Rogers v. Jewell Belting Co.

• Decision Date: 19 February 1900
• Parties: ROGERS et al. v. JEWELL BELTING CO.
• Court: Illinois Supreme Court

184 Ill. 574

56 N.E. 1017

ROGERS et al.

v.JEWELL BELTING CO.¹

Supreme Court of Illinois.

Feb. 19, 1900.

Error to appellate court, Fourth district.

Exceptions by Rogers, Brown & Meacham to the allowance of a claim of the Jewell Belting Company against the estate of the Todd Pulley & Shafting Works, an insolvent corporation. From a judgment of the appellate court (84 Ill. App. 249) reversing a judgment disallowing the claim, plaintiff brings error. Reversed.

Charles W. Thomas, for plaintiff in error.

F. N. Judson and John F. Green, for defendant in error.

CARTWRIGHT, C. J.

The Todd Pulley & Shafting Works, a corporation of East St. Louis, organized to carry on the general business of a foundry, made a voluntary assignment for the benefit of its creditors April 19, 1898. The Jewell Belting Company, defendant in error, a corporation of Connecticut, filed a claim against the assigned estate, based on six promissory notes, dated March 17, 1898, for $1,861.87 each, payable to said Jewell Belting Company in 2, 4, 6, 8, 10, and 12 months after date, respectively, with interest at 6 per cent., signed by the Todds & Stanley Mill-Furnishing Company, a corporation of Missouri, and by the insolvent, the Todd Pulley & Shafting Works. The firm of Rogers, Brown & Meacham, plaintiff in error, filed exceptions, as creditor of the insolvent, to said claim, on the ground that the insolvent corporation signed the notes as surety for the Missouri corporation, that there was no consideration moving to the insolvent for the execution of the notes, and that they were accommodation paper and ultra vires and void. There was a hearing before the county court, and the claim was disallowed. An appeal was taken to the appellate court for the Fourth district, and that court reversed the judgment of the county court, and remanded the cause, with directions to allow the claim.

The material facts, as proved at the hearing, are as follows: The Jewell Belting Company consigned to the Todds & Stanley Mill-Furnishing Company, the Missouri corporation, at St. Louis, leather belting, at a certain price, with an agreement that said consignee might sell the goods, and have as its profit the difference between said invoice price and the selling price; and said consignee was to remit on the 10th or 15th of each month for the sales of the preceding month. Some time in 1897 there was a settlement between the parties, and afterwards the Missouri corporation sold goods amounting, with interest, to $11,282.44, which was due the Jewell Belting Company March 17, 1898, when the notes were made. Part of this belting had been sold to the Todd Pulley & Shafting Works, the Illinois corporation, and had been used partly upon its machinery at its foundry at East St. Louis, and partly to fill orders from its customers for leather belting. The belting so sold to the insolvent was charged on the books of the Missouri corporation, but there was no evidence what the charges were, or the amount. The remainder of the belting was used by the Missouri corporation, or sold to other parties. The stockholders in the two corporations were the same persons, and they had the same officers and directors. They kept separate books, showing the property of each, and were separate and distinct, but, whenever one had money, it was used to meet liabilities of the other, if necessary, and charged to the other. One corporation would sign paper as maker, and the other indorse it, and money would be raised in that way when necessary. If the Illinois...