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ant obtained the note described in his plea after he had notice that his note had been assigned by Barker to the bank for value; second, that defendant obtained the note described in his plea after maturity and after the Barth note had been assigned to the bank for value. The first replication above was good, and the demurrer should have been overruled. The demurrer was properly sustained to the second replication. The Barker note was negotiable by endorsement, and the allegation that it was due would only let in defenses existing against it in favor of Barker, the maker, at the time of the endorsement. Such allegation would not let in defenses in favor of the mere holder by assignment, whether obtained before or after the endorsement, unless Barth had notice.
If this suit had been brought by Barker alone, for his own benefit, no one can question but that Barth would have had the right to set off Barker's note set up in the plea. Being sued by Barker, for the use of the bank, did not deprive Barth of his right of set-off, unless Barth had notice at the time he took the note of the bank's equities. The second replication did not allege notice, and was bad.
The Barker note in the hands of the bank without endorsement or any agreement to endorse, was no more than a simple chose in action held by assignment, and the debtor, in such case, can set off existing or afteracquired demands against the payee obtained before notice. “And this appears to be the true distinction between the endorsement of a note over-due and the assignment of a chose in action. In the latter case, notice of the assignment must be given by the assignee to the debtor to prevent him from making payment to the assignor.
* * The assignee takes an equitable interest, only, which must be enforced in the name of the assignor, and until notice he has no equity against the debtor which can be recognized and protected by a court of law or equity. The endorsee of a note over-due takes a legal title, but he takes it with notice on its face that it is
discredited, and therefore subject to all payments and off-sets in the nature of payments.” (Baxter v. Little, Metc. 7; 39 Am. Dec. 707.) Neither payment nor any. thing in the nature of payment was being insisted upon by these replications, but an equity arising out of another note in a third party whose duty it was to give notice.
The question still remains, should the case be reversed for the error in sustaining the demurrer to the first replication to the plea of set-off above discussed? Courts of appeal do not reverse cases that have been tried up. on their merits simply for the correction of pleadings. Unless the plaintiff has been prejudiced in his defense against the plea of set-off by the ruling of the court in this respect the judgment should not for that reason be disturbed. The court will look into the pleadings and evidence to determine such matters. There is no claim that any other note than the one described in the second count was held by the bank or sought to be collected in this suit. It will be observed that in the second count of the narr., after averring the assignment and delivery of the Barth note by Barker to the bank on May 1, 1892, the further allegation, "of which assignment so made as aforesaid said defendant
on the same day and year had notice,” is contained. Defendant replied that he obtained the Barker note by endorsement from McElwee & Carney, for value, before maturity and before he had any notice or knowledge that the note sued on was assigned to the Union National Bank. Thus the only proper issue tendered by the replication to which the demurrer was sustained was presented and the plaintiff given the benefit on the trial.
We have carefully examined the refused instructions and find no error in their refusal. The judgment of the Appellate Court is affirmed.
1. CONTEMPT—when proceeding is criminal and not remedial in character. An independent contempt proceeding in behalf of the People for the purpose of punishing a receiver in a chancery suit for his alleged participation in the wrongful removal of the goods in his custody from the store house used by him, which goods had been returned to his possession, is criminal in character.
2. SAME—when party charged with contempt must be discharged on answer. In criminal contempts alleged to have been committed out of the presence of the court, if the defendant's sworn answer is sufficient to acquit him of the charge he is entitled to be discharged.
Oster v. People, 94 Ill. App. 288, reversed.
APPEAL from the Appellate Court for the First District;-heard in that court on writ of error to the Circuit Court of Cook county; the Hon. ELBRIDGE HANECY, Judge, presiding.
MYER S. EMRICH, for appellant.
ROSENTHAL, KURZ & HIRSCHL, for the People.
Mr. JUSTICE Boggs delivered the opinion of the court:
In a proceeding in chancery instituted in the circuit court of Cook county by one Peter Klein against his copartner, Morris Winkler, for a partnership accounting, the appellant, Harry Oster, was, on the 12th day of July, 1900, appointed receiver of the assets of the firm and placed in possession of such assets in his capacity as receiver, with directions to continue the business of said firm as theretofore conducted, and with authority to employ assistants, purchase goods to replace those sold, etc. On the 7th day of August, 1900, certain creditors of the firm, viz., the Reynolds & Reynolds Company, William Loghlin Bros. and H. P. Emmerson & Co., filed their
petition in said chancery cause, in which they alleged that Martin Winkler, (a brother of said Morris Winkler,) said Peter Klein and said Oster, receiver, had removed a portion of the goods (of which the assets of the firm were composed) from the stock so in the hands of said receiver for said firm from the place of business of the said firm and of said receiver, under circumstances that indicated an intent on the part of said parties to secrete said goods and deprive the court of the control thereof and deprive the creditors of the firm of the value thereof. The prayer of the petition was that said Oster, as receiver, should immediately demand and procure the return to him, as receiver, of said portion of said stock of merchandise so alleged to have been taken from said stock, etc. On the same day all of said parties except said Oster were notified to appear before the judge of said court in chancery sitting, and show cause, if any, why they should not be attached as for contempt, but no such action was taken as to said Oster. On the petition said Morris Winkler, Peter Klein and Oster were brought into court and required to make answer thereto.
The issues made under the petition and the answers thereto came up for hearing on the 7th day of August, 1900,—the same day on which the petition was filed. Evidence upon the part of the petitioners and the respondents to the petition was taken on the 7th and 8th days of the said month of August. The transcript does not disclose any decree or order entered with relation to the action of the court on the prayer of the petition, but it appears from the proof in the record the goods which the petition alleged had been improperly removed from the custody of the receiver were restored to his possession during the night of the 7th of August. It appears, however, from the transcript of the record, that on the following day, the 8th day of August, during the course of the proceedings upon the petition, the court entered the following order in the matter of such petition:
"The court finds that the said Harry Oster, receiver in this case of Peter Klein v. Martin Winkler, being case Gen. No. 208,885, and Martin Winkler, Peter Klein and Albert Winkler, should be and hereby are attached to show cause, if any they have, why they, and each of them, respectively, should not be adjudged guilty of contempt of court in this: that they, that is to say, the said Peter Klein, Martin Winkler and Albert Winkler, with the full knowledge and consent and assistance of the said Harry Oster, receiver, did, after the appointment of the said Harry Oster as receiver in said cause in this court, to-wit, after the 12th day of July, A. D. 1900, take and carry away from the possession of said receiver and from the premises occupied by said receiver and the said firm of Winkler & Klein, sundry goods, wares and merchandise, the property and part of the estate of said Martin Winkler and Peter Klein, trading as Winkler & Klein, and being in the hands of the said Harry Oster as receiver of the said Winkler & Klein, consisting of harmonicas, marbles, toys, pocket-books, lead-pencils, stationers' supplies, blank books and other articles, of the value of eight hundred dollars, ($500) with the intention of defrauding said estate.
"It is therefore ordered that the said Harry Oster, Peter Klein, Martin Winkler and Albert Winkler be and hereby are ordered to show cause as above set forth, and directed to appear before this court Friday, August 10, at the opening of court, at ten o'clock A. M. on said date, before Judge Hanecy, to further answer to said charge, and to appear at such other times, from day to day and from time to time, as this court may direct, and that the further hearing of this cause be continued until Friday, August 10, A. D. 1900, at ten o'clock A. M., and that the said Harry Oster give bond for his appearance on the said 10th day of August, A. D. 1900, at ten o'clock A. M., before the said Judge Hanecy, in the sum of fifteen hun. dred dollars ($1500), with good and sufficient surety to