author: Mr. Justice Baker

text:
    Philetus Sawyer et al. v. Ambrose Campbell et al.

      Filed at Ottawa

      October 31, 1889.

    1. Bill to remove cloud upon title—parties claiming under a common source—which shall prevail. If both parties in a bill to quiet title and set aside the assumed title-of the defendant, claim from a common source, and the title of the complainant is subsequent and subordinate to that of the defendant, which is held under a valid sale under trust deeds given to the person under whom the respective claims are derived, the bill will fail.
    2. Evidence—as showing under whom one claims title. A person holding a conveyance of land, accepted a quitclaim deed containing this clause, after the description of the property: “Being the same property described in the deed heretofore made by us to G. W. 0., dated * * * This deed is made to clear away certain objections made to said last named deed, or to the abstract thereof, and is made to confirm the title of said grantee claimed under such deedHeld, the grantee in the later deed admitted, by his acceptance of it, that he claimed title under C. W. 0., and under a deed made by the grantors to 0. W. C., and that such quitclaim deed was procured by the grantee merely in confirmation of such title.
    3. Same—writings given in evidence generally—effect to be given them ■—whether party concluded by their contents. Where a party puts certain instruments in writing in evidence generally, and not specially for a particular and limited purpose, they will be in evidence to prove any fact material to the issues which they may tend to establish. But by giving them in evidence generally, the party will not be estopped from contradicting any statement contained in them.
    4. Deed of tbtjst—bill to foreclose—whether a waiver of right to sell under power in the deed. The doctrine that a mortgagee can not, during the pendency of his bill to foreclose, advertise and sell the mortgaged property under the power contained in his mortgage, has no application to a case where a creditor of the mortgagee, during the pendency of a suit against the latter, takes an assignment of the mortr gage debt, which he is to collect with reasonable diligence, and is to apply the proceeds of the collection on his claim against the mortgagee.
    5. Same—bill to set aside sale—prior suit pending, as tending to prevent competition. A filed a bill against 0 to establish an equitable lien on certain real estate, which the latter had sold and conveyed to D and E, taking their notes for the price, secured by two trust deeds. After C’s death, his heirs and legal representatives, for the purpose of settling the suit, transferred the notes given by D and E, to be collected and applied on A’s debt, which was conceded, and it was agreed that A’s suit should stand until the collection of these notes. A caused a sale to be made on the trust deeds given by D and E, whereby most of his claim was satisfied. It was claimed by H and S, who also claimed title under 0 to the property sold, that the sale under the trust deeds, while A’s bill was still pending, prevented competition. The property was sold for the amount due on the trust deeds, with the costs and expenses, and H and S’s title was subject to such deeds of trust. The sale under the trust deed did not pay the entire demand of A by about $3000: Held, that the failure of A to dismiss his bill before the sale under the trust deeds of D and E, afforded, no ground for setting aside the sales under the trust deeds, nor did the failure to announce on the day of sale that the proceeds of the sales were to be applied on A’s demand.
    6. In such case, the payment of the trust deeds of D and E would have worked the release of the land from A’s lien, and it was the negligence of H and S, or their willful repudiation of the trust deeds as constituting liens upon their title, after they had in terms assumed to pay them, that prevented them from redeeming their own property, and getting the benefit of the arrangement which the heirs of their cove-nantor had made for their protection.
    7. Same—claimant of lien—buying in adverse title. And pending the bill of A to establish his equitable "lien on the land, and before the arrangement by the heirs of 0 for payment to him, there would be no impropriety in his buying in an adverse title, and seeking to avail of it in furtherance of his efforts to enforce his own lien.

      8. Same—sale under trust deed—as to the mode of payment by the purchaser. A sale of land under a trust deed for no greater sum than is due on the debt secured, and the costs and expenses, will not be invalidated by the fact that the holder of the debt takes the notes of the piu'chaser for most of the purchase money secured by his deed of trust. In such case no one is injured by so giving credit to the purchaser.
    9. The fact that a purchaser at a trustee’s sale of a lot gave his notes for $900 in excess of his bid, for a deed to him by a third person having a claim on the property, whereby a cloud on the title is removed, will not render the sale invalid, or afford ground for avoiding the same.
    10. Chaucert—incompetent evidence—presumption that it was not considered. Where there is sufficient competent and proper evidence in a chancery suit to sustain the decree, the admission of improper evidence will not be material, as it will be presumed that the court, on the final hearing, rejected the same, and decided the case only upon the legal testimony.
    11. Same—amendment of bill after hearing and decision announced. After the hearing of a bill filed to remove certain deeds of trustees, made under deeds of trust, as clouds upon title, and the decision of the court was announced, complainants asked leave to file an amendment of their bill, offering to redeem from the trust deeds, which was denied: Held, that the allowance of the amendment at that stage of the case was a matter resting in the sound discretion of the chancellor.
    12. .Same—disclaimer by a defendant—in what way to be disposed of. A defendant in chancery filed a disclaimer of any interest whatever as to the" subject matter of the suit or the result thereof, denying all manner of unlawful combinations, etc. There was also filed a stipulation of the other defendants, releasing him from any and all liability. His answer under oath was waived, and no discovery was sought from him and no relief was asked against him. Upon this, the chancellor dismissed the bill as to him, to which action no objection was made at the time : Held, that while the proper practice would have been to have him stand as a defendant until the hearing, the dismissal as to him was not such error as to require a reversal of the decree.
    Appeal from the Circuit Court of Cook county; the Hon. M. F. Tuley, Judge, presiding.
    Mr. Edward Roby, and Mr. George R. Grant, for the appellants.
    Mr. Henry Decker, and Mr. H. F. Vallette, for the ap-pellees.
   Mr. Justice Baker

delivered the opinion of the Court:

This was a bill filed in July, 1881, in the Cook circuit court, by Philetus Sawyer and George F. Harding, to quiet the title or remove clouds from the title to lot 2, in the subdivision of the east half of the south-west quarter of section 15, town 38, range 14, in Cook county. Possession of the lot, seizin thereof in fee, and freedom of the premises from incumbrances, were alleged in the bill.

Ambrose Campbell, appellee herein, who was one of the defendants to the bill, claimed that he was the owner in fee of the land, under and by virtue of certain sales made in conformity with the powers given in a trust deed executed in 1868 by Frederick A. Weage, to secure the payment to Charles W. Clayton of purchase money due on that part of said lot 2 lying west of the Vincennes road, and a trust deed executed in 1868 by Hiram Canfield, to secure the payment to Charles W. Clayton of purchase money due on that part of said lot lying east of said road, and in a trust deed on the entire lot, made in 1877 by Francis Canfield to Granville S. Ingraham, in trust, to secure the payment of notes for $18,000 and interest, payable to John McNab.

It is manifest, that if both Campbell, appellee, and Sawyer and Harding, the appellants, claim from said Charles W. Clayton as a common source of title, and the title of appellants is subsequent and subordinate to that derived under the trust deeds, and there have been valid sales and conveyances under said trust deeds, then the contention of appellants is not well grounded, and their bill of complaint was properly dismissed by the circuit court.

It appears from the evidence, that the land records of Cook county were destroyed by fire on or about the 9th day of October, 1871, and that fact, no doubt, is the primary and principal cause of the present controversy, and of the difficulty which has been experienced in arriving at a proper and just conclusion in respect thereto. That Campbell derives title from Clayton, is patent from the evidence. The parol testimony of Joel D. Harvey and Frederick A. Weage shows that Clayton executed and delivered to said Weage a deed of conveyance for that part of lot 2 lying west of the center of the Vincennes road, and to Hiram Canfield a conveyance of that part of said lot lying east of the center of said road. It is satisfactorily shown that these original conveyances are not in the possession or control, of appellees, but, on the contrary thereof, it sufficiently appears that they were destroyed by the same fire that burned the public record that was made of them. The record before us contains a trust deed from said Weage to Joel D. Harvey, trustee, dated August 26,1868, and recorded September 3, 1868, in book 475, page 329, in which it is recited that it was given to secure a part of the purchase money of that part of lot 2 lying west of the center of the Vincennes road; and also a trust deed from said Hiram Canfield to said Joel D. Harvey, trustee, dated October 27,1868, and recorded October 31, 1868, in book 490 of deeds, page 112, in which it is recited, it was given to secure a part of the purchase money of that part of lot 2 that lies east of the center of the old Vin-cennes road. It also appears that on December 22, 1876, and after the death of said Charles W. Clayton, his executors and heirs transferred and delivered said two deeds of trust, and the promissory notes secured thereby, duly assigned, to John McNab. The evidence further shows, that on the 28th of May, 1877, said Joel D. Harvey, trustee, sold, under said trust deeds, respectively, said west part and said east part of said lot 2, and conveyed the same, by trustee’s deeds, to Francis Canfield, and that said Francis Canfield, by his trust deed dated June 5, 1877, conveyed the whole of said lot 2, along with other-property, to Granville S. Ingraham, in trust, to secure the payment of certain notes described therein; and that after-wards, on July 27,1881, said lot 2 was sold by said Ingraham, trustee, under said trust deed, and struck off to Campbell, appellee, and conveyed to him by deed from said Ingraham. So the title now held by Campbell is connected with and dependent upon the titles of said Charles W. Clayton.

It appears from the record, that upon the hearing of this cause the decision of this court, “as found in McNab v. Young, 81 Ill. 11 to 15,” was, without objection, considered as read in evidence. In the opinion in that case, as so found, it was, among other things, said: “We place our decision on the following grounds: The title acquired by Parsons at the judicial sale was the legal title. * * * He held the title unchallenged for more than four years, when he sold and conveyed to Clayton. * * * Clayton purchased Heald’s interest, paying him $5000 therefor. Parsons, holding the legal title, sold and conveyed it to Clayton.”

The title of appellants to lot 2 is derived immediately from Alonzo J. Sawyer. The latter, by deed dated April 23,1870, conveyed an undivided one-half interest in the premises to appellant Harding, and by deed made in 1876, conveyed the other undivided one-half interest to appellant Philetus Sawyer. The evidence shows that one Benjamin F. Haddock, by his conveyance of April 23, 1870, deeded the lot to said Alonzo J. Sawyer, but that the latter purchased the same for the joint interest of himself and said Harding, and that they went into possession under such conveyance. It further appears from the evidence, that Horatio N. Heald, who, as was decided in McNab v. Young, as reported in 81 Ill. supra, sold his interest in that and other land to Clayton for $5000, quitclaimed, along with his wife, the premises in controversy, on December 20, 1871, to said Alonzo J. Sawyer and Harding, and the quitclaim deed then executed, following the description of the property, contained this language: “Being the same property described in the deed heretofore made by us to Charles W. Clayton, dated October 9,1867, filed April 2, 1870, and recorded in book 573, page 326, of the records of deeds of Cook county, Illinois. This deed is made to clear away certain objections made to said last named deed, or to the abstract thereof, and is made to confirm the title of said grantees claimed under said deed.”

The fact that Sawyer and Harding accepted this deed from Heald, and had it recorded, is an admission they claimed title under Clayton, and under the deed made by Heald to Clayton, and that this quitclaim deed was procured by them merely in confirmation of such title. The date of the quitclaim deed, and the recitals therein, afford evidence to show that their prior deed from Haddock was in the line of conveyance from and through Clayton. The parol evidence of appellants themselves is, that they “claim to have originally .derived title from Clayton,” and that they “entered into possession under the deeds from Haddock and from Heald.” They introduce in evidence no deeds other than the deeds from Haddock and from Heald. Mr. Harding, in his testimony, said: “I have no recollection of any other title deeds save those produced here. So far as I know, I have produced all that ever were in my possession.”

The deed from Haddock to Alonzo J. Sawyer recites: “This deed is made subject to certain incumbrances, which, with interest up to the 1st day of April, 1870, amount to ten thorn sand four hundred and thirty-four and y2^ (10,434.22) dollars, which the party of the second part assumes and agrees to pay. ” The contention of Campbell is, that this provision in the deed has reference to the incumbrances included in the Weage and Hi ram Canfield trust deeds. The contention of appellants is, that it does not so refer, and for the reason that the amounts due upon those two mortgages, calculated to the 1st day of April, 1870, amounted to $10,446.39, instead of $10,434.22. It is also suggested it may refer, at least in part, to the note for $4390.28 given'by Sawyer to Haddock for a portion of the purchase money of the premises.

In our opinion, neither of these claims of appellants is well grounded. The $4390.28 was not an incumbrance on the lot on April 1, 1870, and did not become such until April 23, 1870, and then its payment was secured by a trust deed of that date. It is very improbable that if this latter sum had been secured by the provision in the deed from Haddock, the parties would, on the very same day, have gone to the trouble and expense of further securing it, hy giving .and taking a double security on the identical property. It would be unreasonable to impute to them so vain and useless a performance. Besides this, the provision in the deed plainly contemplates incumbrances upon which interest had accrued prior to April 1, 1870, and it is absurd to suggest that interest had at that date accrued upon an indebtedness which was not contracted until more than three weeks thereafter. Moreover, the idea of the identity of this $4390.28 with any part of the $10,434.22 is completely rebutted by the terms of the written agreement, made on said 23d day of April, by and between Alonzo J. Sawyer and Harding. That agreement speaks both of the fact that the deed from Haddock “is made subject to certain in-cumbrances, which, with interest up to the 1st day of April, 1870, amount to $10,434.22, which the party of the ‘second part’ assumes and agrees to pay,” and also of the further fact that the said- Sawyer had given to Haddock his note for $4390.28, the remainder of the purchase money, with interest at ten per cent per annum, secured by a mortgage of said lot.

The clause in the Haddock deed evidently refers to recognized and admitted incumbrances upon the lot which were in existence on and prior to April 1, 1870, and upon which interest had accrued to that date. The only such incumbrances shown or suggested by the testimony are the trust deeds to Harvey, made by Weage and Hiram Canfield, respectively. It may be true that an accurate computation of the amounts due upon said trust deeds, down to the date mentioned, will show them to then have aggregated $10,446.39 in place of $10,-434.22, as stated in Haddock’s deed. If so, the discrepancy is small,— only $12.17,— and might easily have occurred through an error or inexactness in computation, or it may be that one or the other of the mortgages, as Haddock, who is now dead, then understood, was entitled to a small credit. At all events, the slight variance that exists, affords no just and reasonable ground for the conclusion that other and different incumbrances were intended, especially as none such are shown to have been in existence.,

The logical and rational conclusion from the evidence is, that the title of appellants goes back, through Haddock,1 to Charles W. Clayton, as the source of title, and was subject and subordinate to the payment to Clayton of the unpaid purchase money due on the lot, which was secured by the two trust deeds to Harvey.

There is much other evidence which strongly corroborates this view of the case. At the hearing, the appellants put in evidence a certain stipulation made in December, 1876, by parties to a cause in chancery then pending in the Superior Court of Cook county, wherein John McNab was complainant and Virginia B. Clayton et al. were defendants. A portion of said stipulation was as follows:

“Whereas," the complainant, John McNab, has an acknowledged claim against the estate of Charles W. Clayton, deceased, growing out of transactions between Horatio N. Heald and the complainant, and between the complainant, Horatio N. Heald, John R. Parsons and Charles W. Clayton, which the complainant claims constitutes a lien or charge in equity upon the lands described in his bill of complaint filed in said above entitled cause; and whereas, it is contended on behalf of the defendants above named, claiming as heirs, devisees and legal representatives of the said Charles W. Clayton, deceased, that all the claims of said complainant against the said lands, and all the interest he had therein on January 2, 1868, were contracted to be sold and transferred to the said Charles W. Clayton, under an agreement in writing made and delivered to said Clayton, bearing date January 2, 1868, and referred to in the said bill, by the said complainant, as a? proposition merely, which was never accepted, but if accepted, was afterwards abandoned; and whereas, the parties in interest are desirous of putting an end to this litigation and settling said mortgage claim under said memorandum agreement of January 2,1868 :

“Therefore, the representatives of the said estate of Charles W. Clayton, and also Mary A. Clayton, deceased, and the heirs-at-law interested in both of said estates, have deposited with E. S. Smith, as the attorney and agent of John McNab, the said complainant, and for his use, as collateral security, three certain securities, amounting, in the aggregate, to about $22,-562, as per statements hereto annexed as part of this stipulation,—two of said securities executed by Frederick A. Weage, and the other security by Hiram Canfield. It is understood that the amount of the said mortgage claim of said McNab amounted to, as computed up to January 1,1877, $25,460, without including any taxes paid on the land.

“It is hereby stipulated that said securities are so deposited, as collateral security to enable said complainant to realize the amount of money due thereon as so much payment upon his said claim against said parties in interest depositing said securities, and that reasonable diligence shall be used by said complainant to make the money thereon, and for the purposes of realizing thereon, the said complainant shall have the same rights and authority in the said securities, the same as though he had taken them as absolute payment, with all the rights in said securities expressed. * * *

“It is further stipulated, that for the present, and until the said securities are paid or returned, the said suit shall remain in statu quo, without prejudice to the rights of either of the parties, and when said claim of said John McNab shall have been fully paid, then he will execute and deliver to the heirs of said estates full release and satisfaction, under his hand and seal, of all his said claim, under his said security, against said Heald, and all of his said claim under said memorandum dated January 2, 1868, and quitclaim all rights to the lands under the said mortgage or trust deed so given by said Heald, except taxes paid after the year’s tax for 1868.”

In the statement annexed to this stipulation is found a full and accurate description of the Weage and Hiram Canfield notes, and the two trust deeds to Harvey securing the same.

The release provided for in the stipulation was also given in evidence. It recites:

“Whereas, Horatio N. Heald and his wife did execute and deliver their trust deed to Henry Moore, dated August 17,1857, for $15,000, by which conveyance, as a security, certain lots and tracts of land were conveyed, described as follows: (Here follows description of twenty-four lots, embraced in six different blocks, in the subdivision named; also lots 2, 5 and 9, in E. i, S. W. J, Sec. 15, etc., lot 2 being the premises in question ;) and whereas, said trust deed was made to secure to John McNab said sum of $15,000, with interest, for which said McNab filed a bill in the United States Circuit Court for the N. Dist. of 111., against said Heald, Moore et al., to foreclose said security, on February 27,1868, and such proceedings were had that a decree of foreclosure and sale was entered by the court, and said tracts of land were sold by one of the masters of the court, and were deeded by said master to John E. Parsons ; and whereas, said Parsons conveyed said lots to Charles W. Clayton, now deceased, after which said McNab filed his bill in the Superior Court of Cook county, in chancery, July 15,1869, against Hezekiah Young, executor of said Charles W. Clayton et al., to set aside the conveyance from said Parsons to said Clayton, and such proceedings were had that upon the final determination of said cause in the Supreme Court of Illinois said conveyance by. the master to sai'd Clayton was upheld, and in the decision of the case by the court it was held that said McNab had an equity existing in his said security. Thereupon said McNab filed his bill of complaint in the Superior Court of Cook county, October 2, 1876, in chancery, to foreclose his said mortgage lien, against said Horatio N. Heald, Victoria B. Clayton, Lucy C. Dana, heirs-at-law of Charles W. Clayton, Frederick A. Weage, Hiram Canfield et al., and such proceedings were had in said cause, that afterwards the said heirs of said Charles W. and Mary A. Clayton, who claimed an interest in said lands, transferred to the said John McNab certain securities held by them upon certain lots of said several tracts of land for the purpose of satisfying said mortgage debt so in suit of foreclosure; and whereas, afterwards, upon a sale of the land upon said transferred securities, the said mortgage debt was satisfied, except as to certain taxes paid by said John McNab upon the lots and tracts of land during the pendency of the' suit so instituted to set aside the conveyance from said Parsons to Clayton, which taxes said McNab claims in his said foreclosure suit, still pending in the said Superior Court, in chancery: * * *

“Now, therefore, this indenture witnesseth, that the said John McNab, in consideration of the premises, do hereby acknowledge full satisfaction of said trust deed security debt set out and stated in his said foreclosure bill, for the said principal and interest, and do hereby forever discharge the same from said lots and tracts of land, reserving and excepting so far as to preserve a lien upon said lots for the taxes paid thereon after the year 1868.”

These instruments were put in evidence generally, and not specially offered for a particular and limited purpose. They are in evidence to prove any fact material to the issues which they may tend to establish. We do not hold, however, that because appellants gave them in evidence, they were thereby estopped from contradicting any statements contained in them that they might have seen fit to deny. But inasmuch as such statements have not been contradicted, they are evidence tending to establish that Charles W. Clayton was a common source of title. Moreover, the theory that Clayton was such common source, and that the title of appellants was subsequent and subordinate to the trust deeds made to secure to him his purchase money for the lot, is consistent with and is corroborated by all the other evidence in the case, and is consistent with and corroborated by the conduct, during many years, of all the parties to this litigation, and that of the parties to numerous former suits, the records of which are here in evidence.

From the proper evidence in the case, we feel fully assured that in respect to the points we have thus far considered the truth of the matter is with appellees.

The notes of Weage and of Hiram Canfield, secured by their respective trust deeds, all of which had been transferred to McNab, not having been paid, Harvey, the trustee, sold the property at public vendue on May 28,1877, and the same was bid off by Francis Canfield. 'These sales, and the deeds which were thereupon executed by the trustee, compose, in part, the clouds which appellants seek to remove from their title. At the sales, the land east of the Vincennes road was struck off at $7300, and the land west of that road at $10,300, making $17,600 in all, and being the amounts of the two incum-brances, with costs and expenses.

Some technical objections are urged against the regularity of these sales, which we need not specify, since we find in them no substantial of sufficient grounds to impeach the validity of the proceedings. The notices of sale were published in a newspaper in Chicago, as was required by the deeds of trust, and the sales seem to have been made in conformity with the provisions of those instruments.

It is claimed that the premises were sold at a sacrifice, caused by the circumstances surrounding the sales, due to the conduct and actions of McNab, the cestui que trust. In McNab v. Young, supra, this court said: “That appellant has equities in this matter in controversy we do not question, and, if properly presented, doubtless they will be decreed to him.” That he did, in fact, have an equitable and valid claim against the estate of Charles W. Clayton, deceased, for a considerable sum of money, which was enforceable on all or a part of the lands involved in the chancery suit then pending in the Superior Court, including the lot here in controversy, is established by the evidence, and by the fact the legal representatives and heirs of Clayton admitted the justice of such claim, and transferred to McNab, in settlement thereof, the notes and trust deeds of Weage and of Hiram Canfield, and subsequently paid him the further sum of $3000. McNab occupied in the chancery suit a position which was adverse to the legal representatives and heirs of Clayton, and to the purchasers from him, including appellants. He had been vainly attempting, for many years, to enforce his equitable lien upon the property; and in the facts that he made the stipulation he did with the representatives of Clayton, and took' in part payment of his claim incumbrances which they held on a part of the property, which had been given to Clayton by purchasers from him, and, in accordance with his agreement in said stipulation, used reasonable diligence to make the money thereon, we find nothing so unjust or reprehensible as to call for the interposition of a court of equity. Complaint is made that he did not dismiss his chancery suit, but that, in conformity with the terms of the stipulation, said suit remained in statu quo until the securities transferred were paid or returned, without prejudice to the rights of either of the parties. The notes and mortgages covered only a part of his admitted claim, and it would have been unreasonable to require of him to dismiss his chancery suit before the remaining $3000, and the large claims in addition that he held for taxes advanced on the lands, were either paid or secured. It does not appear that it was with any fraudulent intent that the stipulation was not filed in the chancery cause, and there was no occasion for filing it until the conditions of its taking effect were fulfilled. It was for the interest of both Clayton’s representatives and of McNab that the property should bring a good price, if sold. Both parties understood that the makers of the notes and trust deeds were insolvent, and that payment of the same was not intended. McNab had no interest in preventing a redemption of the lot from the trust deeds, by appellants. In fact, it clearly appears that his sole object was to secure and get, at as early a day as practicable, payment of his long delayed moneys.

The circumstance that the proceeds of the sales would go in discharge of McNab’s liens was not announced at the sales, but one of the appellants was present and forbid the sales, and he made no inquiry of or statement to either the trustee or McNab, or the latter’s solicitor in the chancery suit, all of whom were present, which would have elicited that information. Appellants had expressly agreed to pay these debts, and it was negligence in them if they did not ascertain, either as above indicated or from their grantors and co-defendants, that the proceeds were to be so applied, if that fact was not generally known. The trustee’s deeds conveying the lot to Francis Canfield were recorded June 7, 1877, and the formal release executed by McNab, reciting the whole transaction, was recorded June 27,1877. Appellants remained inactive for more than four years thereafter. By their conduct throughout, and by the bill which they finally filed, they seem to have' intrenched themselves behind a shadowy possession, and to have thought that those claiming under the trust deeds could not prove their title, because of the loss and destruction of records and papers.

We think the case of Coffman v. Secville, 86 Ill. 300, should not here control, even if we assume that McNab, by taking the trust deeds, stood in the shoes of Clayton. Under the stipulation made, payment by appellants, of the mortgages, would have worked the release of the lots from McNab’s lien, and it was their own negligence, or their willful repudiation of the trust deeds as constituting liens upon their title, after they had, in terms, assumed to pay them, that prevented their redeeming their property and getting the benefit of the arrangement which the heirs of their covenantor had made for their protection.

The evidence is insufficient to show that McNab combined with Heacock to have the latter buy up and file the bill to enforce the claim of title made by the heirs of John Beach, for the purpose of clouding the Clayton title, and thereby discouraging appellants from paying off the Weage and Hiram Canfield mortgages. That suit was pending long prior to the time McNab got these mortgages, and could not have had any reference to sales under them. Besides this, the Beach title, was adverse to the title upon which depended McNab’s security for the large debt he was seeking to collect in his chancery suit, and it would not have been improper, and perhaps would have been advisable, for him to buy up that title, and seek to avail of it in furtherance of his efforts to enforce his lien for the collection of the indebtedness due him.

The cases of Hurd v. Case, 32 Ill. 45, Funk v. McReynolds, 33 id. 496, and Warrick v. Hull, 102 id. 280, are not in point in the matter of the sales under the powers in the trust deeds to Harvey. The doctrine of those cases is, that a mortgagee can not, during the pendency of his bill to foreclose, advertise and sell the mortgaged property under the power contained in his mortgage. Here, the fact McNab was prosecuting a bill to give effect to an equitable lien that grew out of transactions that transpired in and prior to 1864, would have no tendency to lull appellants to security that no attempt would be made to sell a portion of the same premises under powers in trust deeds made to parties other than McNab, in 1868. In fact, the very object of the transfer of the trust deeds to McNab was, that he should “make the money thereon with reasonable diligence,” and there is no place in the facts for the application of the doctrine of waiver.

Nor does the rule announced in the late case of Ryan v. Newcomb, 125 Ill. 91, control in respect to the sales now in hand. In that ease, the sale under the power was made during the pendency of a bill filed by the maker of the trust deed against the creditor thereby secured, charging usury and payment, and asking for an accounting and for redemption on payment of the sum found due, and it was held that the power of sale was improperly exercised pending the suit to redeem, and that for that reason the sale should be set aside and redemption allowed on the payment of the amount actually due. There, the filing of the bill and the service of process had given the court jurisdiction of the subject matter of the trust deed, and of the parties, and one of the parties to the controversy could not, by assuming to act under the power, oust the court of such jurisdiction. The case would be here in point had there been, at the time of the sales under the trust deeds to Harvey, a bill pending to redeem from the Weage and Hiram Canfield trust deeds; but there was pending no such bill, nor any bill to foreclose said mortgages, nor any other bill involving the subject matter of said trust deeds or the indebtedness secured thereby.

When the sales were made under the two trust deeds, there was a delay of a few days in closing them up and delivering the deeds from the trustee to the purchaser. In lieu of cash, the purchaser, with the consent of MeNab, the creditor, finally gave his notes for most of the purchase money, and secured them by a deed of trust on the lot, and on other property in addition thereto. There was no surplus arising from the sales, the entire bids only covering McNab’s debts, and therefore no one was injured by the credit which he saw proper to extend to the bidder. Burr v. Borden, 61 Ill. 389; Waterman v. Spaulding, 51 id. 425.

It is urged, however, that there was a surplus, since the deed of trust given by Francis Canfield was to secure the principal sum of $18,000, besides interest, and $500 was paid in cash. We think this is sufficiently and satisfactorily explained by the evidence. It appears therefrom that the amount included in the mortgage, which was in excess of the bids, was the consideration paid Heacock for a deed releasing the lot from the claim of the heirs of Beach, which was a cloud on the title, reaching back of the Clayton title. If the purchaser was content to pay $900 for the deed to him from Heacock, and the consequent removal of this cloud, we are unable to perceive it was any concern of appellants, or did them any injury.

The Francis Canfield trust deed to secure the notes given to McNab was made to Granville S. Ingraham, as trustee. On November 7, 1879, Ambrose Campbell, appellee, bought from McNab said notes and trust deed, paying therefor, in cash, $22,464.83, that being the principal sum of $18,000, and interest, at ten per cent, to the date of the purchase. He also paid McNab about $1200 for that amount of tax liens on the lot taken up by him in protection of said security. In July, 1881, the trustee advertised and sold the lot under the power contained in the trust deed, and the same was struck off to Campbell for $26,000, and conveyed to him. In the view we take of the case, the title to lot 2 is vested in Campbell, and appellants have no just ground for the claim that the conveyances under which he holds should be set aside as clouds upon their title.

There are several questions of minor importance which we will briefly consider:

It is urged the court erroneously admitted in evidence certain tax deeds, without proof of compliance with the constitution and statute in regard to the service of notice on or publication of notice to the owner, occupant and person in whose name the land was taxed. It is also assigned as error, that the court appointed a special master to examine certain ante-fire abstract books, relating to transfers of real estate in Cook county, which were in the possession and control of Handy & Co., and report to the court what said abstract books show in relation to the title to the land here in question prior to October 9, 1871, and upon his making a report, ordered it to be filed and received. If these tax deeds, and this report and abstract furnished by the special master, were incompetent evidence, as is claimed by appellants, then the action of the court, under the circumstances of this case, was of no moment, and furnishes no just cause for reversal. In our view of this record, the other evidence therein fully sustains the decree of the court. If the evidence objected to was incompetent, we must presume the circuit court, on the final hearing, rejected ' it, and decided the case upon the legal testimony. Were this an action' at law, the rulings of the court in admitting evidence would be subject to review. But this being a chancery cause, a different rule prevails, and the inquiry here is, whether or not the competent evidence in the record, taken in connection with the pleadings, sustains the decree that was entered.

In the bill that was filed by-appellants, John McNab was made a defendant, and he appeared and filed a disclaimer, in which he fully and absolutely disclaimed “all manner of right, title and interest whatever in and to, and all and all manner of claims or liens upon, the real estate, or any part or parcel thereof, described in said bill of complaint,” and denied all and all manner of unlawful combinations and confederacies, etc. There was also a stipulation filed, sighed by Campbell and other defendants, releasing said McNab from liability in the action, or on account of any result thereof. Thereupon the court ordered that the bill of complaint stand dismissed as to McNab. The proper practice would have been to have retained McNab as a defendant. We think, however, that under the circumstances of the case, as disclosed by the record, there was no manifest or reversible error in the action of the court in dismissing him out of the case. He had no interest in the subject matter of the suit. The bill waived the oath to his answer, and it would not have been evidence, as an admission or otherwise, against his co-defendants. No discovery was sought by the bill, and he was not called upon to account. No relief of any other character was asked against him. No objection to his dismissal from the suit was interposed, either at the time the order was made, or during the term, or at any time thereafter.

It is suggested that the bill might have been amended at some subsequent day, and allegations made against h'im, such as to require his being a party defendant. But no such amendments were made or proposed. The order of dismissal was entered February 18, 1882, and the final hearing was not had until April 8, 1884,—more than two years thereafter. No doubt a suggestion to the court, made during the intervening period, of a desire to have him brought back and retained as a defendant, would have had the effect to restore him as a defendant in the record. But no such move was made, and appellants were apparently content as matters stood. There is nothing in the record to indicate or raise a presumption that McNab is in any way legally .liable to respond to appellants, or that if he had remained a defendant it would have been of even the slightest advantage to them, or that they would in that event have pursued a course other than they did. In this state of the case, to reverse the decree solely on account of his dismissal from the cause would be sheer technicality.

After the suit had been heard, and the chancellor had announced his decision, appellants asked leave to file an amendment to their bill, offering to redeem. This privilege the court denied. It was a matter resting in the sound discretion of the court, whether or not an amendment should be allowed at the time the application was made, and we are unable to say that discretion was abused.

We find no substantial error in the record, and the decree is affirmed.

Decree affirmed.


source: Caselaw Access Project

author: Mr. Justice Magruder

license: Public Domain

text:
    Charles F. Chickering et al. v. Julius Bastress et al.

      Filed at Ottawa

      October 31, 1889.

    1. Contract—whether a sale, or a mere bailment. Where the identical thing delivered is to be restored in the same or an altered form, the contract is one of bailment; but when there is no obligation to restore the specific article, and the person receiving it is at liberty to return another thing of equal value, he becomes a debtor to make a return, and the title to the property is changed—it is a sale.
    2. Law and fact—construction of a contract—and its fraudulent purpose. Whether a written agreement between parties constitutes a contract of bailment of goods, or was designed to cover a sale on which the vendor’s lien might be preserved, is a question of law. But the question of actual fraud or intent to defraud creditors is one of fact, to be submitted to the jury.
    3. Fraudulent transfer of goods—reserving a secret lien in favor of the vendor. Whatever the form of an agreement may be, if its purpose be to cover up a sale and reserve a secret lien in the vendor, it is void as respects creditors of the vendor, whether the credit was given before or after the delivery of the goods. A consignment for such pur-" pose is no better than any other device.
    4. Where one party, by means of contract,but without notice to the world, suffers the real ownership of chattels to be in himself, and the ostensible ownership to be in another, the law will postpone the rights of the former to those of the execution or attachment creditors of the latter, because to injure third persons by giving a false credit to such ostensible owner is the natural and probable result of the transaction.
    5. A entered into a written contract with B & 0, whereby A was to ship pianos to B & 0, and in which it was provided: First, that the prices at which B & 0 were to take the goods were to be agreed upon and expressed in the invoices; second, they were to pay all freight charges and cost of shipment, and keep the pianos insured for the benefit of A; third, B & 0 were at liberty to sell the pianos at such prices as they might fix upon them, and have ail they could get above the invoice price, in full for charges, commissions, expenses, etc.; fourth, advances might be made by B & 0 by negotiable paper, and when such paper was paid, it should transfer the title to the particular pianos for which such paper was given; and fifth, all pianos delivered by A to B & 0 were subject to the order of the former, and their right to transfer, remove, sell or repossess themselves of the same at any time ■without notice: Held, that while the form of the agreement was that of a consignment for sale, its real purpose was to cover up a sale and preserve a lien in favor of A.
    Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. John P. Altgeld, Judge, presiding.
    This is an action of replevin to recover the possession of 17 pianos, valued in the affidavit for the writ at $6000.00. The action was brought in the Superior Court of Cook County on February 7, 1883, by the appellants, composing the firm of Chickering & Sons of New York City, against the appellees Julius Bastress of Chicago, and Seth F. Hanchett Sheriff of Cook County, and also against Alonzo Pelton, Andrew J. Pom-eroy and Bichard W. Cross, composing the firm of Pelton, Pomeroy & Cross of Chicago. Bastress and Hanchett filed pleas of non cepit, non detinet, and property in Pelton, Pom-eroy & Cross. Hanchett also filed a special plea, setting up levy upon the pianos, as property of Pelton, Pomeroy & Cross, under an execution issued upon a judgment for $10,252.00 rendered by said Superior Court in favor of Bastress against Pelton, Pomeroy & Cross, etc. Upon the first trial of the case the verdict and judgment were in favor of the plaintiffs. Upon appeal to the Appellate Court the judgment was reversed and the cause was remanded as will appear from the case of Bas~ tress v. Chickering, 18 Bradw. 198. The second trial resulted in favor of the defendants, and the judgment has been affirmed by the Appellate Court whence it is brought here by appeal.
    The facts will appear from the following statement which precedes the opinion of the Appellate Court in Bastress v. Chickering,..supra:

    “It appears that Chickering & Sons, plaintiffs below, had, for a long time prior to the transaction in question, been manufacturers, in the city of New York, of pianos known by their name; that for some two years prior to October 14, 1882, Pelton, Pomeroy & Cross "had been carrying on a general music store in Chicago in their own names, as owners, and had been accustomed to buy for said business musical instruments, etc., from other parties as well as from plaintiffs; that said house in Chicago had been of long standing .before Cross became a partner, did a large business, and had a good reputation, financially and otherwise, but that, in fact, the firm had become financially embarrassed prior to October 14, 1882, and had borrowed large sums of money from one Tainter, for which he held the firm’s judgment note for $41,000; that the execution creditor, Bastress, was ignorant of that fact, and from time to time, after as well as before that date, lent to said firm sums of money, so that February 6, 1883, the amount borrowed of him amounted to $10,252. The evidence tends to show that Cross put no capital into the firm, and that for some reason he was zealously interested in behalf of Chicker-ing & Sons; that he, without the concurrence of either Pelton or Pomeroy, but co-operating with the Chickerings, prepared for execution the following agreement, which was in fact executed October 14,1882, but antedated as of August 31,1882, Cross signing it for his firm. It was signed in duplicate, and is as follows:
    “ ‘This agreement, entered into this 31st day of August, 1882, between the co-partnership of Chiekering & Sons, of New York City, parties of the first part, and the co-partnership of Pelton, Pomeroy & Cross, of the city of Chicago, parties of the second part:
    “ ‘ Witnesseth: The parties of the first part, at the request of the parties of the second part, agree to forward and deliver on consignment to the parties of the second part, all pianos of the manufacture of the parties of the first part that the last named parties may determine that the parties of the second part may need in their business in Chicago, at rates and prices to be agreed upon and specified in the invoices of pianos forwarded as aforesaid, said pianos to remain the exclusive property of the parties of the first part, and to be sold for them and on their account by the parties of the second part. And the parties of the second part agree to pay all freight charges and costs of shipment of pianos so consigned to them, and also keep them fully insured for the parties of the first part, and pay all insurance premiums thereon, and to accept and receive said pianos only on consignment, as aforesaid, and sell and dispose of them only for and on account of the parties of the first part. And it is agreed that the parties of the second part, as compensation, and in full for all charges, commissions, expenses, compensations,' and claims of every nature against the parties of the first part, by reason of such consignments, shall have all moneys received by the parties of the second part for the parties of the first part for the sale of such pianos, over and above the prices at which such pianos shall have been consigned; and all moneys so received by the parties of the second part shall be regularly remitted to the parties of the first part, less the sums the parties of the second part are entitled to retain under this agreement; and the moneys so remitted shall be credited and allowed in payment and discharge for the particular piano or pianos the same was received by the parties of the second part in payment for. All advances that may be made by said consignees to said consignors by negotiable paper, shall be credited on and for the particular piano or pianos they were made upon, but only when such negotiable paper shall have been paid, and not before, and such advances, until paid in full, shall transfer no title to said consignees. All pianos consigned, as aforesaid, shall be subject to the order of the parties of the first part, and their right to transfer, remove, sell or re-possess themselves of the same at any time and without notice. The parties of the first part shall have the right to fix, at any time or in any ease, the amount of advance to be made by the parties of the second part by negotiable paper, on consignments, and to fix the time of such negotiable paper, and may end this agreement at any time.’

      “It appears from the evidence, that although Pelton, Pom-eroy & Cross were from time to time borrowing money from Bastress after said agreement was made, yet he was kept ignorant of its existence. It also appears, that for two years prior to that agreement the plaintiffs had been selling and delivering pianos to Pelton & Co. on credit, the usage being for the latter firm to give the former notes covering the aggregate prices of those delivered during the month, at the end thereof, and that among those so sold and delivered were two which were in the store of Pelton & Co. at the time of the agreement, and were among those replevied. There was nothing to indicate any change in the manner or character of the business of Pelton & Co. after the said agreement, which the plaintiffs and Cross kept secret, except that the word ‘consigned’ was written across each invoice of pianos shipped. All of said invoices, under which those in question were delivered, except as to number and prices, were as follows:
    “ ‘The following conditions are agreed to as a statement of the 'relative positions and rights of Chickering & Sons and their agents: The ‘agents’ of this firm are its customers who are engaged in selling its pianos in the territory allotted to them. Such customers are not ‘agents’ in any. sense known to the law, having no authority to bind said Chickering & Sons, or to incur liability on their account. The Messrs. Chickering & Sons will take care of their own warranties of pianos whenever requested, by making repairs, or authorizing them to be made, if justly chargeable. ‘Agents’ are not at liberty to make or procure repairs at the expense, of Chickering & Sons without permission. The agency may be terminated at any time by either party, unless a written contract exists. It is agreed, that the pianos specified in this bill are bought and sold upon the conditions herein set forth.
    Pe™> Pomeeot & Ceoss-

      To Chickering é Sons, Dr.’

      “Then followed the pianos, with style and number and price, in the usual form of a bill of goods sold, but across was written the word ‘consigned.’
    “The evidence tended to show, that at the end of each month Pelton, Pomeroy & Cross made and sent their promissory notes, to Chickering & Sons for all the pianos received by the former of the latter during the month, and accompanied by said form of invoice, the same as had been done prior to said agreement,, and that they had paid, in cash, $1000. The evidence tended to show, that Pelton, Pomeroy & Cross were in failing circumstances in January, 1883; that an agent of Chickering & Sons then came to Chicago, and Cross went through the form of turning over to said agent the pianos in question, but the latter left them in the possession of Pelton, Pomeroy & Cross,, the same as they had previously been; that on the morning; of February 7, 1883, the same form was repeated, but there-was no visible change of possession, and they were then and there taken upon the execution aforesaid, in favor of Bastress;; that said agreement, which was in fact made October 14, 1882,. was dated as of August 31, 1882, so as to cover pianos which had been sold and delivered by Chickering & Sons to Pelton, Pomeroy & Cross, and were in the possession of the latter, as purchasers, at the time said agreement was made, and so remained thereafter. There was evidence tending to show, and sufficient to go to the jury, that said agreement was in fact made with the intent on the part of the parties making it, to-hinder, delay and defraud the creditors of said Pelton, Pom-eroy & Cross, by conferring upon said firm the indicia of ownership of the pianos, and thereby give them a false credit,, while Chickering & Sons should retain to themselves a secret lien thereon, whereby they could, in case of danger from the-creditors, through said agreement and the friendliness of Cross,. keep the other creditors at bay.”

      Messrs. Lyman & Jackson, and Mr. Allan C. Story, for the appellants:
    The consignment contract was valid between the parties and as to creditors, and no title could pass to the pianos consigned until they were sold to third parties, or had been paid for by Pelton, Pomeroy & Cross. Gray v. Agnew, 95 Ill. 317; Rankin v. Shepardson, 89 id. 445; Barton v. Coryea, 40 id. 321; Alexander v. Tomlinson, 40 Ark. 216; Printing Press Co. v. Lowell, 60 Cal. 454; Walker v. Butterick, 105 Mass. 237.
    Goods held by a factor are not liable to execution for his debts. Wharton’s Com. on Agency, sec. 757; Horn v. Baker, 9 East, 245; Looke v. Hollingsworth, 5 L. R. 226.
    The fact that Pelton, Pomeroy & Cross were to receive as their commissions all moneys received over a certain price, does not affect the fact of their agency. Mower and Reaper Co. v. Raynor, 38 Wis. 119; Rees v. Spruance, 45 Ill. 308.
    The contract expressly provided that the pianos should be subject to the order of appellants, and a right to transfer, remove, sell or re-possess themselves of the same at any time, and without notice. Under this contract, the rights of creditors of Pelton, Pomeroy & Cross could not attach. Foster v. Smith, 56 Ill. 211; Fairbanks v. Malloy, 16 Bradw. 282; Cannabel v. Lynch, 45 Iowa, 85; Alexander v. Tomlinson, 40 Ark. 216; Pam v. Wilmar, 54 How. Pr. 285.
    On the part of appellants there was nothing secret in connection with the contract in question, or the business done in connection with the consignment account. The invoices accompanying each shipment contained notice of the consignment. Gray v. Agnew, 95 Ill. 319; Fairbanks v. Malloy, 11 How. 209; Insurance Co. v. Kiger, 103 U. S. 352; Alexander v. Tomlinson, 40 Ark. 216; Chicago Taylor P. P. Co. v. Lowell, 60 Cal. 454; Ballard v. Bergot, 40 N. Y. 314; Coville v. Hill, 4 Denio, 323; McNecd v. Tenth Nat. Bank, 46 N. Y. 325; McCreary v. Gaines, 55 Texas, 485; Thompson v. Borman, 49 Iowa, 392; Story on Agency, p. 325, sec. 113.

      Mr. H. W. Magee, for the appellees:
    No mortgage, trust deed, or other conveyance of personal property having the effect of a mortgage or a lien upon such property, shall be valid, as against the rights and interests of any third person, unless possession thereof shall be delivered to and remain with the grantee, and the instrument is acknowledged and recorded as directed by the statute; and every such instrument shall, for the purpose of the act, be deemed a chattel mortgage. Bev. Stat. chap. 95, sec. 1.
    An unrecorded agreement between parties, whereby the title to personal property remains in one, while the possession and all the indicia of ownership, with the right of sale, is given to another, whereby others are induced to give credit, is void in the State of Illinois, as against bona fide creditors, and amounts to a sale as far as they are concerned, and the property covered would be subject to levy by an execution creditor. See Thornton v. Davenport, 1 Scam. 296; Kitchell v. Bratton, 1 id. 300; Morris v. Grover, 2 id. 528; Rhines v. Phelps, 3 Gilm. 464; Jennings v. Gage, 13 Ill. 614; Reed v. Eames, 19 id. 596; Thompson v. Yeck, 21 id. 74; Brundage v. Camp, 21 id. 330; Read v. Wilson, 22 id. 377; Ketchum v. Watson, 24 id. 591; Bay v. Cook, 31 id. 336; Brownell v. Dixon, 37 id. 197; Bell v. Farrar, 41 id. 404; McCormick v. Hadden, 37 id. 371; Butters v. Haughwout, 42 id. 29; Lonergan v. Stewart, 55 id. 44; Murch v. Wright, 46 id. 488; Railroad Co. v. Phillips, 60 id. 190; Railroad Co. v. Wagner, 65 id. 197; Young v. Bradley, 68 id. 553; Ticknor v. McClelland, 84 id. 474; Allen v. Carr, 85 id. 388 ; Lucas v. Campbell, 88 id. 449; Sibley v. Tie, 88 id. 287; Latham v. Sumner, 89 id. 233; Van Duzor v. Allen, 90 id. 499; Roger v. Williams, 92 id. 189; Doane v. Lockwood, 115 id. 490; Martin v. Wirts, 11 Bradw. 572; Denny v. Mead, 90 Ill. 379; Bastress v. Ghickering, 18 Bradw. 198.
    The law on this subject, as held in Illinois, has been affirmed and adopted by the United States Supreme Court. Hervey v. Locomotive Works, 93 U. S. 671; Heryford v. Davis, 102 id. 243.
   Mr. Justice Magruder

delivered the opinion of the Court:

All the questions of fact involved in the case, including the question whether or not there was actual fraud on the part of the Chickerings and Cross, in entering into the agreement in question, were properly submitted to the jury under the instructions which were given, and are settled, so far as we are concerned, by the judgment of the Appellate Court.

The main question, which arises upon exceptions to the giving and refusal of instructions in the case, relates to the proper construction to be given to the agreement between Chickering ■& Sons and Pelton, Pomeroy & Cross. Upon this subject we concur in the following views, expressed by the late Justice McAllister, in delivering the opinion of the Appellate Court:

“But the question as to what was the real object or purpose of the parties to that agreement,—whether it was designed to cover a sale of the pianos from the Chickerings to Pelton, Pomeroy & Cross, and under the label or device of a consignment for sale to preserve in the vendors a lien upon the goods, or whether it constituted a contract of bailment,—were questions to be determined by the court upon a construction of the instrument, fairly considering all its provisions, with the view of finding therefrom what was the real intention of the parties. Those, undoubtedly, are pure questions of law. Murch v. Wright, 46 Ill. 487; Hervey v. Rhode Island L. Works, 93 U. S. 664; Heryford v. Davis, 102 id. 235 ; Fish v. Benedict, 74 N. Y. 613.

“As pertinent to those questions, we may briefly state that the contract provides: 1. That the prices at which Pelton, Pomeroy & Cross were to take the pianos of the Chickerings were to be agreed upon and expressed in the invoices. 2. Pel-ton & Co. were to pay out of their own pockets all freight charges and costs of shipment, to keep them insured for the benefit of the Chickerings, the former paying the premiums. 5. Pelton & Co. were at liberty to sell the pianos at such prices as they chose to fix upon them, and to have all they could get over and above the invoice prices, in full for all charges, commissions, expenses, etc. When they sold one or more they were to remit the invoice price to the Chickerings, and that should be in payment and discharge for the pianos so sold. 4. Advances might be made by Pelton & Co. by negotiable paper, and when such paper was paid it should transfer the title to the particular pianos for which such paper was given. 5. All pianos delivered by the Chickerings to Pelton & Co. were subject to the order of the former, and their right to transfer, remove, sell or re-possess themselves of the same, at any time, without notice.

“The last clause we regard as in the nature of the insecurity clause usually inserted in chattel mortgages. Is this a contract of bailment ? It is well settled in this State, that when the identical thing delivered is to be restored in the same or an altered form, the contract is one of bailment, and the title to the property is not changed; but when there is no obligation to restore the specific article, and the receiver is at liberty to return another thing of equal value, or the money value, he becomes a debtor to make a return, and the title to the property is changed—it is a sale. (Lonergan v. Stewart, 55 Ill. 49, and authorities there cited; Richardson v. Olmstead, 74 id. 213.) Sir William Jones, in his work on Bailments, (2d ed.) 102, says: ‘It may also be proper to mention the distinction between an obligation to restore the specific things, and a power or necessity of returning others equal in value. In the first case it is regular bailment; in the second it becomes a debt.’

“It is indisputable, that, under the contract in question, Pel-ton & Go. were vested with the power and right of discharging themselves from any further obligations, as respected all the pianos mentioned in any one invoice, by paying to the Chick-erings the negotiable promissory note given therefor, but which, for the purpose of disguising the real nature of the contract, is therein called an ‘advance.’ In our opinion, it was not a contract of bailment, and the provisions authorizing Pelton & Co. to determine solely for themselves at what prices they would sell the pianos from their store, is almost conclusive that in reality they were not acting as the agents or factors of the Chiekerings; but that, with the further provision that they were to bear as their proper burden all the expenses of shipment, etc., the same, precisely, as purchasers, would leave no doubt that the contract was not one of bailment, or of principal and factor.

“The form of the agreement was that of consignment for sale, but its real purpose was to cover up a sale and preserve a lien in the Chiekerings for the price of the pianos. The invoices used are in perfect harmony with this view. They contained conditions which were to be considered as agreed to, and one of them was: ‘The agents of this firm (Chickering & Sons) are its customers who are engaged in selling its pianos in the territory allotted to them. Such customers are not agents in any sense known to the law,’ etc. Then follows: ‘It is agreed that the pianos specified in this bill are bought and sold upon the conditions herein set forth.’ It is true that the word ‘consigned’ was written across the bill, but there is no magic in that word which can take from the transaction its real character.

“In Thompson v. Pratt, 94 Pa. St. 275, the court says: ‘Whatever the form of the agreement, if its purpose was to cover up a sale and preserve a lien in the vendors for the price of the goods, it was void as respects creditors, whether the credit was given before or after the delivery of the goods. A consignment for such objects is no better than any other device.’ The same view was taken in Murch v. Wright, supra, where the device was a pretended lease. So, also, in Hervey v. Rhode Island Locomotive Works, supra. The cases cited are authority for the doctrine, that where one party, by means of contract, but without notice to the world, suffers the real ownership of chattels to be in himself, and the ostensible ownership to be in another, the law will postpone the rights of the former to those of the execution or attachment creditors of the latter, because, to injure third persons by giving a false credit to such ostensible owners, is the natural and probable result of the transaction. Rose v. Story, 1 Barr, 190; Martin v. Mathiot, 14 Serg. & R. 214; Stadtfeld v. Huntsman, 92 Pa. St. 53; Brunswick v. Hoover, 10 Weekly Notes of Cases, 219.

“We are of opinion that the agreement in question was void, as respects Bastress, the execution creditor, and the sheriff, for the reasons just stated.”

The views thus expressed are not inconsistent with those presented in the case of Gray v. Agnew, 95 Ill. 315, referred to by counsel for appellants. In the latter case, the opinion of the Court proceeded upon the assumption that there was a consignment of goods, and that the fact of such consignment was not denied by either party. Here, however, the question is whether a contract in writing can be properly construed to be a contract for the consignment of goods, or a contract for the sale of goods.

The judgment of the Appellate Court is affirmed.

Judgment affirmed.


author: Mr. Justice Scholfield

text:
    W. Irving Culver v. Charles Phelps.

      Filed at Ottawa

      November 26, 1889.

    1. Process—to what term returnable. An alias summons was issued from the Superior Court of Cook county October 6,1875, returnable to the then next October term, which was the twelfth term of court thereafter, and served upon the defendant. On the 6th day of December, 1875, judgment was entered, by default, against the defendant. The summons and the return thereon being lost, the defendant filed his petition to restore the same, which the court allowed, finding that such summons was the only one served: Held, that the summons was void by reason of having been made returnable to the wrong term, and service thereof conferred no jurisdiction on the court to render the judgment.
    2. Same—recital of service—whether conclusive. Recitals in a judgment showing that due personal service of process of summons issued in the cause was had upon the defendant more than ten days before the term, may be contradicted and overcome by the record showing that the only process of summons served was void, because made returnable to a wrong term.
    3. Shebiee’s deed—under a void judgment—set aside in equity. Where land is sold on execution under a judgment which is void for want of jurisdiction of the person of the defendant, a court of equity will set aside the sale and sheriffs deed on bill filed by the defendant in the judgment, or his grantee.
    4. Res jddioata— how far conclusive. A decree restoring a lost summons, and the return of service thereon, found that such summons was the only one served on the defendant in the judgment, upon an issue presenting that question: Held, on bill to set aside a sale and sheriffs deed under the judgment, for want of jurisdiction, that such decree was res judicata, and conclusive as to the facts found therein, no matter whether it was authorized by the law and the evidence or not.
    5. Revebsad oe judgment — after sale on execution—rights of the purchaser. Where a judgment under which a sheriffs sale has been made is reversed, the reversal will defeat the sheriffs deed to the purchaser, he being the attorney for the plaintiff in the case, and therefore chargeable with notice of the errors in the record.
    Appeal from the Superior Court of Cook county; the Hon. Egbert Jamieson, Judge, presiding.
    Messrs. Culver & Madden, for the appellant:
    This court will take judicial notice of the Superior Court of Cook county. Railroad Co. v. Lynch, 67 Ill. 150 ; Hearson v. Graudine, 87 id. 115; Harmon v. Chicago, 110 id. 400; Bruner v. Madison County, 111 id. 11; Railivay Co. v. People, 116 id. 401; Russell v. Sargent, 7 Bradw. 98.
    Section 2, chapter 116, of the Revised Statutes, can not be used or made to subserve any purpose beyond supplying a record, or part thereof, which has been lost or destroyed. This is its end and purpose, and any order beyond this, upon an application made under it, is void. Culver v. Colehour, 115 Ill. 558.
    The finding in an order or decree that due legal service of process has been had on the defendant, can not be contradicted in a collateral proceeding, dehors the record. Reddick v. State Bank, 27 Ill. 145; Osgood v. Blackmore, 59 id. 261; Barnett v. Wolf, 70 id. 76; Searle v. Galbraith,, 73 id. 269; Logan v. Williams, 76 id. 175; Turner v. Jenkins, 79 id. 228; Harris v. Lester, 80 id. 307; Fahs v. Darling, 82 id. 142; Andrews v. Bernhardi, 87 id. 365; Wenner v. Thornton, 98 id. 156; Matthews v. -Hoff, 113 id. 90.
    And such finding can not be impeached by the oath of the person on whom the service purports to have been made. Hunter v. Stoneburner, 92 Ill. 75.
    Mr. Edward Eoby, for the appellee:
    The summons was void, and the defendants were not in court. Bunn v. Thomas, 2 Johns. 190; Hitchcock v. Haight, 2 Gilm. 603; Calhoun v. Webster, 2 Scam. 221; Elee v. Wait, 28 Ill. 70; Miller v. Handy, 40 id. 448; Hildreth v. Hough, 20 id. 331; Grant v. Baggs, 3 East, 128; Rev. Stat. 1874, chap. 22, sec. 9.
    Upon such a summons the court had no jurisdiction. It could not enter judgment that defendants were in default, because it had not summoned them to appear,—and this appears by the record in the case itself. Smith v. Smith, 17 Ill. 483.
    Notice to defend is, by all law, necessary to jurisdiction. The King v. Chancellor, 1 Strange, 557; The Queen v. Archbishop, 1 E. & E. (108 E. C. L.) 545; In re Brook, 111 E. C. L. 416; 2 Coke’s Inst. 35 ; Cooper v. W. B. of W. 14 C. B. (N. S.) 108; E. C. L. 180; Dr. Bentley’s case, 1 Strange, 557; People v. Speer, 7 N. Y. 431; 2 Ld. Eaym. 1334; 8 Mod. 148; Fortesque, 202; Botsford v. O'Conner, 57 Ill. 76; Hayiuood v. Collins, 60 id. 332; Vail v. Iglehart, 69 id. 332.

      Where the service is by summons, the only knowledge the court can have of the summons and service is by the summons and return, which go before the judgment order on the roll, and are the foundation for it. Botsford v. O’Conner, 57 Ill. 78; Barnett v. Wolf, 70 id. 78; Hams v. Lester, 80 id. 316; Sloan v. Graham, 85 id. 28.
    If the requisite notice has not been given to or process served upon a party, then the court has no more authority to adjudicate upon his rights than a stranger or a private individual; and all the court does, and all its findings, are absolutely void,— as well the finding that the notice has been given or process served, as the others. Goudy v. Hall, 30 Ill. 116; Starbuck v. Murray, 5 Wend. 158; People v. Cassels, 5 Hill, 168; Canal Bank v. Judson, 8 N. Y. 259; Sears v. Terry, 26 Conn. 280.
    No case can be found in which a judgment order has been held good, where it has been solemnly adjudged in the same court, in the same record, upon fair and full trial, that jurisdiction was'assumed on a particular summons that on its face appears to be wholly void, and that did not sunimon the party to appear at that term or at any term. Orendorff v. Stanberry, 20 Ill. 89; Gill v. Hoblit, 23 id. 473; Botsford v. O’Conner, 57 id. 77; Pardon v. Dwire, 23 id. 572; Fell v. Young, 63 id. 108 ; Haywood v. Collins, 60 id. 334; Whitney v. Porter, 23 id. 447; Morris v. Hogle, 37 id. 153.
   Mr. Justice Scholfield

delivered the opinion of the Court :•

This was a bill in equity, by appellee, against appellant, in the Superior Court of Cook county, to set aside certain deeds as clouds upon appellee’s title. " The deeds sought to be set aside are a sheriff’s deed to the Mechanics’ National Bank of Chicago, a deed of the Mechanics’ National Bank of Chicago to Francis R. Butler, and a deed of Francis R. Butler to appellant, W. Irving Culver, each purporting to convey title to lot 10, in block 10, in the “Ironworkers’ Addition to South Chicago.” Appellee claims title to the lot under a deed from William H. Colehour, who is conceded to have been the original owner of the lot. The sheriff’s deed to the Mechanics’ National Bank of Chicago was executed by virtue of a sheriff’s sale under an execution issued upon a purported judgment of the Superior Court of Cook county, rendered at its November term, 1875, namely, on the 6th day of December, 1875, in favor of the Mechanics’ National Bank of Chicago, and against Charles W. Colehour and William H. Colehour, for $4000 damages.

The sole question in the case is whether the Superior Court had such jurisdiction of the person of William H. Colehour as authorized it to render that judgment at that time, for both Francis R Butler and the appellant, having been attorneys for the bank in that suit, occupy no different position, as respects that question, than that occupied by the bank. McLean County Bank et al. v. Flagg, 31 Ill. 290.

William H. Colehour presented his petition to the Superior Court of Cook county on the 16th day of April, 1884, wherein he alleged, among other things, as follows :

“That he, said petitioner, is one of the defendants in the above entitled cause, in which cause judgment was entered against both defendants on the 6th day of December, A. D. 1875; that part of the record in said cause has been lost or destroyed,—that is to say, the summons in said cause, served on your petitioner and on Charles W. Colehour, his co-defendant, together with the return of the sheriff of Cook county thereon indorsed, and the indorsements of filing thereof, upon which summons and return of service, the order entering the default of the defendants, and the judgment in the said cause, were based; that a certified copy of said summons and return, and the indorsements of filing thereof, can not be obtained by your petitioner, nor any certified copy of any part of said summons, return or indorsement. Your petitioner further states, that * * * the following is a true copy of said summons, and the return of the sheriff thereon indorsed:
u‘Tlie People of the State of Illinois, to the sheriff of said county—gree ting:
‘We again command you, that you summon Charles W. Colehour and William H. Colehour, if they shall be found in your county, personally to be and appear before the Superior Court of Cook county on the first day of the term thereof to be holden at the court house, in the city of Chicago, in said Cook county, on the first Monday of October next, to answer unto the Mechanics’ National Bank of Chicago in a plea of trespass on the case uj>on promises, to the damage of said plaintiff, as it is said, in the sum of $4000. And have you then and there this writ, with an indorsement thereon in what manner you shall have executed the same.
“Your petitioner further states, that at the time your petitioner made such copies, said summons was among the papers and files of said cause in the custody of the clerk of this court, and your petitioner made a copy of said summons and return in the office of the clerk of this court, as aforesaid, and that said summons so copied, and of which the above and foregoing is a true copy, is the only summons in said cause ever served on this petitioner.”

Appellant and the bank were made defendants to this petition. Its prayer was, that the court make an order “reciting what was the substance and effect of said summons, and return of service, and filing of the same, according to the provisions of the statute in such case made and provided.” Eev. Stat. chap. 116, sec. 2.

The hank and appellant, separately, answered the petition, putting in issue its material allegations. Appellant, in his answer, admitted that “upon examination of the papers in said cause made by him, the writ'of summons issued in said cause that was served on said petitioners is not to be found thereinand he alleged, among other things, “that there was more than one summons issued in said cause, and that, as he is advised and believes, the said petition does not show nor give a copy of the summons duly issued in said cause, upon which service was had upon said petitioner, and judgment rendered against him. And upon like information and belief he denies that the writing set out in said petition, purporting to be a copy of the summons in said cause served on said petitioner, is a true and correct copy of the summons served on him. ”

Eeplications were filed to the answers, and the cause was heard and decree rendered therein at the June term, 1884, of the court. The court found and decreed in accordance with the prayer of the petition, and restored the summons and service thereof, upon which judgment was rendered, literally as before herein set out as being recited in the petition. The case was then taken, by the appeal of the present appellant, to the Appellate Court for the First District, and that court, by its judgment, affirmed the decree of the Superior Court, and from the last named judgment the same party brought the case by appeal to this court, and the judgment of the Appellate Court was here affirmed pursuant to the opinion filed on the 25th of January, 1886, and that judgment has never been set aside. Culver et al. v. Colehour, 115 Ill. 558.

It is not pertinent to the question now under consideration to determine what power is vested in the Superior Court by chapter 16 of the Devised Statutes of 1874, in relation to burnt records, nor what evidence is admissible upon the hearing of a petition filed pursuant to the provisions of that chapter. It is only important to know what was decreed in the case supra, for that decree is res judicata in the present case, no matter whether, it was authorized by the law and the evidence or not. Bradish v. Grant, 119 Ill. 606; Attorney General v. Chicago and Evanston Railroad Co. 112 id. 538; Hanna v. Read, 102 id. 596; Tilley v. Bridges, 105 id. 336.

It has been seen that the decree supra restores the summons which was served upon the defendants in the case before judgment was rendered, and not merely a summons that was served in that case. The issue was made by the answer, that the summons set out in the petition was not the summons served upon the defendants pursuant to which judgment was rendered. But the court found against the answer, and so we must now accept it as a fact, that the only summons served upon the defendants before judgment was rendered was this summons. The case is therefore within the rule laid down in Osgood v. Blackmore, 59 Ill. 265, and Barnett v. Wolf, 70 id. 76.

The record contradicts the recitals in the judgment “that due personal service of process of summons issued in said cause has been had on the defendants for more than ten days before this term, ” (the November term, 1875,) and shows that the only summons served in the case was one issued on the 6th of October, 1875, returnable to the twelfth term of the court thereafter to be held, namely, to the October term, 1876, of the court. The summons being returnable at a term other than the first term, and to be held more than three months after its date, was void, (see Rev. Stat. 1874, chap. 110, sec. 1, and Hildreth v. Hough, 20 Ill. 331,) and in no view can it be held to confer jurisdiction of the person to render judgment at the November term, 1875.

We think the court below, therefore, properly decreed that the deeds be set aside as clouds upon complainant’s title. The decree is affirmed.

Judgment affirmed.


text:
    Constantine Malaer et al. v. Alexander Hudgens.

      Filed at Mt.Vernon

      October 31, 1889.

      1. Appeals&emdash;whether a freehold is involved&emdash;as affecting the right of appeal directly from the trial covert. A freehold is not involved, within the meaning of the statute giving an appeal directly from the trial court to this court, where the litigation may, on certain contingencies, result in the loss of a freehold, but which will not necessarily have that effect, or when the freehold may be directly affected by the judgment or decree unless payment is made or some act done to arrest the sale of the land, as, discharging a lien thereon for the payment of money. In order that there should be a right of immediate appeal to or writ of error from this court, the title to the freehold must be directly put in issue.
    2. A freehold is involved, within the sense of the constitution and statute, only in cases where either the necessary result of the judgment or decree is, that one party gains and the other loses a freehold estate, or when the title is so put in issue by the pleadings that the decision of the case necessarily involves a decision of such issue.
    3. In a suit for partition, the decree settled the rights of the parties, from which no appeal was taken, and ordered a sale of the property. A sale was made and reported, together with the fact that the purchaser refused to pay his bid. Subsequently, the court ordered the master to sell the land for the costs, which was done, the sale reported and approved, and a deed made to the purchaser. The complainant being dissatisfied with the proceedings subsequent to the first sale, sued out a writ of error from this court to the trial court, assigning for error such subsequent proceedings: Weld, that no freehold was involved, and therefore 'this court had no jurisdiction.
    4. Same&emdash;freehold&emdash;as having been involved&emdash;but not arising on the appeal. Although a freehold may have been involved in the suit, and in the decree therein rendered, yet, if no objection is taken to that part of the decree relating to the freehold, an appeal from or writ of error that brings up another part of the same decree, having no relation to the question of freehold, will not lie to bring the record directly from the trial court to the Supreme Court.
    Writ of Error to the Circuit Court of Johnson county; the Hon. Oliver A. Harker, Judge, presiding.

      Messrs. Clemens & Warder, for the plaintiffs in error.
   Mr. Justice Baker

delivered the opinion of the Court:

Alexander Hudgens filed his bill in the Johnson circuit court, against the plaintiffs in error, Constantine Malaer and Mahala Springs, asking the partition of certain real estate. At the December term, 1878, of the court, plaintiffs in error were defaulted, and a decree pro confesso entered. • The court found that defendant in error was the owner in fee of an undivided eight-tenths of the lands, and that each of the plaintiffs in error was the owner in fee of an undivided one-tenth of said lands, and decreed partition, and appointed commissioners to make the same. The commissioners reported, showing the lands were not susceptible of division, and placing values upon the several tracts, which amounted, in the aggregate, to $1400. At the same term of the court this report was approved, and the lands decreed to be sold, and the terms of the sale, as fixed by the court, required that ten per cent of the purchase money should be paid in cash and the residue in twelve months, the deferred payment to be secured by note, with personal security, and a mortgage on the premises.

At the November term, 1879, the master in chancery reported that he had struck off said lands on January 27, 1879, to Alexander Hudgens, for $933.33^-, but said Hudgens had failed to comply with the terms of the sale. The court thereupon ordered the master to re-sell the same. On March 23, 1881, a written notice, signed by the master, was served on Hudgens, that unless "he made good his bid on or before the first day of the April term of the court, 1881, he, the master, would make application to have the lands re-sold. At said April term an order was entered, reciting such notice, and ordering the master to re-advertise and sell, as provided in the decree of 1878, and ordering that all additional expenses and costs occasioned by the default of Hudgens should be taxed to him.

At the April term, 1882, an order was made, reciting the sale to Hudgens for $933.33¿-, his failure to comply with the terms of sale, and that he had been notified, in writing, more than ten days before the first day of the term, to comply with said terms of sale, and ordering, adjudging and decreeing that said lands he sold by the master in chancery “to satisfy the costs.” At the November term, 1883, of the court, the master reported, that in pursuance of the decree rendered at the April term, 1882, he had, on the 10th day of July, 1883, struck off and sold the whole of said lands to C. N. Damron, subject to the right of redemption, for $35, that being the amount of costs. An order was entered on November 22, 1883, approving this report, and the cause was continued for final report. At the November term, 1884, the master reported he had, in pursuance of the decree rendered at the April term, 1882, executed and delivered, on the 15th day of November, 1884, to C. N. Damron, in default of redemption, a deed of conveyance for all of said lands, and an order was made approving such report.

This writ of error was sued out of this court on the 14th day of November, 1888, and by it the record was brought directly from the circuit court to this court.

The assignments of error are as follows: “First, the decree of the court below, at its April term, 1882, for the sale of the lands described, for the costs of the suit, was a nullity, and void; second, the court below erred in its order at the November term, 1883, approving the master’s report of sale of the lands in question under the void order of the court at the April term, 1882; third, the court below erred in its order at the November term, A. D. 1884, approving the master’s report of the deed to G. N. Damron under the sale based upon the void decree of sale at the April term, 1882; fourth, the court below erred in not setting aside the sale of the master in chancery reported at the November term, A. D. 1883, of said court; fifth, the court below erred at its November term, A. D. 1884, in failing to cancel at that time the master’s sale of said lands, when called to act upon the master’s report of a deed to C. N. Damron;—by reason whereof the plaintiffs in error pray that the decree of the court below, at its April term, A. D. 1882, be declared null and void, and the action of said court thereafter, at its November term, 1883, and at its November term, 1884, confirming and approving of the action of the master thereunder, be reversed,” etc.

There is no doubt a freehold was involved in the partition suit, and in the decree rendered at the December term, 1878, of the circuit court, but no error is assigned which claims that decree was erroneous, or challenges the fact that the rights, titles and interests of the parties were as therein determined. The sole objects of the present writ and of the assignments i of error are to call in question the validity of the decree of the April term, 1882, for the sale of the lands “to satisfy the costs,” and of the order made at the November term, 1883, approving the master’s report of the sale of the premises, and of the order made at the November term, 1884, approving the master’s report of the execution of a deed based on such sale. The rule is, that although a freehold may have been involved in the suit, and in the decree therein rendered, yet if no objection is taken to that part of the decree relating to the freehold, an appeal from or writ of error that brings up another part of the same decree, having no relation to the question of freehold, will not lie to bring the record directly from the. circuit to the Supreme Court. Cheney et al. v. Teese et al. 113 Ill. 444; Walker v. Pritchard et al. 121 id. 221.

A freehold is not involved, within the meaning of the statute giving an appeal directly to or writ of error directly from this court from or to the trial court, where the litigation may, on certain contingencies, result in the loss of a freehold, but which will not necessarily have that effect, or where the freehold may be directly affected by the judgment or decree unless payment is made, or some act done to arrest the sale of the land, or discharge a lien thereon for the payment of money. In order there should be a right of immediate appeal to or writ of error from this court the. title to the freehold must be directly put in- issue. (Chicago, Burlington and Quincy Railroad Co. v. Watson, 105 Ill. 217.) A freehold is involved, within the sense and contemplation of the constitution and the statute, only in cases where either the necessary result of the judgment or decree is that one party gains and the other loses a freehold estate, or where the title is so put in issue by the pleadings that the decision of the case necessarily involves a decision of such issue. Sanford v. Kane, 127 Ill. 591.

The court, in decreeing, in April, 1882, that the lands should be sold for the payment of the costs that had accrued in the cause, and in subsequently approving of the reports of the master, did not adjudicate upon any issue formed to try the title to the freehold, nor was it the necessary result of the decree and sale that either party either gained or lost a freehold estate. In fact, leaving out of consideration the partition decree of 1878, which is not brought here by this writ for review, there was in the proceedings in the cause no place or room for a contention between the parties to the suit in regard to the title to the freehold. If any contention in respect to the freehold has arisen as the result of the decree of 1882 and subsequent orders, it is not between plaintiffs in error and defendant in error, but between them jointly and a third party, the purchaser at the master’s sale, and that contention was not at issue or determined in this cause, and such purchaser is not a party to this record, or brought before us, as a terre tenant or otherwise.

The writ of error herein should have been sued out of the Appellate Court. For want of jurisdiction in this court to review the decree and orders brought here by this writ, and pass upon the errors assigned, the writ is dismissed.

Writ of eiror dismissed.