Court Opinion

ID: 6968888
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:58:46.830397+00
Date Added: 2024-06-11T16:08:43.405150
License: Public Domain

Mr. Justice Wilkin delivered the opinion of the court: If it could be held that there was a valid agreement entered into by the parties at the meeting of November 5, as alleged in the cross-bill, that conclusion would dispose of all issues made on the original bill, hence that branch of the case naturally arises first. While the master reported to the circuit court that the evidence established such an agreement, the court, on exceptions and objections to his report, overruled the finding and dismissed the cross-bill, and that decision has been affirmed by the Appellate Court, both holding that the evidence on that subject failed to prove that the alleged agreement was consummated by the parties, McDoügall & Hammond and their creditors. To carry out such a contract would, we think, under all the circumstances of the case, be equitable and just as to the creditors, and there is therefore a natural inclination to do so. We are, however, unable to find in the record sufficient proof upon which to found such a decision. The only theory upon which the alleged agreement could be given effect would be, that the action of McDougall & Hammond, and their creditors, at that meeting, amounted to an assignment of the assets of the firm for the benefit of all their creditors. It is not claimed that Edward Johnson, one of the creditors, agreed to the proposition to pro rate the assets, nor does the proof show that McDougall so consented. As shown by the opinion of the Appellate Court, (Adams, J.,) the result of the meeting was not a consummated contract, but merely a preliminary arrangement for the drafting and circulation of a written agreement, which, though partially written up, was never signed. It is therefore impossible to ascertain just what the real action of the meeting was. The cross-bill being based solely upon the validity and binding force of the alleged agreement, and the proof failing to sustain that agreement, the order of the circuit court dismissing it at the cost of the complainants was properly affirmed by the Appellate Court. The appellants Dolese & Shepard, complainants in the original bill, insist that the circuit court erred in refusing to enforce the alleged assignment by McDougall & Hammond to them of October 24, 1891. It was held below that they had waived that assignment by participating in the creditors’ meeting of November 5. It had been so found by the master, and no objection to that finding was made by the complainants nor exception to his report urged before the court. We think the Appellate Court properly held that it was too late to make the objection there. (Hurd v. Goodrich, 59 Ill. 450; Pennell v. Lamar Ins. Co. 73 id. 303; Jewell v. Rode River Paper Co. 101 id. 57; Medsker v. Bonebrake, 108 U. S. 66.) .This sufficiently disposes of the contention without reference to the question whether the right to insist upon that assignment was waived by the conduct of the complainants prior to the filing of their bill, though we think there is force in the reasoning of the Appellate Court in its opinion in support of the conclusion that there was such waiver. These appellants also insist, that the circuit court erred in sustaining the claims of Olof Vider & Co. and Frieding & Johnson, as against them. McDougall, of the firm of McDougall & Hammond, had given these parties orders on the village of South Evanston on November 14, 1891, to the former for $4619.72 and to the latter for $974, this order specifying that it was “for work done on said special assessment for us.” The Appellate Court, we think, properly disposed of this assignment of error, as follows: “It is not questioned that Vider & Co. and Frieding & Johnson furnished to McDougall & Hammond labor and material for the improvement of West Lincoln avenue, nor is the correctness pf the amounts claimed by them, respectively, questioned; but it is objected that warrants were drawn, in pursuance of the orders, in violation of the injunction, and that the order payable to Olof Vider & Co. did not operate as an assignment of any part of the special assessment fund levied for the improvement of West Lincoln avenue. We do not understand that complainants’ solicitor questions the power of McDougall to assign the claims of the firm in payment of the firm debts, nor do we think his power in that regard can be successfully denied. (Manchett v. Gardner, 138 Ill. 571.) The money raised by the special assessment levied by the village of South Evanston for the improvement of West Lincoln avenue .was due to McDougall & Hammond, the contractors, for the making of the improvement. This is not controverted, but is impliedly admitted. The giving the orders operated as an equitable assignment to the payees of' the amounts mentioned in the orders, respectively, of the special assessment fund. Savage v. Gregg, 150 Ill. 161; Donk v. Alexander, 117 id. 330; Morgan County v. Thomas, 76 id. 120; Morris v. Cheney, 51 id. 451; Chicago Title and Trust Co. v. Smith, 158 id. 417. “Complainants’ counsel object that the order in favor of Olof Vider & Co. did not operate as an assignment of any part of the special assessment fund, for the reason that it does not expressly direct the amount of the order to be paid out of that fund; that the words of the order, ‘and charge the same to our acc’t. on West Lincoln av.,’ are not equivalent to a direction to pay from the proceeds of the West Lincoln avenue assessment. The cases cited by counsel in support of this proposition all relate to orders in which the drawers and drawees were private persons or private corporations, there being no legal limitation on the application of the fund subject to their control, and in this respect they are distinguishable from and inapplicable to the present case. The money due to McDougall & Hammond from the village was for work and labor performed and material furnished for the improvement of West Lincoln avenue in pursuance of a contract between them and the village, and the contract price for the improvement was to be paid for from the proceeds of a special assessment levied by the village. “When an ordinance of a city or village provides for the making of a local improvement, the ordinance must prescribe ‘whether the same shall be made by special assessment, or by special taxation of contiguous property, or general taxation, or both,’ (Starr & Cur. Stat. chap. 24, par. 118,) and the improvement cannot be made in any other than the prescribed mode. It is further provided that ‘all persons taking any contracts with the city or village, and who agree to be paid from special assessments, shall have no claim or lien upon the city "or village in any event, except from the collection of the special assessments made for the work contracted for.’ (Starr & Cur. Stat. chap. 24, par. 165.) The orders are evidence that McDougall & Hammond so agreed. The treasurer is required to keep a separate account of each fund and the debits and credits pertaining thereto, (Id. par. 94,) ahd no fund can legally be expended for any purpose other than that for which it was appropriated. (Id. pars. 90, 91, 92.) In the case of a special assessment for a local improvement, and if an amount is collected in excess of the cost of the improvement, the excess is to be refunded ratably to the persons by whom the assessment shall have been paid. (Id. par. 65.) “It is manifest from these provisions that a contractor for an improvement to be made by special assessment can be paid only from the proceeds of the special assessment. The account of the fund to be kept by the treasurer consists of charges to the fund of money paid into the treasury on account of it and credits of warrants drawn against it. The contractor’s account with the village necessarily consists of credits for work done on the improvement, and debits for warrants issued corresponding with such credits. Therefore, the direction in the order in favor of Vider & Co. , ‘charge the same to our acc’t. of West Lincoln av.,’ was, in effect, a direction to issue a warrant or warrants for the amount of the order on the special assessment fund for the improvement of that avenue. The order could be complied with only in that way. “It is further contended by complainants’ solicitors, that the warrants were issued to Vider & Co. and Frieding & Johnson in violation of the injunction. The orders, as before stated, were delivered to the payees the day of their date, viz., November 14, 1891. The Vider & Co: order was presented to the president of the board of trustees of the village the same day. The Frieding & Johnson order was drafted by W. S. Gates, a member of the board of trustees of the village, chairman of the finance committee of the board and. temporarily in charge of the streets, and was then signed ‘McDougall & Hammond’ by McDougall. By order of the president of the board, warrants were drawn in favor of Vider & Co. and Frieding & Johnson for the amounts specified in the orders and were duly signed. On the evening of November 16, 1891, after the service of the writ of injunction, Mr. Gates rS-ported to the board, then in regular session, the receipt of the orders and what had been done in regard to them, and the board approved the report and directed payment to be made to Vider & Co. and Frieding & Johnson. After such approval, and while the board was still in session, the writ of injunction was read by the village clerk. November 17, 1891, warrants were delivered to Vider & Co. for the amount of the order. The warrant in favor of Frieding & Johnson was tendered by Mr. Gates to Frieding after the board adjourned, but Frieding told Mr. Gates that they wanted the cash, and requested him to keep the warrant and have it discounted for them. Gates subsequently tore off the signature and returned the warrant to the village clerk. The court found, as heretofore stated, that the issuing of the warrants was not a violation of the injunction, for the reason that Olof Vider & Co. and Frieding & Johnson were, by virtue of the orders of November 14, 1891, the equitable owners of amounts of the special assessment equal to the amounts of the orders. We are not prepared to say that this finding of the court is erroneous, but, even conceding that there was a technical violation of the injunction, we can not perceive how the complainants could be prejudiced thereby, inasmuch as Vider & Co. and Frieding & Johnson, being the equitable owners of the fund to the extent of their orders, the fund, to that extent, could not be applied in satisfaction of complainants’ judgment.” The claims of other creditors are not questioned. Other questions raised and discussed by counsel in their argument have been considered, but we do not regard any of them as of controlling importance. The record is very voluminous, and seems to have been very carefully considered by the Appellate Court, and, in our opinion, disposed of in conformity to the law and facts of the case. Its judgment will accordingly be affirmed. , , , _ Judgment affirmed.