Opinion of the Court.

Subsequently there was made the following agreement: "CHICAGO, ILL., June 3d, 1871.

"Whereas, certain controversies and claims exist between Cushman & Hardin, and I. H. Hardin, of the one part, and the Lamar Insurance Co. of the other part, growing out of a contract made by Cushman & Hardin with said company, dated September 17, 1869, and also growing out of advances made by said Cushman & Hardin to said company, and the withdrawal of the same; and also in reference to the salary of I. N. Hardin as vice-president of said company; and whereas a settlement of all such business is essential to an adjustmeut of the business of the company, without great injury and loss to the company; it is hereby mutually agreed between the Lamar Insurance Co., through this committee, and I. N. Hardin, that said Hardin shall be allowed to retain the amount he has already drawn as salary, to-wit: $4,940, and shall waive and release all further claims to said company for any additional amount; and in consideration of such release, and of co-operation and aid of said Hardin and said Cushman & Hardin, to be rendered in the settlement of the affairs of the company, it is hereby mutually agreed that this shall be in full settlement of all differences and liabilities of the company to said Cushman & Hardin and said Hardin, and of said Cushman & Hardin and said Hardin to said company; this being intended mutually to be a full settlement of liabilities existing between said parties to this date, except as stockholders of said company."

Signed by the committee, Cushman & Hardin, and I. N. Hardin.

Respecting the circumstances under which the agreement was made, one of the committee says, "we all agreed that it (the business of the company) should be closed in one of two ways. One was, to bring suit against Cushman & Hardin; in which event, it was conceded, we could not re-insure, as the best mortgage which the company had, about $67,000, was upon Hardin, and we could not negotiate that mortgage while

Opinion of the Court.

quarreling with Hardin. The other was, to effect a settlement with Cushman & Hardin, and re-insure, which was eventually done and these papers executed."

It appears that Hardin had borrowed $67,000 of the company's money, practically about all the money the company had; that the securities Hardin had given for the money were not due and were not in proper form to be negotiated, and that Hardin refused to pay them or to assist in their negotiation, unless the claims against Cushman & Hardin were first released.

The business of the company was suspended under the direction of the committee, its liabilities running on and losses likely to occur; and from the evidence and the recitals of the agreement, it was a necessity of the situation to comply with the demands of Hardin, or of Cushman & Hardin. Cushman was treasurer of the company, and Hardin was the managing partner of the banking house of Cushman & Hardin, in which, it was stipulated by the contract of September 17, 1869, all the funds of the company should be deposited, and Hardin was the vice-president of the company and a director. Hardin himself says, that he was elected vice-president in the spring of 1870; that the office was thrust upon him, and further says, "I took no active part in the management of the company." There is no evidence that he was to have any salary. The committee agree that he shall retain the amount he has already drawn as salary, to-wit: $4.940; and he agrees to waive his claims for any further amount; and what the company secured by that waiver was really the only consideration for the pretended surrender of a claim against Cushman & Hardin, for moneys and securities wrongfully withdrawn from the assets of the company, to the amount of $110,000, and their liability as stockholders in respect of $550,000 of stock. This agreement is not under seal. Considering the relations of Cushman & Hardin to the company, and the duties thereby devolved upon them, it can not be said that the company or the stockholders really received any consideration for the execution of the

Opinion of the Court.

paper which is here set up as a sufficient discharge of all existing claims upon Cushman & Hardin.

It is claimed that the first one of the above resolutions gave to this committee full power to make the settlement of these claims against Cushman & Hardin in this manner; it is said that it is almost impossible to conceive language which would confer more ample power in regard to the settlement of disputed matters, than is thereby conferred; that the second resolution contains no limitation upon the power conferred by the first, but confers additional power.

But we regard the first resolution as rather one naming the general purpose for which the committee are appointed.

When the committee had decided to close up the affairs of the company, we think their powers under the resolutions were such only, as were conferred upon them by the second resolution, which specifically provides what they shall do, in the event they find the company in such condition as to require it to be wound up. The authority, in that case, is specific and definite, viz: To collect the assets and to sell the franchises and property of said company, pay the debts, re-insure the risks, and make equitable distribution of the surplus amongst the stockholders.

If Cushman & Hardin had improperly withdrawn from the company money or securities to the amount of $110,000, that sum was owing by them to the company, and was an asset, which the committee was authorized to collect. The authority to collect and distribute does not embrace the power to release without payment. The courts have repeatedly held, that an attorney, intrusted with a claim for collection, has no power to discharge it without payment in full, and that to compromise a claim under such circumstances, requires a special authority from the principal. Nolan v. Jackson, 16 Ill. 272; Vickery v. McClellan, 61 id. 311.

This committee we consider, in the event which happened, had authority to collect the assets of the company, but no power to give them away, or release them without payment.

The point is made by counsel for plaintiffs in error that the

30-80TH ILL.

Opinion of the Court.

paper itself does not express a release of this claim against Cushman & Hardin, for their liability as stockholders is expressly excepted by the concluding words, "except as stockholders of said company." But we lay no stress upon that, as they were admittedly stockholders to the amount of $55,000 of other stock, and we have no doubt the exception has reference to that stock only.

We regard this agreement of release as one which should not be sustained in a court of equity, and that it can not be set up in discharge of the liability of the defendants.

It is urged, that from the delay in bringing this suit, the complainants should be held to have acquiesced in the settlement made by the directors, or the committee appointed at the stockholders' meeting of 1871. The bill was filed July 31, 1873. We find nothing, in this respect, which should preclude the entertaining of the bill.

It is objected, that these complainants can not, in this suit, control and hinder the receiver appointed in the suit of the creditors' bill, from collecting of the stockholders (among whom are the complainants) the sums due to the creditors of the company. We shall not assume to do so, but only to pronounce upon the claim of liability preferred in this bill of complaint.

In regard to the claim for $70,000, set up in the bill, we do not understand it to be seriously pressed by counsel for plaintiffs in error that there is any liability on the part of Cushman & Hardin in respect to that. The evidence shows it to have been a loan to the company and repaid. The fact, that it might have been placed in the hands of the company in order that a better showing might be made to the Auditor than the real condition of the company warranted, is no ground, that we can see, upon which these complainants can found any claim of liability in their favor against Cushman & Hardin.

It follows, from what has been said, that this $110,000 was wrongfully withdrawn by Cushman & Hardin from the company, and should be refunded by them; that the cancellation of the 55,000 shares of stock, issued to Cushman & Hardin,

Statement of the case.

should be disregarded, and they still be regarded as stockholders in respect to such stock; and in any assessment upon the stock of the company, those shares should be assessed equally with all the other stock. The decree, so far as respects Cushman and Hardin, will be reversed, and the cause remanded for further proceedings in conformity with this opinion.

Decree reversed.

ISAAC A. COATES

v.

ALEXANDER CUNNINGHAM.

1. WRIT OF ERROR-interlocutory decree. A decree simply appointing a receiver and settling no rights, is interlocutory, and a writ of error will not lie to reverse it.

2. RECEIVER-effect of appointing. The appointment of a receiver does not determine any right nor affect the title of either party. He is the officer of the court, and his holding is that of the court for him from whom the possession is taken. He holds for the benefit of the party ultimately entitled, and when this is ascertained he will be considered his receiver.

WRIT OF ERROR to the Superior Court of Cook county; the Hon. SAMUEL M. MOORE, Judge, presiding.

This was a bill in chancery, filed by Alexander Cunningham, for himself and in behalf of all other creditors of the Bank of Chicago, against Isaac P. Coates, the Bank of Chicago, the president of the bank, and others. The object of the bill is stated in the opinion. The defendant in error moved the court to dismiss the writ of error, for the reason that it did not lie in such a case as this.

Messrs. SHUFELDT & WESTOVER, for the plaintiff in error.

Messrs. HARDING, McCOY & PRATT, for the defendant in

error.