Stokes v. Frazier

Citations

• 72 Ill. 428

Syllabus

<p>1. Pledge—presumption as to time of payment. Where bonds are pledged ' to a party as collateral security for money advanced by him to aid in doing the work for which the bonds were issued, and also for a share of the profits arising from such work, and no time is fixed for the payment of the money, the law presumes that a reasonable time is intended.</p> <p>2. Same—who may purchase, etc. The pledgee of bonds held by him as collateral security for the repayment of money advanced by him, can not become the purchaser of such bonds at a sale made by himself, in default of the payment of the money to him. If he does so purchase, the pledgor has the right to treat it as a valid sale, or to treat it as void; and if he elects to treat the sale as void, then the title to the bonds remains precisely as if no sale had been made, with the lien of the pledgee still on them for the amount of his debt.</p> <p>3. But if such sale is made by the pledgee fairly, in good faith and without any fraud, and a disinterested party becomes the purchaser, the title would pass to him, and the pledgee, on a settlement, would be chargeable with the proceeds of such sale, to be applied as a credit on the indebtedness for which the bonds were pledged as of the date of the sale.</p> <p>4. Interest—rate allowed on decree. A greater rate of interest than six per cent can not be allowed, unless it is under a contract to pay more, not exceeding ten per cent, by a court of equity, upon a bill for an accounting.</p> <p>5. Chancery jurisdiction—distribution of trust fund. Where contractors with a city to make certain improvements, to be paid for in its bonds, borrow money of a party with which to prosecute the work, and deliver to such party the bonds when received, as collateral security, the lender to be repaid the money advanced, with interest, and to have one-third of the profits realized, and no time is fixed for repayment to him, or within which the collaterals may be sold, or a division of profi