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ance Trust may become subrogated to all the rights in each of said accounts of the Thornburgh Pressteel Company. The seventh clause provides that in case of breach of warranty the Commercial Acceptance Trust shall be entitled to receive damages arising out of such breach, including attorney's fees, expenses, court costs, etc. The eighth clause appoints attorneys in fact of the Thornburgh Pressteel Company, with power to receive, open, and dispose of all mail addressed to it, and to indorse its name upon any notes, acceptances, checks, drafts, money orders, or other evidences of payment or collateral that may come into its possession as payments of or on accounts purchased under said contract. The ninth clause provides that no change shall be made in the contract except in writing, duly entered into by the parties.

In answer to interrogatories filed in the municipal court the garnishee set up this contract, and alleged that at the time of service of the writ, July 31, 1919, it was not indebted to the judgment debtor, but that after that time, and up to the time of filing its amended answer, on August 27, 1919, the sum of $1,017.89 became due it from the garnishee on the accounts purchased under the contract. The answer was traversed, and on the trial the court found that on the date of the answer the garnishee owed the judgment debtor | the sum of $1,017.89, less $309.17 due it under the agreement, and entered judgment for the sum of $708.72 as the difference between the amounts.

It was on the trial admitted by the garnishee that it had collected, after the filing of the answer and before the hearing herein (some two years later), the entire 23 per cent. referred to in the contract, amounting, less deductions, to the sum of $4,622.55, which sum, less that admitted due by the answer in the garnishment proceedings, it had remitted to the judgment debtor. This is the amount claimed by appellant.

Appellee contends that, as the trial was by the court and no propositions of law were submitted, no demurrer to the evidence or motion to find for appellant, and no question having been raised as to the admission and exclusion of evidence, no question of law is presented to this court for review, and the judgment of the Appellate Court is conclusive.

the uncontroverted facts, the judgment was erroneous. The court said:

"It has been held by this court in numerous cases, that where a declaration alleges a good cause of action, and there is issue thereon, and a trial is had before the court without a jury, and no questions of law are raised at the trial in regard to the admission or exclusion of evidence, and no propositions of law are submitted to the court, pursuant to the statute, to be trial court is affirmed by the Appellate Court, ruled upon, and the judgment entered by the

no question of law can arise in this court in respect to the finding of the trial court, and the judgment of the Appellate Court must necessarily be affirmed."

In Bolton v. Johnston, 163 III. 234, 45 N. E. 203, the action was to recover damages for breach of a contract. The trial was by the court upon an agreed statement of facts. There was judgment for the plaintiff, which on appeal to the Appellate Court was affirmed. On the trial of the case no objec tion was made to the admission of any evidence, and no propositions of law were submitted to be held by the court. This court held that, where the declaration alleged a cause of action, issues were made by pleas, trial had before the court without a jury, and no objections made to the admission or exclusion of evidence, and no propositions of law were submitted, when the judgment is affirmed by the Appellate Court, no question of law can arise in this court in regard to the finding of the trial court, but the judgment of the Appellate Court is conclusive, and must be affirmed. In that case the action was based on a written contract, which was introduced in evidence, and upon that question the court said, if a construction of the contract was desired, it might have been obtained by submitting an appropriate proposition of law to the court, and a ruling on any other legal question might have been obtained in the same way. The court cites and quotes at length from Cothran v. Ellis, 125 111. 496, 16 N. E. 646, in support of the deci sion.

Grabbs v. City of Danville, 166 Ill. 441, 46 N. E. 1116, was an action begun before a police magistrate for an alleged violation of a city ordinance. Plaintiff recovered, and defendant appealed to the circuit court. In that court a jury was waived, and the case It must be admitted there is some confu- heard before the court on an agreed statesion in the decisions of cases coming to ment of facts, resulting in a judgment for this court from the Appellate Court. Ameri- plaintiff, which was affirmed by the Appelcan Exchange Nat. Bank v. Chicago Nat. late Court. At the trial in the circuit court Bank, 131 Ill. 547, 22 N. E. 523, was an action no question was raised as to the admission of assumpsit. After plea filed and issue or exclusion of evidence and no propositions joined the case was submitted to the court of law were submitted to the court. This for trial without a jury. There was a judg-court said: ment for plaintiff, which on appeal to the Appellate Court was affirmed. There was no conflict in the testimony, and the question of law sought to be raised was whether, under

"Under such a state of facts this court has

often held that no question of law is presented on appeal or writ of error for decision"-citing Bolton v. Johnston, supra, and Chicago,

(144 N.E.)

Burlington & Quincy Railroad Co. v. City of
Ottawa, 165 Ill. 207, 46 N. E. 213.

The action in Mutual Protective League v. McKee, 223 Ill. 364, 79 N. E. 25, was on a death benefit certificate, and defendant filed pleas denying liability. After the issues were joined a jury was waived and the case tried by the court upon a stipulation of facts. The court rendered judgment for plaintiff, which was affirmed by the Appellate Court.

The court said:

"This court has uniformly held that except as to questions arising during the progress of the trial upon the rulings of the court upon pleadings, the admissibility of evidence and kindred subjects, questions of law can only be preserved and presented to this court, when the trial is before the court without a jury, by written propositions in accordance with section 42 of the Practice Act."

The court cites and approves Grabbs v. City of Danville, supra, and Bolton v. John

ston, supra.

Conway v. Garden City Paving Co., 190 Ill. 89, 60 N. E. 82, was an action of assumpsit. After issues joined, a jury was waived and the case submitted to the court on an agreed statement of facts in writing. Judgment was rendered for plaintiff, which was affirmed on appeal to the Appellate Court. In the trial court the defendant moved the court to find the issues for him, which motion the court denied. This court reviewed the judgment of the Appellate Court and reversed it. In the opinion the court said it had held that in a trial before the court it is proper to raise a question of law for review in this court by demurrer to the evidence, propositions of law submitted to the court, or a motion to find for the party. This court held the contract sued on was fraudulent and illegal, and that question of law was preserved by the

motion of defendant to find for him.

In Babbitt v. Grand Trunk Western Railway Co., 285 Ill. 267, 120 N. E. 803, it was held that when an action at law is tried without a jury, and no question is raised as to the admission or exclusion of evidence, and no propositions of law are submitted, but the defendant moves for judgment in his favor, the overruling of the motion presents a question of law for review by this court in a case coming here from the Appellate Court. The court said, when there is no controversy as to the facts, what is the proper judgment to be rendered may be raised as a question of law by demurring to the evidence, by propositions to be held as law, or by motion to find for the party. The court further said, if none of those methods had been adopted, no question would have been preserved for review by this court.

Appellant seemingly concedes the cases cited above, or some of them, hold that the method of preserving a question of law for

review in this court in a case brought here
by appeal or writ of error from the Appellate
Court is by demurrer to the evidence, propo-
sitions of law, or motion to find in the trial
court, but insists the cases do not say those
are the only ways in which the question can
be preserved, and refers to Weld v. First Nat.

Bank, 255 Ill. 43, 99 N. E. 72, and Pittsburgh,
Cincinnati, Chicago & St. Louis Railway Co.
V. Chicago City Railway Co., 300 Ill. 162, 133
N. E. 181. The Weld Case involved the con-
struction of a written instrument and the tri-
al court held a proposition of law construing
it. In the last case cited the decision is appar-
ently based on the proposition that a question
of law may be raised by an exception to the
judgment, but since, under the Practice Act
as it now exists, the judgment may be in-
quired into without preserving exceptions to
it, a question of law as to the correctness of
the judgment may be preserved without re-
sort to the submission of propositions of law,
or any of the other methods held necessary
in numerous previous decisions. We think
the former decisions are sound and should
not be overruled, and that the case of Pitts-
burg, Cincinnati, Chicago & St. Louis Rail-
way Co. v. Chicago City Railway Co., supra,
in so far as it departs from the previous de
cisions, should not be adhered to.
pointed out in Bradish v. Yocum, 130 Ill. 386,
23 N. E. 114, that the rule is not the same in
cases coming directly to this court from the
trial court.

It was

[blocks in formation]

(312 III. 386)

PATTERSON et al. v. VERMILION ACAD
EMY. (No. 15903.)

(Supreme Court of Illinois. April 14, 1924.
Rehearing Denied with Modification
June 12, 1924.)

1. Mortgages 114-Held to secure only pay-
ment of annuity.

Where, in consideration of the payment of an annuity to grantor, he conveyed property to an educational institution pursuant to a contract that the income thereof should be used "exclusively for school purposes," by deed giving grantee the right to sell the real estate after death of grantor and thereby convey the fee, and the grantee, pursuant to the same contract, delivered back to grantor a mortgage on the realty conveyed. "to secure the payment" of the agreed annuity, “and for the performance of all covenants and agreements

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

under" such contract, held, that the mortgage secured only the payment of the annuity, and, there having been no default in the payments, terminated at mortgagee's death.

kept out at interest by the party of the second part, and the income derived therefrom to be used by the party of the second part exclusively for school purposes for which the

2. Deeds 168-Equity will not enforce for- party of the second part has been incorpofeiture.

Equity will not lend its aid to enforce a forfeiture because of breach of a condition subsequent.

3. Trusts 61(1), 2711⁄2-Equity has plenary jurisdiction in administration of trust estates in hands of trustees.

Equity has plenary jurisdiction in the administration of trust estates in the hands of trustees, but such rule will not give it jurisdiction of a bill, not to administer a trust, but to terminate a trust by enforcing forfeiture of a deed to and contract with defendant trustee because of breach of condition subsequent

therein.

Appeal from Circuit Court, Vermilion County; John H. Marshall, Judge.

Suit by J. M. Patterson and others against the Vermilion Academy. Decree for defendant, and complainants appeal. Affirmed.

John H. Lewman and O. M. Jones, both of Danville, for appellants.

rated; and the party of the second part shall have no lawful right or power to use any part of the principal for any purpose except to loan the same, and thereby raise an annual income to be used exclusively for school purposes as aforesaid, and not with a view to profit; and any court of compe tent jurisdiction shall have full power and jurisdiction to enforce this trust and compel the proper management and control of said endowment fund, providing that should the party of the second part at any time fail or refuse to maintain an institution for educational purposes under its charter and fail or refuse to expend the annual income exclusively for school purposes as provided for in its articles of incorporation, then said endowment fund hereby granted shall revert to and vest in the party of the first part, his heirs, executors, administrators or assigns." The contract also provided that Patterson should convey, by good and sufficient deed of conveyance, the real estate describ

Acton, Acton & Snyder and Clark & Hut- ed. The contract stipulated as to the use ton, all of Danville, for appellee.

STONE, J. Appellants' intestate, Golden Patterson, filed a bill in the circuit court of Vermilion county for the purpose, as declared in the briefs, of enforcing the terms of a written contract and to foreclose a mortgage given to secure the performance of that contract. On a hearing the bill was dismissed for want of equity, and the cause comes here for review.

Golden Patterson, appellants' intestate, on June 3, 1914, entered into a contract with appellee, the Vermilion Academy, a corporation organized under the laws of the state of Illinois for educational purposes, and not for pecuniary profit, by which he transferred to it all his personal and real estate, amounting to approximately $200,000, and consisting of notes, mortgages and farm lands. It appears that he was at that time a bachelor, about 80 years of age, and had been considering for some time the making of such disposition of his property as would cause it to be used for educational or charitable purposes. Pursuant to that purpose negotiations were had between him and the academy. The contract entered into on that day provided for the transferring of all notes and mortgages to the academy, which was "to hold said notes and moneys received, upon collection of the same, and interest thereon, in trust as an endowment fund of the party of the first part, to be known as the 'Golden Patterson endowment fund,' the said endowment fund to be loaned and

of the income from the real estate in the same manner and with the same forfeiture as to the notes and mortgages. As to the real estate it was further stipulated as fol

lows:

"With the full right in the party of the second part, after the death of the party of the first part, to sell and convey said lands, or deed of conveyance, and any moneys realized any part thereof, by a good and sufficient from the sale of said lands, or any part thereof, shall be held by the party of the second part in trust as a part of the endowment fund mentioned in paragraph 1 above, and exactly upon the same terms and conditions and for the same purposes and with the same rights, powers and liabilities in said paragraph 1 above the second part fail or refuse to maintain an inmentioned, provided that should the party of stitution for educational purposes under its charter at any time prior to the sale of said lands or any part thereof, then such land remaining unsold shall, in the event of the failure of the party of the second part to maintain an institution for educational purposes as provided for in its articles of incorporation, revert to the party of the first part, his heirs and assigns."

The contract stipulated as a consideration for this agreement that the academy agrees to pay to Patterson 6 per cent. per annum from March 1, 1914, on the sum of $200,000, this being the value placed upon all of the property transferred by Patterson. The first payment of $12,000 was to be made on March 1, 1915. Thereafter the $12,000 was to be paid in semiannual payments, $6,000 on each 1st day of September and 1st day of March,

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(144 N.E.)

commencing with September 1, 1915, "so long the mortgage be foreclosed. The bill was as the party of the first part shall live." The contract also provided that the academy would furnish good and suitable board and room and free tuition to two scholars to be selected by Patterson during his lifetime, and after his death by the supervisor of the town of Love, such scholars to be selected from among the worthy children of the town of Love, whose parents were unable to pay the expense of such education. It was agreed in the contract, also, that the academy should execute and deliver back to Patterson a good and sufficient first mortgage on all of the real estate above described, "to secure the faithful performance of all the agreements and covenants herein made by the party of the second part."

The deed executed by Patterson pursuant to the contract warrants and conveys to the academy the real estate therein described in trust for the purpose of receiving all the rents, issues, and profits arising therefrom, and using the same exclusively for school purposes for which the academy has been incorporated, and not to be used with a view to profit. The deed provides, also, in accordance with the terms of the original contract, that after the death of Patterson the grantee may, at its option, sell and convey the real estate, or any part thereof, by a good and sufficient deed of conveyance, and thereby convey the fee to the lands; the moneys realized from the sale of the lands to be held as a part of the permanent endowment fund. The deed also contains a recital of other stipulations of the contract. At the time of the making of the deed there was executed by the academy to Patterson its mortgage deed in the following form:

filed on September 23, 1920. Patterson died April 1, 1921. His death was suggested on the record, and the appellants, his heirs, were substituted as parties complainant. An amended and supplemental bill was filed, and appellee filed its answer thereto, admitting the execution and delivery of the contract, mortgage, and deed, but denying that it had not kept and performed the covenants and agreements contained in the contract, but averring that it had fully performed the same. It set out in the answer that from time to time it collected the interest on the notes transferred to it by Patterson and the rents accruing on the land conveyed to it; that it received the same under its articles of incorporation as a part of its general fund to maintain an institution of learning under its charter powers, as provided by the statute giving it the legal right to receive, either by gift or purchase, property for the use of the corporation, and to use the same, as well as other property, as might be considered most conducive to the interest of the institution and its purposes; that it was considered most conducive to the best interest of the institution to use the funds belonging to the corporation to carry out its part of the agreement, and that in so doing it was not using such funds for any other than school purposes, as provided in its articles of incorporation; and that it had not at any time used any of the funds with a view to profit.

It is admitted by the answer that during some of the years since the execution of the contract with Patterson all of the rents from the land and the interest from the notes were used in payment of the semiannual sum due Patterson, and in addition thereto other "The mortgagor, Vermilion Academy, a corfunds of the academy were used in making poration of Vermilion Grove, in the county up the balance of such payments; that in of Vermilion, state of Illinois, mortgage and some years it used only a portion of the inwarrant to Golden Patterson, of Humerick, terest and rents in paying the amount due county of Vermilion and state of Illinois, to Patterson; that it had a lawful right to use secure the payment of $12,000 per year during said income for such purpose in maintainhis life and for the performance of all cove-ing and providing for the institution, under nants and agreements under a contract be- its articles of incorporation. The answer tween the mortgagor and mortgagee dated June 3, 1914, to which reference is hereby made, the following-described real estate [here follows description of real estate] situated in the county of Vermilion, in the state of Illinois, hereby releasing and waiving all rights under and by virtue of the homestead exemption laws of this state."

The original bill set out that contrary to the terms and conditions of the contract the academy did not use the income from the property transferred to it by Patterson for school purposes, but it had been used to pay the annuity of $12,000 due to him. The pray er of the bill was that the court enforce the provisions of the contract by compelling the academy to return the property, and that

also avers that at the time of the execution and delivery of the contract Patterson knew that a part or all of the interest on the notes and the rents from the land would of necessity from time to time be used in making the semiannual payments to him, and that the mortgage given back on the land was for the purpose of securing such payments. It is also averred in the answer that at each time Patterson received a payment from the academy he knew that it was made up, either in whole or in part, out of the interest from the notes and the rents from the land; that he knew that the other income of the academy was not sufficient to meet such payments; that he made no pro

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

test or claim that the payments so made | contract and deed, in giving to his grantee were in violation of the contract, and he thereby waived any right to forfeit the contract on that account; that on March 1, 1921, after having started the suit in question, he received a payment of $6,000, knowing the same to be made out of the interest and rents from the property, and thereby waived all right to forefeiture. The answer denies the complainant was without remedy, except in a court of chancery, and avers that he had an adequate remedy at law, and that a court of chancery has no jurisdiction or right to declare a forfeiture.

The court held, first, that equity has no jurisdiction; and, second, that the payment of the income to Patterson was not a violation of the contract, but in accordance with the interpretation of the contract as placed thereon by the parties.

The principal grounds upon which appellants seek a reversal of the decree dismissing the bill are, first, that the payment of the annuity out of the income of the prop erty transferred was a violation of the contract to use such income exclusively for school purposes, and that, this being so, a court of equity will enforce the forfeiture clause of the contract as made by the parties; second, that a court of equity has jurisdiction of the action because it involves the foreclosure of a mortgage; third, there was no waiver or estoppel on the part of Patterson; and fourth, the court erred in permitting incompetent testimony to be introduced.

the right to convey the property in fee simple after his death, that the mortgage should be for the purpose, only, of securing the annuity during his life and that it would cease to become operative upon his death. The language of the deed is hardly compatible with a mortgage, if such an instrument could be conceived, to secure the use, according to the contract, of the money arising from the sale in fee simple of the mortgaged. land after his death. Either the mortgage expired with his death, or the academy must, if it chooses to convey the real estate, do so subject to the mortgage. This is clearly incompatible with the definite stipulations of the deed. Patterson evidently intended the mortgage as security for payment of the annuity, and that with his death and the termination of the annuity the mortgage should likewise expire. Under no other construction could the academy convey the full fee-simple title to the land. The mortgage having been given to secure the payments of the annuity only, there having been no default in such payments, and the mortgage having died with the mortgagee, there is nothing left for a court of equity to foreclose. It might be a matter of some interest to contemplate the character of foreclosure decree to be entered on a mortgage such as appellants contend this to be, if that question were in the case.

[2] It follows that the only possible relief remaining is the forfeiture which the contract stipulated shall arise in case the We will consider first the question of the academy shall fail to carry out its agreejurisdiction of a court of equity in this case ment as to the use of the funds. This forin the light of the admitted circumstances. feiture is by the contract to arise on a con[1] Appellee contends that the mortgage dition subsequent. If we were to concede, in the case was given only for the purpose of which we do not, that there has been a securing the payments of the annuity, and breach of the contract, we have in this case that, since it is stipulated that there was no a bill to declare a forfeiture on the ground default in those payments, there was no de- of the breach of a condition subsequent. fault under the mortgage, and nothing for a That condition is that the income arising court of equity to foreclose, and therefore from the property conveyed shall be used for nothing in the case of which will take ju- school purposes and none other. A condirisdiction. Appellants earnestly urge that tion subsequent is to be distinguished from the mortgage was given, not only for the a covenant. The consequence of the nonpurpose of securing the payments, but for fulfillment of this condition is the forfeiture securing the enforcement of all the terms of the estate. By such forfeiture the granand conditions of the contract, including the tor may re-enter and possess himself of use of the income for school purposes. It the property. The rule has long been setis necessary only to consider the instruments tled in this state that, while a court of which passed between the parties to deter- equity may in a proper case enforce specific mine the purpose of the mortgage. The deed performance of a covenant, it will not lend transferring the mortgaged real estate to the its aid to enforce a forfeiture because of the academy gave it a right to sell the real estate breach of a condition subsequent in a deed after the death of the grantor, "by a good or contract conveying property. That the and sufficient deed of conveyance, and there- breach in this case, if there is a breach, is by convey the full fee-simple title in and of a condition subsequent is shown by the to said lands, or any part thereof, to any language of the contract and the deed, purchaser." The contract provides for the "that should the party of the second part use of the endowment fund, not only dur- at any time fail or refuse to maintain an ing the life of Patterson, but indefinitely institution for educational purposes under thereafter. It seems clear that it was the its charter, and fail or refuse to expend intention of the grantor, as shown by the the annual income exclusively for school

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