James H. Rice Co. v. Agnew

147 Ill. App. 468, 1909 Ill. App. LEXIS 119
CourtAppellate Court of Illinois
DecidedMarch 22, 1909
DocketGen. No. 14,339
StatusPublished

This text of 147 Ill. App. 468 (James H. Rice Co. v. Agnew) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
James H. Rice Co. v. Agnew, 147 Ill. App. 468, 1909 Ill. App. LEXIS 119 (Ill. Ct. App. 1909).

Opinion

Mr. Presiding Justice Adams

delivered the opinion of the court.

Counsel for the defendant, appellant here, contends that the bill, being one in aid of an execution, the court was limited to setting aside the conveyance from Joseph McJohn to Edward McJohn, defendant’s testator, and that the decree, in applying the rents in payment of the complainant’s judgment, is unwarranted by the allegations of the bill, and is erroneous.

Edward McJohn and Joseph 'McJohn were served with summons October 8,1902. They neither answered nor filed an appearance,, and, April 25, 1904, more than eighteen months after service on them, an order was entered defaulting them and taking the bill, as amended, pro confes so against them, for want of an answer.

Section 18 of the act regulating chancery practice provides: “When a bill is taken for confessed, the court, before a final decree is made, if deemed requisite, may require the complainant to produce documents and witnesses to prove the allegations of his bill, or may examine him under oath or affirmation touching the facts therein alleged. Such decree shall be made in either case as the court shall consider equitable and proper55. This section has been in force since 1845, and its construction is well settled.

In Van Valkenburg v. Trustees of Schools, 66 Ill. 103, it was .insisted by a defendant, against whom the bill had been taken pro confesso, that there were numerous errors in the record, in respect to which the court say: “It is insisted that the decree is not supported by the evidence. The bill was taken for confessed as against all the plaintiffs in error, and under the construction uniformly given to the statute, the court could enter a decree even without evidence, and if the evidence was in fact heard, it is not indispensable that it should be preserved in the record. In Smith v. Trimble et al., 27 Ill. 152, it was said that when a bill was taken as confessed, the court trying the cause may, in its discretion, require proof as to all or any portion of the allegations of the bill, or render a decree on the pro confesso order without evidence. A party against whom a bill has been taken for confessed cannot therefore assign as cause of error that the proof does not sustain the allegations of the bill. It is a matter of discretion with the court, under our practice, whether he will require evidence to be produced. Harmon v. Campbell, 30 Ill. 25; Sullivan v. Sullivan, 42 Ill. 315; Cronan v. Frizell, Admr., 42 Ill. 319".

The court, on Edward and Joseph Me John being defaulted, might have entered a decree against them without hearing any evidence. Mason v. Patterson, 74 Ill. 191, 195. It was admitted by them, in suffering default, that there was a valid judgment against Joseph Me John remaining wholly unsatisfied, and that while the indebtedness existed for which the judgment was rendered, and before its rendition, Joseph Me-John, the judgment debtor, made a fraudulent conveyance of the premises described in the bill, to hinder and delay the complainant and other creditors; also, that said premises were the only property which Joseph Me John had, and that the sheriff had frequently demanded that he pay the judgment, or turn out property to satisfy it, which he refused to do. These admitted facts show that Joseph Me John was insolvent. The property conveyed by him to Edward Me John was the only property which he had, and while it was fraudulent as to creditors, it was good as between him and his grantee, Edward, and he could not use it in payment of his debts.

There is evidence that the premises fraudulently conveyed were insufficient to satisfy the complainant’s judgment. The court, in the decree, found that Samuel Schweitzer was the holder of a mortgage superior in equity to the judgment, and that, June 15, 1905, in foreclosure proceedings in the Circuit Court of Co.ok county, a decree of sale was entered, and, in pursuance thereof, all the interest of Joseph Me John in the premises was sold to Samuel Schweitzer, and a master’s deed of the premises was delivered to him. A master’s deed of the premises in question, of date October 1, 1906, was put in evidence, from which it appears that Samuel Schweitzer bid for the premises $16,038.92. There was, therefore, nothing left to apply on complainant’s judgment except the rents accruing due pending the suit.

The complainant had a judgment lien on the premises subordinate to the prior mortgage. In the case of a mortgage ben, the court, on equitable principles, and without a provision in the mortgage pledging the rents as security, will appoint a receiver and apply the rents in payment of the debt, if the mortgagor is insolvent or of questionable responsibility, and the mortgaged premises are insufficient security. Haas v. Chicago B’g Society, 89 Ill. 498, 302; First Nat. Bank v. Ill. Steel Co., 174 ib. 140, 149-50. See, also, Glos v. Roach, 80 Ill App. 283, affirmed 181 Ill. 440.

The object of the bill is the collection of the judgment out of the property, and it is averred in the bill that the premises are improved by a three-story brick building, a portion of which was occupied by Joseph Me John, the remainder being vacant, and the bill prays for general relief. We are not prepared to hold that the decree, in appropriating the rents to the payment of the judgment, is not warranted by the averments and prayer of the bill.

Counsel for Agnew object to the order appointing a receiver, on the ground that the order did not convey title to the rents, and also on the ground that the complainant was not required to give bond to Edward Me John. In the view we take of the cause, Edward Me John was not in the least damaged by this omission. The order appointed Johnston receiver of the estate, real and personal, things in action, debts, equitable interests and other effects of the defendant, Joseph Me John. This was amply sufficient to authorize the receiver to collect the rents. Moreover, the court, by subsequently approving the reports of the receivers, confirmed their acts in the premises. A fund was created by the collection of rents by the court, through the receivers, and the question was how it should be applied. Agnew, the administrator, has no greater rights than had his testator. Had Edward Me John lived, would he have had any title to or interest in the rents 1 It is admitted of record that the conveyance by Joseph to Edward McJohn was fraudulent as to the complainant, Joseph’s judgment creditor, which being so, Joseph Me John, the fraudulent grantor, was, as to complainant, the equitable owner of the rents from the time of the execution of the fraudulent conveyance to the termination of the period of redemption from the sale under the decree foreclosing the mortgage, and Edward Me John, the fraudulent grantee, took nothing by the conveyance, as to complainant, the judgment creditor; and his administrator is litigating in respect to a matter in which he has no interest. Equity looks to the substance of things. It is apparent from the record that unless the rents accruing due pending the suit are applied in payment of complainant’s judgment, it is remediless. The corpus of the property was sold under the decree foreclosing the prior mortgage, and Joseph McJohn is insolvent.

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Related

Smith v. Trimble
27 Ill. 152 (Illinois Supreme Court, 1862)
Harmon v. Campbell
30 Ill. 25 (Illinois Supreme Court, 1862)
Sullivan v. Sullivan
42 Ill. 315 (Illinois Supreme Court, 1866)
Cronan v. Frizell
42 Ill. 319 (Illinois Supreme Court, 1866)
Van Valkenburg v. Trustees of Schools
66 Ill. 103 (Illinois Supreme Court, 1872)
Mason v. Patterson
74 Ill. 191 (Illinois Supreme Court, 1874)
Haas v. Chicago Building Society
89 Ill. 498 (Illinois Supreme Court, 1878)
Roach v. Glos
54 N.E. 1022 (Illinois Supreme Court, 1899)

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Bluebook (online)
147 Ill. App. 468, 1909 Ill. App. LEXIS 119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/james-h-rice-co-v-agnew-illappct-1909.