Grosse v. Sweet, Dempster & Co.

Per Curiam: In deciding this case the Appellate Court, after stating the facts as set forth in the preceding statement, delivered the following opinion: “It is claimed for appellant that appellee stands in no better position, as regards the $1200 found to be due to Andrew Z. Olson from Grosse on the accounting between them, than would Olson were he suing Grosse for the same; that the contract of employment was an entire contract, and Olson having broken it, he could not recover as against Grosse, and that, even if the contract were divisible, Grosse could set off or recoup the damages sustained by him by reason of Olson’s violation of the terms of the contract. We are of opinion that these contentions cannot be maintained on this record. By the terms of the contract an accounting yearly is provided for between Grosse and Olson, and that the balance, if any, found to be due to Olson at the end of the year, should be allowed to remain in the business, at the option of Grosse, in which event interest at the rate of six per cent should be allowed upon such amount. The master and the court found, and the evidence supports the finding, (at least the finding cannot be said to be manifestly against the evidence,) that the amount found to be due Olson upon the accounting was, by agreement between him and Grosse, assigned and transferred to Florence M. Olson for the purpose of hindering and delaying the creditors of Andrew Z. Olson, and that this assignment was and is a fraud upon appellee, as a creditor of said Olson. As between the Olsons and Grosse this assignment was valid and binding, although void as to creditors of Olson who were creditors at the time of such assignment. Upton v. Craig, 57 Ill. 257; Phelps v. Curts, 80 id. 109; Fitzgerald v. Forristal, 48 id. 228; Beebe v. Sautter, 87 id. 518; Campbell v. Whitson, 68 id. 240; Songer v. Partridge, 107 id. 529. “In the TJpton case, supra, the Supreme Court, in speaking of a fraudulent conveyance, say: ‘It was settled by a long course of decisions in this country and in Great Britain, that however fraudulent the deed may be as to creditors it is valid and binding between the parties. ’ “In the Phelps case, supra, it was held that where a deed ' was set aside as fraudulent it would be upheld as to the grantee, who was not guilty of actual fraud, to the extent of the actual consideration which passed from such grantee. “In the Campbell case, supra, the court say: ‘It is well settled and familiar doctrine that, although voluntary conveyances are or may be void as to existing creditors, yet they are valid and effectual as between the parties, and cannot be set aside by the grantor if he should become dissatisfied with the transaction. The law regards it as his own folly to have made such a conveyance, and leaves him to bear the consequences without means.of redress. * * * A conveyance of this sort is void only as against creditors, and then only to the extent in which it may be necessary to deal with the conveyed estate for their satisfaction. To this extent, and to this only, it is treated as if it had not been made. To every other purpose it is good. Satisfy the creditors and the conveyance stands,’ — citing cases. “The assignment of the claim of Olson against Grosse to Florence M. Olson was a voluntary act on the part of Olson, to which Grosse gave his assent and agreed to pay the amount of the claim to Mrs. Olson for the purpose of enabling Olson to hinder and delay his creditors. Grosse, having undertaken to pay the $1200 to Mrs. Olson on demand, thereby waived all his rights, under the contract, to retain the money until the end of the contract between him and Olson, This agreement, under the authorities cited, was binding upon Mm, but because the transaction was a fraud as to the then creditors of Olson, as to such creditors it was not binding, and for this reason we think the authorities cited by appellant which go to sustain the general proposition that assets of a debtor cannot be reached by creditor’s bill where the debtor himself is not in a position to recover the same by suit, are not applicable. “We think it clear that the arrangement between the Olsons and Grosse had the effect of modifying the contract between Olson and Grosse to the extent stated, — that is, that Grosse waived any right which he had, under the terms of the contract, to retain the amount found due to Olson until the end of the contract, and therefore waived, as to this amount, any right which he had to set off or recoup any damages which he may have suffered by reason of any alleged violation subsequently, by Olson, of the terms of the contract. “But even if it could be held that Grosse had any such right of set-off and recoupment, we cannot say, after a careful consideration of the evidence in this record, that it shows there has been any violation by Olson of the contract. There is a conflict in the evidence in this respect, and while neither the master nor the chancellor has made any specific finding on the question, the cross-bill is dismissed for want of equity, and we cannot say that for this reason it was not proper to dismiss the cross-bill. Moreover, the proof as to damages claimed to have been sustained by Grosse is so uncertain and indefinite in its nature as to have justified the chancellor in finding that it was insufficient to justify any relief on the cross-bill by way of set-off or recoupment. “The claim is made that the suit by appellee was prematurely brought, for the reason that Grosse was entitled to keep the $1200 in his business during the term of the contract, which did not expire for nearly eighteen months after the filing of the bill. We are of opinion that this point is not well taken, because Grosse only had the option to retain this money to the end of the contract if he saw fit to exercise it. This, as we have seen, he failed to do, but undertook to pay the money to Mrs. Olson and thereby waived his option.” After a careful consideration of this case we have reached the same conclusion as that arrived at by the Appellate Court. That opinion will therefore be adopted as the opinion of this court, and the judgment of the Appellate Court affirming the decree of the circuit court will accordingly be affirmed. Judgment affirmed.,