Court Opinion

ID: 7004872
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:48:38.404038+00
Date Added: 2024-06-11T16:09:59.147615
License: Public Domain

Mr. Presiding Justice Adams delivered the opinion of the court. The main question to be decided on this appeal is, whether the power of attorney from appellant to Lincoln W. Walter is revocable, appellant contending that it is, and appellee the contrary. The solution of this question, as counsel for the parties in their arguments impliedly concede, depends mainly on the construction to be given to the agreements between the parties. In construing these agreements we must place ourselves as nearly as possible in the position of the parties, and the agreements having been made at the same time, and referring to the same subject-matter, must be construed together, as if constituting a single instrument. These propositions are fully sustained in Wilson v. Roots, 119 Ill. 379, 386, and cases cited. It is alleged in the bill, and not contradicted by answer, or otherwise, that March 7, 1903, when the agreements were made, complainant was the owner of 243 shares of the capital stock of the Monarch Book Company. The appellant, in her affidavit filed in opposition to the application for an injunction, while claiming that she was the owner of 100 shares of said capital stock, says that appellee is the owner of 143 shares of said stock. It is also alleged in the bill, and not denied, that the agreements were made “ for the purpose of making suitable provision for the support and maintenance of said Lulu M. Eider, and to assure to said Lulu M. Eider such alimony as might thereafter be decreed by the court ” in the divorce suit which she contemplated, and which appellee, in substance, says he' could not successfully defend. It is also averred in the bill, and not denied, that “ contemporaneously with the making of said agreement, exhibit 1, which is in regard to sixty-seven shares of the stock included in stock certificate 61, complainant caused to be transferred to said Lulu M. Eider, and to be issued to her, sixty-seven shares of the capital stock of said Monarch Book Company, being certificate Ho. 61.” In view of these allegations in the sworn bill, which are not denied, it must be assumed that appellee, prior to and at the time of the agreements in question, was the owner of 243 shares of the capital stock of the Monarch Book Company, sixty-seven shares of which were free from liens and incumbrances, and that he caused said sixty-seven shares to be transferred to appellant, and a stock certificate therefor to be issued to her. While by the transfer and the issue of the certificate to her she held the legal title to the sixty-seven shares, she was not, as her counsel contend, the absolute and beneficial owner of the stock. This is evidenced by the agreement of the parties in respect to the sixty.-seven shares. If appellant were the absolute owner of the stock she would, very clearly, be the owner of and entitled to all dividends dedared on it, and would be entitled to the possession of the certificate, and to sell the stock for what it would bring in the market. But, by the agreement, she is limited as to the amount of the dividends which she may receive and apply to her own use, viz: five per cent on $6,700, and is bound to apply the excess over said five per cent, if any, to appellee’s credit on the agreed purchase price of the stock, and, in addition, the stock is to be deposited with a trust company for ten years, unless sooner paid for, and it is only to be paid for from the excess of dividends over five per cent on the purchase price. If at the end of ten years the stock shall not be ful ly paid for, it is to be delivered to appellant, and she is to deliver to appellee an amount of the stock equal to ninety per cent of the amount paid, although such amount may have been paid from dividends, which, if she was the actual owner, would have belonged to her. It is too plain to require argument that appellant, when she executed the agreement in respect to the sixtvseven shares, did not consider herself the absolute and sole owner of the shares. The agreement is evidence of the truth of the averment in the bill, that appellee was the owner of the shares, and caused them to be transferred to appellant and a stock certificate for them to be issued to her. Considering the transfer of these shares to appellant, and the agreement between the parties in respect to them together, and as if contained in a single instrument, the transaction is in the nature of a mortgage from appellee to appellant of the stock, conditioned that she may receive to her own use an amount of the dividends earned by the stock equal to five per cent on $6,700, the excess of dividends over said five per cent to be retained by appellee until such time as such excess shall amount to $6,700, when the stock is to be delivered to appellee by the trust company. But, if at the end of ten years such excess shall not amount to $6,700, appellant is to have the stock, less an amount of it equal to ninety per cent of the excess of dividends received by appellant, over five per cent on $6,700, which last amount of the stock is to be delivered to appellee. Appellee, as the actual and equitable owner of the sixty-seven shares of stock, to such extent, and who will be entitled to a retransfer of the same, if, within ten years the amount of $6,700 shall have been received by appellant, in excess.of said five per cent, or if said sum of $6,700 shall have been otherwise paid to appellant, is clearly interested in the stock, and, consequently, interested in having it voted so as best to promote his interest and that of the company. He is the owner of the thirty-three shares which are the subject-matter of the agreement, exhibit 2. Those shares have never been transferred to appellant, and are only to be transferred to her on fulfillment of the condition in the agreement specified. ' The shares were, at the time of the execution of the agreement, held by the Illinois Trust & Savings Bank, as collateral security for an indebtedness of appellee to Lincoln W, Walter, and, by the express terms of the agreement, were there to remain till said indebtedness should be paid from dividends on the stock received by appellee in excess of five per cent of the dividends declared, and until, after payment of said indebtedness, appellant should have received, from such excess of dividends, the sum of $3,300. Appellee, as the owner of the stock, had the right to vote it, while it remained on the company’s books in his name, and if the $3,300 should be paid to appellee, from said excess of dividends over five per cent, plus the indebtedness to Walter, or by actual payment of $3,300 by appellee to appellant, he would be entitled to have the certificates, of the stock delivered to him. It is true that, by the terms of the agreement, he is not obliged to pay for the stock except from dividends, but he has legal right to pay otherwise, if he so chooses. This agreement, therefore, is, like exhibit 1, in the nature of a mortgage, and subject to appellee’s right of redemption. Appellee being interested in the entire 100 shares of stock, as above stated, and appellant being also interested therein, and neither being willing that the other should vote the stock, it was agreed between them that Lincoln W. Walter should vote it, and that a power of attorney should be executed to him. for that purpose, and this 'was accordingly done, as part and parcel of their agreemant. If the execution of the power of attorney had been solely for the benefit of appellant, and she had the sole interest, she might revoke it; but it was executed for the benefit of both parties, each having an interest. The legal title to the sixty-seven shares having been transferred to her and a stock certificate therefor issued to her by the company, she would have the right to vote said shares were it not for the agreement, and the legal title to the other thirty-three shares being in appellee, he would have the right to vote those shares, were it not for the agreement. Standing as they did in a relation to each other in the nature of mortgagor and mortgagee, and apparently anticipating that there might arise some conflict in their respective interests, appellee was not willing that appellant should vote the sixty-seven shares, nor she. that he should vote the other thirty-three shares. It was for his protection that the sixty-seven shares should be voted by an impartial third person, and for hers that the thirty-three shares should be voted by such person. The appellee, in his bill, avers that he would not have executed the agreements, if the power of attorney had not been executed to Walter, or to some other person equally satisfactory to himself, and we are inclined to the view that neither of the parties would have executed the agreements without the "execution of the power of attorney. It appears by the bill that the question as to who should be appointed attorney was discussed by the parties, and that appellant herself suggested "Walter. We regard the provision for the appointment of an attorney to vote the stock, and the appointment itself, which was made simultaneously with the agreement to appoint, as material parts of the agreement. In Bonney v. Smith, 17 Ill. 531, the court, after defining a power coupled with an interest, say : “ Another class of powers is, when they are executed upon a valuable consideration, and to operate as a transfer, mortgage or security to another; although the power can only be executed in the name of the principal,” citing authorities. In the present case the transfer to appellant of the sixty-seven shares and the agreement to transfer to her the other thirty-three shares, constituted a sufficient consideration for her agreement to execute, and her execution of the power of attorney; and the power was executed not only as security to her, but as security to appellee that the stock would be properly voted. The court cites, among other authorities, Story on Agency, 9th ed., sec. 477. The author says : “ But, where an authority or power is coupled with an interest, or where it is given for a valuable consideration, or where it is a part of a security, there, unless there is an express stipulation that it shall be revocable, it is, from its own nature and character, in contemplation of law, irrevocable, whether it is expressed to be so upon the face of the instrument conferring the authority, or not. Thus, for example, if a power of attorney to levy a fine is executed, as a part of a security to a creditor, the power is irrevocable. So, if a letter of attorney to sell a ship is taken as a security upon a loan of .money, it is irrevocable. So, if the principal assigns all his effects for the benefit of his creditors, and gives the assignee a power of attorney to collect and receive all debts and outstanding claims, the power is irrevocable. So, if a power of attorney to sell lands is given to a creditor to pay his debts out of the proceeds of the sale, the power is irrevocable. So, a remittance to an agent of money or goods, to be delivered to a creditor in discharge of his debt, is irrevocable after the creditor has assented thereto, and signified his assent to the agent. The ground of this doctrine is that a party shall not be at liberty to violate his own solemn engagement, or to vacate his own security by his own wrongful act; for that would be to enable him to perpetrate a fraud upon innocent persons, who have placed implicit confidence in him, which is against the clearest principles of justice and equity. But a power of attorney, although irrevocable by the party, and although founded upon a valuable consideration, or given as a security, is nevertheless, as we shall presently see, revoked by the death of the party, unless it be also coupled ■with an interest.” ■ In Hunt v. Rousmanier, 8 Wheat. 174, cited by counsel for appellant, the court, while holding that the power of attorney given by Bousmanier to Hunt was revoked by the death of the former, said that Rousmanier, while living, could not have revoked it, evidently because it was given for a valuable consideration, and as a security to Hunt. The case is cited by Mr. Justice Story in support of the text above quoted. Lincoln Walter is not a party to the suit, therefore no question arises as between appellant and him, but only as between appellant and appellee; and while as between appellant and Walter, the latter might not be able successfully to defend against the revocation of the power, a different question is presented as between appellant and appellee. We are not inclined to the View that it is necessary to appear that the power conferred on Walter must be coupled with an interest in the subject-matter of the power, in prder to render it irrevocable as to appellee. The question here is whether appellee was equitably entitled, under all the circumstances, to a temporary injunction to restrain appellant from violating the contract, until such time as the court could hear the cause on its merits. Story, in the section above quoted, says : “ So, if the principal assigns all his effects for the benefit of his creditors, and gives the assignee a power of attorney to collect and receive all debts and outstanding claims, the power is irrevocable,” citing Walsh v. Whitcomb, 2 Esp. 565. In that case Walsh, being insolvent, had made to one Barker a general assignment, and, at the same time, executed to him a power of attorney to collect the debts due him for the benefit of his creditors, with power of substitution. Barker, in pursuance of the power of substitution, executed authority to one Hinman, who collected and receipted for a debt due from Whitcomb to Walsh. Walsh, subsequently to the execution of the power of attorney to Barker, gave a power of attorney to another person, who applied to Whitcomb for payment of his debt to Walsh, and refused to recognize Hinman’s receipt, and suit was brought in Walsh’s name, the plaintiff contending that the power of attorney to Barker was revocable, but the court held the contrary. It will be obserx’ed that the person contending lor the irrevocability of the power of attorney xvas not the grantee of the poxxmr, but a debtor of the grantor, who set it up in support of his defense of payment. “ The sole object of an interlocutory injunction is to preserve the subject in controversy in its then condition, and, xvithout determining any questions of right, merely to prevent the further perpetration of wrong, or the doing of any act whereby the right in controversy may be materially injured or endangered.” High on Injunctions, 3rd ed., sec. 4. See also ib., sec. 11. The bill in this case was filed January 27,1904, and the annual meeting for the election of officers and directors of the Monarch Book Company xvas to occur the tenth of the next February. We think it apparent from the record before us, that appellant is somexvhat hostile in her feelings towards appellee, at least in regard to the subject-matter of this suit, and we also think it apparent that, had not the temporary injunction been granted, the stock in question might have been voted in a manner prejudicial to appellee, and xvhich might haxTe resulted in damage to him which could not have been readily estimated, if at all. Under the circumstances we cannot say that the court erred in granting the temporary injunction. On the contrary, we think it xxras the exercise of reasonable precaution on the-part of the court to preserve matters in statu quo by injunction, till there could be a full and final hearing on the merits. We have carefully read and considered the argument of appellant’s counsel, and the questions discussed therein, but do not deem it necessary, on this appeal, to refer to all the questions discussed by counsel. In affirming the injunction order, it must be understood that xve hold, merely, that as the matter xvas presented to the chancellor, he did not err in granting the interlocutory injunction. Whether the record is such as to entitle appellee to the permanent relief prayed, is a question not before us. The decree will be affirmed. Affirmed.