Roby v. Title Guarantee & Trust Co.

Mr. Justice Cartwright delivered the opinion of the court: The circuit court of Cook county entered a decree June 12, 1890, finding and declaring the respective interests of Charles W. Colehour, William H. Colehour and plaintiff. in error in lands in said county. The lands had been sold for taxes and at master’s sales, but the time for redemption had not expired. By that decree the defendant in error, the Title Guarantee and Trust Company, was appointed receiver of said lands, and for the purpose of redeeming the same was directed to proceed to properly advertise them for sale, either at public auction or private sale, and to sell sufficient to pay and discharge the debts and liens as therein recited, and, if necessary so to do in order to perfect the title, was authorized to pay and discharge a certain judgment of about §1500 rendered against Charles W. Colehour and others, in favor of Loviza Thunman. The receiver was ordered to report the sales it might make, to the court for approval, and to give at least one day’s notice of the application for approval to said plaintiff in error and the Colehours, by leaving notice at the office of said plaintiff in error and the office of the solicitors of said Colehours. A bond in the sum of §100,000 was required from the receiver before entering upon the discharge of its duties, and the parties were each directed to convey the property to said receiver. Prom that decree plaintiff in error prayed an appeal to this court, and was allowed twenty days to perfect the same, but did not complete the appeal. After the expiration of that time the receiver’s bond was filed, and it entered upon its duties as receiver. Plaintiff in error, however, sued out a writ of error from this court to reverse the decree, but it was affirmed. (Roby v. Colehour, 135 Ill. 300.) The judgment of this court was subsequently affirmed by the Supreme Court of the United States. (Roby v. Colehour, 146 U. S. 153.) Orders were entered from time to time by the circuit court in the subsequent administration of the receivership created by the above mentioned decree, and the writ of error in this case is prosecuted to reverse fifty such orders. An objection which plaintiff in error seeks to apply to all these orders is, that the defendant in error the Title Guarantee and Trust Company could not be legally appointed receiver, and a lengthy argument is made on the propositions that the act under which it was organized is unconstitutional and void and its organization illegal. The appointment of the receiver was made by the original decree, which was affirmed as above stated, and it is now too late to question its validity. If it was desired to dispute the capacity of the corporation, as organized and acting, to receive the appointment and act as receiver, it should have been done before that decree became conclusive. Besides, plaintiff in error recognized the capacity of the acting corporation by consenting to an order providing for the advancement of money by it to protect the estate in its possession as receiver. The money was advanced, and he is now estopped from claiming that the receiver was not lawfully appointed or competent to act. The above mentioned order is first to be noticed as being distinguished from the others by the consent to its entry. It was entered July 18, 1890., upon a petition of the receiver, stating that a map of the real estate had been made, that the receiver was procuring a valuation and abstracts of the property so as to properly place it upon the market; that the taxes and assessments for the year 1889 were due and unpaid; that among the liens ordered to be paid were liens for taxes upon which the lands had been sold and certificates of sale issued, upon which the purchasers would soon be entitled to deeds, and that sales could probably not be made in time to redeem the lands. The order authorized the receiver to pay the taxes and assessments for 1889, and to settle with the holders of tax certificates or redeem the land, and that it should be allowed six per cent interest on moneys so paid, the advances to be a first lien on the lands, subject to the liens provided for in the original decree, and to be paid out of the moneys received from the sale of the lands by the receiver. Plaintiff in error objects to this order on the ground that the method of discharging the tax liens adopted was improper, as different from the plan of the original decree, and amounted to a change of such decree after the term at which it was entered, and also because under that order the receiver became the creditor of the parties and disqualified to act. The order recites that he was present and consenting, and he seeks to accomplish a reversal by disputing this recital. To this end he testified that he was present when the order was entered and did not make any objection to its being entered, but did not give any other consent than being so present and not objecting. The record cannot be contradicted in that way, but is conclusive of the fact. Having consented he cannot impeach the order on any ground. If it was an alteration of the original decree, he agreed to the alteration and cannot complain. He also consented that the receiver should advance money to protect the property in its charge and reimburse itself from sales to be made in the future, and therefore he cannot object that the receiver became a creditor by making such advances. There were other orders entered, however, which do not recite any consent of plaintiff in error, about which practically the same questions are raised as above mentioned. These orders were entered for the purpose of redeeming the lands from the master’s sales. The time of redemption from the larger portion of these sales expired December 30, 1890, and the remainder in January, 1891, and it was expected that about §190,000 would be required. The receiver, finding it impracticable to sell lots enough to redeem within the time allowed, applied to the court, by petition, for leave to issue interest-bearing receiver’s certificates. The order was made but the money could not be obtained from the banks nor realized from the estate, and the property" was about to be lost, when, on December 30, 1890,—the last day for redemption of most of the land,—the receiver succeeded in getting §110,000 from Hetty H. R. Green, upon twenty-two certificates of $5000 each. To do this it was compelled to guarantee the payment of the certificates and obtain the guarantee of William C. Goudy, solicitor for William H. Colehour, and also to pledge its own mortgage securities for the amount. With the money so obtained redemptions were made. In January, 1891, the receiver borrowed from the Chicago Public Library $10,000 upon two receiver’s certificates, and used the money, with about $26,000 of its own, to complete the redemptions contemplated by the decree. By the order these claims were made first liens on the premises, which were thereby saved to the estate. The receiver paid to Mrs. Green the amount of one certificate November 16, 1891, and on December 23, 1891, the court, on petition of the receiver, authorized it to take up the remaining certificates issued to her. They were drawing eight per cent interest. The receiver wanted possession of its mortgages pledged for their payment. By taking up the certificates the rate of interest was reduced to seven per cent, which it was provided should be allowed to the receiver on the amount advanced, which was to be a first lien on the property. The original decree provided, as before stated, that the receiver should sell sufficient lands and lots to pay and satisfy the debts and liens. Plaintiff in error contends that the provisions of that decree must govern, and that after the expiration of the term at which it was entered there could be no change in the manner of administering the trust or executing the decree, and if the method therein provided should not be effectual the property must be lost. This claim that the court and receiver should have let the property be swept away rather than raise the money to preserve it is most unreasonable. It can only be accounted for by the fact that the hostility of plaintiff in error to other parties in interest is so strong and rancorous that he would prefer to suffer loss father than see anything saved for them. Portunately his objection is without force, and the court was not powerless to protect the estate in its custody. The original decree was final in its determination of the rights and interests of the parties, but the power of the court to change the form of the liens in the administration of the receivership was not thereby taken away. By the order the substance of things was not altered, but the moneys were advanced, and the parties advancing them were subrogated to the rights of the former lienholders. This was only another way of accomplishing the object of the decree by changing the form from certificates of sale to certificates for money borrowed, and was not a change of any material part of the decree. The court, in making these claims first liens, did not postpone the lien of any person. The taxes were, of course, first liens, and the redemptions were from sales that were paramount to the rights of plaintiff in error. No lienholder disputes the right to make the claims first liens. Plaintiff in error says further that there was usury in the loan made by Mrs. Green. The order authorized the receiver to pay a commission to a broker for negotiating certificates, and it is contended that the lender was interested in that provision. No commission was paid or agreed to be paid, and therefore there was no usury in the transaction, even if the contention had any foundation. The same claim is also made under these orders as under the consent order of July, 1890, that the receiver became incompetent to act by having become a creditor of the estate. The cases cited in support of the claim of disqualification are where officers interested in the proceeds have themselves been the vendors, while in this case the receiver is not the vendor and cannot complete a sale. It has no power to sell at its own will to pay itself, but the sales are judicial, and it cannot transfer the property until they are approved by the court upon notice to the parties interested. The cases do not apply. Furthermore, the receiver did not become a creditor, in the ordinary sense. The balance of the account as receiver was in its favor, but the parties were not its debtors nor was it a creditor outside of the receivership. The liability to it only arose in the course of the receivership, and as an incident to it in the discharge of duty. It could not be that it should forfeit its powers as a receiver properly appointed, when it was not a creditor, by advancing its own money as receiver to save the estate. If so, the zealous and faithful discharge of duty would operate to destroy its power. We do not think that is so, even if there were any absolute disqualification of an ordinary creditor to act as receiver under the control and direction of the court. It is also objected by plaintiff in error that the various orders which he seeks to have reversed were entered without notice to him. They were mostly orders approving proposed sales reported to the court by the receiver or relating to such sales. The parties were in court and no notice was necessary except for some rule of court or direction of the decree, but all parties were bound to take notice of motions made in the case. The original decree provided for the manner in which notices of applications for such approval should be given. Plaintiff offered in evidence certain alleged rules of court on the subject of notice, and testified that they were adopted by the judges, but they were not proved by the record, which is the only competent evidence of their existence, nor was there any evidence that they were ever entered of record. But assuming that they were rules of the court duly entered, they could not affect this case, since the decree which bound the parties fixed the notice to be given. It is too late to object that the decree differed from the general rules of court. One of the alleged rules provided that in cases where the emergency would not admit of delay, motions might be heard upon such notice as the court might determine, or without notice, if the court should so determine,—and that rule left the whole matter of notice of such motions as these were to the discretion of the court. Plaintiff in error was contradicted on the question of notice being given by several witnesses, and there was evidence that when before the court and asked if he claimed that he had not received notices of the applications, he said in answer that he did not mean to say he had not received notice, because he believed he had received notice of the proceedings. He was claiming that the court had no jurisdiction to enter the orders, and he paid no attention to notices. He was refusing to appear and ignoring the action of the receiver and the court. In the orders themselves the court found due notice had been given, and it was fully proved to have been given according to the direction of the decree. To the report of the master upon the receiver’s petition and account the plaintiff in error filed thirty-nine objections, which were renewed as exceptions. They were all overruled, and the account, with the exception of charges for abstracts, which were reserved, was approved. It is not worth while to discuss or explain all the objections and answers thereto in detail. The objections included all the points noted above which have been thought worthy of discussion. The receiver was also charged with negligence in making sales, but the evidence does not support the charge. On the contrary, it shows a faithful discharge of duty. Plaintiff in error did not convey to the receiver as ordered, and was prosecuting writs of error from the decree at the time he now claims the receiver should have hastened the sales under the decree. He was trying to discourage and obstruct sales by every means within his power, and unfounded complaints that the receiver did not use sufficient diligence in making sales in spite of his opposition come with bad grace from him and are entitled to little notice. Some of the orders approving sales and orders permitting settlements of claims or clouds on titles are objected to, but we see no objection to any of the sales made or to the action of the receiver or the court. We approve of the several orders and decrees in ques- and affirmed. Decree affirmed.