and Herrick & Herrick, for defendants in er

ror.

CARTWRIGHT, C. J. The appellants, Harry E. Stevenson and Mattie A. Stevenson, his wife, filed their bill in the circuit court of Champaign county to set aside a conveyance of their home in Champaign to the appellee John R. Suma, and a deed by Suma and wife to the appellee David L. Campbell, on the ground of alleged fraud, by which they were cheated out of the premises. The bill set forth the alleged fraud, and also charged a fraudulent attempt on the part of Campbell to estop them by obtaining a contract from the complainant Harry E. Stevenson, in the form of a lease. David L. Campbell, John R. Suma, Cora R. Suma, his wife, and Charles L. Winslow, were made defendants, and answers were filed denying the fraud; and Campbell set up that he was an innocent purchaser of the premises for value, without notice, and that complainant Harry E. Stevenson was estopped to deny his title because of the execution of said lease. The issues were referred to a special master in chancery, to take and report the evidence with his conclusions. He reported the evidence, with the conclusion "that some of the material allegations of the complainants' bill, necessary to afford the relief prayed in said bill, are not proven by the evidence in the case," and that "the equities of the case are with the defendants." The court referred the cause back to the special master to find facts. The master filed an additional report, but did not find anything on the question of fraud alleged in the bill, or as to the alleged fraud in obtaining the lease which was claimed as an estoppel, but reported that before the conveyance to Campbell he knew that complainants had conveyed the premises to the defendant Suma, his grantor, and that he had knowledge complainants were in possession of the premises, but did not have any actual knowledge of the alleged fraud affecting the deed from complainants to Suma. The court heard the cause upon the report, and entered a decrée finding that complainants affirmed the purchase of Campbell by taking a lease of the premises, and that Campbell had no actual notice of the alleged fraud, and dismissing the bill for want of equity, at the costs of the complainants.

There is some contradiction in the evidence, but it is mainly on minor questions, and the facts, as we find them from the evidence, are substantially as follows: Complainant Harry E. Stevenson held the legal title of the lot in question, upon which there was a dwelling house occupied as a homestead, and his wife, the complainant Mattie A. Stevenson, had an equitable interest in the estate to about one-half. The property was worth about $2,800, and was subject to a mortgage of $300, and it had been placed in the hands of Cyrus Paul, a real-estate agent, for sale. About the 1st of January,

1898, Paul communicated with J. A. Richards, a real-estate agent or trader living in Deland, Piatt county, and Richards, who was acting for the defendant Charles L. Winslow, offered to trade for the premises two notes secured by mortgage. One note was for $1,500, and the other for $1,650, and they were made by John West and Clara West, and purported to be secured by a mortgage of said John West and Clara West, of the town of Goose Creek, in Piatt county, upon 160 acres of land, being lot No. 594 of plat No. 3 of the Alexander Walcott grant, in Johnson county, Ky. In pursuance of the offer the complainant Harry Stevenson met Richards in a real-estate office in Champaign, and Richards stated that the defendant Winslow had sold this land in Kentucky to West, and had taken the notes as part pay; that he had an abstract of the land, but he either said it was in Kentucky, or that he had given it to Suma. He represented that Winslow, who had indorsed the notes in blank, was good, and owned over 160 acres in Piatt county; that the notes were good, and the Kentucky land improved and cultivated, and worth $50 an acre. So far as these statements related to the value of the notes and mortgage, they were all false. John West and Clara West were very poor, and had gone to Arkansas. They owned no land, and could not pay their board when they left this state, and their household goods were returned to the people from whom they bought them. Neither Winslow nor West ever owned the supposed land in Kentucky, and there was no such land there. If the supposed tract was ever conveyed to the Wests, they paid no attention to it, but went to Arkansas. Winslow had an interest in some land, but he was not worth anything, and the notes and mortgage were worthless. The complainant Harry E. Stevenson agreed, on these representations, to make the trade if Richards would satisfy Mr. Garwood, a man who discounted paper, that the papers were all right, so that he would discount them. At that time the defendant John R. Suma appeared on the scene, and Richards said that he had traded the papers to Suma. Suma took no interest in the trade, but assented to whatever was done by Richards, who was acting for Winslow; and Richards, Paul, Suma, and Stevenson then went to see Garwood. Garwood looked at the papers, and asked to keep them until after dinner. Richards and Suma say that Garwood pushed the mortgage aside, and said that he cared nothing for that, but wanted to look into the papers. Garwood went to the bank, and was told by the cashier that Winslow was not strong financially, that he had to sue him for a judgment, and that he did not consider the paper gilt-edged. The parties went back after dinner, and Garwood suggested that they should get a printed guaranty, used by the bank, stamped on the note with a rubber stamp. and have Winslow sign it, and led Stevenson to be

lieve that he would take the notes. The stamp guaranty was put on, and Richards went to Clinton, Ill., to get Winslow's signature. He returned with it, and the exchange was made, and the deed was made by complainants to Suma, who was a day laborer and had no property. He testified that he gave Winslow 160 acres in Hays county, Neb., and a team worth $100, for the notes, and made a deed of the Nebraska land to Richards; that he made no inquiry about the Kentucky land, and knew nothing about it, or whether it was worth $5 or $50; that he had never seen the Nebraska land which he traded, and had not been told anything about it; that he did not know who was in possession; that he paid no taxes on it, and did not get any rent for it, and did not know whether it was wild land or in cultivation. Suma did not go to see complainants' property, had never been in the house or on the lot, and did not have the abstract examined. Neither he nor Winslow knew anything about the property, and paid no attention to it. It is beyond controversy that the notes and mortgage of the Wests never represented, and were not intended to represent, any value. The transaction with complainants was a fraud from first to last. Garwood is dead, and there is no evidence, except hearsay, of his relation to the transaction. He refused to take the papers after the trade was closed. As to the parties guilty of the fraud, or any person who had notice of it, the complainants have an undoubted right to the relief prayed for.

The deed of complainants to John R. Suma was made January 8, 1898, and on the 27th day of the same month Suma and wife conveyed the premises to the defendant David L. Campbell for the stated consideration of $3,000, subject to the mortgage of $300. Campbell gave for the premises two notes, of $600 each, and a tract of land in Kansas, the value of which is not shown; but Campbell testified that he traded a jackass for it, and that he could tell what the land was worth "if you can tell what a jackass is worth." Although Suma made the deed to Campbell, and claims that he was the purchaser from Stevenson, yet Campbell made the deed of the Kansas land and the notes to Richards. Winslow also claimed that he bought complainants' property, and was up there to look at it with his agent, Richards, who managed the whole business. Campbell had never been in the house when he bought it; did not know the size of the lot, how many rooms there were in the house, how it was lighted or finished, whether with hard wood or otherwise, whether it was supplied with gas or water or plumbing, or whether there was a well or cistern on the premises. He made no inquiry whether the taxes were paid, or the interest on the mortgage. lived in Champaign, about 21⁄2 blocks from the house. The complainants were in possession, which they had never surrendered, and they

He

had learned at that time that they had been swindled. There is much evidence that Campbell had actual notice of the fraud, but that he thought he could buy as a third party and hold the premises notwithstanding the fraud. He claims that he obtained his information of the fraud later, and that at the time of his purchase he did not know of it. He admits that he made no inquiry whatever of the parties in possession, paid no attention to the matters already detailed, which purchasers ordinarily do not disregard, and does not show that he paid anything like value for the property. It is true that a person in possession may, by delivering a deed of the premises, estop himself from relying upon his possession as evidence to subsequent purchasers that he claims title; but, if the possession of complainants would not operate as absolute notice, it is a circumstance to be considered, in connection with other facts, on the question of notice and good faith. The law will protect a bona fide purchaser without notice, but in this case we think the evidence shows that Campbell did not occupy that position.

After Campbell got his deed, he went to get possession of the premises, and Stevenson refused to give up possession because the controversy was unsettled. Stevenson and his wife occupied the upper part of the house, and had been accustomed to rent the lower portion. Campbell got his deed in January, and the following April it was agreed that Stevenson should retain the upper portion and give Campbell possession of the lower part until the controversy was settled; but Stevenson was to have control of the question who should go in, and, if not agreeable to him, he was to put the tenant out. Stevenson was to have the use of half the garden, and the use of the stable and other outbuildings. This agreement was put in the form of a lease April 4, 1898. This contract ran from April 4, 1898, to August 15, 1898, and contained the agreement that no rent was to be paid until September 1, 1898. Stevenson claimed that he was defrauded in obtaining the paper, but, while it was put in the form of a lease, no rent was to be paid; and the evidence shows that it was nothing but a compromise agreement between the parties, by which they were to have a sort of joint possession until the controversy was settled. Campbell had the house painted by the tenant who occupied the lower part, and he put a piece of tin over a leak in the roof. There was also an attempt to settle the matter by Stevenson offering to exchange some land in Effingham county with Campbell for the premises, but Campbell refused to do it. Stevenson was already in possession, claiming title, and claiming that he was defrauded, and Campbell had no possession to turn over to him. There is nothing in the agreement to estop him denying Campbell's title. The decree is reversed, and the cause remanded to the circuit court, with directions to grant the prayer of the bill. Reversed and remanded.

(185 Ill. 514)

UNIVERSITY OF ILLINOIS v. GLOBE SAV. BANK et al.1

(Supreme Court of Illinois. April 17, 1900.) INSOLVENT BANK-PROPERTY OF PRESIDENT

-EQUITABLE LIEN-STATE UNIVER-
SITY-PARTIES-REVIEW.

1. Act June 11, 1897, providing that all causes of action of the state university for the misappropriation of its funds by its officers shall vest in the state officers, does not affect a suit instituted before the passage of the act, where the right of the university to proceed with the suit was recognized in the act.

2. When lands conveyed by the president of an insolvent bank had been purchased with bank funds, which he had misappropriated, but which were afterwards replaced by him, the bank has no claim upon such property.

3. Where a receiver of an insolvent bank, under an order of the court to open a safetydeposit vault belonging to the president of the bank, and get bank property, seized individual property of the president, the bank did not acquire an equitable lien thereon, good against a subsequent transfer of the property by the president.

4. Where a decree in equity makes a finding of fact that an equitable lien exists on certain property, and the evidence on which the finding is made is not in the record, the decree will not be reversed.

Appeal from circuit court, Cook county; M. F. Tuley, Judge.

Suit by the people of the state of Illinois, on the relation of J. S. McCullough, against the Globe Savings Bank. From a decree against the University of Illinois as intervener, it appeals. Reversed in part.

On and prior to April 3, 1897, Charles W. Spalding was president, principal stockholder, and manager of the Globe Savings Bank, doing business in the city of Chicago. He was at the same time treasurer of the University of Illinois. On that day the bank closed its doors, and Spalding left the state. On the 5th of the same month this litigation was begun in the circuit court of Cook county by the cashier of the bank, George E. Churchill, filing a bill to settle its business, and wind up the corporation. On the filing of that bill the Chicago Title & Trust Company was appointed receiver of the bank, and the latter's officers were ordered to turn over to such receiver all its property. On April 8th an order was entered restraining Spalding from interfering with or opening certain safety-deposit boxes in the Globe safety-deposit vaults under the bank, ta which he alone had access, and from assigning or transferring the contents thereof, until the further order of the court. On April 10th the receiver was ordered to open the safety-deposit boxes, and take possession of the contents "appearing to belong to the bank." On the 13th the order was so modified as to permit the University of Illinois to take any conveyance from Spalding, by way of security or otherwise, of any property which the bank did not own or have an interest in, but without prejudice to any rights the bank or its receiver might have

1 Rehearing denied June 8, 1900. 57 N.E.-27

by reason of the bill and amendments thereto. On the last-named date the receiver reported to the court that upon opening said boxes it found therein and took possession of certain bonds known in the records as "Endowment Bonds," and also 16 bonds of the town of Buckley, state of Washington, dated July 1, 1892, Nos. 4 to 19, both inclusive; 17 bonds, of $1,000 each, of the Marshalltown Light, Power & Railway Company, Nos. 11 to 17, inclusive, 27, 28, and 63 to 70, both inclusive; 55 bonds of the Idaho Canal Company, Nos. 79, 80, 95 to 100, both inclusive, 115 to 124, both inclusive, 237 to 248, both inclusive, and 250 to 274, both inclusive; 2,390 shares of stock of the Idaho Canal Company, par value $100 per share; 50 bonds, of $1,000 each, of the Pocatello Power & Irrigation Company. On April 14th Spalding conveyed and assigned by deed to the university the bonds so reported as security for an indebtedness by him to it. On the 19th the university filed two intervening petitions, by the first claiming the abovementioned endowment bonds. By the second petition it was alleged that at the filing of the bill and the appointment of the receiver, and on April 14, 1897 (the date of the assignment), Spalding was the owner of all the securities taken by the receiver from the safety-deposit boxes described in the petition, including the above-named Buckley, Marshalltown, and Idaho Canal Company bonds, and claimed the same under and by virtue of the conveyance to it by Spalding. On the 24th of May following, the attorney general filed a bill on behalf of the state to settle the affairs of the bank, and for the appointment of a receiver, and subsequently that suit and the one begun by Churchill

were consolidated, the Chicago Title & Trust Company being again appointed receiver. On the hearing the court found, among other things, the following:

"The court, having considered the two intervening petitions of the University of Illinois, filed herein April 19, 1897, and the issues made thereon, and the evidence therein, and the rights and interests of said university and of its trustees, finds as follows with reference to the rights, interests, and obligations of the said University of Illinois in, about, and concerning all and singular the property claimed by it, described in any of the pleadings herein and in its several petitions, and all matters and things included in this litigation in which the said university and said state officers, acting as aforesaid, are concerned. The court further finds that at the time of the commencement of this suit and at the time of the appointment of the receiver herein the said Charles W. Spalding was the owner of certain bonds, stocks, and other securities hereinafter specifically described, and that the same were in the private boxes of the said Charles W. Spalding at said time, and in his exclusive and personal possession;

that on April 14, 1897, the said Charles W. Spalding, by an instrument duly executed for that purpose, purported to convey, assign, and transfer to the said University of Illinois all the said bonds, stocks, and securities, the same being specifically described therein, as follows. [Here follows a description of the bonds, etc., taken from said boxes, including the Buckley, Marshalltown, Idaho Canal, and other bonds and stocks as above.]

"The court finds that by the assignment and transfer the said University of Illinois became the owner, for all the uses and purposes in the said instrument stated, of all and singular the said bonds, stocks, and other securities mentioned and so transferred, but subject to the equities of the other creditors of said bank to have the said $15,000, hereinafter referred to as having been taken by the said Spalding from the moneys of said bank after its failure, returned to said bank or its receiver, which was appointed by this court prior to its transfer to the said University of Illinois, and that neither the said Globe Savings Bank, nor its said receiver, nor its creditors or depositors, had then, nor now have, any right, title, or interest therein, or any lien or charge thereon, with the exception following: Finds that three of said bonds of Pocatello Power & Irrigation Company had been in the possession of the said Globe Savings Bank as security for the note of E. H. Tillson, and that the said Globe Savings Bank had a lien or charge upon said three bonds for the payment of said Tillson note, but that, after the closing of said bank, and after the appointment of the receiver herein, the same had been fraudulently taken out of the possession of the said Globe Savings Bank by Spalding, and placed in his private box, and that the bank and its receiver were entitled to the possession of said three bonds; directs the receiver to sell the said three bonds for the payment of said Tillson note, and apply the net proceeds thereof to the payment of said note, the balance, if any, to belong to the University of Illinois; finds that five bonds of the Idaho Canal Company, for $1,000 each, are held by the receiver as security for a note of Frank W. Smith for $5,000; directs the receiver to sell said five bonds of the Idaho Canal Company at public sale and apply the proceeds of said sale to the payment of said note, the balance, if any, to be paid to the university; finds that fifty-five Idaho Canal Company bonds, numbered 79, 80, 95 to 100, both inclusive, 115 to 124, inclusive, 237 to 248, inclusive, and 250 to 274, both inclusive, which were, as above herein found and determined, in the private box of said Spalding, and in his possession, when the receiver herein was appointed, were part of an issue of three hundred bonds of like amount, date, and tenor, secured by a trust deed of said company," setting forth the facts, showing

the reissue of bonds by the company, and stating: "That on the application for entry of this decree counsel for the University of Illinois, on behalf of said university and of the state officers authorized by law to receive the proceeds of this litigation, disclaimed any desire to claim or receive any of the Idaho Canal bonds of said first issue, or any other bonds of said company except the specified fifty-five bonds so assigned to said university by said Spalding and numbered as aforesaid, and found by said receiver in the said Spalding's private box as aforesaid. Finds that at the time of the closing of said bank the said Spalding fled from the city of Chicago and concealed himself at the Calumet Club grounds, in the state of Indiana. And the court further finds that at the time the said Globe Savings Bank was closed, on the 3d day of April, 1897, its available cash was reduced to about $30,000, and was known by said Spalding to be unable to resume business and to be insolvent, but said Spalding wrongfully and fraudulently appropriated $15,000 out of the cash funds of said bank, and afterwards used upwards of $7,000 thereof in payment of debts and dues of the funds of the University of Illinois, and that such appropriation of the funds of said bank by said Spalding was a fraud upon the rights of other creditors of said bank, and that said Spalding cannot in equity demand the return of said bonds without first doing equity by restoring said sum of $15,000 so wrongfully appropriated by him, and said university has no greater rights under or by virtue of the bill of sale or assignment from said Spalding. And the court further finds that said Globe Savings Bank had and has an equitable lien upon said fifty-five bonds of the Idaho Canal Company to enforce the payment to the receiver herein of said sum of $15,000. And it appearing to the court that the said fifty-five Idaho canal bonds now in the hands of said receiver in lieu of the ninety Idaho Canal bonds so delivered by said Spalding to said Churchill, and by the latter to the receiver, as aforesaid, are insufficient, in case of the sale thereof (if a sale be made as hereinbefore ordered), to repay to said receiver the said $15.000 so fraudulently taken from the said assets of said bank after said failure; and that in equity and good conscience said University of Illinois should make good to said receiver said $15,000, or any deficiency, if any, that may arise from the sale of said fifty-five Idaho Canal bonds, and that the said twenty-three hundred and ninety shares of stock of said Idaho Canal Company in the hands of said receiver which were taken possession of by said receiver from the private box of said Spalding, and said seventeen bonds of the Marshalltown Light, Power & Railway Company, and said sixteen bonds of the town of Buckley, which belonged to said Spalding prior to his transfer of the same to said University of

Illinois on the 14th day of April, 1897, are sufficient, if sold, to reimburse said receiver for the said $15,000 so taken by said Spalding, or to supply any deficiency thereof which may arise if said fifty-five Idaho Canal bonds be sold as aforesaid.

"It is ordered, unless the said university, or some person in its behalf, shall, on or before any such sale of said fifty-five Idaho Canal bonds be made, pay to the said receiver said $15,000, with interest from the date of this decree, or shall, within five days after such sale, pay any deficiency there may be found from the sale not sufficing to pay said sum of $15,000 and interest, that said receiver proceed to sell the said twenty-three hundred and ninety shares of Idaho Canal stock and such Marshalltown and town of Buckley bonds at public sale, after five days' public notice in a newspaper published in said city of Chicago, and apply the proceeds of said sale, after paying the expenses of said sale, to the extinguishment of said equitable claim for the return of said $15,000 and interest, aud pay the remainder, if any, over to said University of Illinois, or its solicitors, and that he retain possession of the said twenty-three hundred and ninety shares of stock and said Marshalltown and town of Buckley bonds until said $15,000 so taken by Spalding, with interest thereon, is paid as aforesaid. It is therefore ordered, adjudged and decreed that unless the said Charles W. Spalding, the University of Illinois, or some other person shall pay to the receiver herein the said sum of $15,000 within ninety days from the entry thereof, the receiver herein sell said fifty-five bonds of the Idaho Canal Company at public sale, or so many thereof as may be necessary to pay said $15,000 and costs of sale, and that said receiver apply the proceeds of sale to the payment of said sum of $15,000 and costs of sale, and deliver the balance, if any, of the said bonds so remaining unsold to the University of Illinois or its solicitors. And it is further ordered that the said receiver be permitted to bid at the sale of any of the above-described property such sum or sums as it may deem the same reasonably worth; and the court hereby reserves, until after the receipt by the receiver of said $15,000 and interest, by sale or otherwise, all questions as to what credit or dividend on account thereof, if any, any party in interest may be entitled to. It is further ordered, adjudged, and decreed that the receiver herein and the clerk of this court deliver to the governor, auditor, and treasurer of the state of Illinois, on behalf of the state of Illinois, or to Wilson, Moore & McIlvaine, solicitors herein for the University of Illinois, on their behalf, all and singular the said bonds, stocks, notes, and other securities assigned by the said Spalding to the said university as above herein specifically mentioned, that is to say, fifty-five Idaho Canal Company bonds (new issue), etc., giving their numbers and amounts; twenty-three hundred

and ninety shares of stock of said company, par value $100 each; sixteen bonds of the .town of Buckley; seventeen bonds of the Marshalltown Light and Power Company,upon the payment of said sum of $15,000 upon said dividend to said receiver in discharge of the said equitable lien, and in default thereof that he sell the same, and apply the proceeds as hereinbefore directed."

Then follows a description of all other bonds and securities mentioned in the second petition, found in said boxes, as reported by the receiver. By an amendment and supplement to the original bill the bank claimed an interest of Spalding in what is called "Ford's Subdivision" of certain real estate, on the ground that it had been paid for out of the bank funds. This claim was resisted by the university. The court found in its decree that, although certain sums of money were taken by Spalding from the bank and used in making payment for the lands, the same, prior to the failure of the bank, had been repaid in cash from moneys of Spalding derived from his individual resources, and accordingly decreed in favor of the university on that issue. Many other questions were involved in the action below, and decided, but the foregoing statement is deemed sufficient for an understanding of the questions raised on this appeal.

E. C. Akin, Atty. Gen. (Wilson, Moore & McIlvaine, of counsel), for appellant. Henry W. Magee and Max Pam, for appellee the Chicago Title & Trust Co. John W. Smith, for appellee Globe Sav. Bank.

WILKIN, J. (after stating the facts). From the decree of the circuit court the University of Illinois alone prayed and was allowed an appeal, and by its assignment of errors questions only the order requiring it to pay the bank, or receiver, the $15,000 wrongfully appropriated by Spalding, as a condition precedent to its receiving the abovementioned bonds and stocks. Appellees assigned cross errors upon the record, by which they seek to question the ruling of the court below upon the first intervening petition by the university in holding the university entitled to the bonds, securities, etc., claimed by the second petition, subject only to the lien for $15,000, and in refusing to sustain the bank's claim to the Ford subdivision interest. Notwithstanding these assignments of cross errors, counsel have filed no abstract whatever of those parts of the record upon which they are based, and no certificate of the evidence or bill of exceptions has been filed by either party. We have, however, looked into the record-especially the portions of the decree omitted from the abstract filed by appellant--sufficiently to find that on the facts found none of the cross errors are well assigned.

Going to the merits of all the claims made by the University of Illinois, it is said by