surviving partners to settle up the business of the partnership without delay, and it is also the duty of the administrator of the estate of the deceased partner to see that they do so.
    6. If a surviving partner fails to use proper diligence to settle and close the partnership matters, and does not settle within a reasonable time, he may be coerced thereto by the county court, or on application to a court of chancery he may be removed from his trust and a receiver appointed.

      Writ of Error to the County Court of Williamson county; the Hon. James M. Washburn, Judge, presiding.
    Messrs. Hartwell Bros., and Mr. A. D. Duff, for the plaintiffs in error:
    On application by an administrator to sell land, the heirs may contest the claims allowed, and show they are no charge on their real estate. Stone et al. v. Wood, 16 Ill. 177; Stillman v. Young, id. 318; Hopkins v. McCowan, 19 id. 113; Heirs of Langworthy v. Baker, 23 id. 484.
    Beal estate can be sold only to pay debts existing at the death of the intestate. Donnan v. Yost, 13 Ill. 127; Fitzgerald v. Glancy, 49 id. 465; Farrar v. Dean, 24 Mo. 16.
    If the creditors do not enforce their lien against the real estate within seven years, it is lost. McCoy v. Morroio, 18 111. 519; Heirs of Langworthy v. Baker, 23 id. 484; Wolf v. Ogden, 66 Ill. 224; Furlong v. Riley, 103 id. 628.
    The ground assigned for the delay in making the application furnishes no excuse at all. It was the duty of the administrator to have had the partnership matters adjusted, and the attempted excuse in this respect is but another way of stating his own gross negligence in the discharge of his duty.
    An administrator of a deceased partner, under sections 86 to 89, inclusive, of chapter 3, of the Bevised Statutes, had the power to go into the county court and compel the surviving partners to do their duty, or they might have been compelled to settle up by bill in chancery. Miller v. Jones, 39 Ill. 60; Nelson v. Hayner et al. 66 id. 487.
    Messrs. Clemens & Burton, for the defendant in error:
    There are circumstances that not only authorize, but make it the duty of, an administrator to redeem lands from tax sale. McCreedy v. Mier, 64 Ill. 499.
    Claims against an estate may be exhibited within two years from the grant of letters, and not be allowed until long, after-wards. Wells v. Miller, 45 Ill. 33; Mason v. Tiffany, id. 392; Barbour v. Thurman, 49 id. 283.
    Tlie allowance of claims is prima facie correct as to the heirs, and conclusive on the administrator. Gold v. Bailey, 44 Ill. 491; Stone v. Wood, 16 id. 177; Motsinger v. Coleman, id. 171; Hopkins v. McCowan, 19 id. 113; Mason v. Blair, 33 id. 194.
    As to the defence that this application by the administrator, is, by analogy to the Statute of Limitations, barred by the. lapse of time, we insist (considering the circumstances of the unsettled partnership matters as to the principal portion of this land, and the widow’s dower, etc., over the rest, the continued ownership by the heirs, there having been no transfers nor any improvements, etc.,) the rule, with its qualifications, announced in the cases of Rosenthal v. Renick, 44 Ill. 202, Moore et al. v. Ellsworth et al. 51 id. 310, and Bursen v. Goodspeed, 60 id. 277, furnishes no sufficient justification for the objection to this application by the administrator for the order.
   Mr. Justice Scholeield

delivered the opinion of the Court:

This was a petition in the county court of Williamson county, by the administrator, against the widow and heirs at law of Evan T. Wiley, deceased, to sell real estate to pay debts.

Among other defences interposed by the answer was that of laches—that the petition was not filed until after the expiration of more than seven years from the grant of letters of administration. The county court disallowed the defence, and decreed a sale of the real estate in conformity with the prayer of the petition.

Although numerous errors are assigned upon the record, in the view we have taken of the ease it will only be necessary to inquire whether the defence of laches was properly disallowed.

The letters of administration were granted on the 16th of May, 1870, and the petition was not filed in the county court until the 26th of January, 1883,—a period of almost thirteen years. It may be regarded the settled doctrine of this court, that where it is not satisfactorily explained, delay for seven years after the grant of letters of administration in presenting a petition of this character, is such laches as will bar any relief under it. (Rosenthal, Admr. v. Renick et al. 44 Ill. 202 ; Moore et al. v. Ellsworth et al. 51 id. 308; Bishop et al. v. O’Conner et al. 69 id. 431; Furlong, Admx. v. Riley et al. 103 id. 628.) The explanation of the delay here relied upon is, that, as to one town lot, it had been assigned to the widow as and for a .part of her dower in the estate of the decedent, and had been and was continuously occupied by her as a homestead, and that the residue of the real estate belonged to the decedent, and Charles M. Edwards and Andrew J. Mann, as partners; that at the March term, 1873, of the Williamson county circuit court, a decree was rendered in behalf of said Edwards and Mann, as surviving partners, against the widow and heirs of the decedent, finding that the firm was indebted beyond its personal property, ehoses in action, etc., and’empowering and directing the said Edwards and Mann, as such survivors, to sell and convey said real estate, and apply the proceeds to be received therefrom, first to the payment of the balance due on the partnership debts, and second, the remainder, if any, pay over to the administrator of the intestate; and that three attempts, each of which was unavailing, were made to sell under that decree. This explanation is not satisfactory. The condition of the town lot is precisely now what it has been all the time. If the fact of its being incumbered by the widow’s dower and homestead was ever a reason why it should not be sold, that reason still exists. The interest of the heirs in the remainder has neither yielded them anything nor been augmented or rendered more available by transpiring circumstances, but the debt, by the addition of accumulating interest, has been growing until it is almost doubled. The policy that has been pursued is the most destructive of the rights of the heirs that could have been pursued by the administrator and creditors.

As to. the partnership property, it is to be observed there is not a particle of proof in the bill of exceptions or certificate of evidence transcribed in this record that the partnership debts have yet been paid. The decree, it is true, finds to that effect, but we are confined to the evidence in the bill of exceptions or certificate when the evidence is so preserved as it is here, and when this does not sustain the recital in the decree, the recital goes for naught. (Brooks et al. v. Martin et al. 64 Ill. 389.) No reason therefore appears why it may not yet be necessary to sell under this decree, and no necessity can exist for also selling under another decree, since, by the very terms of this decree, all that the administrator can reach is to be paid over to him by the surviving partners after sale, and payment of the partnership debts.

Apart from this, however, no reason is shown why 'the partnership ivas not settled up many years since. No protracted litigation is shown, and no impediment of any character to a speedy and full settlement of the partnership matters was proved. Three different offers to sell the land within a period of ten years (and that is all that is proved) is simply no diligence. It was the duty of the surviving partners to proceed to settle the business of the partnership without delay, and it was the duty of the administrator to see that they did so. They could have been coerced thereto by action of the county court, (Rev. Stat. 1874, p. 120, secs. 89, 90,) or, upon application to a court of chancery, they could have been removed from their trust and a receiver have been appointed. (Nelson v. Hayner et al. 66 Ill. 487.) So far as this record discloses, this administrator has made no effort to close up this estate during this long period of time. He has stood- idly by and suffered the surviving partners to act, or not act, as they chose, and the creditors of the estate have acquiesced in this laches by taking no action themselves.-

The court below erred in disallowing the defence of laches and decreeing the sale. The decree will, therefore, be reversed.

Decree reversed.


author: Mr. Justice Scott

text:
    Elizabeth Anderson v. Thomas E. Fruitt.

      Filed at Mt. Vernon January 22, 1884.

      Appeal—-final judgment in Appellate Court—what so regarded—and in what manner to be shown. Where the Appellate Court reverses the judgment of the circuit court, and remands the cause without any specific directions, but generally for such other proceedings as to law and justice shall appertain, no appeal or writ of error lies from such judgment of the Appellate Court, it not being a final One.' This court can not look into the opinion of the Appellate Court to see what it may have directed to be done. This must appear from the judgment or final order of that court.
    Wbit oe Ebbob to the Appellate Court for the Fourth District ;—heard in that court on writ of error to the Circuit Court of Madison county; the Hon. William H. Snydeb, Judge, presiding.
    Messrs. Happy &• Tb'avous, for the plaintiff in error.
    Messrs. Iewin & Spbingee, for the defendant in error.
   Mr. Justice Scott

delivered the opinion of the Court:

This action was originally commenced in the circuit court of Madison county, by Thomas E. Fruitt, administrator of the estate of John. P. Anderson, deceased, against Elizabeth Anderson, conservatrix of John Anderson, an insane person. The declaration is in the usual form in assumpsit, and contains the common counts, to which the general issue was pleaded, and it was agreed the plea of the Statute of Limitations may be considered pleaded in due form, with the proper issue given thereon. The cause was submitted to the court for trial without the intervention of a jury, and the court found the issues for defendant, and rendered judgment against plaintiff for costs. On a writ of error sued out by plaintiff, that judgment was reversed in the-Appellate Court for the Fourth District, and the “cause remanded to the circuit court for such other and further proceedings as to law and justice shall appertain. ” It is obvious this is not a final judgment, in the sense those terms are used in the statute, so that the unsuccessful party could bring the cause to this court on appeal or writ of error. No direction is given in the judgment or final order of the Appellate Court to the circuit court, other than simply remanding the.cause for “such other and further proceedings as to law and justice shall appertain.” This court can not look into the opinion of the Appellate Court to ascertain what that court may have directed to be done. (Coalfield Coal Co. v. Peck, 98 Ill. 139.) It must appear from the judgment or final order of that court. Harzfeld v. Converse, 105 Ill. 534.

As the judgment rendered by the Appellate Court is not a final judgment in the sense those terms are used in the statute, the writ of error herein must be dismissed.

Writ of error dismissed.


author: Mr. Chief Justice Sheldon

text:
    Charles Parsons et al. v. The East St. Louis Gas Light and Coke Company.

      Filed at Mt. Vernon January 22, 1884.

      1. Taxation—when a personal tax. Taxes assessed on the capital stock of a corporation are a personal property tax.
    2. Same—when personal tax becomes a lien. A tax on personal property does not become a lien on any personal property until the tax books are delivered into the hands of the collector, and it does not become a lien on real estate until the collector, on failure to collect the tax from personal property, charges the same on such real estate in his application for judgment for delinquent taxes.
    3. Same—priority of lien of trust deed. A corporation being liable for taxes on its capital stock, gave a deed of trust upon all its property, real and personal, which was duly recorded, after which recording its personal property tax was sought to be charged by the collector against the real estate embraced in the trust deed: Held, that any lien in respect to such taxes was subsequent to that of the deed of trust, and was to be held subordinate thereto.
    4. Trust deed—construed as to payment of taxes. A deed of trust given by a corporation provided that on default in any of its terms the trustees were authorized to enter upon the premises and property conveyed, operate the same, and collect all income, rents and profits, and after deducting “all payments for taxes, assessments, charges and liens upon the premises,” etc., to apply the same to the debt secured: Held, that such provision constituted no such an agreement on the part of the trustees to pay the taxes on the mortgaged property as a county could enforce as a promise in its favor. By such provision the trustees were authorized to pay taxes and reimburse themselves out of the property, but it imposed on them no obligation to make such payment.
    Appeal from the Circuit Court of St. Clair county; the Hon. Amos Watts, Judge, presiding.
    This was a bill in chancery, brought by the trustees and bondholders, to foreclose a deed of trust given by the East St. Louis Gas Light and Coke Company, to secure the payment of certain bonds and interest coupons specified in the deed of trust. The latter is dated July 1, 1874, was duly recorded, and embraces all projeerty rights, privileges and assets, qf whatever kind, then possessed or that might be thereafter acquired by the company. The suit was commenced May 6, 1880, and at the September term, 1880, William D. Griswold, the principal bondholder, was, by consent of parties, appointed receiver of the mortgaged property pending the foreclosure proceedings. On the 16th day of December, 1881, a decree was made directing a sale of the mortgaged property. Authority was given to the bondholders, or any one of them on behalf of all, to become purchasers, and to pay the amount of their bid with bonds and coupons, except enough in cash to pay costs and expenses, and such further sums as might, on the incoming report of sale, be found due any intervenors, there having been intervening petitions filed. A sale was made by the special master appointed for that purpose, on May 9, 1882, at which William D. Griswold, as trustee for all the bondholders, became purchaser, for the sum of $78,000, leaving a considerable deficiency due under the deed of trust.
    After the decree of sale had been made, and on the 20th day of December, 1881, the county of St. Clair filed its intervening petition asking to be paid out of the mortgaged property certain capital stock and personal property taxes due from the East St. Louis Gas Light and Coke Company. Upon hearing on said petition, on September 17, 1883, the court found there to be due from said company, on account of such taxes, the sum of $1257.33, and ordered payment accordingly by the purchaser at the sale. Griswold, the purchaser, and the trustees and bondholders, appeal to bring in review the propriety of this order of allowance for taxes.
    The record shows that the greater portion of the taxes claimed in the intervening petition were assessed on the capital stock of the company for the years 1875 and 1876, the remainder, amounting to $288.45, having been assessed on its personal property for the years 1876, 1877 and 1878. There being no personal property found out of which to make these taxes, they were prior to 1SS0 dropped as personal property taxes, and were charged against part of the real estate mortgaged, on the tax books for the years 1876, 1877 and 1878, respectively. They have been carried as a tax against said real estate ever since the time of such charge, and up to May, 1881, and were no longer carried as personal-property taxes. For the year 1878 they stood charged against one of the mortgaged lots,—lot 5, in block 8, of the third ferry division of East St. Louis,—and on November 15, 1879, the lot was forfeited to the State for the amount due. They were carried forward against the same lot for the year‘1879, and the lot was again, on August 20, 1880, forfeited to the State for the amount due. The receiver was appointed in December, 1880, and when in May, 1881, the collector made application for judgment against the lot, the receiver appeared and made objection to any judgment. Thereupon the application for judgment was withdrawn, and subsequently this intervening petition of the county of St. Clair was filed.
    Mr. W. C. Kueffnee, for the appellants:
    • The company having mortgaged its property before any levy was made upon the same, and before the taxes became a lien, the mortgagees wrere not liable for them, nor the property, in preference to the payment of their indebtedness, and a levy and sale of the same for such taxes will be enjoined. Binkert v. Wabash Ry. Co. 98 Ill. 206.
    A tax on personal property does not become a lien on the real estate of the owner until the collector, on failure to collect the same, charges the same on such real estate in his application for such judgment, and after such real estate is conveyed by the owner, his personal tax can not be charged against the lands in the hands of his grantee, even though the grantee had notice at the time of his purchase of the unpaid personal property tax. Belleville Nail Co. v. The People, 98 Ill. 399; Cooper et al. v. Corbin et al. 105 id. 225.
    A petition by a collector of taxes ’ for an order to compel an assignee of the tax debtor to pay taxes due from the person who made the assignment, out of funds in his hands, which fails to show that any property went into the assignee’s hands to which a lien could attach in any event, is properly dismissed for want of equity. Petition of Johnson, 104 Ill. 51.
    Mr. R. D. W. Holdee, and Mr. R. A. Halbeet, for the appellee :
    The authorities cited to show that these taxes never became a lien on the real estate, and that the taxes can not be collected of the receiver, for the reason that no warrant was in the hands of the officer while the property remained in the company’s possession, have no application to the facts of this case.
    The trust deed was made prior to any levy, and conveyed everything the corporation ■ had or might ever acquire. On default the trustees were authorized to enter upon all the property, and hold and operate the same, collect and receive all incomes, etc., and among other things, after deducting “all payments for taxes, assessments, ” etc., apply the same to the debt, etc.
    We insist that in accordance with the terms of the trust deed all taxes and assessments were to be paid, and it was right and proper it should be so. Everything the corporation had or could acquire in the nature of property, was mortgaged to raise money to construct its works.
   Mr. Chief Justice Sheldon

delivered the opinion of the Court:

Taxes assessed on the capital stock of a corporation are a personal property tax. A tax on personal property does not become a lien on any personal property until the tax books ' are delivered into the hands of the collector, and it does not become a lien on real estate until the collector, on failure to collect the tax from personal property, charges the same on such real estate in his application for judgment for delinquent taxes. (Cooper v. Corbin, 105 Ill. 225; Binkert v. Wabash Ry. Co. 98 id. 206; Belleville Nail Co. v. The People, id. 399; Carter v. Rodewald, ante, p. 351.) It does not appear that any personal property was sold in this case on which the taxes in question were a lien, and their levy on the real estate was subject to the prior deed, of trust made and recorded in 1874. The tax charged upon the real estate here is not a tax assessed on it, but a tax assessed upon personal property, and sought to be collected by charging the same against real estate. Any lien in respect of these taxes is subsequent to that of the deed of trust, and is to be held as subordinate thereto.

These principles and authorities would seem to be decisive of this case; but they are claimed by appellee to be without application to the facts of the present case, because of the particular provision contained in the deed of trust in respect to payment of taxes. The deed provides, that upon default in any of its terms the trustees are authorized to enter upon all the gas works premises and property conveyed, and operate the same, and collect and receive all income, rents and profits, and after deducting “all payments for' taxes, assessments, charges and liens upon said works and premises, to apply the same to the debt secured by the deed of trust; ” and in case of a default in payment for three months, the trustees were authorized to sell and dispose of the. property, and after deducting all payments made by them for taxes or assessments thereon, to pay over the balance to the bondholders. It is said that thus, by the express terms of the deed of trust, all taxes and assessments were to be. paid. We do not so read that there was any agreement here to pay taxes which the county could avail itself of as a promise iu its favor to pay the taxes. The deed no doubt authorized the trustees to make payment of any taxes, and in case of their doing so, to reimburse themselves out of the property; but we can not construe the language as imposing any obligation to pay the taxes, and especially those accruing, as did these, before taking possession of the property. We fail to find, then, in this provision in the deed of trust as to payment of taxes, a ground to sustain the prayer of the petition.

We hold that the bondholders had a paramount lien on the property embraced in the deed of trust for the satisfaction of their debt, and that the circuit court should have dismissed the intervening petition of the county. The decree upon that petition is reversed, and the cause remanded for further proceedings in conformity with this opinion.

Decree reversed.


text:
    Ottomar W. Heyer et al. v. Max H. Alexander et al.

      Filed at Mt. Vernon January 22, 1884.

    1. Practice—continuance of motion for new trial. In attachment suits a trial was had upon the issues presented by several parties interpleading and claiming the property attached, resulting in a finding against the inter-pleaders, and upon motion for a new trial the cause was continued to the next term of court, when final judgment was rendered in favor of the plaintiffs in attachment: Held, that there was no error in not rendering judgment at the term the trial was had, and in rendering the same at the next term.
    2. Attachment—practice as to trial of several interpleaders. In an attachment where several different parties interplead, each claiming the same attached property, it is a matter of discretion in the trial court to order the issues to be tried separately as to each claimant, or all at one time. Section 29 of the Attachment act makes no provision for separate trials in such a case.

      3. Same—disposition of proceeds of personal property sold. Where personal property attached has been sold as perishable property, it will be presumed that the court trying the case has made a proper disposition of the proceeds of the personal property, and apportioned the proceeds of the property attached among the several judgment and attachment creditors, and it is incumbent on a party alleging error to show it, to entitle him to a reversal.
    A Same—who may question distribution of proceeds. A party inter-pleading in an action of attachment, and claiming all the property attached, who, on trial of the interplea, is found to have no claim on the property, will not be heard to object to the disposition made of the proceeds of the property among the several creditors, if the judgment is proper in other respects.
    5. Statute—of State, has no extra-territorial force on property—conflict of laws. A statute or judgment of a court of our State can not in the least aifect the title or possession of property beyond its territorial limits, except where the court may compel one subject to its jurisdiction to convey in accordance with the laws of the State where the property may be.
    6. Foreign and domestic creditors—of their relative rights—conflict of laws. A decree of court appointing an assignee or receiver to administer a debtor’s property for the benefit of his creditors, whatever may be its effect in the State where it is rendered, has no extra-territorial effect on the debtor’s real estate in foreign jurisdiction.
    7. A non-resident debtor having real estate in this State may pass the same to his assignee by a deed of assignment executed in his State, where such debtor has no creditors resident in this State; but such a conveyance will not be allowed to withdraw the debtor’s assets and means from this State, to the detriment or injury of domestic creditors. It is subject to the claims of resident creditors where the property is located.
    8. The rule in such case-is the same as obtains in respect to the adminis-tration of estates of non-resident decedents. While ancillary administration may be had in this State, the courts will see that domestic creditors are first fully paid, and where the residuum of the assets may be transferred to the court in which the original administration is had. In analogy to this doctrine, a foreign debtor can not place his property in trust for creditors so as to defeat his creditors in the State where his property is situated.
    Writ of Error to the Appellate Court for the Fourth District ;—heard in that court’on writ of error to the Circuit Court of St. Clair county; the Hon. William H. Snyder, Judge, presiding.

      Mr. W. 0. Kueeenee, for the plaintiffs in error:
    The law is well settled that assignments of personal property, if valid when made, will be upheld everywhere; and where there has been an actual transfer of possession, the transfer will be sustained everywhere. Burrill on Assignments, (ed. of 1882,) sec. 308.
    A voluntary assignment in one State, valid by the laws of that State, will operate to convey personal property not already subject to liens, in whatever State it may be found. Burrill on Assignments, (ed. of 1882,) p. 437, sec. 302, and authorities cited; Larrimore v. Jenckes, 21 How. 126; Story on Conflict of Laws, 423; 2 Kent’s Com. 455; Means v. Nap-good, 19 Pick. 105.
    If good in the State where made, it will pass personal property in another State, although it would not have been good if made under the laws of such other State. Caskie v. Webster, 2 Wall. Jr. 131; Law v. Miller, 18 Pa. St. 185; Kelstadt v. Reilly, 55 How. Pr. 373; Kelly v. Crapo, 45 N. Y. 86; Ackerman v. Cross, 54 id. 29 Slattery. Carroll, 2 Sandf. 573.
    The true rule and public policy is this: that a voluntary assignment made abroad, inconsistent in substantial respects with our statute, should not be put into execution here to the detriment of our citizens, but for all other purposes, if valid by the lex loci, it shall be carried fully into effect. Beatly v. Whittemore, 19 N. J. Eq. 462; Moore v. Bonnell, 31 N. Y. 90; Burrill on Assignments, p. 451, sec. 310.
    A voluntary assignment of real property is not inoperative and void where such property is situated, merely because it was made in another State, nor is it necessarily repugnant to the laws of the former State because not conformable to them. (Burrill on Assignments, p. 442, sec. 304; Chafee v. Fourth National Bank, 71 Maine, 514.) And though the deed of assignment be void in the State where made, if it is effectual to pass title to land in another State, it may be sustained by the courts of the latter State against an attaching creditor from a third State. (First National Bank v. Hughes et al. 10 Mo. App. 8.) And the real estate assigned passes by the mere delivery of the deed. Burrill on Assignments, p. 388, sec. 270.
    The circuit court erred in directing that the issues between the plaintiffs and defendant, and between the plaintiffs and the interpleaders, be tried together. The statute (chap. 11, sec. 29, Rev. Stat.) contemplates separate trials, and on general principles the parties .were entitled to it. A jury ought not to be confused by being compelled to try numerous issues between different parties at the same time,
    Messrs. Hay & Knispel, for the defendants in error:
    The transfer of title to real estate can only be effected in. the mode recognized by the laws of the State where it lies. City Ins. Co. v. Commercial Bank, 68 Ill. 348.
    A judgment or attaching creditor and a purchaser are equally protected against an unrecorded'deed, of which they had no notice. Massey v. Westcott, 40 Ill. 160; Morrison v. Kelly, 47 id. 433; Jones v. Jones, 16 id. 117.
    An assignee for the benefit of creditors is not a purchaser for value. He takes subject to all equities and liens against the assignor. Bridgeford v. Barbor, 4 Ky. L. 404; Talcott v. Dudley, 4 Scam. 427; Burrill on Assignments, 439.
    An assignment made by an insolvent debtor in another State, will be permitted to operate upon property in this State, except so far as it may conflict with our own laws or policy, or be prejudicial to our own citizens. First National Bank v. Hughes, 10 Mo. App. 8.
    An assignment by law has no legal obligation out of the territory of the law maker. Milne v. Moreton, 6 Binn. 353; Holmes v. Remsen, 20 Johns. 229; Taylor v. Geary, Kirby, 313; Chevalier v. Lynch, 1 Doug. 170; Waring v. Knight, 1 Cooke, 407; Harrison v. Sterry, S Cranch, 289.

      Assignment in trust for creditors can not transfer real estate in another State. Burrill on Assignments, 334, 406; Story on Conflict of Laws, (3d ed.) 517, 525, 527; United States v. Crosby, 7 Cranch, 115; McCormick v. Sullivan, 10 Whart. 192; Osborn v. Adams, 18 Pick. 245; Rogers v. Allen, 3 Ham. 488.
    An assignment hy a non-resident debtor can not be allowed to operate upon property so as to defeat an attachment of a resident creditor, made subsequent to the assignment. Fox v. Adams, 5 Greenlf. 245; Ingraham v. Geyer, 13 Mass. 146; Fall River Iron Works Co. v. Croade, 15 Pick. 11; Dunlap y. Rogers, 47 N. H. 281.
   Mr. Justice Walker

delivered the opinion of the Court:

Defendants in error brought an action of assumpsit in the St. Clair circuit court, against Ottoman W. Heyer, who resided in Missouri, and also sued out a writ of attachment in aid. On the 2d of December,-18S2, the writ was levied on a piece of ground in East St. Louis, on which defendant had a lease for ten years. On this piece of ground defendant had a glucose factory, and, connected with it, material and other personal property. On the next day the writ was also levied on a portion of this personal property in the factory building, but it was not removed from the building. On the 28th day of November, Dank Brothers & Co. had caused an attachment against Heyer to be levied on this lot and a portion of the personal property,'and a custodian was placed .in possession of the property in the building, and it was not removed therefrom. On the 29th of Noi'ember, Heyer made an assignment of his property for the benefit of his creditors. The assignment was made in Missouri, under the laws of that State, and it is not denied that it conformed to the requirements of those laws. It was recorded in St. Louis, and on the 3d of December following, it was recorded in St.- Clair county, in this State. The trust deed purports to convey the grantor’s right, title and interest “in and to all of the real estate, lands, tenements, personalty, goods, chattels, moneys, choses in action, accounts, notes, property of every kind, nature and description whatever, and wherever situated, ” excepting property exempt from execution under the laws of Missouri. On the 29th of November the assignee, Muench, appointed P. B. Eenske agent, to take possession for him of all of Heyer’s property in this State. This appointment was in writing. He, on the same day, wrote to the sheriff of St. Glair county, notifying him that he had been appointed assignee, and the notice was received by the sheriff before the levy was made by him, on the 2d of December. Eenske, on the 29th of November, went to the factory in East St. Louis, and employed Bauer, Heyer’s superintendent, to keep the factory and property for Muench until further orders. The custodian placed in charge of the property on the 28th of November remained in charge of the property, and Bauer claimed possession of the property after the 29tli of the month. It is claimed that Taussig, one of the plaintiffs in the attachment, who levied on the leasehold interest on the 2d, and the personal property on the 3d, of December, had notice of the assignment before suing out the writ of attachment. The first levy, under the Dank attachment, only embraced a part of the personal property. Soon after the levy the sheriff sold a part of the property levied on, as perishable, and on the 5th of January, 1882, the balance was sold, under an order of the St. Louis circuit court, and the sale was approved. The purchaser sold the property to the St. Louis Syrup, Glucose and Grape Sugar Company. Muench, the trustee, and that company, filed interpleaders, each claiming all the property levied on, and issues were formed. The interpleaders moved the court for a separate trial, but the court denied the motion. A trial was had by the court without a jury, by consent, and the court found the property subject to the attachment. This was at the February term. Motions for a new trial were entered, -which were overruled at the May term, and a personal judgment was rendered in favor of plaintiff for $902.56, against defendant, with an order for a sjieeial execution for the sale of the real estate levied on under the attachment, hut no order was made as to the personal property.

The court refused to hold the following propositions, asked hy the interpleaders, to be the law in the case:

“On behalf of the interpleaders the court is requested to declare the law to be, that the deed of assignment from Otto-mar W. Heyer to Hugo Mueneh, introduced in evidence, was sufficient to convey to said Mueneh any real estate, or any interest therein, situate in the State of Illinois, belonging to said Heyer.
.“The court is further requested, on behalf of said inter-pleaders, to declare the law to be, that said deed of assignment from Heyer to Mueneh was sufficient, if actual possession - was taken under it of the real estate involved, before the rights of others attached, to convey to said Mueneh any real estate, or any interest therein, of said Heyer, situate in the State of Illinois, so as to enable said Mueneh, or his grantee or grantees, to hold the same against a subsequent attaching creditor having notice of said conveyance.
“The court is further requested, on behalf of said inter-pleaders, to declare the law to be, that the words of general description contained in said deed from Heyer to Mueneh were sufficient to convey real estate, or any interest therein, of said Heyer, situate in the State of Illinois, if the conveyance was otherwise valid.”

Plaintiffs in error removed the case on error to the Appellate Court for the Fourth District. On a trial in that court the judgment of the circuit court was affirmed, and the case comes to this court, on a certificate under the statute, on error from that court.

Plaintiffs in error urge a reversal on the grounds that the Appellate Court erred in holding that the language of the deed of trust was not sufficient to pass title to property of the grantor situated in this State, as against creditors residing therein; in not reversing because the circuit court refused separate trials to the interpleaders; in not making an order disposing of the personal property levied on under the attachment; and in finding the amount due to, and rendering judgment in favor of, defendants in error, at the May term, when the issues were found at the February term. We shall consider the errors in the inverse order of their assignment.

The record discloses the fact that at the February term the case was submitted for trial, the evidence heard, and the issues found for plaintiffs. A motion for a new trial was entered, and the ease continued. At the next term the motion was overruled, and a judgment entered in favor of plaintiffs. It is beyond our comprehension to see any, the slightest, error in this. No reason is shown, nor is the slightest injury to the interpleaders suggested. The case was continued to determine whether a new trial should be granted. All know that had judgment been entered at the February term, that would have, in effect, overruled the motion for a new trial. We are unable to see the slightest reason for holding this was error.

■ The circuit court tried all of the issues on the several interpleaders together, having refused to order separate trials. This is urged as error. The interpleaders were all in one case, and related to the same property. We therefore see no objection to trying the issues at one and the same time. It, we think, was 'in the discretion of the court to have ordered them to be tried separately, or at one time. The 29 th section of the Attachment act is referred to as providing for a separate trial. It provides that when an interpleader is filed, if neither party shall apply for a continuance the court shall immediately impanel a jury to try the issue of the ownership of the property. It was evidently the design of the legislature to have that issue speedily determined, as, if it should be found for the claimant, that would terminate the proceedings in attachment. But that section makes no provision for separate trials in case there are several interpleaders. That is left to be regulated by the practice of the court.

It is next urged that the court should have made an order disposing of the money arising from the sale of the personal property. The 37th section of the Attachment act provides that “all judgments in attachments against the same defendant, returnable at the same term, and all judgments in suits by summons, capias, or attachment against such defendant, recovered at that term or at the term when the judgment is rendered, shall share pro rata, according to the amount of the several judgments, in the proceeds of the property attached, either in the hands of the garnishee or otherwise,” etc. The law presumes that the judgment is right, and it is for plaintiffs in error not only to allege error, but to show it, to entitle them to a reversal. We must presume there were others who had brought suits to the same term, who were, or might be, entitled to participate in the proceeds of the property. In fact, the record discloses the fact Dank Brothers & Co. commenced a suit in attachment against Heyer to the same term. Again, if the judgment was. proper in other respects, it is no concern of plaintiffs in error what disposition is made of the money. If they have no right to it they can not urge any error as to its disposition. There is no force in this objection.

We now come to the consideration of the important and controlling question in the case,—that is, whether the deed of assignment was operative to pass the title to the property as against creditors in this State. It is obvious that neither the statute of Missouri nor a judgment of a court in that State can in the least affect the title or possession of property beyond its territorial limits. We consider that as the settled law, beyond all dispute. But the owner of real property in this State, although a citizen of another State, may, under our statute, convey it by conforming to its requirements in the execution of the deed of conveyance.

We shall now consider the question whether the deed of trust operated to- pass the title to this leasehold estate beyond the reach of the attachment of the domestic creditors.

There seems to be some confusion growing out of the fact that no distinction is made, in some cases, between assignments made by decree of court and a conveyance by the owner in trust for specified purposes, as, for the payment of his debts. A decree of court appointing an assignee to administer the debtor’s property for the benefit of his creditors, whatever its effect in the State where it is rendered, has no extra-territorial effect on the debtor’s real estate in another or foreign jurisdiction. But this is not true of conveyances of real estate lying in a different State from the residence of the owner. In all the States of the Union their laws authorize non-residents to convey real estate by conforming to the requirements of their laws. Thus it is seen there is a broad distinction between a foreign decree' and- a conveyance by a non-resident. Neither a statute nor decree of another State can directly affect titles to land in this State. No doubt a court of chancery may require an owner of lands in a different State to convey them to a person entitled in equity to the property, and when so conveyed, if the laws of the State where the lands are situated are observed, the title would pass. It would, in this case, seem to be clear that the leasehold estate passed by this deed of assignment, subject to such restrictions as our laws may impose. But after so conveying this' estate the grantor declared a trust. The question is, will our laws permit that trust to 'be unconditionally enforced as against his creditors resident in this State? This conveyance is only valid by the comity between the States, and the same comity in some cases imposes terms upon the conveyance for the protection of the inhabitants of the State where the property to be affected is situated. In some of the States it has been held that a deed of assignment by a non-resident debtor to a trustee for payment of debts will not be enforced against creditors residing in the State where the land is situated. In the ease of Chafee v. Fourth National Bank, 71 Maine, 514, it was held, “that an assignment made by an insolvent debtor in another jurisdiction will not operate upon property in this State so as to defeat the attachment of a creditor residing here. * * * Comity between States is not thus to be extended to the prejudice of our own citizens.” The doctrine is, that such a conveyance is subject to the claims of resident creditors where the property is located. This we regard as the true rule. It is not just or fair that creditors in this State should be compelled to go to a foreign State to receive a pro rata share of the debtor’s property, when they perhaps extended credit alone upon the faith of the debtor’s property in this State, and to which they looked for payment.

The recognized law, well settled and of uniform application, in reference to the administration of estates, is, that where a foreign administrator or executor takes out new or ancillary letters in another country, the creditors residing in such country must be first paid. In regard to the administration of personal property in a State foreign to that in which a debtor dies, Story (Conflict of Laws, sec. 512,) says: “In regard to the title of executors and administrators, derived from a grant of administration in the country of the domicile of the deceased, it is to be considered that that title can not, de jure, extend, as a matter of right, beyond the territory of the government which grants it, and the movable property therein. As to movable property situated in foreign countries, the title, if acknowledged at all, is acknowledged ex comitate, and, of course, it is subject to be controlled or modified as every nation may think proper with reference to its own institutions, and its own policy, and the rights of its own subjects. And here the rule * * * applies, with great strength, that no nation is under any obligation to enforce foreign laws prejudicial to its own rights, or to those of its own subjects. Persons domiciled and dying in one country are often deeply indebted to foreign creditors living in other countries, where there are personal assets of the deceased. In such cases it would be a great hardship upon such creditors to allow the original executor or administrator to withdraw those funds from the foreign country without the payment of such debts, and thus leave the creditors to seek their remedy in the domicile of the original executor or administrator, and perhaps there meet with obstructions and _ inequalities in the enforcement of their own rights from the peculiarities of the local law. ”

In section 513 he further says: “The right of a foreign executor or administrator to take out such new administration is usually admitted, as a matter of course, unless some special reason intervenes to vary or control it, .and the new administration is treated as merely ancillary or auxiliary to' the original foreign administration, so far as regards the-collection of the effects and the proper distribution of them. Still, however, the new administration is made subservient to the rights of the creditors, legatees and distributees who are resident within the country where it is granted, and the residuum is transmissible to the foreign country only when a final account has been settled in the proper tribunal where the new administration is granted, upon the equitable principles adopted by its own law in the application and distribution of the assets found there.”

This is the principle that the comitjr between the States requires that administration be granted to the foreign administrator on the implied condition that the creditors of the State where the property is found shall be first paid from the assets of the foreign deceased debtor. In analogy to this doctrine, a foreign debtor can not place his property in trust so as to defeat his creditors in the State in which this property is situated. We are not prepared to hold, nor do we decide, that this doctrine applies to any conveyance except an assignment by a debtor for the benefit of his creditors. That is the question presented in this case, and we decide it alone. That the States have the right to discriminate in favor of domestic creditors, and against foreign creditors, was fully recognized by the framers of the Federal constitution, and the recognition of the principle was one of the grounds for providing for a general bankrupt act. Had there been such a law in force, no such assignment could have been made.

This case is unlike the case of Chicago, Milwaukee and St. Paul Ry. Co. v. Keokuk Northern Line Packet Co. (ante, p. 317.) In that case the property was personalty, that passed on its sale by delivery, and situated in Missouri, where the receiver was appointed, and the title vested in him by his appointment, and the property was brought temporarily into this State, without any intention of its remaining permanently. But in this ease the property was permanently located in this State, and is still here. It was here when the conveyance was made. In this there is a broad and marked distinction between the two cases. The circuit court therefore did not err in refusing to hold the propositions asked by the interpleader's, as the law governing this case.

It is urged that appellee had notice of the deed of assignment before he commenced this suit, or such notice as put him on inquiry. We are precluded by statute from reviewing controverted facts in eases coming here from the Appellate Court. That was a controverted fact, and the Appellate Court has conclusively determined it, and it is beyond our power to review that fact. But that question-is immaterial to this decision.

Perceiving no error in the record, the judgment of the Appellate Court is affirmed.

Judgment affirmed.