Cleveland Iron Co. v. Ennor
| Decision Date | 25 January 1886 |
| Citation | 4 N.E. 762,116 Ill. 55 |
| Parties | Cleveland IRON CO. v. ENNOR. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Appeal from appellate court, Second district.
M. Y. Johnson and J. S. Barnum, for appellant.
R. H. McClellan and D. & T. J. Sheean, for appellees.
This was a bill in chancery, brought by William Ennor, in the circuit court of Jo Daviess county, for relief in respect of a judgment for $5,678 rendered against him, in favor of the Galena & Southern Wisconsin Railroad Company, on June 30, 1879, for the subscription price of eight of the first mortgage bonds of said company, which he had agreed to pay by signing the following subscription paper for eight bonds:
‘Galena, February, 1877.’
The action wherein the judgment was recovered, was brought upon said subscription paper. The bill sets out that the complainant never received from the company the bonds or stock so subscribed for, and that the company is utterly unable to furnish and deliver the bonds and stock; that the company is wholly insolvent; that its railroad and all its property and franchises were sold and conveyed on May 3, 1879, to a purchaser at a foreclosure sale under a decree of foreclosure of a mortgage given by the company to secure all the bonds issued by it; that one hundred of said bonds were never subscribed for, a fact of which the complainant was ignorant at the time of the recovery of the judgment, and has since discovered; that on July 11, 1879, upon a writ of capias ad satisfaciendum issued upon the judgment, the complainant was arrested, and imprisoned in jail, and kept so imprisoned until September 28, 1880, a period of more than 14 1/2 months, when he was released on bail, pending proceedings on appeal for discharge under the insolvent debtor act, which proceedings were still pending; and that it was not until after such release from imprisonment, when for the first time he learned that the full number of 100 bonds had not been subscribed for. Fraud is charged in obtaining the judgment, through false representations and false testimony on the part of the railroad company. The bill prays for an injunction to restrain any further attempts to collect the judgment until the defendant is able and ready to produce and deliver the said eight bonds and forth shares of stock; that the judgment be set aside and a new trial granted. Also that a promissory note for $500, which the complainant holds against the company, be set off against the judgment. The circuit court, on hearing, dismissed the bill. On appeal to the appellate court for the Second district, that court reversed the judgment of the circuit court, and entered a final order that a new trial be granted, and that the collection of the judgment be enjoined until the railroad company produce the bonds and stock in court, to be delivered to the complainant, whereupon the defendant took this appeal. There is no controversy upon the facts, and we do not think they show ground for setting aside the judgment and allowing a new trial.
As respects there not having been the number of 100 bonds subscribed for, it appears there were three subscription papers: the one signed by the complainant, upon which were subscribed 73 bonds; upon another similar paper, 19 bonds; and a third paper, containing 10 bonds, is as follows:
‘GALENA, April 13, 1877.
As to a portion of the bonds on the paper containing the 73, it is objected that the subscription for them was only colorable, in this: that two of the subscriptions for five bonds each were under the secret agreement that the subscribers should be required to take and pay for two only; and another, for five bonds, was under a similar agreement that only three should be taken and paid for. Such secret agreement was fraudulent as to the other subscribers, and was void and of no avail, and the subscription is to be regarded a valid one for the amount subscribed. Melvin v. Lamar Ins. Co., 80 Ill. 457. As to the paper containing the 10 bonds, it appears that the company never graded the railroad to a point within five miles of the village of Montfort and ceased to work upon the road before September 20, 1877, and never again resumed the work. Nothing was ever paid on any of these bonds, and none of them were even taken, and this was an invalid subscription from non-compliance with the conditions thereof by the railroad company. So, then, there were but 92 bonds subscribed, and complainant's subscription did not become binding upon him, there not having been 100 bonds subscribed for. This was a defense which might have been and should have been made in the action at law wherein the judgment was recovered; and it was not mere matter of defense, the one hundred bonds not being subscribed, which it was for the defendant to find out and make appear, but the subscription for them was an element of the cause of action, without proof of which there could not have been a judgment recovered. The declaration was upon the subscription paper averring that the 100 bonds had been subscribed. The defendant appeared, and defended against the suit by his attorney. All that was needed to avoid the recovery of the judgment was for the defendant to stand upon his legal rights, and insist upon the cause of action being established in a legal mode. Instead of this being done, there was produced upon the trial only the one subscription paper signed by the defendant; and secondary evidence, without objection by the defendant, was given, by the statement of a witness that 100 bonds had been subscribed. Thus the defendant waived his right to have the best evidence and the legal evidenceof the subscription, to-wit, the subscription papers, produced; when, if he had but stood upon such right, the subscription papers would have to have been produced, which, of themselves, would have shown the lacking subscription, and have defeated the action. The result-the judgment recovered-came from the defendant's neglect and inattention as to his legal rights.
What is relied upon as showing the fraud charged, in obtaining the judgment through false representations and false testimony, is that the president of the company told the complainant several times after his subscription that the 100 bonds were subscribed for, and that the exsecretary of the company testified on the trial that the 100 bonds were subscribed for. W...
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