dissenting: I am unable to concur in the decision of this case as set forth in the majority opinion. In view of the stipulation entered into between the parties, in which they agreed that all the facts therein recited were true, we must assume that when Kowalewski obtained the mortgage and notes from Mrs. Lane on August 14, 1924, he accomplished that result by misrepresentations of fact and that in doing so he perpetrated a fraud upon her. We must also accept it as true that she thought the paper he gave her at that time was a receipt for her mortgage and notes. But it further clearly appears from the stipulated facts that Mrs. Lane must have known as early as February, 1925, what the nature of her transaction with Kowalewski, in 1924, really was. But she made no claim of fraud at that time and was quite satisfied to treat the paper which he had given her, in August, as a note; and it is clear that she took no other .position until after Kowalewski had committed suicide and she found he was without any property and that ' he had left no estate, and then, for the first time, she took the position which- she now seeks to establish, as against the plaintiff bank.
At the time Mrs. Lane turned over her mortgage and notes to Kowalewski, in August, 1924, she had been the owner of them over four years. On January 7 and July 7 of each year during that period, she had taken her interest coupons, calling for $122.50 each, to the bank where Kowalewski cashed them for her, apparently taking them for collection, but giving her the amount called for, in cash, whenever she brought them in. If Mrs. Lane merely turned over her mortgage and notes to Kowalewski, in 1924, to enable him to protect her against some fraud which the former owners of the property were supposed to be preparing to perpetrate, on which theory she would continue to be the owner of the mortgage and the notes, she was entitled to continue to collect the interest. The next semiannual interest payment on the mortgage was due the following January 7. At that time, on Mrs. Lane’s theory, she was entitled to receive $122.50 interest on the mortgage. In the meantime, it appears, the plaintiff bank had purchased the mortgage, in good faith, from Kowalewski, into whose possession Mrs. Lane had delivered it, and on January 7, 1925, it collected the $122.50 interest then due, as was consistent with its ownership of the mortgage. Mrs. Lane who now claims she owns the mortgage, and has owned it all the time, made no inquiry as to why she was not getting her usual semiannual interest and she does not appear to have even given that matter any thought. On the contrary, a month later she accepted $90 in cash from Kowalewski, which amount equals the semiannual interest then due on his" note for $3,000. Mrs. Lane must have known that had nothing to do with any payment of interest on her mortgage. All the facts point to her knowing, at least at that time, that she held Kowalewski’s note for $3,000, on which this was an interest payment and that the $3,000 represented by that note, plus the amounts he had paid her prior to August, 1924, was given her by him in the way of buying the mortgage and notes from her. That such was the real transaction is further indicated by the fact that when Kowalewski gave Mrs. Lane his note for $3,000 on August 14,1924, he also gave her $167.40, and that odd amount added to previous sums he had given her, amounting to $350, and the $3,000 notes he was then giving her, equalled $3,500, the face of the mortgage and notes plus $17.40 which just equalled the interest on the mortgage which had been earned up to that date following the last semiannual interest payment on the mortgage, which had been paid July 7, previous. All of these facts, in my opinion, show conclusively that Mrs. Lane sold this mortgage to Kowalewski on August 14,1924. If she did not know it then, she certainly did the following February. She no doubt thought Kowalewski was responsible financially, and for that reason she felt safe in exchanging her mortgage for his note, and she continued to be satisfied with it, even after he had been put out of the bank and until lie had committed suicide and she discovered that he had left an insolvent estate.
All the facts set forth in the stipulation were submitted under a provision contained in the last paragraph of the stipulation, to the effect that “the competency, relevancy and materiality of any stipulated facts are left entirely to the court, as well as the legal effect of the same.” The statement of fact in the stipulation, to the effect that when Mrs. Lane asked Kowalewski how she would be protected in delivering her papers to him, he told her she was doing business with the Sherman Park State Bank, was clearly incompetent, and should be given no consideration by the court.
As stated in the majority opinion, our Supreme Court has held that a corporation purchasing securities of its president is not chargeable with any knowledge the latter may have as to infirmities in his title. Higgins v. Lansingh, 154 Ill. 301, 387; Seaverns v. Presbyterian Hospital, 173 Ill. 414. In the Higgins case, at page 388, the court said: “In such a transaction the officer, in making the sale and conveyance, stands as a stranger to the company. (Stratton v. Allen, 1 C. E. Green, 229.) His interest is opposed to theirs, and the presumption is, not that he will communicate his knowledge of any secret infirmity of the title to the corporation, but that he will conceal it. Where an officer of a corporation is thus dealing with them in his own interest opposed to theirs, he must be held not to represent them in the transaction, so as to charge them with the knowledge he may possess but which he has not communicated to them, and which they did not otherwise possess, of facts derogatory to the title-he conveys.” This quotation was made by the Supreme Court from Barnes v. Trenton Gas Light Co., 27 N. J. Eq. 33, with approval. The exception to the foregoing rule, noted in the majority opinion, as set forth in Mutual Inv. Co. v. Wildman, 182 Ill. App. 137, arises where the president or other corporate officer who sells securities of his corporation is “an essential representative” of the corporation in the transaction. • No fact or suggestion is included in the stipulated facts in the case at bar, showing, or tending to show, that when Kowalewski sold this mortgage and the notes to the bank, for their full, face value, shortly after Mrs. Lane had turned them over to him in August, 1924, he was an essential representative of the bank in completing the transaction. If such were the fact, or if the bank in fact did not become a bona fide holder of these securities, as it purported to be, the burden was on Mrs. Lane to show it by a preponderance of the evidence. She not only failed to do that, but, in my opinion, there is no evidence at all to that effect. I am, therefore, of the opinion that the chancellor erred in entering the decree appealed from and that it should be reversed.