Bouton v. Dement

• Decision Date: 11 November 1887
• Citation: 14 N.E. 62,123 Ill. 142
• Parties: BOUTON v. DEMENT.
• Court: Illinois Supreme Court

123 Ill. 142

14 N.E. 62

BOUTON

v.DEMENT.

Supreme Court of Illinois.

November 11, 1887.

Appeal from appellate court, First district.

Leaming & Thompson, for appellant.

R. A. Childs, for appellee.

SHELDON, C. J.

This is an appeal from a judgment of the appellate court for the First district, affirming a decree of the circuit court of Cook county against Christopher B. Bouton, rendered on June 30, 1886, for the sum of $17,584.92, in the case of a creditors' bill brought by A. B. Dement and others against said Bouton and others, the appeal being by Bouton. The decree was for an indebtedness found to be due from Bouton to the Empire Fire Insurance Company of Wheaton, for shares of the capital stock of said company taken by Bouton. On October 26, 1878, said Dement and others recovered a judgment against said insurance company for $3,500 as damages, and $17 costs, for a loss upon a policy of insurance issued by the company in January, 1877. On October 1, 1878, the insurance company made an assignment of all its property and effects to William D. Cole, for the benefit of its creditors. An execution upon the aforesaid judgment having been issued, and returned ‘No property found,’ the plaintiffs therein, Dement and others, on March 2, 1880, brought this creditors' bill upon the judgment, making the company, Bouton, Cole, and others, parties defendant, and praying for discovery and relief. The defendants filed their respective answers; Cole, in his answer, admitting the material allegations of the bill. He also filed a cross-bill, as assignee, making all the other parties to the original bill defendants, alleging Bouton's liability to the company, and breaches of trust on his part and that of other directors and officers of the company; praying for the proper relief, and that the several parties charged with liability to the company be required to pay the several amounts found against them, to him, to be distributed among the creditors of the company.

Bouton's account, by his answer and testimony, of his alleged liability to the company, is as follows: That about January 15, 1875, he was the holder of 150 shares of the capital stock of the Union Insurance Company, of the par value of $15,000, which he at that time exchanged for 280 shares of the par value of $14,000 full-paid Empire Fire Insurance Company's stock, with said Empire Company; that he did not give his note to the said Empire Company for any sum whatever, did not owe said company anything, and did not agree to pay said Empire Company any sum whatever for said 280 shares of its stock, other than the said 150 shares of said Union Insurance Company's stock which were then delivered in payment of said 280 shares of the Empire Insurance Company's stock. That the Empire Insurance Company of Chicago had purchased a note for $10,000, made by him to his own order, and by him indorsed to the Union Insurance Company, which note after wards came into the possession and ownership of the Empire Fire Insurance Company of Wheaton; that this note was secured by real estate in Cook county, conveyed by a trust deed to a trustee. That in April, 1877, anticipating bankruptcy, he applied to the Empire Fire Insurance Company of Wheaton for a description of the note, whose officers then requested him to make an effort to get some third party to purchase the land securing the note, and to given a new note, with the same security in lieu of his, Bouton's, note; that this was done with one J. F. Page, to whom the real estate was conveyed; that Page's note for $11,200, and trust deed securing it, of the same real estate, were substituted for Bouton's note and deed of trust, and the latter were canceled and surrendered to Bouton. That the Page note was afterwards hypothecated to the First National Bank of Chicago, and by it sold to one Cushing, and by Cushing to Bouton, who still holds it.

The Union Insurance Company became merged in the Empire Fire Insurance Company.

The finding of the circuit court was that the change from the Union Insurance Company to the Empire Fire Insurance Company left Bouton a stockholder in the latter company, and left him indebted upon the stock that he held there, in the amount of the face of the Page note; that that note stood in place of his liability for that stock; and found the measure of his said liability. The decree was for the amount of the note, after deducting all payments of money made on account of it by Bouton.

After a full examination of the testimony we are not prepared to say that this finding of fact by the circuit court was not justified from the evidence. The evidence shows that from about the time Bouton became a stockholder in the Empire Fire Insurance Company until it made its assignment, he was a director and a member of the finance committee of the company; that, when the Union Insurance Company was merged into the Empire Fire Insurance Company, a certain portion of the stockholders of the former made new subscriptions to the capital stock of the...