Christoffel v. Lee

Mr. Justice Smith delivered the opinion of the court. The record before us presents an unusual jumble of pleadings, orders and practice. It shows that ten days after the bill was filed, September 22, 1899; the controversy involved In the original bill of complaint was settled, and that there remained thereafter no ground upon which the bill could be maintained, or upon which it could serve any legal purpose. Yet, a receiver of all the property of the Sunnyside Express Company was continued in charge of the property and business .of the company for years thereafter. After the vendors’ lien of the complainants was settled and adjusted, and the property upon which the complainants asserted the lien was released by an agreed order of court, and the bill was dismissed as against the defendant Mason, it apparently was maintained as a stockholders’ bill to protect the company and its property against the creditors of the company. The case thus fell under the condemnation of The People v. Weigley, 155 Ill. 491, and the court was without jurisdiction to entertain the case. True, we have nothing to do with the main case on this appeal further than to pass upon the decree on the intervening petition, but, if the court had no cause before it over which it had jurisdiction, the intervening petition did not give the court jurisdiction to hear and determine anything. The order of reference to the master was, “to take proof of all the material allegations in the said bill contained and report,” etc. On the hearing before the master no evidence was offered in support of the bill. The hearing before the master was upon the intervening petition, which had not been referred to the master. The master’s report was upon the claim of the intervening petitioner, and the decree followed the report. The intervening petition names no parties defendant. It sets up the purchase and ownership of the notes and chattel mortgage securing the same by the petitioner, and that the property covered by the mortgage is in the possession of one Heide, not describing him as receiver or otherwise, and that there had been a default in the payment of certain of the notes since petitioner purchased them; and according to the terms of the mortgage the whole sum represented by the notes was due and payable; and prays for an order on the receiver to turn over to the petitioner the property. No rule was entered requiring any one except Catherine and Peter Christoffel, who had filed a demurrer to the petition, to answer the petition, and no answer was filed by anyone except Catherine Christoffel, who did not have possession of the property. The Sunnyside Express Company was not a party to the petition, and its rights to the property referred to in the petition were not litigated or settled. It necessarily follows that as to the Sunnyside Express, Company the decree is erroneous and must be reversed. But, beyond that no consideration appears in the record moving to the company for the notes secured by the chattel mortgage. The notes and mortgage were executed by W. Gr. Mason as president, and Edgar B. Steele as secretary of the corporation, to B. C. Sturgeon, but it does not appear that the company was indebted to Sturgeon or Mason or that these instruments were executed and delivered in the ordinary course of the business of the express company. The only inference from what appears in the record is that the notes were executed in connection with, and for the purposes of, the sale of the real estate described in the bill of complaint from complainants to Mason. The notes appear to have been endorsed over at once without recourse by Sturgeon to Mason. They were made to represent, apparently, an indebtedness between the Christoffels and Mason in the trade between them, of May 29, 1899. There is no evidence that the company owed Mason this indebtedness or any part of it. No actual consideration is claimed in argument. The facts shown warrant the conclusion that there was no consideration for the notes and mortgage and this would be available by the company as a defense against the mortgage either in a foreclosure of the mortgage or in a proceeding to obtain possession of the property under the mortgage for the purpose of foreclosing. The express company was, therefore, vitally interested in the proceedings under the intervening petition, and should have been made a party to the petition and jurisdiction obtained over it. The petitioner Lee took the chattel mortgage subject to all defenses in favor of the express company. C. D. & V. Ry. Co. v. Loewenthal, 93 Ill. 433. The assignment of the notes secured by the mortgage did not carry an assignment of the separate guarantee or assumption of Catherine Christoffel and contained in the agreement of September 22, 1899, to the petitioner Lee or for his benefit. We know of no authority for holding upon the facts in this case that the separate assumption or guarantee passed by the mere assignment of the notes so as to make Mrs. Christoffel liable for the payment of the mortgage indebtedness in a proceeding of this character. Nor do we think Mrs. Christoffel or the Sunnyside Express Company in any event liable by estoppel for any deficiency in the sale of the property for the payment of the mortgage debt in this proceeding. Hence the decree in providing for the payment by Mrs. Christoffel and the Sunnyside Express Company of the amount of the deficiency with interest is erroneous. The petition properly prays for an order directing the receiver to turn over to the petitioner the property described in the mortgage. It does not ask for any other or further relief. It does not pray for a foreclosure of the mortgage. Such relief was not germane to the original bill and would not have been proper under a formal cross-bill filed for that purpose for that reason. Under no rule or principle of equity practice could it be proper under an intervening petition to obtain the possession of property in the hands of a receiver to decree foreclosure of a mortgage. The decree doe's not answer or respond to any pleading in the cause which was or could be properly filed. Rosenbleet v. Rosenbleet, 122 Ill. App. 408; Bremer v. C. & C. Canal & Dock Co., 123 Ill. 104. The decree is reversed and the cause is remanded with directions to dismiss the intervening petition, but without prejudice to the right of the intervenor to proceed at law or in equity for relief respecting his rights, if any. Reversed and remanded with directions.