Hegeler v. First National Bank of Peru

Mr. Justice Wilkin

delivered the opinion of the Court :

The sole ground upon which a reversal was asked in the Appellate Court was stated by counsel for appellant in the following language:

“The theory upon which complainant seeks a reversal of the decree below will appear from the following extracts from his bill of complaint, viz.: ‘That although the notes upon which ■said judgments were confessed in favor of the Peru bank were dated anterior to the time when the indebtedness for which ■said judgments were confessed was contracted, still said notes were kept by said bank in its custody and concealed from the knowledge of complainant, and the judgments thereon were ■confessed after said glass company became indebted to complainant; that it is inequitable and unjust for said bank to ■assert a lien upon said premises, under said judgments, as •against complainant. Tour orator would further represent, that although said judgments in favor of the First National Bank of Peru were not entered up until December 22, 1882, yet said notes both became due in January, 1882, and were each accompanied by power of attorney to confess judgment at any time; that prior to January 10, 1882, the date of the execution of each of said powers of attorney, the De Steiger Glass Company was unable to meet its obligations, and was insolvent, which was then and prior thereto known by said First National Bank of Peru; that said bank had cause for so ■believing; that just prior thereto said glass company offered to mortgage its property to said bank, but said bank refused, because it would injure the credit of the glass company and prevent it from obtaining elsewhere further credits and loans; that thereupon said bank took from said glass company said notes, and powers of attorney attached thereto, and agreed to ■conceal the same, and to allow said glass company to retain the full control of the property, free from any recorded or known lien; that in pursuance of such agreement said First National Bank of Peru, with the intention of allowing said glass company to obtain new and future credit elsewhere, and to defraud its creditors, did keep concealed in its possession for over eleven months, and until December 22, 1882, said judgment notes, when it entered judgments thereon and took out executions and made levies as aforesaid, with the express, purpose of defeating the just claims of your orator and other creditors of said glass company incurred during the period of said concealment, and concealed the amount of indebtedness, from the glass company to it until December 22, 1882; that-your orator advanced $10,000 September 21,1882, and $4500 November 20,1882, on the false and fraudulent statements of the De Steiger Glass Company as to its financial condition,, and upon the delusive and fictitious credit given it by said First National Bank of Peru in allowing it to retain all its property apparently free from incumbrance, and that had your orator-known or suspected the existence of said judgment notes he-would have given no credits or loans whatever to said glass-company ; that such concealment enabled the glass company,, under the semblance of being the owner of a large amount of unincumbered real estate and personal property, to deceive and mislead your orator and other persons to give it credit that-would otherwise have been withheld, by reason of which said glass company did contract the aforesaid debts to your orator, now remaining wholly unpaid; wherefore your orator avers it-is inequitable and unjust for said First National Bank of Peru to be allowed to enforce its said pretended liens to the injury of your orator, and until your orator has been paid in full his-aforesaid judgment.’ ”

The briefs and arguments filed in the Appellate Court are-re-filed here as the principal arguments in this court.

It must be admitted, that if the averment that appellee “agreed to conceal the same, and to allow said glass company to• retain the full control of the property free from any record or known lien, and that in pursuance of such agreement it did conceal,” etc.,, was stricken out of the bill, it would be demurrable, for want, of equity appearing on its face. (Field et al. v. Ridgely et al. 116 Ill. 424.) There is not a particle of evidence in the record to support that averment, nor is it relied upon, in the argument, as being essential to complainant’s cause. On the contrary, the argument proceeds throughout upon the proposition that the bank took its notes and held them under circumstances that made its conduct operate as a fraud upon others. There is no pretense that there was any agreement to conceal its claim against the glass company, much less that any such agreement was made for the purpose of enabling the company to obtain credit from others. No evidence can be found in the record proving, or tending to prove, acts or declarations on the part of appellee calculated to induce appellant to give credit to the glass company. There is nothing in the bill, and certainly nothing in the evidence, to show that at the time appellee took its notes, and refused to take mortgage security, it did not honestly believe, that, notwithstanding the insolvency of the glass company, it would, if its credit could be maintained, successfully recover from its embarrassment, continue business, and pay all its debts.

The authorities cited in the brief of appellant lay down correct rules and principles of law, but in our view of this case they are wholly inapplicable. We think the bill was properly dismissed.

In the additional brief and argument filed in this court, it is insisted that the circuit court erred in ordering the property in controversy to be turned over to appellee, and in granting it leave to amend its answer after the cause had been submitted. Neither of these points was presented to the Appellate Court for decision. The first is not even raised by the assignment of errors. We do not think the order was erroneous. The leave to amend the answer was clearly within the discretionary power of the chancellor.

We find no error in this record, and the judgment of the Appellate Court will be affirmed'.

Judgment affirmed.