Trustees Soldiers' Orphans' Home v. Lyon , 1891 Ill. App. LEXIS 325 ( 1891 )

Wall, P. J.

The question is presented whether a court of equity has jurisdiction of the subject-matter. This should have been raised distinctly in the court below. After having permitted the case to pass through all the stages of a hearing upon bill, answer, replication and proofs, without objection, appellants should not make the point here for the first time.

We think, however, there is no doubt of the jurisdiction. Here was a common fund in which divers claimants had an interest. It was in the hands, mainly, of the trustees as agents of the State, who were claiming under the contract the right to apportion according to their judgment. There was no convenient machinery in the courts of law to bring in all the claimants and adjust their respective rights. The sureties, by virtue of their advances and of their liability on Patterson’s account, had an ’nterest in the proper distribution of the fund.

It was eminently a case where the rights of parties could not be well determined in any tribunal save that of chancery, and where, but for equitable interference, there would have been a failure of justice.

The fund in the hands of the bank should be regarded as in all respects the same as though it had not passed from the hands of the trustees. It was improperly drawn by Patterson. The main fund should carry with it this portion also, and those creditors who participate in the main fund should not object to this course.

They who ask equity should be willing to do equity. The mere fact that some of the creditors may have garnished this money in the hands of the bank, is not to be regarded as a reason for giving them an exclusive interest in it, when they are permitted to share equitably in the much larger fund in the hands of the trustees, and especially is this so where the money is really a part of, and by reason of the means by which it was obtained by Patterson, should be regarded, in equity at least, as still belonging to the main fund.

It is complained that the Lyon-Armstrong company, a corporation, should have been postponed to other creditors because the stockholders therein were also sureties on the bond of Patterson, but in our judgment there is no good reason for this objection.

We are satisfied that the court was governed by equitable principles in its distribution of the funds, and we find no error in the record so far as the money in the hands of the trustees is concerned. It is objected, however, that the decree as against the bank is erroneous because there was no service upon, or entry of, appearance by the bank. This objection appears to be well taken and we are compelled to sustain it. However, the error.in this respect does not necessarily affect the residue of the decree.

As to the funds found to be still in the bands of the trustees the decree will be affirmed, and the same should be paid out accordingly.

As to the money in the hands of the bank the decree must be reversed and the cause remanded with directions to make the bank a party, and if upon a hearing as to the bank it shall be found that the facts are as they now appear, the money so in the hands of the bank will be distributed, as by the present decree. The bank will recover its cost herein of the defendants in error. The decree will be affirmed in part, and in part reversed, and cause remanded.

Affirmed in fart and reversed, in fart, wnd'remanded.