tificate, with power of attorney or indorsed in blank, passes title without transfer on the books of the company, even when the by-laws of the company provide to the contrary. 18 Am. & Eng. Enc. Law, 612. It has even been held that between the parties a mere delivery of a certificate as security vests in the pledgee an equitable title, subject only to the rights of third parties who have acquired them bona fide. Id. 611. As between the parties to the pledge and the corporation a different rule prevails, and, until the transfer is made on the books of the company a holder of a certificate of stock cannot assert a legal title against the company. Id. 613. But the delivery of certificates of stock as security, indorsed in blank or with power of attorney, but not transferred on the books of the company, when asserted against the rights of creditors of the pledgor, has given rise to much conflict in decisions. The policy of this state was early defined by chapter 77 of the Revised Statutes, in favor of creditors. Prior to the amendment of section 52, above quoted, it simply provided: "The share or interest of a stockholder in any corporation may be taken on execution, and sold as hereinafter provided." The case of Bank v. Gridley, 91 Ill. 463, settled the question in this state that, as between a vendee or pledgee and a judgment creditor, the latter was preferred. Following that decision, the statute was amended, and its language materially changed, as here shown. There is but one rational conclusion as to the meaning and purpose of that amendment, and that is that it was to give more commercial freedom to transfers of stock for purposes of collateral security than existed before, and therefore the foundation for the holding in Bank v. Gridley, supra, no longer exists. Authorities may be found sustaining the position that a delivery of a certificate of stock as security, indorsed or with power of attorney, but not transferred on the books of the corporation, is not valid against lien creditors of the pledgor, even under the language of the statute; but the current of decisions in the commercial states of the Union is to make shares of stock as nearly negotiable as possible, and we are of the opinion that such was the intention of the legislature in enacting the amendment to section 52, supra. The phrase "sold or pledged" should not receive a construction which will include a portion of stock transactions coming under the head of "collateral securities," but not others, where there has been a delivery of the stock certificate.

Independently of the views here expressed, the decree of the lower court was correct. As between F. B. Rice and Horace Gilbert, the evidence was sufficient to justify the finding that the latter held the certificates of stock as collateral security for the loan. In fact, the pleadings do not deny it. The evidence was also sufficient to sustain the 50 N.E.-69

contention of complainants that B. A. Rice had notice, actual or constructive, of the condition of the stock; and, from any view of the case, defendants in error were entitled to the relief sought. The decree of the appellate court will be affirmed. Decree affirmed.

ROCK ISLAND NAT. BANK et al. v.
THOMPSON et al.

(Supreme Court of Illinois. June 18, 1898.) COURTS-JUDGMENT LIENS OF FEDERAL COURTSEXTENT-RETROACTIVE LAWS-CONSTRUCTION OF STATUTES LIMITATIONS-OPERATION OF SUPERSEDEAS ON EXECUTIONS-PLEADING.

1. A state court, in determining to what extent a judgment of a circuit court of the United States operates as a lien, must be governed by federal decisions.

2. A judgment of the circuit court of the United States, prior to the act of congress (25 Stat. 357) regulating such liens, operated as a lien upon all lands of the judgment debtor situated in the district for which the court was holden.

3. 25 Stat. 357, relating to liens of judgments of United States courts, has no application to judgment liens already acquired under existing laws.

4. Suing out a writ of error from a judgment and filing supersedeas bond within 60 days, as prescribed by Rev. St. U. S. § 1007, suspends the issuance of execution.

5. Rev. St. c. 77, § 2, providing that, if the issuance of execution is restrained by injunction or appeal, the time of such restraint shall not be considered as part of the time allowed to take out execution, is applicable to appeals by writs of error.

6. The time for which an execution is suspended by supersedeas bond is not to be computed as part of the year within which an execution must issue on a judgment to secure a lien, as required by Rev. St. c. 77, § 1.

7. The year in which an execution must issue to secure a judgment lien, as prescribed by Rev. St. c. 77, § 1, does not begin to run, when the judgment is appealed from, until the mandate of the appellate court has been issued and filed in the trial court.

8. A bill for foreclosure alleged that another claimed an interest in the mortgaged property, asked that such person be made a party, and prayed that the property be sold and proceeds divided. The party answered, and on the trial established a lien. Held, that he was entitled to have his lien satisfied, although he filed no cross bill.

Appeal from appellate court, Second district.

Bill by Rock Island National Bank and others against Benjamin F. Thompson and others. From a judgment, plaintiffs appealed to the appellate court, and from a judgment therein (74 Ill. App. 54) appeal to the supreme court. Affirmed.

Sweeney & Walker, for appellants. Peck, Miller & Starr, for appellees.

PER CURIAM. The decree of the circuit court was, on appeal, affirmed by the appellate court for the Second district, and the said appellate court, by Mr. Justice Dibell, delivered the following opinion:

"On March 31, 1888, Thompson and Root

recovered a judgment against the J. S. Keator Lumber Company in the circuit court of the United States for the Northern district of Illinois. On April 21, 1888, defendant therein sued out from the supreme court of the United States a writ of error to review said judgment, and took certain steps to cause said writ of error to be made a supersedeas. Said judgment was affirmed by the supreme court of the United States on April 4, 1892 (12 Sup. Ct. 669), and execution and alias execution were issued as hereinafter stated. Two days after the affirmance of said judgment appellants filed for record in Rock Island county a mortgage from the said Keator Lumber Company upon real estate in said county which said Keator Lumber Company had owned on March 31, 1888, and ever since that date, which mortgage was given to secure debts due appellants. Sixteen days after the mortgage was recorded this suit was begun by filing in the circuit court of Rock Island county a bill to foreclose said mortgage. By amendment Thompson and Root were made defendants. They answered, claiming their judgment was a first lien. Upon final hearing the court decreed the foreclosure of said mortgage, but found such judgment a prior lien upon said real estate, and directed that it be first paid out of the proceeds of the sale of the mortgaged property. The mortgagees prosecute this appeal from said decree.

"The circuit court of the United States, when it rendered said judgment, was sitting in Cook county. This real estate is in Rock Island county. The first question presented for decision is whether said judgment ever became a lien upon said real estate. Appellants earnestly contend that it only became a lien upon real estate in Cook county, where said court sat when it rendered judgment. Appellees claim it became a lien on all real estate of the Keator Lumber Company within the Northern district of Illinois, which includes Rock Island county.

"The legislation affecting this subject, which was in force when this judgment was rendered, is as follows:

"Revised Statutes of the United States: "Sec. 914. The practice, pleadings, and forms and modes of proceeding in civil causes, other than equity and admiralty causes, in the circuit and district courts shall conform, as near as may be, to the practice, pleadings and forms and modes of procedure existing at the time in like causes in the courts of records of the state within which such circuit or district courts are held, any rule of court to the contrary notwithstanding.'

"Sec. 916. A party recovering a judgment in any common law cause in any circuit or district court shall be entitled to similar remedies upon the same, by execution or otherwise, to reach the property of the judgment debtor, as are now provided in like

causes by the laws of the state in which such court is held, or by any such laws hereafter enacted which may be adopted by general rules of such district or circuit courts; and such courts may, from time to time, by general rules, adopt such state laws as may hereafter be in force in such state in relation to remedies upon judgments as aforesaid, by execution or otherwise.'

"Revised Statutes of Illinois of 1874 (chapter 77):

"Sec. 1. That a judgment of a court of record shall be a lien on the real estate of the person against whom it is obtained, situated within the county for which the court is held, from the time the same is rendered or revived for the period of seven years, and no longer: provided, that there shall be no priority of the lien of one judgment over that of another rendered at the same term of court or on the same day in vacation. When execution is not issued on a judgment within one year from the time the same becomes a lien it shall thereafter cease to be a lien; but execution may issue on such judgment at any time within said seven years, and shall become a lien on such real estate from the time it shall be delivered to the sheriff or other proper officer to be executed.

"Sec. 2. When the party in whose favor a judgment is rendered is restrained by injunction out of chancery, or by appeal, or by the order of a judge or court, or is delayed on account of the death of the defendant, either from issuing execution or selling thereon, the time he is so restrained or delayed shall not be considered as any part of the time mentioned in sections 1 or 6 of this act.'

"That congress has power to pass all necessary laws to carry into execution judg ments rendered by the courts of the United States, and that it may make them liens upon property of the debtor, whether such property is or is not subject to the lien of judgments under the laws of the state where the property is situated, though denied by Reid v. House, 2 Humph. 576, must be regarded as settled by Wayman v. Southard, 10 Wheat. 1, and Bank v. Halstead, Id. 51, and other decisions of the supreme court of the United States. In any case, the only question can be, how far has congress exercised this power? We also consider it too obvious for extended argument that while the supreme court of this state is the final tribunal for the determination of the true construction of the state statute above quoted, as applied to the lien of judgments rendered by the courts of this state, yet when the question arises, what is the meaning of the said federal statute, and to what extent the liens of judgments rendered in the courts of the United States within this state are governed by said state statute, and whether the language of the state statute is to be applied literally and with strictness to judg

ments of the courts of the United States, upon such questions the courts of the United States are the final arbiters. The question, what is the lien of a federal judgment? is a question of federal law, to be conclusively settled by the construction adopted by the highest federal tribunal. To what extent courts of the United States held within this state are bound by our state statutes upon practice, pleadings, and modes of procedure is a question of federal law, upon which the conclusions of the supreme court of the United States are final. That court has not adopted a literal construction of the provisions in question. It has been held by the supreme court of the United States that the words 'as near as may be,' in said section 914 above quoted, do not mean as near as may be possible, nor as near as may be practicable. That court said in Railroad Co. v. Horst, 93 U. S. 291, that this provision 'devolved upon the judges to be affected the duty of construing and deciding, and gave them the power to reject, as congress doubtless expected they would do, any subordinate provision in such state statute which, in their judgment, would unwisely incumber the administration of the law or tend to defeat the ends of justice in their tribunals. While the act of congress is to a large extent mandatory, it is also to some extent only directory and advisory.'

Accordingly

it was there held that many statutory provisions as to practice in state courts are not binding and compulsory upon the courts of the United States within such state. To the same effect is Phelps v. Oaks, 117 U. S. 236, 6 Sup. Ct. 714, and other cases.

"A circuit court of this state has jurisdiction only within the county in which it is held, and, when our state statute made its judgment a lien on real estate 'situated within the county for which the court is held,' it made the judgment territorially coextensive with the jurisdiction of the court which rendered it. In the application of this language to the lien of a judgment rendered by the circuit court of the United States having jurisdiction over the entire northern half of this state, the question whether the letter or the spirit of this statute is to fix the extent of the lien of such judgment is not a question of interpretation of our statute law, but of the extent to which it was adopted for the federal courts by the federal statute quoted, and that is a federal question, to be settled by the courts of the United States.

"This question was considered by the supreme court of the United States in Massingill v. Downs, 7 How. 760, and that court reached the following conclusions: "The circuit courts of the United States exercise jurisdiction co-extensive with their respective districts. It has never been supposed that by the process of 19th May, 1828, which adopted the process and modes of proceeding of state courts, the jurisdiction of the

circuit courts was restricted. The "process and modes of proceeding" in the state were adopted by congress in reference to the jurisdiction of the circuit courts, and not with a view of limiting the jurisdiction of these courts. In those states where the judgment or the execution of a state court creates a lien only within the county in which the judgment is entered, it has not been doubted that a similar proceeding in the circuit court of the United States would create a lien to the extent of its jurisdiction. This has been the practical construction of the power of the courts of the United States, whether the lien was held to be created by the issuing of the process or by express statute. Any other construction would materially affect, and in some degree subvert, the judicial power of the Union. It would place suitors in the state courts in a much better condition than in the federal courts.' In Williams v. Benedict, 8 How. 107, that court said: "The proc

ess, both mesne and final, in district and circuit courts of the United States, being conformed to those of the different states in which they have jurisdiction, the lien of judgments on property within the limits of that jurisdiction depends also upon the state law, where congress has not legislated on the subject. In some of the statutes a judgment is not a lien on land; in others there is a lien co-extensive with the jurisdiction of the court.' In Brown v. Pierce, 7 Wall. 205, 217, it was said: 'Congress, in adopting the processes of the states, also adopted the modes of process prevailing at that date in the courts of the several states in respect to the lien of judgments within the limit of their respective jurisdictions.'

"Many of the federal circuit and district courts have had this question before them. In Cropsey v. Crandall, 2 Blatchf. 341, Fed. Cas. No. 3,418, it was held by Nelson, judge of the United States supreme court sitting upon the circuit, that a judgment or money decree docketed in a court of the United States for the Southern district of New York was a lien upon the lands of the defendant in whatever county of the district they were situated, notwithstanding noncompliance with a state law making it necessary to the creation of a judgment lien upon land in any county that a transcript of the judgment should be filed in the office of the clerk of that county. In U. S. v. Scott, 3 Woods. 334, Fed. Cas. No. 16,242, decided by Bradley, judge of the United States supreme court sitting upon the circuit, it was argued that a judgment rendered by the United States circuit court for the Western district of Texas was not a lien till recorded in the county where the lands were, but the court held the judgment is a lien upon all lands in the district within the jurisdiction of the court and within reach of its process.' The headnote to Carroll v. Watkins, 1 Abb. 474, Fed. Cas. No. 2,457, decided in the United States district court for the Southern dis

trict of Mississippi, is as follows: 'A state statute requiring judgments to be enrolled in the county in which the lands to be affected lie, before they can become liens on real property, has no effect upon the lien of a judgment of a court of the United States. Such judgment becomes a lien on lands throughout the district in which it is recovered.' In Shrew v. Jones, 2 McLean, 78, Fed. Cas. No. 12,818, McLean, judge of the United States supreme court sitting upon the circuit, said: "The law of Indiana regulating judgments and executions, as it stood in 1828, is the law of congress by adoption. Effect must be given to the provisions of this law, so far, at least, as they are adapted to the organization and powers of this court. If the rules of proceeding of the circuit courts of the state be followed by this court, effect is given to them without reference to the limited jurisdiction of those courts. The limits of the state, in the exercise of the jurisdiction of this court, is as the limits of a county to the local court. The principles of the state law are adopted, but the instruments which give effect to those principles are necessarily different, and they are made to operate throughout a more extended jurisdiction.' Barth v. Makeever, 4 Biss. 208, Fed. Cas. No. 1,069, assumes a judgment by the circuit court of the United States for the district of Indiana was a lien upon all lands of the judgment debtor in that state. The circuit court of the United States for the Northern district of Ohio, in Ludlow v. Railroad Co., 1 Flip. 35, Fed. Cas. No. 8,600, stated the law thus: "The limits of a federal judicial district, in the exercise of the jurisdiction of the United States circuit court, is as the limits of the county to the local courts. *** The lien, therefore, of a judgment rendered in this court has the same effect, and operates to the same extent, upon the debtor's land throughout the Northern district of Ohio, as the lien of a like judgment rendered in the state courts operates on a debtor's land in a county.' The opinion of Caldwell, J., in Bank v. Bates, 44 Fed. 546, holds that prior to the act of congress of August 1, 1888, hereinafter stated, the lien of judgments of the federal courts was 'coextensive with the jurisdiction of the courts.' He points out the hardships which led congress to pass the act just referred to, and in so doing speaks of 'the all-prevailing lien of a judgment in a federal court,' and how buyers 'lost their lands by reason of the lien of judgments in federal courts held in some other county.' He also holds that where the states have not provided for docketing federal judgments under said act of congress of August 1, 1888, 'in such states, the lien of a judgment of a federal court continues to be co-extensive with its territorial jurisdiction.' The opinion of Judge Drummond in U. S. v. Duncan, in the circuit court of the United States for this district, print

ed in 12 Ill. 523, assumes the lien of such a judgment extended throughout the state. There are other like decisions by other federal courts, and none to the contrary, so far as we are advised.

"It is therefore the doctrine of the federal courts, passing upon a subject wholly within their judicial domain, that in construing and applying said act of congress it is not to be held a literal adoption of the state statutes to govern the lien of federal judgments, but that the fact is to be considered that the jurisdiction of each federal court extends over a much larger territory than any one state court of general jurisdiction, and includes the territory of many such state courts; that, where the spirit and effect of the state law is to make the lien of the judgments of each state court of general jurisdiction co-extensive with the territory over which it has jurisdiction, the act of congress will be held to have adopted said state law in such spirit and effect; and that, as the effect of such act of congress so adopting such state law, the lien of the judgments of each federal court in said state will extend throughout the territory within the jurisdiction of such federal court.

"This question has been considered and a like view adopted by state courts. Dermott v. Carter (Mo. Sup.) 18 S. W. 1121; Trapnall v. Richardson, 13 Ark. 543; Branch v. Lowery, 31 Tex. 96; Sellers v. Corwin, 5 Ohio, 399. There are like decisions by other state courts outside of Illinois. Some states have held a contrary doctrine: Hall v. Green, 60 Miss. 47; Reid v. House, supra. There has been similar judicial reasoning by the supreme court of this state. Bustard v. Morrison, 1 Scam. 235; Durham v. Heaton, 28 Ill. 264. Jones v. Guthrie, 23 Ill. 421 (ejectment), was decided upon the assumption that a judgment rendered by the United States circuit court for the district of Illinois (when the whole state was in one district) was a lien from the end of the term on lands in Schuyler county, where we judicially know it did not sit. In Tenney v. Hemenway, 53 Ill. 97, the opinion of the court assumes that certain judgments rendered by the circuit court of the United States for the Northern district of Illinois were liens upon real estate of the judgment defendant in Lee county. The text-books are to the same effect. 1 Black, Judgm. § 415; Freem. Judgm. § 405.

"It is worthy of note here that our statute does not say a judgment shall be a lien on lands within the county in which the court is held, but 'within the county for which the court is held'; and, while our state courts of general jurisdiction for the county are held exclusively in the county, the circuit court of the United States for the Northern district of Illinois is held for the county of Rock Island just as truly as it is for the county of Cook, where the court sits. There are many cases where a strict

application of our statutes relating to practice and modes of proceeding in civil cases would restrict the jurisdiction of the courts of the United States to the counties in which

they are held. Section 2 of our practice act says it shall not be lawful to sue any defendant out of the county where he resides or may be found. Ejectment must be brought in the county where the land lies. So of scire facias to foreclose a mortgage (Rev. St. 1874, c. 95, § 17), which is governed by the practice in courts of law. An execution must issue to the sheriff of the county where the land lies on which a levy is sought, while federal courts have no county officer answering thereto. In each of these cases the word 'county' must be applied to federal courts in the sense of 'the territory within the jurisdiction of the court,' or the greater part of the state is beyond the reach of the federal courts,-a result congress never intended. We therefore hold that when judgment was recovered on March 31, 1888, by Thompson and Root against the Keator Lumber Company, in the United States circuit court for the Northern district of Illinois, sitting in Cook county, it became a lien upon the lands of the defendant in Rock Island county, within said district.

"On August 1, 1888, congress passed an act to regulate the liens of judgments and decrees of courts of the United States. 25 Stat. 357. It provided that such judgments and decrees rendered within any state shall be liens on property throughout such state, in the same manner, and to the same extent, and under the same conditions only, as if rendered by a court of general jurisdiction of such state; and that whenever the laws of such state require the judgments or decrees of a state court to be registered, docketed, etc., in a particular manner or in a certain office or county, before a lien shall attach, this act shall be applicable therein whenever, and only whenever, the laws of such state shall authorize the judgments and decrees of the United States courts to be so registered, docketed, etc. In 1889 the legislature of Illinois amended section 1 of chapter 77 of our statutes so as to provide for filing in the office of the clerk of any court of record in this state a transcript of any judgment or decree rendered in any other county in this state, and making it a lien thereafter upon real estate in the county where so recorded, with like force and effect as in the county where said judgment was rendered; and also passed an act (Laws of 1889, p. 197) providing judg ments and decrees of courts of the United States held within this state may be registered, docketed, etc., in the public offices of this state, so as to conform to the requirements relating to judgments and decrees of courts of this state.

"It is claimed that, in order to continue the lien in force upon the land here in ques

tion, it was necessary Thompson and Root should file a transcript of the judgment in the office of the clerk of a court of record in Rock Island county, and that for failure to do so they lost their judgment lien. We do not concur in this proposition. There is nothing in either of said statutes indicat ing they were intended to have a retroactive operation, or were to apply to judgments which had already become liens upon real estate under prior laws. The language all refers to the future. Retrospective laws are not looked upon with favor. Statutes are usually construed as operating on cases which come into existence after the statutes are passed, unless a retrospective effect is clearly intended. End. Interp. St. §§ 271, 273, 275, 276; Betts v. Bond, Breese, 287; Thompson v. Alexander, 11 Ill. 54; In re Tuller's Will, 79 Ill. 99. If these statutes are to be treated as retroactive because they relate to the remedy, their provisions for retroactive operation are void because they give the holders of federal judgments theretofore rendered no reasonable time in which to preserve their lien theretofore acquired upon lands in counties other than that in which the judgment was rendered, by procuring and filing transcripts of such judgments. Dobbins v. Bank, 112 Ill. 553; Pearce v. Patton, 7 B. Mon. 162; Berry v. Ransdall, 4 Metc. (Ky.) 292; King v. Belcher, 30 S. C. 381, 9 S. E. 359; Gunn v. Barry, 15 Wall. 610; Edwards v. Kearzey, 96 U. S. 595. According to the position here contended for by appellants, upon the taking effect of these laws the lien of federal Judgments on lands within the jurisdiction of the court, but outside the county where the court sat, was instantly destroyed, unless the plaintiff had foreseen the legislation, and obtained and filed transcripts before said legislation went into effect. If such lien ceased when these laws went into operation, then, before a new lien could be acquired by filing transcripts, subsequent judgments of state courts in the county and later incumbrances would in many cases intervene to destroy the value of the lien. We are of opinion an act framed for the purpose of accomplishing such a result could not be supported as to its retroactive features. The 23 days between June 3, 1889, when our statute for docketing judgments in foreign counties was approved, and July 1, 1889, when it went into effect, was not a reasonable time for plaintiffs, in all federal judgments at that time liens on real estate outside the county where the court was held, to learn of the new act, and procure and file transcripts of such judgments in all counties where they wished to preserve the judgment liens they had already secured under prior laws. We hold that the lien of the judgment of Thompson and Root, having attached to these lands on March 31, 1888, was not defeated by the laws referred to.