{ "id": 3422127, "name": "John Irwin, Successor Receiver et al., Appellants, v. Edward Schleichert and Hattie M. Schleichert, Appellees", "name_abbreviation": "Irwin v. Schleichert", "decision_date": "1946-01-07", "docket_number": "Gen. No. 43,444", "first_page": "512", "last_page": "520", "citations": [ { "type": "official", "cite": "327 Ill. App. 512" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "291 Ill. App. 558", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5621430 ], "opinion_index": 0, "case_paths": [ "/ill-app/291/0558-01" ] }, { "cite": "375 Ill. 402", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2534921 ], "opinion_index": 0, "case_paths": [ "/ill/375/0402-01" ] }, { "cite": "349 Ill. 547", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2603896 ], "opinion_index": 0, "case_paths": [ "/ill/349/0547-01" ] }, { "cite": "239 Ill. 122", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 849043 ], "opinion_index": 0, "case_paths": [ "/ill/239/0122-01" ] }, { "cite": "307 Ill. App. 1", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3182932 ], "opinion_index": 0, "case_paths": [ "/ill-app/307/0001-01" ] }, { "cite": "387 Ill. 67", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2497099 ], "opinion_index": 0, "case_paths": [ "/ill/387/0067-01" ] }, { "cite": "387 Ill. 97", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2497332 ], "opinion_index": 0, "case_paths": [ "/ill/387/0097-01" ] }, { "cite": "384 Ill. 112", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2490701 ], "opinion_index": 0, "case_paths": [ "/ill/384/0112-01" ] } ], "analysis": { "cardinality": 647, "char_count": 13799, "ocr_confidence": 0.527, "pagerank": { "raw": 4.518461695170957e-08, "percentile": 0.28309082884755055 }, "sha256": "1b3649066ad95d554b30f237cd5fda650b074ff2384c7ae865e56dbcfca1f09b", "simhash": "1:85e3681d3e7ed061", "word_count": 2387 }, "last_updated": "2023-07-14T21:56:20.695781+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "John Irwin, Successor Receiver et al., Appellants, v. Edward Schleichert and Hattie M. Schleichert, Appellees." ], "opinions": [ { "text": "Mr. Justice O\u2019Connor\ndelivered the opinion of the court.\nMay 12, 1944, John Irwin, as receiver, and David Sterling, as a creditor of the Marshall Square State Bank, and Aaron Soble, as administrator of the estate of Emilia Sehleichert, deceased, filed a creditors\u2019 bill against Edward Sehleichert and Hattie M. Schleichert, his wife, to set aside two conveyances to a two-apartment building in Chicago, on the ground that the conveyances were fraudulent. Defendants denied the charges, the cause was referred to a master in chancery to take the evidence and make up his report together with his recommendations, which the master did and, among other things, found there was no fraud and recommended that the complaint be dismissed for want of equity. Objections to his report were overruled, they were ordered to stand as exceptions, the chancellor overruled the exceptions, approved the report, entered a decree dismissing the complaint for want of equity and plaintiffs appeal.\nThe record discloses that Albert Sehleichert and Emilia, his wife, owned the two-apartment building as joint tenants. Albert owned 40 shares of the capital stock of the Marshall Square State Bank of the par value of $100, which was in no way involved here. His wife, Emilia, also owned 40 shares of the same stock and on April 1, 1931, they executed a warranty deed conveying the premises to their married daughter, Selma Kostulski, for and in consideration of $10 \u201cand other good and valuable considerations and love and affection.\u201d The deed was recorded.May 28, 1931, The Marshall Square State Bank was closed October 2, 1931, and never reopened. It was apparently liquidated in the usual way by the Auditor of Public Accounts. On the day the bank closed, viz., October 2, 1931, plaintiff, David Sterling, as a creditor of the bank, brought a representative suit against the stockholders to enforce the constitutional liability. Prior to the filing of this suit Albert Sehleiehert died June 3, 1932, and Emilia, his wife, died October 28, 1938. August 28,1937, Selma Kostulski, the daughter of Albert and Emilia Sehleiehert, and her husband Casimir Kostulski, by quit claim deed conveyed the property to the defendants, Edward Sehleiehert and Hattie M. Sehleiehert, his wife, in consideration of $1 and other good and valuable considerations.\nAugust 23, 1934, judgment was entered in the creditors\u2019 suit against Emilia Sehleiehert for $4,000 and some time afterwards an execution issued which was returned by the sheriff no part satisfied. Nothing further was done until May 4, 1942, when David Sterling as a creditor in the stockholders\u2019 suit and the then receiver of the bank appointed in that suit, filed their complaint in equity against defendants, Edward and Hattie Sehleiehert, to set aside as fraudulent the conveyance of the property and to subject it to the payment of the judgment of $4,000. (On the oral argument counsel for plaintiffs said that plaintiffs sought only to subject Emilia\u2019s interest to the payment of the judgment.) This suit was dismissed on motion of defendants September 24, 1942. And it appears nothing further was done until the filing of the present suit, May 12, 1944. The present suit is based on a claim allowed by the Probate court against the estate of Emilia Schleichert, deceased, for $5,964.88, being the amount of the $4,000 judgment with interest thereon. All proceedings in the Probate court were brought May 4, 1944, by Aaron Soble, counsel for plaintiffs in the instant case, he was appointed administrator of Emilia\u2019s estate, and as administrator, is one of the plaintiffs here. All of the Probate proceedings were without notice or knowledge of defendants.\nThe evidence is further that defendant, Edward Schleichert, was born in 1890; he did not graduate from grammar school but, at an. early age, started to work for his parents who conducted a small milk business on the West Side of Chicago, and. he continued in this work until 1917 when he was 27 years of age, at which time he was drafted into the army in the first World War, went overseas and was gassed in France. During the time he worked for his parents he received no compensation other than a living. Upon his discharge from the army he again went to work for his parents but on account of the state of his health he was not able to do the hard work required in the milk business and he then sought other employment. \u2022 About 1920 he was married to Hattie Schleichert, the other defendant. About 1920 his parents sold the milk business and purchased the two-apartment building in question and about 1925, moved into one of the apartments. There is further evidence to the effect (and it is found by the master and sustained by the chancellor) that the parents desired to compensate their son, Edward, who was not very strong physically, for the service he had rendered, and to do so they wanted him to eventually own.the building. In addition to Edward,there was born to Albert and Emilia, two daughters, both of whom were married at the time in question, and apparently did not need any financial assistance from their parents. But the parents wanted to reserve their right to live in the apartment and to collect rent from the other apartment in case they needed financial help and they felt they could then look to Edward, and with this in view, they executed the warranty deed April 1, 1931, conveying the property to their daughter, Selma, for the benefit of Edward. After the execution of this deed, Albert and Emilia, his wife, continued to live in > the apartment until Albert died, June 3, 1932. Thereafter Emilia continued to occupy the apartment until the summer of 1937. From the time the deed was executed in 1931, Edward lived in one of the apartments and paid some rent to his father and mother until the father died and until the mother later vacated the premises.\nThere is further evidence that Edward made considerable repairs on the building and that the daughter, Selma, paid taxes levied on the property from 1931 f until 1937. In 1937 the mother, Emilia, on account of her health, was about to go to a hospital and was in need of money and it was at that time that Selma and her husband conveyed the property by quit claim deed to the defendants, Edward and his wife, Hattie. After the mother vacated one of the apartments, Edward rented it, collected rent from the tenant and paid no further rent to his mother. At the time of the execution of the quit claim deed, Edward paid his mother $2,000 in cash and executed and delivered to her his \"note for $2,000 and trust deed conveying the property to the Chicago Title & Trust Co., to secure payment of the note. The evidence as to the payment of the $2,000 in cash is that he cashed his soldier\u2019s bonus check for $1,356.16, withdrew from his savings account two checks, one for $233 and one for $400 and delivered the checks to Selma\u2019s husband who cashed the checks and paid the proceeds to Selma\u2019s mother, Emilia, for the purpose of paying the hospital, doctor bills and other expenses of the mother who died October 28,1938, and the balance of the $2,000 was expended for her funeral expenses.\nThe mortgage given to secure the other $2,000 was to be used in the event the mother, during her lifetime, needed the money. If she did not require additional money, the mortgage was to be cancelled upon her death. She died shortly thereafter and the mortgage was then cancelled.\nThe evidence further shows that Edward paid taxes on the real estate from 1938 to and including 1942, and there is further evidence to the effect that neither Edward, his wife, nor his two sisters, Martha or Selma, knew that their mother owned stock in the State Bank or that judgment had been entered against her until the summons was served in the suit filed to set aside the deeds in May, 1942.\nThere is further evidence and the master found, that from January 28, 1930 to and including April 1, 1931, 12 banks in Chicago were closed and that from April 2, 1931, to and including October 2, 1931, approximately 41 other banks were closed in Cook county; and further that the two deeds and other papers were drawn by Martha\u2019s husband \u2014 son-in-law of Emilia Schleiehert\u2014 Theodore Szmergalski, who was an attorney at law; that the fair, cash value of the property on August 28, 1937, was $7,000. That at the time of Emilia\u2019s death on October 28, 1938 she left no property to which she held title except the balance of the $2,000 in possession of her daughter, Selma, above referred to.\nThe master also found there was no evidence offered by either of the parties to the suit showing what property, if any, was owned by Albert Schleiehert or his wife, Emilia, on April 1, 1931 or August 28, 1937 and that the payment of the $2,000 in cash and the execution of the trust deed securing the payment of the note for the other $2,000 were \u201cproved beyond all doubt.\u201d And that the defendant, \u201cEdward Schleiehert and his brother-in-law, Theodore Szmergalski and the other witnesses for the defendants told the truth concerning the transactions complained of by plaintiffs,\u201d and that the master was of opinion that plaintiffs were guilty of inexcusable laches.\nAs stated, the chancellor approved the master\u2019s report in all things and it was decreed that the suit be dismissed for want of equity.\nCounsel for defendants contend that plaintiffs failed to sustain the burden of proof that the transfers were fraudulent; that all the evidence, except some suspicions interposed by plaintiffs, showed the transfers were not fraudulent but were made in good faith. And furthermore, the \u25a0 rule of law announced by the Supreme court in this state is that where the master saw the witnesses and heard them testify, while his conclusion will not be given the weight of the verdict of the jury, his finding, when approved by the chancellor, will not be disturbed unless manifestly against the weight of the evidence, citing McKey v. McKean, 384 Ill. 112; while on the other side, counsel for plaintiffs say that this is not a correct statement of the law, citing Jones v. Koepke, 387 Ill. 97, where it was said that: \u201cIt is only where the court has heard the evidence that we have refused to disturb the finding unless it was clearly and manifestly against the weight of the evidence,\u201d and then analyzes the evidence, or lack of it, and says the evidence did not sustain the master. The court there, in speaking of the duty of a court of review when considering the finding of the master, said: \u201cHis finding, however, on such questions, and the weight to be given to such finding, depends upon the record in each particular case.\u201d\nIn Stasch v. Romza, 387 Ill. 67, the rule is announced to be that contended for by defendants, and in Phillips v. W. G. N., Inc., 307 Ill. App. 1, we considered this question and cited authorities and said that whichever rule was followed in that case the result would be the same. So, too, in the case at bar we are of opinion that upon a consideration of all the evidence in the record the finding of the master and the chancellor ought not to be disturbed.\nIn support of plaintiffs\u2019 contention that there was fraud in the execution of the two deeds, they discuss the evidence and say that it shows that the conveyance of the property on. April 1, 1931, by Albert and Emilia was wholly without consideration and was done merely to avoid Emilia\u2019s liability as a stockholder of the bank, and in support of this cite Kennard v. Curran, 239 Ill. 122, and from that case quote the following: \u201cAppellant contends that the decree cannot be sustained because there is no proof that Curran was insolvent at the time of the conveyances to his wife. Actual insolvency is not necessary in order to render a voluntary conveyance void. If a person largely 'iivdebted makes a voluntary conveyance and shortly after beco.mes insolvent such conveyance will be held fraudulent.\u201d Counsel say the italics are theirs. We think the quotation from the Kennard case is not applicable to the facts in the case before us. Here Emilia, on April 1, 1931, when she and her husband made the conveyance, was not indebted, so far as the record shows, to anyone. She was not indebted on account of her ownership of the bank stock to anyone and could not be indebted or liable for such stock ownership unless and until a demand was made on the bank and payment refused. Sanders v. Merchants State Bank, 349 Ill. 547-564; Burnett v. West Madison State Bank, 375 Ill. 402 and Cohen v. North Ave. State Bank, 291 Ill. App. 558.\nIn the Sanders case the court said: \u201cUntil demand the depositor can maintain no action against the bank and .therefore has no cause of action. The stockholder is liable to the same extent as the bank \u2014 that is, to pay upon demand made of the bank in such sums, at such times and to such persons as the depositor may direct. He can be held on no other terms and no action can be maintained against him until demand made on the bank.\u201d\nWe have considered the other contentions made by counsel for plaintiffs and also the point made by defendants that this court has no jurisdiction and that the appeal should be dismissed but find nothing that would warrant us in not considering the appeal on its merits and in affirming the decree.\nThe decree of the Superior court of Cook county is affirmed.\nDecree affirmed.\nHatchett, P. J., and Niemeyer, J., concur.", "type": "majority", "author": "Mr. Justice O\u2019Connor" } ], "attorneys": [ "Aaron Soble and Martin S. Gerber, both of Chicago, for appellants.", "Clones & Cavender, of Chicago, for appellees." ], "corrections": "", "head_matter": "John Irwin, Successor Receiver et al., Appellants, v. Edward Schleichert and Hattie M. Schleichert, Appellees.\nGen. No. 43,444.\nHeard in the first division of this court for the first district at the June term, 1945.\nOpinion filed January 7, 1946.\nReleased for publication January 21, 1946.\nAaron Soble and Martin S. Gerber, both of Chicago, for appellants.\nClones & Cavender, of Chicago, for appellees." }, "file_name": "0512-01", "first_page_order": 532, "last_page_order": 540 }