author: Mr. Justice Mulkey

text:
    Victoria Umlauf v. Lewis Umlauf.

      Filed at Ottawa June 21, 1882

      denied Rehearing deniedSeptember Term, 1882.

    1. Appeals and writs of error—right of appeal in case of bill by wife for separate maintenance. The right to an appeal from, or writ of error to, the Appellate Court is not given by statute in ease of a bill by a married woman for a separate maintenance, where the original decree is for a less amount than $1000, as, where it requires the husband to pay $60 a month to the wife for the support of herself and child.
    2. Same—right to, in general. By section 90 of the Practice act, and section 8 of the Appellate Court act, the legislature intended that the right to an appeal from, or writ of error to, the Appellate Court to recover money or property in a civil action should be limited by the amount in controversy, as shown by the record, or by the amount of the recovery in the court below in cases sounding in damages, that sum being $1000.
    3. Same—meaning of term “actions ex contractu." The expression “actions ex contractu, ” in section 8 of the Appellate Court act, has reference to the nature of the cause of action, rather than to the form of the proceeding to enforce it. By it is meant all causes of action arising ex contractu, as contradistinguished from those arising ex delicto, without regard to whether the proceeding is at law or in equity.
    4. Same—meaning of word “contract." The word “contract” in law embraces not only the agreements of parties actually to do, or refrain from doing, some lawful thing, but also many other legal obligations which the law creates or implies from certain relations of the parties to each other, such as the duty of a husband to support his wife or a parent his child.
    5. Same—penal actions are not treated as ex contractu. The 8th section of the Appellate Court act expressly excludes “actions involving a penalty” from the category of actions ex contractu, and hence, for the purpose of determining the right of appeal, every civil proceeding for the recovery of a penalty, whatever may be its form, must be treated as an action ex delicto.

    6. Same—when it lies in actions ex contractu. In actions ex contractu an appeal or writ of error lies, first, in cases where the amount in controversy, as shown by the record, is as much as $1000, exclusive of costs; and second, in cases sounding in damages,—that is, where the damages are not susceptible of direct proof,—where the judgment of the court below is as much as $1000, exclusive of costs.
    7. Same—when it lies in actions ex delicto. In actions ex delicto an appeal or writ of error lies, first, where the sum or value in controversy exceeds $1000, exclusive of costs; second, in cases sounding in damages where the amount of the recovery in the court below is as much as $1000, exclusive of costs.
    8. Separate maintenance—obligation to support wife arises ex contractu. A right of a married woman to a separate maintenance, if it exists at all, grows out of the marital relations of the parties, and falls within that numerous class of legal obligations which are known as contracts created by the law, in contradistinction to those created by the parties themselves. In such a cage tlie record must affirmatively show that the amount in controversy is as much, at least, as $1000, exclusive of costs, to give an appeal from the Appellate to the Supreme Court.
    Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. John A. Jameson, Judge, presiding. '
    Mr. Francis Lackner, for the appellant.
    Mr. D. J. Lyon, for the appellee.
   Mr. Justice Mulkey

delivered the opinion of the Court:

This is a proceeding under the statute, instituted by Victoria Umlauf, against her husband, Lewis Umlauf, in the Superior Court of Cook county, for a separate maintenance. Upon the' hearing of the cause that court found the equities with the complainant, and by its decree directed the defendant to pay her for the support and maintenance of herself and two children the sum of $60 per month while they lived ■ separate from him. On appeal to the Appellate Court for the First District this decree was reversed, and a decree was there entered dismissing the bill, from which latter decree the complainant appealed to this court.

Upon the bringing of the cause here appellee entered a motion t'o dismiss the appeal, on the ground no appeal lies to this court. In view of the importance of the question presented by the motion, and for the purpose of giving it greater and more deliberate consideration, it was reserved till the final hearing of the cause.

The 90th section of the Practice act gives the right of appeal from the final judgments of the Appellate Courts to this court in all “cases where the sum or value in controversy exceeds $1000, exclusive of costs. ” By the 8th section of the Appellate Court act a like appeal is given in all actions ex. contractu not sounding in damages, where the amount involved is $1000 or over, and by the same section the right of an appeal is given in all eases sounding in damages, whether the action be ex contractu of ex delicto, where the judgment of the court below is $1000 or over, exclusive of costs. The legislature, in adopting these sections, clearly intended the right to an appeal, or to a writ of error, should, in all cases where the chief and direct object of the suit is to recover money or property, be limited by the amount in controversy, as shown by the record, or by the amount of recovery in the court below, “in cases sounding in damages. ” As has been heretofore said, all rights of action which have for their object the recovery of money or property must, in contemplation of law, arise either ex contractu or ex delicto, in the extended sense of those terms; and as was held in the Baber case, 93 Ill. 342, the legislature, in using the expression “actions ex contractu,” in the 8th section of the Appellate Court act, had reference to the nature of the cause of action rather than to the form of the proceeding for its enforcement. By it they manifestly meant all causes of action arising ex contractu, as contradistinguished from those arising ex delicto, without regard to whether the proceeding was at law or in equity.

The term “contract, ” in its popular signification, is generally limited to actual agreements between determinate contracting parties, but in law it has a much more extended signification. There are many duties and obligations growing out of certain relations which are regarded by the law as species of contracts, where it is clear there never was any actual agreement between the parties to such relations. Hence it is said by Mr. Bishop, in defining a contract, that “a contract is a promise from one to another, either made in fact, or created, by the law, either to do, or refrain, some lawful thing, ” etc. (Bishop on Contracts, secs. 1, 5, 73.) There are many familiar illustrations of this doctrine, such as the legal obligations which grow out of the relation of husband and wife, parent and child, joint creditors, co-sureties, client and attorney, and the like.

It is the duty of the husband to support his wife, and if he refuses to do so, and others supply her with necessaries suitable to the husband’s condition in life, the latter, except under special circumstances, will be liable to those furnishing them, although supplied contrary to his express orders. Here, notwithstanding it affirmatively appears there was no actual agreement or understanding on the part of the husband to pay for necessaries -thus furnished, yet, since it was his duty to do so, the law nevertheless implies such an agreement, and enforces it precisely in the same manner as if it had been expressly entered into by him. On the same principle statutory penalties, although of a quasi criminal nature, and universally imposed for some delict or wrong, yet, for purposes of enforcement against the wrongdoer, they are generally treated as a species of contract, and hence an action of debt is the ordinary form of action for their recovery. The 8th section of the Appellate Court act, however, by an express provision excludes “actions involving a penalty” from the category of actions ex contractu, and hence, for the purposes of determining the right of appeal, every civil proceeding for the recovery of a penalty, whatever may be its form, must be treated as an action ex clelicto. The legislature, in thus classifying cases involving penalties, affords another strong proof, in addition to those mentioned in the Baber case, that its classification of cases, for purposes of appeal, is based upon the nature of the cause of action rather than the form of the proceeding selected for its enforcement. As every right of action for the recovery of a penalty arises ex delicto, it is more philosophic and in consonance with scientific legal principles to classify such cases, as the legislature has done, with actions for torts.

Using the expressions ex contractu and ex delicto in the sense already stated, it may be said, in general terms, that for the purposes of appeals and writs of error all civil actions that have for their direct object the recovery of money or property, whether real or personal, tangible or intangible, belong to one or the other of these classes. In the former,— that is, in actions ex contractu,—an appeal or writ of error lies, first, in cases where the amount in controversy, as shown by the record, is as much as $1000, exclusive of costs; second, in cases sounding in damages,—that is, where the damages are not susceptible of direct proof,—where the judgment of the court below is as much as $1000, exclusive of costs. In actions ex delicto an appeal or writ lies, first, where the sum or value in controversy exceeds $1000, exclusive of costs; second, in cases sounding in damages, where the amount of recovery in the court below is as much as $1000, exclusive of costs. It will be thus seen that all cases sounding in damages, whether the cause of action arises ex contractu or ex delicto, stand precisely upon the same footing. In either case the right to an appeal or a writ of error depends upon the amount of recovery in the court below, and the only difference between actions ex contractu and actions ex delicto, not sounding in damages, so far as the right of appeal is concerned, is, that in the latter class of cases the amount in controversy must exceed $1000, exclusive of costs, whereas in the former class it is sufficient if the judgment is as much as $1000, exclusive of costs.

An exception to the general view here expressed has been recognized by a majority of this court in quasi criminal eases, such as actions for penalties and bastardy proceedings. This class of cases, contrary to the views of the writer of this opinion, has been placed upon the same footing with criminal cases, and appeals and writs of error are allowed in them, without regard to the amount sought to be recovered or the judgment of the court below.

The object of the proceeding under consideration is to recover money from the husband for the maintenance of the wife, and it is prosecuted upon the assumed legal hypothesis that, under the circumstances alleged and proved, he is bound to pay the amount sought to be recovered for the purpose in question. Assuming there is a right of recovery at all, it clearly grows out of the marital relations of the parties, and hence is brought within that numerous class of legal obligations- which are known to the law as contracts created by law, in contradistinction to those created by the parties themselves. They are also sometimes distinguished from other contracts as quasi contracts. Viewed in this light, it is clear the record must affirmatively show the amount in controversy is as much, at least, as $1000, exclusive of costs, otherwise the appeal was improvidently taken. Upon looking at the record, we discover the parties themselves have .fixed the amount of recovery at $60 per month, provided the court is of opinion there should be a recovery at all. Now, it is clear from this stipulation there is not necessarily •involved in this suit as much as $1000. There is no certainty that the. present relations between the parties will exist any considerable length of time, and we are aware of no principle that would warrant a presumption the one way or the other upon that subject. A resumption of the conjugal relations, or the death of - either party, would operate as an extinguishment ■ of the claim. The fact that the claim might in the course of time,—assuming their present relations to continue,—amount to as much as $1000, we do not regard as sufficient to give this court jurisdiction. Before the right of appeal attaches in a case like this,, it must clearly appear from the record there is involved in' the controversy, independent of all contingencies, the amount of $1000, exclusive of costs. Testing the present case by this rule, it is clear the appeal does not lie, and -will therefore have to be dismissed.

It is urged, however, this suit is not simply a suit for the recovery of money; that its chief object is to establish the status of the parties. We do not regard this position as tenable. No question of status is raised either by the pleadings or evidence. The relation of husband and wife exists between- the parties, and they are living apart. These are conceded facts, about which'there is no controversy. She seeks to recover money from him for her support and maintenance, and her right to do so depends upon whether their living apart is without her fault, and this is all.

Appeal dismissed.

Mr. Chief Justice Scott : I do not concur either in the reasoning or conclusion of this opinion.


source: Caselaw Access Project

author: Mr. Justice Scholfield

license: Public Domain

text:
    Gysbert De Clerq et al. v. Francis Jackson et al.

      Filed at Ottawa

      May 12, 1882

      Rehearing denied September Term, 1882.

    1. Purchaser — when he will hold subject to equities against his grantor—title held in trust. Where one person acquires real estate, but has the deed made to another for his benefit, the grantee is but a trustee for him, and subject to the same equities that would have applied against the beneficiary had the conveyance been made to him, and the same rule applies to a grantee of the trustee who does not pay for the property until long after the filing of a bill to impeach and avoid the several conveyances.
    2. Creditor’s bill—as against one holding under a deed which is a •mortgage. Where one having notice that an absolute deed is only a mortgage to secure a debt, procures a deed from the mortgagee, he will occupy the position of assignee of the mortgage, and his title will not be subjected, on creditor’s bill, to the payment of a judgment against the mortgagor, when no redemption from the mortgage is sought. The creditor will be required to pay him the mortgage debt before divesting him of his title.
    3. Payment—whether a particular transaction amounts to a payment. A person conveyed four lots to an agent of an insurance company to secure the payment of notes to the company for money loaned, and also assigned a policy of insurance upon his life to the same agent, as security for the payment of two other notes given the company for another loan, and the agent gave back a writing, stating that if the notes, or either of them, was not paid, the agent might surrender the policy to the company for its value, to be determined by the officers of such company, and such sum should be applied upon the four notes, whether due or not. The policy was not surrendered to the company upon any terms, but the agent assigned the same to another person: Held, that the contingency on which the proceeds of the policy were to be applied on the notes never happened, and that payment of the notes could not be held as against one acquiring the lots from the grantee of the debtor.
    4. Same—satisfaction of a judgment—conveyance of land to be applied thereon. Where the beneficial plaintiff in a judgment takes a conveyance of a lot to be applied in payment on the judgment, no price being agreed upon for the lot, or as collateral security for the payment of the judgment, such conveyance will not operate to satisfy the judgment, so as to prevent the subsequent issue of an execution, and a levy and sale thereunder. The judgment creditor in such case, in the absence'of proof of the value of the lot conveyed, will be held as having been paid only the net sum realized from the property above all prior liens and incumbrances paid by him to make the title dear and good.

      Appeal from the Superior Court of Cook county; the Hon. Geobge Gardner, Judge, presiding.
    Mr. H. M. Matthews, for the appellants.
    Mr. John P. Wilson, for the appellees.
   Mr. Justice Scholfield

delivered the opinion of the Court:

This was a bill in chancery, by certain judgment creditors of Obadiah Jackson, deceased, to subject real estate, whereof they claim he died seized, to the payment of their judgments. Of the real estate in question four lots were conveyed by Jackson, in his lifetime, to Lewis C. Grover, and subsequent to Jackson’s death Grover conveyed the same lots to Alice M. Bradford, and she conveyed them to the Chicago West Division Railway Company. At the time the lots were conveyed by Jáckson to Grover, and as a part of the transaction, an agreement in writing was entered into, whereby it was, among other things, agreed as follows:

“Whereas, Obadiah Jackson and wife have conveyed by warranty deed, dated September.5, 1876, lots 51, 52, 53 and 54, in C. R. Field’s subdivision, etc., and said deed, though in form absolute, is, in reality, given to secure the payment of two notes of Obadiah Jackson, for $1750 each, to the Mutual Benefit Life Insurance ■ Company, of Newark, New Jersey, one in nine and the other in twelve months, with seven per cent interest; and whereas, the said Grover has delivered in escrow to Nehemiah Perry a quitclaim deed of said lots, executed by him to the said Jackson: Now, if the two notes are paid at maturity, said Perry shall deliver the said quitclaim deed to the said Jackson; but if the said two notes are not paid within sixty days of their maturity, respectively, then the said Perry shall return the said quitclaim deed to the said Grover, and the said Grover shall deliver the said notes to the said Jackson, and the deed and title of said lots be absolute in the said Grover, or the said Grover may cause the mortgage to he foreclosed in equity. And whereas, the said Jackson has assigned policy „No. 58,050, in the said Mutual Benefit Life Insurance Company, at Newark, New Jersey, on his own life, to the said Grover, which assignment, though in form absolute, is a security for the payment of two notes, dated September 5, 1876-, of said Jackson, for $1750 each, to the said insurance company, one in three and the other in six months, with seven per cent interest; Now, if these two notes are paid at maturity, the said Grover shall re-assign said policy to said Jackson, and if said notes, or either of them, is not paid at maturity, the said Grover may surrender to said insurance company said policy, for the value thereof, to be determined by the officers of said company, and such sum shall be applied upon the four promissory notes herein described, whether they are due or not due.”

In March, 1877, Obadiah Jackson assigned this insurance policy to Francis Jackson, who thereafter, until Obadiah’s death, paid the premiums on the policy. After the death of Obadiah Jackson, Francis Jackson, through his attorney, proposed to the insurance company to exercise its right to surrender the two notes secured upon the four lots, take the title to them, and he would purchase them, paying therefor the amount due on the two notes surrendered, and also to purchase of the company judgments which it had obtained on the other two notes. The proposition was accepted, and the contract thus closed was carried out. By direction of Francis Jackson the four lots were conveyed fo his sister, Alice M. Bradford.

The case must" be considered just as if the title to the property were in Francis Jackson, for Alice M. Bradford was but a trustee for him, and it appears the railroad company did not pay for the property until long after the filing of the bjll. But, as between Francis Jackson and these complainants, it is quite clear that he is, at least, entitled to occupy the position of assignee of a. mortgage, and the bill does not seek to redeem from his mortgage. He purchased whatever right the insurance company had in these four lots. If it was an absolute title, he got an absolute title. If they held them only as mortgages to secure the payment of the two promissory notes, then he purchased their right to have them subjected to the payment of the amount due upon those notes.

It is claimed on behalf of appellants, however, that Francis Jackson was,bound to apply the proceeds of the insurance policy in satisfaction of these notes. The policy was certainly not assigned to him by Obadiah for that purpose, but, as the evidence shows, in part security or indemnity for a large indebtedness from Obadiah to -Francis, growing out of the settlement of their deceased father’s estate, and the only ground for claiming that the proceeds should be so applied is the language of the agreement between Obadiah Jackson and the insurance company, that “if said notes, or either of them, is not paid at maturity, the said Grover may surrender to said insurance company said policy, for the value thereof, to be determined by the officers of said company, and such sum shall be applied upon the four promissory notes herein described, whether they are due or not due. ” 'But the sufficient answer to this position is, “said Grover did not surrender to said insurance company said policy” upon any terms. On the contrary, it was assigned to Francis Jackson, and he subsequently paid at least one installment of premium upon the policy. The contingency in which the proceeds of the policy were to be applied to the payment of the four notes, never happened.

As to the other real estate sought to be reached, the facts are substantially these: On the 24th of August, 1876, Obadiah Jackson gave his judgment note for $7000, guarantied by Horace White, to the Commercial' National Bank. White was compelled to pay the note, and, at his instance and for his-benefit, the bank thereupon assigned the note to David Vernon, and on the 14th day of November, 1876, judgment was entered thereon in favor of Vernon, for the benefit of Horace White, for $7071.75. On the 21st of the same month, Obadiah Jackson and his wife conveyed to Horace White the t premises known as 375 Dearborn avenue, on account of the same indebtedness for which the judgment was rendered, and on the 25th of the same month an execution was issued on the judgment, and levied on, certain household goods, pictures, etc., belonging to Obadiah Jackson, from the sale of which White realized $3438.75, less sheriff’s fees, $61.25, and custodian’s fees, $10, which had to be deducted. On March 22, 1877, Horace White, through his attorneys, caused the judgment to be assigned to John P. Wilson. On the 13th of April, 1877, an alias execution was issued upon the judgment, and subsequently levied upon certain lots in Cook county, which were sold to John P. Wilson; and it is claimed this sale should be set aside, because the judgment had been paid before it was assigned to Wilson.

The evidence, in our opinion, shows the deed for 375 Dearborn avenue was in the nature of collateral security for the judgment. White says Jackson had promised him a deed of the property before he obtained the judgment, but neglected so long to execute it that he despaired getting it, and so had the judgment entered. When the deed wa& executed no agreement was made, no price was fixed upon the property, and at no time was there any agreement of how it was to be accounted for. Of course both parties understood it was a payment on the debt evidenced by the judgment ; but in the absence of an express agreement that it should be accepted in absolute satisfaction of the debt, it could only be equitable to treat it as a payment to the extent that it actually did so. What it was reasonably worth is not proved, except presumptively from the fact that White sold it to Ella Kennett for $19,000. Let this be regarded, however, as its reasonable value, and we have this result: Yalue of property, $19,000; but it was incumbered, and to relieve those incumbrances, so as to realize this amount, he had to pay, on foreclosure sale under bank trust deed, $10,000; he had also to pay, in consequence of back taxes, mechanics’ liens, special assessments, etc., $2898.26; then White had to deposit with J. H. Eeed, as security to George Crozier, assignee of a mortgage covering a small portion of this ground, with other property, $500; and he had to pay Francis Jackson, also, who owned one-third of the property, $2000,—making a total of $15,398.26; this, deducted from the value of the property, left to apply on the judgment only $3601.74. But even this is not free to be applied on the judgment. White had to execute two bonds for $5000 each, —one to Jeannette Smith and the other to George Crozier,— to indemnify them from loss for releasing a mortgage on a portion of this property in the event that Francis Jackson should succeed in his claim to one-third of the property. What that amount may be is not yet known, and of course was not, and could not have been known when the judgment was assigned. Necessarily, therefore, when the judgment was assigned, this was the state of facts: There was a judgment for $7071.75; credited by amount realized on execution sale, after deducting sheriff’s and custodian’s costs, $3367.50—balance due, $3704.25; and to meet this, an indefinite balance between $3601.74 and nothing, to be ascertained after settling the liability of White on the two $5000 bonds.

The judgment then, it is clear, was not, in fact, paid. Had Obadiah Jackson, on the day the judgment was assigned, filed a bill alleging and showing these facts, it can surely admit of no doubt that he would not have been entitled to have a decree entered that the judgment was satisfied. As between him and White, it was not satisfied, and is not yet satisfied. White then had in the judgment, notwithstanding these transactions, something to assign—there was a balanee due on the judgment upon which an execution could issue, and which an assignee coúld take hy assignment.

Although White says he assigned the judgment for the benefit of Obadiah Jackson, and because he requested it, this does not accurately disclose the real nature of the transaction. Francis and Obadiah Jackson were brothers, and Obadiah, as Francis testifies, and has been before shown, had become indebted to him, on account of the division of their father’s estate, many thousands of dollars. He found he was breaking up, and, not unnaturally, felt an anxiety to save something for his brother. His request to have the judgment assigned to Wilson wras not for his own use, but for that of his brother, Francis, and not because the judgment had been paid, but because there was a balance due upon it. The parties did not treat the judgment as satisfied, but as still subsisting, and whether the consideration as between White and Francis Jackson was sufficient, is not material. Whether Wilson shall be held to be the trustee of Francis Jackson or of Horace White, concerns only those parties. If there was a balance unpaid on the judgment,— if the judgment was not, in equity, satisfied and discharged before the sale of these lots,—the sale is regular, and can not be set aside. Upon what terms subsequent creditors would be entitled to redeem from this sale, is a question not before us. The bill is framed upon the theory of the illegality of the sale, upon the ground that the judgment had been previously satisfied, and seeks to enforce no right of redemption.

We think there was a subsisting unsatisfied balance due upon the judgment, upon which an execution might issue; and so believing, it follows we approve of the decree of thp court below. It will, therefore, be affirmed.

Decree affirmed.


author: Mr. Justice Dickey,

text:
    John Seeley Wallace v. Cythera M. Rappleye et al.

       The principal opinion in this case will be found in this volume, ante, p. 229. This dissenting opinion by Mr. Justice Dickey was omitted from its proper place at the close of the case on page 262.

   Mr. Justice Dickey,

also dissenting :

This case has been passed upon twice by this court. In September, 1881, the decree of the Superior Court of Cook county was affirmed. On rehearing, granted upon petition of appellant", and upon further consideration, the present result is reached.

In affirming the decree on the first hearing, this court, speaking by Mr. Justice Mulkey, said:

“The controverted questions presented for our determination by the present record, arise upon the cross-bill of Mrs. Bappleye, and the answer thereto of John Seeley Wallace. The cross-bill is in the nature of a bill for the specific performance of the alleged contract between John Seeley Wallace, deceased, and Jane Slover, the mother of Mrs. Bappleye. A number of objections to the propriety of the decree of the court below are urged with much earnestness and marked ability, and while it is conceded the case is not free from difficulty, yet, upon a very careful consideration of it, we are of opinion that the decree is warranted by the law and the evidence.

“In the first place, it is claimed that the agreement between Wallace and Jane Slover has not been clearly and satisfactorily proven. If this objection is justified by the facts appearing of record, it is certainly fatal to the decree, for it is a well recognized principle of the law of specific performance that courts of equity will not decree the specific performance of an alleged contract where there is a reasonable doubt as to the existence of such contract,—or, in other words, where it has not been clearly and satisfactorily established. If the proof of the present contract consisted alone of the testimony of Jane Slover, the difficulty in sustaining the decree would be much greater than it is; yet even her testimony, when considered in the light of surrounding circumstances, and the very rigid and exhaustive cross-examination to. which she was subjected, has much inherent force in it. In passing upon her testimony, it must be remembered that she is evidently a woman of no culture, and has lived in comparative poverty and obscurity all her life, and it is not therefore to be expected that sh& would acquit herself upon the witness stand, under the pressure of a searching cross-examination, especially upon unimportant incidents connected with the affair which did not impress themselves upon her memory, with the same degree that she probably would if her opportunities in life had been better. Upon the vital question of the agreement and its terms, although required to repeat them often through her long and skillful examination, she is consistent with herself throughout. Counsel even object to her testimony on the ground that she can not be moved from her position upon the vital point in the agreement,. namely, that her child was to be adopted and made the heir of Wallace, while she fails to sustain herself so well on less important matters. We do not think the conclusion is just. It is not reasonable to suppose that she would remember mere collateral details and conversations between herself and Wallace, that did not directly affect the well-being of her child. On -the other hand, no lapse of time would probably ever efface from her memory the substance of the terms upon which she surrendered forever all right and claim to it. According to her statement, the terms of the agreement are few, pointed, and of marked significance. That the child was given to Wallace upon some kind of an understanding between them, can not, in the light of the admitted circumstances, be doubted, and there is no evidence in the record tending to establish any other agreement than that testified to by her; and since she is strongly corroborated by other witnesses and all the circumstances in the case, we must accept her statement of it as true. It contains, as just remarked, but a few plain, pointed provisions,—just such as an uneducated, simple, confiding young mother under such circumstances could never forget. She was to give Wallace her child and abandon it forever, and he was to take it to his home and raise and educate it as his own child—adopt it and make it his heir. There was no misunderstanding or forgetting of these terms by either of the parties. The lives and subsequent conduct of both the contracting parties demonstrated this beyond all controversy. The agreement was faithfully executed on the part of the mother and the child, and with equally good faith was honestly attempted to be carried out by Wallace in his lifetime, and by his daughter, Frank, since his decease, whose noble and generous conduct in the affair challenges the highest admiration; and the question simply remains, whether the undoubted objects and purposes of both parties to the agreement shall be carried out in good faith, or be defeated.

“It is also urged that the agreement is not sufficiently specific to warrant a court of equity in decreeing its execution. We do not think so. The agreement on the part of Wallace, as we have just seen, was to adopt the child and make it his heir. That meant something more than to merely confer on it the capacity of inheriting his estate. That alone might or might not be of any practical benefit, depending upon whether or not he made a will, and if so, the character of its dispositions. What was really intended and obviously understood by the parties was, that Wallace -was to adopt such legal measures as would secure to the child the same interest in his estate as she would, on his dying intestate, succeed to if a legitimate child. If; as is claimed, there was no law at that time by which Wallace could confer upon her the capacity of inheriting his estate upon his intestacy, to give the contract any force at all it must be construed as an undertaking on his part to secure to her by deed, will, or some other appropriate means, so much of his estate, subject to distribution at the time of his death, as she would have been entitled to, if a legitimate child, upon his dying intestate; for it is manifest, to give it the construction contended for would render it inoperative altogether. This we are not prepared to do.

“It is also contended that there is no sufficient consideration to support the agreement in question. We think otherwise. The liability of Wallace to support the child, and the surrender of its custody on the part of the mother, at his request, afford a sufficient consideration for the undertaking on his part; and that a contract of this character is valid and binding, is fully sustained by the following authorities: Allen v. Dawson, 16 Ind. 417; Hook v. Pratt, 78 N. Y. 376; Ridley v. Ridley, 11 Jur. N. S. 475; Alderson v. Maddison, 5 Exch. 293; Taudus v. Ansley, 4 Ves. 501; Hammersley v. DeBeel, 12 Cl. & Fin. 45; Prole v. Soady, 2 Giff. 1; Johnson v. Hubbell, 10 R. I. 335; Wright v. Tinsley, 30 Mo. 396.

“The enforcement of the agreement is also resisted, on the ground that it is not in writing, and therefore falls within the Statute of Frauds. Conceding the contract, when originally made, was obnoxious to this objection, yet we are of opinion that, inasmuch as it has been fully performed on one side, it would be a fraud upon complainant to permit that objection to prevail now. The evidence shows there has been such a performance of the contract as to take it out of the operation of the statute; hence it is unnecessary to inquire whether the contract, as originally made, was within the statute or not. Gupton v. Gupton, 47 Mo. 40; Van Dyne v. Vreeland, 11 N. J. Eq. 371.

“Finally, the agreement between Wallace and his divorced wife is relied on as a defence to the relief sought upon this cross-bill. If the contract relied on in the cross-bill is valid, as we have seen, it is difficult to perceive how Mrs. Bappleye’s rights can be affected by the subsequent contract with Mrs. Celia W. Wallace. Viewed from appellant’s own standpoint, the most that can reasonably be claimed is, that the equities of himself and Mrs. Bappleye are equal, and if so, the latter’s, being first in time, should prevail. But we are unable to see anything in that agreement that is in conflict with her rights. The manifest object of it was to bind Wallace not to discriminate against his son in the distribution of his property by devising it to his other child or children. The agreement evidently was not intended to affect interests in his estate that had already been legally conferred on another. ”

I approve so heartily of what was then, as I think, so aptly said, that I adopt the words as my own.

I wish, also, to say, that it now does not seem to me that the fact that Mrs. Matthews got the impression in November, 1879, that the paper presented to her by Bappleye at that time had been brought by him from Chicago, when in truth it was prepared by Bairpleye at Fort Scott, after he had, in conversation with her, found what she did remember, has the slightest bearing against the accuracy of her memory of the events of her early days. The experience of every person of mature years teaches the universal truth that the events of early life are preserved in the memory far more accurately and more vividly than intervening events of a much later-date. This remark is equally applicable to the matter of. the memory of the witness YanAuken. Nor do I see any substantial difference between the effect of the testimony of that witness without prompting, and that called out by the leading question which followed. Were the words used in a pleading, a difference might well be alleged; but when an unlettered witness said, of Wallace: “He said he agreed to take the child and bring it up as his own, to educate and treat it as his own child, and he wanted it as heir to his property,— that is, the only heir he had, ” etc.,—does not this language carry the idea that the proposition “to make the child an heir” was a part of the agreement and arrangement made with its mother? It adds nothing in substance, then, for the witness to say, in addition, that he wished to be understood that Wallace “agreed with Jane that the child should be his heir. ” It is not the recollection of particular phrases, at the distance of thirty-five years, on which reliance is to be placed, but the recollection of the substance of what was said.

Keeping in view the uniform course of conduct by Wallace through a long course of years, his attempt to adopt the child, and his evident supposition that he had made the child his heir by adoption, it does not require very clear proof in addition thereto to convince the mind fully that he did agree to do so, and as an honest man he diligently tried to do so, and died under the belief that he had faithfully kept his contract. The circumstantial evidence that he did so promise to Jane, is, to my mind, very cogent. The consideration for the promise, which gives it force in my mind, was the promise of Jane that she would absolutely surrender the child, forbear to visit it, and so act that the child might successfully be held out as the legitimate child of Wallace. During all these years she faithfully kept that promise, notwithstanding the maternal yearnings prompting her to a different course of conduct. So faithfully was her part of this contract performed that the child never suspected she was other than a legitimate child of Wallace and his wife, until shortly before her marriage. There was no fraud in the contract, at the time when it was made, which could possibly affect the existing rights of any one; for the then wife of Wallace was at that time made cognizant of the whole affair, acquiesced in the arrangement, and did her part toward carrying it into effect.

Nor do I see that the contract of April 10, 1872, made between Wallace and the mother of John Seeley Wallace, stands at all in the way of the just claim of Mrs. Eappleye. That contract was, that the property of the father’s estate owned by him at his death, “shall be so divided that his son (the appellant) shall have the same share as he would take under the laws of Illinois were his father to die intestate. ” The father did die intestate, hence the rights of appellant are just what they would have been had no such contract been made. The contract of April 10, 1872, by its- very terms, is to be operative only in case the father made a will. So much for the letter of that contract.

Departing from .the letter, and seeking the meaning and intention of the parties, we find that at that time the illegitimacy of appellee was known only to very few. It does not appear to have been known to the mother of appellant. She did know that Mrs. Eappleye was, recognized by every member of the family as one of the prospective heirs of the father. The substance of the contract was, that appellant should not be deprived *of his right to inherit one-third of the estate by any will which his father might make.

The eminent justice of the claim asserted by Mrs. Eappleye is so palpable to my mind, and so well sustained by the facts, that I think the decree of the trial court ought to be affirmed.


text:
    Walter P. Roche v. Joseph Ullman.

      Filed at Ottawa May 12, 1882

      —Rehearing denied September Term, 1882.

    1. Party walls—purchaser—covenant running with the land. An agreement under seal between the owners of adjoining premises, whereby one is to build a party wall, one-half on the ground of each, for building purposes, and the other is to pay for one-half the cost of its construction when he uses the same, or any part thereof, for a building upon his premises, when executed gives to each of the parties an easement on the lot of the other for the purpose of support of their respective buildings, which becomes appurtenant to their several estates, and as such passes to their respective assignees by any mode of conveyance that passes the title to the land itself.
    2. Such an agreement providing that the covenants therein shall remain binding upon each party, his heirs and assigns or grantees, and so construed as to run with the land, and being duly recorded, will create cross-easements as to each owner, which will so run as to bind all persons succeeding to the estates to which such easements are appurtenant, and a purchaser of the estate of the owner so contracting will be required to pay one-half of the cost of the wall, if he avails himself of its benefits.
    3. The doctrine that when the relation of landlord and tenant does not exist, only such covenants as are beneficial to the estate will run with the land, has no application to covenants respecting party walls creating mutual easements upon such owner’s land to which they relate.

      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 is an appeal from a judgment of the Appellate Court for the First District, affirming a decree of the Superior Court of Cook county, wherein the appellant, Walter P. Boche, is charged personally, as the assignee of William M. Butler, with one-half the cost of a party wall constructed by appellee, under a written contract with Butler, upon the dividing line between adjacent lots in the city of Chicago, belonging, respectively, to Butler and appellee.
    The following seem to be the facts in the ease: In 1872, Joseph Ullman, the appellee, owned the west half of the west half of lot 2, block 31, original town of Chicago, and William M. Butler owned the east half of the west half of the same lot. July 16, 1872, Ullman and Butler made the following party wall agreement:
    “This agreement, made and entered into this 16th day of July, A. D. 1872, between Joseph Ullman, of the city of Chicago, State of Illinois, party of the first part, and William M. Butler, of the same city and State, party of the second part:
    “Witnesseth: Whereas, said party of the first part is the owner in fee simple of the following described lot or parcel of land in the city of Chicago, county of Cook, State- of Illinois : the west quarter of lot number two (2), of block thirty-one (31), in the original town (now city) of Chicago; and whereas, said party of the second part is owner in fee simple of the east half of the west half of lot number two (2), of block thirty-one (31), in the original town (now city) of Chicago ; and whereas, said party of the first part is about to erect a brick wall, with a good-and substantial foundation of stone, on the division line of said two parcels of land above named, four stories high above the basement, and one hundred and sixty feet from front to rear, the wall basement to be twenty inches thick, wall of first and second stories to be sixteen inches thick, wall of third and fourth twelve inches thick to top of battlement wall, is to extend eighteen inches above the roof of said proposed buildings; and whereas, said wall is to be built one-half on said east one-half of the west one-half of lot 2, block 31, and said other one-half of wall is to be built upon the west one-fourth of said lot 2, block 31, original town; and, whereas, both of said party owners desire to use and own said wall as a party wall and for common benefit:—It is hereby mutually covenanted and agreed that said wall, of the size and dimensions above described, the division line of the said above described parcels of land being the- center of said wall, and said second party should have the right, at any time, to use said wall, or any part thereof as he may need, as a party wall for any building erected upon his said east half of west half of lot 2, block 31, original town, provided said second party shall first pay said party of the first part the then market value of said wall, or such part of said wall as he, the said party of the second part, may want or use. It is further agreed that the wall shall be ledged out four inches at each resting for the floor joists of each and every story of said building. It is also further agreed that the party of the second part will be to the expense of one-half of all the area walls, both front and rear, upon like conditions of the foregoing contract for building walls. It is also further agreed that all the covenants and agreements herein contained shall be binding upon each party, their heirs, executors, administrators and assigns, and grantees of the said parties of the first and second part, and shall be so construed as to run with the land.
    “In witness whereof the said parties have hereunto set their hands and seals, the day and year above written.
    Jos. TTllman, [seal.]
    William M. Bijtleb. [seal.] ”

      This agreement was recorded in the recorder’s office of Cook county, August 2, 1872. Ullman thereupon proceeded to build upon his own lot, and in doing so erected a party wall, in accordance with the above agreement, one-half of which was upon his own lot and one-half upon Butler’s lot. After the above agreement was made and recorded, Butler sold and conveyed his lot to Eben F. Runyan, who sold and conveyed it to John J. Douglas. April 6, 1875, Douglas borrowed $10,000 of Roche, the appellant, for which he gave his note, due in ten years, with interest at nine per cent per annum, payable semi-annually. To secure this note, Douglas gave a trust deed of the Butler lot to Murray F. Tuley, dated April 6, 1875. About June 1, 1876, Douglas commenced the erection of a building on the Butler lot, and made use of the party wall for the west wall of his building. The building erected by Douglas was of the same height and length as the party wall. About September 1, 1876, Douglas abandoned work upon the building. At this time the walls were up, the roof on and the joists set, but there were no floors or stairs, doors or windows, plastering or partitions. The building remained in this condition until December 14, 1876, when the bill in this ease was filed.
    The bill sets forth substantially the foregoing facts, and the further fact that Ullman had not been paid one-half the value of the party wall, and asks to have the defendants restrained from any further use of the wall until such payment was made. A temporary injunction was granted, according tó the prayer of the bill. In the meantime Douglas had defaulted in his interest on the note to Roche, who elected to declare the whole amount of principal and interest to be due and payable, and directed Tuley to advertise and sell under the trust deed. Tuley proceeded accordingly, and on the 9th day of January, 1877, as trustee under the deed, he sold and conveyed the Butler lot to Roche. Roche took possession of the property, and in order to avoid delay in completing the building, entered into a stipulation, in pursuance of which the injunction was dissolved upon Roche giving a bond to Ullman in the penal sum of $2500, conditioned to pay Ullman whatever sum, if any, the court should decree that he should pay for said party wall, or the amount of any lien which the court should decree in favor of Ullman upon the lot or building, or any part of either, for any portion of the cost of the wall. Roche gave the bond, and the injunction was dissolved on the 28th' of February, 1877. Roche then proceeded to complete the building by laying the floors, putting in the doors and windows, and plastering the first story, and has ever since owned and occupied the premises. It was agreed that the market value of the wall, when used by Roche, was $1372.69. In February, 1881, the complainant filed a supplemental bill, setting forth the facts which had occurred subsequent to the filing of the original bill. Answers were duly filed to the original and supplemental bills.
    Upon the above facts the court decreed that the covenants in the party wall agreement were binding upon Roche personally; that he was personally liable to the complainant for the value of the party wall, and interest from May 1, 1877, and that the complainant was entitled to a lien therefor upon the east half of the west half of said lot 2. A personal decree was entered against Roche, and a sale ordered in case of non-payment, as in foreclosure proceedings.
    Messrs. Stiles & Lewis, for the appellant:
    The covenant to pay for half the expense of the wall did not bind an assignee or grantee, because there was created no privity of estate or tenure, which is essential. 1 Smith’s Leading Gases, 171,172; 2 Washburn on Real Prop. (3d ed.) 262; Hurd v. Curtis, 19 Pick. 459; Balby v. Wills, 3 Wils. 29.
    Privity of estate arises when one having an estate in land grants out of that some estate or interest to another, and yet reserves to himself some estate or interest in the same land, and that privity will continue indefinitely between the successive owners of the interests so granted or reserved. Hurd v. Curtis, 19 Pick. 459; Bouvier’s Law Dictionary.
    The covenant was not of a nature to run with the land. It being for the payment of money only, it may be performed anywhere, and its performance or non-performance can in no way affect the use or enjoyment of the land. Dolph v. White, 12 N. Y. 296; Glenn’s Exr. v. Canby, 24 Md. 127; Block v. Isham, 28 Ind. 37; Sherred v. Cisco, 4 Sandf. 480; Patridge v. Gilbert, 15 N. Y. 601; 2 Washburn on Real Prop. 334.
    The obligation of all contracts is ordinarily limited to those by whom they are' made, and if privity of contract be dispensed with, its absence must be supplied by privity of estate. Cole v. Hughes, 54 N. Y. 444; Scott v. McMillan, 76 id. 141; Hurd v. Curtis, 19 Pick. 459; Harsha v. Reid, 45 N. Y. 415 ; Keppel v. Bailey, 2 Myl. & K. 517. See, also, Ingles v. Bringhurst, 1 Dall. 341; Hart v. Rucker, 5 S. & R. 1; White v. Snyder, 2 Miles, 395; Davids v. Harms, 9 Barr, 501; Todd v. Stokes, 10 id. 195; Weld v. Nichols, 17 Pick. 538; Rawson v. Bell, 46 Gra. 19.
    But conceding that the covenant is one that runs with the land, it was broken before the assignment to Roche, by the full use of the party wall. Tillotson v. Boyd, 4 Sandf. 516; Taylor’s Landlord and Tenant, 449; Woodfall’s Landlord and Tenant, 109, 208, 369; 1 Smith’s Leading Cases, 204.
    That Ullman has no lien upon Roche’s lot or building for the value of the party wall, see Goodrich v. Lincoln, 93 Ill. 359; Curtis v. White, Clark’s Ch. 389; Ingles v. Bringhurst, 1 Dall. 341; Weld v. Nichols, 17 Pick. 538.
    Mr. William H. King, Mr. Frederick W. Packard, and Mr. Charles Weston, for the appellee:
    The effect of the agreement was to create an easement upon each party’s lot in favor of the other. Keteltas v. Penfold, 4 B. D. Smith, 122.

      It was an incorporeal hereditament, and the covenant connected with it bound and was a charge upon the land. Keteltas v. Penfold, 4 E. D. Smith, 122; Weyman’s Exrs. v. Ringold, 1 Bradf. 55; Breckinridge v. Ingram, 2 Ves. 663 ; Brewster v. Kitchell, 1 Ld. Raym. 317; Balby v. Wells, 3 Wils. 26; Mayor of Coughton v. Pattison, 10 East, 130; New Ipswich Factory v. Batchelder, 3 N. H. 192; Platt on Covenants, 469; 2 Crabb on Real Prop. 1088; 1 Smith’s Leading Cases, 93.
    That this covenant is one which runs with the land and binds the assignee, see Savage v. Mason, 3 Cush. 504; Morse v. Aldrich, 19 Pick. 452; Derisby v. Custance, 4 T. R. 75; Kingdon v. Nottle, 4 Maule & Selw. 53; Norman v. Wells, 17 Wend. 147; Grey v. Cuthbertson, 2 Chit. 482; Platt v. Eggleston, 20 Ohio St. 419; Wickersham v. Orr, 9 Iowa, 259; Osgood v. Howard, 6 Maine, 452; Russell v. Richards, 10 id. 429; Hilbourne v. Brown, 12 id. 162; Smith v. Benson, 1 Hill, 576; Renick v. Kern, 14 S. & R. 267; Ricker v. Kelley, 1 Maine, 117; Clement v. Dustin, 5 id. 9; Wells v. Bannister, 4 Mass. 415.
    Any deed that will convey the land will convey the covenants running with the land. Brady v. Spurch, 27 Ill. 482.
    A covenant runs with the land when either the liability for its performance, or the right to enforce it, passes to the assignee of the land. Dorsey v. St. Louis, Alton and Terre Haute R. R. Co. 58 Ill. 67; Sterling Hydraulic Co. v. Williams, 66 id. 397; 1 Smith’s Leading Cases, part 1, 133; Trull v. Eastman, 3 Metc. 121; Woodruff v. Trenton Water Power Co. 2 Stockt. Ch. 489; Cole v. Hughes, 54 N. Y. 446.
    There is a privity of estate through the medium of the easement which is created by the covenant. Weyman’s Exrs. v. Ringold, 1 Bradf. 41.
    When the benefit and burden of a contract are inseparably connected, both must go together, and liability to the burden is a necessary incident to the right of the benefit. Norfleet
      v. Cromwell, 70 N. C. 641; 1 Smith’s Leading Cases, 143; Savage v. Mason, 3 Cush. 318; Coleman v. Coleman, 7 Harris, 100.
   Mr. Justice Mulkey

delivered the opinion of the Court:

By the agreement between Butler and Ullman the latter was authorized to build a party wall, the east half of which was to rest on Butler’s part of the lot, and the west half on Ullman’s, and it wTas expressly provided that when so built, Butler, upon payment of one-half the cost of its construction, should have the right to use the same, or such part of it as he might need, as a party wall for any building he might erect on his part of the lot. The legal effect of this agreement, upon its performance, was to give to each of the parties an easement on the other’s lot for the purpose of support of their respective buildings, which became appurtenant to their several estates, and as such would pass to their respective assignees by any mode of conveyance that would transfer the land itself. That such would have been the effect of the agreement had it been executed on the part of Butler, is not questioned. But it is .claimed that Boche, his assignee, occupies a better position with respect to the agreement than Butler, through whom he claims,—that while he may avail himself of all its benefits, he is relieved of all obligations to perform its burdens. If this be the correct view, it must be conceded it results solely from the fact the parties to the agreement had no power to impose its burdens as well as its benefits upon their assignees, for nothing can be clearer than it was their intention to do so, and it is equally clear the terms expressive of such intention are altogether appropriate and sufficient for that purpose, if, as matter of law, they had power to thus bind their assignees. The language of the agreement expressive of such intention is: “It is also further agreed, that all the covenants and agreements herein contained shall be binding upon each party, their heirs, executors, administrators and assigns, and grantees of the said parties of the first and second part, and shall be so construed as to run with the land. ” There can be no mistaking the object and purpose which the parties sought to accomplish by this provision, and appellant, having bought with constructive, and doubtless actual, notice of it, must be presumed to have intentionally assumed the burdens as well as the benefits of the agreement. The duty of paying for one-half the wall being a continuing liability resting upon the owner of the lot in his character of owner, and this not having been paid at the time of appellant’s purchase, it is to be presumed that in becoming a purchaser, and thus assuming the relation of owner himself, he paid less for the property by the amount of the incumbrance than he otherwise Would have done. Such being the ease, it would now be highly inequitable to permit him to enjoy the benefit of the wall without reimbursing Ullman for one-half its cost.

But outside of the equitable view here suggested, we think the law is with appellee on other grounds. While the authorities are not altogether harmonious with respect to the legal effect of covenants and agreements providing for the construction of party walls between adjacent proprietors, yet we think the decided weight of authority establishes the position that an agreement under the hands and seals of such parties, containing covenants and stipulations like those found in the instrument we are considering, will, when duly delivered and acted upon, as was done in this case, create cross-easements in the respective owners of the adjacent lots with which the covenants in the agreement will run, so as to bind all persons succeeding to the estates to which' such easements are appurtenant. This being so, it follows that Boche, in succeeding to the east half of the lot, whereby he acquired an easement in the west half, became bound for the performance of the covenant to pay one-half the cost of constructing the wall. We do not deem it necessary to enter upon a review of the "authorities upon this subject, but will content ourselves with a reference to the following cases, which are believed to sustain the conclusion reached: Keteltas v. Penfield, 4 E. D. Smith, (N. Y.) 122; Savage v. Mason, 3 Cush. (Mass.) 504; Mame v. Cumston, 98 Mass. 317; Standish v. Lawrence, id. 111; Dorsey v. St. Louis, Alton and Terre Haute R. R. Co. 58 Ill. 68; Sterling Hydraulic Co. v. Williams, 66 id. 397; Rindge v. Baker, 57 N. Y. 209; note to Spencer’s case, Smith’s Leading Cases, (6th Am. ed.) 211; Weyman’s Exrs. v. Ringold, 1 Bradf. 40; Giles v. Dugro, 1 Duer, 331.

The decision in Goodrich v. Lincoln, 93 Ill. 359, does not conflict with the conclusion reached in the present case.

We concede the general doctrine, as contended for by appellant’s counsel, that where the relation of landlord and tenant does not exist, only such covenants as are beneficial to the estate will run with the land, but we do not regard the doctrine as applicable to' cases where adjacent proprietors have, as in the present case, so contracted as to create mutual easements upon each other’s estates, and entered into covenants with respect to the same. The new relation thus created being of an intimate character, involving reciprocal duties with respect to each other’s estates, may be regarded as an equivalent for the absence of tenure, so as to give effect to all covenants without regard to whether they are beneficial or onerous. However this may be, it is cléar the rule contended for does not seem to be applied in this class of cases.

The judgment of the Appellate Court is affirmed.

Judgment affirmed.


author: Mr. Justice Walkeb

text:
    Herman Felsenthal et al. v. William T. Johnson.

      Filed at Ottawa May 12, 1882

      —Rehearing denied September Term, 1882.

    1. Taxation—what constitutes an assessment. The schedule returned by a party to the assessor is not an assessment until it is passed upon and approved by the assessor. The schedule is required to enable the assessor to perform his duty of assessing the value of the property. The act of assessing is official, and must be performed by the assessor.
    2. Same—remedies for grievances in assessment. The statute has provided ample means for all grievances in the assessment of property for taxation, whether by over-valuation, or by imposing the assessment on property not subject to taxation, or on property not owned or liable to be assessed to the tax-payer. The statute embraces every kind of grievance in the assessment of property.
    3. The statute gives an appeal from the action of the assessor to the town board of review, and again to the county board. On property assessed after the fourth Monday of June, application for relief is given to the county board, under the rules regulating the township board of review, at the meeting of the same on the second Monday of July in each year.
    4. Chancery—remedy at law. To entitle a party to equitable relief where he has not availed of his legal remedy, he must have used every reasonable effort to have sought his legal remedy. His or his agent’s negligence is fatal in such case.
    5. In matters of revenue, courts of equity rarely grant relief, and never where the party has means of relief at law, and fails or refuses to pursue his legal remedy, or show equitable excuse for' such failure.
    6. Same—relief against taxes on the ground of accident or mistake— negligence to pursue legal remedy. A person assessed for taxation who knows of the amount assessed in time to appeal to the county board to have the same corrected for over-valuation, and makes a slight effort to do so by filing objections with the county clerk, who promises to notify him when to appear before the board, which the clerk fails to do, has no ground for equitable relief under the head of accident or mistake. ' The clerk’s neglect, as his agent, is his own, for which he is responsible.
    Appeal from the Superior Court of Cook county; the Hon. John A. Jameson, Judge, presiding.

      Messrs. Moses & Newman, for the appellants.
    Mr. Consideb H. Willett, for the appellee.
   Mr. Justice Walkeb

delivered the opinion of the Court:

This was a bill filed to restrain the collection of taxes levied for State, county and local purposes, for the year 1878, against appellants, as private bankers. 'They furnished the assessor with a list of what they claim was all of the property in their hands subject to taxation. The assessor subsequently notified them to appear on a specified day, for the purpose of fixing the assessable amount of their property. One of the members of the firm applied at the office of the assessor at the time named, and submitted to an examination as to the taxable property in their hands. The valuation was not then fixed. One of appellants says he asked if his explanation was satisfactory, when the assessor' replied he would let him know, but never gave him any notice. . ,

The assessor fixed the value of the property at a much larger sum than it was returned by appellants, and it is claimed, and there is evidence tending to show, appellants were not notified of the amount of the valuation. The hearing before the assessor was on the 13th day of August, 1878.-Felsenthal swears he accidentally learned that the assessor had fixed the value higher than he had returned it, some days after, while the county equalizing board was in session, and that he filed with the clerk of the board of commissioners objections to the amount fixed by the assessor, and that the clerk said to him he would inform him when it would be necessary to testify before the board. The clerk testifies that he has no recollection of the matter, nor does the record show anything in reference to'it. He says he directed parties to file the objections with the committee on equalization, etc., which was in daily session; that the committee, when it acted on objections, usually returned the papers to him, and he filed them, but was unable to find any as to this assessment. Felsenthal testifies the clerk informed him the committee referred the objections back to the assessor, but the clerk does not sustain him in this. It is not claimed that appellants, or any one for them, appeared before the committee to obtain a reduction or to have the claim of over-assessment corrected. No other steps were taken than what is claimed above. On the hearing the court below dismissed the bill, and appellants seek to reverse that decree.

In matters of revenue, courts of equity rarely grant relief, and never where the party has means of obtaining relief at law, and fails or refuses to pursue his legal remedy, or shows an equitable excuse for such failure. The statute has provided ample means for the correction of errors in assessments of property for taxation, by an appeal to the town board of review, and again to the county board. These appeals are provided for and regulated by the 86th and 97th sections of the Revenue law. The first provides that property assessed as this was, after the fourth Monday of June, the time for the meeting of the town board of review, shall be subject to complaint to the county board, under the rules regulating the town board of review. The 97th section provides there shall be a meeting of the county board on the second Monday of July in each year, and on the application of any person considering himself aggrieved, “they shall review the assessment, and correct the same, as shall appear to be just.” The statute thus provides ample means for all grievances in the assessment of property for taxation, whether by over-valuation, or by imposing the assessment on property not subj ect to taxation, or on property not owned or liable to be assessed to the tax-payer. It embraces every kind of grievance in the assessment; and even where there is a supposed grievance, the tax-payer has but to appear, make his complaint known, and have a hearing. If appellants felt themselves aggrieved they had hut to appear and state their complaint, and be heard. This they failed to do, and so failing, chancery will not assume jurisdiction to review the assessment. They failed to pursue their remedy at law, and can not appeal to equity for relief against their own neglect.

. It is urged that relief should be granted under the equity head of accident. We fail to see- that there was any accident. Appellants knew the amount of the assessment in time to appeal to the county board to have it corrected. They knew that the board was in session, and they failed to attend and prove there was an over-assessment. Although the assessment was made too late for an appeal to the town board of review, it was in time for a review by the county board, and they were apprised of the fact, and made some slight effort to bring the matter before the board. Felsenthal testifies he filed objections with the clerk, who promised to notify him when he should appear before the board to testify. If he constituted the clerk, as he says, his agent, and the clerk failed to notify him, the neglect of his agent was his, and he must be held responsible for that neglect. No such accident is shown as equity regards as ground for relief. To entitle a party to equitable relief when he has not availed of his legal remedy, he must have used every reasonable effort to have employed it.

It is urged that the assessor, without'notice or hearing, changed the assessment of appellants’ property, and this is ground for equitable relief, and decisions of this court are cited in support of the doctrine. The authorities have no application, because the.record fails to show that such a change was made by the assessor. There was but one assessment on his b.ooks, and that was made after one of appellants submitted to the examination on the 13th day of August. The assumption seems to be that the schedule returned by appellants was the assessment, and that the larger sum placed on the assessor’s books was an alteration of the assessment. This is not true. The assessor, and not the tax-payer, makes the assessment. The latter is required to make and return the schedule to enable the assessor to perform the duty of assessing the value of the property. Until the assessor approves the schedule, or makes a new one and fixes the valuation of the property, there is no assessment. The act is official, and must be performed by the assessor. It is his judgment, and not that of the tax-payer, that controls. We fail to find that the valuation of this property was ever changed after it was fixed by the assessor, whose duty it was to fix the amount. The cases therefore have no application to the facts in this case. Appellants objected that the value was placed at too large a sum. The assessor’s valuation is presumed by the law to be correct, and it devolves upon the tax-payer to overcome that presumption by proof. He offered no proof to establish=that objection. He did not appear before the committee and have a time fixed for a hearing, nor did he do any act to have his evidence heard. He could have availed of the means of learning when he could be heard by the committee.

There is no evidence that the committee referred this objection back to the assessor. It only appears that the clerk informed one of appellants that there was such action by the committee. It was but hearsay evidence, at most. If such was the action, we presume it appears of record somewhere, or there was legitimate evidence of the fact, and could have been produced. But if the evidence had been heard, we do not determine now whether it would constitute ground for relief.

The decree of the court below is affirmed.

Decree affirmed.


author: Mr. Justice Sheldon

text:
    Howard L. Clapp et al. Exrs. v. Georgie H. Peterson.

      Filed at Ottawa June 21, 1882

      —Rehearing denied September Term, 1882.

    1. Corporations—right to purchase their own stock, as against creditors. Private corporations may purchase their own stock in exchange for money or other property, and hold, re-issue or retire the same, if it is done in entire good faith, and the exchange is of equal value, and is free from all fraud, actual or constructive, and if the corporation is not insolvent or in process of dissolution, and the rights of creditors are not affected thereby.
    2. The purchase of its own stock by a corporation by the exchange of its property of equal value, though made in good faith, without any element of fraud about it, there not being anything in the apparent condition of the company to interfere with the making of the exchange, will not be allowed where it injuriously affects a creditor of the company, even though the fact of indebtedness was not at the time established or known to the stockholder.
    3. Same—creditors have an equitable lien on capital stock. The capital stock of an incorporated company is a fund set apart for the payment of its debts, and its creditors have a lien in equity. If diverted, they may follow it as far as it can be traced, and subject it to their claims, except as against holders who have taken it bona fide for a valuable consideration and without notice.
    4. Same—shareholders cure chargeable with notice of trust. The shareholders of a corporation are conclusively charged with notice of the trust character which attaches to the capital stock. As to it, they can not occupy the status of innocent purchasers, but they are to all intents and purposes privies to the trust. When, therefore, they have in their hands any of this trust fund, they hold it cum onere, subject to all the equities which attach to it.
    5. Same—taking property by stockholder in exchange for his stock, as against creditors. Where a stockholder of a corporation surrendered $55,500 of his stock in the company, and received real estate of equal value therefor, and the stock was canceled, and it appeared that prior to that the company had purchased property of a third person, in which fraud was after-wards discovered and established, and a decree rendered against the company for over $5000, and that an execution issued after such decree was made was returned nulla bona, it was held, that the exchange of the stock for the real estate, and the cancellation of the stock, was a withdrawal by the stockholder of his share of the capital stock, leaving the creditor’s debt unpaid; that the transaction was to the injury of- the creditor; that the property so taken by the stockholder stood charged with a trust for the payment of the decree, and that the stockholder could not be held an innocent purchaser, and that the property in his hands was in equity liable for the payment of such decree. It may be different where the corporation exchanges property for other property of equal value, or sells for money, for then it receives an equivalent which is liable for its debts.
    6. Same — creditor of, pursuing property taken by stockholder, is not bound to have equities between stockholders adjusted. On bill filed by a creditor of an insolvent .corporation, after the return of an execution unsatisfied, to subject property taken by a former stockholder of the company in exchange for his stock, which property, before its exchange, was a trust fund for creditors of the corporation, the court, by its decree, found the properly of the company so withdrawn and in the hands of the stockholder liable for the whole debt, instead of charging such property with the stockholder’s pro rata share thereof: Held, that the decree was proper, and that the creditor in stich a case was not bound to see to the adjusting of the equities between the stockholders.
    7. Laches—in bringing suit to avoid sale for fraud. Where a fraud is practiced by the purchaser of property by means of false representations, which at the time is not known (to the vendor, and the latter files his bill to set aside the sale as soon as he discovers the fraud, though several years after the sale, no laches can be imputed to him.
    8. Decree—against corporation is evidence against a former stockholder taking property charged with trust. A decree obtained against a private corporation on a bill in chancery filed after a stockholder had ceased to be a member of the company, by taking property of the company for his stock, is evidence of the indebtedness of the corporation on a bill by the creditor against such stockholder to subject the property taken by him to the payment of such decree.
    . Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Circuit Court of Cook county; the Hon. William H. Barnum, Judge, presiding.
    Messrs. Isham, Lincoln, Burry & Byerson, for the appellants :
    The exchange of stock for property between Clapp and the company was a legal and valid transaction, and one not liable to he impeached by any one. As to the power of corporations to purchase their own stock, see Tayler v. Miami Exporting Co. 6 Ohio, 218; Coleman v. Columbia Oil Co. 51 Pa. St. 77; Chicago, Pekin and Southwestern R. R. Co. v.
      Marseilles, 84 Ill. 643; City Bank of Columbus v. Bruce, 17 N. Y. 507; Hartridge et al. v. Rockwell et al. R. M. Charlt. (Ga.) 260; Angell & Ames on Corporations, see. 280; Brice on Ultra Vires, (2d Eng. ed. 1877,) 175; Williams v. Savage Manf. Co. 3 Md. Ch. 452; State v. Smith, 48 Vt. 266; Cooper v. Frederick, 9 Ala. 738.
    Where the corporation is insolvent or in the process of dissolution, an exchange of its property for stock will not be sustained as against creditors. Wood v. Dummer, 3 Mason, 308; Vose v. Grant, 15 Mass. 505; Spear v. Grant, 16 id. 9; Curran v. Arkansas, 15 How. 304; Bartlett v. Drew, 57 N. Y. 587.
    A stockholder is not a trustee at all. Directors are, but as such they bear ño greater relation to stockholders than to a creditor. Angelí & Ames on Corporations, see. 313; Verplanck v. Mercantile Ins. Co. 1 Edw. Ch. 87; Bayliss v. Orne, 1 Freeman’s Ch. 174; Hodges v. Screw Co. 1 R. I. 312.
    This is certainly a case where the doctrine of equitable estoppel should be applied, to prevent injustice. Pierpont v. Bernhard, 4 Barb. 364; Nolte v. Chisman, 88 Ill. 186; Lloyd v. Lee, 45 id. 277; Herman on Estoppel, 12.
    We also submit that the decree was erroneous in holding Clapp to be accountable on all the stock surrendered by him, instead of such a pro rata as his stock bore to the whole capital stock. Wood v. Dummer, 3 Mason, 308; Vose v. Grant, 15 Mass. 505; Curran v. Arkansas, 15 How. 304; Mumma v. Potomac Co. 8 Pet. 281.
    Messrs. Page & Plum, for.the appellee:
    The capital stock of the corporation is a trust fund for the payment of its debts. (2 Story’s Equity Jur. sec. 1252.) It is a substitute for the personal liability existing in partnerships, and the creditors have a lien upon it in equity. If diverted, they may follow it as far as it can be traced, and subject it to the payment of their debts, except as against
      bona fide purchasers without notice of the trust. Sanger v. Upton, 91 U. S. 60; Bartlett v. Drew, 57 N. Y. 587; Tinkham v. Borst, 31 Barb. 407; Spear v. Grant, 16 Mass. 9; Ogilvie v. Knox Ins. Co. 22 How. 387; Mumma v. Potomac Co. 8 Pet. 286; Curran v. Arkansas, 15 How. 304; Hightower v. Thornton, 8 Ga. 486; Wood v. Dummer, 3 Mason, 308; Vose v. Grant, 15 Mass. 505; Adler v. Milwaukee P. B. Co. 13 Wis. 60;, Perry on Trusts, secs. 217, 835, 836.
    Stockholders are conclusively charged with notice of the trust character of the capital stock. As to it they can not occupy the status of innocent purchasers, but are for all purposes privies to the trust. Thompson’s Liability of Stockholders, sec. 13; Angelí & Ames on Corporations, see. 600; Wood v. Dummer, 3 Mason, 313; Curran v. Arkansas, 15 How. 307; Ogilvie v. Knox Ins. Co. 22 id. 387; Upton v. Hansbrough, 3 Biss. 436.
    There is no estoppel or ground for laches in this case. As soon as appellee discovered the fraud, and in 1874, she filed her bill, and it was pressed in the courts as fast as possible, and only terminated September 5, 1879, when a rehearing was denied in this court, (Reed et al. v. Peterson, 91 Ill. 288,) and this bill was filed September 18, 1879'.
    It is not incumbent upon appellee to adjust the equities, if any, between the stockholders. Hatch v. Dana, 101 U. S. 205; Bartlett v. Drew, 57 N. Y. 587.
   Mr. Justice Sheldon

delivered the opinion of the Court:

By the will of her step-son, P. W. Bonner, who died in July, 1870, appellee, Georgie H. Peterson, a resident of the State of New York, became owner of all personal property-left by said Bonner, and in September, 1870, on application made to her in New York, she sold all said property to the/ Illinois Land and Loan Company. On November 20, 1874,] she filed her bill against said company to set aside such sale, and for other relief in respect thereto, on the ground that she had been induced to make the sale through the fraudulent misrepresentations of the company, for an inadequate consideration, and on May 1, 1877, she obtained in the suit a money decree against the company, for $5653.33. An execution issued upon the decree having been returned nulla bona, Mrs. Peterson, on September 18, 1879, filed her bill in chancery in the present case, to subject property in the hands of Caleb Clapp to .the payment of this decree. A decree was entered in her favor granting the relief sought, which, on appeal to the Appellate Court for the First District, was affirmed, and the present appeal taken to this court.

It appears that the Illinois Land and Loan Company was chartered by an act of the legislature in 1867, with a capital stock of $100,000, with 1000 shares, of $100 each, all of which was paid in. Caleb Clapp,, a non-resident of the State, was a stockholder in the company, and in January, 1874, he surrendered to the company 555 shares of stock, in| consideration of which the company executed to him a deed oil warranty of two lots in Chicago, one of the value of $50,000j; and the other of the value of $5500, that amount being the consideration stated in the deed. The stock was canceled, and was considered, at the time, of par value. Mr. Clapp continued to be till his death, and his estate still is, the owner of the lots. It is these lots which are sought to be subjected to the payment of said money decree against the company.

The legal principle which appellants’ counsel lays down and insists upon as applying to the case, is, that corporations may purchase their own stock in exchange for money or other property, and hold, re-issue or retire the .same, provided such act is had in entire good faith, is an exchange of equal value, and is free from all fraud, actiial or constructive, this implying that the corporation is neither insolvent nor in process of dissolution. We think there must be added to the proposition the further condition that the rights of creditors are not affected. •

The doctrine so elaborately urged by appellants’ counsel, that a corporation has the power to purchase its own stock, seems well enough settled, and was asserted by this court in Chicago, Pekin and Southwestern R. R. Co. v. Marseilles, 84 Ill. 643. Yet, in so holding there, the qualification was added, that, in equity, the transaction might be impeached if it operated to the injury of creditors. We see nothing to show that the transaction in the present case was not in good faith, that there was any element of fraud about it, or that there was anything in the apparent condition of the company to interfere with the making of the exchange that was had. It is only as injuriously affecting the interests of creditors, we think, that the transaction can be questioned, and it is in that view that it must be considered and passed upon.

In Sanger v. Upton, 91 U. S. 60, it is laid down: “The capital stock of an incorporated company is a fund set apart for the payment of its debts. It is a substitute for the personal liability which subsists in private co-partnerships. When debts are incurred a contract arises with the creditors that it shall not be withdrawn or applied, otherwise than upon their demands, until such demands are satisfied. The creditors have a lien upon it in equity. If diverted, they may follow it as far as it can be traced, and subject it to the payment of their claims, except as against holders who have taken it bona fide for a valuable consideration and without notice. It is publicly pledged to those who deal with the corporation for their security. ” This doctrine is abundantly established by the authorities. 2 Story’s Equity Jur. sec. 1252; Wood v. Dummer, 3 Mason, 308; Spear v. Grant, 15 Mass. 505; Curran v. Arkansas, 15 How. 304; Bartlett v. Drew, 57 N. Y. 587.

The shareholders of a corporation are conclusively charged with notice of the trust character which attaches to its capital stock. As to it they can not occupy the status of innocent purchasers, hut they are to all intents and purposes privies to the trust. When, therefore, they have in their hands any of this trust fund, they hold it cum onere, subject to' all the equities which attach to it. Thompson’s Liability of Stockholders, sec. 13; Wood v. Dimmer, 3 Mason, 312.

It is objected, against the principles above stated, that the cases in which they were declared were where there was actual or constructive fraud or unfairness, where the corporations were insolvent, or in process of being wound up. The question naturally would arise mostly in such circumstances, but the principles enunciated are general in scope, following from the nature of the capital stock of corporations, and the * relation of a stockholder to the corporation, and we know of no limitation of their application as above suggested, or reason for genial of their full applicability to the present case. Indeed, we do not understand appellants’ counsel as asserting the validity of the purchase, or reduction by a corporation of its stock, where it should directly appear that it was an' injury to its creditors. But it is denied that there was any such injury in this case. It is said, first, the company actually owed no' one at the time, and even if it did; as the bill admits that the shares at the time of the exchange were valued at par, and worth full purported value, it follows from the stock being worth its par value, as a matter of course, that the company was then entirely solvent, and had assets sufficient to discharge all its debts, if it had any debts, and also to pay the stock in full,—that under no other circumstances could the admission of the bill be true. There was no proof as to the condition of the company, or the value of the stock, save the testimony of the secretary of the company that at the time of the deed to Clapp the stock in the company was at par value technically,—that he did not know what the market value was, and did not know that it had any market value. The admission of the bill was the' simple fact that the stock was at par. The complainant, of course, knew nothing as to what made the stock at par. But if the stock was at par, in so rating it this indebtedness to appellee could not have been taken into account. It was supposed, of course, the purchase of personal property, which had been made of appellee, would stand, and that there was no liability on account of it. If, then, the stock was just at par, not considering appellee’s claim with that claim recognized, the assets would have failed to pay the indebtedness of the company by the amount of her claim, to-wit, $5653.33, and to that amount the company was insolvent.

It is insisted that this exchange of corporate property ; for stock was unassailable by any one, because it was an/ exchange of equal values—the lots being worth $55,500, and! the shares of stock being worth $55,500, there was equal value received, and there could be harm to no one. This can not be so, as respects creditors. Suppose all the remaining property of the company had been one other lot worth $44,500, and the company had made a like exchange with another stockholder of that lot for the remaining 445 shares of stock, and canceled the stock, what would there have been left to pay creditors 9 The partial exchange which was made || affected the rights of creditors in a like way, only to a less extent. It is not as if there had been an exchange made 11 with Glapp of these lots for other real property of equal value, or as if there had been a sale to him for $55,000 in money. In such case' a substitute would have been furnished to the company to which creditors might have had recourse for payment of their debts. But the exchange of corporate prop-1 erty for shares of stock, and canceling the stock, furnishes I [, no equivalent for creditors.

Although the money decree in favor of appellee was not obtained until in 1877, some time after Clapp’s purchase, yet the cause of action of appellee against the company (the fraudulent purchase of the personal property from her) arose in September, 1870, which was before the purchase by Clapp, that being in January, 1874, so that at the time of Clapp’s purchase appellee must be regarded as being a creditor of the company. /

We can but regard the transaction in question, of the exchange of stock for the lots and the cancellation of the stock, as a withdrawal by the stockholder of his share of the capital stock, leaving appellee’s debt against the com- - pany unpaid; that the transaction was to the injury of ; appellee as a creditor; that the property taken by Clapp ' stood charged with a trust for the payment of appellee’s ‘ claim; that Clapp can not 'be held to be an innocent pur-; chaser, and that the property in his hands is affected with j the trust, and appellee may pursue the property and subject, it to the satisfaction of her debt.

It is insisted" there was such laches here on the part of appellee in lying by for so long a time before the purchase by Clapp, taking no steps to disaffirm the fraudulent purchase from her, as should estop her from resort to this property in the hands of Clapp. Had appellee known of the fraud upon her, or should have known of it in the exercise of reasonable diligence, there would have been force in this position; but the bill alleges" that on the discovery of the fraud appellee filed her former bill to set aside the fraudulent sale, and if such was the fact no laches would be imputable to her. Appellee’s residence in a distant State would be a circumstance which would go to account for not sooner discovering the alleged fraud. We are not prepared to say that there was such laches here as should disentitle to the ■relief sought.

It is said that appellee’s decree against the company was rendered, as well as the suit commenced, after Clapp had ceased to be a member of the company, and not being a party to the suit he should not be bound by the decree against the company, and that as against him the decree should not be taken as evidence of. the alleged fraudulent purchase by the company from appellee. We think Clapp took the property affected with all equities as against the company, and subject to the equity of being charged with whatever prior claim might be established as against the company, and the decree is the highest evidence of an indebtedness by the company.

It is finally urged that at least the decree is erroneous in holding the property received by Clapp to be chargeable with the whole debt, instead of a share of it, in the proportion his stock bore to the whole capital stock. As among the stockholders such a pro rata decree would have been equitable. But in such a case as this, of a judgment creditor, after return of an execution against the company unsatisfied, seeking in a court of equity to reach certain specific property once belonging to the company, as charged with a trust for the payment of his debt, he may pursue the property into whosesoever hands he may find it, where it stands affected with the trust, and subject it to the satisfaction of his debt, and he is not obliged to attend to adjusting the equities between the stockholders. r We regard the following authorities as fully warranting this, and the form of the decree in this respect: Bartlett v. Drew, 57 N. Y. 587; Marsh v. Burroughs, 1 Woods, 463; Hatch v. Dana, 101 U. S. 205.

The judgment of the Appellate Court will be affirmed.

Judgment affirmed.