Bride v. Stormer

• Decision Date: 08 June 1938
• Docket Number: No. 24481.,24481.
• Citation: 368 Ill. 524,15 N.E.2d 282
• Parties: BRIDE et al. v. STORMER et al.
• Court: Illinois Supreme Court

368 Ill. 524

15 N.E.2d 282

BRIDE et al.

v.STORMER et al.

No. 24481.

Supreme Court of Illinois.

April 15, 1938.

Rehearing Denied June 8, 1938.

Suit to foreclose trust deed by Nicholas Bride and others against Joseph W. Stormer and others, wherein the complainants sought to obtain a deficiency decree against the receiver of Henry Denhart & Company, a defunct state bank. From a judgment of the Appellate Court, 291 Ill.App. 502, 10 N.E.2d 208, affirming decrees of the circuit court dismissing the bill for want of equity as against the receiver and rendering a deficiency decree against Joseph W. Stormer alone, Nicholas Bride and others appeal.

Judgment of the Appellate Court and decrees of the circuit court reversed, and cause remanded, with directions.Appeal from Appellate Court, Second District, on Appeal from Circuit Court, Lee County; Albert H. Manus, Judge.

Ernest J. Henderson, of Minonk, Orman Ridgely, of Eureka, and Nathan Weiss and C. R. Birkett, both of Peoria, for appellants.

C. L. Conder, of Pekin, and George W. Hunt, of Peoria, for appellees.

FARTHING, Chief Justice.

The appellants in this foreclosure suit sought to obtain a deficiency decree against the receiver of Henry Denhart & Company, a defunct State bank. The circuit court of Lee county, by its foreclosure decree of November 19, 1936, dismissed the bill for want of equity, as to the receiver, and, on December 29, 1936, rendered a deficiency decree against Joseph W. Stormer, alone, the maker of the notes and trust deed. The Appellate Court for the Second District affirmed the circuit court's decree, and the cause is here by leave granted to appeal. 291 Ill.App. 502, 10 N.E.2d 208.

There is no dispute as to appellants' right to foreclose. The land is located in Lee county but the bank was located in Tazewell county, and the receiver appointed by the Auditor of Public Accounts had applied to the circuit court of Tazewell county for its assistance in the liquidation of the bank. One of his contentions is that he could not be sued elsewhere than in the circuit court of Tazewell county.

In Heiple v. Lehman, 358 Ill. 222, 192 N.E. 858, a former receiver of the same bank had taken judgment in the circuit court of Woodford county against the two makers of a note. They were granted leave to plead, and we affirmed a judgment in favor of one of them, which judgment had been ordered paid in the due course of liquidation. We overruled the receiver's contention that the circuit court of Woodford county lacked jurisdiction to render a judgment on the claim set off against the note, and that the defendant should have been compelled to file her claim in the Tazewell county circuit court. The receiver was appointed by the Auditor of Public Accounts under the Banking Act. Ill.Rev.Stat.1937, c. 16 1/2, § 11. The foreclosure suit in the present case was required to be brought in the county where the land is located, and since the receiver was not appointed by any court, and the statute gives him the right to sue and defend, it was proper to make him a defendant in the foreclosure suit in Lee county without the consent of any court. This contention must be overruled.

The appellees contend that the foreclosure decree, rendered November 19, 1936, was final and appealable. It dismissed the bill, as against the receiver of the bank, for want of equity. The decree determining the deficiency and ordering execution to issue against Stormer was rendered December 29, 1936, and the appellants' notice of appeal was filed on March 12, 1937. The general rule is that a decree dismissing a bill or complaint for want of equity, as to one or more defendants, is not final and cannot be appealed from on that ground until there has been a final disposition of the cause as to the remaining defendants, except where great hardship or injustice would be occasioned by a denial of such an appeal. People v. Banks, 285 Ill. 137, 140, 120 N.E. 466;Sheaff v. Spindler, 339 Ill. 540, 549, 171 N.E. 632;Free v. Successful Merchant, 342 Ill. 27, 30, 173 N.E. 753. The decree of November 19, 1936, could not determine ultimately the question of a deficiency. It could not then have been determined that appellants would ever have a right to a deficiency decree. This would depend on what occurred at the sale, and nothing final could be done with reference to a deficiency until the coming in and confirmation of the master's report of sale. An appeal based on the ground that the chancellor had found that the receiver was not liable for a deficiency, in the decree of November 19, 1936, would have been premature.

In this connection, section 74(1) of the Civil Practice Act, Ill.Rev.Stat.1937, c. 110, § 198(1), p. 2407, provides that: ‘Every order, determination, decision, judgment or decree, rendered in any civil proceeding, if reviewable by the Supreme or Appellate Court of this State by writ of error, appeal or otherwise, shall hereafter be subject to review by notice of appeal, and such review shall be designated an appeal and shall constitute a continuation of the proceeding in the court below.’ Under the earlier practice, a decree determining the rights of the parties was not subject to review in an appeal from a subsequent decree in the same suit, which did not involve those rights; but a writ of error, sued out after the later decree was rendered, could be made use of to review the entire record, including the earlier decree. Drummer Creek Drainage District v. Roth, 244 Ill. 68, 72, 91 N.E. 63, 64. In that case we held: ‘While this court has held that in partition proceedings the decree which finally adjudicated the rights and interests of the parties could not be reviewed on appeal from a later decree in the same proceeding which did not affect such interests of the parties (Crowe v. Kennedy, 224 Ill. 526, 79 N.E. 626;Piper v. Piper, 231 Ill. 75, 83 N.E. 100;), we have also permitted, in partition proceedings, the original decree fixing the rights of the parties and a later decree taxing costs against certain of the parties to be reviewed by one writ of error. (Smith v. Roath, 238 Ill. 247, 87 N.E. 414,128 Am.St.Rep. 123).’

Appellants could have reviewed both these decrees by a single writ of error before the adoption of the Civil Practice Act, and now, in view of section 74(1), supra, both decrees may be reviewed by one appeal. The contention that the notice of appeal filed March 12, 1937, could not include the decree of November 19, 1936, cannot be sustained.

Originally, Henry Denhart & Company was a private bank, but after it had operated from 1866 to 1920 it was incorporated as a state bank. It was closed on April 11, 1930. The appellee, Joseph W. Stormer, began work at the bank in 1908 and was made assistant cashier in 1921, and was so employed when the bank closed. In 1919, George T. Harland owned the land involved in this suit and obtained a mortgage loan of $9,000 from the private bank of Henry Denhart & Company. After the bank was incorporated the two customers who held the $5,000 and $4,000 Harland notes and interest coupon notes, received from the bank the money due on the interest notes. In 1923, Henry Denhart, trustee, acting for the bank, filed a suit to foreclose the Harland trust deed. He alleged in his bill of complaint that the bank was the owner of all the Harland notes and the decree found this to be the fact. At the close of the period of redemption, the land was sold; that master's certificate of indebtedness was surrendered; Henry Denhart, trustee, receipted for $7,830; a deficiency decree was rendered against George T. Harland, and the land was deeded by the master in chancery to Joseph W. Stormer, February 28, 1925. Stormer's testimony is not disputed that he knew nothing about this until later, and that he had authorized no one to bid at the sale for him. He paid no part of the purchase price.

Before using the certificate of indebtedness, issued by the master at the beginning of the period of redemption, in the purchase of the land at the foreclosure sale in February, 1925, the bank paid its two customers the amounts due on their $4,000 and $5,000 notes mentioned above, and entered these notes on its books as bills receivable. Two years later, one of these customers, George Birkett, bought from the bank one of the notes involved in the foreclosure suit before us.

On March 5, 1925, Joseph W. Stormer and wife executed a trust deed of the same land securing payment of notes for $12,000. These notes were carried on the bank's books as bills receivable until sold by it to customers, and it, alone, received the proceeds of the loan. Stormer and wife also executed a warranty deed to the mortgaged land, with the grantee's name omitted, and delivered that deed to the bank. These transactions were at the request of the cashier, H. A. Kingsbury. The bank paid the interest on the Stormer notes, and its agent in Lee county had charge of the mortgaged land, collected the rents, paid the taxes and made the repairs from the time Stormer acquired the legal title until the bank was closed.

Appellants introduced in evidence the minutes of the meeting of the board of directors of the bank, held in 1923, authorizing the foreclosure of certain Lee county mortgages, including the Harland trust deed. They also introduced minutes of meetings of that board held in February and March, 1925, which contain a general discussion of the making of the new Stormer trust deeds and notes and a resulting improved condition in the bank's bills receivable account. The receiver offered in evidence part of the files in four other foreclosure proceedings in Lee county showing that the bank had made four other Lee county loans about the same time it made the Harland loan, and that it foreclosed all five trust deeds about the same time in separate suits. The proof showed that the bank's attorney was paid by it for his services in foreclosing the Harland trust deed. Stormer testified that he had no...