author: Mr. Justice Shops

text:
    John D. Gillett v. John E. Wiley.

      Filed at Springfield June 18, 1888.

      1. Gtjabdian and wabd—surety on guardian’s bond—transactions between guardian and ward. From the confidential relation between a guardian and his ward, it will be presumed that the ward acts under the influence of the guardian, and all transactions and dealings between them, prejudicially affecting the interests of the ward, will be held to be constructively fraudulent. This presumption continues even after the guardianship has ended, when the matters between the guardian and ward have not yet been fully settled; and transactions between them .during the presumed influence, which are injurious to the interests of the ward, will be set aside, unless shown to have been the deliberate act of the ward, after full knowledge of his rights, in all such cases, the burden rests upon the guardian to prove the circumstances of knowledge and free consent on the part of the ward, good faith and absence of influence, which alone can overcome this presumption.
    2. To bind the ward in a transaction with his guardian, it must be shown that he acted, after the termination of his disability, with deliberation, and with full knowledge of all material facts.
    3. In this case a guardian had given a mortgage on his land to indemnify his surety. The ward resided in the guardian’s family from eight years of age to his majority, and was ignorant, and of a weak mind. After his majority, his guardian woke him from a sleep, and procured him to sign a receipt in full, there being no settlement or payment of any money, on the false assurance that he was signing a note as his guardian’s surety. On this receipt the guardian, without notice to the ' ward, procured his discharge from the county court, and the release of the mortgage from his surety. The ward had no knowledge who was ¡ surety on his guardian’s bond, or that he had taken a mortgage as indemnity from his guardian, and had no purpose to aid his guardian in perpetrating a fraud on his surety, but was himself the victim of imposition and fraud: Held, that the ward was not estopped, by the giving of the receipt in ignorance of what it was, from showing that his guardian had not paid him, and asserting his rights against the surety. In such case, the ward owed no duty to the surety.
    4. Samm—finding by county court as to amount in gua/rdian’s hands— how far conclusive. An order of the county court finding the sum in a „ guardian’s hands belonging to his ward, after the majority of the latter, and ordering its payment to the ward, is conclusive upon the guardian -and his surety, except for fraud or mistake, as to the amount then actually in the hands of the guardian.
    5. Same—discharge of guardian by county cowrt, upon fraudulent ■testimony — whether conclusive. Where the amount of money in the guardian’s hands belonging to his ward is ascertained after the ward becomes of age, and the guardian is directed to pay the same to him, before the county court can enter an order discharging the guardian it must appear to that court that the guardian has complied with its former order. If such final order is procured without notice to the ward, on a forged receipt, or one obtained by fraud and circumvention, it can not avail to discharge the guardian, or his surety on his bond.
    6. A receipt given by a ward, after his majority, in full of the sum •due him from his guardian, is prima facie evidence that the latter had, on or before its date, paid him the sum therein named, but is not conclusive'. Like any other receipt, it is open to explanation or contra•diction.
    7. So where a guardian procures his ward, even after the latter has .attained his majority, to sign a receipt in full of the moneys in his hands, by falsely representing to the ward that the paper presented was a note which he wished him to sigii as surety, and the ward signs the same without reading it, and by means of such false and fraudulent receipt the guardian procures an order of discharge from the county •court without any notice to the ward, when, in fact, no settlement was ■ever made with the ward and no money was paid him, these facts may be shown in a suit upon a guardian’s bond, and will be sufficient to fix rthe liability of the surety of such guardian.
    8. A guardian owes his ward a duty which can be discharged only by performance of the condition of his bond, and no one except the ward has power to release the obligation of the guardian or his surety.
    9. While full faith and credit must be given to the public records, and those relying upon and dealing in view of them will ordinarily be protected, the record of the discharge of a guardian by the county ■court will not protect the guardian, or the surety on his bond, if such order is procured by the fraud of the guardian.
    10. Surety—surrendering his indemnity—negligence in so doing. A surety upon a guardian’s bond, upon the faith of an order, procured by fraud, discharging the guardian, released a mortgage taken from the latter as an indemnity against loss. The order of discharge was procured by a receipt signed by the ward upon the false assurance that it was a note of the guardian. The ward was an inmate of the guardian’s family, and could readily have been seen by the surety, but was not inquired of on the subject: Held, that the surety was guilty of negligence in releasing Ms mortgage, and should have known that the order of the county court was liable to be set aside for fraud, or any infirmity in the dealing between the guardian and the ward, and that he was not released from his obligation as surety.
    11. Limitation—when the statute begins to run—in case of fraud. In case of fraud, the limitation will begin to run only from the discovery of the fraud, or from the time when the fraud could have been discovered by the exercise of reasonable diligence. But the failure to use such diligence may be excused when there exists a relation of trust and confidence between the parties, rendering it the duty of the party . committing the fraud to disclose to the other the truth, and where it was through the acts of the former that the latter was induced to re- • frain from inquiry.
    12. Same—in suit on guardian’s bond—in equity. Courts of equity, in considering the rights of a ward as against a surety on his guardian’s bond, will, unless there is some equitable reason for the adoption of a different period, adopt the limitation fixed by the statute.
    13. A suit in equity on a guardian’s bond was brought by the ward about twelve years after he attained his majority, in which it appeared the ward, who was of a feeble mind, had, from his boyhood, resided, and, after his majority, continued to reside, with the guardian, who had complete control of him, and it appeared the rights of the ward . were concealed from him until shortly before the filing of the bill: Held, that the ward was not barred by laches.

    14. Estoppel in pais—equitable basis of the rule. The doctrine of estoppel in pais is never applied, except when it would be contrary to equity to allow the assertion of the right or proof of the fact to avail. It is never applied to one who is without fault, or who has not, by act or declaration, or by silence when he should speak, induced another to alter his condition on the faith of such acts or the truth of such declarations. The facts which give rise to such estoppel must be such-as to make it unjust and inequitable to allow the party estopped to. assert that which would otherwise be his right, or make proof of matters tending to establish such right.
    15. It is not essential to the creation of an estoppel, that there shoul d be actual fraudulent intent at the time of making the declarations or performing the acts upon which the other party has relied, but it is essential that there should be voluntary acts or declarations by which ■ another is made to believe in the existence of certain facts, which induce him to act upon that belief.
    16. Same—as between the ward and surety on guardian’s bond. The-surety on a guardian’s bond undertakes for the fidelity and honesty, of his principal toward his ward, and when the guardian, by means of fraud and circumvention, procures his ward to execute an instrument. in writing as an acquittance, in the belief it is something else, whereby the guardian is enabled to defraud his surety, the doctrine of estoppel can not be invoked by such surety to prevent the ward from asserting his legal rights.
    Appeal from the Appellate Court for the Third District;— heard in that court on appeal from the Circuit Court of. Logan county; the Hon. Geokge W. Hekdhan, Judge, presiding.
    This is a hill in chancery, filed in the circuit court of Logan county, by John E. Wiley, against Joshua Day and John D. Gillett, to set aside the discharge of said Day as guardian of Wiley, entered by the county court of that county, and for a decree against Day and Gillett for the sum due to complainant, as shown by the report of said Day, as guardian of Wiley, June 22, 1869, and interest thereon.
    On March 23, 1859, said Joshua Day was, by the county court of Logan county, appointed guardian of the complainant, who was then an infant, and qualified by giving bond in the penal sum of $3500, with said John D. Gillett as surety. April 24, 1860, Gillett required, and Day gave him, a mortgage on his farm, in Logan county, to indemnify him, Gillett, as such surety, which mortgage was duly recorded. Day made several reports of .his guardianship to the county court, and on June 22, 1869, made final report, showing in his hands, as such guardian, $2695.41, and complainant being then of age, said county court made an order directing said guardian to pay over to said ward that amount, less $18 costs paid, and file his voucher for such payment, and upon the filing of which he was to be discharged. On the 22d day of July, 1870, Wiley filed in the office of the clerk of the county court of Logan county the following receipt:
    “Received of Joshua Day, guardian of John E. Wiley, the sum of twenty-six hundred and seventy-seven dollars, this July 1,1869.

      Thereupon, the following entry or order of said county court was made of record: “Minor heir of Daniel Wiley, deceased. Joshua Day, guardian of John E. Wiley, minor heir of said deceased, presented vouchers for payment ordered heretofore, and the same having been examined by the court, it is ordered by the court that said vouchers be filed, and the guardian be, and is hereby, discharged from said guardianship.” Some time afterwards Day requested Gillett to release the mortgage on his farm, telling him that full settlement had been made with said ward, and he had obtained his discharge from the county court as guardian of said Wiley. Gillett went to the county clerk’s office, and was there informed of the fact that Day was discharged as the guardian of John E. Wiley, and, acting upon such information, on November 30, 1872, released the mortgage given to indemnify him as surety of said Day on said guardian’s bond." 'Shortly after the-release of said mortgage, said Day conveyed said lands, and became insolvent in 1879, and has ever since continued to be insolvent.
    It is shown that at about the age of seventeen years the defendant became afflicted with chorea, or St. Vitus dance, and also, to some extent, addicted to the use of intoxicating liquor. The night before the day upon which the receipt was signed, the complainant had been to a dance, and had been drinking. Just prior to the signing of the receipt he was lying on the floor, at Day’s house, asleep. Day awakened him out of his sleep, and there is a conflict in the evidence as to what then occurred. Complainant testifies: “I was lying asleep upon the floor. He got me up and told me to sign a paper. I asked him what it was. He said it was a note. I asked him to give it to me. He said if I had it I would lose it, and that he would put it in his- books and keep it. He put it away in his books, and kept it.” There is also evidence tending to show that complainant’s habits and illness had to some extent impaired his mind. He could read writing, but did not attempt to read the paper he signed, believing, as he says, that Day told him the truth. Day never, in fact, paid him any portion of the money in his hands. On the other hand, there is much evidence tending to show that complainant knew Day was his guardian, and had money in his hands belonging to complainant, and that at the time of signing said receipt, Day told him (Wiley) that he wanted him to sign the receipt for the money he (Day) owed him, (Wiley,) to enable Day to settle with the . court, and release the mortgage that Gillett held on his (Day’s) land. Complainant denies that he knew that Day was his guardian, or that he had money in his hands belonging to him, • until some time in 1881. Complainant became of age in the spring of 1869, and from the time he was eight years old lived in the family of Day, until the spring of 1881, when he and Day had a falling out. The other facts necessary to an understanding of the case are stated in the opinion.
    Messrs. Blinn & Hoblitt, for the appellant:
    It is not necessary, in order to constitute an equitable estoppel, that the party should design to mislead. It is enough if the act or declaration was calculated to, and did, in fact, mislead another who acted in good faith and with reasonable diligence. Rosenthal v. Mayhugh, 33 Ohio St. 168; Bail v. Wait, 69 N. Y. 115 ; Bigelow on Estoppel, 556.
    An equitable estoppel will arise by the negligent acts and declarations of a party, even though ignorant of the truth of his acts or declarations. Bigelow on Estoppel, 540; Beardsley v. Foot, 14 Ohio St. 416; Smith v. Newton, 38 Ill. 236; Calhoun v. Richardson, 30 Conn. 210.
    It is such negligence for one who can read writing, to sign a paper without reading it, that the law will not permit him to say either that he believed he was signing a different paper, or was induced to sign it by fraudulent representations, as against the rights of one who is innocent and free from negligence. Douglass v. Matting, 29 Iowa, 498; Chapman v. Rose,
      56 N. Y. 137; Nebeker v. Catzinger, 48 Ind. 440; Foster v. McKinnon, 38 L. J. 310.
    The decisions of the cases cited above are not limited to commercial paper. Seeright v. Fletcher, 6 Blackf. 380; Miller v. Sullivan & Co. 26 Ohio St. 640.
    Wiley is estopped, as against the surety upon his former guardian’s bond, by his neglect, for twelve years after giving the receipt, to assert his rights, and after Day had become insolvent.
    Mr. S. L. Wallace, and Messrs. Beach & Hodnett, for the appellee:
    The suit can be maintained until the Statute of Limitations runs on the bond. Gilbert v. Guptil, 34 Ill. 112; Scheel v. Eidman, 77 id. 301; Bard v. Wood, 3 Metc. 24; Clark v. Clay, 11 Fost. 393; Crane v. Barnes, 1 Md. Ch. 151; Wade v. Lobdell, 4 Cush. 510.
    The limitation law in force at the time the bond was executed, controls. Scheel v. Eidman, 77 Ill. 301; Beesley v. Spencer, 25 id. 216.
    The Limitation act of 1872 is prospective in its operation, and does not apply to causes of action that accrued prior to that time. Dickson v. Railroad Co. 77 Ill. 331.
    Transactions between guardian and ward before discharge of the guardian, are void, as against public policy. Story’s Eq. Jur. sec. 301; Hatch v. Hatch, 9 Ves. 296; Johnston v. Johnston, 2 Hill’s Ch. 277; Say v. Barnes, 4 S. & R. 112 ; 8 Am. Dec. 679; Fish v. Miller, 1 Hoffm. Ch. 267; Elliott v. Elliott, 5 Binn. 8; In re Van Horn, 7 Paige, 46; Stanley’s Appeal, 8 Barr, 431; Sullivan v. Blackwell, 28 Miss. 724; Wells’ Appeal, 10 Harr. 325; Ebert v. Ebert, 5 P. F. Smith, 110; Long v. Mulford, 17 Ohio, (N. S.) 484; Harris v. Carstarphen, 69 N. C. 416.
    Courts look upon settlements made by guardians with wards recently come of age, with distrust, and will not consider them binding unless made with the fullest deliberation, and the most abundant good faith on the part of the guardian. Sullivan v. Blackwell, 28 Miss. 737; Richardson v. Linney, 7 B. Mon. 571; Wright v. Arnold, 14 id. 638; Andrews v. Jones, 10 Ala. 400; Spalding v. Brent, 5 Md. Ch. 411; McClellan v. Kennedy, 8 Md. 230; Meek v. Perry, 36 Miss. 190; Williams v. Powell, 1 Ired. Eq. 460; Boyett v. Hurst, 1 Jones’ Eq. 166; Hawkins’ Appeal, 32 Pa. St. 263; Story’s Eq. Jur. sees. 317, 318 ; Perry on Trusts, (1st ed.) sec. 200, p. 173.
    There is no difference between principal and surety, as regards their liability on a bond. The same act or neglect which charges the principal must charge the surety. Seaver v. Young, 16 Vt. 658; Roth v. Miller, 15 S. & R. 100; Hobbs v. Middleton, 4 J. J. Marsh. 176.
    Any act of the principal which estops him from setting up a defense personal to himself, operates equally against his sureties. Chicago v. Gage, 95 Ill. 606; Davis v. Hoops, 33 Miss. 173; McCabe v. Ramey, 32 Ind. 309; Stovall v. Bank, 10 Wall. 583; United States v. Girault, 11 How. 27; Bank v. Elwood, 21 N. Y. 90; Belloni v. Freeman, 63 id. 387; Gilbert v. Isham, 16 Conn. 525; Patterson’s Appeal, 48 Pa. St. 345 ; Patterson v. Guardians of the Poor, 38 Eng. L. and Eq. 440; Evans v. Keeland, 9 Ala. 42; Wells v. Gallaher, 46 Pa. St. 205; Baker v. Preston, 1 Gilmer, 235; State v. Granmer, 29 Ind. 530; Pinkstaff v. People, 59 Ill. 148; Commissioners v. Mayrant, 2 Brev. 228; Ream v. Lynch, 7 Bradw. 161; Roper v. Sangamon Lodge, 91 Ill. 518; Fogarty v. Ream, 100 id. 366.
    A guardian’s discharge is no bar to opening his accounts in relation to his trust, at the suit of the ward. Runkle v. Gale, 3 Halst. Eq. 101; Stark v. Gamble, 43 N. H. 465.
    The surety is not discharged by the fraud of the principal. United States v. Girault, 11 How. 27.
    A receipt given by the ward to the guardian is no bar to a suit. Bennett v. Hanifan, 87 Ill. 31; Brewer v. Vanarsdale,
      6 Dana, 204; Hall v. Cone, 5 Day, 543; Fish v. Miller, 1 Hoffm. Ch. 267; Schouler on Domestic Relations, see. 372.
    The equity of the surety depends upon the relation between himself and his principal, and has no operation on a contract with a creditor. 2 White’s Tudor’s Lead. Cases in Eq. p. 2; Supervisors v. Otis, 62 N. Y. 88; Harris v. Newell, 42 Wis. 687.
    It is the duty of a surety of a guardian to make inquiries,, and see that his principal discharges the obligation resting upon him. Forester v. State, 46 Md. 154.
    A party knowing the relation existing between a guardian and ward, is bound to know the infirmity of a contract between them, and acts in relation thereto, at his peril. Sherry v. Sansberry, 3 Ind. 330; Gale v. Wells, 12 Barb. 84; Schouler' on Domestic Relations, sec. 389.
    The ward, to be barred by his own acts in all transactions with his guardian, must have acted, after the termination of his disability, with deliberation, and on full knowledge of the essential facts. Fish v. Miller, 1 Hoffm. Ch. 267; Benion v. Miller, 27 Ga. 78; Scott v. Freeland, 7 S. & M. 409; Hume v. Hume, 3 Barr, 144; Worrell’s Appeal, 23 Pa. St. 44; Sherry v. Sansberry, 3 Ind. 320; Trader v. Lowe, 45 Md. 1; Ferguson v. Lowery, 54 Ala. 510; Singleton v. Love, 1 Head, 357; Lee v. Brown, 4 Ves. 361; Cory v. Gertcken, 2 Madd. 362.
    Before Wiley can be bound by any rights of Gillett, it must be shown that he knew that Gillett was Day’s surety at the' time Day obtained the receipt, and that Gillett would be in- • jured thereby. Wilson v. Foot, 11 Metc. 285; Hollier v. Eyre, 9 C. C. & F. 1; Gahn v. Neimcewicz, 3 Paige, 614; 11 Wend. 312; Elwood v. Deedendorf, 5 Barb. 398; Agnew v. Merritt, 10 Minn. 308; Kaign v. Fuller, 1 McCarter, 419; Martin v. Taylor, 8 Bush, 384; Burke v. Cruzer, 8 Texas, 66; Miller v. Dyer, 1 Duv. 263.
    That a creditor had notice of the rights of the surety is not presumed, but must be proved. Agnew v. Merritt, 10 Minn. 308; Dorlarque v. Cress, 71 Ill. 380.

      A party, to be estopped, must have knowledge of the rights of the person who claims the estoppel. Howell v. Lawrenceville, 31 Ga. 633; Neel v. Harding, 2 Metc. 247; McGee v. Metcalf, 20 Miss. 535; Nichols v. Parsons, 6 N. H. 30; Debury v. Adams, 9 Yerg. 52; Piper v. Gilmore, 49 Me. 149; Andrew v. Lyons, 11 Allen, 349; Whitaker v. Williams, 20 Conn. 98; Dorlarque v. Cress, 71 Ill. 380; Davenport v. King, 63 Ind. 64.
    In order to constitute an estoppel, there must be an intention that the opposite party should act on the statement. Kuhl v. Mayor, 23 N. J. Eq. 84; Turner v. Griffin, 12 Allen, 401; Piper v. Gilmore, 49 Me. 149; Wilcox v. Howell, 44 N. Y. 398; Clarke v. Hart, 6 H. L. Cas. 633; People v. Brown, 67 Ill. 435; Taylor v. Ely, 25 Conn. 250; Bigelow on Estoppel, 60, 437; Herman on Estoppel, 327, 331, 426; Donaldson v. Hall, 2 Daly, 325; Martin v. Zellerbach, 38 Cal. 300; In re Railway Co. L. R. 3 Q. B. 584; McAfferty v. Conover, 7 Ohio St. 99; Freeman v. Cook, Exch. 654.
    Any act of the principal which works a forfeiture of his bond, forfeits the bond, also, as to his surety. Wayne v. Commercial Nat. Bank, 52 Pa. 631.
    A receipt given does not estop the party giving it, even though it may.be acted upon, unless the party giving it knew it would be acted upon. Kuhl v. Mayor, 23 N. J. Eq. 84.
    A signature obtained by fraud is the same as a forged signature. Wade v. Lobdell, 4 Cush. 510; 20 Pick. 321.
   Mr. Justice Shops

delivered the opinion of the Court:

The last account of the guardian, filed in the county court June 22, 1869, just after his ward’s majority, shows in the guardian’s hands the sum of $2695.41, belonging to the ward, which was directed by the court to be paid to the ward, less the sum of $18 costs. It is conceded that the guardian never, at any time, paid any portion of the money to the ward, but on July 22, 1870, he filed his ward’s receipt for $2677, dated July 1,1869, and procured an order of the county court for his final discharge as guardian. There was no citation of the ward, nor was he present, or given notice of such proceedings. An order had been .previously entered by the county court requiring said guardian to pay over to Ms ward the sum of money in his hands, less the costs before mentioned, and such order is conclusive upon the guardian and his security upon Ms bond, except for fraud or mistake, as to the amount then actually in the hands of the guardian. Ammons v. People, 11 Ill. 6; Ralston et al. v. Wood, 15 id. 159.

The complainant’s receipt, filed by the guardian, is prima facie evidence that his guardian, on or before July 1, 1869, paid him the sum of $2677, but is not conclusive. Like any other receipt, it is open to explanation or contradiction. (Scott v. Bennett, 3 Gilm. 243; Walrath v. Norton; 5 id. 437; Frink v. Bolton, 15 Ill. 343.) The evidence clearly establishes that the receipt is not true, and that the guardian never, in fact, paid the complainant said sum, or any part of it, and that there had at no time been a settlement between the guardian and ward. This, of itself, is sufficient to fix the liability of appellant, who was surety on the guardian’s bond, unless he has shown sometMng which exonerates him, or which, in equity, will defeat the right of complainant to the relief sought.

No discussion of the facts as to whether, at the time of the execution of the receipt mentioned, the ward understood the purport of that instrument, will be entered upon. He testifies, that he was told that it was a note his guardian wished him to sign, and that he signed it without reading it, relying upon such statement. The evidence showing the contrary is shown to be so unreliable in its character as to entitle it to little or no weight or consideration. It may therefore be assumed as a fact, that the receipt upon which the order of court was predicated, was obtained by said Day, guardian, by falsely representing to his ward that the paper presented for his signature was a note Ms guardian desired him to sign.

It is claimed that in giving this receipt by the ward to his guardian, he failed to exercise proper care and caution in ascertaining the nature and effect of the instrument signed, and .that he thereby put it in the power of the guardian to practice a fraud upon the court in procuring the order of discharge, and upon appellant, by means of such order and receipt, whereby appellant was induced to release his security, and that the ward should therefore be estopped from asserting the liability of such surety on said bond, and that complainant’s laches are, in equity, sufficient to defeat the relief sought. It is clear, however, that the guardian owed his ward a duty, which could be discharged only by performance of the condition of his bond, and that no one except the ward had power to release the obligation of the guardian or his surety. Before the county court could enter its order discharging the guardian, it must appear to that court that the guardian had complied with its former order, and paid over to his ward all money in his hands belonging tó said ward. Under the circumstances here, shown, the mere order of the county court would not avail to release the guardian from his obligation to account to his ward, and if the guardian is not released by it, it is equally clear that the surety would not thereby be released. If a dishonest guardian could file an ex parte account, showing payment in full to his ward, and by forged receipts, or receipts procured by fraud and circumvention, obtain an order of discharge, without notice to the ward, and thereby satisfy or defeat the condition of his bond requiring him to pay over to the ward the estate of the ward in his hands, it would defeat the purpose of the law in requiring such bonds, with security.

The principal contention, however, arises out of the fact that appellant had taken a mortgage upon the guardian’s land to indemnify himself against loss by reason of his suretyship on said guardian’s bond, and that by reason of said receipt, and the order of court thereby procured, and in reliance thereon, appellant was led to change his condition, and give up his security against loss by reason of his suretyship for said guardian ; and it is contended, that as, by giving the receipt, the ward aided his guardian in practicing a fraud upon appellant, he should be estopped from now disputing the validity and fairness of his receipt, and that he alone should suffer the consequences of his own want of due and proper care and circumspection in signing said receipt.

The doctrine of estoppel in pais is never applied except where it would be contrary to equity to allow the assertion of the right, or proof of the fact, to avail. It is never applied to one who is without fault, or who has not, by some act or declaration, or by silence when he should speak, induced another to alter his condition on the faith of such acts or the truth of such declarations. The facts which give rise to an estoppel must be such as to make it unjust and inequitable to allow the party estopped to assert what would otherwise be his right, or make proof of matters tending to establish such right. Its effect is the forfeiture of a pre-existing right, or the exclusion of evidence of such right. At the time of the execution of this receipt by Wiley, it is apparent that he had no knowledge that appellant was security on the guardian’s bond, or that the security on such bond, whoever he might be, had taken a mortgage or other security from Day. Wiley so testifies, and is uncontradicted by any credible testimony. It is therefore evident that he could have had no purpose, in executing said receipt, of aiding said Day in perpetrating a fraud upon the security on such bond, even if he had known that he was executing a receipt. The ward owed no'duty to appellant; made no statement or declaration to appellant to influence his conduct. Instead of giving the receipt to deceive appellant, and induce him to believe that the guardian had paid him, he was himself the victim of fraud and deception.

It was said by this court in People v. Brown, 67 Ill. 436, that “the doctrine on this subject we understand to be, that when a person, by his words or conduct, voluntarily causes another to believe in the existence of a state of things, and induces him to act upon that belief, so as to change his previous position, he will be estopped to aver against the latter a different state of things.” It is clearly apparent in this case that there was no voluntary act of Wiley which could have misled appellant, or induced him to part with his security. The act of Wiley was procured by fraud and misrepresentation of his guardian, for the faithful performance of whose duty appellant was surety. The mind of Wiley never assented to the execution of the receipt as an acknowledgment of having received the money therein mentioned. What he voluntarily did was to execute what he supposed to be a promissory note. It is not essential to the creation of estoppel that there should be an actual fraudulent intent at the time of making the declarations or performing the act upon which the other party has relied, but it is essential that there should be voluntary acts or declarations by which another is made to believe in the existence of certain facts, and which induce him to act upon that belief. Picard v. Sears, 6 A. & E. 469; Freeman v. Cook, 2 Ex. 654; Cornish v. Abbingdon, 4 Hurl. & N. 549; People v. Brown, supra; Powell v. Rogers, 105 Ill. 318.

The cases and text writers seem to use interchangeably the words “willfully,” “intentionally,” “means” and “voluntarily” as synonymous terms in discussing the question of the making of declarations or performing acts from which it is alleged an estoppel arises. The rule, as gathered from the various cases in respect of this element of estoppel, perhaps is, that where one voluntarily, by acts or declarations, represents a certain state of facts to exist, and thereby procures a change of conduct in another, he can not afterwards be heard to assert a contrary state of facts, if injury results to or fraud is perpetrated thereby upon the party who had acted relying upon the truth of his representations. It is, however, claimed “that an equitable estoppel will arise by the negligent act and conduct of a party, even though ignorant of the truth of his declaration.”

It is said in Bigelow on Estoppel, p. 540: “It seems to be settled that a party’s ignorance of the truth of the representation will not remove the estoppel if his ignorance is the result of gross negligence.” It is urged that it was gross negligence for Wiley to sign the paper produced as a receipt, without informing himself as to the contents thereof. We have seen that he was ignorant of the fact that he was making any representation or acknowledgment of payment by the guardian. His negligence, .if any is attributable to him, was in relying upon the statement of Day as to the contents of said paper. It, however, appears that appellee’s father died in 1856 ; that appellee was then about eight years old; that on March 23, 1859, Day was appointed guardian, and took appellee to his (Day’s) home, where the ward continued to reside as a member of the guardian’s family until after he became of age, and until the spring of 1881. When the signature was procured to the receipt, the ward was still an inmate of his guardian’s family, -and had just arrived at his majority. He would not be expected to distrust his guardian or question the truthfulness of his representations. Appellee says he had every confidence in his guardian, and the facts and circumstances shown tend to corroborate his statement. He was assured that the paper he was asked to sign was a note, and having been just awakened from sleep, did not read the paper before affixing his mark to it. That we can now see how utterly unworthy of confidence this guardian was, and how recreant to every trust and confidence reposed in him, furnishes no criterion for determining the condition of appellee’s mind in this respect. Considering, as we must, the confidential and intimate relations existing between appellee and his guardian, with whom he had had no settlement or talk of settlement of the ward’s affairs, it can not be said that there was anything to apprise appellee that he might be acknowledging payment by the guardian, or that would put him upon inquiry in that regard. It is to be remembered that this boy, while having a considerable patrimony, had been reared in ignorance, and allowed to fall into vicious habits, and, in addition, had, several years prior to his arriving at majority, become afflicted with a nervous disease, that, to some degree, impaired his mental faculties. If it be conceded that appellee knew that Day was his guardian, or that Day had money in his hands belonging to appellee, what was there to induce appellee to believe that the signing of this particular paper had anything to do with the matter of his estate? Manifestly, nothing whatever.

Ordinarily, one having the means of information as to the contents of a paper executed by him, will, as against third persons, be held to have known the contents, and will not be permitted to assert his ignorance of its contents to avoid responsibility according to its real import. Here, however, the signing of this receipt was the will and act of the guardian, rather than that of appellee. Courts will watch settlements of guardians with their wards, or any act or transaction between them affecting the estate of the ward, with great jealousy. From the confidential relation between the parties, it will be presumed that the ward was acting under the influence of the guardian, and all transactions between them, prejudicially affecting the interests of the ward, will be held to be constructively fraudulent. (Carter v. Tice et al. 120 Ill. 277.) The doctrine is thus stated in 1 Story’s Eq. Jur. sec. 217: Where the guardianship has, in fact, ceased, by the majority of the ward, the courts “will not permit transactions between guardians and wards to stand, even when they have occurred after the minority has ceased, and the relation become thereby actually ended, if the intermediate period be short, unless the circumstances demonstrate, in the highest sense of the term, the fullest deliberation on the part of the ward and the most abundant good faith on the part of the guardian, for, in all such cases, the relation is still considered as having an undue influence upon the mind of the ward, and as virtually subsisting, especially if all the duties attached to the situation have, not ceased,—as, if the accounts between the parties have not been fully settled, or if the estate still remains, in some sort, under the control of the guardian.”

It is seen that the presumption of influence on the part of the guardian, and the dependence of the ward, continues after the legal condition of guardianship has ended, and transactions between them, during the continuance of the presumed influence of the guardian, will be set aside, unless shown to have been the deliberate act of the ward, after full knowledge of his rights. In all such cases, “the burden rests heavily upon the guardian to prove the circumstances of knowledge and free consent on the part of the ward, good faith and absence of influence, which alone can overcome this presumption.” (2 Pom- , eroy’s Eq. 961, and authorities cited.) It is not only shown as a , fact, but will be presumed from the circumstances here shown, ' that undue influence was exercised by the guardian in procuring the receipt of his ward. The act, then, was the act of the guardian,—the carrying into effect of his will, to which the mind of the ward was subordinated. In no just sense can it i be said that a party thus circumstanced has been guilty of ' negligence. To bind the ward it should appear that he acted : after the termination of his disability, with deliberation, and with full knowledge of all material facts. Fish v. Miller, 1 Hoffm. Ch. 267; Scott v. Freeland, 7 S. & M. 409; Sherry v. Sausburry, 3 Ind. 320; Trader v. Low, 45 Md. 1; Ferguson v. Lowery, 54 Ala. 510; Garvan v. Williams, 44 Mo. 465; Harris v. Christopher, 69 N. C. 416; Wade v. Lobdell, 4 Cush. 510.

Nor can it be said that appellant was a third party, charged with no duty in respect of the matters here being considered. He was under contract obligation, to the ward to the extent of the money coming into the hands of the guardian, and had undertaken that the guardian would faithfully perform his duty in respect thereof. He is presumed to have known the law, and therefore must have known that the order of the county court was liable to be set aside for fraud, or any infirmity in the dealing between the guardian and ward. He was required to know that nothing short of the actual payment of the money in his hands would release the guardian from his liability as such, and that, in the event of said order being set aside, the guardian would be liable to account to said ward. He is shown to have known that the ward had been, and was then, a member of the guardian’s family, and had but recently attained his majority. Common prudence would therefore dictate that further inquiry should be made than merely looking to the record and the receipt before releasing his indemnity. The ward was in the neighborhood, and could have readily been seen and inquired of as to whether or not he had been paid. To hold otherwise, would be to put it in the power of every insolvent guardian who may have given security to his bondsmen, to despoil his ward of his estate, and then, by fraud or undue influence, procure the simple receipt of his ward, and thereby discharge the liability of the security upon the guardian’s bond.

But it is said, that where one of two innocent persons must suffer by the fraud of a third person who owed a duty to both, he who put it in the power of the third person to commit the fraud must bear the loss, rather than the other. It is contended, that appellee, by giving the receipt, enabled the guardian to impose upon the court and appellant, and the principle mentioned is sought to be invoked; against him. As we have seen, he did not knowingly give the receipt, nor did he have any knowledge that appellant held a mortgage or other security against loss by reason of his suretyship, and was not guilty of negligence with which he was chargeable in signing said receipt. The object of requiring a bond with security, is to protect the ward from the fraud and dishonesty of his guardian, no less than against his insolvency, and to allow the surety to escape liability through the very fraud of his principal which he was under contract obligation to protect the ward against, would be to establish a most dangerous precedent, and render such bond unavailing as a protection to the ward, and defeat the purpose of the law in requiring guardians to give bond with security. In Forrester v. State, 46 Md. 154, it is said, “that it is the duty of sureties on the bond of the guardian to make inquiry, and see that their principal discharges the obligation resting upon him, whether he be solvent or insolvent.” It was the duty of appellant, as it is of the courts, to scrutinize with care the transactions between the ward and the guardian for whom he is surety. When, by the exercise of reasonable care and diligence, the fact can be ascertained, he should be held to know of any infirmity in the dealings of the guardian with his ward. While full faith and credit must be given to the public records, and those relying upon and de'aling in view of them will ordinarily be protected, the record of discharge of the guardian by the county court will not protect the guardian, or the surety on the guardian’s bond, if such order is procured by the fraud of the guardian. In view of the facts of this case, it must be held that the negligence of the surety in not determining what was the truth, when the means of ascertaining the same was readily at hand, was the occasion of his loss, if loss he must suffer.

The delay of appellee in bringing this bill is set up and relied upon as laches, which should defeat the relief sought. The bill was not filed until twelve years after the right of action accrued. The statutory limitation to suits upon the bond then in force was sixteen years. Courts of equity, in enforcing rights of the ward as against the surety, will, unless there is some equitable reason for the adoption of a different period, adopt the limitation fixed by the statute. (Scheel et al. v. Eidman et al. 77 Ill. 301.) In cases of fraud, the limitation will begin to run only from the discovery of the fraud, or from the time when the fraud could have been discovered by the exercise of reasonable diligence; but it is well settled, that the failure to use such diligence may be excused when there exists a relation of trust and confidence between the parties, rendering it the duty of the party committing the fraud to disclose to the other the truth, and where it was through the acts of the former that the latter was induced to refrain from inquiry. (Bigelow on Fraud, 445; 2 Perry on Trusts, sec. 805; Atlantic Bank v. Harris, 118 Mass. 147; Wear v. Skinner, 46 Md. 257.) Here, the suit was brought within the limitation of actions on the bond, and while-the court may, for equitable reasons, adopt a less period of limitation, they will do so only when equity demands it. We see no reason in this case for departing from the general rule. It is true that the guardian became insolvent, as appellant says, in 1879; but appellee remained a member of the guardian’s family, and under his influence and control until 1881, and that he was subjected to and dominated by the will of the guardian, is, we think, apparent. In 1880, appellant testifies, appellee wrote him a letter demanding money that Day owed to appellee. It appears that appellant knew that appellee was living at Day’s at the time of the release of the mortgage, and long subsequently,—that he had seen Wiley occasionally, and knew of his physical affliction. It is shown that when Wiley became of age “he was a drunken spendthrift.” In view of the facts disclosed, we are not prepared to say that good conscience requires the application of the doctrine of laches.

.Finding no error in this record, the judgment of the Appellate Court is affirmed.

Judgment affirmed.


source: Caselaw Access Project

author: Mr. Justice- Bailey

license: Public Domain

text:
    The Birmingham Fire Insurance Company v. Emilie Pulver.

      Filed at Ottawa November 15, 1888.

    1. Insurance—proofs of loss—defects therein—waiver—evidence. In. case of defects in the proofs of loss under a policy of fire insurance, required to be made, it is the duty of the insurance company to point out such defects, and afford all reasonable facilities to the assured to obviate them. An unwillingness or refusal of the company to afford reasonable facilities to the assured to prepare and serve amended proofs of loss, is evidence for the jury, as tending to show a waiver of the defects in the proofs.
    2. After a loss by fire, the assured furnished the insurance company with proofs of the loss, the policy requiring the same, to which exceptions were taken. The attorney who made out the proofs having died, the assured employed .another attorney to correct them, who called upon the local agent of the company to learn what was wrong, and what could be done to correct the proofs. The latter promised to show the attorney the proofs, but failed to do so. The attorney then called on the adjusting agent of the company, who refused to let him see the proofs. The attorney then wrote a letter to the local agent, in which he recited his several efforts in that behalf, and asked for an explanation. In a suit on the policy, the plaintiff, after proving these facts, offered in evidence the letter of his attorney, which the court admitted, over the defendant’s objection: Held, no error, and that the interviews and correspondence between the plaintiff’s attorney and the defendant’s agents, in relation tó obtaining a view of the proofs served, was competent, as tending to prove a waiver of the defects therein.
    3. Same—measure of recovery-—whether limited by the certificate of another—or sworn statement of assured. A policy oí insurance required the assured, in case of loss, to furnish, with his proof of loss, a certificate of a magistrate of the value of the goods destroyed. The policy did not make such certificate an award, or provide that the assured should be bound by his estimate. The assured, in his proof of loss, stated the loss to be $3883, while the magistrate, whose" certificate was appended to and formed part of the proof of loss, stated the loss to be $1000: Held, that the assured was not limited to the amount certified to by the magistrate, but might, notwithstanding such certificate, establish by witnesses the true amount of the loss.
    4. It has been held, that even the sworn statement of the assured himself, in his proofs of loss, will not estop him, but that in a suit on the policy he may give evidence of the actual amount of his loss, and recover accordingly.
    5. Same—measure of recovery upon basis of “the actual cash value”— an instruction construed. In an action for a loss on a policy of insurance, which provided that the estimate of any loss should be made according to “the actual cash value” of the property, an instruction was given which directed the jury to estimate the plaintiff’s damages, in case of a recovery, according to the “fair cash- value” of the property destroyed: Held,-tinat there was no practical difference in the two forms of expression in relation to the measure of damages.
    6. The actual cash value of property is the price which it will bring in a fair market, after fair and reasonable efforts have been made to find a purchaser who will give the highest price. The actual cash value, then, is the fair or reasonable cash price for which the property can be sold in the market.
    7. Same—condition to arbitrate—effect upon right of action on policy. A condition in a policy of insurance providing for an arbitration in ease the parties can not agree as to the amount of a loss, can not operate to deprive the assured of his right of action, unless clearly made a condition precedent to the existence of such right.
    8. Error—favorable to party complaining. Where a party asks an instruction which he is not entitled to, which is refused, and the court, in lieu thereof, gives another which is more favorable to him than he is entitled to have, if there is error in the latter it is one of which he can not complain.
    ' 9. Evidence—opinions of witnesses—expert testimony. In an action on a policy of insurance to recover for a loss of goods by fire, the defendant offered to give in evidence the estimates or opinions of several witnesses who saw the debris and ashes after the fire, based upon what they saw, as to the quantity of goods lost by the plaintiff: Held,, that apart from the fact that the opinions sought to be elicited were based upon data too uncertain and equivocal to be of any value, the case was not one which properly admitted of expert evidence. It was for the witnesses to describe what they saw, and leave the conclusions to be drawn therefrom to the jury.
    10. Practice—limiting cross-examination. It is in the discretion of the trial court to confine counsel within reasonable limits in the cross-examination of witnesses, and the exercise of such discretion, when not abused, can not be assigned for error.
    11. Same—remarhs of the court in ruling upon evidence. Remarks of the court in ruling upon the admissibility of evidence, alluding to other evidence in the record, to make his meaning clear, is not unusual; and even when inadvertent remarks are made by the court, and the jury are told, by instructions, that they are the judges of the weight of the evidence and the credibility of the witnesses, and they are given the usual charge as to the preponderance of the evidence, so that it appearssuch remarks do not operate to the prejudice of the party complaining, they will not constitute such error as to require a reversal.
    12. In ruling upon the admissibility of evidence, the judge should use great caution in expressing his opinion on any question which it is the province of the jury to decide. But every unguarded expression of the judge in stating reasons to counsel for his rulings, can not be treated as ground for granting a new trial.
    13. Charging the juey—court not limited to instructions asked by the parties. In this State, the court is not limited to giving instructions submitted by counsel. The court may limit itself to giving instructions asked which properly state the law, and then, even though the law be inadequately given to the jury, no error can ordinarily be predicated upon such action, for the reason if counsel deem further instructions necessary, they should ask them.
    14. On the trial of a case, the defendant asked nineteen instructions, all of which, as well as the instructions asked by the plaintiff, were refused, and the court gave, in lieu thereof, a series of instructions prepared by himself. Some of the defendant’s instructions asked were erroneous, while as to the others, some collateral points and details were not covered by those given, but every material point in those refused, having a direct bearing upon the issues, was fairly covered and clearly stated in those given: Held, that the defendant had no substantial ground of complaint.
    15. Where the trial judge sees proper to do so, it .is competent for him to prepare his own charge to the jury; but if he does so, he should embody in it, either literally or in substance, all proper instructions asked by counsel.
    16. Same—as to the proper subject of the charge—directing the jury as to the mode of discharging their duty. Instructions to the jury as to the proper method of discharging their duties, or cautions against prejudice and favoritism, may properly be given; but the giving of them is necessarily a matter very much in the discretion of the court, and their, refusal can not ordinarily be assigned for error.
    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.
    Messrs. Moses & Newman, for the appellant.
    Messrs. Kraus, Mayer & Stein, for the appellee.
   Mr. Justice- Bailey

delivered the opinion of the Court:

This was a suit in assumpsit, brought by Emilie Pulver against the Birmingham Fire Insurance Company of Pittsburg, to recover the amount of a loss under a policy of insurance against fire. The trial in the Superior Court resulted in a judgment in favor of the plaintiff for $1103.85 and costs, which judgment was affirmed on appeal by the Appellate Court. By a further appeal the defendant brings the record to this court and assigns for error the judgment of the Appellate Court.

The policy of insurance in question was one of three policies for $1000 each, issued to the plaintiff by the defendant and two other insurance companies, upon her stock in trade, consisting chiefly of dresses and cloaks, manufactured and in process of manufacture, and in dress goods and trimmings, contained in a certain building on North Clark street, Chicago. Various questions of fact were presented at the trial, upon •most of which the evidence was more or less conflicting. Most prominent among these were, whether the plaintiff was the owner of the property insured at the time the policy was issued and at the time of the loss; whether the plaintiff fraudulently overstated the amount and value of the property destroyed or damaged in her proofs of loss; whether she fully performed the conditions of the policy relating to preliminary proofs of loss, or whether the defendant accepted the proofs rendered as a performance of said conditions and waived further performance ; and the true amount and value of the property damaged or destroyed. As to all these questions the judgment of the Appellate Court in favor of the plaintiff is conclusive.

Complaint is made of the admission by the Superior Court of certain evidence offered by the plaintiff upon the question of a waiver by the defendant of the conditions of the policy in relation to preliminary proofs of loss. The policy contained the condition usually found in fire policies on that subject, and the first count of the declaration alleged the furnishing of certain proofs of loss and an acceptance and approval of such proofs by the defendant and a waiver of all exceptions and objections thereto, while the second count alleged that the defendant waived and dispensed with the proofs of loss required by the policy. Certain proofs of loss furnished by the plaintiff to the defendant having been read in evidence, and it appearing that the defendant, after having retained said proofs for a considerable time, took some exceptions thereto, the plaintiff, to establish a waiver of the alleged defects in the proofs, gave evidence, among other things, tending to show that shortly after said proofs were served, the attorney who drew them up had died and that the plaintiff thereupon employed another attorney, who called upon the local agent of the defendant twice to ascertain what was the difficulty with the proofs and ■ to learn what should he done by way of correcting them; that the local agent offered to show him the proofs but failed to do so; that he then called upon the defendant’s adjusting agent who also refused to let him see the proofs. The plaintiff then, offered and the court admitted in evidence over the objection and exception of the defendant a letter written by the attorney to the local agent after the failure of his several efforts to obtain a view of the proofs, fin which he recounted his efforts in that behalf and their result, and asked for an explanation’.' We can perceive no error in the admission of this letter. That, and the attorney’s preceding interviews with the defendant’s agents were only parts of the attempt on his part to ascertain the nature of the objections to the proofs of loss so as to be able to obviate them. If there were any defects in the proofs of which the defendant in good faith complained, it was its duty to point them out and afford all reasonable facilities to the plaintiff to ascertain what they were so as to-be able to remedy them. A refusal to exhibit the proofs was evidence tending to prove that the objections urged were merely captious, and not made with any view of obtaining corrected proofs. The unwillingness of the defendant to afford reasonable facilities to the plaintiff to prepare and serve amended proofs, was evidence for the jury to consider, as tending to show that it was content with the proofs already ''furnished and therefore waived all defects therein. ■ It follows that the interviews and correspondence between the plaintiff’s attorney and the defendant’s agents in relation to obtaining a view of the proofs served was competent as tending to prove such waiver.

The plaintiff, in her proofs of loss, stated the amount of her loss to be $3886.95, while the notary public whose certificate is appended to and forms a part of said proofs, stated the loss to be $1000. The defendant claims, as a matter of law, that the plaintiff is bound by the notary’s certificate as to the amount of the loss, and that, as there are three concurrent policies of $1000 each, the plaintiff’s recovery should have been limited to one-third of the amount certified to by the notary. In this view we are unable to concur. Proofs of loss are required by the conditions of policies of insurance for the purpose of furnishing the insurer with evidence upon which to determine the fact and the amount of its liability, and also to serve as the basis for the adjustment of the loss with the insured. Among the proofs required are the plaintiff’s sworn estimate of the amount of the loss, and an official estimate of it by a neighboring and disinterested magistrate. The magistrate’s certificate is produced, not as the award of an arbitrator, or as the certificate of a party by whose estimate the insured either expressly or impliedly agrees to be bound, ‘but merely as the estimate of a third party which the insurer sees fit to require by the conditions of the policy. The insured obtains and furnishes the certificate as a performance of such condition, and not as admitting its accuracy or agreeing to be bound by it. It is open to him, notwithstanding the certificate, in a suit upon the policy, to establish by witnesses the true amount of the loss.

It has been frequently held that even the sworn statement of the insured himself in his proofs of loss will not estop him, but that, in a suit upon the policy, he may give evidence of the actual amount of his loss and recover accordingly. Lebanon Ins. Co. v. Kepler, 106 Pa. St. 28; Miaghan v. Hartford Ins. Co. 24 Hun, 58 ; Hoffman v. Ætna Ins. Co. 1 Rob. (N. Y.) 501; 32 N. Y. 405 ; Parmelee v. Hoffman Fire Ins. Co. 54 id. 193 ; McMaster v. Insurance Co. 55 id. 222; Commercial Ins. Co. v. Huckberger, 52 Ill. 464. In Farrell v. Ætna Fire Ins. Co. 7 Baxter, 542, it was held that the statement in the magistrate’s certificate as to the value of the property lost by fire is not even competent evidence in favor of the insured to show the amount of the loss, which could certainly not be the rule if such certificate constituted an estoppel, for the reason that estoppels must be mutual.

A number of exceptions were taken by the defendant to the rulings of the court in giving and refusing instructions to the jury. The defendant asked nineteen instructions, all of which, as well as the instructions asked by the plaintiff, were refused, the court giving, in lieu of the instructions asked, a series of instructions prepared by himself, covering, as he seemed to view the case, all the questions of law presented upon which it was necessary or advisable to instruct the jury. The propriety of the practice thus adopted is challenged, the proposition contended for seeming to be, that in this State, the functions of the court in the matter of instructing the jury, are practically limited to giving or refusing the written instructions submitted by counsel. Such clearly is not the case. True, he may, if he sees fit, limit himself to giving the instructions submitted by counsel which properly state the law, and then, even though the law be inadequately given to the jury, no error can ordinarily be predicated upon such action, because, if counsel had deemed further instructions necessary, they might and should have asked them. But where the judge sees proper to do so, it is competent for him to prepare his own charge to the jury, but if he does so, he should embody in it, either literally or in substance, all proper instructions asked by counsel. Indeed, the preparation of a charge by the judge may often have the advantage of furnishing the jury with a terse, consecutive and logical statement of the law applicable to the ■ case, in place of the loose, disjointed and obscure presentation of the law which often results from giving instructions in . the form in which they are prepared by the respective counsel.

The series of instructions given by the court is criticised both for what it contains and for what it omits. So far as it goes, we are able to discover no error of which the defendant can complain. It is urged that it is erroneous in directing the jury to estimate the plaintiff’s damages, in case of a recovery, according to the “fair cash value” of the property destroyed, while the policy requires that the estimate should be made according to “the actual cash value” of the property. Between these two forms of expression we are unable to perceive any practical difference. The actual cash value of property is the price which it will bring in a fair market,' after fair and reasonable efforts have been made to find the purchaser who will give the highest price: The actual cash value then is the fair or reasonable cash price for which the property can be sold in the market. We see therefore no impropriety in explaining the “actual cash value” as meaning the “fair cash value,” or in using the two phrases as practically synonymous.

The instructions given enumerate among the defenses of which the defendant was seeking to avail itself, the failure of the plaintiff to submit her differences with the defendant in relation to her loss or damage to arbitration, in accordance with the conditions of the policy, and on that question the jury were instructed as follows:

“As to the question of arbitration, you are instructed that, under the provisions of the policy, if there was a dispute as to the amount of the loss, then either party could demand an arbitration, to determine the amount of such loss, by serving a notice in writing on the opposite party; and, before you can find against the plaintiff on this point, you must believe, from the evidence, that there was a dispute between the parties as to the amount of the loss, and that notice in writing was served on her, or on some one authorized to act for her, demanding such arbitration in accordance with the provisions of the policy, and that she in person, or by her attorney, without sufficient cause, refused to submit to such arbitration.”

It is insisted that this instruction, though holding the law substantially in accordance with the defendant’s theory, is erroneous in not conforming in its hypothesis to the evidence as it was actually given, the evidence being, as is claimed, in accordance with the hypothesis of an instruction asked by the defendant which was as follows:

“If the jury believe, from the evidence, that the plaintiff requested such award, and the defendant accepted and acted upon such request and proceeded to appoint an arbitrator, and if the jury further believe, from the evidence, that the plaintiff, without any sufficient reason, abandoned said arbitration SO' requested by her, then the plaintiff can not recover in this case, and your verdict will be for the defendant.”

It is useless to inquire whether the instruction given is defective as claimed, for the reason that, under the conditions of the policy, a failure to arbitrate could in no event be a defense. The policy provides that, “in case differences shall arise touch- ‘ ing any loss or damage, after proof of these has been received in due form, the matter shall, at the written request of either party, be submitted to impartial arbitrators, whose award in writing shall be binding on the parties as to the amount of such loss or damage, but shall, not decide the liability of the company under this policy.” There is no condition in the policy that the loss should not be payable until such arbitration and award should be had, or in any way making a submission to arbitration a condition precedent to the payment of the loss. The promise to pay, and the provision making such payment conditional upon the production of proofs, etc., are in a preceding part of the policy, and are in no way incorporated with or made dependent upon the condition in relation to arbitration.

A condition in a policy providing for an arbitration can not operate to deprive the insured of his right of action, unless clearly made a condition precedent to the existence of such right. Liverpool, London and Globe Ins. Co. v. Creighton, 51 Ga. 95; Patterson v. Triumph Ins. Co. 64 Maine, 500; Roper v. Lendon, 1 Ell. & Black. 825; Gore v. Council Bluffs Ins. Co. 67 Iowa, 272; Reed v. Washington Fire and Marine Ins. Co. 138 Mass. 572; Canfield v. Watertown Fire Ins. Co. 55 Wis. 419; German-American Ins. Co. v. Steiger, 109 Ill. 254. There was no error therefore in refusing the instructions asked by the defendant on the subject of arbitration, and the instruction given being more favorable to the defendant than it had a right to ask, there was no error in giving it of which the defendant can complain.

But it is claimed that the court erred in refusing the defendant’s instructions because they contained various propositions of law upon which the jury should have been instructed which were not covered by the instructions given. It would serve no useful purpose for us to review each of the refused instructions in detail, and it must therefore suffice for us to say generally that we have carefully examined them in connection with the instructions given, and are of the opinion that no proposition of law was omitted in respect to which the defendant has any substantial ground of complaint. Several of the instructions refused were properly refused on account of inherent defects in the instructions themselves. As to the residue, while some collateral points and details are not covered, we think every material point having a direct bearing upon the issues in the case is fairly and clearly stated. Several propositions, it is true, are omitted, which bear merely upon collateral matters, and consist of lectures to the jury upon the proper method of discharging their duties, or cautions against prejudice and favoritism. Instructions of this character may properly be given, but giving them is necessarily a matter very much within the discretion of the court. He is in a position to observe and know whether the situation is such as to render such cautionary instructions necessary to a due administration of justice, and if in his opinion they are not, his refusal to give them can not ordinarily be assigned for error.

At the trial the defendant called several witnesses who saw the debris and ashes after the fire, and offered to introduce in evidence the estimates or opinions of said witnesses, based upon what they saw, as to .the quantity of goods lost by the plaintiff. This evidence was excluded, and we think properly. Apart from the consideration that the opinions sought to he elicited were based upon data too uncertain and equivocal to be of any value, the case is not one which properly admitted of expert evidence. It was for the witnesses to describe what they saw, and if any reliable conclusions could be drawn from the appearance of the debris and ashes as they appeared some time after the fire, the jury were as well qualified as the witnesses to draw such conclusions.

Certain criticisms are made upon the conduct of the judge during the course of the trial. On that subject we adopt, as expressing our views, the following portions of the opinion of the Appellate Court pronounced by Moran, J.:

“Complaint is made of the course of the trial judge in interfering with the cross-examination of some of the witnesses, and because of remarks made in ruling on points in reply to the arguments of counsel. The cross-examinations were in some instances inordinately extended, and it is in the discretion of the court to confine counsel within reasonable limits. We find no abuse of such discretion in this case. While ‘patience and gravity of hearing is an essential part of justice,’ the judge has the direction of the trial, and is much better able to perceive what is unnecessary than counsel who is engaged in a heated contest with the witness. The remarks or comments of the court mainly complained of were made in ruling upon objections, and are statements that the evidence upon certain points was thus and so. The admissibility of evidence offered frequently depends upon the evidence already introduced, and it is not unusual for the court in ruling, to allude to such evidence as is in the record, to make his meaning plain.

“This, of course, should be done in such manner as to express no opinion as to what such evidence proves. Owing to the regard which is paid by jurors to the opinion of the judge, he should use great caution in expressing his.opinion on any question which it is the province of the jury to determine. But every unguarded expression of the judge in stating reasons to counsel for his rulings, can not be treated as a ground for granting a new trial. To do so would be to greatly embarrass the administration of justice.

“The jury were told that they were the judges of the weight of the evidence, and of the credibility of the witnesses, and were given the usual instructions as to the preponderance of the evidence, and from the whole course of the trial no doubt thoroughly understood that it was their province to determine what were the facts established by the evidence. We are of' the opinion that the inadvertent remarks of the court did not in fact operate to the injury of appellant, and do not constitute such error as to require us for that reason to reverse the case.” After a patient examination of the whole record we fail to find any error of law which in our judgment is material. The judgment of the Appellate Court will therefore be.affirmed.

Judgment affirmed.


author: Mr. Chief Justice Craig

text:
    John W. Seymour et al. v. Duncan Mackay et al.

      Filed at Ottawa November 15, 1888.

    1. Mortgage—deed absolute in form—mortgagors interest subject to execution. Where an absolute deed of land is given as security for money loaned, it will be treated as a mortgage, and the interest of the grantor will be subject to levy and sale under execution against him, while the relation of mortgagor and mortgagee exists.
    2. Same—vesting entire estate in mortgagee, as cutting off the rights of other creditors. Where the transaction is fair, and not attended with oppression or fraud or undue influence, and the mortgagee has not availed himself of his position to obtain an advantage over the mortgagor, a bona fide agreement between the parties to vest the entire estate in the mortgagee will be sustained, and the execution of a formal deed will not be required.
    3. So where a deed, absolute in form, is given as a security for a debt, and a contract given by the grantee to reconvey, on payment, and the debtor, being unable to pay, surrenders such contract in discharge of tho debt, and takes a lease of the premises, he will thereafter have no such interest in the land as will be subject to levy and sale under execution.
    4. Same—satisfaction entered, through fraud or mistalce, etc.—subsequent incumbrancer. If the entry of satisfaction of a mortgage is procured by fraud, or it is entered by accident or'mistake, it may be set aside by a court of equity.

      5. But where the owner of the mortgage debt enters satisfaction of the mortgage on the record, under an agreement with the mortgagor, to enable the latter to obtain money with which to make an investment on joint account, and the mortgagor fails to procure the money and make the investment as agreed, the entry of satisfaction will be good in favor of a party holding a subsequent mortgage, who took no part in procuring the entry of satisfaction, and the entry will not be set aside as to him.
    6. Same—consideration for release. Where tho mortgagee releases his mortgage-of record, upon the agreement of the.mortgagor to procure a loan of money on the premises, for investment for himself and the mortgagee, on joint account, out of which to pay the mortgage debt, such agreement will be a sufficient consideration to support the contract to release the mortgage, and the release will be as valid and operative as if payment of the mortgage indebtedness had been made.
    7. Same—ratification of release. The holder of a mortgage debt, for the purpose of enabling the mortgagor to borrow money for investment on joint account, had the mortgagee enter satisfaction of the mortgage on the record. The mortgagor failed to obtain money and carry out the agreement under which the release of the mortgage was made, and some three years afterward the holder of the mortgage debt, without having taken any steps to set aside the release, had a settlement with the mortgagor, under which he surrendered the old note and mortgage, and took a new note for the sum found due: Held, that this was to be regarded as a ratification of the release of the mortgage, and that such mortgage could not be thereafter enforced, to the prejudice of parties having subsequent liens or rights in the property.
    8. Contbact—execution in ignorance of its terms—negligence. Where a party executes a written contract after having full opportunity to read it and study its provisions, and he does read it, and subsequently signs the same, it will be his own fault if he does not understand it, and he will be bound by its terms and provisions.

      Writ op Error to the Appellate Court for the Second District ;—heard in that court on writ of error to the Circuit Court of Carroll county; the Hon. John V. Eustace, Judge, presiding.
    This action, as originally commenced, was a bill in equity, brought by Daniel Belding, against Duncan Mackay, to cancel a certain lease, to declare certain deeds to he mortgages, for an accounting, and for general relief. It is, in substance, set up in the bill, that on the 5th day of February, 1870, complainant, Daniel Belding, and his wife, conveyed, by deed to Mackay, a certain tract of land in Carjoll county, consisting of about 340 acres; that the conveyance was intended as a mortgage, to secure the payment of $4000 and interest, money loaned. It is also alleged, that at the same time Mackay executed an agreement to Belding to reconvey upon the payment of $4000 and interest. It is also alleged in the bill, that on February 9, 1872, Belding and wife executed and delivered to Mackay another deed, conveying 120 acres of land in Carroll ■county, for the expressed consideration of $3800, but the deed was made for securing an indebtedness of only $2000; that the land belonged to Harriet Belding, wife of complainant, and it was understood that Mackay should execute an agreement to reconvey the land to Harriet upon the payment of $2000 and interest. It is also set up that this loan was usurious. It is also alleged, that complainant and his wife, on or about April 15, 1874, executed and delivered to» Mackay a quitclaim deed for certain lands in Carroll county, for the expressed consideration of $2000, but that no consideration passed; that the deed was merely made to correct a mistake in the description of the lands in the deed of February 5, 1870. The bill also charges a sale of 92^°^ acres of the land conveyed to Mackay, to one Alonzo Heath, for $3696, and the receipt by Mackay of the money, to apply on his indebtedness. The bill also alleges a contract between Mackay and Belding, under which Mackay should take all the land south of a certain telegraph road not taken by Heath, amounting to 132 acres, at $40 per acre, to apply on the indebtedness. It is also alleged in the bill, that in February, 1879, complainant refused to continue to pay " Mackay interest at ten per cent on the amount Mackay claimed to be due him, and it was then agreed that in lieu of interest Belding should pay two-fifths of the crops raised on the lands during the season of 1879; that shortly after making the agreement, Mackay presented complainant a paper for his signature, stating that it merely contained their agreement in reference to two-fifths of the products of the farm in lieu of interest; that complainant signed the paper without reading it; that he now finds that the paper was a lease, under which the farm is leased from March 1, 1879, to March 1, 1880, containing provisions of a stringent character. The bill also charges that Mackay now insists that he is the absolute owner of the premises, and wholly denies that complainant has any interest in the lands. The bill prays for an accounting, that the price of the land south of the telegraph road, at $40 per acre, should be credited on the indebtedness, and that the other deeds to Mackay may be decreed to be mortgages.
    The defendant, Mackay, put in an answer to the bill, in which he alleges that the deed of February 5, 1870, was executed and delivered to secure a loan of $4000, and future advances ; that the deed of February 9, 1872, was executed as security for $3800 additional indebtedness due and owing from Belding to him; denies that he ever agreed to convey the lands therein described to Harriet Belding, upon the payment of $2000 and interest. It is also set up in the answer, that at least once a year, from February 9, 1872, to November, 1876, defendant and complainant had a settlement with each other, and in such settlement interest'at ten per cent was computed on the sum found due defendant at the last previous settlement, and whatever he had paid or loaned complainant over the amount paid to and for defendant during the year, was credited to defendant, and also interest at ten per cent; that in October, 1876, defendant sold complainant the cheese factory erected on said land by defendant, at $2750; that said cheese factory cost defendant $4000; that in November, 1876, they had another settlement of all their financial matters to that time, and which was after defendant sold said cheese factory to complainant, and there was then due defendant $13,750; that they made a written agreement, November 1, 1876, by which defendant agreed to convey to complainant, by special warranty deed, all lands conveyed by complainant and wife to defendant, except the 92T^°0- acres conveyed to said Heath; that this was to be done when complainant paid defendant said $13,750, on or before November 1, 1880, with interest at ten per cent, and all the taxes subsequent to 1875; that by said agreement it was provided, that if complainant failed to make the payments, or any of them, as therein required, said contract, at the option of defendant, might be forfeited, and possession taken by him of said premises. It is also set up in the answer, that the deed of February, 1874, was executed to correct a mistake in the deed of February 5, 1870. The defendant admits that he received $3696 from Heath for the 92 acres sold, and accounted to Belding for the amount in their settlements; that he never agreed to take, at $40 per acre, the balance of the land south of the telegraph road not taken by Heath. The defendant also sets up that the agreement of November 1,1876, superseded and cancelled all .prior agreements for the conveyance of lands; that since said agreement Belding has paid Mackay nothing, but has been in the full receipt of the rents and profits of the lands. It is also set up in the answer, that in the fall of 1878 complainant notified defendant that he was unable to pay anything, and offered to surrender the land and the contract for a deed; that defendant accepted the offer; that the contract of November 1,1876, was delivered up to the defendant; that the complainant, after the surrender of the contract, expressed a desire to lease the lands, and pay as rent two-fifths of the products; that defendant assented to this request, and prepared a lease, which was -read, and somewhat modified, and approved, and the premises were leased from March 1, 1879, to March 1, 1880; that the lease was executed by complainant with a full knowledge of its contents.
    About the time the bill in this case was filed, Belding executed a judgment note, payable to John W. Seymour, for $6164, dated February 1,1877. Judgment was confessed on the note January 26,1880, for $7658.86, and on February 3 an execution issued, and was levied on Belding’s interest in the lands. On the 12th day of May, 1880, complainant amended his bill, and made John W. Seymour a party defendant. The amendment contains the following allegation: That “Seymour has, or claims to have, some judgment or other lien on the whole of the premises, and an equitable interest therein.” Seymour answered the bill, admitting substantially all the material allegations therein, and on May 23, 1880, filed a cross-bill: The' cross-bill is quite voluminous. It refers to the original bill and its different provisions, and re-alleges its main allegations. At the same time it contains special grounds upon which relief is predicated. Those grounds are in substance as follows: That on the 16th day of December, 1867, Seymour' loaned Belding $3700, for five years, with interest at ten per cent per annum; that in order to secure the payment of the money loaned, Belding executed his note, payable to Helen M. Seymour, wife of complainant, John W. Seymour, and also a mortgage, executed by himself and wife, on the south-west quarter of section 30, township 24, range 6, east, and the north-west quarter of section 31, same town and range, all in Carroll county; that the mortgage was recorded August 30, 1871. It is also alleged, that on or about the 10th day of October, 1871, Helen M. Seymour, at the request of her father, Daniel Belding, went to Mount Carroll, and cancelled of record the mortgage. It is alleged as an excuse for the release of the mortgage, that about the 1st day of October, 1871, Belding, with the assistance of Mackay, had made application to the Northwestern Life Insurance Company of Milwaukee for a loan of money sufficient to discharge all liens on the lands; that Mackay had signed a certificate that the lands were worth $75 per acre; that Helen M. Seymour was then and there informed by said Belding and said Mackay that it would be necessary to cancel the record of said trust, deed which she held; that, believing said Mackay was acting in good faith in making said statement, and intended to aid said Belding, her father, in obtaining said money of said insurance company, and was going to settle with said Belding, she, at the request of her father, said Belding, October 10,1871, receipted on the margin of the record of said trust deed full satisfaction of the mortgage; that no money was actually paid her, or any one else, on the sum secured by the mortgage; that the cancellation was made without consideration, but was made solely to enable Belding to obtain the money from the insurance company. It is also alleged, that after the mortgage was cancelled, Mackay persuaded Belding not to borrow money of the insurance company; that Mackay, in his attempt to assist Belding, did so solely to get the mortgage held by Helen M. Seymour removed from the record, to enable him to obtain the farm without advancing money above what he had already loaned.
    The cross-bill contains many other allegations, but it will not be necessary to set them out here. The prayer is, that Belding and Mackay shall come to an accounting with each other and with Seymour, that the lands in the Helen M. Seymour mortgage be declared subject to the trusts therein declared, that the cancellation of the mortgage be declared void, and that the lands be sold in satisfaction of the mortgage. Mackay, in his answer, set up that he never had any knowledge of the existence of the Helen M. Seymour mortgage until the filing of the cross-bill, or that Seymour or his wife claimed any lien on part of the lands; denies that he hindered or prevented Belding from borrowing money of the insurance company; denies that he ever made a certificate that the lands were worth $75 per acre. Indeed, he denies all the material allegations of the cross-bill. The court, on the hearing, dismissed the cross-bill.
    Messrs. W. & W. D. Barge, for the plaintiffs in error:
    Courts of equity will grant relief upon the ground of fraud, ’ established by presumptive evidence. Chesterfield v. Janssen, 2 Ves. 125 ; Fullager v. Clark, 18 id. 483; 1 Story’s Eq. Jur. (5th ed.) sec. 190.
    Fraud will be presumed, in equity, from the' circumstances of the parties. Ward v. Lamberth, 31 Ga. 150; Gallatian v. Cunningham, 8 Cow. 361.
    The borrower is not on an equality with the lender of money. The former is generally controlled by a necessity that places him within the power of the latter. Hewitt v. Dement, 57 Ill. 500.
    Fraud will be presumed when the parties to a transaction do not stand upon an equal footing. Kerr on Fraud and Mistake, 143; Story’s Eq. Jur. sec. 222; Edwards v. Myrick, 2 Kan. 68; Casborne v. Barsham, 2 Beav. 76.
    Great distress of mind and a proffer of assistance are cir- • cumstances that may.be considered in determining whether a transaction is fraudulent. Dismakes v. Terry, Walker, 197; Wilson v. Watts, 9 Md. 356.
    Where there is the appearance of fraud, from the nature of the transaction or the situation of the parties, the burden of showing that the transaction is free from fraud, is upon the party who seeks to uphold it. Kerr on Fraud and Mistake, (Am. ed.) 385, 386; Watt v. Grove, 2 S. & L. 502; Insurance Co. v. Palmer, 25 Beav. 605; Cooke v. Lamotte, 15 id. 240; Ray v. Smith, 7 H. L. 750.
    Through the misconduct of Mackay, Seymour has been illegally deprived of his security, which was a lien on the land prior to all liens held by Mackay subsequent to the $4000 loan of February 5,1870. From this wrong a court of equity will relieve him. And here, the general rule is, that particular persons in contracts and other' acts shall not only transact bona fide between themselves, but shall not transact mala fide in respect to other persons who stand in such a relation to either as to be affected by the contract or the consequences of it. 1 Story’s Eq. Jur. (5th ed.) sec. 333; 2 Parsons on Contracts, (2d ed.) sec. 268; Chesterfield v. Janssen, 2 Ves. 125.
    The prayer of the cross-bill should therefore have been, granted, the security for the $3700 restored to J. W. Seymour, and the lands therein described subjected to the payment of his debts.
    Mr. E. P. Barton, and Mr. J. M. Hunter, for the defendants in error:
    The parties to a mortgage may, by a subsequent agreement fairly made, voluntarily cancel the defeasance, and thereby give to the deed the effect of an original absolute conveyance. Reed v. West, 55 Ill. 242; Carpenter v. Carpenter, 70 id. 457; 2 Washburn on Beal Prop. (3d ed.) 167; 2 Jones on Mortgages, sec. 977.
    The Seymour mortgage was released in consideration of Belding’s promise to raise money and pay a portion of the mortgage debt, and he was unable to fulfill his promise. But this failure did not revive the mortgage.
    If the release did not effectually cancel the mortgage, it was completely done by Seymour in 1874, by settling with Belding and taking a new note for the sum due on the mortgage, and the surrender of the old note and mortgage. ■ This was a ratification of the release. 2 Jones on Mortgages, sec. 926.
    The laches of Seymour is such as to bar his claim. Cunningham v. Fithian, 2 Gilm. 650; Cox v. Montgomery, 36 Ill. 397; 43 id. 110; Brink v. Steadman, 70 id. 241; Breit v. Yeaton, 101 id. 242.
   Mr. Chief Justice Craig

delivered the opinion of the Court:

On the final hearing, upon the pleadings and evidence, the circuit court dismissed the original bill of Belding, and also the cross-bill of Seymour. A writ of error was sued out in the Appellate Court by Seymour, where the decree of the circuit court was affirmed. To reverse that judgment, Seymour has sued out this writ of error.

As the complainant in the original bill (Belding) is not before the court, and is not complaining, it will not be necessary to enter upon a consideration of the matters involved in the original bill, except so far as may be necessary to a proper and legitimate determination of the matters involved in the cross-bill.

The different transactions between Mackay and Belding, wherein money was advanced and a deed taken, may be regarded as mortgages. Indeed, there is no controversy between the parties in regard to the fact that the deeds executed and delivered by Belding and wife to Mackay were given as security for money loaned, and were in fact mortgages. If, therefore, Seymour had obtained a judgment and a levy on the lands while this relation existed between Belding and Mackay, doubtless, if anything had been left after the payment of Mackay’s claims, which were prior liens, such assets might properly have been reached by Seymour in satisfaction of his judgment. But it will be observed that Mackay, in his answer, sets up, that as often as once in each year after February 9, 1872, he and Belding had an accounting together; that on the 1st day of November, 1876, they had a full and complete accounting, and on such accounting Belding was found to be indebted to him in the sum of $13,750; that they then executed, in duplicate, a contract, under which, in ease Belding paid said sum, with interest at ten per cent per annum, on or before a certain date, Mackay was to convey to Belding all the lands Belding had conveyed to him, except those deeded to Heath. It is also set up, that after the accounting Belding paid nothing, but in the fall of 1878 offered to surrender the lands and his contract; that Mackay accepted the offer, and the contract held by Belding for a conveyance of the lands was surrendered, and that Belding accepted a lease of the lands, under which he agreed to occupy the same until the 1st of March, 1880, and pay as rent two-fifths of the crops raised.

The contract of November 1, 1876, and the lease, were put in evidence, and, so far as appears, they were fairly and deliberately made by the parties. They speak for themselves, and the rights and obligations of the two contracting parties must be determined by them. It is true that Belding claims, in his evidence, that he was to have $1500 if he surrendered the contract and his interest in the lands, but in this he is not supported by any other evidence in the record.

As to the lease, it is claimed that he did not understand its terms and conditions. The lease was not,'however, executed until he had full opportunity to read it and study its provisions. No haste or undue activity was resorted to for the purpose of procuring its execution, but it was left in the custody of a third party, for Belding to examine and execute. He called on that party, read the lease, and went away, and on a subsequent day returned and deliberately executed it. Where a contract is executed under such circumstances, it is the party’s own fault if he did not understand it, and he will be bound by its terms and conditions. If, therefore, the rights of Belding and Mackay were settled by the contract of November 1, 1876, and the agreement under which it was surrendered and a lease executed, it is plain that at the time Seymour obtained his judgment there was no title in the lands resting in Belding upon which the judgment could become a lien. Conceding that in the fall of 1878 the relation existing between Belding and Mackay was that of mortgagor and mortgagee, as Mackay held the legal title, and Belding but an equity, the relation of mortgagor and mortgagee might be terminated by a surrender of the contract providing for a conveyance, held by Belding, and the acceptance of a lease. Where the transaction was fair, and not attended with oppression or fraud or undue influence, and the mortgagee has not availed himself of his position to obtain an advantage over the mortgagor, a bona fide agreement between the parties to vest the entire estate in the mortgagee will be sustained, and the execution of a formal deed will not be required. West v. Reed, 55 Ill. 242; Carpenter v. Carpenter, 70 id. 457; Harrison v. Trustees of Philips Academy, 12 Mass. 456; 2 Washburn on Real Prop. (3d ed.) 67; 2 Jones on Mortgages, see. 977.

This disposes of the case so far as Seymour may claim relief under the judgment he obtained on the 26th day of January, 1880, and the next question to be considered is, whether the release of the mortgage given by Belding and wife to Helen M. Seymour, in 1867, which was entered upon the record by Helen M. Seymour. October 10,1871, operated as a release of the lands from that mortgage. If it did, of course no decree could be rendered foreclosing the mortgage.

Section 8, chapter 95, of our statute, provides, that upon payment of a mortgage the mortgagee shall enter satisfaction upon the margin of the record of such mortgage, in the recorder’s office, which shall forever thereafter discharge and release the same, and shall bar all actions or suits brought, or to be brought, thereon. Here the release was made in due form. It was done with the' knowledge and approbation of Seymour, who owned the mortgage indebtedness, by his wife, in whose name the mortgage was taken. If the release had' been procured by fraud, or if the evidence established that the mortgage was released by accident or mistake, there might be ground for setting it aside; but the evidence fails entirely to' establish a case of fraud, accident or mistake. The arrangement, whatever it may have been, which led to the release, was made between Belding and Seymour. Mackay had nothing to do with it. Indeed, he did not know at the time that the Seymour mortgage existed. He had two abstracts of title to the land, neither of which showed the Seymour mortgage.

Seymour, in his evidence, in speaking of the release, said: “I knew of the releasing of this trust deed at the time it was done. It was arranged between Belding and myself that the trust deed should be released, for the purpose of allowing him to raise the money to carry out his agreement with me to purchase cattle, in which I was to have an interest or partnership in lieu of the amount secured by the trust deed, but as Belding failed to carry out his agreement to give me an interest in the cattle, neither my wife nor myself received any consideration for releasing the trust deed.”

Belding gives the following account of the release: “The reason she (Helen Seymour) cancelled it (the mortgage) was, some time in the fall Seymour wanted to go into the cattle business, and we wanted money to buy them. We found we could get the money from the Northwestern Life Insurance Company. The company required an abstract of title to the land, and certificate of two or three men of its value. I got a certificate from Duncan Mackay, putting the value of the land at $75 an acre, and got another one of 3". F. Allison, putting it at $65 an acre. Allison made an abstract. The trust deed was cancelled to raise money to pay off Duncan Mackay, • and money to buy the cattle. I was to furnish the money, Seymour to have half the cattle when fattened and sold. I did not obtain the money of the insurance company. A short time after that, Mackay came to my house and stayed all night. When I lit him up to bed, he said he thought it was foolish for me to borrow the money of a foreign company when I could just as well get it near home at just as good rates. He said he could let me have the money to buy all the cattle I needed on the farm. That is the reason I did not get the money of the insurance company.”

It is not claimed that Belding was guilty of any fraud or deception which led to1 the release of the mortgage. The substance of the arrangement seems to have been this: that the release was made to enable Belding to raise money with which he and Seymour expected to engage in the cattle business; but after the release had been made, it turned out that Belding failed to raise the money. But the failure of Belding to raise the money could not instil life and vitality into a mortgage which had been cancelled of record. The statute says that where a mortgagee has received full satisfaction and payment of all such sum or sums of money as are really due, he shall enter satisfaction upon the margin of the record, which shall forever discharge and release the same, and shall bar all actions brought thereupon. This mortgage was not paid with money, but upon a consideration agreed upon which was valuable to the parties. No fraud or deception being practiced, it was cancelled and released of record. No reason is perceived why a release made under such circumstances may not be as valid and binding, and be treated in the same way, as a release where the mortgage debt has been paid. The mortgagee may accept less than the full amount in payment of the mortgage, and enter a valid release. If he may accept less than the full amount due, he may agree to release for some other good and valuable consideration, and a release entered of record upon ■such a consideration ought to be binding on the parties, and operate in the same way as if full payment had been made. The agreement made by Belding with Seymour to furnish the necessary funds and engage in the cattle business, made in good faith, as it was, may be regarded as a sufficient consideration to support the contract of Seymour to release the mortgage.

Again, after it turned out that Belding was not able to raise the amount of money which it was anticipated he would, no effort was made by Seymour to avoid or set aside the release, but, on the other hand, in 1874,—three years after the mortgage had been released, and long after Belding had failed to furnish the money agreed upon, and after the arrangement to enter into the cattle business had been abandoned,—Seymour made a settlement with Belding, figured up the amount that was due on the old mortgage indebtedness, and took a new note for the balance due, surrendering the old note and mortgage. Now, while it may be conceded that the giving of a new note for an old one does not necessarily pay the old debt, yet in this case we are of opinion that the surrender of the old note and mortgage, and accepting a new note therefor, with the knowledge that the mortgage had been released of record, for three years, may be regarded as a ratification of the release on the part of Seymour. 0

The judgment of the Appellate Court will be affirmed.

Judgment affirmed.

Mr. Justice Baker took no part in the consideration of this case in this court, he having passed upon the case in the Appellate Court.