Court Opinion

ID: 7000299
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:40:51.994071+00
Date Added: 2024-06-11T16:09:53.319479
License: Public Domain

Mr. Presiding Justice Worthington delivered the' opinion of the court. In addition to the exhibits, all the evidence in this case is the testimony of Charles A. Todd, treasurer of both corporations ; Henry Stanley, president of both, and Emile C. Teuscher, vice-president and secretary of both. Henry Stanley testified, as abstracted : “ The claim of the Jewell Belting Company originated with a consignment of goods by the Jewell Belting Company to the Todds & Stanley Mill Furnishing Company; that the Todds & Stanley Mill Furnishing Company got behind with the Jewell Belting Company and used the money realized from the sale of the goods in both concerns, as they were both intimately connected; that the goods consisted of leather belting, and were sent to the Todds & Stanley Mill Furnishing Company, to be sold by that company, for the account of the Jewell Belting Company. The goods were sold to their customers, and the money was collected and used for the necessities of the two concerns; that is, the Todd-Stanley Company and the Todd Pulley & Shafting Works. The goods were consigned by the Jewell Belting Company to the Todds & Stanley Mill Furnishing Company, to be sold by that company on commission, and they were so sold to various parties, and with the money that arose from the sale of these goods, both the corporations were run, some of the money that arose from the sale of these goods being used for the purpose of operating the Todd Pulley & Shafting Works, and some for the purpose of operating the Todds & Stanley Mill Furnishing Company; that a part of the leather belting so sent by the Jewell Belting Company was used by the Todd Pulley &. Shafting Works upon their own machinery, the belting being conveyed by the Todds & Stanley Mill Furnishing Company to the Todd Pulley & Shafting Works.” * * * “ That under the contract between the Jewell Belting Company and the Todds & Stanley Mill Furnishing Company, the Todds & Stanley Mill Furnishing Company was to account to the Jewell Belting Company for all goods sold under the contract; but the Todd Pulley & Shafting Works also signed these notes because it received a part of the money for which the Jewell Belting Company’s goods were sold ; that he could not tell exactly how much of the money the Todd Pulley & Shafting Works received, but it got a good deal of it; that the two concerns were practically run as one; one company would get paper discounted, and, with the money so received, the liabilities of both companies would be paid; and whenever one company had money and the other had none, the money on hand would be used for both companies; that he could not tell just how much of the money received by the Todds & Stanley Mill Furnishing Company from sales of the Jewell Company’s goods was so used by the Todd Pulley & Shafting Works; he could only guess at it; but from the general idea he had of it, he thought the money was used about half and half for each company.” The witness further testified that he could not tell the exact condition of the accounts between the two companies; that the books might show it, but that it was a complicated account. Upon cross-examination he stated “ that the reason he could not individualize the money was because the two corporations were run practically as one whenever their mutual interest required it; that they had the same stockholders and the same officers; that at the time these notes were executed there was no apprehension of the insolvency of either corporation; both expected to go on and do business, and whatever was done was done in good faith.” Emile C. Teuscher testified “ that the two concerns were practically one, but their corporate capacities were separate.” The following is a copy of the resolution of the stockholders authorizing the making of the notes in evidence, and was drawn by Mr. Watts, acting as attorney for both companies: “ Special Stockholders’ Meeting Ho. 14. Office of the Todd Pulley & Shafting Works. East St. Louis, Ill., March 17, 1898. “At a stockholders’ meeting of this company, this day held, at which all of the stock of the company was legally represented, it was unanimously agreed, after motion duly made and seconded, and voted upon, that this corporation should make joint notes with the Todds & Stanley Mill F. Co., of St. Louis, Mo., in favor of the Jewell Belting Company, of Hartford, Connecticut, to the amount of twelve thousand dollars or less. The reason of this action by the stockholders of the company is the fact that the stockholders in the above mentioned two corporations are jointly interested, and that this corporation has received a part of the goods and benefits for which these notes were given. Adjournment. There being no further business, the meeting, on motion, ¿djourned. Emile C. Teuscher, Sec.” When the notes to the Jewell Company were given the indebtedness was due, and by the acceptance of these notes the time of payment was extended for two, four, six, eight, ten and twelve months, according to the terms of the notes respectively. Part of the belting was delivered by the Furnishing Company directly to the Pulley Company, and used by it, and the proceeds of the sale of the remainder shared by both companies. The intimate relations of both com-panics, as shown, by the evidence, practically made an extension of time for payment to one company an extension to the other. Both shared, as the evidence appears, in the benefits derived from the belting furnished by the Jewell Company to the Furnishing Company to be sold on commission. Both companies, through their officers being the same, knew on what terms and conditions this belting was consigned. Treating both corporations as separate and distinct, so far as the record discloses, the Todd Pulley & Shafting Company owed the Todds & Stanley Mill Furnishing Company for so much of the belting as it had used or disposed of, and the account was due. By the execution of these notes, it secured an extension of time to the extent of this indebtedness, at least, which extension was a valid consideration on its part for the execution of the notes. Harris v. Harris, 180 Ill. 157. Under all the facts in the case, we think the action of the stockholders, at their meeting March 17,1898,-cited supra, was not ultra vires, and that there was valid consideration for the notes moving to both corporations as signers. The objection, that this proceeding is in the nature of an action at law, and no propositions of law having been submitted, and no exceptions taken to the introduction of testimony or to the finding of the court, is not well taken. The proceedings in the County Court in cases of voluntary assignment are in the nature of proceedings in chancery, regulated by statute in the County Court. Union Trust Co. v. Trumbull, 137 Ill. 146; Farwell v. Patterson, 76 Ill. App. 601. Judgment reversed and case remanded, with directions to allow claim.