Brown v. Schintz

• Decision Date: 24 April 1903
• Parties: BROWN et ux. v. SCHINTZ et al.
• Court: Illinois Supreme Court

202 Ill. 509

67 N.E. 172

BROWN et ux.

v.SCHINTZ et al.

Supreme Court of Illinois.

April 24, 1903.

Error to Appellate Court, First District.

Action by Theodore H. Schintz, trustee, and others, against Thomas Brown and others, for the foreclosure of certain trust deeds. From a judgment in favor of defendants Huber and Mann, affirmed by the Appellate Court (98 Ill. App. 452, 459), defendant Brown and wife bring error. Affirmed.

Magruder, C. J., dissenting.

Albion Cate, for plaintiffs in error.

Ives, Mason & Wyman, for defendants in error.

George Wheatman and William Boulton, copartners, and John Beaubien, file their petition in the circuit court of Cook county on August 9, 1897, to enforce a subcontractor's lien on lot 45, block 1, etc., in the city of Chicago. The defendants were Thomas Brown, the owner and occupant of said lot, and Elizabeth Brown, his wife, and Theodore H. Schintz, trustee in two trust deeds executed to him by Brown and wife to secure two notes, one for $2,500 and the other for $700, payable to Schintz; the first having been assigned by him to Jacob Huber, and the second to Nicholas J. Mann, who were likewise defendants, together with certain persons claiming mechanics' liens upon the lot under contracts with Brown for the erection of a building thereon, and for labor and material for the same. The interests of the latter defendants are not involved in this writ of error. Brown and wife and Huber and Mann answered, but Schintz was defaulted. Huber and Mann, in their answer, set up the trust deeds and notes held by them, respectively, and prayed a foreclosure thereof. The cause was referred to the master to take testimony and report his findings, which he did, to which objections were filed and overruled, and the same ordered to stand as exceptions to said report. He found against the claim of Huber and Mann, and that the petitions, intervening petitions, cross-petitions, and all answers claiming mechanics' liens on the premises, should be dismissed for want of equity. The chancellor confirmed the master's report as to all mechanic's lien claims, but sustained exceptions thereto on behalf of Huber and Mann, and entered a decree in favor of the former for $1,069.73 and costs, and in favor of the latter for $300.84 and costs, both subject to a receiver's trust deed for $600. Brown and wife alone prosecuted an appeal to the Appellate Court for the First District, and the branch of that court affirmed the decree of the circuit court. To reverse that judgment of affirmance, this writ of error has been sued out.

The facts are undisputed. Thomas Brown, the owner of the lot in question, applied to Theodore H. Schintz for a loan of $3,200 with which to erect a building on the same, to be secured by trust deeds upon the premises. Schintz agreed to make the loan, and Brown executed one note for $2,500 on April 26, 1897, payable to his own order, due in five years, with interest notes of $75 each, due every six months, and indorsed said several notes to the defendant in error Jacob Huber. He and his said wife also executed a trust deed upon the premises to Schintz, as trustee, to secure these notes, which was duly recorded April 27, 1897. On the same day he executed another note for $700, with interest coupons, which he indorsed to defendant in error Nicholas J. Mann, and he and his wife executed another trust deed of the same date to Schintz, trustee, to secure said last-mentioned notes, conveying the same lot, which was also duly recorded May 5, 1897. Schintz agreed to advance the money on the loan as the building progressed and the mechanics erecting the same should become entitled to payment. On July 16, 1897, he made his two personal checks, payable to the order of Thomas Brown, on the Merchants' Loan & Trust Company, and delivered the same to him-one for $1,075, which on the same day was indorsed by Brown to C. S. Mattice & Co., contractors on the building, and by them immediately indorsed to Wheatman & Boulton, subcontractors; the other for $125, which on the same day Brown indorsed to C. S. Mattice & Co., and they immediately indorsed to James Dwyer, another subcontractor. Neither of said checks was presented to the payee bank until the 19th day of July following, at which time payment was refused because, as stated by the bank, the drawer, Theodore H. Schintz, had on that day made an assignment for the benefit of his creditors. He had a balance on deposit in the bank when he made the checks, and at the close of business hours on Saturday, July 17th, amounting to about $2,000 (more than enough to pay both checks); and, so far as the evidence shows, that money remained in the bank at the time of the general assignment by Schintz. The Merchants' Loan & Trust Company was located in, and Schintz and all the persons to whom the checks were issued and transferred resided in, the city of Chicago. The building in progress of erection on the lot was not completed at the time of the general assignment by Schintz, and, learning of that fact, the contractors abandoned the work. A receiver was then appointed for the premises, who was authorized by the court to borrow $600 to complete the building, which order was made by consent of all the parties in interest; the certificate of that loan to be a first lien upon the premises and all assets in the receiver's hands, together with the rents, etc. He accordingly borrowed $600, executing a trust deed to secure the same, with which he completed the building. That trust deed is by the final decree made a superior lien to the trust deeds held by Huber and Mann. Nothing was paid upon the building loan of $3,200, unless the two checks above mentioned amounted to such payment. The correctness of the amounts found due Huber and Mann, if they are entitled to recover, is admitted.

WILKIN, J. (after stating the facts).

Counsel for defendants in error object that the transcript of the record is incomplete and insufficient to present the errors insisted upon. The principal question raised in the Appellate Court, and again in this court, is whether the above-named checks constituted payments by Schintz to Brown on the $3,200 building loan. The parts of the record contained in the transcript sufficiently present that question, and for such purpose the transcript is sufficient. See authorities cited in the opinion of the Appellate Court. Of course, errors cannot be insisted upon, which the transcript fails to show. As was said in Bertrand v. Taylor, 87 Ill. 235: ‘This court cannot properly consider any question arising upon the record unless we have a full record before us, or it is made known to us in some approved manner that the transcript contains all parts of the record material to the question submitted to us for decision.’ See, also, Culver v. Schroth, 153 Ill. 437, 39 N. E. 115;Deimel v. Parker, 164 Ill. 627, 45 N. E. 966.

It is further objected that the transcript is insufficient because the certificate of evidence certifies only what the evidence tended to show. For the purpose of raising legal questions, it is sufficient if it appears from the bill of exceptions or certificate that the evidence tended to support the issue. Costly v. McGowan, 174 Ill. 76, 50 N. E. 1047;Johnson v. Johnson, 187 Ill. 86, 58 N. E. 237.

On the principal question, as above stated, the controversy is between Brown and wife and Huber and Mann-whether or not the decree in favor of the latter is, under the law, authorized by the facts. They claim only the amount of the two checks mentioned in the foregoing statement, amounting to $1,200, and interest to be prorated between them according to the amounts held by them, respectively, against Brown; their contention and the holding of the courts below being that such checks were payments, upon the consideration for which their trust deeds were given-that is, an advancement to that amount by Schintz upon the building loan. It is conceded that, deriving their interest in those trust deeds by assignment from Schintz, they held them subject to all the infirmities to which they would have been subject in his hands. The position of counsel for plaintiffs in error is that under the facts the making and delivery of said checks to Thomas Brown were in no proper sense payments upon said loan, and therefore the consideration for the notes and trust deeds wholly failed-a complete defense against the trust deeds in the hands of Schintz, and consequently against his assignees. They say these checks were absolutely worthless. But that is not a fair statement of their real character. At the time they were drawn and delivered to Brown, the drawer (Schintz) had funds on deposit sufficient to pay them in full, and hence they were at that time perfectly good. Although they were not actually paid to the parties to whom Brown assigned them, that was because the parties failed to present them to the Merchants' Loan & Trust Company in apt time. The nonpayment was attributable wholly to the negligence of the holders. All parties agree that, the bank being located and all parties interested residing in the same city, it was the duty of the payee or his assignees (the same diligence being required of the assignees as of the drawee) to present the checks to the bank for payment on the same day, or, at farthest, the next day after, they were delivered and indorsed, within banking hours, and that the failure to do so absolutely discharged the indorser, Brown. Bickford v. First Nat. Bank, 42 Ill. 238, 89 Am. Dec. 436; Story on Promissory Notes, 495; Strong v. King, 35 Ill. 9, 85 Am. Dec. 336; 5 Am. & Eng. Ency. of Law (2d Ed.) 1042; 2 Daniel on Neg. Inst. 516; 2 Randolph on Com. Paper, 1103; Merchants' Bank v. Spicer, 6 Wend. 443;Little v. Phenix Bank, 2 Hill (N. Y.) 425; Veazie Bank v. Winn, 40 Me. 60. The maker, Theodore H. Schintz, however, remained liable unless he suffered some loss by reason of the holder's failure to present them in apt time. See same...