University of Illinois v. Globe Savings Bank

Mr. Justice Wilkin delivered the opinion of the court: From the decree of the circuit court the University of Illinois alone prayed and was allowed an appeal, and by its assignment of errors questions only the order requiring it to pay the bank, or receiver, the $15,000 wrongfully appropriated by Spalding, as a condition precedent to its receiving the above mentioned bonds and stocks. Appellees assigned cross-errors upon the record, by which they seek to question the ruling of the court below upon the first intervening petition by the university, in holding the university entitled to the bonds, securities, etc,, claimed by the second petition, subject only to the lien for $15,000, and in refusing to sustain the bank’s claim to the Ford subdivision interest. Notwithstanding these assignments of cross-errors, counsel have filed no abstract whatever of those parts of the record upon which they are based, and no certificate of the evidence or bill of exceptions has been filed by either party. We have, however, looked into the record,—especially the portions of the decree omitted from the abstract filed by appellant,—sufficiently to find that on the facts found none of the cross-errors are well assigned. Going to the merits of all the claims made by the University of Illinois, it is said by counsel for the receiver, though not seriously insisted upon, that by an act of the legislature approved June 11, 1897, all its rights of action for such claims became vested in the State officers, and therefore it could not maintain the suit. The question is raised by neither of the assignments of cross-errors, and if it were, the contention is wholly without merit. The petitions of the university were pending when the act was passed, having been filed April 19 prior thereto, and issues joined thereon, and the statute does not purport to take away its right to prosecute the action, but clearly recognizes the then pending litigation and the right of the university to prosecute the same. As to the Ford subdivision interest, the transaction, as found by the court, amounted to no more than a borrowing of money from the bank to invest in lands and re-paying the loan. Had Spalding failed to return the money, the bank, by tracing it into the land, might have enforced its claim against it, but no such case can be made out of the facts recited in the decree. The decree was in accordance with the facts found. As to the bonds described in the first petition, the finding is that they were the property of the university, and in its possession, by its treasurer, at the bringing of the suit and when taken from the safety deposit boxes. As to those claimed by the second petition, except as to those specifically named, the finding is equally clear and explicit that Spalding was the absolute owner, his title being unaffected by any lien in favor of the bank when taken possession of by the receiver. As we understand counsel for appellees, their contention is, that although all these bonds were the property of the university, and of Spalding when he conveyed, the bank had some sort of an equitable lien upon them for the satisfaction of its creditors, and that before the university could claim them it should be required in equity to discharge such lien. No legal or equitable right to the property existing either in the bank or receiver at the time it was seized, the question must be, did the act of taking possession thereof under the order of the court give a specific lien in the bank’s favor? As the facts are found the order of the court did not authorize the receiver to take the securities out of the boxes. It was ordered to take from them only such as appeared to belong to the bank, and when it took those owned by the university, and by Spalding in his individual right, its possession was clearly unauthorized and wrongful. But if they had been seized in strict obedience to that order the rights and interests of the parties therein would not have been changed. When it took them it simply had possession, as the officer of the court, for the owners of the property from whose possession they were taken. It was appointed receiver, not for the bank alone, but on behalf of all parties, interested. It could not deprive the university or Spalding" of its or his right to the property seized or to the possession thereof, but could only hold it for them if they succeeded in establishing their ownership. (Coates v. Cunningham, 80 Ill. 467.) While the receiver so held them for the court and the benefit of those who should ultimately appear to be entitled thereto, the order of the 13th of April, permitting the university to take any conveyance from Spalding, by way of security or otherwise, as above stated, was entered, and in pursuance of that order the assignment under which the university claimed, in its second petition, was made. There is no feature of an equitable attachment in the case. The seizing of the bonds, stocks, securities, etc., in question, was the usual taking possession of property by a receiver under an order of the court, to be held pending" the determination of the title thereto. On the facts found, the decree of the circuit court as to the endowment bonds, and-all the securities claimed by the second petition, except the three Pocatello Power and Irrigation Company bonds, the Idaho Canal Company bonds, the twenty-three hundred and ninety shares of stock of the same company, the seventeen bonds of the Marshalltown Light, Power and Railway Company and the sixteen bonds Of the town of Buckley, was clearly right. Each of the cross-errors will accordingly be overruled. As already stated, the errors specified by the appellant g"o only to those parts of the decree which give the bank a lien upon the fifty-five Idaho Canal Company bonds, the twenty-three hundred and ninety shares of stock in that company, the seventeen Marshalltown bonds and the sixteen town of Buckley bonds. As to all of these securities except the fifty-five Idaho Canal Company bonds no finding can be observed in the decree of any lien in favor of the bank. But however that may be, from what has been said as to the other bonds, stocks and securities described in the second petition, the decree erroneously gave the bank a lien upon them. As to'the Idaho canal bonds, the finding is that five were held by the receiver as security for a note of Frank W. Smith for $5000, and the decree directs him to sell them and apply the proceeds in payment of that note, the balance, if any, to be paid to the university. The correctness of that finding and order does not seem to be questioned by the appellant. There were therefore only fifty of those bonds remaining to be disposed of, but the subsequent finding and order speaks of the whole number fifty-five. As to these the decree recites: “And the court finds that said Globe Savings Bank had and has an equitable lien upon said fifty-five bonds of the Idaho Canal Company to enforce the payment to the receiver of said sum of $15,000.” It is sufficient to uphold a decree in chancery that the facts as found by the court from the evidence are recited in the decree, and such finding must be taken as true when the evidence has not been preserved in the record. (Atkinson v. Linden Steel Co. 138 Ill. 192; Davis v. Christian Union, 100 id. 313; Knickerbocker v. McKindley Coal Co. 172 id. 535; Schuler v. Hogan, 168 id. 369.) Under the foregoing finding, in the absence of the evidence, we see no reason for disturbing the decree of the circuit court as to the Idaho canal bonds. If the university desired to challenge the finding of the court as to the existence of an equitable lien against those bonds on the facts, it should have preserved the evidence in the record. In so far as the decree below gives the bank a lien on the Idaho Canal Company stock, the seventeen Marshall-town bonds and the sixteen bonds of the town of Buckley it will be reversed, but in so far as it gives to the said bank a lien upon the Idaho Canal Company bonds it will be affirmed. It should, however, give a first lien for the $15,000 upon but fifty of those bonds. The cause will be remanded to the circuit court, with directions to modify its decree as herein indicated and carry the same into effect, each party being required to pay one-half of the costs in this court. ,, , . , Decree reversed m part.