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    Celia W. Wallace v. Henry S. Monroe, Trustee, and Cythera M. Rappleye.

      At'achment— Equitable Estate, within Act — Res Adjudícala — Husband and Wife — Agency—Administration—Claim for Interest — Duty of Trustee.

    1. Under Sec. 3 of the Attachment Act, an equitable estate for life in lands is subject to attachment.
    2. The misfortune of physical or mental debility can not be recognized as a sufficient ground for allowing a party to redeem from an execution sale after the expiration of the statutory period.
    3. The relation of principal and agent does not spring from that of husband and wife, nor can it be presumed from that relation alone. Before a wife can be charged with responsibility for the acts of her husband in relation to her separate property, she must be shown by some affirmative and satisfactory evidence to have given him authority to act in her behalf.
    4. It is not the duty of an administrator to pay a claim for interest against an estate until it is presented and allowed by the Probate Court.
    5. In the case presented, it is held: That at the time of the service of the writ of attachment the cross-complainant had an equitable estate for life in the premises in question; that a former decree precludes her from alleging, as against the purchaser at the execution sale or his assignee, that her interest in said land was not subject to attachment; that the cross-complainant has no ground offcomplaint against the administrators in refusing to pay her claim for interest; and that the trustee does not appear to have finally refused to mortgage the land in question to raise money with which to redeem.
    [Opinion filed June 28, 1887.]
    In error to the Circuit Court of Cook County; the Hon. Thomas A. Moran, Judge, presiding. ■ ■

      Statement by Bailey, J. This was a bill in chancery brohght by Henry S. Monroe, trustee, against Celia W. Wallace and Cythera M. Bappleye, to determine the respective equitable rights and interests of the defendants in and to a certain tract of land described in the bill. The defendants appeared and answered, setting up their respective claims to said land, and said Celia W. Wallace filed her cross-bill praying to redeem said land from an execution sale under which said Cythera M. Bappleye claimed an equitable interest therein and the right to receive the rents and profits thereof, and that, upon payment of the redemption money, said Cythera M. Bappleye be decreed to quit-claim said land to her. Answers were filed to said cross-bill, and issues were duly formed thereon, as well as upon the answer to the original bill, by replications, and the cause coming on to be heard on pleadings and proofs, a decree was entered-finding that said Cythera M. Bappleye had an equitable estate in said land, and was entitled to receive the rents and profits thereof during the life of said Celia W. Wallace, and directing said trustee to pay said rents to her, and dismissing the cross-bill of said Celia W. Wallace at her costs, for want of equity. From this decree said Celia W. Wallace has appealed to this court.
    The facts, as shown by the pleadings and proofs, are substantially as follows : John S. Wallace, being about to marry said Celia W. Wallace (then Celia Whipple), conveyed the land in question to Henry S. Monroe, in trust, for the benefit of said Celia Whipple. The declaration of trust in said deed is as follows: “ But in trust, to and for the following uses and trusts, to-wit: for the sole and separate use of the said Celia Whipple during her natural life, and free from the debts, contracts and engagements of any future husband, and from and after her death for the benefit of any child or children of said Celia Whipple by said party of the first part, and the descendants of any such child or children being deceased, having descendants, such descendants are to take their parent’s share in equal parts between them; but during the minority of any child or children, the trustee or trustees hereunder for the time being, and from time to time, shall collect and receive the rents, profits and income, if any, of said premises, or other property which may be substituted therefor on said trusts, and apply the same for the benefit of such child or children or descendants thereof, as to such trustee or trustees shall seem most expedient, or settle the same upon any such children upon their attaining their majority generally, or upon . any trust which may be declared the better to preserve the estate for the benefit of such child or children of said Celia by the said John S. Wallace, or of the descendants thereof respectively as aforesaid; but from and after the death of said Celia, if the said Wallace shall survive her anl such child or children and descendants respectively, the said Wallace, his heirs and assigns forever, shall have the sole use and benefit of the aforesaid trust property and the avails or income thereof, and of the property substituted on like trusts by virtue hereof, and it shall and may be lawful for the said Celia, by her separate writing, to be acknowledged as in the case of an unmarried person, at any time hereafter, to enable the said Monroe, or his successor or successors in the trust aforesaid, to sell, convey, mortgage, lease or,otherwise .incumber or dispose of any part or the whole of the above described premises, or other property substituted for the same on the same trust, or to make any contract in reference thereto which the said trustee or trustees could do if sole 'owners without being bound by any trust, and it shall not be the duty of the purchaser to see to the application of the purchase money, and in case of selling, mortgaging or leasing of said premises or any part thereof, the said trustee or trustees shall pay the purchase money, rent or other moneys into the hands of the said Celia, or invest the same in other property upon like trusts and with like powers, and in all respects as aforesaid as she shall in writing elect or direct, and in case the said Monroe shall die or resign, oz*, in consequence of removing to a distant place or otherwise, become zznable and unwilling to discharge the duties of a trustee as aforesaid, then the said Celia, by her separate writing to be acknowledged as if she were unmarried, may nominate a successor in trust who shall have the like powers and be subject to the same limitations as the said party of the second part. In case the said property shall be used and occupied by the said Celia or her family, the said trustee shall in no way be liable for the rents, issues and profits of the same, and full power and authority is hereby given said party of the second part to permit said Celia, her husband, or any agent she may appoint, to collect said rents and profits for her use, and said trustee shall not be bound to see to the payments of taxes unless he shall see fit to do so.”
    Said conveyance to said trustee was executed February 23, 1805, and on the 1st day of the following March, John S. Wallace and Celia Whipple were married. In-the year 1867, there was born, as the fruit of said marriage, a son, John S. Wallace, Jr., who died in 1882, leaving his mother surviving him. On the 9th day of April, 1872, Mrs. Wallace obtained a divorce from her husband on the ground of cruelty, and the 24th day of December, 1878, said Wallace died leaving him surviving his said son, John S. Wallace, Jr., Frank R. Wallace, a daughter by a former marriage, and said Cythera M. Rapploye, an illegitimate daughter.
    On the 28tli day of March, 1874, the land in question was leased by said trustee to Henry W. Martin for a term of ten years, at an annual rental of $500, the lessee to pay all taxes an 1 assessments during the term. On the 30th day of March, 1876, Robert Hervey and others brought a suit in assumpsit against Celia W. Wallace, and sued out an attachment in aid of said suit, by virtue of which the Sheriff attached all the right, title and interest of said Celia W. Wallace in said land. Such proceedings were had in said suit that, on the oth day of January, 1878, the plaintiffs therein recovered a judgment against said Celia W. Wallace for $450 and costs, with an order for a special execution for the sale of the property attached. On the 28th day of October, 1878, said property was sold under such special execution for $497.47, Elbridge Hanecy, one of the plaintiffs in the execution, becoming the purchaser and receiving the certificate of purchase. During the period of redemption, and according to Hanecy’s testimony on the 30th day of - October, 1879, Hanecy sold and assigned said certificate to said Cythera M. Rappleye, and on the 13th day of Maro'i, 1880, the Sheriff executed a deed of said premises to her. After the execution of said deed, both Mrs. Wallace and Mrs. Bappleye claimed the rents, and as the consequence, the tenant refused to pay the rent to either. At the request of both, the trustees thereupon took measures to collect the rent due, and at the date of filing his bill he had succeeded in collecting a portion and was about to collect the residue.
    At the time Celia Wallace obtained her decree of divorce from her husband, the court awarded her as alimony, and for the support and maintenance of her son, the custody of whom was committed to her, $6,500 in cash and $20,000 in ten years, with 8 per cent, interest, payable semi-annually, the last-mentioned sum being evidenced by two promissory notes executed to her by said Wallace for the sum of $10,000 each, said notes being secured by a deed of trust on certain real estate in Chicago. One of said notes was paid by said Wallace in his lifetime and the other remained in the hands of Mrs. Wallace.
    Immediately after the death of Wallace, his daughter, Frank B. Wallace, then an unmarried woman about twenty-two years of age, and one Albert P. Smith, were appointed administrators of his estate. Frank B. Wallace was then living in the family of Mrs. Bappleye and her husband, both of whom were on unfriendly terms with Mrs. Wallace, and was largely under their influence. As Mrs. Wallace claims, and as the evidence tends to show, the administration of said estate was carried on to a great extent according to Mr. Bappleye’s advice and under his control. She also claims, and gave evidence tending to prove that at the time of the sale of said land under' execution, and during the entire period of redemption, she was in embarrassed and straightened circumstances, and was without the means to redeem said land from said sale; that she was wholly dependent upon the interest on the $10,000 note held by her for the money to make said redemption; that after the death of Wallace no interest was paid her on said note until after the time of redemption had expired^ when the entire interest due her was paid; that she applied to the administrators for said interest to enable her to redeem said land, but that the administrators, acting under the advice of Rappleye, declined to make such payment, the purpose of Rappleye being, as she alleges, to deprive her of the ability to redeem the land and to prevent her from making such redemption, and that it was in consequence of such conduct on the part of Rappleye that she failed to redeem the land. It does not appear, however, that she ever presented either said note or the interest coupons to the Probate Court for allowance as claims against said estate, and evidence was given on behalf of Mrs. Rappleye tending to show that the administrators asked her to present her claim for interest to said court for allowance, assuring her that if allowed it would be paid, but that she declined to do so.' •
    She also claims and gave evidence tending to show that at the date of the sale of said lands, and until the time of redemption had expired, she was in very feeble health, and was, owing to her feeble condition of body, incapable, physically and mentally, of attending to any ordinary or complicated matters of business, and that such facts were known to Mr. and Mrs. Rappleye, and she alleges that her said sickness was taken advantage of by Mrs. Rappleye in acquiring said certificate of sale.
    The evidence further shows that on the 11th day of November, 1878, Mrs. Wallace filed her bill in chancery in the Circuit Court of Cook County against Hervey, Anthony, Galt and Hanecy, the plaintiffs in said judgment, and the Sheriff of Cook County, alleging that said plaintiffs, as her attorneys, rendered for her certain professional services, and that she deposited with them the promissory note of one Martin, for §150, as security for the payment to them of a compensation for their services rendered and to be rendered, and that they promised that the amount of the note should be collected and applied in payment for said services, and any balance returned to her; that before the maturity of the note a dispute arose between her and said attorneys in relation to the value of their services, and that in March, 1876, they brought suit against her in said Circuit Court, and that in such suit the value of said services was fully litigated and determined and found to be §450, and that judgment was thereupon rendered against her in their favor for that amount; that during the pendency of said suit §473.76 was paid said attorneys on said note, and that upon the recovery of said judgment it was their duty to apply the amount so collected to the satisfaction of said judgment, and account to her for the residue; that they refused to do so, and claimed that their judgment was for the sum due them over and above the amount of said note; that in October, 1878, they sued out an execution on said judgment, and on the 28th day of October, 1878, pretended to sell the property in question to said Hanecy for the amount of the judgment and costs, and that the Sheriff threatens to convey to Hanecy all her right, title and interest in said land; that she is the owner of an equitable life estate in said premises, and by the pretended sale and filing of the certificate thereof, her title has become clouded; that the sale is wholly invalid as against her, and that the judgment, in equity, was fully paid. The bill prayed for a decree against all of said parties, enjoining them from claiming any right, title or interest in said premises by virtue of said pretended sale or certificate of sale, and enjoining the Sheriff and his successors in office from executing any deed of said premises in pursuance of said sale to Hanecy or his assigns, and that the judgment might be declared satisfied and the plaintiffs therein be decreed to satisfy the same of record, and said 'Hanecy be compelled to execute a release of all interest acquired by him by virtue of said certificate, and that the said sale might be declared void, and an account be taken and a decree rendered in her favor against Hervey, Anthony, Galt and Hanecy for any balance remaining in their hands, and also a general prayer for relief. The defendants answered alleging the validity of said judgment and Sheriff’s sale, and a replication to said answer was filed, and on final hearing on pleadings and proofs, a decree was entered dismissing the bill at the costs of Mrs. Wallace, the complainant therein, for want of equity. In the present suit Mrs. Kappleye has, in her answer to both the original and cross-bill, set up said proceedings and decree as a bar to so much of the "relief prayed for by Mrs. Wallace as is founded upon the non-liability of her interest in the land in question to sale on said execution. The remaining facts are sufficiently stated in the opinion of the court.
    Messrs. Lyman & Jackson and Melville W. Fullee, for plaintiff in error.
    The Sheriff’s deed must be set aside on account of the fraud perpetrated upon plaintiff in error by Nicholas B. Bappleye, the husband of Oythera M. Bappleye.
    The administrators of the estate" of John S. Wallace could neither defeat the marriage settlement made by Mr. Wallace in his lifetime, by purchasing an adverse claim to it, nor could they defeat it by withholding from Mrs. Wallace money due her from the estate and thus prevent her from redeeming from the Sheriff’s sale.
    In a marriage settlement the trustee is bound to carry the-appointment into execution without himself setting up, or allowing any one else to set up, anything to defeat it. Ho venden on Fraud, Vol. 1 (Ed. of 1832), 484; Morris v. Clarkson, 1 Jac. & Walk. 107.
    We insist that the marriage settlement having been made by Mr. Wallace in his lifetime, and he being incapacitated from defeating it, the administrators of his estate were under like disability. If he had purchased a tax claim for the purpose of defeating the marriage settlement, there can be no doubt butjhat a court of equity would have allowed her to redeem.
    The trustees of John S. Wallace, being incapacitated from purchasing, the Sheriff’s certificate for the purpose of setting it up to defeat the marriage settlement made by Wallace in his lifetime, or from withholding money due to Mrs. Wallace, growing out of the marital relation existing between Mr. and Mrs. Wallace, for the purpose of preventing her from protecting her marriage settlement, the same disability extended to both Mrs. and Mr. Bappleye.
    All the acts of Bappleye connected with the estate must be subjected to the closest scrutiny, and neither he nor his wife can be permitted to obtain any advantage growing out of his connection with the estate. Davis v. Hamlin, 108 Ill. 39, 48; Keech v. Sandford, 1 Ld. Cases in Eq. 53; G., C. & S. R. R. Co. v. Kelly, 77 Ill. 426, 434.
    Appellant had no interest in the property in question subject to levy of attachment or execution, and was therefore entitled to the relief prayed by her cross-bill.
    Under the provisions of the contract Mrs. Wallace had no such legal or equitable right or interest in or to the land itself as was subject to the levy of an attachment or execution, and as the trust was created in good faith by, and the fund proceeded from a person other than Celia W. Wallace, it could not be reached by creditor’s bill.
    The trust created by this deed was clearly, as this court has held, an active trust and not a passive one. Mrs.. Wallace had not the fee nor any other estate, right, title, or interest in or to the land itself, which she could convey or transfer, and therefore none such as could be taken, conveyed or transferred in invitvm.

    Trusts of real and personal property and of the rents, issues, profits and produce of the same, may be created, which shall secure the use of the same during life, to the beneficiary, but so that it shall not be subject to alteration either by voluntary act on his part, or in inviium by his creditors. Spindle v. Shreve, 11 U. S. 542; Steip v. Whitehead, 111 Ill. 247.
    Mr. James E. Munboe, for Cythera M. Eapplcye, defendant in error.
    “ Our statute of wills requires all claims to be presented to the Probate Court, and to be there adjusted before they can be legally paid out of the assets of the estate.” Reitzell v. Miller, 25 Ill. 67; Walker v. Deihl, 79 Ill. 473; Lynch v. Hickey, 13 Ill. App. 139.
    An heir is under no liability to pay the debt of the ancestor from whom he takes real estate, except when the personal estate of the ancestor is exhausted, or until it has been determined to be insufficient to pay the liabilities of the deceased. McLean v. McBean, 74 Ill. 134 ; Diversey v. Johnson, 93 Ill. 547, 557; Ryan v. Jones, 15 Ill. 1.
    The administrators had no power to make the proposed exchange of securities. Their duties were to pay the debts due from the estate upon probate thereof, to collect debts due to the estate, and pay the balance in their hands remaining to the distributees unden the order of the Probate Court. Reitzell v. Miller, 25 Ill. 67; Scott v. Atchison, 38 Texas, 390; Parkam v. Stith, 56 Miss. 465.
    It is well settled that statutory rights of redemption will not be extended by courts of equity to cases not provided for by the statute. This rule is enforced by the following authorities and many more that might be cited. McCormack v. Russell, 25 Pa. St. 185; Smith v. Macon, 20 Ark. 17.
    Failure to redeem within the statutory period through mistake of law or fact, or through negligence, will not be a ground for equitable interference afterward. Campan v. Godfrey, 18 Mich. 27; Playter v. Cochran, 37 Iowa, 258.
    The trustee had a discretion, which equity could not control, to grant or deny the request to mortgage the property. Wallace v. Wallace, 82 Ill. 530.
   Bailey, J.

All the right, title and interest of Celia W. Wallace in and to the land in controversy having been seized on attachment and sold on execution, the question is raised whether she had any interest or estate in said land liable to attachment or execution. The statute in relation to the service of writs of attachment is as follows:

“ Such officer shall without delay execute such writ of attachment upon the lands, tenements, goods, chattels, rights, credits, moneys and effects of the debtor, or upon any lands or tenements in and to which such debtor has or may claim any equitable interest or title, of sufficient value to satisfy the claim sworn to, with costs of suit, as commanded in such writ.” R. S., Chap. 11,. Sec. 8.

The statute in relation to judgments and executions is equally broad. After declaring that judgments and executions issued thereon shall be liens upon the real estate of the judgment debtor, it defines the term “real estate” as follows:

“ The term ‘real estate,’ when used in this act, shall inchide lands, tenements, hereditaments, and all legal and equitable rights and interests therein and thereto, including estates for the life of the debtor or of another person, and estates for years, and leasehold estates, when the unexpired term exceeds five years.” R. S., Chap. 77, Sec. 3.

Prior to March 31, 1889, an attachment could not be levied upon an equitable interest in lands. West v. Schnebley, 54 Ill. 523; Farrar v. Payne, 73 Ill. 82. The section of the Attachment Act above cited, which was passed March 31, 1869, and re-enacted December 23, 1871, renders equitable interests in land subject to attachment to the same extent as legal titles. Laclede Bank v. Keeler, 103 Ill. 425. It can not be doubted, we think, that at the time of the service of the writ of attachment, Mrs. Wallace had an equitable estate for life in the land in question. Said land was conveyed to the trustee to be held by him in trust for the sole and separate use of the said Celia Whipple (now Mrs. Wallace) during her natural life.” Language could scarcely have been chosen manifesting more clearly an intention to vest Mrs. Wallace with the entire equitable estate for life. While the legal estate was conveyed to the trustee, the entire beneficial interest was given to her. The subsequent portions of .the deed contain various provisions directing and regulating the manner in which the trust was to be executed, but they in no way change the character of. the interest vested in Mrs. Wallace as an equitable estate in the land. There can be no doubt then that her interest in said land was an equitalfie interest or title within the meaning of the .Attachment Act, and that it was subject to attachment.

We are also of the opinion that Mrs. Wallace is precluded by the decree in her chancery suit against Hervey and others fro in alleging, as against the purchaser at the execution sale, or his assignee, that her interest in said land was not subject to attachment. In her bill in that case she alleges that she had an equitable life estate in said premises, but alleged that the sale was invalid and prayed to have it so declared. The decree dismissing her bill for want of equity was a final adjudication upon the question of the validity of said sale, and is conclusive of that question whenever it arises between her and the defendants to said bill or those standing in the relation of privity with them.

But that portion of the decree to wliiph our attention is chiefly directed by counsel, is that which denies the prayer of Mrs. Wallace’s cross-bill to be permitted to redeem. In support of her prayer to be allowed now to redeem from the execution sale, she urges the following equitable considerations : 1, That at the time of the sale, and during the period allowed by the statute for redemption, she was in such health physically and mentally, as to be incapable of attending to business; 2, That during the same period she was in straitened pecuniary circumstances, and without the means to make the redemption: and 3, That she was deprived of money to which she was entitled, and which would have been sufficient to enable her to redeem from the sale, by the fraudulent or oppressive acts of the administrators of the estate of John S. Wallace, deceased, of Mr. Kappleye, and of the trustee, until the period of redemption had expired.

With regard to the first two of the foregoing grounds for relief, it is sufficient to say, that however much the misfortune of physical or mental debility or of want of means may appeal to our sympathies, they never have been, so far as we are advised, and can not be, recognized as sufficient grounds for allowing a party to redeem after the statutory period has expired. The statute makes no exception in favor of those thus unfortunately situated, and we are not aware that the courts have attempted to do so.

As to the other ground for relief, even if it should be held . to be good in law, we do not think that it is made out by the evidence. Bo fraudulent practice or oppressive conduct is shown as against Mrs. Kappleye, the holder of the title under the execution sale. There is no proof that she has done anything of which Mrs. Wallace has a legal right to complain. It is claimed, however, that the course pursued by the administrators and the trustee in relation to Mrs. Wallace was under the direction and advice of Mr. Kappleye, her husband, and that in all those matters Mr. Kappleye was acting in the interest and as the agent of his wife. The evidence tends to show that, in the purchase of the certificate of sale, Mr. Rappleye carried on the negotiation and made the purchase as his wife’s agent, but there is no evidence that his agency extended beyond that single transaction. The relation of principal and agent does not spring from that of husband and wife, nor can it be presumed from that relation alone. Before Mrs. Rappleye can be charged with responsibility for the acts of her husband, she must he shown by some affirmative and satisfactory evidence to have given him authority to act in her behalf, and in the absence of such evidence she, in all her property rights, is as much a stranger to him as though no relation whatever existed between them. Whatever, then, may have been done by Mr. Rappleye, or the administrators, or the trustee, can have no effect upon the legal or equitable rights of Mrs. Rappleye.

But we are of the opinion that Mrs. Wallace has no ground of complaint in relation to the action of the administrators in refusing to pay her money. At the time of the death of Mr. Wallace, Mrs. Wallace held his promissory note for §10,000, secured by a deed of trust on real estate, and bearing interest at the rate of 8 per cent, per annum, payable semi-anuually. Of this interest an installment of §400 became due in April, 1879, and a like installment in October of the same year. So far as we can see from the evidence, these two sums were all the money due and payable to her from the estate of Mr. Wallace up to the time the redemption from said sale expired. 'The evidence tends to show that she applied to the administrators for payment of those sums, and that they, acting under Mr. Rappleye’s advice, refused to pay them. It further appears, however, that she neglected to exhibit her claim for said interest to the Probate Court for allowance, and the evidence tends to show that she was requested by the administrators to make such presentation of her claim, they telling her that they would paj it when allowed. The posi tion thus taken by the administrators was clc-arly correct and legal. They had no right to pay out the moneys of the estate except upon the order of the Probate Court in satisfaction of claims duly presented and proved, and allowed by that court, and it certainly was not their duty to pay a claim not proved or allowed. Under the circumstances, then, their refusal to pay Mrs. Wallace’s claim for interest partook of no element of either fraud or oppression.

It is further claimed by Mrs. Wallace that, as a means of raising money, she proposed to the administrators to exchange her §10,000 note and deed of trust for certain other property belonging to the estate, but that the administrators, acting under the advice of Eapplejm, refused to make the exchange. Apart from the fact that Mrs. Uappleye is in no way connected with the matter of such proposition, we are unable to see how Mrs. Wallace can complain of the action of the administrators in this respect. Whether they had the power to make the exchange or not, they clearly had. the right to decline to make it, and their doing so was an act of neither fraud nor oppression, so far as concerns Mrs. Wallace.

It is said that the trustee was at fault in not complying with Mrs. Wallace’s request to mortgage the land in question for the purpose of raising money to redeem said land from the execution sale. The evidence shows that Mrs. Wallace applied to the trustee to mortgage said land for §2,500 to raise money, not only for the purpose of such redemption, but to defray the expenses of the maintenance of her infant child. The trustee seems to have discussed the matter with her, and to have expressed the opinion that the execution of a mortgage for that amount would be unwise, and, he appears to have suggested to her the expediency of trying to borrow the money on the security of her §10,000 note and deed of trust. She does not seem to have pressed her request for the execution "of a mortgage, and the matter does not appear to have been finally decided between them, as she admits in her testimony that the trustee did not refuse her request to execute it. We see in these facts no ground of relief to Mrs. Wallace, especially in view of the decision of the Supreme Court giving construction to the identical deed by which said trust was created, that while by the terms of said deed Mrs. Wallace could authorize the trustee to sell the land, she could not compel him to do so, and that no sale could be made without the concurrence of both the cestui que trust and the trustee. Wallace v. Wallace, 82 Ill. 530. It is manifest that by the terms of said deed, the rule applicable to a sale applies as well to a mortgage.

We are of the opinion that the decree of the court below was the only one justified by the law and the evidence, and it will be affirmed.

Decree affirmed.

Moran, J., took no part in the decision of this case.


source: Caselaw Access Project

author: McAllister, P. J.

license: Public Domain

text:
    Mary L. Lambert and Rudolph Lambert v. Frances Hyers.

      Foreclosure of Trust Deed — Parties—Practice—Evidence.
    1. In a suit in chancery to foreclose a trust deed in the nature of a mortgage, the grantee in such deed, in whom the legal title is vested, is an indispensable party. *
    2. If such grantee is dead, such fact must be brought into the hill either by way of amendment or supplement, and it should be supported by evidence. A mere recital of the fact in the decree is insuEcient.
    3. Upon the death of the original trustee, his successor, if any, should be made a party to the proceedings.
    4. In the case presented, it is held: That the evidence on the issue of payment of the note secured by the trust deed, while closely conflicting, shows no such preponderance in favor of the defendants as would justify a reversal of the decree on that ground.
    [Opinion filed June 28, 1887.]
    In error to the Circuit Court of Cook County; the Hon. Thomas A. Moran, Judge, presiding.
    Mr. C. M. Hardy, for plaintiffs in error.
    Mr. George C. Christian, for defendant in error.
   McAllister, P. J.

This was a bill in chancery brought February 25, 1884, by Frances Hyers against Mary L. and Rudolph Lambert to foreclose a deed of trust made July 13, 1883, by said Lamberts, conveying land described therein to Madison Beal as security for the payment by said Lamberts of their promissory note for §3,500, payable to the plaintiff on or before five years from said last mentioned date, with interest at the rate of six per cent., payable semi-annually. The trust deed provided for the whole indebtedness becoming due upon the failure to pay any part of the interest and contained the powers in the trustee usually expressed in such deeds.

There was also this provision: “In case of the death, resignation, removal from said Cook County or other inability to act of said grantee, then George C. Christian of Cook County is hereby appointed and made successor in trust herein, with the like power and authority as is hereby vested in said grantee.” •

Beal, the grantee, was named as a party defendant in the bill and summons, but there was a direction of the plaintiff’s solicitor upon the summons not to serve him and he was not served. There was no allegation in the bill that Beal had died, resigned, removed from the county, or become unable to act as such trustee. George C. Christian was made a party defendant to the bill as originally filed, but there was nothing on the face of the bill to show that he was a necessary or even a proper party, and there was no amendment of that bill or any supplementary bill filed.

The Lamberts filed answers setting up payment of the entire indebtedness as a defense. Issue was taken on that defense, and the case heard by the chancellor upon oral testimony, who found against it and entered a decree finding the amount due and directing a foreclosure of the mortgage. Upon that decree the Lamberts bring error to this court.

We have read the evidence upon the question of payment and find it closely conflicting, but there was no such preponderance in favor of the defendants below as would justify us in reversing the finding of the chancellor who had the witnesses before him and therefore a better opportunity" of judging of their credibility than we can have. Besides there are circumstances testified to by the Lamberts themselves which strongly tend to lead the impartial judicial mind to the conclusion that their story, about having paid and taken up the said note and then afterward losing it by reason of its destruction by a- child, was a pure invention having no basis in truth, especially in view of the undoubted fact that the complainant had had said note all the time in her possession or under her immediate control, and produced, proved and fully established its identity on the hearing.

There is, however, such an error in the proceedings that we must reverse the decree for the purpose of correcting that error.

In a suit in chancery to foreclose a trust deed in the nature of a mortgage, the grantee in such deed, in whom the legal title is vested, is an indispensable party. Walsh v. Truesdell, 1 Ill. App. 126, and authorities there cited.

Beal was such grantee. As above stated he was named as party defendant in the bill, but was not served, and LTovember 18, 1884, on motion of the plaintiff’s solicitor, the bill was dismissed as to him without any reason being assigned. It is true that in the final decree it is recited that the bill had been theretofore dismissed as to said Beal because of-his death. But the certificate of evidence purports to contain all the evidence in the case and that shows none as respects Beal’s death.

If it be true that he has died, that fact must be brought into the bill by proper allegation, either by the way of amendment or supplement according to the time of its occurrence with relation to that of commencing the suit, and it should be supported by evidence, and then it should be further alleged and proved that George 0. Christian had accepted the trust as successor to said Beal. If the latter has not departed this life he should be served with summons.

For the reason stated the decree below must be reversed and the cause remanded for the purpose of correcting and with directions to correct the error pointed out.

Deoree reversed.

Moban, J., took no part in the decision of this case.


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    Christopher B. Bouton v. A. B. Dement et al., etc.
    Creditor’s* Bill — Cross-bill by Assignee of Insolvent Insurance Company — Decree against Stockholder — Fraud—Parties.
    Upon a creditor’s bill filed by judgment creditors of an insolvent insurance company against said company, the assignee and others, and a cross-bill filed by said assign e, it is held: That the company’s assignee was a proper party complainant in the cross-bill; and that the evidence sustains the decree against one of the defendants finding that the company had been fraudulently deprived of certain notes given by him in payment for stock issued to him.
    [Opinion filed June 28, 1887.]
    Appeal from the Circuit Court of Cook County; the Hon. Thomas A. Moran, Judge, presiding.
    Messrs. Teaming & Thompson, for appellant.
    Appellant obtained the stock held by him, on January 16, 1875, by exchanging therefor stock of the Hnion Insurance Company. This transaction occurred and was closed nearly two years before the policy to complainants in the original bill was issued, on which their claim was based, hence said complainants are entitled to no relief on account of the holding of stock by appellant.
    Complainant in the cross-bill is a voluntary assignee under a deed of assignment by the Empire Fire Insurance Company, of Wheaton, and as such possesses no other or greater powers than those possessed by this assignor at the time of the assignment. His whole power is derived from the deed of assignment. Bishop on Insolvency and Assignments, p. 270, Sec. 292; Estabrook v. Messersmith, 18 Wis. 551; Hawk’s Assignee v. Pretzlaff, 51 Wis. 160; Brownell v. Curtis, 10 Paige, 210; Jones v. Yates, 9 Barn. & C. 532 ; Leach v. Kelsy, 7 Barb. 466; Knowles v. Lord, 4 Whart. 500 ; Starr & C. Ill. Stat., Sec. 47, Chap. 72.

      The original bill having been filed on behalf of complaining creditors alone, and not on behalf of creditors generally, they could in no event be entitled to a decree for a larger amount than sufficient to liquidate -their judgment and costs.
    Mr. R. A. Childs, for appellee.
    Mo payment has been made for the stock taken by appellant, and he is liable therefor to the creditors of the insolvent corporation. Upton v. Tribilcock, 91 U. S. 45; Sawyer v. Hoag, 17 Wall. 610; New Albany v. Burk, 11 Wall. 106 ; Morawetz on Private Corporations, 588-9; Melvin v. Lamar Ins. Co., 80 Ill. 446; Union Ins. Co. v. Freer Stone Mfg. Co., 97 Ill. 537; Brigham v. Mead, 10 Allen, 245; Seymour v. Sturgess, 26 N. Y. 134.
    The decree was properly rendered in favor of the assignee for the benefit of the creditors. Dewing v. Perdicaries, 96 U. S. 193; Austin v. Daniels, 4 Den. 301; Hodges v. New Eng. Screw Co., 1 R. I. 312; Neal v. Hill, 16 Cal. 145; Charitable Corporations v. Sutton, 2 Atk. 401; Hersey v. Veazie, 24 Me. 12; Smith v. Poor, 40 Me. 415; Robinson v. Smith, 3 Paige, 222.
    The assignee represents the creditors, and may pursue, collect and receive the assets, both legal and equitable, of the insolvent debtor-on their behalf.
    The insolvent debtors’ act, as amended in 1877, has greatly extended the powers of assignees. Starr & C.’s Ill. Stat., Secs. 37, 44, 47; Paddock v. Bates, 19 Ill. App. 470.
    It is the duty of the assignee, on behalf of the creditors:
    1. To present to the court their claim. Starr & C.’s Ill. Stat. & Chap. 72, Secs. 37, 40.
    2. To prosecute them to judgment. Same Act, Sec. 41.
    3. He then stands as judgment creditor seeking assets of the insolvent estate, out of which such judgments may be satisfied. His position in this suit is similar to that of the complainant in the original bill, and precisely the same reasons exist for him to receive the money and to enter a decree in his favor that would exist in case of any other judgment creditor. Pennell v. Lamar Ins. Co., 73 Ill. 303.
    The capital stock of a corporation can not be relieved from Ills liability to creditors by any artifice, device, mistake or change in the character, whether the ti-ansaction be bona fides or mala fieles. Upton v. Tribilcock, 91 U. S. 45; Sawyer v. Hoag, 17 Wall. 610; Cumberland C. & I. Co. v. Parish, 42 Md. 600; Emporium R. E. & Mfg. Co. v. Emrie, 54 Ill. 345; Thompson’s Liability of Stockholders, Secs. 11, 13, 357; Wood v. Dummer, 3 Mason, 308; Adler v. Milwaukee Patent Brick Co., 13 Wis. 60.
   McAllister, P. J.

This is an appeal by Bouton from the decree of the court below for the sum of $17,584.92, rendered against him June 30, 1888, on a hearing upon pleadings and proofs in the original and cross-suits of the parties as stated below. Such decree was based upon an alleged breach of an undertaking on the part of said Bouton to pay to the Empire Eire Insurance Company, of Wheaton, for shares of the capital stock of said company, amounting in all to $14,000, issued by said company to and taken by him January 25, 1875, but for which he had never in fact paid.

It appears that in January, 1877, said company issued a policy of insurance to appellees, Dement, Clark & Israel, upon a certain building which was burned in the next succeeding month; that about October 1, 1878, the said company becoming insolvent, made a general assignment under the statute to appellee Cole for the benefit of their creditors, which trust Cole accepted; that, October 26, 1878, Dement, Clark & Israel, having previously brought suit upon said policy against the insurance company, obtained a judgment for $3,500 as damages and $17 costs against said company, and having exhausted their remedy at law upon the judgment without avail, March 2, 1880, they brought a creditor’s bill upon said judgment, setting out the matters aforesaid, among other things alleged and charged, making said company, Bouton, Cole and others, parties defendant, and praying for discovery and relief. Bouton and others filed their respective answers. So did said Cole, but admitting all the material allegations of the bill. He also filed a cross-bill in his character as such assignee, making all the other parties to the original bill defendants, and alleging Benton’s liability to said company and breaches of trust on his and the part of other directors and officers of said company, praying for the proper relief and, that the moneys to be collected of the several parties charged with liability to said company be required to pay the several amounts found against them to him, to be distributed among the creditors of the said company under the directions of the court.

The evidence shows that at or immediately after the time when Bouton took said shares of stock he was elected and appointed one of the directors and a member of the finance committee of said corporation, which position he accepted and continued to hold down to tin* time of the said general assignment; that at the time of taking said shares of stock, ho, Bouton, gave his promissory note to said company as security for the payment therefor, in the sum of §10,000, payable in three years with interest at the rate of S per cent, per annum, which note was secured by a deed of trust of certain lands situate in Hyde Park, executed by said Bouton to one Hoyt as trustee; that in April, 1877, Bouton then fearing that he was insolvent and would be compelled to go into bankruptcy, by a collusive arrangement between himself and some other officers of said company, obtained a surrender to him of said note without other consideration than that of substituting in its place the note of one of his employes — a wholly irresponsible person, financially — for §11,200, that being the amount due at the time on the surrender of the note, had said Hoyt reconvey to him the land described in said trust deed, and then executed another deed of trust of the same land, to secure the substituted note. But it appears from the evidence that afterward, by skillful manipulations and abuse of trust on Bouton’s part and that of other officers of said corporation, he, Bouton, at a cost to him of only about §1,500, got back into his own possession said substituted note, so that said company has by such fraudulent means been deprived of both of said notes and payment for said shares of stock to the injury of its creditors.

The point has been made by Bouton’s counsel on this appeal, that the company’s assignee was not authorized and was not the proper party as complainant, to pursue him and recover upon said claim in and by such cross-bill. We are unable to perceive any just legal foundation for the objection. The authorities cited by the appellee’s counsel, in our opinion, fully justify the procedure in the court below, and that the decree is supported by the evidence there seems to us to be no reason to doubt. The decree will therefore be affirmed.

Affirmed.

Moran, J., took no part in the decision of this case.


author: Moran, J.

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    David Hyman v. Sigmund Coen.

      Action to Recover for Goods Sold — Presumption—Question for Jury— Instructions.

    1. Where an inference of fact is to be drawn from facts in evidence, such inference is for the jury and not for the court.
    2. Mere silence on the part of a debtor, when a bill is presented, can not be treated as a conclusive presumption that the amount of the bill is correct.
    3. When the jury have been fairly instructed on the issue submitted, and the verdict is not manifestly against the evidence, this court will not interfere.
    [Opinion filed June 28, 1887.]
    Appeal from the Superior Court of Cook County; the Hon. John P. Altg-eld, Judge, presiding.
    Mr. Isaac E. Adams, for appellant.
    Ho brief filed for appellee.
   Moran, J.

This was an action of assumpsit brought in the Superior Court to recover for goods sold and delivered, by one A. Goldsmith, to appellee. Goldsmith assigned the account to Edward JST. Marks, who assigned to appellant. The claim was for certain diamond earrings and a gold watch. Appellee admitted an indebtedness of $455, but disputed the remainder of the amount claimed, and the jury returned a verdict for the amount which was admitted and no more. There was a direct conflict in the evidence as to the disputed items of the account, and the jury has settled that conflict in favor of appellee. We have examined the instructions which were requested to be given by the appellant in the court below and the refusal to give which is assigned for error here.

The court committed no error in refusing said instructions. It is well settled that, where an inference of fact is to be drawn from facts in evidence, that such inference is for the jury and not for the court. In each of the refused instructions the jury were told in effect that they must find for the plaintiff, if the defendant, when the bill for the account was presented to him, did not dispute the correctness of the account. While silence as to the amount of a bill when presented may be a proper circumstance for the jury to consider in determining the question of fact as to whether the bill was correct, yet mere silence on his part, when a bill is presented to a debtor, can never be treated as giving rise to a conclusive presumption that the amount of the bill is correct. It would have been clear error for the court to have given the instructions as asked. The jury were fairly instructed on the issue submitted to them by instructions given for the plaintiff and the defendant, and when such is the case and the verdict is not manifestly against the evidence, this court is not authorized to reverse. We can not say that the verdict in this record is so manifestly against the evidence, or that the verdict is not supported by the evidence. There being no error, the judgment of the Superior Court will be affirmed.

Judgment affirmed.


author: Per Curiam.

text:
    William H. Stoelker v. The Chicago Building Supply Company.

      Statute of Frauds — Instructions.
    In an action to recover for certain building materials, furnished to a contractor upon the promise of the defendant, the owner of the building in which said materials were to be used, to withhold from the contractor sufficient money to pay therefor, it is held: That the law was correctly stated in the instructions; and that an instruction to the effect that if the jury find from the evidence that the agreement “ was a mere guaranty to answer for the debt of another previously incurred, such a guaranty is a collateral contract, and within the Statute of Frauds,” was not rendered erroneous by the insertion of the words in italics.
    [Opinion filed July 13, 1887.]
    In error to the Superior Court of Cook County; the Hon. Hollín S. Williamson, Judge, presiding.
    Messrs. George C. Buell and William B. Bradford, for plaintiff in error.
    Mr. Arnold Tripp, for defendant in error.
   Per Curiam.

This action was brought in the court below to recover for certain materials delivered for the building of plaintiff in error. The evidence tended clearly to establish that defendant in error had refused to deliver the material to certain carpenters who were erecting a house for plaintiff in error; that therefore. all the parties met together, and plaintiff in error, with the assent of the carpenter contractors, agreed with defendant in error that it would furnish the material if he, plaintiff in error, would retain from the contractor sufficient money to pay for it, and would pay it to defendant in error. The materials were furnished on such agreement, and plaintiff in error did retain from the contractor, and has in Ills hands sufficient money to discharge the amount due to the defendant in error. The claim is made that the contract was, in effect, one to pay the debt of another, and that it was within the Statute of Frauds. The law was correctly given to the jury in the instructions. Some criticism is made of a modification by the court of one of the instructions requested by plaintiff in error. We are not prepared to say that the instruction, as given, was erroneous. It certainly did not tend to mislead' the jury under the facts in this record. The principle of law stated in the instructions is correct, and the verbal criticism hypercritical. There is no error which will authorize a reversal, and the judgment will therefore be affirmed.

Judgment affirmed.


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    Henry Jackson v. The People of the State of Illinois.

      Criminal Law — False Pretenses — Trial 5y Court — Admission of Incompetent Evidence — Error without Prejudice.

    This court declines to interfere with the findings of the court below, in a trial by that court without a jury, of an indictment charging the defendant with obtaining money by means of false nretenses, although certain in- ■ competent evidence was admitted, there being sufficient competent and undisputed evidence to sustain his conviction, i,
    [Opinion filed July 13, 1887.]
    In error to the Criminal Court of Cook County; the Hon. Hurray F. Tuley, Judge, presiding.
    Messrs. Forrest & May, for plaintiff in error.
    Mr. Julius Grinnell, State’s Attorney, for defendant in error.
   Per Curiam.

Henry Jackson, the plaintiff in error, was tried at the February term, 1886, of the Criminal Court, upon an -indictment in due form, charging him with having obtained from one Hines the sum of $110 by means of false and fraudulent pretenses made in the sale by the former to the latter of a worthless horse, and he was sentenced to six months imprisonment and to pay a fine of one dollar, upon which he brings error to this court.

Much evidence was given on the part of the prosecution and none by the defendant below, so that there was no conflict of testimony.

We think there was sufficient competent evidence to prove the defendant guilty of the offense charged in the indictment, beyond all r.asonable doubt, and we do not find any basis for any of the exceptions taken on the trial except such as were made to the admission of some portions of the testimony of Morgan, a witness for the prosecution, which may be obnoxious to the objection of being hearsay as to one part of it, and to the objection of giving parol evidence of the contents of a certain advertisement said to have been published in a newspaper, without sufficiently accounting for the non-production of the paper itself or sufficiently connecting Jackson therewith as to another part.

There was such evidence which the court admitted against the defendant’s objection, and refused to strike out and exclude on his motion which was not competent and which was material. But there was no jury. The case not being one of felony, it was, by agreement, tried by the court without a jury. The objectionable testimony was cumulative, and from our consideration of the strictly competent evidence, we think, there being none in conflict with it, there was sufficient of such competent evidence to establish the defendant’s guilt within the rule of certainty required in criminal cases. If so, then how could he have been prejudiced by the inadvertence of the presiding judge who excluded much testimony of a similar character, though failing to exclude all of it?

All of the points of law, made upon the effect of the written contract for the sale of the horse or Jackson’s warranty, are disposed of adversely to him in Jackson v. People, 18 Ill. App. 508. We think the conviction should be affirmed.

Judgment affirmed.


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    Peter Ragor v. John A. Lomax and George F. Harris.

      Jurisdiction — Freehold—Bill to Redeem from Tax Title — Acquisition of Tax Title by Mortgagee — Notice—Rights of Person in Possession.

    1. This court has jurisdiction of a bill to redeem from a tax title on the ground that it is held by the defendant merely as security, the freehold not being involved.
    2. The mortgagee, whether in or but of possession, can not, by the acquisition of a tax title, bar the right of the mortgagor to redeem. Such title when so acquired at once and by operation of law attaches to the security and becomes liable to redemption on equitable terms.
    3. The purchaser of real estate, or any interest therein, is chargeable with notice of the rights of any person in possession.
    4. In the matter of a legal title being affected by equities, a tax title, or a title originating in a tax sale, stands the same as any other.
    [Opinion filed July 13, 1887.]
    Appeal from the Superior Court of Cook County; the Hon. Hemet M. Shepabd, Judge, presiding;
    Statement by Moran, J. Appellant and one John Ragor, being the owners of certain real estate situate in the Lafraniboise Reserve, on December 27, 1873, conveyed the same by trust deed to Elias Greenbaum to secure appellant’s note for 811,000, payable to his own order three years from date, indorsed by him in blank and delivered to said Greenbaum.
    In 1875 John Ragor conveyed his interest in the land to appellant, and by regular transfer one Charles He per became the legal holder of the note. The trust deed of Greenbaum, among other things, contained a covenant that the grantors would pay all taxes and assessments to be levied on the land, and in case of neglect or refusal of the grantors to pay such taxes, then it was provided that the trustee or “ the holder of said note pay such taxes or assessments. And all moneys thus paid, with interest thereon, shall become so much additional indebtedness secured by this deed of trust and to be paid out of the proceeds of sale of the lands and premises ” therein conveyed, if not otherwise paid by said party of the first part. In September, 1876, the land conveyed, except five acres thereof, was sold for taxes of prior years to one Nichols, who took a tax deed of the land so sold on March 22, 1879. On August 16, 1879, said Charles Heper, the owner of said note, for the purpose of protecting his security upon the premises under the deed of trust, purchased from Nichols and took a deed from him for all the interest said Nichols acquired by said tax deed. Heper held said note and the said tax title until June 10, 1882, when lie sold the note to John A. Lomax and also transferred to him by deed the tax title. Lomax paid the principal due on the note, which at that date was §6,000, and interest due thereon, some §880, the amount Heper had paid for the tax title, §100, and interest on said sum from date of purchase, §111.66, the taxes that had been paid by Heper for the years 1880 and 1881, and interest thereon, and some costs attending release, etc., in all §7,521.70.
    On or about the 23d day of June, 1882, appellant, by his attorney, offered to Lomax the amount due on the note, principal and interest, and the other amounts which had been paid for taxes, etc., and requested Lomax to deliver up the note, and execute a quit-claim deed to appellant of the property covered by the tax title. Lomax refused to execute any deed for the land unless the amount of a judgment which he held against Peter Ragor was paid to him, and appellant declined to pay said judgment.
    On June 21th, the next day after said offer, Lomax made a deed for the land covered by said tax title to George F. Harris, for the consideration, as testified by said Harris and Lomax, of §1,250 cash. Harris certified that he did not know that Lomax was the holder of note secured by trust deed upon the property. Lomax told him nothing but that he had a tax title of the property, which he would sell, and Harris bought it without any examination of the title, as he knew what tax titles were. He went to look at the property, and saw there was a house on it, but made no inquiries. About June 24, 1882, Lomax transferred the note to one William Kolze, taking Kolze’s note, payable in six months, in payment therefor, and on July 20, 1882, said Kolze caused a trustee’s notice of sale of the land to pay said note, to be published in accordance with the provisions of'the trust deed. Before the day of sale . Bagor paid the note and interest to Kolze, and Kolze with the money paid his note to Lomax. The bill herein was filed in April, 1884, to redeem from the tax title held by Harris, offering to pay to Harris or to Lomax, whoever should be found entitled thereto, the amount paid by Lomax for the tax title, with interest thereon, alleging that Lomax took said tax title as part of his security when he purchased the note from Heper, and knew that Heper so held it, and that Harris took it from Lomax with notice that it was held as security by him, and alleging that at the time of the purchase by Lomax and by Harris of said tax title appellant was, by his tenant, in the open and notorious possession of the land covered by said deed, charging that the transfer from Lomax to Harris was in bad faith, and for the purpose of defrauding appellant and offering to do equity. Lomax and Harris answered, claiming that Lomax was the owner of the land under the deed from Heper, and that he sold and deeded it to Harris in good faith, who took it without knowledge that there was any trust deed against the property in the possession of Lomax, and Harris claims to be the owner of the property under said tax title, and denies that same can be redeemed or that complainant has any rights therein.
    Hpon the hearing the facts appeared as above stated, and the court, declining to compel the redemption from the tax title held by Harris, dismissed the bill for want of equity, and the decree is brought to this court by appeal and error assigned.

      Messrs. B. W. Ellis and Geo. W. Smith, for appellant.
    Messrs. P. T. MoElherne, E. S. Cummings and Egbert Hervey, for appellees.
   Moran, J.

A motion to dismiss this appeal was made and argued on the ground that the question of freehold was involved in the ease. The freehold, as we understand, is not in dispute in this case. The validity of the tax title is not assailed. The claim is that the tax title is held under such circumstances, not as make it invalid, but as render it subject to be redeemed by the appellant as being in fact a mortgage instead of an absolute title. In essence the attempt is to declare a title apparently absolute, to have been held as security merely, and therefore to be subject to redemption. Hollingsworth v. Koon, 113 Ill. 443; Gage v. Starkweather, 103 Ill. 559.

This court has jurisdiction, and we must therefore consider and determine the questions arising on the record.

It has been for a long time well settled that a mortgagee in possession can not acquire a tax title and set the same up against the right of the mortgagor to redeem. Brown v. Simons, 44 N. H. 475.

And payment of taxes by such mortgagee after condition broken, is not such a payment as is required to constitute a bar under the Statute of Limitations of seven years’ possession and payment of taxes. ' Chickering v. Failes, 26 Ill. 507, 519.

But whether a mortgagee out of possession may acquire a title at tax sale, whereby the mortgagor will be barred of his equity of redemption, is a question about which there is a conflict of authority. The earlier cases seem to hold that there is no such relation of trust between the mortgagee not in possession and the mortgagor, as will preclude the mortgagee from purchasing the outstanding title and setting the same up against the mortgagor to bar his right to redeem. Jones on Mortgages, Sec. 713.

An examination of the later authorities, however, leads to the conclusion that the clear tendency of decision' is toward holding that, so far at least as relates to tax titles, a mortgagee, whether in or out of possession, will not be permitted to acquire and hold such title against the mortgagor. This seems to us to be the true doctrine and to have a solid basis • of foundation in the relations of the parties. It may, it is true, in all cases be the duty of the mortgagor, as between himself arid the mortgagee, to pay the taxes upon the land, and to keep the same free from liens which will affect the security of the mortgagee. But while it may not be the duty of the mortgagee to pay the taxes it is clearly his right to do so, for he has a manifest interest in the protection of his mortgage title. In the land both the mortgagor and the mortgagee have an interest. It is a fund, the protection of which is for the benefit of both, but the lien of the State for taxes is superior to the right of each, and if one or the other does not discharge it, the land will be sold and the interest will be extinguished. The mortgagee has an interest in discharging the tax lien and a right to discharge it, and the sum that he pays to discharge it goes to increase the amount of his incumbrance, even if not so agreed in the mortgage, for it is the duty of the mortgagor to protect the security he has given. But in this case by the terms of the security the taxes paid by the mortgagee are to be treated as an addition to the indebtedness and to bear interest at ten per cent. The mortgagee then having the right to pay, though not bound to do so, and the means of compelling repayment, if he does pay, is it not just to say that he shall be held to have paid the tax or purchased the tax title for the purpose, not of cutting off the right of the mortgagor, but of securing himself — that his act shall inure to the protection and not to the destruction of the regular title? Judge Cooley, in his work on Taxation, 347, says: It can not be said in such case that either mortgagor or mortgagee is under no obligations to the government to pay the tax. On the contrary, the tax being one that purposely is made to override the lien of the one as well as the title of the other, it might well, as it seems to us, be held that neither mortgagor nor mortgagee was at liberty to neglect the payment, as one step in bettering his condition at the expense of the other, but that the presumption of law should be that the party purchasing did so for the protection of his own interest merely.” In Maxfield v. Willey, 46 Mich. 255, in the opinion of the court written by the learned Judge whose words are above quoted, it was said: “ When the mortgagee, instead of making payment of the taxes, makes a purchase of the land at tax sale, either in his name or in the name of another person who has his money for the purpose, we have no doubt of the right of the mortgagor to have the purchase treated as a payment and to compel the cancelment of the certificate or deed on refunding the amount paid with interest. * * * Neither party to a mortgage can be suffered, against the will of the other, to buy at a tax sale and thereby cut off the other’s interest.”

In Woodbury v. Swan, 59 N. H. 22, we find the principle under discussion thus admirably stated: “ Mortgagor and mortgagee have a unity of legal interest in the protection of their title against a sale for non-payment of taxes, and against outstanding tax titles, and it is not equitable that either of them should act adversely to the other in the acquisition and use of such titles. Therefore, the mortgage contract comprises an implied agreement that while either party may buy a tax title for the preservation of his right in the mortgaged property, neither of them will buy a tax title for the extinguishment of the title, in the maintenance of which they, as well as partners and tenants in common, are in law jointly concerned.”

The doctrine stated in the cases above cited finds general support in the following cases, and will be found applied under varying conditions of fact. Martin v. Swofford, 59 Miss. 328; McLaughlin v. Grier, 48 Miss. 175; Fair v. Brown, 40 Iowa, 210; Middletown Bank v. Bacharach, 46 Conn. 513; Fish v. Brunnette, 30 Wis. 102.

Though the question now being considered can not be said to have been directly decided by our Supreme Court, yet from the language used by the court in cases involving the principle, the conclusion is justified that the court takes the view of the relation of mortgagor and mortgagee announced by the authorities above cited.

In Moore v. Titman, 44 Ill. 367, the mortgagee had taken a title under a judgment against a mortgagor, which was a prior lien to the mortgagee, and set it up to bar the interest of the mortgagor. The court on a review of the evidence found and held that the outstanding title was in fact purchased by the mortgagee under an agreement with the mortgagor that it should be so purchased, and that it should be subject to redemption, and that but for the agreement the mortgagor might have made other arrangements for its purchase, and therefore a court of equity would enforce the agreement.

From what is said in the opinion, however, there is little doubt that the court would have granted the relief if there had been no agreement between the parties with reference to it. The remark of Lord ¡Nottingham, that in obtaining the' renewal of a lease, “ the mortgagee but grafts upon liis stock, and it shall be for the mortgagor’s benefit,” is quoted with approval, and it is said by the court: “There are many acts which third parties might perform, and thus acquire interest in the' estate of the mortgaged property, the performance of which by either party to the deed would give him no new absolute right as against the other." Their relations to éach other, in reference to the property, is such that in many things their acts are held to be performed for the benefit of the estate and to preserve the security.” It is also said in the same opinion that, “like a trustee, a mortgagee can not affect the right of the mortgagor by purchasing the property at a sale for delinquent-taxes.” Though this was said where the point was not before the court, yet .we deem it' authoritative, as the doctrine announced was applied in a subsequent case, Pratt v. Pratt, 96 Ill. 194, where the contention was not that the tax title could not be set up, but that the tax certificates purchased by the mortgagee could not be charged up against the mortgagors. The court said: “It was as much the duty of Pratt to pay the taxes to protect his lien as for Miller and wife [who as to Pratt stood in the relation of mortgagees] to preserve theirs, and hence when paid by the Millers, that lien became a lien on the land,- of the same character as that previously held by them” See also, Moore v. Wood, 100 Ill. 451, where the same doctrine finds recognition.

We conclude then that when Heper purchased the outstanding tax title from Hichols, said title at once and by operation of law attached itself to'the security and became liable to redemption on equitable terms. As a matter of fact such was the intention with which Heper bought it. He had no idea of acquiring a title adverse to the trust deed or mortgage title held for him by the trustee Gfreenbaum, bat says that he bought only for the better protection of his interest under that instrument, and immediately charged up as additional indebtedness against the mortgagor the amount paid by him for the tax-title interest. Thus the actual intention of the mortgagee accords with the intention which the law would conclusively impute to his act, and the intent as well as the legal effect of the purchase was to create for the mortgagor a right of redemption from the tax title, and any person thereafter taking said title from the mortgagee, would take it charged with all the equities existing in favor of the mortgagor. We have little doubt from the evidence that Lomax, when he purchased the note and tax title from Heper, well understood that Heper held the tax title as security, but whether he knew it in fact or not, he was charged by the law with such knowledge. Besides, when he purchased the note he became the. mortgagee, and he no more than Heper could set up. a tax title purchased with the note, or purchased subsequently while he held the note as adverse to the title of the mortgagor. Hor could he relieve the tax title which he held as mortgagee from the equities attaching to it in favor of the mortgagor, or authorize the hostile assertion of it as adverse to the mortgagor’s title by selling the tax title to another, and concealing from such other the fact that he held a mortgage against the land. The mortgagor was in possession of the land by his tenant and such possession was notice of his rights, both legal and equitable, and whoever took a title to said land, whatever the origin of the title, took it subject to all the equities which existed against it and in favor of the party in possession, and as to which inquiry the party in possession would have brought information. Webber v. Curtiss, 104 Ill. 309; Haworth v. Taylor, 108 Ill. 275.

Harris, before he purchased from Lomax, saw the land and saw that there was a dwelling house upon it. He had actual notice of the possession, and where there is actual notice of a fact, sufficient to put one on inquiry of leading to the truth, it will be regarded as good notice of the ultimate fact.

In the matter of a legal title being affected by equities, a tax title, or a title originating in a tax sa'e, stands the same as any other. Such a title may be the subject of a resulting trust, dr of any other equity. The origin of a title is not the determining consideration. The equity arises from the circumstances under which the title is taken or held, and equities will attach at any point of time subsequent to the inception of the title, when the title is held under circumstances which give rise to such equities, and all subsequent grantees take subject to such equities while they are subsisting. It follows that the title was subject to redemption by Eagor in the hands of Harris and is so subject in the hands of his heirs, and therefore that the Superior Court erred in refusing to grant the prayer of the bill and dismissing it for want of equity. The case will therefore be reversed and remanded to the Superior Court, with directions to order that the legal title in said land shall be properly conveyed to appellant upon the payment by him to or for the use of the heirs of said Harris, of the amount which was paid by said He per for the said tax tife with’interest thereon according to the terms of the trust deed from Eagor to Greenbaum. The claim of the heirs of Harris against Lomax, for the excess paid for the tax title, will be appropriate matter for a cross-bill between them, if that shall prove necessary.

Reversed <md remanded.


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    Peter Hansen Jasper et al. v. Leopold Schlesinger and David Mayer.

      Practice — Confession of Judgment — Time and, Place of Indorsement of Order by Judge — Entry of Judgment — Issue of Execution.

    1. Upon a writ of error to review the action of the court below in refusing to grant a motion to change the record of a judgment by confession, to show that the Judge’s indorsement to enter judgment was made outside the court room and before the opening of the court, and upon certain other motions, it is held: Thit in the absence of evidence to show where it .was made it must be presumed that the order was made at the place where, by law, the court was authorized to be held; that there was no error in the refusal of the court to alter or amend the record in the manner suggested; that motions to vacate the judgment and to quash the execution, on the ground that-at the time it was issued there was no record entry of the judgment, were properly overruled; and that the refusal of the court to expunge from the cognovit an unauthorized agreement, providing that no appeal or writ of error should be prosecuted nor bill in equity filed, is not such error as to justify a reversal.
    2. A term of court, though running through several weeks or months, is to be regarded as one day, the court being open until the expiration of the term or adjournment sine die.

    3. The words “ enter judgment,” written by the Judge upon the papers in a confession proceeding that have been submitted to the court for . inspection and judgment, indicate that the court has considered the matter and intends by those words to render a judgment for the amount confessed • in the cognovit, and that such minute or memorandum fully authorizes the spreading on the record by the clerk of the full and formal judgment order.

      4. A reviewing court may not interpret the court’s minutes or memorandum or expand them into formal and complete orders, but when the ' court itself does so during the term, and the record shows them duly entered, the recital thereof is conclusive.
    [Opinion filed July 13, 1887.]
    In error to the Superior Court of Cook- County; the Hon. Elliott Anthony, Judge, presiding.
    Messrs. Grant & Brady and Frank F. Lbffingwell, for plaintiffs in error.

      Messrs. Kraus, Mater & Brackett, for defendants in error.
   Moran, J.

On the 17th day of June, 1886, a judgment hy confession was entered in the Superior Court of Cook County by defendants in error against the plaintiffs in error upon a certain note and warrant of attorney substantially in the usual form. On June 26th thereafter, a motion was made by the plaintiffs in error in the said court to correct the record of the said judgment so as to show that the branch of the said court; presided over by the Hon. Elliott Anthony, who directed the entry of the judgment, did not open on the 17th day of June, 1886, and said judge did not take his seat on the bench till 10 o’clock in the forenoon of said day, and that the direction to enter the judgment was indorsed by said Judge upon the declaration filed in said case, to which was attached the cognovit note and warrant of attorney, and that such indorsement was made before the hour of 10 o’clock in the forenoon of said 17th day of June and outside of the court room which was at that date occupied and used by said Judge. Affidavits were filed in support of said motion, from which it appears that the decHration, cognovit, etc., with the order to enter judgment thereon, was handed to a recording clerk about 10 o’clock and that the judgment order was written by him in the judgment record book by fifteen minutes past ten, and that prior to the recording of judgment an execution had he'en issued and delivered to the plaintiffs’ attorneys in said case. That on said 17 th day of J une the branch of said court presided over by Judge Anthony, “ was opened and said Judge ascended the bench on that morning at 10 o’clock and not before.” There was evidence tending to show that the declaration, cognovit and other papers, with the indorsement enter judgment, E. Anthony, Judge, etc.,” were filed in the office of the clerk of the Superior Court about 9:30 o’clock on the morning of said 17th day of June. The court refused to change the record as-required bye the motion and such refusal of the court is assigned for error.

The record of the judgment as it comes here, shows that the June term of the court was duly opened on the first Monday, being the 7th day of June, A. D. 1886; that on the 17th day of June, 1886, the declaration note, warrant of attorney and cognovit was filed in the clerk’s office of the Superior Court with the words, “'enter judgment, E. Anthony, Judge, etc.,” indorsed thereon, and then follows the judgment by the court, “ on consideration that the plaintiffs do have and recover, etc,” in all respects a formal judgment order. It is to be observed that there is no order of adjournment. at all in the record; that as appears, the court being opened on June 7th, continued open without any adjournment whatever down to and including the day on which the judgment was entered. Even if the ordinary recess or adjournment of the court over night could be held a suspension of the functions of the court until there should be a proclamation of the opening of the court the next morning, there is nothing in the record to show that there was any such temporary adjournment.

There was no offer by plaintiffs in error in their motion to change the record, to show that the court had adjourned at any time prior to the morning of June 17th, and no evidence contained in the affidavits filed in support of such motion, that there had in fact been any such adjournment. The statement that the branch of .said court “was opened and said Judge ascended the bench on that morning at 10 o’clock and not before,” may give rise to an inference that the court had been adjourned, but it is very far from a statement to that effect, and the inference can not be indulged in. particularly in the face of the record itself. The rule of law is that the court is open from the first convening at the commencement of the term as fixed by law till it is closed by the expiration of the term or adjourned sine die, and the term, though running through several weeks, and even months, is to be regarded as one day. Richardson v. Beldam, 18 Ill. App. 527; Union Pacific R. R. Co. v. Hand, 7 Kan. 380; Barnett v. State, 1 Wis. 156.

The decision in Conkling v. Ridgeley, 112 Ill. 36, that the period of definite adjournment for several weeks during the term will, under our statute, be_ vacation for the purpose of authorizing the clerk to enter up confessions of judgment, does not conflict with the general rule which has always obtained at common law.

The statement in the motion, that the indorsement to enter judgment was made outside the court room, which was at that date occupied and used by said Judge, is wholly unsupported by the evidence. There is absolutely no showing whatever as to where the indorsement was made, and the record showing the court open and reciting the formal order of judgment, it must be presumed that the order was made at the place where, by law, the court was authorized to be held.

There was no error, then, in the refusal of the court to alter or amend the record in the manner suggested in the motion of the plaintiff in error. Neither was there error in overruling the motion subsequently made to vacate the judgment on the ground that its entry was not based upon any order or judgment of a Judge of said court, made or found in open court. As we have seen in the discussion of the prior motion, the court was open, and the record shows a proper order of judgment by the court. This record imports verity, and until altered by a proceeding apt and proper for the purpose, it can not be contradicted.

A further motion was made to quash the execution, on the ground that at the time it was issued by the clerk and delivered to the attorneys there was no judgment entered — no record entry of the judgment; i. e., the record of the judgment had not been made up in the record of the court by the clerk.

The papers in the case became a part of the record when filed and the order of the court to enter judgment was a sufficient minute to guide the clerk in writing out a formal order of judgment. It is not the practice of the court in rendering judgment in any case at common law to write out the formal order at length, nor is it the practice for the minute clerk to write out such order in his minutes, but such memorandum is made as clearly indicates what the judgment of the court is.

We have no judgment roll in which all the pleadings and each order is formally and with great particularity written out as was the ancient practice in England. Judgment for the plaintiff for §100,” is a skeleton entry which, if made by the Judge or entered on the minutes of the clerk by the Judge’s order, will sufficiently indicate the formal entry that is to be made in the record of the court. The words, “ enter judgment,” written by the Judge upon the papers in a confession proceeding that have been submitted to the court for inspection and judgment, indicate very clearly, in our opinion, that the court has considered the matter and intends by those words to render a judgment for the amount confessed in the cognovit, and that such minute or memorandum fully authorizes the spreading on the record by the clerk of the full and formal judgment order. We find in the record, as it is brought here, the judgment order rendered on the 17th day of June.

This is not like the case cited by counsel where, when the full record was certified by the clerk, no judgment appeared to have ever been rendered. When the complete record is inspected on error the formal entries are required to be set out in it. In England in practice the proceedings are seldom entered on the judgment roll unless it is absolutely necessary to do so for the purpose of bringing error or for the purpose of evidence. Smith’s Action at Law, 192. A reviewing court may not interpret the court’s minutes or memorandum or expand them into formal and complete orders, but when the court itself does so daring the term and the record shows them duly entered the recital thereof .is conclusive.

In vacation, where a confession of judgment is entered by the clerk, the judgment order as held in Ling v. King, 91 Ill. 571, must be entered before any judgment can be held to be inexistence. The judgment and the record evidence of it is in that case the same thing, but in term time a judgment may be rendered by the court at the beginning of the term and the full record of the order may not be written up till after the expiration of the term. It could not be said that there was no judgment because the judgment order had not been spread out at length upon the judgment record. The judgment is a fact from the moment it is pronounced by the court, and the clerk’s duty is to record suck judgment before the final adjournment of the term “ or as soon thereafter as practicable.” R. S., Chap. Sec. 14.

We see no reason for making a distinction between a judgment rendered by the court in term time on confession and a judgment in a suit where there has been an issue and a contest. When the judgment has been rendered in the one case it will authorize the issuing of an execution as fully as in the other and each will be a lien on the real estate of the person against whom it is obtained “ from the time the same is rendered.”

It is not, however, necessary for us to decide in this case the question as to whether the execution may issue before the judgment is written up in the judgment record. If there was an absolute requirement of the statute that the judgment order should be recorded by the clerk before execution should issue, yet the record being written on the same day but after the execution issued, the irregularity would not avail the defendant on the facts appearing in the record. By the statute in Hew York, “ no judgment shall be deemed valid so as to authorize any proceedings thereon until the record thereof shall have been signed and filed.” In Small v. McChesney, 3 Cow. 19, upon a motion to set aside the execution, it was shown that the execution was issued and levied between 2 and 4 o’clock in the morning, whereas the judgment was not signed till about 11 o’clock of the same morning and the record was not filed till 4 p. m. of the same day. The court said : “ The party who moves has sustained no injury by this proceeding. The whole proceeding is on the same day, which the law will not divide into fractions unless this be necessary for the purpose of guarding against injustice. Here has been none. The objection is merely technical and the technical answer is enough when there has been no injury from the proceeding.”

To the same effect are Clute v. Clute, 4 Den. 241, and 3 Den. 263. There is no pretense here that the judgment was not for' a debt iona fide due, that it was not for the correct amount, or that .the execution was obtained or issued for any unlawful purpose. The motion was based at the very best on a mere technicality and was upon the authority of the cases cited properly overruled.

The plaintiffs in error also moved the court to set aside wholly, or in part, the cognovit filed, for the reason that the attorney who signed the same exceeded the authority conferred by the warrant of attorney. The cognovit agreed that no w.rit of error or appeal should be prosecuted from the judgment entered nor any bill in equity filed to interfere with the operation of the judgment. The warrant of attorney did not authorize such agreement, but only gave power “to waive and release all errors which may intervene in any such proceedings.” This motion the court might well have granted and expunged from the cognovit the unauthorized portion without in, any manner affecting the validity of the judgment. But the refusal of the court to do so is not such error as will reverse.

The unauthorized agreement could not be made effectual against plaintiffs in error unless affirmatively ratified by them. The prosecution of this writ of error evidences the fact that the agreement is futile to deprive them of their rights. That error only which injures is available to cause a reversal.

The judgment of the Superior Court will be affirmed.

Judgment affirmed.