Joel J. Bailey & Co. v. Snyder Bros.

Mr. Justice Lacey delivered the opinion of the Court. The point is presented in this case, whether the four judgments named above—confessed on judgment notes by the president and secretary of the company, where the notes were without the seal of the corporation, and where there was no proof on file at the time of the confession that the president and secretary had authority to execute judgment notes, and power of attorney to confess judgment—were void, or whether they were good and valid judgments. This, and similar questions, have been before this court on several occasions, and we have held that judgments confessed in vacation, as these, before the clerk were void unless accompanied by proof of their execution, or of other facts necessary to show that the debt was then due and owing. In the case of Matzenbaugh v. Doyle, 50 Ill. App. 189, we held that where, on the face of the note, the statute of limitations had run against it, a judgment confessed on it in vacation was void where there was no accompanying proof that the debt had been revived, and the judgment could not be made valid or helped out by extrinsic evidence that the note had been revived by payments. The judgment of the Appellate Court was affirmed in the Supreme Court, 156 Ill. 331. The president and treasurer, or secretary of a corporation, can execute a power of attorney to confess judgment against the corporation only when such power is conferred by the. board of directors. They have no such power by virtue of their office. Joliet Electric Light and Power Co. v. Ingles, 23 Ill. App. 45; Adams v. Cross-Wood Printing Co., 27 Ill. App. 313; Beach on Private Corporations, Vol. 1, Sec. 202. The seal of the corporation, however, is prima facia evidence of the assent of the corporation, when the signature of the president and the custodian of the corporate seal of the corporation attached to the instrument are shown to be genuine. See authorities above cited. In this case there was no proof filed with the cognovit showing that the president and secretary had authority to sign a power of. attorney to confess judgment, nor any resolution of the board giving them such power; there was no corporate seal to the note and power of attorney. It therefore follows that the judgments' on their face, as to all the world, were void and of no validity. It is insisted, however, that there was a resolution of the board of record giving such power, and it was produced in evidence. This proof, however, as decided in Matzenbaugh v. Doyle, supra, could not be received to validate the judgments entered in vacation by confession. After the judgments were alleged to be void in appellant’s bill, and all the defendants, including the stockholders, the corporation, and the holders of the void judgments, were served with summons, the directors of the corporation met and passed a resolution authorizing a sale, and sold the assets of the corporation to the judgment creditors for the sum of their judgments, said judgments amounting to $3,091, said to be the full value of the goods. This was all done while this suit was pending, and when the court had full jurisdiction of the subject-matter and of the parties. Snyder Bros, were powerless to make this sale at that time and the judgment creditors to receive the benefits of it. McCauley v. Rogers, 104 Ill. 578; Grant v. Bennett, 96 Ill. 513; Hallhorn v. Green, 125 Ill. 247. The doctrine of lis pendens applies as to the creditor of the corporation, and the corporation itself, and to the purchaser of the goods. It was too late to prefer the creditors, or for them to be preferred, after the commencement of the suit and the service of the summons. Under section 25 of chapter 32 of the Revised Statutes, under which this bill was filed, it is contemplated that in proceedings under it the assets of the corporation shall be distributed pro rata among the creditors, where there is not enough to pay all claims in full, and like the assignment act, it is its policy to pay all creditors equally and pro rata. The corporation had no power to make a valid sale and prefer creditors after bill filed and service of summons, and to deprive the court of its jurisdiction and its power to settle up the affairs of the corporation. The assignment of the book accounts may be settled in the County Court. The decree of the Circuit Court is reversed and the cause remanded, with directions to proceed to settle the estate in accordance with the prayer of the bill except as to the book accounts.