Gunsul v. American Sur. Co. of New York

• Decision Date: 13 June 1923
• Docket Number: No. 15165.,15165.
• Citation: 308 Ill. 312,139 N.E. 620
• Parties: GUNSUL v. AMERICAN SURETY CO. OF NEW YORK.
• Court: Illinois Supreme Court

308 Ill. 312

139 N.E. 620

GUNSUL

v.AMERICAN SURETY CO. OF NEW YORK.

No. 15165.

Supreme Court of Illinois.

April 18, 1923.

Rehearing Denied June 13, 1923.

Error to Appellate Court, Second District, on Appeal from Circuit Court, Kane County; Adam C. Cliffe, Judge.

Action by Harvey Gunsul, receiver, against the American Surety Company of New York. Decree for plaintiff in circuit court was affirmed by the Appellate Court (225 Ill. App. 76), and defendant brings certiorari.

Judgment of Appellate Court affirmed.F. F. & J. V. Norcross, of Chicago, for plaintiff in error.

John K. Newhall, of Aurora (John M. Raymond, of Aurora, of counsel), for defendant in error.

FARMER, J.

This case comes to this court on petition for writ of certiorari to review a judgment of the Appellate Court for the Second District affirming a decree of the circuit court of Kane county against petitioner, the American Surety Company of New York.

Frank W. Cherry was on July 10, 1916, by the circuit court of Kane county appointed receiver of the Chicago, Aurora & De Kalb Railroad Company, and gave bond as such receiver in the sum of $25,000, with the American Surety Company of New York as security. Cherry continued to act in the capacity of receiver until September, 1917, when he presented to the court his report and also his resignation as such receiver, his resignation ‘to take effect and be accepted only on the entry by the court of its final order’ upon the report filed with the resignation. At a later date of the same term of court Cherry filed a supplemental report of his receivership, and an order was entered approving the report, accepting the resignation, and discharging Cherry as receiver. At a later date of the same term, on the application of intervening creditors, the order approving Cherry's report was vacated, and on January 15, 1918, Harvey Gunsul was appointed receiver in place of Cherry. Creditors, and Gunsul as receiver, instituted proceedings in the receivership case, charging that Cherry, while receiver, had made large profits by dealing in the stocks and bonds of the railroad company, which he should account for to the creditors. That proceeding resulted in a decree July 16, 1918, ordering and directing Cherry to pay to Gunsul, as receiver, $52,416.71, with interest at 5 per cent. from the date of the decree, and that execution issue therefor. Cherry prayed an appeal from the decree to the Appellate Court, which was allowed upon his giving bond in the sum of $70,000 within 60 days and filing a bill of exceptions. No appeal was perfected, but a writ of error was sued out of the Appellate Court. No order was obtained making the writ of error a supersedeas, and no supersedeas bond was filed. On the 9th of September, 1918, which was a term of court subsequent to the one at which the decree was entered, on the petition of Cherry the following order was entered by the circuit court of Kane county:

‘This cause having come on to be heard upon the petition of F. W. Cherry filed herein, and the said F. W. Cherry appearing by John A. Russell, his solicitor, and Harvey Gunsul, receiver of the Chicago, Aurora & De Kalb Railroad Company, appearing for himself and by John K. Newhall, his solicitor, the court, having heard said petition read and being now fully advised in the matter, and having heard the argument of counsel in respect thereto, doth find that said petitioner desires to have the decree heretofore entered submitted to the Appellate Court of the Second District of the state of Illinois for review on writ of error, and that said petitioner is now actively engaged in prosecuting said writ of error for the purpose of reviewing the decree heretofore entered against the said F. W. Cherry and for the purpose of reversing the same. It is therefore ordered, adjudged, and decreed by the court that during the time said cause is pending for review either in the Appellate Court of the Second District of the state of Illinois or in the Supreme Court of the state of Illinois, that in case a certificate of levy shall be issued upon the decree heretofore entered against the respondent, F. W. Cherry, in the above-entitled cause during the pendency of said cause on review, that such certificate of levy shall not be assigned, transferred, or sold by the said Harvey Gunsul, receiver of the said Chicago, Aurora & De Kalb Railroad Company, nor by said company, nor by the successor of the said Harvey Gunsul in case one should be appointed, and that no sale shall be made thereunder until said cause shall have been finally disposed of on review. It is further ordered, adjudged, and decreed by the court that the said F. W. Cherry shall prosecute his said appeal with diligence, to the end that a full determination thereof may be had as expeditiously as reasonably it may be. It is further ordered, adjudged, and decreed by the court that, in case said Cherry shall not prosecute his said appeal with diligence, said Harvey Gunsul, receiver as aforesaid, may apply to the court to have this order modified, vacated, or set aside.’

Cherry prosecuted his writ of error with due diligence. The Appellate Court affirmed the decree against him in the main, but slightly reduced the amount found due from him, reversed the decree, and remanded the case, with directions to the circuit court to modify the decree in accordance with directions given in the Appellate Court opinion. The judgment of the Appellate Court was reveiwed on writ of error by this court and affirmed. See 217 Ill. App. 213; 297 Ill. 130, 129 N. E. 730. On filing the final mandate in the circuit court the decree was made to conform to the directions of the final remanding order. This suit was brought by Gunsul as receiver on the bond given by Cherry as receiver in the sum of $25,000, which was signed by plaintiff in error as surety.

At the time the decree was entered by the circuit court against Cherry, July 16, 1918, he was the owner of 440 acres of land in Green county, Ill., which was free of incumbrance, and on the 18th of July a transcript of the decree was filed in the recorder's office of Green county for the purpose of making it a lien on the land in that county, and an execution was issued on the transcript. No attempt was made to sell the Green county lands by virtue of the decree while it was pending for review in the Appellate Court and in this court. Plaintiff in error filed four special pleas to the declaration of Gunsul, receiver, on the bond of Cherry, but its defense is embraced in the forth plea. That plea alleges the filing of the transcript of the decree in the office of the recorder of deeds of Green county in order that it might become a lien against the lands of Cherry in that county, which were alleged to be reasonably worth more than the amount of the decree. The plea alleges Cherry prayed an appeal from the decree, which was allowed upon his filing bond in the sum of $70,000 within 60 days, and that thereafter, and before the expiration of 60 days, on September 9, 1918, a consent order, by agreement between Cherry and Gunsul, was entered by the circuit court of Kane county without notice to or consent of plaintiff in error, which order is set out in full in the plea, the material portion of which we have above quoted. The plea alleges that Cherry, in reliance upon said order, did not perfect his appeal, but prosecuted a writ of error, which was finally disposed of upon review in the Supreme Court on April 14, 1921, a period of more than two years after the entry of said consent order. The plea alleges:

‘That by reason of the entry of said consent order postponing the sale of said farming land and waiving the giving of said appeal bond, and in the meantime reserving to the plaintiff the right to the immediate issuance of a certificate of levy or sale as set forth in said order, all without the consent of this defendant, this defendant was released and discharged from all liability as surety of said F. W. Cherry upon said receiver's bond in plaintiff's declaration mentioned.’

Plaintiff in error contends the order of the circuit court of Kane county of September 9, 1918, was entered by consentas an agreed order between the obligee and the principal in the bond without consent of the surety; that it was a binding agreement for a stay of execution of the decree against Cherry; that the obligation guaranteed by the surety should not be enforceable until the expiration of a certain period of time; that this essentially changed the original obligation for the performance of which the surety was bound, and such surety, not having consented thereto, was released from liability, whether damnified or not.

The order of September 9 recited that Cherry was actively prosecuting a writ of error to review the decree against him and ordered that no sale be made under the decree until the cause shall have been finally disposed of on review. In the first place, we are of opinion the court had no jurisdiction to enter the order. The term at which the decree was entered had expired, and Cherry, being unable to give an...