author: Mr. Justice Sheldon

text:
    H. Leroy Thayer v. The Wilmington Star Mining Company of Coal City et al.

      Filed at Ottawa November 23, 1882

      Rehearing denied March Term, 1883.

    1. Party complainant—in bill for specific performance. A bill for specific performance of a contract for the sale of real estate was filed by the assignee of the contract, a corporation, after its assets and property were placed in the hands of a receiver. The defendant filed his cross-bill, making the receiver a party, and the cause proceeded to a hearing on both bills: Held, that inasmuch as the receiver was made a party, the defendant had no substantial cause to complain that the suit was not brought in the name of the receiver.

      2. Contract—acts amounting to waiver of right to declame a forfeiture. Where a contract for the sale of land makes the time of payment of the essence thereof, the vendor may insist on a forfeiture for non-performance by the vendee or his assignee at the proper time; but this is also a right he may waive, so as to be thereafter held to a specific performance. So where, after default of payment, the vendor acquiesces in the laches of the vendee, and treats the contract as still subsisting, by applying for payment, and participates in having a receiver appointed for the vendee, praying in his petition that the receiver be required to pay him the sum due, he thereby waives his right of forfeiture, and can not afterwards insist on it without giving reasonable notice of his intention to do so, and a tender of the sum due on the day of such notice will protect the equitable rights of the vendee.
    3. Same— right of vendor to performance of covenant as affecting his interest. The purchaser of coal land covenanted with the vendor, not only to make certain payments, but also to cause to be built within a given time a railroad track from a town near the land, to intersept another railroad, and erect at the town a freight and passenger depot, and it appeared the cost of this was largely in excess of the price to be paid for the land, and that the vendor was still the owner of other coal land in the vicinity of the town, which would be enhanced in value by the construction of the railroad: Held, that the covenant to build the railroad was not only as a security for the payment of the purchase money by increasing the value of the land sold, which stood bound for its payment, but also an essential part of the consideration for the sale as enhancing the value of the vendor’s other land, and that a specific performance of the contract to convey would not be decreed except on requiring such road to be constructed within a given time, as well as the payment of the moneys agreed to be paid.
    4. Same—contract construed as to debts to be paid as part of price of sale. In a contract for the sale of coal land the purchaser agreed to pay the vendor a certain sum, and to pay all liens and incumbrances on the land, including a mortgage thereon securing certain notes payable to the vendor, which were to be paid within three years. The vendor had, previous to the sale, parted with four of these notes, two of them then being in the hands of the purchaser and the others in the hands of a third person, as collateral security for an indebtedness of the purchaser. After the sale the purchaser delivered the two notes in his hands to the vendor, and he afterwards acquired the other two by paying the sum for which they were pledged: Held, that the purchaser or his assignee was bound to pay such four notes, as well as the others, before he was entitled to a specific performance of the contract of sale.
    5. Interest—when allowed on interest. While it is true that compound interest will not be allowed in the absence of an agreement to pay it, yet, after interest has become due, it may, by agreement of the parties, be turned into the principal, and be made to bear interest for delay of payment, and the agreement enforced.

      6. Specific performance—when error to decree sale of property sold for the purchase price. On bill by the purchaser of land for a specific performance of the contract of sale, which makes the time of payment essential, and pro-tides for a forfeiture for non-payment on the day named, the forfeiture hating been waived, it is error in decreeing the relief sought to require a sale of the land for the payment of the unpaid purchase money. The'decree should find the sum due, and require its payment to the vendor by a short day, and on default of such payment declare all the rights and interest of the purchaser extinguished; and where the purchaser has agreed to build a railroad, which is of interest to the vendor, as a part of the consideration for the sale, he should be required to do so within a short time (sixty days) as a condition precedent to his obtaining a deed, or lose all his rights under the purchase.
    Appeal from the Appellate Court for the Second District;— heard in that court on appeal from the Circuit Court of Grundy county; the Hon. Josiah McRoberts, Judge, presiding.
    The original bill filed in this case by the Wilmington Star Mining Company of Coal City, a corporation, seeks to compel the specific performance of a contract in relation to the sale of certain real estate therein described, situate in Grundy county, in this State. The contract is in writing, and was executed by H. Leroy Thayer and Charles H. Goold, as parties of the first part, and one Ira F. Benson, as party of the second part, and bears date October 3, 1876. Shortly after the execution of the contract, in November, 1876, it was assigned by Benson to the Wilmington Star Mining Company of Coal City, and thereupon the latter took possession of the premises, and from that time, either by its agents or its receiver, has been in possession thereof, taking out large quantities of coal, greatly exceeding in value all payments made on the contract and all expenditures made otherwise, of whatever kind.
    By the terms of the contract Benson was to pay Thayer and G-oold each the sum of $4300, with interest at eight per cent per annum, in three years after the date of the contract, interest payable semi-annually; and Benson also assumed to pay two mortgages on a portion of the real estate, each made to secure the sum of $12,500, with interest at.ten per cent per annum, bearing date April 1, 1875, the notes thereby secured being due in one, two and three years from date, interest payable annually, the two mortgages and the notes having been executed by the Coalfield Coal Company, and respectively given to Thayer and Goold. Benson also agreed to save Thayer and Goold harmless from all loss on account of certain other liens and incumbrances existing upon the premises, and pay the interest thereon as the same should mature, which-were prior to Thayer and Goold’s mortgages. Benson further covenanted to cause to be built, within six months from the date of the contract, a steam railroad track from Coal City, to intersect the Chicago and Alton railroad at or near Mason creek, and cause to be erected a freight and passenger depot at Coal City, and also to pay a royalty of ten cents per ton on all coal mined, payable monthly,—the principal sums secured by said mortgages of Thayer and Goold to be paid within three years from the date of the contract. The lands embraced in the contract,—being some nine hundred and sixty acres,—are coal lands, and had a mining shaft located thereon, with appliances for mining coal, when the contract was executed. The amounts to be paid Thayer and Goold became due and payable October 1, 1879. The bill was filed May 6, 1880, against Thayer, it alleging that Goold had assigned all his interest in the contract and lands to Bacon Wheeler and Isabella Clark, and that the company had made a satisfactory arrangement with the latter in respect of the Goold part of the contract. Time and the prompt performance of every covenant and agreement are made of the essence of the contract, and it is also provided that Benson should forfeit all rights under the contract unless the same should, in all respects, be complied with by Benson at the respective times and in the manner therein .declared, and should also comply with all the covenants and agreements on his part to be performed.
    The evidence shows that neither Benson nor the company, or its receiver, have ever paid any portion of the principal sums stipulated to be paid to Thayer; that the interest on the $4300 has been paid only to October 3, 1878, and the interest on the $12,500 mortgage held by Thayer has been paid from date of the contract to April 1,1878, and no excuse is offered in the bill for the laches or failure to make the payments mentioned in the agreement at the times they severally became due. It alleges, however, that the amount due and unpaid to Thayer will not exceed $15,811; that on May 5, 1880, the complainant caused to be tendered to Thayer the sum of $15,811, in full payment of the amount his due, and demanded a deed; that Thayer refused to accept the amount or make a deed, and that complainant is ready, upon just accounting had, to pay, and it offers to pay, to Thayer, such sum as shall be.found justly his due. Thayer filed a cross-bill, making the corporation and its receiver defendants thereto, setting up the making of the contract, the assignment thereof, its conditions, amounts agreed to be paid thereby, insisting that the same had been forfeited by reason of non-compliance with its terms, and for failure to make the payments at the times the same severally became due.
    It appears that in April, 1878, upon a creditor’s bill filed in the circuit court of Will county, alleging insolvency of the corporation, Milford D. Buchanan was appointed receiver of all the property of the company, and ever since has been in possession of the real estate, and engaged in carrying on the business of the corporation,—of mining and selling coal,— and that in pursuance of an order of the court the company executed to the receiver a deed of all its property.
    The circuit court rendered a decree in favor of the complainant company, requiring it or its receiver, within forty-five days, to pay Thayer the sum of $16,794.46, and upon tender thereof ordering him to convey to the company the real estate described in the contract. It was also decreed, that in case of failure to pay such sum within the time limited, the master in chancery, at the request of Thayer, might make sale of the interest of the company in the real estate, and from the proceeds, after paying costs, to pay said sum to Thayer. The Appellate Court for the" Second District affirmed the decree on appeal, and Thayer appealed to this court.
    Messrs. Olin & Phelps, for the appellant:
    That part of the decree directing a sale is bad. Fitzhugh v. Smith, 62 Ill. 490; Berger v. Potter, 32 id. 73; Clark v. Hall, 7 Paige, 382.
    The decree, in fixing the sum to be paid to Thayér at $16,794.46, is for too small a sum. Counsel discussed the evidence upon this question, fully, in the light of the contract of purchase, which provides that the vendee should pay to G-oold, (one of the vendors,) $4300, and to Thayer, (the other vendor,) $4300, and also pay all incumbrances on the premises, including a mortgage to Thayer to secure $12,500, and one to Goold to secure a like sum,—“which several sums secured by said two mortgages are to be paid in full, interest and principal, within the time limited. ”
    Mr. E. C. Hagar, and Mr. A. O. Marshall, also, for the appellant:
    The property having been conveyed to the receiver, the corporation can not maintain its bill, or demand a performance of the contract. High on Receivers, secs. 201, 316; Iglehart v. Bierce, 36 Ill. 133; Miami Exporting Co. v. Gano, 13 Ohio, 269. The appointment of a receiver vests in him all the title to" the debtor’s property. High on Receivers, sec. 447; Porter v. Williams, 9 N. Y. 142.
    A party must comply with its terms before he can ask for specific performance of a contract. Stow v. Russell, 36 Ill. 18; Cronk v. Trumble, 66 id. 428; Phelps v. Illinois Central R. R. Co. 63 id. 468.
    The time of payment being made of the essence of the contract, appellant’s right to a forfeiture is sustained by the following cases: Doyle v. Teas, 4 Scam. 202; Chrisman v. Miller, 21 Ill. 237; Milner v. Willard, 34 id. 38; Heckard v. Sayre, id. 142; Stow v. Russell, 36 id. 18; Supervisors v. Henneberry, 41 id. 179; Warren v. Richmond, 53 id. 52; Iglehart v. Gibson, 56 id. 81; Phelps v. Illinois Central R. R. Co. 63 id. 468; Cronk v. Trumble, 66 id. 427; McCabe v. Crosier, 69 id. 501; Brink v. Steadman, 70 id. 241; Kimball v. Tooke, id. 553; Brix v. Ott, 101 id. 74.
    The payment of interest upon past due interest is not unlawful. Haworth v. Huling, 87 Ill. 23; Harper v. Ely, 70 id. 580.
    Mr. Geo. S. House, for the appellees:
    Forfeitures are held odious in law, and courts will not search for such construction of the language as will produce one. Hartford Fire Ins. Co. v. Walsh, 54 Ill. 164; Palmer v. Ford, 70 id. 377.
    The law does not favor forfeitures by construction, and contracts providing therefor are strictly construed. Bullock v. Goemble, 45 Ill. 218.
    An election to terminate a contract by forfeiture is essential. Heald v. Wright, 75 Ill. 17.
    A vendor may waive his right to a forfeiture by his acts treating the contract as in force, so that afterwards the vendee is entitled to notice before he exact it. Thayer v. Meeker, 86 Ill. 470.
    The corporation has the right to secure and preserve its assets for its creditors. The receiver is a mere trustee.
    It was not the original contract, and any subsequent one to pay compound interest is usurious. Jenkins v. Greenebaum, 95 Ill. 24.
   Mr. Justice Sheldon

delivered the opinion of the Court:

It is first urged, that the corporation is not the proper party to bring this suit. The record discloses that by decree of the Will county circuit court, of date March 15, 1878, the Hon. Josiah MeBoberfcs, judge, presiding, Buchanan was appointed receiver. The present suit was in the Grundy county circuit court, and heard before the Hon. Josiah McBoberts. Appellant filed his cross-bill, making the receiver a party thereto, and the cause proceeded to a hearing upon the original and cross-bills. Under such condition of the record, the receiver being thus brought into the cause, we do not think the objection should be allowed to prevail that the suit was not brought in the. name of the receiver, instead of that of the corporation. The cause thus proceeding, there was a tacit assent on the part of the receiver and the court that appointed him, to the suit being carried on in the name of the corporation. It would be competent for the court to protect any interest of the receiver in the decree to be made, and as respects the defendant, at least, there would not seem to be any substantial cause of complaint.

It is insisted that appellee is not entitled to a specific performance because it has not performed on its own part,—that the time of performance was, by express terms, made of the essence of the contract, and that in such ease there must be performance at the exact day. This was a right which appellant might have insisted upon and stood by, and it was also a right which he might waive. After the default of payment at the time appointed, there was acquiescence in the laches of the vendee, and appellant treated the contract as still subsisting. He, after that time, applied for payment. He participated in the appointment of the receiver in the case of the creditor’s bill, and concurred in his selection, upon the ground that he would be more likely to have paid to him his money than if another person suggested were appointed. The record shows that on February 20, 1880, in the cause wherein the receiver was appointed, in the Will county circuit court, appellant filed his petition, claiming that the company was indebted to him on this contract, and after alleging the amount his due, prays that the receiver may account and pay him the amount due on account of royalty for coal mined under the contract, and lots sold, and that the receiver be directed, at an early day named by the court, to pay him all the money due him. By these acts ’ appellant manifested that he did. not intend to rely upon his right of forfeiture, or rescinding, for any past failure of performance, but was willing to receive his money and execute his contract, and we are of opinion they amounted to a waiver of the right to declare a forfeiture, and insist- upon time as the essence of the contract in respect of any previous failure of performance, and that he could not thereafter exercise such right without giving reasonable notice of his intent to do so. On May 1, 1880, appellant did declare a forfeiture of the contract for non-performance, and had notice thereof filed for record in Grundy county, and on May 5, 1880, delivered a copy of the notice to the secretary of the company, and on that same day the company made the tender above mentioned, as alleged in the bill. Under such circumstances we think this objection of non-performance, as respects payment, should not be sustained. See Chrisman v. Miller, 21 Ill. 227; Thayer v. Meeker, 86 id. 473; Webster v. French, 11 id. 254; Pomeroy on Specific Perform, secs. 337, 394.

But it is alleged that there is an entire want of performance in the construction of the railroad. It is true that it is a stipulation of the contract that Benson should cause the railroad to be constructed within six months. Appellee insists that this provision is solely for the benefit of the property, and for the purpose of strengthening it as security for the payment of the purchase price, and so the payment of the money will render the construction of the road an immaterial affair. The contract itself does not show this. It appears the length of the road would be about six miles, and its cost about $90,000. This would be largely in excess of the purchase price, and we may suppose the benefit .to the land purchased influenced, to a large extent, the making of the covenant. But the proof shows appellant to be the owner of a half section of coal land in the vicinity, which would be enhanced in value by the building of the railroad. It would not do to excuse the non-performance of this covenant on the ground of its being non-essential. It appears that there was an expectation that the Chicago and Alton Railroad Company would build this railroad, and before the making of the contract,.appellee, .with Benson, went to the president of that company to-ascertain as to that fact, and the president assured them that the railroad company would build the road; but on their requesting him to sign a writing to that effect, he declined, and afterward the contract was made with this stipulation in it: that Benson should cause the road to be constructed within six months. It was expected Benson would be the contractor for the work. Appellant himself testified that the Chicago and Alton Railroad Company graded a line from Coal City down to their track at or near Mason creek, in the fall of 1880. Under these circumstances we are satisfied that the railroad soon will be, if it has not already been, completed. Indeed, appellee’s counsel asserts, in his argument, that the road has been constructed, .though the proof fails to show this. The same waiver by conduct, which we have noticed, of the payment of the purchase price on the day appointed, applies equally, we conceive, to the building of the railroad within six months; and if it be proper for that reason to dispense with payment on the day appointed, and allow a brief time for payment of the money, it is in the same manner proper that there should not be a forfeiture because of not having constructed the railroad within the time limited, and to allow a time for the construction of it.

If it be held that appellee is entitled to a decree for specific performance, it is insisted, then, that the decree is for a less sum than the amount due appellant. In this respect there is evident error in the decree. Benson agreed to pay appellant the sum of $4300, and also assumed and agreed to pay twelve notes running to appellant, eleven of them for $1000 each, and one for $1500, all secured by mortgage on the premises executed, as well as the notes, by the Coalfield Coal Company. There were other incumbrances on the land which Benson was to take the land subject to. But the language in respect to this mortgage, and another like it to Goold, is peculiar. By the contract Benson covenants to pay all the liens and incumbrances on the land of whatsoever character, including said mortgages, “or save and keep harmless said parties of the first part from any and all loss, or danger of loss, on account of said liens or incumbrances, except the said mortgages, one given to Charles H. Goold and one given to H. Leroy Thayer, as above named,—which several sums, secured by said two mortgages last named, are to be paid in full, in interest and principal, within the time limited, ” (three years.) For four of these mortgage notes to him, appellant seems not to have been allowed by the decree. The situation with respect to those four notes was, that Thayer had previously parted with them, two of which were in the hands of Benson, and the other two in the hands of third parties, held as collateral security for indebtedness of Benson.

The two notes in the hands of Benson were delivered by him to Thayer at the time of the execution of the contract ; the two others held as collateral, Thayer subsequently acquired from the parties who so held them, paying for one $375, and for the other $605. Appellant thereafter, and at the hearing, held these four notes, as well as the eight other mortgage notes. He was the payee of the notes. The covenant was express to pay the sums represented by these notes in full, interest and principal, within the time limited,— three years. . The two notes which Benson had in hand and had the power to deliver, he did then deliver to appellant. If Benson was not to pay these mortgage notes as a part of the purchase price, why did'he deliver them to the appellant, the payee ? Why not cancel them, or hold them in his own hands as evidence that he had, so far, satisfied the mortgage ? Benson was the president of this appellee corporation. Buchanan was its secretary from the date of its organization to the time he was appointed receiver. The account books of the corporation show an indebtedness to appellant for the full amount of all the mortgage notes,—$12,500. The officers of the corporation repeatedly admitted appellant to be entitled to the entire sum covered by all the twelve notes. Buchanan rendered written statements showing that all the notes were owned by appellant. One of these statements was part of his sworn report as receiver, made to the court that appointed him, filed June 10, 1878. It is a statement of account with H. L. Thayer. The first item reads: “April 3, 1878. To one-half of $2875, annual interest due H. L. Thayer and C. H. Goold, on principal sum of $28,750, at ten per cent per annum, $1437.50.” This account was, upon motion of said receiver, referred to the master for examination, and by him reported to the court as correct, and at the instance of the receiver it was approved by the court. Said principal sum of $28,750 was made up of all these mortgage notes, of $12,500 to Thayer and Goold, each, and the interest which had accrued thereon at the date of the contract,—$1875 on each mortgage,—which interest Benson had agreed with appellant to turn into principal, and pay ten per cent interest on it. Another statement by Buchanan is entitled and dated, “April 3, 1877. Due Thayer and Goold, ”— and then showing the sum ($1437.50) obtained by multiplying the principal sum of $28,750 by five, and which appears to be a computation of six month’s ten per cent interest on $28,750. This principal sum also included all of said mortgage notes, and said accrued interest to date of contract. Each of said accounts also showed to be due appellant the further principal sum of $4300, and ■ interest. The books of account of the corporation, in evidence, show the debit side of the real estate account, as follows: “To bills payable, * * * for-notes of the Coalfield Coal Company, to H. L. Thayer,-dated April 1, 1875: eleven notes for $1000 each, and one note for $1500.-” And on the journal of the company appears the entry: “Real estate account, debtor, to H. L. Thayer and C. H. Goold: interest due them April 3, 1877, on $28,750, six months, at ten per cent, $1437.50; interest due them April-3, 1877, on $8600, six months, at eight per cent, $344.”

In opposition to all this is the testimony of Buchanan that he- was present at the making of the contract, and there was an agreement that Thayer would induce Goold to' join with him in the conveyance to Benson of certain lots in Coal City, and would advance the money to take up the two notes hypothecated, in consideration of which Benson would turn over to Thayer the two notes held by him, and also his right in the two notes hypothecated; and then, upon repayment to Thayer of the money advanced to take up the two notes hypothecated, with interest, the conveyance of the lots was to be delivered to Benson, and one-half of. the four notes to be and belong to Benson, to be indorsed on the contract, or otherwise, as he might direct. This testimony, contradicted by appellant, or anything else there may be in the case, we consider as wholly without avail to overcome the other conclusive evidence which has been referred to, showing that all the mortgage notes, of $12,500, belong to appellant, and are a just indebtedness, to be paid to him before a specific execution of the contract should be enforced.

Appellant testified that soon after the making of the contract, an agreement was made between him and Benson that the interest which had accrued on the $12,500 mortgage given by the Coalfield Coal Company to appellant, should be considered as a part of the principal sum, and should bear ten per cent interest from the date of the contract, such accrued interest amounting to $1875. Appellee recognized and acted upon this agreement, setting this amount of accrued interest down in its books as a part of the principal sum, and as bearing ten per cent interest, and made several payments of ten per cent interest upon it. It seems the circuit court disallowed such payments, as being the payment of compound interest, we presume. It is true that compound interest will not be allowed in the absence of an agreement to pay it; but after interest has accrued due, it may, by agreement between the parties, be turned into principal, and made to bear interest for delay of payment. There is sufficient evidence that such an agreement was made in this case, and we see no reason why it should not be carried out. See Bishop Hill Colony v. Edgerton, 26 Ill. 54.

There was error in decreeing a sale of the property. As soon as the amount due was determined by the decree it should at once have been paid to appellant. He should not have been subjected to the delay of realizing the money from a sale of the land. This mode of raising money by a sale of the land to pay the purchase price, is not to be permitted to a vendee. Suppose the land should sell for less than the amount due, the vendor then would not get the purchase price, and he would have been made to part with his land upon different terms than he stipulated. Appellant should not be deprived of his land before being paid the purchase money. He was entitled, as before said, to have payment of it as soon as the decree was rendered, and there should have been given but a very short day to pay it, and in default of payment at the day, all right and interest of appellee ór Benson in the lands, under the contract, should have been forever extinguished.

Further, appellee is not entitled to have a specific performance until there has been performance of the contract on its own part in respect of the building of the railroad, as well as of the payment of the purchase money; and if the railroad shall not have already been constructed, then there should be further decree that unless the railroad should be constructed within a certain time, which we fix at sixty days after the entry of the decree of the circuit court, all appellee’s and Benson’s right and interest under the contract in the lands should be forever extinguished.

The judgment of the Appellate Court will be reversed, and the cause remanded for further proceedings conformable to this opinion.

Judgment reversed.

Mr. Justice Walker: I am unable to concur in some of the rules announced.


source: Caselaw Access Project

author: Mr. Justice Craig

license: Public Domain

text:
    The City of Chicago v. Deborah Stearns.

      Filed at Ottawa September 27, 1882

      Rehearing denied March Term, 1883.

    1. Practice—when specific objection should be made. In a suit against a city to recover for a personal injury from a fall, on June 12, 1878, caused by a defective sidewalk, a witness was asked if he knew the condition of the sidewalk in the month of June, 1878, to which the defendant made a general objection, which the court overruled: Held, that there was no error in the ruling. It was proper to prove the condition of the walk in the month of June prior to the injury, and if the defendant desired to object to evidence in regard to its condition after the accident, the objection should have been more definite, and confined to that particular time.
    2. Negligence— of city in respect to sidewalk—liability. A city will not be held liable for an injury from a defective sidewalk unless the authorities have notice of the defective walk, or unless they have notice of such facts and circumstances as would, by the exercise of reasonable diligence, lead a prudent person to such knowledge.
    3. Same—comparative negligence—statement of the rule. In an action based on negligence as the cause of injury, the court instructed the jury, that if they found, from the evidence, “that the plaintiff was herself guilty of some negligence, but that the defendant was guilty of gross negligence, contributing to such injury, and that the plaintiff’s negligence was slight as compared with the negligence of the defendant, still she may be entitled to recover:” Held, that the rule of comparative negligence was correctly stated.
    4. Instruction—construed, as to requiring notice. In a suit against a city to recover damages for an injury received from a defective sidewalk, the court instructed for the plaintiff that it was the duty of the defendant to use reasonable diligence to keep the sidewalk in a reasonably safe condition, and if the jury believed, from the evidence, that the defendant had failed to perform such duty, and that by reason of its negligence in that regard the said sidewalk was permitted to remain out of repair and in a dangerous condition, etc. It was objected that this might authorize the jury to conclude no notice of the defect was necessary to charge the defendant: Held, that the words, “was permitted to remain out of repair,” implied a knowledge on the part of the city of the condition of the walk.
    5. Same—need not be repeated. Where the substance of the part of an instruction stricken out by the court is embraced in another instruction which is given, there will be no error in the modification, even though the portion stricken out was a correct statement of the law.
    6. Error—mil not always reverse. A technical error in modifying an instruction, not calculated to mislead the jury, and which did the party complaining no harm, affords no ground to reverse a judgment fairly obtained.
    Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. Sidney Smith, Judge, presiding.
    Mr. Clarence A. Knight, for the appellant:
    A city is not always liable for an injury caused by a defective sidewalk. Notice of the defect must be shown, or circumstances from which it may be inferred. (City of Peru v. French, 55 Ill. 318; City of Chicago v. Murphy, 84 id. 224.) The instruction for the plaintiff assumes, or would lead the jury to believe, that no such notice was necessary.
    Again, the latter part of the instruction does not correctly state the rule of comparative negligence. This court has frequently held that it is the duty of a person walking on the sidewalk to use his eyes to direct his footsteps, and failing to do so is such negligence as to preclude a recovery. Village of Kewanee v. Depew, 80 Ill. 119; City of Quincy v. Barker, 81 id. 300.
    The plaintiff has not claimed, in her declaration, that the sidewalk was defectively constructed, and hence it was improper in the court to place before the jury that question in its modification of the defendant’s instruction. It was misleading to do so. Chicago and Alton R. R. Co. v. Kellam, 92 Ill. 245.
    Mr. Sidney Thomas, for the appellee:
    The instruction complained of does not ignore the question of notice to the city of the defect in the walk. Eeasonable diligence does not exclude the right to notice of the defect and opportunity to repair, and, in short, all that the argument claims. The word “permit, ” in the instruction, implies that the party permitting acts understanding^, and permission implies knowledge, and knowledge is notice. The case was not tried on thé theory of a defect in the original construction of the walk, and the objection urged could not have affected the verdict in the least.
   Mr. Justice Craig

delivered the opinion of the Court:

This was an action brought by Deborah Stearns, in the Superior Court of Cook county, against the city of Chicago, to recover for injuries received from a fall on and through a defective sidewalk, on LaSalle street, on the 12th day of June, 1878. On a trial before a jury the plaintiff recovered ■a judgment of $1500, which, on appeal to the Appellate Court, was affirmed. ■

A single question has been raised in regard to the admission of evidence. Mrs. Beck, a witness for plaintiff, was asked if she knew the condition of the sidewalk in the month of June, 1878. To this question a general objection was made by the defendant, and overruled by the court. We perceive no error in the ruling. It was proper to prove the condition of the walk in the month of June, prior to the time of the injury, and if the defendant desired to object to evidence in regard to the condition of the walk after the accident occurred, the objection should have been more definite, and confined to that particular time. As it was not, we think the ruling of the court was not erroneous.

The next question presented by counsel for appellant involves the decision of the court on the instructions. At . the request of the plaintiff the court instructed the jury as follows:

“1. It was the duty of the defendant to use reasonable diligence to keep the sidewalk in question in a reasonably safe condition, and if the jury believe, from the evidence, that the defendant failed to perform such duty, and that by reason of its negligence in that regard the said sidewalk was permitted to remain out of repair and in a dangerous condition, by reason whereof the plaintiff, while exercising reasonable care on her part, received the injury complained of, then the defendant is liable. And the court further instructs the jury, that if they find, from the evidence, that the plaintiff was herself guilty of some negligence, but that the defendant was guilty of gross negligence contributing to such injury, and that the plaintiff’s negligence was slight as compared with the negligence of the defendant, still she may be entitled to recover.
“2. If you-find the defendant guilty, then the plaintiff is entitled to recover her actual damages which she has sustained as the direct or proximate result of such injury, such as, her loss of time, her pain and suffering, her necessary and reasonable expenses in medical and surgical aid and nursing, as the .same may appear from the evidence in this cause. And if the jury find, from the evidence, that the said injury is permanent and incurable, they should also take this into consideration in assessing the plaintiff’s damages.”

It is said that under the first instruction the jury might well conclude that no notice whatever was requisite to charge the city with liability, but that, at all times, the sidewalk must be kept in a reasonably safe condition, without regard to whether there was any actual or constructive notice. So far as the question of notice to a city of a defective sidewalk is concerned, the law is well settled that the city will not be held liable unless it has notice of the defective walk, or unless it has notice of such facts and circumstances as would, by the exercise of reasonable diligence, lead a prudent person to such knowledge. (City of Chicago v. Murphy, 84 Ill. 224.) We do not, however, regard the instruction to be in conflict with this rule. It will be observed that the instruction contains the words, “was permitted to remain out of repair. ” Webster, in referring to the words “permit,” “allow,” and “suffer,” says, “permit” is the most positive, denoting a decided assent. From this definition it is -plain that if the city assented it did so from a knowledge of the condition of the walk,—the assent implied knowledge. But however this may be, the third instruction, given on behalf of the defendant, places the question of notice before the jury in such clear and emphatic language that they could not be misled on this question. As to the last part of the instruction, we perceive no substantial objection to it. The question of comparative negligence seems to be correctly-stated.

As respects the second instruction, it is claimed that there was no evidence to support it, and for that reason it should not have been given. The proof showed that plaintiff employed physicians, who attended her, and she was nursed by her daughter, and the expenses were about $600. The various items were not called for or given, but the evidence was sufficient, at least, to base ¡the instruction upon. It will be presumed that the physicians who attended the plaintiff were authorized to practice, unless the contrary appeared.

It is next claimed that the court erred in modifying instruction No. 1, by striking out a portion thereof. The substance of that portion of the instruction which the court refused to give was embraced in instruction No. 4, which was given, and it was not error to refuse an instruction which was a mere repetition of another, in different language.

It is also claimed that the court erred in the modification of instruction No. 3, by submitting to the jury a question not involved in the case,—that is, the “defective construction” of the sidewalk. The declaration was not framed with a view to the recovery on the ground that the sidewalk, as originally built, was defectively constructed, and no evidence was introduced to establish a claim of that character, and, so far as appears from the record, plaintiff did not base her right of recovery on that ground; and while it may be admitted that the modification was a technical error, it was one that could not mislead the jury, and did the defendant no harm.

The real issue involved in the case was fairly presented to the jury.by the instructions, and we perceive no substantial ground for disturbing the judgment.

The decision of the Appellate Court affirming the judgment will be affirmed.

Judgment affirmed.


author: Mr. Justice Mulkey

text:
    Francis Cassady et al. v. Trustees of Schools.

      Filed at Ottawa November 20, 1882

      Rehearing denied March Term, 1883.

    1. Official bonds—sureties—evidence—condition of liability of surety on school treasurer’s bond—principal not served. The sureties on a school treasurer’s bond, in an action thereon, can not object to evidence showing a breach of the conditions of the bond by the principal because he has not been served with process, or is not within the jurisdiction of the court, or because his defalcation has not been established by a judgment against him. The obligation of a surety, on such bond is not collateral, but a direct one.
    2. So the want of service on the principal, in an action on a school treasurer’s bond, will not affect either the quantum or character of proofs necessary to make out a case against the sureties. Whatever would show a breach of the condition of the bond by the principal will establish the liability of his sureties, whether he is in court or not.
    3. Same—obligation is joint and several. Section 13, chapter 103, of the Revised Statutes, relating to official bonds, in effect says, that for any breach of such a bond a suit may be brought, and prosecuted to final judgment, against the principal and his sureties, or any one or more of them, or against one of the sureties or any number of them less than all, or against all the sureties, without first obtaining judgment against the principal.
    4. Same—when liability of surety is secondary-—construction of the statute. Section 14 of the same law has no application except to cases where a judgment has been obtained against the principal and some one or more or all of the sureties. In such case the officer is not permitted to levy on the property of the surety or sureties until he has exhausted the property of the principal. When the plaintiff has been unable, or has failed, to obtain judgment against the principal, that section has no application.
    5. Same—evidence against swreties—entries by school treasurer in his record. The entries made by a school treasurer in the books of his office, showing his receipts and disbursements of the school money, and other official acts, even those made prior to the execution of his bond on which the suit is brought, are admissible in evidence against his sureties as well as himself.
    6. Where the books upon which the entries of a public officer are made are such as the law requires to be kept, so that they constitute the official record of the acts performed by him in the discharge of his official duties, such entries are, on general principles, admissible in evidence for or against all persons having any interest in them or the facts to which they relate, including the officer and the sureties on his bond.
    7. Evidence—admissibility of proof of what party testified to on former trial. Evidence of what an officer testified to, on a former trial, in an action on his official bond, as to when his alleged defalcation took place, when he, at the second trial, is absent from the State, is properly rejected, when it does not appear but that his sureties knew of his whereabouts in time to have taken his deposition in the case.
    8. Practice—judgment where only a part of several defendants are served. Where several are sued upon a contract, and service is had on part of the defendants only, the statute expressly authorizes the plaintiff to proceed with the case as to those served; in such case, however, he must prove the cause of action against all the defendants sued, the same as if all were duly served.
    9. Interest—on moneys in hands of officer refusing to pay over. In all cases where-a public officer appropriates and converts to his own use moneys which he holds in his official capacity, and upon proper demand re-, fuses'to pay over to the party or parties entitled to receive the same, such officer and his sureties will be liable on his official bond for the amount of such moneys, with interest thereon at the rate of six per cent, from the time of such conversion.
    Writ of Error to the Appellate Court for the Second District ;—heard in that court on writ of error to the Circuit Court of Will county; the Hon. Josiah McRoberts, Judge, presiding.
    Mr. Geo. S. House, for the plaintiffs in error:
    The liability of a surety on an official bond is collateral, and not direct. The surety’s liability on such a bond is the same as that of a' surety on administrator’s, executor’s or guardian’s bond, and governed by the same rule. Before the passage of the 13th section of the chapter of the Revised Statutes entitled “Official Bonds, ” it was necessary to establish the liability of the principal before suing the surety on the bond. Briggs v. Postlewait, Breese, 154; Braxton v. Winslow, 1 Washb. 31.
    Since the passage of that statute, in order to recover against a portion of the obligors in the bond the principal must be a party to the judgment. This is manifested by section 14 of the act, which provides that execution may issue on any judgment so rendered, but that the officer executing the same shall not levy upon the property of the surety until he shall fail to find sufficient property of the principal to satisfy such execution.
    It is the established law that the sureties of a public officer . can not be held liable for moneys received by such officer before the execution of the bond, unless the money remained on hand at the time of the execution of the bond. Inhabitants v. Randall, 105 Mass. 295; Farrar v. United States, 5 Pet. 374; United States v. Boyd, 15 id. 298; United States v. Eckford’s Exrs. 1 How. 262; United States v. Body, 5 id. 48; Bruce v. United States, 17 id. 443; Nolley v. County Court, 11 Mo. 287; State v. Rhodes, 6 Nev. 352; Mahaska v. Ingalls, 16 Iowa, 85; Bessinger v. Dickenson, 20 id. 261; Paw Paw v. Eggleston, 25 Mich. 36; Detroit v. Webber, 29 id. 24; Bissell v. Sexton, 66 N. Y. 55; Patterson v. Inhabitants, 38 N. J. L. 256; Vivian v. Otis, 24 Wis. 518.
    The entries in the cash book made by the principal subsequent to the execution of his bond were proper evidence in this suit, but not the -entries made prior to the date of the bond in suit, as against his sureties. Kagay et al. v. Trustees, 68 Ill. 77; City of Chicago v. Gage et al. 95 id. 628.
    The court should have admitted proof of what the principal testified to on a former trial of this case.
    Interest can not be recovered in this State except where the statute authorizes it. Madison County v. Bartlett, 1 Scam. 67; City of Pekin v. Reynolds, 31 Ill. 529; Illinois Central R. R. Co. v. Cobb et al. 72 id. 148; City of Chicago v. Allcock, 86 id. 385; Bedell v. Janney, 4 Gilm. 193; Chapman v. Burt, 77 Ill. 337; Bradley v. Geiselman, 22 id. 494; Chicago and Northwestern R. R. Co. v. Schultz, 55 id. 421.

      Messrs. Hill & Dibell, for the defendants in error:
    The liability of a surety upon an official bond is direct, and not collateral, and he may be sued, and prosecuted to judgment and execution, without joining the principal, or establishing the liability of the principal by obtaining judgment against him alone. Rev. Stat. 1874, chap. 103, sec. 13; DeColyar on Guaranty, 215, 216; Taylor v. Beck, 13 Ill. 376; People v. Harper, 91 id. 375; Governor v. Perkins, 2 Bibb, 395; Smith v. Commonwealth, 59 Pa. St. 320.
    In case of official bonds, except executors and administrators, a judgment against the principal, in a suit to which the sureties are not parties, is not admissible against the sureties in a suit upon the bond. Pine v. Webster, 14 Cal. 202; Governor v. Shelby, 2 Blackf. 26; White v. The State, 1 id. 557; Thomas v. Hubbell, 15 N. Y. 405; Douglass v. Howland, 24 Wend. 52; Fireman’s Ins. Co. v. McMullin, 29 Ala. 167.
    When summons is served on one or more, but not on all the defendants, the plaintiff may proceed to judgment against those served, and afterwards have summons in the nature of a sci. fa. for those not served, to make them parties to the judgment. Rev. Stat. 1874, chap. 110, sec. 9.
    Books kept under the authority of particular statutes, or in public offices in the course of official duty, are a species of public documentary evidence, admissible as original evidence in all cases when they are pertinent to the issue. 1 Phillips on Evidence, 243 ; 1 Greenleaf on Evidence, secs. 483-485; Kyburg v. Perkins, 6 Cal. 674; Dikeman v. Parrish, 6 Pa. St. 210; Thornton v. Campton, 18 N. H. 20; Groesbeck v. Seeley, 13 Mich. 341; Bissell v. Hampton, 6 Duer, 512; Cawley v. People, 95 Ill. 262.
    The books offered in evidence were kept by Tighe, as treasurer, under the authority and by the direction of the statute law of the State, and were therefore admissible as official books or entries made in the course of official duty. School Law of 1874, chap. 122, sec. 56.

      Interest is allowed upon money due upon any bond, bill, promissory note, or other instrument in writing, and upon money received to the use of another, and retained without the owner’s knowledge. Massachusetts Mutual Life Ins. Co. v. Robinson, 98 Ill. 330; Stern v. People, 102 id. 540; United States v. Curtis, 100 U. S. 119.
   Mr. Justice Mulkey

delivered the opinion of the Court:

On the 9th of March, 1882, the trustees of schools of township 35, range 10, Will county, recovered a judgment in the Will circuit court against Francis Cassady, William Davidson, Mathew Tuohey, and John Ryan, sureties on the official bond of Nicholas D. Tighe, late school treasurer of said township, for $30,000 debt, and $13,213.46 damaged, together with costs of suit, which, on error to the Appellate Court for the Second District, was affirmed, and the sureties on the bond bring the case here for review.

It appears from the record that Tighe was appointed by the board of trustees school treasurer for three successive terms, and that he gave three separate bonds as such, the first bearing date October 5, 1874, the second, March 1, 1876, and the third, March 29, 1877; that on or about the 27th of June, 1877, and before the expiration of his last term, the board of trustees, for cause, removed him from office, and apjiointed one W. D. Fay his successor; that upon an examination of the treasurer’s books, as kept by Tighe himself, after rejecting certain fictitious credits, amounting in the aggregate to $10,778.79, he was found'to be largely in arrears with the township, and on his refusal to pay the same after a formal demand by his successor, the present suit was brought against him and his sureties on his last official bond, service being had on the sureties only, with the result already stated.

On the trial in the circuit court the controversy was chiefly confined to a single issue of fact,—namely, whether the defalcation complained of occurred under the last bond. The court found this issue in favor of the plaintiff, and rendered judgment accordingly, which being affirmed by the Appellate Court, conclusively settles the same adversely to the plaintiffs in error. Indeed, all controverted questions of fact are in like manner settled against them. It follows, therefore, our present inquiries will be confined to questions of law exclusively.

On the trial in the circuit court the sureties objected to all evidence which tended to show a breach of the bond by Tighe, the principal, on the ground that the latter not being before the court, or within its jurisdiction, such defalcation could only be established by producing a judgment against the principal. The objection, however, did not prevail, and the ruling of the court on that question is one of the errors assigned. The objection in question is based upon the assumption that the obligation of a surety on a school treasurer’s bond, like the one sued on, is a collateral and not a direct undertaking. We understand the reverse of this to be the law, and so hold, hence the objection to the evidence was properly overruled. Rev. Stat. chap. 103, sec. 13; Taylor v. Beck, 13 Ill. 376; People v. Harper, 91 id. 357.

The fact that the officer had failed to obtain service on the principal, did not at all affect either the quantum or character of proofs necessary to make out a case against the sureties. Whether the principal was or was not before the court, the procedure and rules of evidence as to the sureties would be the same. Whatever would show a breach of the condition of the bond by the principal, would, in either case, establish the liability of the sureties thereon. Where several are sued upon a contract, as was the case here, and service is had on part of the defendants only, our statute expressly authorizes the plaintiff to proceed with the cause as to those served; yet in doing so the plaintiff must prove the cause of action precisely in the same way he would be required to do if all the defendants were served with process. The plaintiff, in such case, must prove a cause of action against all the defendants sued and declared against, whether served or not, otherwise he will not be entitled to judgment against any. Rev. Stat. chap. 110, sec. 9.

There is nothing in the 13th section of chapter 103 of the Revised Statutes, above referred to, which requires judgment to be obtained against the principal before proceeding to judgment and execution against the sureties. What the legislature intended by that section to say, and in effect does say, is, that for a breach of any condition of the bond a suit may be prosecuted to' final judgment against the principal and his sureties, or any one or more of them,—that is, such suit may be brought against the principal alone, or against the principal and one or more or all the sureties combined, or such suit may be brought against one of the sureties, or any number of them less than all, or against all the sureties combined, without first obtaining judgment against the principal. Nor is there anything in the 14th section which conflicts with this view. That section has no application except to cases where a judgment has been obtained against the principal and some or all of the sureties. In such cases the officer is not permitted to levy on the property of' the surety or sureties until he shall have first exhausted the property of the principal; but where the plaintiff has been unable, or for other good reason has failed to obtain judgment against the principal, the 14th section has no application. To give these sections of the statute the construction contended for> would, in the case of an absconding bankrupt principal, be to destroy all remedy whatever on the bond, and the very statement of such a proposition shows it can not be the law.

It is also earnestly insisted that the entries made by Tighe in the books kept by him as treasurer, showing his receipts and disbursements of the school money, and other official conduct, and especially such entries as were made by him prior to the execution of the bond sued on, were improperly admitted in evidence against the sureties. We do not think so. The books in which these entries appear are such as the law requires to be kept, and they constitute the official record of the treasurer’s office, and of all acts performed by him in the discharge of his official duties, and are therefore, on general, well recognized principles, admissible in evidence for or against all persons having any interest in such entries or the facts to which they relate, including the treasurer and the sureties on his bond. 1 Greenleaf on Evidence, see. 483, et seq. 491-498; 2 Phillips on Evidence, 243; Thornton v. Campton, 18 N. H. 20; Bissell v. Hampton, 6 Duer, 512; Cawley v. The People, 95 Ill. 249.

It is further complained that the trial court erred in refusing to admit evidence of what Tighe swore on a former trial of the cause, with respect to the time when the defalcation occurred. It appears that at the time this evidence was offered Tighe was in Memphis, Tennessee, beyond the jurisdiction of the court; but how long he had been there, or when the plaintiffs in error first acquired notice of his whereabouts, is not shown. For aught that appears, the plaintiffs in error may have had ample time to take his deposition, and thus availed themselves of his testimony at the trial, had they seen proper to do so; and since nothing appears to the contrary, we must presume that such was the case. Even conceding the former testimony of a living witness beyond the jurisdiction of the court may, under special circumstances, be shown on a second trial, as is permitted to be done in some of the States, still, under the circumstances here shown, the court below was clearly right in excluding the testimony.

The objection that interest was improperly allowed on the amount of the treasurer’s defalcation, is not tenable. It may be stated as á general proposition, founded upon the general provisions of our statute relating to this subject, and upon the previous decisions of this court, that in all cases where a public officer appropriates and converts to his own use moneys which he holds in his official capacity, and upon proper demand refuses to pay the same over to the party or parties entitled to receive the same, such officer and his sureties will be' liable on his official bond for the amount of moneys thus converted and appropriated, with interest thereon at the rate of six per cent per annum, from the time of such conversion until paid. Stern et al. v. The People, 102 Ill. 540.

The judgment will be affirmed.

Judgment affirmed.


author: Mr. Justice Walker

text:
    Samantha Warren v. Ira P. Warren et al.

      Filed at Ottawa November 20, 1882

      Rehearing denied March Term, 1883.

    1. Specific performance—of agreement of a father to convey land to his daughter. An elder daughter, after the death of her mother, at the request of her father continued to reside with him and keep house for him up to his death, a period of over thirty-eight years, and took care of and reared his infant children, managing all the household duties, and assisting him in his declining years in the management of his farm. The father had verbally promised to convey to her his farm in consideration of her services, and had frequently declared that the farm was hers, and it appeared that her services were more than equal to the value of the land, and that he died leaving her in its possession. It was held, that the daiighter was entitled to a decree for the specific performance of her father’s agreement to convey the land to her, notwithstanding the Statute of Frauds was set up and relied-on to defeat her right to such relief.
    2. Statute of Frauds-part performance, to take contract out of. It is not indispensable, to take a verbal agreement for the conveyance of land out of the Statute of" Frauds, that the consideration should he paid at the time or after the making of the contract. A past consideration, or an indebtedness of the seller to the buyer, is equally meritorious, as a consideration, as the payment of money or property at the time of or after the contract is entered into, and is as efficacious, to take the case out of the Statute of Frauds.

      3. Same—what is held possession. Where a father agreed to convey his home farm to his daughter in consideration of her services for over thirty years after her becoming of age, and they both lived together on the farm, and the father gave her charge of the construction of a new house thereon, and she assisted largely in the management of the farm, and remained in possession thereof after his death, it was held, that her possession was such as to take the contract out of the Statute of Frauds.
    4. SAME—what is part performance. Nothing is to be taken as part performance of a verbal contract for the sale of land which does not put the party in a situation which is a fraud on him unless the agreement is performed. Where the consideration of an agreement to convey land by a father to his daughter is nearly forty years of domestic service rendered for him at his request, the non-performance of the contract would work a monstrous fraud upon the daughter’s rights, as the law would limit her claim for wages to five years.
    5. Parent and child—father liable to his admit daughter for services rendered at his request. Where an adult daughter renders services to her father at his request, in the absence of proof that the services were performed as a gratuity the law will create a liability on his part to pay for them, although no price has been agreed upon as compensation.
    6. Witness—objection to competency may be waived. Although the evidence of a party to a suit is not competent, yet if no objection is made to the same on the taking of his deposition, or to the reading of his deposition, the objection thereto must be considered as waived, and its introduction can not be urged as error.
    Writ of Error to the Circuit Court of Will county; the Hon. Francis Goodspeed, Judge, presiding.
    Messrs. Barber & Randall, for the plaintiff in error:
    Specific objection to evidence must be made in the court below, or it will be waived. Sargeant v. Kellogg, 5 Gilm. 281; Swift v. Whitney, 20 Ill. 144; Buntain v. Bailey, 27 id. 410; Gillespie v. Smith, 29 id. 473; Phy v. Clark, 35 id. 377; Howell v. Edmonds, 47 id. 79; Hyde v. Heath, 75 id. 381; Clevenger v. Dunaway, 84 id. 370; Merchants’ Dispatch Trans. Co. v. Leyser, 89 id. 46.
    Objection to the competency of a witness must be made when bis deposition is taken, and in the court, before the bearing. Frink v. McClung, 4 Gilm. 577; Moshier v. Knox

      College, 32 Ill. 155; Goodrich v. Pearson, 33 id. 498; Wilkinson v. Dunning, 80 id. 344.
    In equity, what is agreed to be done is considered as done. Bishop v. Davenport, 58 Ill. 105; 1 Story’s Eq. Jur. sec. 64.
    Where one party has executed his part of an agreement in confidence that the other will perform upon his part, it would be a fraud upon the former to suffer the refusal of the latter to his prejudice. 1 Story’s Eq. Jur. secs. 659, 761, 762, 771.
    Expectancy of inheritance may be surrendered by parol. Galbraith v. McLain, 84 Ill. 382; Bishop v. Davenport, 58 id. 105.
    The courts will enforce family settlements. 1 Story’s Eq. Jur. sec. 793.
    We look upon the arrangement as one of a family nature, designed by the father as a disposition of his property without the formality of a will, by which children were paid off. Galbraith v. McLain, supra; Bishop v. Davenport, supra.

    Messrs. Fithian & Avery, for the defendants in error:
    The evidence not showing complainant was actually put into possession pursuant to the gift or purchase she claims, and that she made valuable improvements on its faith, has no claim that equity can enforce. Pomeroy on Contracts, 184, sec. 130; Browne on Frauds, 467, 469.
    The clearest evidence of a present gift, accompanied by exclusive possession and valuable improvements not to be compensated in damages, is necessary to establish a valid gift of land between father and son. Browne on Frauds, 474; Bright v. Bright, 41 Ill. 97; Langston v. Bates, 84 id. 524.
    The possession of the child must be exclusive, and independent of the parent. Cronk v. Trumble, 66 Ill. 428.
    The presumption of law is, that complainant’s services were performed from love and filial duty, in the absence of proof of a contract. Griffin et al. v. First National Bank, 74 Ill. 262; Morton v. Rainey, 82 id. 216.
    Acts of part performance must take place subsequent to the contract, and be in pursuance thereof. Wood et al. v. Thornby et al. 58 Ill. 471; Browne on Frauds, 474.
    An agreement whereby a party shall ultimately be bound to sell land, is within the Statute of Frauds. Browne on Frauds, 274.
    Possession, to take the ease out of the statute, must be taken in the lifetime of the vendor. Cuddy v. Brown, 78 Ill. 415.
    Admissions of a parent that he intended to convey or give land in the future to a child, can not be enforced. Langston v. Bates, 84 Ill. 524.
    The testimony of complainant was incompetent. Alexander v. Hoffman, 70 Ill. 114; Connelly v. Dunn, 73 id. 218; Stone v. Cook, 79 id. 424; Branger v. Lucy, 82 id. 91; Marshall v. Peck, 91 id. 187.
   Mr. Justice Walker

delivered the opinion of the Court:

It appears that Hiram Warren settled on the farm in controversy, in Will county, in the year 1833. His wife died in 1841, leaving nine children, the youngest about one month old. Just before the wife’s death she obtained a promise from her husband that he would not marry again so long as he had a daughter to keep house for him. ' The mother then requested plaintiff in error, who was over eighteen ye.ars of age, to stay with her father, take the babe, and rear it with the other children, with the help of her father. After his wife’s death the father made the same request of plaintiff in error. She acceded to these requests, and has kept her promise strictly, by remaining with and keeping house for her father until his death, in August, 1879, he never having again married. He died intestate. Plaintiff in error thus remained with him for about thirty-eight and one-half years. She took the care and management of the family, and aided her father in rearing- the children, and as her brothers and sisters severally arrived at manhood and womanhood they married and left home, and their father gave to each land and personal property, in about the same proportions. He never gave plaintiff in error anything but her board and inexpensive clothing. She having, before her mother’s death, learned the trade of a tailoress, cut and made the clothing of her father and brothers, and made, or superintended the making of, the clothes of her sisters. In this entire time she lost but three months from this unremitting service to her father, and, as long as they remained at home, to her brothers and sisters. Nor did her father ever furnish her any hired help, and he generally had one or two hired men on the farm, who were boarded in the family. Some of her sisters were weakly, or absent teaching school, and yet she heroically discharged every duty during that entire period. In addition she, for many years, was relied on by her father for advice in all things relating to the management of the farm.

It is proved that the father, in his lifetime, repeatedly said the homestead on which he first settled, and also died, was to be the property of plaintiff in error, and but a short period before his death he promised to convey it to her, so that her brothers and sisters could give her no trouble about it after his death. This seems, from the evidence, to have been his fixed purpose for many years before his death, and when building a new house on the farm he gave plaintiff in error-charge of its construction, saying it would belong to her after his death. He, from conversations with neighbors, for years before that time, manifestly regarded the property in fact as belonging to her, although the title stood in his name. He said to neighbors that he would give no more to his children except Samantha, and he called the property hers, thus in the most unmistakable manner recognizing her right to, and her ownership of, the property. This evidence stands unimpeached and uncontradicted, and must be regarded as true, and as recognizing the fact that plaintiff in error had paid for and was entitled to the farm. He, thus recognizing both his moral and legal obligation, promised to convey the property to her. He was too just a man to have deprived her of all her hopes and aspirations, and after having received the fruits of her long and weary years' of toil and drudgery, extending through a lifetime, in old age to turn her on the world almost penniless, and too infirm to earn a support.

Subsequent to her father’s death, plaintiff in error filed a bill for specific performance. She alleged the facts above stated, and claimed that her services had fully paid for the land, and that in consideration thereof her father had agreed to convey it to her, but had failed to perform the agreement in his lifetime. Defendants answered, and denied there was such a contract, and claimed that if there was, it was verbal, and is not binding, but is void, under the Statute of Frauds.

That plaintiff in error rendered the services at the request of deceased, when he had no legal claim to them, is clear, beyond dispute; and that these services were, without interest being allowed, almost, if not quite, equal to the full value of the land, and with interest computed from the end of each year, when the year’s wages were due, the sum would largely exceed its utmost value, there can be no question. This, then, formed an ample consideration for the sale of the land, and this consideration had, every dollar of it, been received when the deceased expressly agreed to convey it to complainant. This was a part performance of the agreement.

It is not indispensable, to take a case out of the statute, that the consideration should be paid at the time of or after-making the contract. A past consideration, or an indebtedness of the seller to the buyer, is equally meritorious, as a consideration, as the payment of money or property at the time or after the contract is entered into, and is as efficacious to take the contract out of the statute. This must be treated as a part performance to the extent the purchase money was fully paid.

Nor is it an answer to say that complainant intended to render these services as a gratuity. There is no evidence that she ever said she would or had. The services were rendered at her father’s request, and on that the law creates a liability on his part to pay for them. It would be to reverse legal presumptions to hold, that because she failed to haggle with her father as to the price of wages, she rendered the services as a gratuity. Defendants claim that such is the presumption, and insist complainant is sordid and grasping because she does not choose to surrender the toil and pains of a long life to advance their pecuniary interests,—and this, too, when she has spent her vigor, mental and physical, in laboring for them as a mother, and in her old age they turn upon her, and claim she is grasping and sordid because she claims the fruits of her hard and life-long earnings. The law can not and will not indulge presumptions against her so unreasonable and so unjust. Counsel for defendants in error say, complainant being the oldest daughter, we should expect her to act as she did without compensation. Why the oldest rather than the youngest daughter, or rather than the oldest or other son of the family ? What rule of law or morals imposed this duty on her to toil for the interests of her brothers and sisters, more than they for her? We are aware of none.

It is claimed that plaintiff in error did'not enter into/possession under the purchase. She was in possession as far as the premises were capable of being possessed by her under the circumstances of the case. She and her father were on the place. He was nearly eighty-four years old at the time of his death, and could not have been very active in its management and control,—that must have devolved largely, if not wholly, on complainant. She could have had no greater possession unless she had been the sordid and unnatural person defendants in error claim she was,—by turning her and their aged father out upon the cold charities of the world. They surely would not insist that was necessary for her to have possession. They surely would not demand so unnatural and monstrous an act, yet they insist she was not in possession under the purchase as she did not pursue that course, for she could not have obtained greater possession in any other mode. But over and above all this, after her father’s death no one does or will deny that she was in the open, notorious, visible and undisputed possession. This is clear from the evidence, beyond all dispute. She was in possession after she had made full payment, and her father had agreed to convey the land to her, and this in effect, if not in terms, was a possession under the agreement of the father to convey. She and her father lived together on the farm before and after his promise to convey, and after she had paid for the land, and we must hold, under the circumstances of this case, that was all the possession required by her; but if it were not, she was in full and absolute possession after the father’s death. Her father recognized her as owner, and their relations implied the possession was hers, and he lived with her. Nor is or can. there be a reasonable doubt that the father agreed to convey in consideration and as compensation for her long life of toil in his service. There then was the payment of the purchase money to the fullest extent and beyond the value of the land, and there was such possession, under the circumstances of this case, as to take it out of the operation of the statute, so far as relates to payment and possession.

But it is insisted that plaintiff in error made no lasting and valuable improvements in part performance of the contract of purchase. This is not indispensable to a part performance necessary to take a case out of the operation of the statute. It is the highest evidence that can be afforded of part performance that can not be compensated in damages. As a general rule, when compensation can be made in damages the court will not decree a specific performance, hence the court usually requires the performance of acts under the contract, which, if not carried out, could not be compensated in damages. It is therefore held that payment of a part of the purchase money, "only, will not take a case out of the statute, because it can be recovered back, with interest. But this is not a sufficient ground where the seller becomes insolvent before the money is recovered back. The true ground, says Judge Story, in his work on Equitable Jurisprudence, vol. 2, sec. 761, is, “that nothing is to be considered as a part performance which does not put a party in a situation which is a fraud upon him, unless the agreement be - fully performed.” Tested by this rule, if this contract is not fully performed it will operate as a monstrous fraud upon plaintiff in error. Her father agreed to convey this land to her, as all must agree, for the purpose of cancelling his indebtedness to her, and she was thereby lulled into inaction, and was induced to forbear from procuring evidence of his indebtedness to her, or procuring security for its payment. We are not at liberty to presume he was so unjust, not to say dishonest, as to have refused to pay or secure her this indebtedness, or that he was so far lost to all sense of honor or justice as to have set up the bar of the statute to her claim had she insisted upon a settlement and a recognition of her claim. Defendants in error surely will not insist their father would have been guilty of such injustice and fraud to any one, much less to a daughter who had 'stood by and shielded him in his declining years, and cheered and comforted him in his trials and troubles to the last, when they had deserted him in the pursuit of their personal gains and schemes of aggrandizement. If this contract is not enforced, it must necessarily operate as a great and irreparable fraud on plaintiff in error. It will drive her to her action at law, and enable defendants in error to insist that the administrator shall interpose the bar of the Statute of Limitations, and thus cut off more than seven-eighths of her claim, and leave her to recover no more than for the last five years of her father’s life. Thus - it is seen she must suffer a monstrous fraud and injustice unless the agreement to convey the land to her is carried into full effect. This brings the case within the reason of the rule laid down by Judge Story, and entitles her to the relief sought.

It is insisted that the testimony of plaintiff in error should not be considered, as it is incompetent, under the statute. We have turned to the record, and after a careful search are unable to find that any motion was made to suppress her deposition, or any portion of it. There are no exceptions to questions or answers. Nor do we even find that any objection was raised when the deposition was read, even if that would have been sufficient. A party can not lie by without objecting to the reading of a deposition, and then, after it is read, say the witness or the evidence is incompetent. Even where such legal objections exist, and they are not urged before the deposition is read in evidence, the objections must be considered as waived, and can not be raised for the first „ time in this court. The transcript of the record is-badly arranged, and we have found difficulty in examining it to find evidence referred to, and on turning, in numerous instances, to the pages referred to, we find nothing to verify the reference made, and owing to its great size search for such evidence, if it exists, is impracticable. If such objections were urged in the court below, they are not referred to in the abstract or the briefs of counsel on either side. The evidence of plaintiff in error is strongly corroborated by other witnesses.

The decree will be reversed and the cause remanded.

Decree reversed


text:
    John H. S. Quick et al. v. John R. Lemon.

      Filed at Ottawa November 20, 1882

      Rehearing denied March Term, 1883.

    1. Gross-bill—of the right to file a cross-bill. Where a defendant in a suit in chancery has equities arising out of the subject matter of the original bill which entitle him to affirmative relief, he may, as matter of right, present such equities by way of cross-bill, and it will be error to refuse to permit the cross-bill to be filed.
    2. Subscription to stock—promise to subscribe, and refusal—right of action. Where a person enters into a valid contract with a corporation, by which he agrees to subscribe for a certain number of shares of stock in the company, upon his failure and refusal to comply with that contract, without fault on the part of the corporation, the latter will have a right of action to recover such damages for the breach of the contract as it may have sustained.
    3. Action—gross-demands—of a cross-demand as an independent cause of action. Although a defendant in a suit at law may have a counterclaim which he could properly plead as a set-off in the action, he is not bound to do so, but may bring his separate action for the recovery of his demand.
    4. Set-off—in equity— cross legal demands—non-residence as a ground of equity jurisdiction. A creditor of a corporation recovered a judgment at law against the corporation, upon which an execution was issued, and returned nulla bona. Thereupon the judgment creditor exhibited a creditor’s bill against several persons as stockholders in the corporation, for the purpose of recovering their unpaid subscriptions in satisfaction of his debt. The corporation was also made a party. At the time of the bringing of the suit in which the judgment was rendered, the corporation held a claim for damages against the plaintiff in that action, growing out of the same transaction as that involved in the suit at law, and of such character that it could have been interposed as a set-off in that suit,—but that was not done. The corporation, however, asked leave to file a cross-bill in the suit in chancery, by which it sought to set off its claim as against the judgment held by the complainant in the original bill, who was alleged to be a non-resident of the State. The trial court refused to permit the cross-bill to be filed. This was held to be error. Although the claim of the corporation was a legal demand, and capable of being set off in the suit at law,(the corporation was not bound to set it up as a defence in that suit. The judgment creditor having invoked the aid of a court of equity to enforce the collection of his judgment, this claim of the corporation became a proper subject of set-off in that suit if there was equitable ground for such relief. The fact of the non-résidence of the complainant in the creditor’s bill afforded such equitable ground.
    Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. George Gardner, Judge, presiding.
    This was a creditor’s bill, brought by John E. Lemon, in the Superior Court of Cook county, against John H. S. Quick and John T. Temple, stockholders of the Prudential Life Association, to reach unpaid subscriptions to the capital stock of the corporation, to satisfy a judgment which the complainant had recovered against the corporation. On the hearing the Superior Court found that the appellee (complainant in the bill) had recovered a judgment against the Prudential Life Association, a corporation organized under the laws of the State; that an execution had been issued on the judgment, and returned nulla bona; that John H. S. Quick and John T. Temple each owed to the capital stock of the corporation more than the amount of the judgment. Upon these findings a decree was rendered against the stockholders for the amount of complainant’s judgment. This decree, on appeal, was affirmed in the Appellate Court.
    The Prudential Life Insurance Association was made a co-defendant with appellants, and filed a separate answer, in which it denied the recovery of a valid judgment. It also set up that complainant in the bill agreed to take fifty shares of the capital stock of the company, upon which it avers he paid $1000, leaving $4000 yet to be paid by him, which amount the corporation offered to set off against the judgment. It also appears that the corporation presented a cross-bill, in which it is alleged that on or about April, 1874, and prior thereto, persons interested in organizing and starting the company, desiring to procure subscriptions to the capital stock thereof to enable it to commence business under the laws of Illinois, amounting to $100,000, and having procured subscriptions of $40,000 or thereabouts, the said Lemon represented and caused to be represented to them, and the then directors of this association, that he could influence and obtain persons of his acquaintance to contribute the balance of capital stock of $100,000, and agreed, in case of his election as secretary of said association, he would contribute thereto fifty shares, to wit, $5000, and procure the subscriptions for the balance of said stock by responsible parties of means; that about the same time, Gerrit L. Hoodless, who was then secretary and a director of this association, and a subscriber for forty shares of stock, offered to resign as secretary and director in case his subscription should be -first cancelled, and he be paid certain moneys contributed, paid and advanced by him to promote and aid said organization ; that thereupon, on the representations aforesaid of said Lemon, that in ease of his election as secretary he would procure said stock to be subscribed for, as aforesaid, the resignation of said Hoodless was accepted by the directors of this association, and his subscription to stock cancelled; that said Lemon was elected secretary in place of said Hoodless, and in consideration thereof said Lemon agreed with the directors acting for the association, that he would contribute and pay into the capital stock of this association the amount of fifty shares of such stock, to-wit, $5000, and in pursuance of said, agreement paid to said Hoodless-dollars, and also paid some other amounts, in all about $1000, to promote said organization, as contributions to and payments on account of said fifty shares of stock agreed, as aforesaid, to be contributed; that said Lemon never paid any other sum on account of said fifty shares by him agreed to be paid for, and that on account thereof he still owes the association $4000 or thereabouts, and more than the whole amount by him claimed on his said judgment, or otherwise; and the association (complainant here) offers and asks to set-off against said pretended judgment the said amount so agreed to be contributed by Lemon on the stock to the extent necessary to discharge the same, if he is entitled thereto.
    The cross-bill further shows that Lemon did not obtain or procure subscriptions to stock as he promised and agreed, or any such subscriptions, but wholly failed so to do, and after remaining as secretary and director with the company till about July 2, 1874, he voluntarily abandoned the company and returned to Iowa, where he has remained ever since, and that in consequence of his breach of his agreements and representations aforesaid, and his failure to procure said subscriptions to stock, and his. abandonment of said association, the association and its other promoters and members have been unable to obtain said subscriptions necessary to start business, beyond the $40,000 subscribed, as aforesaid, and has not organized as designed, or commenced the business of insurance.
    The cross-bill also alleges Lemon is a non-resident, and out of the jurisdiction of this court, since he left the State, in July, 1874, and that the claim which he pretends to have put in judgment is for moneys and salary claimed to be earned and paid to promote the formation and organization of said association, and rendered and contributed as a promoter of the same to the capital stock thereof as risks and ventures on its success, for which the said Lemon could not become a creditor thereof, trusting its credit and responsibility, but at most only could occupy the place of a subscriber or contributor to the stock of said association, and could claim only a share in the distribution of its assets on dissolution thereof after its debts were paid, and that all moneys contributed or advanced by him have been paid and spent while he was a member, secretary and director of said association, and that the said association has no assets or property from which the said Lemon can recover, or claim to receive the amount of his said judgment.
    Reference is made to the answer of the association for a full statement, and prays that the same may be made, so far as applicable, as a part of this cross-bill, and states the hope that Lemon would not attempt to enforce judgment on said association, or its promoters or members, and would cancel the same. The cross-bill prays an answer, and that the pretended judgment may be decreed null and void, but that if it is held valid for any purpose, an account may be taken of the amount, if anything is due on the judgment, and set-off made of the amount unpaid on stock agreed to be taken and contributed and paid by Lemon, and that Lemon be restrained from enforcing his said judgment, or any part thereof, and that it be decreed satisfied and discharged, and for further 6 and other or different relief and process, etc., “and asked and moved that the said cross-bill be filed, and for a rule on the . said original complainant, John R. Lemon, to plead, demur or answer to the same; but the court refused to permit said cross-bill to be filed or to make the said rule to answer the same, to which ruling defendants then and there duly excepted. ”
    Messrs. Herbert, Quick & Miller, for the appellants:
    The court erred in not permitting the cross-bill to be filed, and in not ruling the original complainant to answer. The right to file the cross-bill after answer is statutory, and a rule to answer it was the proper course for the court. Rev. Stat. 1874, chap. 22, sec. 30; Jones v. Smith, 14 Ill. 230; Wiley v. Platner, 17 id. 540; Robins v. Swaine, 68 id. 200; Beauchamp v. Putnam, 34 id. 381; Davis v. American and Foreign Christian Union, 100 id. 313.
    The association had a right to a hearing on the eross-bil!, and it was error to hear the case without an issue on such bill. Blair V. Reading, 99 Ill. 611.

      It was error upon the evidence disclosed, even on the answer, not to have allowed to the Prudential Life Association a set-off to the amount of the judgment.
    A prior creditor’s bill, under the statute, will not lie against an insolvent insurance company, for the reason that a statutory remedy lies. Such a bill will not lie in New York. Morgan v. New York and Albany R. R. Co. 10 Paige, 290; 2 Barbour’s Ch. Pr. 157; Sherwood v. Buffalo and New York Central R. R. Co. 12 How. Pr. 136; Corning v. Mohawk Valley Ins. Co. 11 id. 190; Hunds v. Canandaigua and Niagara Falls R. R. Co. 10 id. 487; Harrison v. H. R. Q. and M. Co. 11 id. 33; Bogardus v. Manufacturing Co. 7 N. Y. 147; Mills v. Stewart, 41 id. 390; Griffith v. Mangum, 73 id. 611; Rev. Stat. chap. 73, secs. 84-92; Ward v. Farwell, 97 Ill. 593; Chicago Life Ins. Co. v. Auditor, 101 id. 82.
    A creditor, by filing a creditor’s bill, merely acquires a lien upon the assets of his debtor existing when the bill is filed, and if the assets consist of accounts due or ehoses in action, if the debtor himself could not maintain an action for the recovery of the same the creditor can not maintain the bill. Bonte v. Cooper, 90 Ill. 440; Browning v. Bettis, 8 Paige, 568.
    So in garnishment, the judgment debtor, in order to hold the garnishee, must be able to maintain a suit at law. Richardson v. Lester, 83 Ill. 55; Peck v. Coalfield Coal Co. 3 Bradw. 624.
    Mr. F. W. S. Brawley, for the appellee:
    Unpaid subscriptions to capital stock of a corporation constitute a trust fund for the payment of creditors of the corporation. Lamar Ins. Co. v. Moore, 84 Ill. 575; Union Ins. Co. v. Frear Stone Manf. Co. 97 id. 537; Hatch v. Dana, 101 U. S. 205; Sawyer v. Hoag, 17 Wall. 610; Thompson on Liability of Stockholders, sec. 10, and cases cited.
    The liability on an unpaid subscription to capital stock is that of a debtor. Terry v. Anderson, 95 U. S. 628.

      A court of equity will enforce payment of the subscriptions though no call was made by the board of directors. Hatch v. Dana, 101 U. S. 205; Hickling v. Wilson, 104 Ill. 54; Ogilvie v. Knox Ins. Co. 22 How. 380; Thompson on Liability of Stockholders, sec. 15, and cases cited.
    Appellants can not complain that no decree was entered against the corporation. Downey v. O’Donnell, 92 Ill. 559; Munger v. Jacobson, 99 id. 349; Clark v. Hall, 7 Paige, 382; Vanpeet v. Dunford, 58 Ill. 145; Smith v. Hickman, 68 id. 314; Vanvalkenburg v. Trustees, 66 id, 103; Hedges v. Mace, 72 id. 472; Fanville v. Sausser, 73 id. 451; Clark v. Marfield, 77 id. 258; Richardson v. Greene, 78 id. 525; Stow v. Steele, 83 id. 422.
    The cross-bill was not necessary or proper. Chicago, Danville and Vincennes R. R. Co. v. Field, 86 Ill. 270; Derby v. Gage, 38 id. 27; Tobey v. Foreman, 79 id. 489.
    Refusing a jury trial was in the discretion of the court. Dowden v. Wilson, 71 Ill. 485.
    Unsworn answer: an affidavit necessary to entitle one to trial by jury. Hahn v. Huber, 83 Ill. 243; Sea Ins. Co. v. Daggett, 9 Paige, 369.
   Mr. Justice Craig

delivered the opinion of the Court:

Did the court err in refusing the motion of the defendant corporation to -file the cross-bill? Section 30, chapter 22, Revised Statutes of 1874, provides: “Any defendant may, after filing his answer, exhibit and file his cross-bill, and call upon the complainant to file his answer thereto, in such time as may be prescribed by the court.” In Jones v. Smith, 14 Ill. 229, it was held that a cross-bill was proper whenever the defendants, or any of them, have equities arising out of the subject matter of the original suit which entitle them to affirmative relief, which they can not obtain in that suit. In the case cited the decree was reversed, on the ground, alone, that the court struck the cross-bill from the files, and refused to require the defendants to answer it. In Beauchamp v. Putnam, 34 Ill. 378, it was held that the filing of a cross-bill was a matter of right, and requires no leave; but it does not necessarily stay the original cause. The same doctrine was declared in Davis v. American and Foreign Christian Union, 100 Ill. 313. The doctrine may, therefore, be regarded as well settled, that where a defendant has equities arising out of the subject matter of the original suit which entitle him to affirmative relief, it would be error for the circuit court to refuse to permit a cross-bill to be filed.

Did the defendant corporation, by the averments in the cross-bill, bring itself within this rule ? There may be matters alleged which are not .material, or upon which relief could not be granted; but it is alleged that Lemon, the complainant in the original bill, in case he was elected secretary of the association, agreed to take fifty shares of the capital stock of the company, and pay therefor the sum of $5000; that he was elected secretary, but failed and refused to take the stock which he had agreed to do. If Lemon made a valid contract with the corporation, upon a sufficient consideration, to take stock in the corporation, and failed and refused to comply with that contract without fault on the part of the corporation, the latter may recover such damages for a breach of the contract as it may have sustained. Thrasher v. Pike County R. R. Co. 25 Ill. 404, is a case in point as to the liability of a person to a corporation on a similar promise.

It may, however, be said this defence might have been set up in the action at law in which the judgment was rendered, and the corporation is concluded by- the judgment. In an action before a justice of the peace our statute requires a defendant to bring in all his demands against a plaintiff, unless they exceed the jurisdiction of the justice, and a failure to do so will bar an action brought after the rendition of the judgment. But this statute has no reference to actions brought in the circuit court. The statute allows a set-off to he pleaded in the circuit court, but it is not compulsory. A defendant may decline to plead and prove his set-off, and after judgment sue the plaintiff for his demand, if he desires to do so. Morton v. Bailey, 1 Scam. 213; Chicago, Danville and Vincennes R. R. Co. v. Field, 86 Ill. 270.

The ease then stands in this position: The complainant has recovered a judgment at law against defendant, which he carries into a court of equity to enforce. The defendant has a demand against complainant, which grew out of the same transaction, which has not been reduced to judgment, and which was not pleaded in the action at law wherein complainant obtained judgment. Can this demand be set off in equity when the plaintiff in the judgment comes into a court of equity to collect his judgment? If the judgment had been paid after it was rendered, the defendant might defeat the bill by showing that fact. If it has a legal demand against complainant large enough to liquidate the judgment, although it existed when the judgment was rendered, as it was not bound in law to plead that demand in the action at law, when sued in equity we perceive no reason why the demand may not be relied upon as a set-off to the judgment, if the corporation can show equitable ground for relief.

It is true where a bill is filed to enjoin the collection of a judgment, on the ground that the complainant in the bill has a set-off in equity, courts of equity will not allow such a set-off unless the party seeking it can show some equitable ground for relief against the judgment. (Raleigh v. Raleigh, 35 Ill. 512.) Indeed, a set-off is ordinarily allowed in equity only when the party seeking the benefit of it can show some equitable ground for being protected against the adversary’s demand,—the mere existence of cross-demands is not sufficient. (2 Story, sec. 1436.) But it is a natural equity that cross-demands should be off-set against each other, and that the balance only should be recovered, and where the law -can not give a remedy in a separate action, courts of chancery may grant relief. (Lindsey v. Jackson, 2 Paige, 581.) The insolvency of the party against whom the equitable set-off is claimed, has been held sufficient ground for the exercise of equitable jurisdiction. In this case, insolvency of the complainant was not shown by the allegations of the cross-bill, but it was averred that the complainant was beyond the jurisdiction of the court; that he had moved to the State of Iowa; that he could not be sued and the demand be collected by a judgment in an action at law. Non-residence has been held to be equivalent to insolvency. This was announced in Robbins v. Hawley, 1 Monroe, 194, where the court said: “Bobbins is admitted to be insolvent, and Dodge must be understood, from the proceedings, to be out of the country; and it will not be denied that these facts are sufficient, in general, to warrant a court of equity in taking cognizance of a cause, for the purpose of setting off demands which, from a lack of connection, could not otherwise be decreed in a court of equity. ” It would seem to be inequitable to require the corporation to go to another State to collect its demand in an action at law, and we are inclined to hold that the non-residence of the complainant, in connection with the fact he calls upon a court of equity to enforce his judgment, is sufficient to allow the defendant corporation to prove and set off its demand set up in the cross-bill against the judgment of the complainant.

Other questions have been discussed in the argument, but it will not be necessary to consider them here.

In our opinion the court erred in denying the motion of the defendant corporation to file the cross-bill. For this error the judgment of the Appellate Court will be reversed, and the cause remanded for further proceedings consistent with this opinion.

Judgment reversed.