Bennett v. Woolsey

Mr. Justice Clark delivered the opinion of the court. The first matter to be decided is the motion of the appellant for a dismissal of the appeal. This motion is objected to by the appellees, and after having given the matter full consideration we have reached the conclusion that the decree is a final order, and therefore appealable. (Stahl v. Stahl, 220 Ill. 188.) We come now to consider the case on its merits. The testimony discloses that on October 9, 1902, and for some time prior thereto The Credit Guide Company, the capital stock of which was almost entirely owned and controlled by the complainants, was in a desperate financial condition. Mr. Bennett had built up a considerable business for his company, as a mercantile and collection agency, but the condition of the company had reached snch a pass that he was obliged to borrow money at exorbitant rates of interest. He had personally guaranteed, as he states in his testimony, practically all of the obligations of the company. He had been advised by friends to seek shelter in the bankruptcy court. His standing as an honest business man had always been good, and he naturally shrank from taking an action which lie felt would place him in disgrace in the business world. He had hopes that he could weather the storm. He had on several occasions negotiated with the defendant, who had been associated with him in business for some years as a clerk, bookkeeper and manager of the office, for the purchase of an interest in the business, but they came to no understanding irntil in October, 1902. On October 6th, 7th or 8th, the complainant, Horace C. Bennett, says that he told Mrs. Woolsey that he had tried to get the Dandridge note, so-called, extended, but that he had failed. He further testified that she had on the day previous agreed to furnish the company some money to take up the note, if he would secure her. He said he wrote on some telegraph blanks, at Mrs. Woolsey’s request, what his proposition was, and that the last he saw of them they were in Mrs. Woolsey’s possession. He testified that there was written upon these blanks in substance that her salary was to be increased to $100 per month; that he (Bennett) was not to draw to exceed $1,800 per year; that whatever money Mrs. Woolsey advanced was to be paid back within two years, and if during that time she desired to purchase an interest in the business she could do so at not less than $2,000 nor more than $4,000 for one-third interest. This memorandum was not signed by him. He made out a bill of sale. This was not satisfactory to Mrs. Woolsey, and later she had one drawn by her attorney, which was signed by the complainants and is the one heretofore referred to. Mr. Bennett is an attorney and has been practicing, as we understand it, more or less for many years in Chicago. The certificate of stock which stood in his wife’s name, he procured to he assigned by her to Mrs. Woolsey. He and his wife, the co-complainant, signed the bill of sale which had been prepared by Mrs. Woolsey’s attorney covering their interest in the other shares of stock. The transfer of the certificate of shares of stock appeared to have been made in the usual way. The only unusual thing in the bill of sale which might suggest that it was not intended to be absolute in its nature was the language—“said second party agrees to pay all the debts of said The Credit Guide Company.” It seems to us that the fact that Mr. Bennett was a guarantor, as he testifies, of practically all of the indebtedness of The Credit Guide Company is a sufficient reason why he should insist that these words last quoted be incorporated in the bill of sale. He was anxious, naturally, that the indebtedness of the company, so far as it was guaranteed by him, should be fully paid, so that if at a later date the company should become bankrupt he could not be personally held on such guarantees. There is no claim made by the complainants that the defendant gave to them anything in writing to show that the bill of sale was not absolute, nor is there any claim made that the complainants agreed in writing to indemnify the defendant for any money that she might advance to the Credit Company, and no mention of interest was made. The rule is well established, that in order to overcome the presumption arising from a written instrument, like a bill of sale, absolute in its nature, the evidence must be full, clear and satisfactory to the mind of the court. (Leigh v. Laughlin, 211 Ill. 192; Burgett v. Osborne, 172 Ill. 227.) As said by the Supreme Court of the United States in Howland v. Blake, 97 U. S. 624—“In each ease the burden rests upon the moving party to overcome the strong presumption arising from the terms of a written instrument. If the proofs are doubtful and unsatisfactory, if there is a failure to overcome this presumption by testimony entirely plain and convincing, beyond reasonable controversy, the writing will be held to express correctly the intention of the parties. A judgment of the court, a deliberate deed or writing are of too much solemnity to be brushed away by loose and inconclusive evidence.” Citing Story Eq. Jur., sec. 152. In the very recent case of Stnbbings et al v. Stubbings et al., 248 Ill. 406, our own Supreme Court had occasion to consider the kind of oral testimony required to authorize the court to set aside a written instrument absolute in its terms, and held “To authorize the court to impress a trust upon property upon oral testimony it is essential, even though the Statute of Frauds be not pleaded, that the facts be established by clear and convincing proof, and unless the testimony is of that character the court is justified in denying the relief.” The oral agreement claimed by the complainants to have been made is of itself very uncertain. By its terms the defendant was to have the option of buying within two years, at not less than $2,000 and not more than $4,000, a one-third interest in the company. It clearly appears from the evidence that the defendant had what little money she possessed well invested. It is hardly natural to suppose that the defendant, who appears to have good business capacity, would loan this money to the corporation (admittedly in desperate financial condition) without interest and without any agreement on the part of the complainants to reimburse her, and with only the dubious expectation of receiving at any time within two years one-third of the capital stock of the company, on the payment by her of an indefinite amount, not less than $2,000 and not more than $4,000. She showed her dissatisfaction with the form of the bill of sale prepared by Mr. Bennett, and with him went to the office of another lawyer, who prepared the bill of sale now sought to be set aside. She testifies that nothing was said tending to indicate that it was to be otherwise than an absolute sale of the interest in the stock. Is it not reasonable to suppose that Mr. Bennett, himself a lawyer, would have required something in writing from Mrs. Woolsey to evidence the fact that the assignments of the shares of stock and the bill of sale, all absolute on their face, were not intended to be absolute but merely security for a debt? The solicitors for the complainants have urged that it is a significant fact that the defendant, who kept the cash book of the Credit Company, should have placed upon the book such entries as this: “Oct. 9-2. This money was put in the Credit Guide Co. by M. M. Woolsey as per agreement with H. C. Bennett & Credit Guide Co. $515.00.” In so far as Mrs. Woolsey advanced money to the company, it was perfectly proper that the books of the company should show a credit to her, and it was in exact consonance with the language of the bill of sale, in which she agreed that the debts of the corporation should be met when due, and that thereby Mr. Bennett be relieved from his guarantee of such debts. In our opinion, the decree should be reversed and the case remanded with directions to the Superior Court to enter a decree dismissing the original bill for want of equity, and decreeing upon the cross-bill the relief therein prayed for, declaring that Mrs. Woolsey is the absolute owner of the stock assigned to her, including the stock in the hands of Masterson, Haft & Dandridg'e, upon payment to them of the indebtedness, for which the stock is held as security, with interest thereon up to the date of the tender. Reversed and remanded with directions.