American Radiator Co. v. Walker (276 Ill. App. 150, 1934)

Mr. Presiding Justice Wolfe

delivered the opinion of the court.

The plaintiff in error, Mary L. Walker, is a resident of the City of Joliet, Illinois. She owns a lot in said city on which she decided to erect an apartment hotel at an estimated cost of $450,000. An architect from Chicago drew plans for the building, which were finally accepted by Mrs. Walker. Mrs. Walker advertised for bids for the construction of the building. The contract was not let to a general contractor, but to different contractors, each to do his particular kind of work. The building was started in the early part of the year 1922 and continued until November, 1922. At this time the different contractors refused to work any longer on the building, without receiving their pay. The building operations were at a standstill from November, 1922, to some time in the early spring of 1923. Mrs. Walker, in the meantime, was making a desperate effort to raise money to complete the building, but was having an exceedingly hard time to find one who was interested in the proposition. She came in contact with a representative of Powell, Garard & Company, brokers of the City of Chicago. They agreed to finance the building operation. Mrs. Walker made a written application to Powell, Garard & Company for a loan of $250,000. On the face of this application it appears that it was the ordinary application for making a loan. It is on the wording of this application that the plaintiff in error now bases her defense to this case, namely, that it was a loan of money, and therefore, ultra vires and void, because of the fact that Powell, Garard & Company, under their articles of incorporation, were not authorized to loan money, but could only buy and sell bonds and other securities.

After the agreement to. finance Mrs. Walker, Powell, Garard & Company had the building and grounds appraised at Joliet. They had 450 bonds printed which complied with the Blue Sky Law, Cahill’s St. eh. 32, If 254 et seq. On the face of the bonds it shows they were issued as building bonds.

The application provided that Powell, Garard and Company were to furnish the money at the rate of-seven per cent per annum, but, in addition thereto, they charged Mrs. Walker ten per cent of the amount as commission for furnishing the money. It is now claimed that this was a loan and, therefore, usurious. After the bonds were printed, Mrs. Walker signed all of them and Powell, Garard & Company advanced the money to complete the building. Some was out of their own money and some from the sale of the bonds. All of the bonds were eventually sold to the public and the proceeds used in the construction of the hotel, with the exception of the 10 per cent, the brokers’ fee which they retained as their own.

The American Radiator Company on March 19,1924, filed its petition in the circuit court of Will county against Mary L. Walker and others to foreclose a mechanic’s lien, on the premises therein described, situated at the northwest corner of Pine street and Western avenue in the City of Joliet. (Docket No. 31,651.) The Chester Johnson Electric Company, Han-sell-Elcock Company, Sutton Plastering Company, Kaestner & Hecht Company, American Mosaic and Terrazzo Company, Victor and Martin Ahlvin, JohnsManville, Incorporated, William M. Ryan, Charles W. Berger, and Joliet Sheet Metal Company all filed their respective intervening petitions praying for the establishment of liens against said premises.

Avery Brundage, Hubert Burnham and Daniel H. Burnham, Adam Groth and Company, and McClinticMarshall Construction Company, on April 13, 1925, filed in said circuit court their bill of complaint against said Mary L. Walker as mortgagor, and others interested as lien claimants, and also others interested as second mortgage note holders, to foreclose a second trust deed, Document No. 353572, against said premises given to secure certain notes then held by complainants. An application for an injunction in said cause No. 32,385 was made and allowed without notice or bond. On April 18,1925, the Joliet National Bank was appointed receiver of said property on application made by said complainants. Notice was given to said mortgagor but without a complainant’s bond. The said cause is No. 32,385.

On July 8, 1926, the Chicago Title and Trust Company as trustee (Document No. 353571) exhibited its bill of complaint against alleged unknown bondholders thereunder, against said Mary L. Walker as mortgagor, and' others interested as mechanic lien claimants and as second mortgage note holders, to foreclose said first trust deed as an incumbrance against said premises. On application of said complainant trustee, the Joliet National Bank was, on November 30, 1926, appointed receiver. On November 5, 1927, said defendant, Mary L. Walker, presented her motion for consolidation of said three causes and thereafter an order consolidating said causes was entered in each cause as of November 11,1927.

The bill of the American Radiator Company alleges that on October 22, 1922, Charles H. Law, doing business as Charles H. Law Plumbing and Heating Company, one of the defendants herein, applied to the petitioner to furnish all material, equipment and for installing a heating system in the certain hotel building then in process of construction, which is alleged to be the property of Mary L. Walker; that a contract was entered into between the American Radiator Company and the said Charles H. Law by which the petitioner was to furnish all necessary material and equipment to be used in said building in said heating system, and that said Charles H. Law agreed to pay at market price, cash upon delivery of said material and equipment; that said petitioner did furnish said equipment and the same was used in the construction of the building on said premises and a true and correct account of the material and equipment was furnished Mary L. Walker and said Charles H. Law. The petition went on to state further in detail materials delivered under said contract and that there was now due and unpaid to the petitioners the sum of $2,602.48; that petitioner is entitled to a mechanic’s lien on said premises for said amount.

The petitioner further states that Mary L. Walker on April 2, 1923, executed a certain trust deed for said premises to the Chicago Title & Trust Company to secure the payment of certain notes and bonds in the aggregate sum of $250,000, which said deed is recorded in the recorder’s office of Will county; that said Mary L. Walker, on April 2, 1923, executed a certain other trust deed conveying the same premises aforesaid to the Chicago Title & Trust Company to secure the payment of certain notes and bonds aggregating the sum of $75,000, which trust deed is also recorded in said county; that said petitioner has made due and diligent search and inquiry to ascertain the names of the legal holders of the notes and bonds aforesaid but has been unable to ascertain the same and the names of the owners and holders are unknown to it.

On June 3, 1924, Mary L. Walker filed her answer to said petition. She says she has no knowledge as to whether Charles H. Law applied to the petitioner to furnish material and equipment for installing a heating system in her hotel building upon her premises, but requires strict proof thereof. She admits ownership in fee simple of the premises. She denied that a true and correct account of such material and equipment was furnished to her. She said she does not know whether a true and correct account for such material and equipment was furnished Charles H. Law, but requires strict proof of this fact. She denied knowledge of whether the material and equipment furnished by the petitioner to Charles H. Law was ever used in installing and equipping a heating plant in said building; that the petitioner had ever furnished her a statement of the account; that she ever accepted any of the material and equipment furnished by the petitioner. She says she has no knowledge of any money owing to or due the petitioner from Charles H. Law. She denied that any notice was served upon her, or that the petitioner was entitled to a lien upon the premises. The answer admits that Mary L. Walker, on April 2, 1923, executed two trust deeds mentioned in said petition. The Chicago Title & Trust Company was made a party defendant to the bill and filed its answer to the petition. By their answer they admitted and averred that they are interested in the real estate described in the petition under and by virtue of the trust deed of April 2,1923, executed by Mary L. Walker to said Chicago Title & Trust Company for the real estate described in said bill to secure her indebtedness in the principal sum of $250,000 to be paid by her 440 bonds bearing even date therewith; that said defend-, ant had no information, knowledge or belief as to who were the owners or who are the owners of the bonds secured by said trust deed; that the said trust deed is a good, valid and subsisting lien on said real estate described in said trust deed and bill herein.

The American Mosaic and Terrazzo Company filed an intervening petition in said cause and allege that they are an Illinois corporation; that on June 19,1922, Mary L. Walker was the owner of record of the aforesaid mentioned premises, and that she engaged D. H. Burnham and Company as architects and that on June 19, 1922, they entered into the written contract with Mary L. Walker, whereby they agreed to furnish the labor and materials for the terrazzo tile and mosaic work for the permanent hotel building to be erected on the .premises of said Mary L. Walker; that the petitioner was to receive for the same the sum of $13,500 in instalments, as the work progressed; that they started work on said building, and on July 19, 1923, while the petitioner was working on the premises they submitted a proposition to said Mary L. Walker for additional labor and material for $4,200, for which Mary L. Walker accepted the said proposition; that they furnished additional labor and material in the construction of hotel building; that as the work progressed the said architects were to issue certificates to the petitioner which were to be paid by the defendant, Mary L. Walker; that Mary L. Walker made default and has not paid the certificates nor any part thereof and by reason of her default, the petitioner had suspended work on the building; that nearly all of the work they were required to do under their contract had been completed. At the time of the default, Mary L. Walker was indebted to them in the sum of $7,985. They claimed a lien on said premises as provided in the Mechanics’ Liens Law, Cahill’s St. ch. 82, IT 1 e# seq.

The defendant, Mary L. Walker, admitted that Bum-ham and Company were her architects, but neither admitted or denied that she had entered into a contract with the petitioner for the materials furnished, and demanded strict proof thereof. She neither admitted nor denied that the petitioner was to receive $13,500 for the original contract. She did admit that such petitioner had furnished and installed some cement work and did some tile setting and mosaic work, on the building erected upon the property, but she neither admitted nor denied that the petitioner had submitted its proposition for extra work and material at a price of $4,200, nor that she accepted the proposition, but demanded strict proof thereof. She neither admitted nor denied that the architect had issued certificates to the petitioner for $2,500 for the work done by them which had not been paid, but demanded strict proof thereof. She admitted that the petitioner had quit work on said building, but denied that she had suspended the work on the same or that she was indebted to the petitioner in the sum of $7,985.

The defendant charged that the work by the said petitioner was not well done or done in a workmanlike manner, and was not done according to the directions of the defendant, but that the petitioner failed and refused to perform the said work in a workmanlike manner. She denied that the petitioner was entitled to a mechanic’s lien on said premises.

On June 28, 1923, Victor Ahlvin and Martin Ahlvin filed their intervening petition in said case and alleged that they were copartners engaged in the business of carpentry under the firm name of Ahlvin and Son; that on October 24, 1923, Mary L. Walker was the owner of the premises in question and gave a legal description thereof; that on said date the defendant had engaged Burnham and Company as architects for the plans and specifications for the construction of the hotel building above heretofore mentioned; that on October 27, 1923, the petitioner entered into a written contract with Mary L. Walker in which the claimants agreed to do all the necessary carpentry and labor. They describe their contract in particular, including necessary hardware, kitchen equipment, wardrobes, medicine cases and china cases. They were to furnish the labor necessary to distribute and hoist the material inside of said building and to furnish nails and other building materials.

The petitioner further alleges that by the terms of said contract said work must be completed within a reasonable time; that petitioner was to receive therefor the sum of $8,950 to be paid as the work progressed; that thereafter at the instance and request of Mary L. Walker, the petitioner performed exira labor and furnished extra material on the premises to the value of $652.50; that after the execution of the agreements the petitioners commenced to perform and continued the performance of the contract to furnish extra labor and materials by request for the sum of $652.50; that said petitioners have been paid the sum of $5,959.25 which has been applied on the contract price; that said Mary L. Walker failed and refused to make further payments on said contract and for the reason thereof the petitioner suspended work on said building; that nearly all work on said building had been completed; that petitioners are willing and ready to comply with said contract and to perforin the terms thereof; that the defendant, Mary L. Walker, is now indebted to the petitioner in the sum of $3,193.25 and they are entitled to a mechanic’s lien against the said premises for the said amount.

Mary L. Walker filed on October 24, 1923, her answer to said petition and admitted that Burnham and Company were her architects; that she was the owner of the property in question; that she entered into a contract with the petitioners to supply the necessary carpentry labor, the interior trim, etc., and other material as set forth in petitioner’s hill of complaint; that said work was to be completed within a reasonable time and the petitioners were to be paid for the same in the sum of $8,950 as the work progressed. She denied that she ever requested petitioner to perform any extra work or furnish any extra material, or that any extra material or labor was furnished.

She charges that the petitioners have wholly failed to comply with the contract; that a great part of the work performed by the petitioners was not performed in a workmanlike manner. She states it has not been accepted by her. She admits that the petitioner had ceased working on the building but denied that all of the necessary work had been completed, or that the petitioners were willing to complete their contract. The defendant further charged that the cost of completing the contract and the cost of doing that part of the work required by said contract, which was not done in a good and workmanlike manner, more than exceeded the amount claimed under the contract by the petitioners. She denied that she was indebted to the petitioners for any amount or that they were entitled to a lien on her premises.

On September 12, 1923, the Johns-Manville, Incorporated, were granted leave to file an intervening petition in said case and on said date it filed its petition wherein it alleged that they were engaged in business of furnishing and selling material to use in the construction and equipment of buildings and dwellings; that on June 13,1922, Charles W. Law, doing business as Charles W. Law Plumbing and Heating Company, applied to the petitioner to furnish all the materials and equipment and necessary labor for all installation of pipes, boilers, etc., in the defendant’s hotel, then in process 'of construction on her premises; that a contract was entered into between the petitioner and Law in which the said petitioner agreed to furnish and install such materials and equipment for said building, the said material and equipment to be paid for by cash on delivery; that said petitioner did furnish and install in said building a large amount of such material and equipment; that a true and correct account of such, material, equipment and labor was furnished Mary L. Walker by Charles Law; that all said materials, labor and equipment was used by said petitioner in said building; that the same was necessary to complete said building; that the price charged for each article or item is a fair and reasonable one, and that each article was of good quality; that said building was actually erected and materials furnished by the petitioner constituted a valuable and permanent improvement on said premises; that the said materials and equipment were accepted by said Mary L. Walker; that Charles H. Law on July 15, 1924, had completed the performance of his work under his contract; that there is now due and unpaid to the said petitioner $1,043.60.; that the petitioner is entitled to a mechanic’s lien on said premises for this amount.

• The defendant neither admitted or denied the making of a contract for furnishing materials, etc., but demanded strict proof thereof. She charges that no notice as required by the Mechanics’ Liens Law, Cahill’s St. ch. 82, If 1 et seq., was ever served upon her by the petitioner notifying her that the petitioner had furnished equipment and materials to Charles H. Law; that since the making of the contract Charles H. Law had gone into bankruptcy and that the petitioner was one of the claimants in said bankruptcy proceeding. She denied that she was either indebted to the petitioner in the sum of $1,043.60 or any other amount, or that the petitioner was entitled to a mechanic’s lien.

On December 28, 1924, the circuit court at the November Term thereof, entered an order taking the original petition as confessed by the contractor, Charles H. Law, and by the unknown holders ■ of the bonds described by the trust deed heretofore mentioned. The decree recites that a hearing was had, both oral and documentary proof being introduced; that the American Radiator Company was entitled to a mechanic’s lien as set forth in their bill of complaint; that the claim of Johns-Manville, Incorporated, for mechanic’s lien was by stipulation adjusted. It also found that Martin Ahlvin and Victor Ahlvin, copartners, had fully proven their claim and were entitled to a mechanic’s lien for the amount of $2,916.52.

On January 30, 1925, an order was entered granting permission to George Poehner, A. C. Dillman, William M. Ryan and Charles W. Berger to file their intervening petitions. This was done and a rule entered against all parties to answer the same. The intervening petition of George Poehner and A. C. Dill-man, copartners, as Poehner and Dillman, are not material to the issues involved in this case.

On January 30,1925, Wm. M. Ryan filed his petition alleging that he was a contractor engaged in the business of roofing and sheet metal work; that Mary L. Walker was the owner of the premises involved in this suit; that on May 20, 1922, petitioner-entered into a contract with the defendant, Mary L. Walker, whereby he agreed to furnish the roofing and sheet metal work for the said hotel building then being erected on said premises; that he was to receive $5,200 in instalments from time to time for said work as the same progressed; that he entered into the performance of this contract and that sometime in the month of December, 1922, all the work on said building was suspended by the several contractors engaged in the erection of said building' including the petitioner, on account of the failure of Mary L. Walker to perform her part; that said suspension continued until May, 1923, when an agreement was made between Mary L. Walker, her architects, and the petitioner, whereby the petitioner was to receive in addition to the contract price the further sum of $600 to cover the increased cost of labor and material occasioned by the failure of the said Mary L. Walker to perform her part of the contract; that several of the contractors were engaged in the erection of the building and that numerous delays were occasioned by Mary L, Walker in not carrying out her part of the contract with the several contractors; that the petitioner from time to time after May, 1923, continued in the performance of his contract as directed by the architects until the contract was fully completed; that on August 13, 1924, he gave proper notice to protect his rights under the Mechanics’ Liens Law and that he is entitled to a lien on said premises for the sum of $1,650. The petitioner also set forth the making of two trust deeds from Mary L. Walker to the Chicago Title & Trust Company, alleging that his lien is superior to that of the trust deed.

The petitioner, Charles W. Berger, filed his bill representing that he entered into a contract to furnish temporary elevator service in connection with the construction of the building, and to install a transformer wall and do other work-and furnish material in the erection of said building and that there is now due him on his contract for such labor and material the Slim of $2,731.40. Mary L. Walker filed her answer admitting ownership of the building, and that she employed the architect. She neither admitted nor denied the contract of said petitioner, but demanded strict proof of it. She denied there was $1,000 due on his contract, and charged that he failed to perform his work in a good and workmanlike manner and failed to complete the work as specified by the architects. She admitted that she executed two trust deeds on April 2, 1923.

On March 10,1925, the Thomas Pump Company was given leave to file an intervening petition in said case. The same was filed on the same date. The petitioner alleges that it was engaged in the business of installing motor-driven, deep well pumps; that it entered into contract with Mary L. Walker, on April 1, 1923, to install certain pumping apparatus, pipes, etc., on the premises of the defendant for the sum of $1,225; that they furnished the same and did not receive pay therefor; that proper notices were given and they are entitled to a mechanic’s lien on said premises for that amount.

On May 2, 1925, a petition was filed in said court in said case by Avery Brundage, D. H. Burnham and Company, Adam Groth and Company, McClintic-Marshall Construction Company, the Kelly and Jones Company, Chester Johnson Electric Company, and the Hansell-Elcock Company, praying for an order to set aside the default entered on December 8, 1924, as to the unknown owners of the notes described in the second trust deed of April 2, 1923, and asking permission to answer said petition of the said American Radiator Company and that they be made parties defendant to the said proceeding. On the same date an order was entered vacating said default of December 8,1924, and said petitioners were granted leave to answer the petition of the American Radiator Company.

The answer of these defendants set forth that they were made parties defendant as unknown owners and holders of the notes described by the trust "deed from Mary L. Walker to the Chicago Title & Trust-Company, as trustee, bearing date of April 22, 1923, which is commonly known as the second deed of trust. Each of them asked that they be made parties defendant by his true and correct name. They averred that they were interested in said real estate described in said bill as holder of notes secured by the said deed of trust. The amounts and number of the notes were set forth in detail in the petition. The answer set forth specifically the claims of the respective parties in interest on their respective notes. They claimed by virtue of said trust deed, a valid and subsisting lien on said real estate mentioned in the said trust deed for the full amount of their respective claims as evidenced by said notes and claimed the same was superior to the mechanic’s lien claims against the real estate.

On October 14, 1925, an order was- entered granting the Joliet Sheet Metal Company leave to intervene in said case. It filed its petition alleging that they were engaged in selling and installing sheet metal and sheet metal equipment; that on March 1, 1922, Mary- L.Walker was the owner of the premises in question; that they entered into a contract with Charles H. Law who was doing business as Charles H. Law Plumbing and Heating Company, to furnish labor and material for installing and constructing heating and ventilating ducts, etc., in the hotel building of the defendant, Mary L. Walker; that they furnished said work and did the same in a good and workmanlike manner; that they were to receive the sum of $2,252; that later they entered into a special contract whereby they were to do additional work, which they did at an extra cost; that part of the contract price has- been paid, but there is now due and unpaid the sum of $929.88 and that they. are entitled to a mechanic’s lien on the premises for the same.

On October 13, 1925, Avery Brundage, D. H. Burn-ham, Adam Groth & Company and McClintic-Marshall Construction Company filed their bill in said court, said case being numbered 32,385. They set forth in their bill that on April 2,1923, Mary L. Walker was indebted to the Avery Brundage Company, to the amount of $21,309; to the D. H. Burnham Company in the sum of $4,985.40; to the Adam Groth Company in the sum of $1,844.55; and to the Morava Construction Company in the sum of $10,357.95. Each of the complainants alleged that Mary L. Walker being so indebted to the complainants made and delivered to Powell, Garard & Company of Chicago, for the use and benefit of the various complainants, her promissory note of April 2, 1923, in which she promised to pay to the order of herself certain sums of money with interest at seven per cent per annum payable semiannually on the 2nd day of April and the 2nd day of October of each year. The bill alleges that these notes were properly indorsed by Mary L. Walker and delivered to Powell, Garard & Company; that Powell, Garard & Company delivered to each of the complainants the notes that were due them according to said contract; that they were now the owner and holders of their respective notes. The bill alleges that prior to April 2, 1923, the said Mary L. Walker had commenced the construction of said apartment hotel building upon the real estate of the said Mary L. Walker and that she had engaged D. H. Burnham & Company as architects, and had entered into a contract with the said Avery Brundage, Adam Groth & Company, and the said Morava Construction Company, to furnish certain materials and labor in the construction of said building; that several months prior thereto work had been suspended by the several contractors then engaged in the construction of said hotel building, occasioned by the default of the said Mary L. Walker in carrying out the said contracts on her part, including the contracts of the complainants and other contractors at that time engaged in the construction of the said building; that they had entered into an agreement with Mary L. Walker to accept 30 per cent of the amount of their respective contract in notes secured by a deed of trust conveying said real estate to the Chicago Title & Trust Company as trustees, subject, however, to a lien of a prior trust deed given to secure a bond issue loan of $250,000; that pursuant to said agreement the said note and trust deed were prepared by Mary L. Walker, and by her executed and delivered to Powell, Garard & Company; to hold for the use and benefit of the several contractors, the notes to be delivered to the complainants and other contractors upon written certificates to be issued by the said architects. The bill then alleges that in pursuance of said agreement Mary L. Walker executed and delivered to Powell, Garard & Company 135 notes, each bearing date of April 2, 1923. The notes are then described and then their number and their amount.

It is further alleged that Mary L. Walker executed, acknowledged and delivered her trust deed to secure the payment of said note, both principal and interest, and conveyed the same to the Chicago Title & Trust Company as trustee. Tlié bill describes the property as being the same as described in the petition of the American Radiator Company in case No. 31,651 which the said trust deed was duly acknowledged and recorded in Will county, Illinois; that Powell, Garard & Company in pursuance of said agreement had delivered pursuant to certificates issued by the architect the following notes described by the trust deed: to Avery Brundage, notes Nos. 1 to 12, inclusive, each for $1,420.60; to D. H. Burnham & Company, Nos. 1 to 10, inclusive, each for $332.36; to Adam Groth & Company, notes Nos. 1 to 15, each for $122.97, and to said Morava Construction Company, notes Nos. 1 to 15, each for $690.53; that said Powell, Garard & Company still retained and held notes Nos. 13, 14, and 15, for $1,420.60 each, the property of said Avery Brundage, and the notes Nos. 11, 12, 13, 14 and 15 for $332.36 each, the property of D. H. Burnham & Company, and that they had refused to deliver the same to complainants, Avery Brundage and D. H. Burnham & Company, although authorized so to do by certificates issued by said architects; that Powell, Garard & Company had delivered other of said notes to other contractors on certificates issued by said architects, and that some of said notes were now in possession of said contractors; that such of said owners as were known to complainants were made defendant to this bill by their own proper names and such as were unknown were made parties defendant as “unknown owners or holders of said notes.” The bill alleges that Mary L. Walker had paid some of the notes to other contractors other than the complainants and it alleges that Powell, Garard & Company had delivered to the Sutton Plastering Company two of said notes for $1,188.90 on certificates issued by the architect and had in their possession two other notes for $1,188.90, the property of the said Sutton Plastering Company, which they refused to deliver to them although they had been authorized to do so by certificates issued by the architects. It is further alleged that Powell, Garard & Company had in its possession 15 notes for $242.81 each, the property of Hansell-Elcock, which they refused to deliver to said company although they had been authorized to do so by certificates issued by the architects.

The bill alleged that said real estate, together with all right, estate, title, and interest of the said Mary L. Walker had been conveyed to said trustee for the purpose and use of the trust aforesaid and for the equal security of said principal notes, free from all rights and benefits under the Homestead Exemption Laws of the State of Illinois, Cahill’s St. ch. 52, Hü 1-12, which said rights and benefits of the said Mary L. Walker were, by said trust deed, expressly released and waived. The bill then alleges the terms and provisions of the trust deed as to nonpayment of either principal or interest, or the nonpayment of taxes, assessments and insurance on said premises, and in case of attaching by any lien of mechanics or materialmen or breach of any of the covenants or agreements therein contained to be performed by said Mary L. Walker, then the whole principal sum, secured by said trust deed shall at once, at the option of the holder and owners of said notes or any one of them, became immediately due and payable without notice to Mary L. Walker and thereupon the said trust deed may be foreclosed, and upon the filing of any bill for that purpose, the Chicago Title & Trust Company may at any time thereafter without notice to said Mary L. Walker or any party claiming under her, and without regard to the solvency or insolvency of said Mary L. Walker and' without regard to the then value of the said premises or whether the same be occupied by Mary L. Walker as a homestead, appoint a receiver, for the benefit of complainant or any of the owners or holders of said notes, secured by said trust deed, with full power to collect the rents, issues and profits of said premises during the pendency of said foreclosure suit, and in case of sale and a deficiency, during the full 15 months’ statutory period of redemption.

The bill then alleges that a number of said notes were past due and unpaid and that Mary L. Walker was now in default on the same; and that by reason thereof the said property had become forfeited, subject to redemption, etc.; that several persons, firms, and corporations have filed in said circuit court petitions and intervening petitions to foreclose mechanics’ liens on said property and that such parties were made parties defendant; that said lien suit was still pending in said circuit court, and the aggregate amount sought to be foreclosed was in excess of $18,000, and that said other persons, firms and corporations, including some of complainants, were about to file in said suit intervening petitions to collect various amounts due them from said defendant, Mary L. Walker, and that such additional claims approximate $10,000; that by reason of default of payment of principal and interest on their notes, complainants have elected, pursuant to said trust deed, to declare the whole principal sums due and payable and that there is also due and payable to complainant a reasonable solicitor’s fee and cost, to be determined by said court. The bill then alleges that their said trust deed was subject to a prior trust deed given to secure a bond issue loan of $250,000 and that said premises were meager and scant security for the sum due to complainants.

The bill alleges Mary L. Walker is insolvent, and that a receiver should be appointed without notice to her, to collect the rents, issues and profits during the pendency of said suit; that said real estate is improved with a nine-story apartment hotel building, and that a large income can be derived therefrom if properly managed; that said Mary L. Walker is attempting to manage same and rent the apartments in said building, but is wholly unfit so to do; that if a receiver is appointed the lien of the complainants can be protected and paid and that if said receiver is not appointed at once without notice to said Mary L. Walker, they are in great danger of losing the amount of their respective claims.

The bill alleges that said Powell, Garard & Company had in their possession certain notes executed by Mary L. Walker and secured by said deed of trust; that said Mary L. Walker had demanded that said notes be turned over to her; and that said complainants fear that unless said Powell, Garard & Company are restrained by injunction issued out of said court, restraining them from disposing of or surrendering the same, the rights of the complainants and defendants legally entitled to said notes will be unduly prejudiced and they will be in great danger of losing the amounts of their respective claims evidenced by said notes.

On April 14, 1925, an injunction was issued, directed to Powell, Garard & Company, restraining them from disposing of or surrendering the possession of the notes described in the bill. On April 22, 1925, a notice of the same was duly served on Mary L. Walker. On April 18, 1925, an order was entered appointing the Joliet National Bank as receiver of said hotel property upon its filing its written acceptance of said appointment. Complainants were not required to give a complainant’s bond. On the same date an order was entered enjoining and restraining Mary L. Walker from collecting the rents for said premises and from interfering in any manner with said property. Mrs. Walker was allowed to retain possession of the apartment in said building which she then occupied until further order of the court. The receiver filed an acceptance of said appointment on April 18, 1925.

On. June 26, 1925, the said receiver filed a petition in said case representing that it was for the best interests for all concerned that said receiver be authorized by order of the court and with the consent of all the parties in interest, to finish, repair and redecorate said building at the estimated cost of $25,000 and complete the furnishing of the apartments not then in use at a designated cost of $20,000; that for such purpose the receiver be authorized to negotiate a loan through the issuance of receivers’ certificates. It also represented that Mary L. Walker had assumed a hostile and antagonistic attitude towards the managers employed by said receiver and interfered with the receiver’s management of said hotel and it was for the best interest of all parties concerned including said Mary L. Walker, that she be compelled by an order of court to forthwith surrender the possession of the apartment she then occupied. Said receiver prayed that it be authorized to borrow funds on said receivers’ certificates, and make said repairs and improvements, and that an order be entered requiring said defendant, Mary L. Walker, to forthwith vacate the apartment which she occupied in said hotel building.

On the same date an order was entered granting the prayer of the petition and ordering Mary L. Walker to surrender possession of the apartment occupied by her in said hotel building; that she should not interfere in any manner with the receiver or with any of the agents or employees in the management of the apartment hotel; that after July 1, 1925, she was to remain out of said building. The receiver was authorized and directed to borrow under receivers’ certificates a sum not to exceed $50,000 which certificates were to be a prior and first lien as against all parties to this suit. All the parties consented thereto. The said lien was to be against the real estate with the improvements thereon for the purpose mentioned in said petition. The said receiver was ordered to pay Mary L. Walker the sum of $200 for the use of the hotel furniture and equipment belonging to her. The order further provided that any right of homestead of Mary L. Walker in said property should not be lost or surrendered by reason of her vacating said apartment building as theretofore ordered and directed by the court.

Mary L. Walker filed a petition to remove the receiver. The cause was heard on December 14, 1925, at which time the petition was dismissed without prejudice". On September 9, 1925, Mary L. Walker filed her answer to said bill and by leave of court on November 11,1927, the same was amended. In substance it is as follows:

The said Powell, Garard & Company was organized as a corporation under the General Corporation Act of Illinois, on, to wit: August 18, 1919, with its principal office in the City of Chicago; that the certificate of incorporation of said Powell, Garard & Company was issued by the Secretary of State on August 18, 1919, and filed for record in the office of the recorder of Cook county, August 19, 1919, and duly recorded; that the objects of said corporation are in said certificate of incorporation set forth as follows, to wit:

“The object for which it is formed is to buy, sell, acquire, take over, own, hold, transfer, lease, pledge, mortgage, encumber, convey, dispose of and deal in Federal, State, County and Municipal bonds, public service corporation bonds and stocks, industrial bonds and stocks, stocks and bonds of other corporations, real estate bonds, special assessment warrants, farm mortgages, real estate loans, and other securities as principal, and not as agent; and to take, accept, hold or deposit for safekeeping, any and all bonds, stocks or other securities, or personal property whatsoever, which any person or corporation may deliver or entrust to it; to invest its capital stock and surplus earnings in the purchase of income producing properties to be selected by its directors, subject to all conditions and provisions of the laws, of the State of Illinois, governing corporations. This corporation shall not exercise any of the functions of ‘an agency and loan corporation, ’ as defined in the General Corporation Act.”

That said Powell, Garard & Company afterwards on January 16 and 17, 1924, changed its name to Garard & Company as appears by the certificate of change of name issued by said Secretary of State, etc.; that said Garard & Company on June 22, 1926, again changed its name to Garard Trust Company and changed its objects as appears by the certificate of change of name, etc., issued on the date last aforesaid, and filed for record in the office of the recorder of Cook county on June 24, 1926, wherein the objects of said Garard Trust Company are set forth as follows, to wit:

“To accept and execute trusts, to carry on a general trust company business in all of its branches, and to buy, sell, and otherwise deal in stocks, bonds, notes, mortgages and other securities.”

The defendant by her amendment further answering said that Powell, Garard & Company, on March 13, 1923, in the City of Chicago was then and there engaged in the business of loaning money, and in real estate brokerage, and particularly in making loans for the construction of buildings for the improvement of real estate and negotiating the transfers of real estate by trust deed to secure such loans; that said Powell, Garard & Company then and there procured from the defendant, Mary L. Walker, an application for the loan of its funds in the sum of $250,000, to be secured by a first mortgage trust deed conveying to the Chicago Title & Trust Company as trustee, the premises described in said bill; said loan was for the construction of said apartment hotel on the premises in said bill of complaint mentioned and described; that said application for said first mortgage loan was then and there accepted by said Powell, Garard & Company; that said Powell, Garard & Company then and there entered into a written contract with said defendant, Mary L. Walker; that a true, correct and complete copy of said contract is attached to the amendments to the answer of said defendant in the case of Chicago Title & Trust Company v. Mary L. Walker and others, case No. 33,256, which said copy, on file in said cause, is by reference thereto, made a part of said answer; that said bonds and trust deed of April 2, 1923, sought to be foreclosed in said cause No. 33,256 were made, executed and delivered by said defendant to said Powell, Carard & Company, pursuant to and in consummation of said building loan contract for said sum of $250,000; that said Powell, Carard & Company then and there became the original taker and holder of said bonds and trust deed and advanced on account thereof, all the money, and the only moneys loaned in such behalf; that said notes and said second trust deed to said Chicago Title & Trust Company, being the securities mentioned and described in the bill of complaint sought to be foreclosed in said cause No. 32,385 were made, executed and delivered to said Powell, Carard & Company pursuant to and in consummation of said building loan contract.

The defendant further alleged that on March 13, 1923, the complainants in cause No. 32,385, and other interested parties in consideration of the making of said building loan, entered into a written contract with Powell, Carard & Company, to take from Powell, Carard & Company the notes or bonds mentioned in said second trust deed, on account, for work under their contracts, for the construction of said apartment hotel building to the extent of 30 per cent of their original contract prices for such work; that a true, correct and complete copy of said contract of March 13,1923, is thereto attached, marked Exhibit “A” and made part of said answer; that pursuant to said contract of March 13, 1923, Powell, Carard & Company made an attempted transfer and delivery of several notes mentioned and described in the bill of complaint.

“The defendant further alleged that the said business of loaning money, and real estate brokerage then and there carried on by said Powell, Carard & Company as aforesaid, said loan contract, said first mortgage bonds and Trust Deed made, executed and delivered to said. Powell, Carard & Company pursuant to said loan contract for said sum of $250,000, and said contract of March 13, 1923, between said complainants, Avery Brundage and other contractors and Powell, Garard & Company, the several provisions of said loan contract, said bonds, and said Trust Deed and such indebtedness to said Powell, Garard & Company evidenced by said bonds and first Trust Deed and the transactions out of which said supposed securities arose, and also of the transactions had by and between said Powell, Garard & Company and said several contractors and between said Powell, Garard & Company and this defendant, pertaining to said supposed securities, were, and are each and all outside the said objects and beyond the powers of said corporation, Powell, Garard & Company, were, and are each and all malum prohibitum expressly prohibited by statute in such case made and provided, illegal, null and void.”

The defendant denied that said bonds mentioned and described in said first trust deed were or that any of them was, negotiated or sold or transferred or delivered to said alleged purchasers and holders, or that any of the said notes mentioned and described in said second trust deed and in said bill of complaint of said Avery Brundage and others, were negotiated, or sold or transferred or delivered by said Powell, Garard & Company to said complainants or to others as mentioned in said bill, or that any of said alleged transferees ever advanced or paid to the defendant, Mary L. Walker, any money or moneys or consideration in such behalf.

The defendant further states that any attempted negotiation, or attempted transfer, or attempted delivery of said bonds, or any of them, or said notes, or any of them, by or on the part of said Powell, Garard & Company was also ultra vires — wholly outside the objects of said corporation and beyond its powérs, and also malum prohibitum, illegal, null and void.

“The defendant further answering said that said Garard Trust Company, formerly said Garard & Company, and also formerly Powell, Garard & Company, by reason of the several provisions of said loan contracts, said bonds and first Trust Deed, said notes and second Trust Deeds, making said corporation a party thereto, and by reason of the premises in said Bill and in said answer set forth, said Garard Trust Company was and is interested in the subject matter of said cause Number 32,385 and was and is a necessary indispensable party, and that said Circuit Court was without jurisdiction to proceed therein except and until said Garard Trust Company was made party to the proceedings therein.”

Said Exhibit “A” attached to. and made part of said amendments is dated March 13, 1923, addressed to Powell, Garard & Company, recites: “In consideration of your making a loan of $250,000 covering the Mary L. Walker hotel building, at Western Avenue and Pine Street, Joliet, Illinois, we hereby agree to take up to 30% of our original contract, plus extras as agreed upon to date, in second mortgage bonds on said property, bearing 7% interest, and payable on or before, $5,000 quarterly, beginning September 1, 1924, ’ ’ etc.; and the same is signed by said contractors with the amounts of the contracts set opposite their names, to wit: “Chester Johnson Electric Company, $5,500; Hansell-Elcock Company, $12,785; Avery Brundage, $74,800; D. H. Burnham & Company, $17,500; Adam Groth & Company, $6,475; Kaestner & Hecht Company, $9,750; C. H. Law Plumbing and Heating Company, $62,600; Morava Construction Company, $36,359; and National Fireproofing Company, $37,-500.”

The answer set forth that Avery Brundage had the contract for the masonry, concrete floors, and the rough carpentry in said building; that he had an unpaid balance of $21,309, which represented about 30 per cent of his contract price; that he agreed to, and did, accept 15 second mortgage notes in payment thereof; that he had not fully performed his contract nor furnished the labor and materials in accordance with his contract and the plans and specifications. The bill then sets forth in detail wherein Avery Brundage has failed in the performance of his contract. The defendant avers she was not in default in the payment of any of the notes held by Avery Brundage.

As to the claim of the complainant, McClinticMarshall Construction Company, the answers say that its assignor, the Morava Construction Company, who had the contract for erecting the structural steel work of said building, had neglected and delayed starting at the proper time, under the terms and provisions of the contract; that the defendant was obliged to employ a superintendent for several weeks to be stationed at the plant of the Morava Construction Company to see that said Morava Construction Company and its employees were working on said structural steel to be used in the building; that said Morava Construction Company had failed to perform their contract as specified, and on account of such failure the defendant had been deprived of the large income from said building; that there had been a partial failure of consideration for said contracts; that a number of notes held by the complainant have been paid.

In answer to the D. H. Burnham & Company, the defendant alleges that said company had designed the heating system installed in said building and superintended installation thereof; that said heating system was wholly inadequate to heat certain floors of said building, and the dining room thereof; that during the winter of 1924, a great many of the rooms could not be heated sufficiently for the convenience of guests; that the Burnham Company installed a steam pipe on the outside of said building at the southwest corner thereof, and in the winter of 1924 said pipe froze and the radiators and pipes in the southwest portion of the building burst and spoiled the window shades, furniture, rugs, and decorations, etc., which caused great damage and defendant was forced "to spend a large sum of money for fixing and repairing the damage which was caused by the bursting of this pipe; that on account of the inconvenience to, and moving out of guests, said defendant had incurred a loss and suffered damages to the amount of $10,000; that she was required to equip and put the heating and plumbing system in the proper mechanical condition in order to prevent a recurrence of such damage and loss; that there had been a loss of $25,000 in the income from the apartments and rooms in the rear of said building, on account of the - failure of said D. H. Burnham & Company to properly perform their duties as architects in the construction of said building; that in consequence there has been a total failure of consideration for the said notes held by D. H. Burnham & Company which they claim to hold as the legal holders thereof.

She further alleges that she was not permitted to sign any of the .orders on the $250,000 in the hands of Powell, G-arard & Company; that all the orders for withdrawals out of the construction fund were signed by D. H. Burnham•& Company, the architects; that she was not permitted to control the withdrawal of the proceeds of said loan, and that in consequence said Burnham & Company had issued their certificates of completion of the work of the various contractors, and for material furnished in the construction of said building; that D. H. Burnham & Company had signed orders authorizing said contractors to draw money out of the funds in the hands of Powell, Garard & Company over the protest and complaints of the defendant ; that she repeatedly complained that the work of such contractors in many instances, including that of the complainants in this case, was not completed, and that they should not be paid; that notwithstanding. said protests and complaints, said Burnham & Company had issued said certificates of completion to complainants in this bill.

The answer further charges that at the time the Joliet National Bank was appointed receiver of said real estate and the building thereon, the defendant was in court but not represented by counsel and that the order appointing a receiver failed to provide that the complainant in said bill give a complainant’s bond or that for good cause shown the giving of such bonds was excused or dispensed with as by statute in such case provided; that said order appointing said receiver was null and void, and that the receiver in possession of said premises was acting without order of law and should be removed by the court; that said receiver should be ordered to account for all money in its possession and all such amounts held by the receiver should be ordered turned over immediately to the defendant.

Mrs. Walker charges that the order, compelling her to vacate said apartment, which she had occupied as a homestead for herself and minor child, was illegal and void; that she was going to vacate under protest; that the order should be vacated and set aside and she be restored to the possession of her property and homestead.

The complainant and intervening petitioners in the case of the American Radiator Company against Mary L. Walker, case No. 32,385, filed an answer to the bill setting forth their claims substantially as contained ,in the original suit. Additional parties were granted leave to file answers to said bill and set up their individual claims and rights to the proceeds of the notes of the second deed of trust. Several parties were granted leave to intervene as judgment creditors of said Mary L. Walker.

On July 8, 1926, the Chicago Title & Trust Company as trustee under first trust deed of April 2,1923, started suit in' said court against Mary L. Walker et al., for foreclosure of the first deed of trust. This case is numbered 33,256; the bill states that complainant was on April 2, 1923, and for a long time prior to and continuously since, has been a corporation organized under the laws of Illinois and duly authorized by its corporate charter to accept and execute trusts.

That on and prior to April 2, 1923, Mary L. Walker, the defendant and mortgagor, then a widow, being justly indebted in the principal sum of $250,000 to the legal holder or holders of the indebtedness hereinafter mentioned and in the trust deed attached as Exhibit 1, described, did make, execute and deliver her 440 certain bonds of that date for the aggregate principal sum of $250,000 under the terms of which said bonds she promised to pay the bearer (or to the registered owner) said principal sum, which said bonds áre numbered serially and ran for the number of years and became due and payable without grace as follows, to wit:

NUMBER OF BONDS DENOMINATION MATURITY AMOUNT

1 to 10, inclusive $1000 April 1, 1925 $10,000.00

11 to 15, inclusive 500 April 1, 1925 2,500.00

16 to 25, inclusive ■ 1000 April 1, 1926 10,000.00

26 to 30, inclusive 500 April 1, 1926 2,500.00

31 to 40, inclusive 1000 April 1, 1927 10,000.00

41 to 45, inclusive 500 April 1, 1927 2,500.00

46 to 55, inclusive 1000 April 1, 1928 10,000.00

56 to 60, inclusive 500 April 1, 1928 2,500.00

61 to 70, inclusive 1000 April 1, 1929 10,000.00

71 to 75, inclusive 500 April 1, 1929 2,500.00

76 to 85, inclusive 1000 April 1, 1930 10,000.00

86 to 90, inclusive 500 April 1, 1930 2,500.00

91 to 100, inclusive 1000 April 1, 1931 10,000.00

101 to 105, inclusive 500 April 1, 1931 2,500.00

106 to 115, inclusive 1000 April 1, 1932 10,000.00

116 to 120, inclusive 500 April 1, 1932 2,500.00

121- to 220, inclusive 1000 April 1, 1933 100,000.00

221 to 290, inclusive 500 April 1, 1933 35,000.00

291 to 440, inclusive 100 April 1, 1933 15,000.00

All of which said bonds bear interest at seven per cent per annum before and after maturity, payable semiannually on April 1 and October 1 each year, with interest coupons attached payable to bearer, there being one coupon for each semiannual instalment of interest on said bonds, all executed and authenticated in the name of said mortgagor by her lithograph signature.

That concurrently with the execution of said bonds and coupons, said mortgagor executed and delivered to complainant her trust deed of April 2, 1923, whereby for securing the payment of said principal and interest evidenced by said bonds and coupons, etc., she conveyed and warranted to complainant as trustee for the uses and purposes therein recited the said same premises (described as in the original petition in cause No. 31,651 and in the bill in cause No. 32,385), together with all improvements thereon, etc., and that said trust deed was filed for record on April 14, 1923, and recorded in the office of the recorder of Will county in Book 593, page 576.

That with variations as to number, denominations and maturity, said bonds and coupons are substantially in tenor and form as set forth in said trust deed and that all of said bonds were certified in writing by complainant as trustee as aforesaid by the indorsement of its certificate on each bond as per form set forth in the trust deed; that thereafter all of said bonds and coupons were issued, sold and delivered for value and some or all of them were sold, transferred and assigned to various persons, to complainant unknown, who thereupon became the bona fide legal holders and owners thereof for value and that all of said bonds and coupons are outstanding as existing indebtedness and valid obligations of said mortgagor ; that by virtue of said bonds and coupons and said trust deed, complainant as trustee for the holders and owners of said bonds and coupons, has a valid and subsisting lien upon said premises, improvements, etc.

Under the terms of said bonds, coupons and trust deed there became due and payable on April 1, 1925, the sum of $12,500 as principal on bonds 1 to 15, and as interest on the aggregate principal, $8,750; that on October 1, 1925, there became due as interest the further sum of $8,312.50; and on April 1, 1926, there became due the principal on bonds Nos. 16 to 30, inclusive, $12,500; and as interest on the aggregate principal $8,312.50; that on account of said principal and interest due as aforesaid, the mortgagor had paid $8,246.30, and that as to the balance, to wit: $33,882.40, which had matured as aforesaid, she had made and remained in default.

The bill alleges that to secure prompt payment of said principal and interest as the instalments respectively matured, said mortgagor covenanted that, commencing with May 20, 1923, and on and before the 20th day of each month thereafter, until the notes (bonds) and interest secured by said trust deed were paid, said mortgagor would deposit with Powell, G-arard & Company, a corporation, under the laws of Illinois, with principal office in Chicago (said corporation having thereafter changed its name and become known as Garard & Company), one-twelfth of the amount of the principal and interest maturing during each 12-months’ period, and that each such period should begin on May 20, in each year; that said Garard & Company should apply said deposited funds, together with interest to be credited thereon at the rate of three per cent per annum, while the same should be held in its possession, towards the payment of principal and interest as the same matured, but that nothing in such