Friedlander v. Fenton

Mr. Justice Phillips delivered the opinion of the court: On the 13th day of November, 1893, Albert F. Ross, a merchant at Decatur, executed a judgment note for $6000 to the appellee, Fenton. Rebecca K. Ross, the wife of Albert F. Ross, joined in the execution of the note. The note was secured by a mortgagee upon real estate in Decatur. On the fifth day of June, 1896, judgment was confessed on this note in the circuit court of Moultrie county, in vacation, for the sum of $6957.95, upon which judgment an execution was issued to the sheriff of Macon county, reaching his hands June 6, 1896, at about four o’clock P. M. This execution recited that the judgment was recovered “in the circuit court of the county of Moultrie, at a term thereof begun and held at Sullivan on the 20th day of April, 1896, to-wit, on the day of the date hereof, June 5, 1896, as of said term, by confession of said defendants, and which by the court was adjudged to the plaintiff for his damages herein.” Immediately after the execution was placed in the hands of the sheriff a demand was made upon Albert F. Boss for payment, but no levy was made. On the following day (Sunday) Joseph A. Friedlander, of Cincinnati, representing his own firm and another firm who were creditors of Boss, arrived at Decatur in response to a telegram sent him by Boss. A conference was held between Boss, Friedlander and James W. Bace, a merchant of Decatur who had been called in by the parties. The question of the advisability of an assignment by Boss was discussed. In the afternoon of that day Boss executed judgment notes to Heidelbach, Friedlander & Co. and Levy, Price & Co. for the amounts due them, which notes were delivered to Fried-lander, and at an early hour on the morning of June 8 judgments were confessed on these notes in the circuit court of DeWitt county, and within a few hours after-wards were placed in the hands of the sheriff of Macon county. Shortly after midnight on the 7th Boss executed a deed of assignment to Bace, which was filed for record the forenoon of Monday, June 8. Levy was made by the sheriff of Macon county by virtue of the different executions in his hands, including those of appellants and appellee, but afterwards, on petition of the assignee, the entire stock of g'oods was surrendered to him, all rights of execution creditors being saved. After the assignee had converted the goods into money this controversy arose among the execution creditors concerning their priority, and the assignee having applied to the county court for an order directing him as to distribution, that court held that the appellee should be first paid. The court also held that the executions of appellants were void, on the ground that the notes and warrants of attorney upon which the judgments were confessed, having been issued contemporaneously with the deed of assignment, should be taken and held as a part thereof and that appellants should be paid pro rata with the general creditors. On appeal from that order the Appellate Court for the Third District affirmed the order of the county court, whereupon this appeal was prosecuted to this court. It is contended here that the note of appellee having been secured by mortgage on real estate, he must first have resorted to that before maintaining the lien of his execution as against that of appellants; also, that there was a variance between the execution and the judgment upon which it was based, the judgment having been rendered in vacation and the' execution having recited that it was rendered at the April term of the circuit court of Moultrie county; also, that the judgment notes of appellants, although executed about the time of the assignment, were not void. The mere fact that the note of appellee was secured by a real estate mortgage would not preclude him from enforcing his lien upon this stock of goods. It does not appear from this record what was the value of the real estate mortgaged, or that this security was of value sufficient to satisfy the judgment of appellee. The county court would not be justified, in a case of this character, in withholding settlement with the assignee for the long period of time which would be necessary to enable the mortgagee to go into a court of equity, foreclose his mortgage, procure a decree of sale, await fifteen months’ redemption, and then, perhaps, await a sale of the premises by the purchaser, should the mortgagee bid in the property, in order to determine how much should be realized from this security. While it is true' the general rule is that where a party has a lien or interest in two funds and another party has a lien in only one of the same funds the party having the lien or interest in the two will be compelled by court of equity to first resort to the fund in which he has the sole interest, yet this rule will not be enforced where it operates to the prejudice of the party holding the double interest. Brown v. Cozard, 68 Ill. 178; In the matter of Bates, 118 id. 524; Levy v. Chicago Nat. Bank, 158 id. 88. As to the contention of appellants that there is a variance between the execution and the judgment of appellee, we find no substantial variance. The judgment was in fact confessed in the circuit court of Moultrie county in vacation, on the fifth day of June. The recital in the execution is, that it was recovered in the circuit court of Moultrie county on the day of the date hereof, June 5, 1896, by confession, etc. The other recital as to the April term is a mere clerical error, which may be regarded as surplusage, and when it is so disregarded the execution correctly describes the judgment as having been rendered in vacation. The record in this case clearly shows that the execution of the judgment notes in favor of appellants, and the execution of the deed of assignment to Race, were parts of the same transaction. The matter of the assignment was discussed by the judgment debtor, by appellants and by the assignee. The evidence of Ross clearly shows these judgment notes to have been executed to appellants, at the request of Friedlander, as preferences, in contemplation of an assignment. Under such circumstances and under our statute the notes and the judgments rendered upon them were void. Preston v. Spaulding, 120 Ill. 208; Hide and Leather Nat. Bank v. Rehm, 126 id. 461; Hanford Oil Co. v. First Nat. Bank, 126 id. 584; Illinois Paper Co. v. Northwestern Nat. Bank, 149 id. 450. The judgment of the Appellate Court for the Third District affirming the order of the county court of Macon county was right, and it is affirmed. Judgment affirmed.