Mears v. Hayden , 91 Ill. App. 343 ( 1900 )

Mr. Justice Horton

delivered the opinion of the court.

From the foregoing statement it is apparent that the real issue upon this appeal is between the receiver, as such, and the appellee. It seems to us that counsel for appellee puts the question fairly when he says in his printed brief :

“ The only question arising on this appeal is whether appellant, having come into possession of a fund affected by a prior lien in favor of appellee, can lawfully use that fund to pay the expenses of running a hotel, as receiver, and his own fee as receiver, and the fees of his attorneys, when such a use of the fund will exhaust the fund and thereby put the loss on appellee; in a word, whether a lien existing at the time the receiver gets the property subject thereto, can be displaced in favor of receivership expenses of carrying on business, and the general expenses of the receivership.”

It was adjudged by the court below that when the receiver came into possession of the property sold by him, appellee had a valid lien thereon. It was also thus adjudged that such lien should attach to the proceeds of gale. The parties claiming an interest in said property and the proceeds thereof are not before this court to question such adjudications, and it is-not within the duties or province of the receiver to do so.

The case of Link Belt Machinery Co. v. Hughes, 174 Ill. 155, 162-3, must be regarded as conclusive as against the appellant in the case at bar. That was a proceeding in chancery, and it was there held that a prior lien upon property sold by order of court and by like order transferred to the' proceeds of such sale can not be divested against the consent of the party holding such lien for the benefit of other creditors or to meet the fees and expenses of a receiver incurred in continuing a business by authority of court. In the case at bar the receiver had been continuing the business of the firm for which he was appointed receiver, and the expenses and fees claimed by him and his solicitors were for and in connection therewith. All "costs, expenses and fees in connection with the sale of said property and placing the title thereto in the purchaser were allowed to said receiver. The proceeds of such sale in the hands of said receiver were sufficient to pay all the costs, expenses and fees thus allowed to him and to pay the amount of the lien of appellee in full. The court did not err in directing the payment of the amount due upon appellee’s said lien and the costs of suit.

The case of Hooven, etc., Co., v. Burdette, 153 Ill. 672, relates to proceedings in the County Court between lien claimants and an assignee for the benefit of creditors. The same rule is there applied. Although the County Court is not a court of general chancery jurisdiction, the Supreme Court in the Hughes (Chy.) case cite the Hooven case as supporting its conclusions. See, also, citations in the cases above noted. The decree of the Superior Court is affirmed.