Jenkins v. the Int'l Bank

• Decision Date: 17 November 1884
• Citation: 1884 WL 4362,111 Ill. 462
• Court: Illinois Supreme Court
• Parties: ROBERT E. JENKINS, Assignee,v.THE INTERNATIONAL BANK et al.

111 Ill. 462

1884 WL 4362 (Ill.)

ROBERT E. JENKINS, Assignee,

v.THE INTERNATIONAL BANK et al.

Supreme Court of Illinois.

Filed at Ottawa Nov. 17, 1884.

OPINION TEXT STARTS HERE

APPEAL from the Appellate Court for the First District;--heard in that court on appeal from the Circuit Court of Cook county; the Hon. M. F. TULEY, Judge, presiding.

A bill in chancery was filed February 17, 1875, in the Cook county circuit court, by the International Bank, against Samuel J. Walker and other persons, to foreclose and sell certain collateral securities which had been pledged by Walker to the bank to secure the payment of principal notes of various dates made by Walker to the bank, some twenty-two of which were still held by it, and about ten others transferred to the other parties to the suit. The prayer of the bill was, that a decree might be entered fixing and establishing the amount of indebtedness due the bank from Walker, and for a sale of the collaterals so pledged, and the application of the proceeds to the payment of such indebtedness. Walker answered, alleging that a large amount of usurious interest entered into and formed a part of the alleged indebtedness, and insisting that an account be taken between the parties, and that such usurious interest be applied toward the satisfaction of such indebtedness, and that the collaterals be surrendered. Walker also filed a cross-bill making the same allegations, and praying for an account, and the application of such usurious interest, and for a surrender of the collaterals.

July 6, 1877, the circuit court made an interlocutory decree in the cause, which denied the right to interpose the defence of usury, and directed an account to be taken of what was due on the principal notes held by the bank, excluding the defence of usury and of usurious payments of interest. In pursuance of an account taken as thus directed, dated January 15, 1878, a final decree was entered on April 25, 1878, finding the amount due the bank from Walker on the notes held by it to be, on January 15, 1878, $172,474, and directing a sale of the collaterals held by the bank to satisfy it. April 26, 1878, Walker went into bankruptcy, and July 31, 1878, Jenkins, the appellant, received the deed as his assignee in bankruptcy. The decree of April 25, 1878, was by this court, at its March term, 1881, in Jenkins v. International Bank et al. 97 Ill. 568, reversed, on the ground that the direction to the master, in the order of reference, not to consider the question of usurious payments of interest upon any of the notes, was erroneous. The collaterals so sought to be sold had been specifically pledged by Walker to the bank,--each to secure a particular note. The bank also held an agreement from Walker that each of the collaterals, though specifically pledged as security for a specific principal note, should also, after the satisfaction of such principal note, be held as security for Walker's entire indebtedness to the bank, if any surplus remained which could be so applied after the satisfaction of such particular note.

On March 11, 1874, George Wilshire and others filed their bill of complaint against the International Bank, David Frey, Samuel J. Walker, and others, alleging that they had purchased of Walker certain premises, and setting out that Frey claimed to own a certain mortgage upon the same, executed by Walker prior to their purchase, which Frey obtained from the bank, but that there was nothing due upon it, and praying that the same might be surrendered and cancelled. Frey filed a cross-bill, setting up his principal note and the collateral note and security so executed by Walker to the bank, alleging that he had bought said principal note of the bank for full value, and praying for the foreclosure of the mortgage and sale of the premises. The bank also filed its cross-bill against Wilshire, Frey, Walker, and others, setting up its general collateral agreement above referred to, alleging its right, by virtue thereof, to any surplus that might remain after the satisfaction of the indebtedness so due to Frey on said principal note which had been sold by it to Frey, not exceeding the amount due on the collateral note. The said general collateral agreement provided that the bank should have the benefit of said surplus, though it had sold such principal note to a third party. The bank, in its cross-bill, set up its entire indebtedness so due to it from Walker in the same way and with the same particularity that it had set up the same in the bill in this cause now under consideration, alleging that the notes were due and payable, and asking that it might have any surplus applied to the payment of such indebtedness after the satisfaction of the amount due to Frey. Walker answered that cross-bill in the same way, and alleging the same facts that he had alleged in answer to the bill in this cause. He also filed a cross-bill therein, setting up the same facts that he had set up in the cross-bill filed in this cause, and prayed for an account between himself and the bank, and for the application of all usurious interest in satisfaction of his indebtedness to the bank, and for a return of the bank's collaterals, just as he had done in this case by his cross-bill.

On February 28, 1878, a decree was entered in the Wilshire suit, finding the amount due from Walker to the bank to be the sum of $172,474. That decree stands in full force and effect, and over five years have elapsed since the entry of the same. The case at bar having been redocketed in the circuit court after the reversal of the first decree, on November 26, 1883, by leave of court the complainant, the International Bank, filed a supplemental bill, setting up the said proceedings, pleadings and decree in the Wilshire suit as a former adjudication, and in bar to any further proceedings by Jenkins, assignee, for an account under his cross-bill herein, and as a conclusive adjudication of the amount due the bank upon the evidence of indebtedness set out in its original bill herein. The circuit court held the said former adjudication in the Wilshire suit a bar to any further account as to what was then due, and found the amount due upon the principal notes set out in the bill and offered in evidence, to be the sum of $172,474 on January 15, 1878, as determined by the decree in the Wilshire suit. After the allowance of subsequent collections, the court found the amount due at the time of the decree to be $143,630.22, and rendered a decree for a sale of the collateral securities to satisfy said sum. This decree was affirmed by the Appellate Court for the First District, and the assignee appeals to this court.

Mr. W. T. BURGESS, for the appellant.

Messrs. ROSENTHAL & PENCE, for the appellees. Mr. JUSTICE SHELDON delivered the opinion of the Court:

It is insisted the circuit court erred in holding the former adjudication in the Wilshire suit a bar to any further account as to what was in issue therein. The issues tendered by the bank to Walker, and by Walker to the bank, were precisely the same in that suit brought by Wilshire as they are in the case at bar. The main object in each suit was and is to ascertain the amount due from Walker to the bank. That was litigated and determined in the Wilshire suit, and we think the sum there found to be due must stand, and be taken as the amount then due, without being subject to be overhauled in this present suit. As was said in Briscoe v. Lloyd, 64 Ill. 33, litigation must have a termination, and when a matter has been in issue and the parties before the court, and an opportunity afforded to assert their rights, they must be held concluded from afterwards litigating them in another proceeding. We do not understand appellant's counsel as making question that the decree in the Wilshire suit would not, under the general rule, be a bar to any further accounting, or be binding as to the amount due, upon the principle of res judicata, but he seeks to avoid the effect of such former adjudication by the United States Statute of Limitations, and by the fact that the decree in the Wilshire suit is erroneous, and, as alleged, unjust and inequitable.

Section 5057 of the Revised Statutes of the United States provides, that “no suit, either at law or in equity, shall be maintainable in any court between an assignee in bankruptcy and a person claiming an adverse interest touching any property or rights of property transferable to or vested in such assignee, unless brought within two years from the time when the cause of action accrued for or against such assignee.” To make that statute applicable this view is presented: that as the supplemental bill filed in this cause by the bank on November 26, 1883, setting up the decree in the Wilshire suit, prayed that it might be taken as a bar to any further proceeding by Jenkins under his cross-bill herein, and also that it might be taken as a sufficient adjudication of the amount due the bank, upon the evidence of indebtedness set out in the original bill, the decree was used in the court below for a two-fold purpose: First, as a plea in bar of the accounting; and second, as the cause of action in a supplemental bill taking the place of the cause of action set out in the original bill. It is this latter purpose, and the relief the party prays under it, which it is claimed entitles the assignee to set up in bar of that relief the statute. The decree in the Wilshire case having been rendered February 28, 1878, the deed to the assignee in bankruptcy made July 31, 1878, and the said supplemental bill having been filed November 26, 1883, it was more than two years thereafter.

We do not appreciate the distinction which would thus be taken in respect of a double purpose of the supplemental bill,--one purpose, as a plea in bar of the accounting, in which regard appellant's counsel says he does not apply the statute to the decree as res judicata, but that to its other purpose, as a substantive...