text:
    The Trustees of Schools v. David Schroll et al.

      Filed at Springfield May 12, 1887.

    1. School land—grant to State—completeness of tille thereby given. The enabling act of Congress of April 18,1818, granting to the State section 16 of the public lands, and the ordinance of the State Constitutional Convention of August 26,1818, accepting the same, constituted a solemn compact between the United States and this State, whereby the State became the purchaser of the' school sections, with full power to sell or lease the same for the use of schools, as the State might provide, and think most beneficial to the inhabitants of the respective townships.
    2. Sections 16 in the several townships within the State, after such grant and acceptance, were not public lands, within the act of Congress of March 30,1822, relating to the Illinois and Michigan Canal, and were not within the act of Congress relating to swamp and overflowed lands.
    3. Boundary—land bordering on a stream or river—and herein, of the distinction when the land lies along a natural lalce or pond. Streams and bodies of water within the ebb and flow of the tide, are, at common law, navigable, and the riparian proprietor’s title does not, generally speaking, extend beyond the shore; but grants of land bounded on streams or rivers above tide water, carry the exclusive right and title of the grantee to the centre of the stream, subject to the easement of navigation in streams navigable in fact, unless the terms of the grant clearly denote the intention to stop at the edge or margin of the stream. But a different rule applies where land is conveyed bounded along or upon a natural lake or pond. In such case, the grant extends only to the water’s edge.
    4. The distinction between a stream and a pond or lake is, that in the one case the water has a natural motion or current, while in the other the water is, in its natural state, substantially at rest. This is so, independent of the size of the one or the other. The fact of some current in a body of water is not, of itself, in every instance, sufficient to make it a stream; nor-will the swelling out of a stream into broad water sheets make it a lake.
    5. A body of water five or six miles long, and in some places a mile in width, that is fed by springs, and has no connection with a river or other stream except by a slough, which is dry during the summer, and the body of water in its natural state has no current, is a lake, and not a stream of water.
    6. A riparian proprietor claiming to the thread or middle of • the stream must show the bordering water to be a stream, and that his grant, in terms or legal effect, is bounded upon or along such stream,—in other words, that the stream is made the boundary.
    7. Adverse possession—of land covered with water—sufficiency of proof. The evidence to show twenty years’ adverse possession of land covered by a lake, went no further than the declaration of witnesses, that the claimants, and those under whom they claimed, had had exclusive possession for that length of time; but how and to what extent,—whether the lake, or any part of it, was inclosed by fences, dams, walls or weirs, and how the possession was manifested, ■—there was nothing to show: Held, that the evidence was not sufficient to show such possession.
    8. Conveyance — description by reference to plat. Where lands are purchased and conveyed in accordance with a plat, the purchaser will be restricted to the boundaries as shown by the plat. Where a plat is referred to in a deed as showing the premises granted, such plat will become a part of the conveyance, as much so as if it had been copied into the patent or deed.
    Appeal from the Circuit Court of Morgan county; the Hon. Cyrus Epler, Judge, presiding.
    Fractional section 16, in township 16, north) of range 13, west of the third principal meridian, in Morgan county, being a school section, was platted by the trustees of the township, in April, 1846, and the platted lands advertised for sale by the school commissioner of the county, November 21, 1846. The plat and valuation as made and reported by the trustees to the commissioner, as shown by the record of the county, are here given:

    None of the lots shown by the plat were sold at the time the sale was advertised, for want of bidders; and in March, 1850, the township trustees vacated their first valuation, but not their plat, and re-valued the lots.
    It was shown, by a patent issued by the Governor of this State, to Edward Watson, March 3, 1856, that on November 12, 1855, the school commissioner of the county sold to Edward Watson that part of section 16, township 16 north, range 13 west, (said section having been granted by the United States to the State of Illinois, for the use of the inhabitants of said township, for school purposes,) designated on the map of the section, as-made by the trustees, as lots 12 and 13, containing 22-j---^ acres by survey, and granted those lots, with their appurtenances, in fee simple, to the grantee named. Edward Lusk testified that he bought at the commissioner’s sale of school lands, and had patented to himself, all those parts of the section designated on the map as lots, 3, 4, 5, 6, 7, 8, 9, 10 and 11. He did not produce his patent,—said he had looked for it, but could not find it,— nor was any record of it produced; but upon examination of the patent issued'to Watson, Lusk testified that his patent was like Watson’s, except as to description and name.
    The plaintiffs (appellants here) were admitted to be trustees of township 16 north, range 13 west, and, as such, brought ejectment against David Schroll, Samuel Boles and Letitia Watson, partners, as Schroll, Boles & Co., claiming in fee “all that part of section No. 16, in township 16 north, range 13, west of the third principal meridian, lying east of lots 1, 2 and 3, in said section, and west of lots 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13, in said section.” Upon issue joined, a jury was waived, a trial had by the court, and judgment for the defendants.
    Plaintiffs offered in evidence section 6 of the act of Congress of April 18, 1818, known as the “Enabling act, ” and the ordinance of the Illinois Constitutional Convention of August 26, 1818, accepting the enabling act, and rested. The defendants offered in evidence the record of the platting and valuation of the section, and its being advertised for sale in 1846, and the re-valuation in 1850, before spoken of, and also the patent to Watson, to lots 12 and 13, and the evidence of Lusk as to his purchase, and receiving a patent from the State for lots 3 to 11, inclusive, as before stated. Defendants also offered in evidence the record of a deed said to have been made by Lusk and wife to Carver and Mauck, conveying lot 3 in said section; but this deed, as it appears in the record, ■contains no grantee or grantees, and purports to be a conveyance of lots 3, 4, 5, 6, 7, 8, 9, 10 and 11, in said section 16, containing 90-^^ acres, except 2-j-6^ acres off the' south-east corner of the section, before conveyed to Henry W. Eeiman and Fred A. Hillig, executors of the estate of Francis Eeiman, ■deceased. They also offered in evidence the record of a deed from George M. Chambers and wife, to Eobert Ehea, conveying lot 2 in said section, supposed to contain 57 acres; and also the deed of the county clerk of Morgan county, July 17, 1884, purporting, by the authority of the laws of this State relating to swamp and overflowed lands, and in obedience to an •order of the county board of the county, to convey to David Schroll and Albert S. Boles, various parcels of land situate in sections 3, 9,10 and 16, township 16 north, range 13 west.
    The first parcel said to be part of section 16, is said to contain 84^®,, acres, and is first said to be part of lot 14, although there is nothing in the record -to show any part of ■section 16 had been platted as lot 14; but the specific description is by courses and distances. The initial point is the north-west corner of the section, shown by the plat to be ■on the east bank of the Illinois river, and the first calls are: Thence south thirty-one and one-half degrees west, seven chains, sixty-two links; thence south thirty-seven and one-quarter degrees west, six and three-tenths chains; thence south forty-three and one-quarter degrees west, three chains seventy-four links. To this point the line is projected in a south-westerly direction, seventeen chains, sixty-six links,— diagonally across the Illinois river, and into Brown county. The call then proceeds: Thence north forty-eight degrees west, eight chains, seventeen links; thence north fifty-three and one-half degrees west, five chains, sixty-one links; thence north fifty degrees,—but whether east or west is not stated,—seven chains, seventy-six links. But whether the course in the last call was east or west, the subsequent calls do not close, and the parcel attempted to be described can not be located. It is, however, apparent that the premises attempted to be described, not only do not include the lands in controversy, but do not border thereon. And as the second parcel part of section 16, is described as 40 acres lying south of the first, the impossibility of locating the first, from the description given, renders the location of the second equally impossible.
    One of the defendants (Schroll) testified, as a witness, that as to lots 1, 2, 3, 4, 5, 6, 7, 8, 9,10 and 11, Edward Watson had possession of them over twenty-five years ago, and held possession till he died, about I860; that Watson was a fisherman, and also had exclusive possession of that part of Meredosia lake lying in section 16 ; that after Watson’s death a company was formed, composed of Watson’s widow, son and witness, as Watson & Co.; that the latter firm had possession of the lots named, and the lake, till the son’s death, about ten or eleven years ago, when the defendant firm of Schroll, Boles & Co. was formed, since which time the defendant firm had had possession of lots 4, 5, 6, 7, 8, 9, 10 and 11, under an arrangement with Mrs. Watson, one of the firm of Watson & Co., and of lots 2 and 3 under written leases from the owners, but not producing the leases; and that defendants were not in possession of lot 1. The witness Wackerle testified, that he understood Hodges, Carver and Rhea owned lots 1, 2 and 3, and that Watson, Watson & Co., and the defendant firm, had been in the exclusive possession of that part of the lake sued for, for twenty-five years; and as to the possession of the lake, he was corroborated by Welseheimer and Lusk. The plaintiffs objected to all the evidence offered by the defendants, and each part of it, but their objections were overruled.

      Messrs. Gallon & Epler, for the appellants:
    Appellants are entitled to the land in controversy as a part of section 16, unless it is shown that prior to the commencement of this suit the same was sold by the proper officers according to law. Being school land, and vested in the State for the use of schools, it could not pass to the county as swamp land, as the United States had divested itself of the same before the passage of the act relating to swamp lands. But aside from this, the description in the deed made by the county clerk, clearly failed to cover the. lands in controversy.
    As to the defence of the Statute of Limitations, it is sufficient to say the statute does not run against the public.
    The second ground of defence is, that the parties who had purchased the lands bordering on the lake, took, under their deeds, to the centre of the lake. The lots sold by the school officers were sold by a plat, which showed lots from 1 to 3 on the west bank of the lake, and lots from 4 to 13 on the east bank of the lake. The lots were surveyed and platted, and the number of acres in each was ascertained, and when sold were sold for the exact number of acres as shown by the plat.
    The parties who purchased these lots took the number of acres mentioned in the plat, and no more. The area named in the plat will govern. McCormick v. Huse, 78 Ill. 363.
    It is a general rule that a boundary upon a natural pond or lake carries title, not to its centre, but only to low watermark. Wheeler v. Spinola, 54 N. Y. 377; Waterman v. Johnson, 13 Pick. 261.
    Messrs. Morrison & Whitlock, for the appellees:
    The lands abutting the lake on both sides were platted and sold by the trustees of schools more than twenty years before this suit was brought. The parties purchasing these lots, between which the land in suit is supposed to lie, having taken possession of the lots, supposed they also had title to the water intervening, and this view was acquiesced in by the trustees of schools until this late day.
    This lake is a stream of water emptying into the Illinois river, about five miles in length, and is navigable, at times, for boats. We therefore insist that the appellants, by their officers and trustees, having platted the land to the margin of the lake, and sold them, are now estopped from claiming the lake intervening. In other words, they have sold the lands underlying the water, as well as the land adjoining it. Seaman v. Smith, 24 Ill. 521; Braxton v. Bressler, 64 id. 488; Hubbard v. Bell, 54 id. 110; Trustees v. Haven, 5 Gilm. 548; Middleton v. Pritchard, 3 Scam. 510; Stolp v. Hoyt, 44 Ill. 219; Chicago v. Laflin, 49 id. 172; 2 Washburn on Real Prop. 677, 678, 680, 681; Ice Co. v. Shortall, 107 Ill. 46.
    It may reasonably be supposed that the principal reason for any one purchasing said lands on the banks of the stream, was the advantages of fishery;. and it is evident that appellants can have no other reasons for now attempting to resurrect that long dormant claim to this “land, ” but for the purposes of fishery. To permit this to be done, would, we insist, be to permit one to take an advantage of his own wrong. It would be neither good morals nor good law.
    We recognize the doctrine, that, as a rule, the Statute of Limitations does not run against the public; but that rule is not always applicable to municipal corporations. Lessees v. Presbyterian Church, 8 Ohio, 298; Cincinnati v. Evans, 5 id. 594; Jersey City v. State, 1 Vroom, 421; Cross v. Morristown, 18 N. J. Eq. 305; Galveston v. Menard, 23 Texas, 349; School Directors v. Georges, 50 Mo. 194; Baker v. Johnson, 33 Iowa, 151; Alves v. Henderson, 16 B. Mon. 151; Kelley’s Lessees v. Greenfield, 2 Har. & McH. 132.
    It being supposed by all that the lots sold embraced the intervening stream, the purchasers of these lots took possession, not only of the lots, but also of the lake between them, and they and their grantees have held the same ever since. If the Statute of Limitations is ever to be invoked for repose, this is a proper case for jts application.
   Mr. Justice Shope

delivered the opinion of the Court:

Fractional section 16 was, by the United States, “granted to the State, for the use of the inhabitants of such township, for the use of°schools.” Enabling act of Congress, April 18, 1818, 3 U. S. Stat. at Large, 428; Organic Laws of Illinois, (1 Gross’ Stat.) 19. And this enabling act was formally accepted by an ordinance of the Constitutional Convention of August 26, 1818. (Laws of Illinois, 1819, appx. 21; Organic Laws of Illinois, 1 Gross’ Stat. 20.) The enabling act and ordinance constituted, as this court held in Bradley v. Case, 3 Scam. 585, a solemn compact between the United States and this State, whereby the State of Illinois became the purchaser of the school sections, for a valuable consideration, with full power to sell or lease the same for the use of schools, as the State might provide and think most beneficial to the inhabitants of the respective townships.

Sections 16 in the several townships in the State having been granted and accepted as above stated, were not public lands, within the act of Congress of March 30,1822, (3 U. S. Stat. at Large, 659,) authorizing the State “to survey and mark through the public lands of the United States, the route of the canal connecting the Illinois river with the southern bend of Lake Michigan.” (Canal Trustees v. Haven, 5 Gilm. 548.) And for the like reason we must hold that they were not “swamp and overflowed lands, made unfit thereby for cultivation,” remaining “unsold at the passage of” the act of Congress of September 28,1850, (9 U. S. Stat. at Large, 519,) being “An act to enable the State of Arkansas, and other States, to reclaim the swamp lands within their limits.” After the grant in 1818, they ceased to be public lands of the United States, nor could they, after that time, be regarded as unsold lands, and so they were unaffected by the swamp land act. When, therefore, the defendants in this case offered in evidence the deed of the county clerk of Morgan county, purporting to have been made by order of the county board of that county, on the authority of the laws of this State relating to swamp and overflowed lands, and to convey parts of this school section, the offer should have been denied, and it was error in the circuit court not to have sustained the plaintiff’s objection. And this is so, independent of all question as to whether the uncertain and defective description of the premises said to be part of this particular section, rendered the deed inoperative to that extent, or whether the premises attempted to be conveyed formed any part of the lands sued for, or bounded thereon. When, therefore, the official character of appellants was admitted, and the enabling act and ordinance of acceptance had been offered in evidence, appellants’ right of recovery was complete, unless it could be shown that the State had parted with the title to the lands described in the declaration, or that the township authorities had parted with or lost their right of possession in the same.

It is contended by appellees that Meredosia lake is a stream of water, some five miles in length, and emptying into the Illinois river, and that appellants, by the proper officers, having platted and sold the land to the margin of and bordering on the stream, the grantees took .to the middle of the stream; that the title of such grantees is an outstanding title, and appellees being shown to be in possession under such grantees, rightfully prevailed in the circuit court, and ought to prevail here. The books and authorities are all agreed, that streams and bodies of water within the ebb and flow of the tide, are, at common law, navigable, and the riparian proprietor’s title does not, speaking generally, extend beyond the shore. And it is equally well settled, that grants of land bounded on streams or rivers above tide water, carry the exclusive right and title of the grantee to the centre of the stream, usque ad Jilem aqua, subject to the easement of navigation in streams navigable in fact, unless the terms of the grant clearly denote the intention to stop at the edge or margin of the stream. 3 Kent’s Com. 427; 2 Hilliard on Real Prop. 92; Angell on Water-courses, sec. 5; Jones v. Soulard, 24 How. 41; State of Indiana v. Milk, 11 Fed. Rep. 389; Canal Appraisers v. The People, 17 Wend. 596; Child v. Starr, 4 Hill. 369; Seaman v. Smith, 24 Ill. 521; Rockwell v. Baldwin, 53 id. 19; Braxon v. Bressler, 64 id. 488; Washington Ice Co. v. Shortall, 101 id. 46. But an entirely different rule applies when land is conveyed bounded along or upon a natural lake or pond. In such case the grant extends only to the water’s edge. Angell on Water-courses, secs. 41, 42; 3 Kent’s Com. *429, note a,—citing Bradley v. Rice, 13 Me. 201, and Waterman v. Johnson, 13 Pick. 261. See, also, Warren v. Chambers, 25 Ark. 120; State of Indiana v. Milk, (U. S. Cir. Ct. Dist. Ind., Gresham, J.) 11 Fed. Rep. 389,—citing Wheeler v. Spinola, 54 N. Y. 377, Mansur v. Blake, 62 Me. 38, State v. Gilmanton, 9 N. H. 461, Paine v. Wood, 108 Mass. 160, Fletcher v. Phelps, 28 Vt. 257, Austin v. Rutland Railroad Co. 45 id. 215, Boorman v. Sunnuchs, 42 Wis. 233, Desplains v. Chicago and Northwestern Ry. Co. id. 214, and Seaman v. Smith, 24 Ill. 521. See, also, Nelson v. Butterfield, 21 Me. 229; West Roxbury v. Stoddard, 7 Allen, 158; Canal Co. v. The People, 5 Wend. 423; Jakeway v. Barrett, 38 Vt. 316; Primm v. Walker, 38 Mo. 99; Wood v. Kelley, 30 Me. 47.

The line of defence adopted by appellees, as before stated, presupposes the existence of certain facts, viz.: First, that appellants, being owners of section 16, granted the lands abutting upon the water spoken of as Meredosia lake, within such section, bounding such grants along or upon the margin of such water; second, that Meredosia lake is not, at the common law, navigable; third, that Meredosia lake, and within the bounds of section 16, is a stream or river, as contradistinguished from a lake; and fourth, that the terms of the grant do not clearly denote an intention to stop at the edge or margin of the stream. If the record in this case shows the existence and concurrence of all these facts, this judgment, upon the authority of the cases cited, may be affirmed; but if it shall appear that the case made by the record does not show the existence of the supposed facts, reversal must follow.

It is not pretended that Meredosia lake is a stream or body of water navigable at common law,—that is to say, it is not within the ebb and flow of the tide,—and hence the rules of law applicable in such case can not be invoked. The contention is, that Meredosia lake is a stream of water about five-miles long, emptying into the Illinois river, with its southern, extremity and outlet within the bounds of section 16.

Á careful examination of the record shows that this lake is a natural body of water, five or six miles long, and in some" places a mile in width; that it is fed by springs; that its southern extremity extends into section 16; that it has no* connection with any stream of water, except by a slough at the south end, and near the south line of section 16; that the body of the lake, in its natural state, is without current, but that during portions of the year a current of water passes from the lake, through the slough referred to, into the Illinois river, which flow, however, is stopped in the summer. The record, does not show the average width of the lake, the average depth of the water in the lake in its natural state, nor whether or not. it is in fact navigable, nor are we able to learn therefrom the length and width of the slough, nor the depth of the water-flowing through the same, or the rapidity of the flow from the lake into the river at the natural stage of water in the lake. All we can know of this outlet we must gather from the plat made by the township trustees in 1846, taken in connection with the fact testified to by witnesses, that for a portion of the year some water from a land-locked natural body of currentless water, five or six miles long, and in places a mile in width, flows therethrough, and from this, alone, we are asked. to find and hold that such a body of water so situated is a stream, and not a lake. This, as we understand the law, we can not do.

The word “stream” has a well-defined meaning, wholly inconsistent with a body of water at rest. It implies motion, as, to issue in a stream,—to flow in a current. (Webster’s Dictionary.) Indeed, the controlling distinction between a stream and a pond or a lake is, that in the one case the water has a natural motion,—a current,—while in the other the water is, in its natural state, substantially at rest. And this is so, independent of the size of the one or the other. The flowing rivulet of but a few inches in width is a stream as certainly as the Mississippi. And when lands are granted by the proprietor of both land and stream, bounding such grant upon the stream, the grantee acquires right and title to the thread or middle of the stream. This right is grounded upon the presumption that the grantor, by making the stream the boundary, intended his grantee to take to the middle of the stream; and this presumption will prevail until a contrary intent is made to appear. (Rockwell v. Baldwin, 53 Ill. 19.) The right spoken of does not rest upon the principle that when a grant is bounded on a stream, the bed of the stream to the thread or middle passes as incident or appurtenant to the bordering land, for the bed of the stream is land, though covered with water, and land can not pass as appurtenant to land. As is said in Child v. Starr, 4 Hill. 369: “A conveyance of one acre of land can never be made, by any legal construction, to carry another acre by way of incident or appurtenance to the first. ” The riparian proprietor claiming to the thread or middle of the stream must show the bordering water to be a stream, and that his grant, in terms or legal effect, is bounded upon or along such stream,—that the stream is made the boundary. And while it is obvious that a currentless body of water can not be a stream, the fact of some current in a body of water, is not of itself, in every instance, sufficient to determine its character as a stream, as distinguished from a pond or lake. The presence of some current is not enough, alone, to work an essential change in so essentially different things as a stream and a lake, for a current from a higher to a lower level does not necessarily make that a stream or river which would otherwise be a lake; nor the swelling out of a stream into broad water sheets does not necessarily make that a lake which would otherwise be a river. Angelí on Water-courses, sec. 4.

We are, therefore, constrained to hold, that the position, size and character of this body of water, as shown by this record, fixes its character as a lake, and not a stream, notwithstanding some part of its water, during a portion of the year, may flow through the slough into the Illinois river.

Another fact, the existence of which is presupposed, is, that the proper officers, acting under the laws of the State, granted the lands bordering on so much of the stream called Meredosia lake as was within section 16, bounding such grants on the stream. The only grants shown in this record to have been made, and upon which this contention could be based, are the patents issued to Edward Watson and Edward Lusk. Watson took, under his patent, that part of section 16 designated on the plat of the section made by trustees, as lots 12 and 13, containing 22T-*-g acres, by survey, and Lusk took, under his patent, lots 3 to 11, inclusive, by the same plat, containing, by the plat, 88t7qSo acres. By reference, the, plat of the section made by the trustees in 1846, became a part of the conveyance, as much so as if it had been copied into the patent deed. (Piper v. Connelly, 108 Ill. 646; Louisville and Nashville Railroad Co. v. Koelle, 104 id. 455.) And the rule of law is, that when lands are purchased and conveyed in accordance with a plat, the purchaser will be restricted to the boundaries as shown by the plat. (McCormick v. Huse, 78 Ill. 363,—citing McClintock v. Rogers, 11 id. 279.) The patent deeds contain no intimation that the lots conveyed border on a lake or stream, and when we look at the plat, as we must, all we can determine, is the shape and area of the several lots. No data is given frop^ which we can determine the width or depth of any lot; nor can we know from the plat that either the east line of. lot 3 or the west line of lots 4 to 13, inclusive, as shown on the plat, are, in fact, the western and eastern boundary of Meredosia lake. It may he so, in fact, but this record fails to show it to be so, while as to lots 1 and 2 the record does not show that they were at any time sold or conveyed, or the title vested in the State in any way divested. We therefore hold, that it does not appear, by the record, that the State, for the inhabitants of the township, granted all the lands bordering on Meredosia lake, and within this fractional section 16, nor that the grants, to the extent they were made, were bounded on the lake.

It is thus seen that the essential facts, the existence of which is presupposed as a basis for the defence interposed, are not shown to exist, and hence the defence based on the right as riparian owners on streams to take ad filem aqua, can not be invoked, and has no application to this case. For the reasons stated, all the evidence offered by appellees, on the trial, relating to the title, ownership and possession of the lots shown by the trustees’ plat, should have been refused as immaterial, and its reception, over the objection of appellants, was error.

One other question remains to be considered, viz.: Appellees claim that they are in possession “of a portion of water known as Meredosia lake, claiming title to it by possession for more than twenty years, as fishermen.” Appellants sue for a body of land. Some part of the premises described in the declaration must form the bed of that part of Meredosia lake within section 16, but what part is lake-bed, and what shore, we can not determine from this record. Appellees’ claim of title by possession is not of land, but of water. But if this should be thought hypercritical, and it be assumed that appellees’ claim is of twenty years’ adverse possession of the bed of the lake within the section, still it must be observed that such possession of land as here claimed, is a conclusion of law arising from existing facts. The evidence presérved in the record goes no further than the declaration of witnesses that appellees, and those under whom they claim, had, and had had, exclusive possession for that length of time; but how, and to what extent,—whether the lake, or any part of it, was enclosed by fences, dams, walls or weirs, and how this adverse dominion was manifested,—'there is not one word to show. The claim, under this proof, is without force or merit.

The judgment of the circuit court is reversed and the cause remanded.

T 7 j. j Judgment reversed.


source: Caselaw Access Project

author: Mr. Justice Sheldon

license: Public Domain

text:
    Sarah Pinneo v. Francis Goodspeed et al.

      Piled at Ottawa May 12, 1887.

    1. Bes jtjdioata—effect of a judgment of reversal, as to a master’s report. A master’s account of the rents and profits fixed the rents, etc., at three dollars per acre, and a decree was entered approving the same, and, among other provisions, striking a cross-bill from the files. The Supreme Court reversed that decree, chiefly on the ground of the striking out of the cross-bill, holding that one of the parties was not bound by the master’s statement of the account, and that such account was not sufficiently specific, and the opinion stated, that “so much of the decree, therefore, as directs a dismissal of .the supplemental cross-bill, and approves of the report of the master, ” etc., is reversed, etc.: Held, that there was no confirmation of the master’s report by the judgment of this court, and that the former finding of the master as to the rents to be charged, went for naught, and did not become res judicata.

    2. Mortgagee in possession—liability to account. A mortgagee in possession of the mortgaged premises is only required to account for the actual receipts therefrom, less such sums as he may have paid out for taxes and necessary repairs, unless it is shown that more might have been realized by reasonable diligence.

      3. Administbation of estates—diversion of rents and profits by executors, through mistake—protection to the executors in respect thereto. A divorced wife had a decree for the payment of $500 to her, annually, as alimony, and this was supposed to be a lien on three hundred acres of land, which had been decreed to belong to her husband. After his death, his executors, from the rents and profits of the land, paid the wife $1125, which was receipted for as on her alimony. The decree finding the husband to be the owner of the land, was reversed, and the land found to belong to the wife, and the executors were decreed to account to her for the rents and profits: Held, proper, in taking the account, to charge the divorced wife with the amount of such payment against the rents and profits received from the land, such payment having been made on account of alimony, under a mistake of fact in respect to the actual ownership of the land.
    4. The executors of an estate, in good faith, under the mistaken belief that certain land belonged to the estate, paid $34 from the rents for" the insurance of the property; but the court afterward decided that the property belonged to another, who filed a cross-bill, seeking an account of the rents and profits. The executors were in the management of the property when the insurance was made, and nothing appeared to rebut the inference that in case of a loss the insurance money would have been payable to the owner: Held, that in adjusting the account the executors were properly allowed for the insurance money so paid.
    5. SAME'—payment by executors, out of funds not properly assets, upon claims of a certain class—rights of other creditors of the same class. Where executors, under a mistaken belief that certain moneys coming to their hands are assets of the estate, pay a portion of the seventh class creditors a dividend on the amount of their claims, when it turns out that such moneys are not assets, and there is nothing left to pay any of the seventh class claims, a court of equity will not require the executors to pay the same pro rata share on the claims of the other seventh class creditors. Equality will be enforced only where it may be consistent with equity.
    6. Same—executor buying in claims at a discount—of a proper adjustment. A husband gave his promissory note for $2000, and, together with his wife, mortgaged her lands for its payment. After a divorce between the parties, and the subsequent marriage of the husband, he died, having appointed his second wife and another person the executors of his will. The second wife purchased the note and mortgage for $2800, there being due on the same $2944.95. It appeared that there was no profit derived by the executrix in the transaction, but a loss was incurred, rather: Meld, in a suit involving a settlement of the estate, no error in not making such executrix account for the $144.95 discount, and in decreeing to her the amount due on the note according to its face.
    7. Instjbance—to whom payable—in case it is made payable to wife' of the assured. Where a person procures a policy of insurance upon his life, payable to his wife, she will take all the bénefit of the same, to the ex-elusion of creditors of her husband’s estate; and the fact that he may have given the same to her by will, will not change the rule.
    8. Evidence—sworn answers in chancery. Sworn answers to a bill in chancery will be regarded as evidence for the parties making the same, only so far as they are material and responsive to the bill. Immaterial matters therein will be disregarded.
    Appeal from the Appellate Court for the Second District;—heard in that court on appeal from the Circuit Court of Will county; the Hon. Charles Blanchard, Judge, presiding.
    Mr. R. E. Barber, for the appellant:
    The executors were trustees under the will, and as such they were not at liberty to deal in the matters or things with which they were charged, to their personal advantage and profit. Nelson v. Hayner, 66 Ill. 487; Ogden v. Larrabee, 57 id. 391; Thorp v. McCullum, 1 Gilm. 614; Railroad Co. v. Trust Co. 49 Ill. 333; Davone v. Fanning, 2 Johns. Ch. 252.
    They were trustees to pay the note and mortgage, and not to purchase the same for their own advantage. Phelps v. Reeder, 39 Ill. 173.
    Orange T. Fargo devised the policy of insurance to his wife, and it must be subject to his debts.
    There is no contingency in the decree of $500 yearly alimony upon the life of Orange. It is to her “during her natural life.” There was no misunderstanding as to the objects of the $1125 payments by the executors, and the vouchers which she gave therefor.
    The decree granting the divorce and awarding alimony has never been reversed. Pinneo v. Goodspeed; 104 Ill. 198.
    Appellant was entitled to have the forty per cent dividend paid on the mortgage claim.
    The decree of the circuit court was reversed on three grounds: The dismissal of the supplemental cross-bill, approving the master’s report, and directing the payment of the accumulated rents and profits to Knox. In all other respects the decree was affirmed. One part of the decree affirmed was the finding of the value of the rents and profits to be three dollars per acre per annum.
    The court erred in charging Mrs. Pinneo with the insurance money paid by the executors.
    Messrs. Garnsey & Knox, for the appellees:
    The opinion of the Supreme Court must be read in connection with the pleadings as they stood at the time of the hearing. Griggs v. Gear, 3 Gilm. 63; Binkert v. Railway Co. 98 Ill. 213; Pinneo v. Goodspeed, 104 id. 194; Marvin v. Collins, 98 id. 517.
    The doctrine of res judicata, here invoked, does not at all apply. A judgment is conclusive upon the parties to it only in respect to the grounds covered by it, and the law and facts necessary to uphold it. Bigelow on Estoppel, 22; Davis v. Kennedy, 105 Ill. 306.
    Even where there is a judgment between the same parties, (not the Gasp here,) the facts may be again litigated for any purpose, provided the immediate subject of the decision is not attempted to be called in question. Bans v. Jackson, I Y. & C. 585.
    A judgment, to be binding, must be about the same subject matter, as well as between the same parties. Williams v. Walker, 62 Ill. 518; Miller v. McManus, 57 id. 128; Jessup v. Jessup, 102 id. 486; Kingsbury v. Buckner, 70 id. 514.
    To determine the question, the pleadings must be looked to in order to see whether the matters insisted on as res judicata could have been inquired into. Bentley v. O’Bryan, 111 Ill. 60.
    The appellees were only chargeable with the amount of rent actually received, they acting in good -faith, and with reasonable prudence and diligence. McConnel v. Holobush, 11 Ill. 61; Mosier v. Norton, 83 id. 519; Clark v. Finlon, 90 id. 245.

      The credit to the executors of $1125, paid by them to Mrs. Pinneo, was proper. If it was alimony, it ceased on her husband’s death. Bishop on Marriage and Divorce, (4th ed.) see. 428; Lockridge v. Lockridge, 3 Dana, 28; Lenahan v. O’Keefe, 107 Ill. 620; Gaines v. Gaines’ Exr. 9 B. Mon. 429; O’Hagan v. O’Hagan, 4 Clarke, 509.
    If it was a payment under Fargo’s will, the fund out of which it was to be paid, by the terms of the will, was destroyed by the case of Pinneo v. Goodspeed, 104 Ill. 189.
    The full amount of the mortgage must be. paid by somebody. The purchase by Mrs. Fargo, with her own funds, subrogated her to Mrs. Half’s (the mortgagee’s) rights, (King v. Cushman, 41 Ill. 38, O’Halloran v. Fitzgerald, 71 id. 58, Stinson v. Anderson, 96 id. 73,) and to collect ten per cent interest on it to the diñe of foreclosure. Condict v. Flower, 106 Ill. 117.
    Having actually no funds to pay with, the executors are not obliged to pay anything on this mortgage, even if they did, by mistake’, make a dividend on claims of the seventh class in Fargo’s estate. Brandon v. Brown, 106 Ill. 519.
    The money derived from the policy of insurance was Mrs. Fargo’s, constituted no part of the estate, and the disposition of it by Fargo, in his will, made no difference, nor did it constitute it a part of his estate. Pingree v. Jones, 80 Ill. 177.
    The executors are entitled to compensation and allowances for disbursements and advances made in the course of settling an estate, and in conducting this litigation. Pingree v. Jones, 80 Ill. 177; Williams on Executors, *1860; Hayley v. James, 16 Wend. 61.
   Mr. Justice Sheldon

delivered the opinion of the Court:

This is the same case which is reported in 87 111. 290, and again in 104 111. 184, the opinions wherein are referred to for a full statement of the facts. Present allusion to some of them may be necessary in order to any proper understanding of this opinion. 0

In 1866, Horace Haff died intestate, seized in fee of a certain three hundred acres of land, and other real estate, leaving him surviving, Sarah Ann Haff, his widow, and Sarah Fargo, wife of Orange T. Fargo, and Edwin G. Haff, his only children and heirs-at-law. On January 23,1868, said widow and heirs-at-law of Horace Haff made adjustment of dower and partition of his estate, by deeds duly executed. This three hundred acres was taken by Sarah Fargo as her share of inherited real estate, and, by consent, the deeds for their interest therein were made by Edwin G. Haff and Sarah Ann Haff to Orange T. Fargo. At the same time, Orange T. Fargo made his note for $2000, payable to Sarah Ann Haff, in two years, with interest at ten per cent per annum, to satisfy her dower, and Grange T. Fargo, and Sarah Fargo, his wife, gave their mortgage on the land to Sarah Ann Haff, to secure the payment •of the note. Afterwards, a decree of divorce was obtained by Orange T. Fargo from his wife, under and in pursuance •of which he was to pay her, for alimony, $500 annually, payable quarter-yearly, during her life, and a deed was executed westing the entire title of said three hundred acres in him. Soon after, Sarah Fargo, conceiving that a fraud had been ■practiced upon her, went to the house of Orange T., and took possession of this deed, and carried it away. Thereupon, Orange T. Fargo,.on January 7, 1871, filed the original bill in this cause, against Sarah Fargo, to compel her to restore said deed to him, and to prevent her from conveying or incumbering the title. The circuit court decreed in his favor, and that decree was reversed in 87 Ill. 290. The cause' was remanded to the circuit court, and prosecuted to another decree therein, of date March 10,1881, from which said Sarah, then re-married to John B. Pinneo, appealed to this court, and the decree was reversed, the opinion being that in 104 Ill. 184. One of the errors there was the dismissal of the supplemental cross-bill of appellants. On the cause coming back to tlje circuit court, the supplemental cross-bill was eliminated, and amended in accordance with the suggestions of this court, and was re-filed February 12, 1884.

The amended supplemental cross-bill alleges, that Orange T. Fargo, November 3, 1874, died possessed of the three hundred acres of land in question, holding it as tenant by the curtesy, at the time of his death, subject to the reversionary interest of his former wife, now Sarah Pinneo; that he gave directions in his will, as shown by the record; that the executor and executrix of the will, Francis Goodspeed and Elizabeth M. Fargo, administered the estate under the will, rented the said land, and received the rents from the time of Fargo’s death; that the account of rents ought to be taken according to the former opinion of this court; that a large amount of other property, real and personal, belonged to said estate; refers to the proceedings of the county court for a partition of such personal estate received. It alleges that Elizabeth M. Fargo purchased the $2000 mortgage given by Fargo and appellant Sarah Pinneo, in his lifetime, to Sarah Ann Haff, for the extinguishment of her dower, with money belonging to the estate, and that she ought to satisfy it; that in violation of her duty as executrix, she purchased it, and ought not to be allowed to profit by it, and interest should stop from the day of purchase; that Augustus M. Knox had purchased it for her, held it as her trustee, and had brought suit to foreclose the mortgage, and had obtained judgment in said court, and that case ought to be consolidated with this, and he be perpetually enjoined from foreclosing the mortgage; that a large amount was due complainant, on her alimony decree, in the Cook county circuit court, and the executor should have paid her the ratable proportion of Fargo’s estate; and then follows prayer for full, true and particular answer upon defendants’ several corporal oaths to each allegation, with several interrogatories in regard to the amount of rents on said three hundred acres received, and this one: “Do not the whole amount of rents of said farm (three hundred acres) received, amount to the sum of $3975.35, and were not the rents of the farm received as the property of the estate, and does he, Goodspeed, not still hold them as assets ? Why were other debts paid in preference to the mortgage? On what account was the $1125 paid by said Goodspeed to orator?’ (This was on her alimony.)

The answer of Goodspeed, under oath, completely and specifically answers as to all the charges and interrogatories, Elizabeth M. Fargo, and Knox, also answered under oath, Eeplications were filed, and the cause was then referred to' the master to state an account. The master made report, and a decree was accordingly rendered, ordering the executors to pay said Knox, or to Elizabeth M. Fargo, $1629.07, to be applied on her decree of foreclosure on the three hundred acre tract, of date December 7,1880; that complainant in the cross-bill, Sarah Pinneo, pay to the same parties $2445.38, with six per cent interest from December 7, 1886, in thirty days; that in default, the master sell the three hundred acres, or so much as necessary, to pay the last mentioned sum,—the balance due on the decree of December 7, 1880. On appeal to the Appellate Court for the Second District, the decree was affirmed, and an appeal taken to this court.

One ground upon which the reversal of the decree is asked, is for not allowing rents on the three hundred acres of land at the same rate allowed by the former master’s report, upon which the decree last before this court was based, namely, at three dollars per acre per annum, instead of on the basis of the actual receipts, as was done by the master at this hearing. It is claimed our decision affirmed the former decree in this respect, and so making it res judicata; that three dollars per acre was the value of the rents, and that the executors were chargeable therewith. We think this a mistaken view of that decision. The chief ground for reversal of the former decree was in striking the supplemental cross-bill, in which Knox was made a party, from the files. It was said in the opinion : “Most of these complications and changes of interest occurred after the filing of the original and the cross-bill, and we are of opinion it was proper to bring all the parties interested in the statement of the account, before the court, and this could only be done by supplemental bill, ” and it was said Knox “was not bound by the statement of the account or any of the proceedings. ” And again, that “the statement of the account by the master is not sufficiently specific or comprehensive, nor does it seem to have been prepared with reference to the legal rights of the parties to be affected by it. ” And in the concluding portion, that “so much of the decree, therefore, as directs a dismissal of the supplemental cross-bill, and approves of the report of the master, and directs the accumulated rents and profits of the premises to he paid to Knox, is reversed, but is in all other respects, except so far as it may be modified by what we have already said, affirmed, and the cause is remanded with directions to the court below to refer the cause again to the master, for the jiurpose of restating the account, and for other proceedings in conformity with the views here expressed. ” It thus plainly appears that there was no confirmation, by this court, of the former master’s report; .that the decree of the circuit court, so far as it approved that report, was reversed, and that the cause was remanded with directions to the court below to refer the cause again .to the master, for the purpose of restating the account. The finding of the former master’s report then went for naught, the matter of the account was set at large, and the account was to be restated as if there had been no former one stated. It was said in that • former opinion : “The mortgage having been assigned to Goodspeed, for the use of Mrs. Fargo, on the 14th of April, 1875, she should, from thence until the appointment of a receiver, be treated as mortgagee in possession, and should account for the rents and profits accordingly. ” The rule in such case is, as was stated in Clark v. Finlon, 90 Ill. 249, that a mortgagee in possession is only required to account for actual receipts, less such sums as he may have paid out for taxes and necessary repairs, unless it is shown that more could have been realized by reasonable diligence. And see McConnel v. Holobush, 11 Ill. 61; Mosier v. Norton, 83 id. 519. The master’s report and decree now before us went upon that rule, and we regard them in this respect as correct.

Error is assigned in charging appellant Mrs. Pinneo, in the account, against rents received, $1125, which had been receipted for by her as payment on her alimony decree of $500 per annum, and in not crediting the mortgage note with a forty per cent dividend, as other seventh class claims were credited. It is true, the sums composing this amount of $1125 were" paid upon the alimony decree, and specifically receipted for as so paid; and it is equally true that they were so paid under a mistake of fact, and that Mrs. Pinneo was not entitled to have them so paid. The payments were made upon the understanding that the three hundred acres belonged to the estate of Fargo. It had been so determined by a decree of the circuit court on his original bill herein. Fargo’s will provided, that if the appellant Sarah Fargo lived, the three hundred acres in question could not be sold, and the quarterly installments to her could be paid from the rents of said land; but if she should die, then the said land might be sold, at the option of the executors of the will, as in their judgment should seem best. The proceeds of the sale of this land, and all of such other property as the testator should die possessed of, was to be divided equally among his four children, or as many of them as should be living.. The executors, in execution of the will, and upon the faith of the decree of the circuit court, which had adjudged the land to belong to Orange T. Fargo, proceeded upon the assumption that the land was his, and went on paying out, from the rents thereof, the installments of the alimony decree as they became due, until this court reversed the decree of the circuit court, and decided that Mrs. Fargo was rightfully entitled to the three hundred acres in question. In March, 1876, the executors, upon the supposition that these rents from the three hundred acres belonged to the estate, obtained an order from the county court to pay a dividend of forty per' cent on the seventh class claims against the estate, and made such payments on certain of them, to the amount of $1389.07, which was approved by the county court; but no portion was paid on the alimony decree, other than the $1125, and none on the mortgage debt. With these rents as assets, the executors were able to make that dividend on seventh class claims from the assets of the estate. Without the rents there were no funds of the estate applicable to the payment of any claims in the seventh class, but they would all be absorbed in the payment of claims in the prior classes, which had precedence to the seventh class claims. It turned out, then, when this court decided the three hundred acres in question to belong to Sarah Fargo, now Pinneo, that all payments on seventh class claims had been made without right on the part of'the owners to have them paid, and that they should refund such payments to the executors. The payments which had been made to Mrs. Fargo on the alimony decree were made on a seventh class claim. She was not entitled to receive them, and .she is made to refund them, as she should do, by applying the alimony payments to the rents. The rents from the three hundred acres, under the decision of this court, all belonged to her, and she gets all of them under the decree. She is not entitled to have anything more from the assets of the estate. Because the executors, under mistake, made payments on the alimony decree when Mrs. Fargo was not entitled to have them made, equity will not hold the executors to such mistake, but will relieve against it, so far as may be done.

As-some of the creditors of the seventh class have been paid a dividend of forty per cent on their claims, it is insisted that equity should be observed, and that requires that appellant Pinneo should likewise be paid the same dividend on her seventh class claim, and that the same dividend should be paid on the mortgage note, which is in the same seventh ■class. Equality is to be enforced only where it may be consistently with equity.' Because others have, under mistake, been paid a dividend on their seventh class claims which they were not, in right, entitled to receive, it is not equitable, and the principle of equity does not require, that appellant also should have payment of a dividend made to her on her seventh class claim which she is not entitled to receive, or that any other seventh class creditor should have the dividend paid on his claim. We see no error in charging this $1125 against rents, or in not crediting the mortgage note with a forty per cent dividend.

The executrix, Elizabeth M. Fargo, on April 15,1875, purchased the note given by Orange T. Fargo to Sarah Ann Haff, and the mortgage given by the former and Sarah Fargo, now Pinneo, to secure its payment, for $2800, there being then $2944.95 due and unpaid on the note, the purchaser thus .getting an abatement of $144.95 from the face of the note. It is insisted by appellant Pinneo, this abatement should have been allowed her from her mortgage; that the executrix, in the fiduciary relation she occupied, could not make for herself any profit out of the property. The purchase was made by the executrix with her own individual money; there were no assets of the estate from which anything could be paid upon the mortgage. We do not see that there was any profit made by the executrix in the transaction of the purchase of the note and mortgage, but loss, rather. In the purchase, there was $800 paid for accrued interest. There was upon this sum the loss of any interest up to the time pf the master’s report, for ten years, which would much more than overbalance the amount of the discount made upon the purchase. We fail to perceive wherein it was in any way inequitable to-decree for the amount which was due upon the note, according to its tenor.

It is claimed' there was error in allowing $34 insurance-money. This money was paid for insurance on the property, from the rents, by the executors, who were in the management of the property. It was paid for the benefit of the property, and nothing appears in the case to rebut the inference that in case of a loss the insurance money would’ have been payable to the owner of the property. We can not say this item was erroneously allowed. Orange T. Fargo, in his lifetime, procured a policy of insurance upon his life, of $5000, payable to his then wife, Elizabeth M. Fargo, upon which, after his death, she received from the insurance company the sum of $4956.91. Error is claimed in not finding that the proceeds of said life insurance policy were assets of the estate of Orange T. Fargo. Mrs. Fargo states in her answer, that with the exception of two or three she paid the premiums on said policy of insurance from her own means. But, irrespective of that, the policy evidently belonged to the wife, and she was entitled to all the benefit from it. (Pingree v. Jones, 80 Ill. 177.) The fact of Fargo giving the policy to his wife by his will, is remarked upon as showing that the policy belonged to him. That might be evidence of how he-considered it, but manifestly could have no effect to change-the contract, which was evinced by the policy itself, or to determine in whom was the right to its benefit.

Complaint is made in respect of exceptions to answers, in. the disallowance thereof, and refusal of leave to file exceptions. From the nature of the exceptions, we are unable to-perceive any harm which could have resulted to appellants from the court’s ruling in that regard. There was no lack of fullness in the answers, but the objection was the reverse, that the answers were too full,—that they contained immaterial matter, and were not responsive to the bill. Whether so or not, the court would regard them as evidence only so far as they were material and responsive to the bill. There was enough of them which was responsive to the bill, to sustain the decree.

Exceptions were taken to' the master’s report, that it was not stated in accord with the directions of this court in that regard, nor in conformity with the directions of the circuit court, and error is alleged in not sustaining these exceptions. We find no error in this respect.

The judgment of the Appellate Court will be affirmed.

Judgment affirmed.


author: Mr. Justice Craig

text:
    Seth F. Baird v. Marianna O. Chapman.

      Filed at Ottawa May 12, 1887.

    1. Lien—money loaned by a son to his father—whether a lien or charge upon lands of the latter. A son, in 1864, advanced or loaned to his father $1000, which the latter used in paying his debts, including an incumbrance on his land, which the father promised to repay, but there was no definite contract giving the son a lien on the land. The father died in 1866, and his estate was settled up in 1869, and the claim of the son was not presented against the estate. In 1883 the son filed his bill against his two sisters and mother, for a partition of the lands of his father, in which he sought to charge the land with the payment of the loan, with interest: Held, that the son was not entitled to have such debt made a charge or lien on the land.
    2. Limitation—of claim against estate. Where a claim is not presented against an estate within two years after the grant of letters, it will be barred by the statute; and a court of equity will refuse to enforce payment of the same after a delay of eighteen or nineteen years in bringing suit, unless some satisfactory excuse is given for such delay.
    Appeal from the Circuit Court of Lee county; the Hon. John Y. Eustace, Judge, presiding.

      Mr. A. C. Bardwell, for the appellant.
    Mr. John D. Crabtree, for the appellee.
   Mr. Justice Craig

delivered the opinion of the Court:

This was a bill for partition, brought by Seth F. Baird, a son of Daniel Baird, deceased, against Charlotte F. Baird, the widow, and Caroline Pumphrey and Marianna 0. Chapman, two daughters of the deceased, to divide a certain farm, of one hundred acres, of which Daniel Baird died seized on the 26th day of March, 1866. Baird died intestate, leaving complainant and defendants as his only heirs. No objection was interposed by defendants to a division of the farm into three equal parts between the three children of the deceased, saving the rights of the widow; but in addition to a partition, the complainant, in his bill, set up, that in October, 1864, he enlisted in the army of the United States, and received from Lee county $1000 in bonds as a bounty for so enlisting; that in December of the same year he delivered the bonds to his father, Daniel Baird, under an arrangement or understanding, in substance, that the bonds should be used in the payment of the father’s debts, including an indebtedness on the farm, and that the money so advanced should be held for the use and benefit of the complainant. The bill seeks to charge the farm with the payment of the bonds so advanced, and interest thereon, and prayed that the same may be decreed a lien on the land, and that partition be made subject to the lien so created. But on the hearing, on the evidence of the respective parties, the court rendered a decree against complainant as to the claim predicated on the Lee county bonds, and ordered an equal division of the lands between the three heirs. To reverse this decree, the complainant in the bill appealed.

There is no controversy in reference to the fact that the complainant received the bonds in question from Lee county, and in the last part of December, 1864, delivered them to his father, but there is much conflict in the evidence in regard to the terms and conditions of the arrangement under which the complainant turned the bonds over to his father. It was proven by several witnesses, that the complainant made a present of the bonds to his father,—that they were given as a Christmas gift. On the other hand, the complainant testified as follows: “I let father have them the latter part of December, 1864. I offered them to him as a present, but he said he wouldn’t take them in that wdy; that he would use them in paying the mortgage on the place, but it should be put in the place to keep for me. ” Mr. Austin testified for complainant, as follows: “He said he had had Seth’s $1000, but that he should have it all back again; that he had used it in payment on his land, but when the land was sold or divided he should have every cent of it.” Mrs. Baird, the widow, testified, that her husband said, “Seth should have it all back again, and more with it.”

There was other evidence that the deceased, in his lifetime, made similar declarations. There was also evidence tending to prove that Daniel Baird used the proceeds of the bonds in payment of his indebtedness, and it is fair to presume, from the evidence, that he intended, at some time, to repay his son the money he had received. But we find no evidence in the record that establishes any definite contract made between the parties, conferring upon the complainant a lien on the premises which a court of equity can enforce. There was no agreement to give the complainant a mortgage on the farm, or a lien of any other character known to the law. The complainant bought in no mortgages on the land, nor did he pay off any mortgage, and hence can not claim to be subrogated to the rights of any prior mortgagee. No land was purchased in the name of Daniel Baird with money furnished by complainant, and the doctrine of a resulting trust does not arise. No deeds or title papers were delivered to complainant as a pledge or security for money, and the doctrine of an equitable mortgage can not be invoked; nor is there any evidence in the record which can be construed in such a manner as to create an express trust. Indeed, the only reasonable construction to be placed upon the evidence, viewing it in the most favorable light for complainant, is, that he furnished his father with money, which was used in. discharging the indebtedness of the latter, and which was to be paid back at some future time. The money was advanced, or, it may be said, loaned, in Decenl'ber, 1864. Daniel Baird died on the 26th day of March, 1866. On the 17th day of April, 1866, Charlotte F. Baird was appointed administratrix of the estate, and on the 22d day of March, 1869, she rendered a final report, showing all claims against the estate paid, and she was, by order of the court, discharged. The complainant had a complete remedy at law for the collection of his claim, by presenting it for allowance in the probate court at any time within two years from the time letters of administration were issued on the estate; but he neglected to avail of this remedy which the law afforded him, and under the plain provision of the statute his claim is barred by the Statute of Limitations, which requires all claims to be presented for allowance within two years from the grant of administration. No reason or excuse whatever is shown why the claim was not presented for allowance in the probate court.

But aside from the Statute of Limitations, the doctrine is well settled that courts of equity will refuse to lend their aid to a party who has been guilty of laches in asserting his rights. Here, the defence of laches was set up in the answer, and the only excuse attempted, in the evidence, for a delay of nineteen years, to use the language of complainant himself, is the following: “The reason I have so long delayed urging my claim against the real estate is, that I didn't think it' needed to be put in until the place was divided, and didn’t suppose there would be any trouble about it then. ” ■ The complainant resided in the neighborhood where the property was located, from the time he. loaned the money, in 1864, until 1883, when he filed his bill. He knew all the facts in regard to the transaction. Under such circumstances, the attempted excuse for the delay can avail nothing. The complainant knew his rights, and was bound to assert them within a reasonable time, which was not done. The fact that complainant may have supposed that he was not required to assert his claim until the farm was divided, affords no excuse for the delay. It was his duty to inform himself in regard to his rights. Neither ignorance of his rights, nor a failure to inform himself in regard to them, can be relied upon as a justification for the delay.

The decree of the circuit court will be affirmed.

Decree affirmed.


author: Mr. Justice Shope

text:
    William C. Wright et al. v. The Wabash, St. Louis and Pacific Railway Company.

      Filed at Springfield May 12, 1887.

    1. TAXATION by counties—constitutional limitation. Section 8, article 9, of the constitution of 1870, is intended as a general provision applicable to all counties, whether acting under the township system or not. The taxes therein limited to seventy-five cents on the one hundred dollars, are those assessed by the county authorities for county purposes, and for no other purposes; and in counties not under township organization, taxes for roads and bridges are for county purposes.
    2. A county not under township organization can not levy and collect a road and bridge tax, which, together with the other taxes levied by it, shall exceed seventy-five cents on the one hundred dollars of taxable property.
    Writ of Error to the Circuit Court of Morgan county; the Hon. Cyrus Epler, Judge, presiding.

      Mr. Charles A. Barnes, States Attorney, and Mr. W. P. Gallon, for the plaintiffs in error:
    Section 8, article 9, of the constitution of 1870, provides that counties shall never assess taxes, the aggregate of which shall exceed seventy-five cents per one hundred dollars’ valuation, except for the payment of indebtedness existing at the adoption of that instrument, unless under a vote of the people.
    Section 121, chapter 120, of the Be vised Statutes, substantially limits the power of the county board as in the above section of the constitution. Section 161, chapter 121, of the Revised Statutes, provides, that the county board may annually assess a road tax of not more than twenty cents on each one hundred dollars of taxable property.
    The law casts upon every county not under township organization, the duty of taking care of the public roads. As the county is divided into road districts, with the requisite legal machinery in each district to carry out the objects of their creation, and as the tax is levied in each district, it is reasonable to assume that as to such tax the county board acts as the agent, merely, of such districts, they corresponding with the townships in respect to roads and bridges.
    It was held in Wabash, St. Louis and Pacific Railway Co. v. McCleave, 108 Ill. 369, that the township taxes, including road tax, are in no sense county taxes, within the meaning of the constitutional limitation. The only difference between township levies and the one at bar is, that in the former case the township authorities may certify the tax required, while in this case the county board, acting for the various districts, directs the levy.
    A part of the county being exempted by law from this road tax,—cities, villages and incorporated towns,—how can it be called a county tax? A county tax must be uniform in its operation. It can not be supposed it was ever intended by the constitutional limitation to make a distinction in different counties.

      Mr. George B. Burnett, and Mr. George S. Grover, for the defendant in error:
    The levy in question is, strictly speaking, a tax. It has none of the features of a special assessment. Rev. Stat. (Cothran’s ed.) 1883, sec. 161, chap. 121, p. 1345; Cooley on Taxation, (1st ed.) 1; Hilliard on Taxation, sec. 26, p. 16; Burroughs on Taxation, sec. 4, p. 2.
    The levy of twenty-two cents in excess of seventy-five cents on the one hundred dollars, being in excess of the constitutional limit, was void. Mix v. People, 72 Ill. 241; Const, see. 8, art. 9.
    The road tax, being twenty cents of the excess above mentioned, being assessed, levied and collected as other county revenue, was clearly a portion of the “aggregate” of taxes which the county court was authorized to levy. Rev. Stat. (Cothran’s ed.) 1883, sec. 25, par. 6, chap. 34, p. 63; sec. 27, chap. 34, p. 64; sec. 161, chap. 121, p. 1345.
   Mr. Justice Shope

delivered the opinion of the Court:

The county of Morgan appears not to have adopted township organization. In 1882, a tax was levied on all the taxable property within the county, for county purposes, of seventy-seven cents on each one hundred dollars’ valuation, and in addition thereto, on all taxable property outside incorporated cities and villages, the county board assessed a road tax of twenty cents on each one hundred dollars’ valuation. This aggregate tax of ninety-seven cents on each one hundred dollars’ valuation was extended against all taxable property outside incorporated cities and villages, including the property of the Wabash, St. Louis and Pacific Railway Company, within Morgan county. On bill filed by the railway company, the circuit court enjoined the collection of all •this tax in excess of seventy-five cents on each one hundred dollars’ valuation, for county purposes; and to reverse this decree, William C. Wright, county collector, and the county of Morgan, sued out this writ of error.

It is not questioned but that the levy for county purposes to the extent of two cents (the excess over seventy-five cents on each one hundred dollars’ valuation) was an illegal levy, and the decree, to that extent, correct,—both parties conceding that section 8, of article 9, of the constitution, prohibits county authorities from assessing a tax in excess of seventy-five cents per one hundred dollars’ valuation, for county purposes. That section reads: “County authorities shall never assess taxes, the aggregate of which shall exceed seventy-five cents per one hundred dollars’ valuation, except for the payment of indebtedness existing at the adoption of this constitution, unless authorized by a vote of the people of the county. ”

The material question presented by this record is, does this constitutional provision prohibit county boards, in counties not under township organization, from assessing a road tax of twenty cents per one hundred dollars’ valuation on all the taxable property within the county, and outside of incorporated cities and villages, in excess of a levy of seventy-five cents per one hundred dollars’ valuation, for ordinary county purposes, thus making an aggregate levy of ninety-five cents per one hundred dollars’ valuation. The circuit court held, that the county board was prohibited from levying in excess of seventy-five cents per one hundred dollars’ valuation, and that the levy of the twenty cents per one hundred dollars’ valuation for road purposes, in excess of the seventy-five cents per one hundred dollars’ valuation for county purposes, was without warrant of law, and so decreed. Unless, therefore, it shall be found that the circuit court erred in this respect, its decree must be affirmed.

The constitutional provision referred to was considered by this court in Wabash, St. Louis and Pacific Railway Co. v. McCleave, 108 Ill. 368, and it was held, that in counties under township organization, town taxes levied for town purposes are not county taxes, within the meaning of this section of the constitution. And in that case, care was taken to show that the constitution itself, (sec. 9, art. 9,) in terms, recognized the power of the legislature to authorize municipal corporations to assess and collect taxes for municipal purposes, and to further show, that organized townships, under the Township Organization law, were municipal corporations. It was also shown in that ease, by whom, as a matter of law, township taxes were to be levied; and although the board of supervisors assumed to order the levy, it was held, that this action neither added to nor detracted from the levy,—the levy being made by the township authorities, by filing their certificate of the amount required, with the county clerk, on the authority of which he extends the same upon the tax books.

Counsel for plaintiffs in error direct our attention to that part of the opinion in the McCleave case where this language is used: “Section 8 of that article is only a limitation on the legislative power to authorize the levy of county taxes, and we have seen the taxes complained of are in no sense county taxes. As well claim the State taxes are for county purposes. The one is no more dissimilar to a county tax than the other. When collected, they are paid to town officers and expended for town purposes. ” And then asks: “Is the constitution to be construed differently for counties under township organization, and those not? Is it the law that townships can levy road taxes in the townships without violating section 8 of article 9 of the constitution, and that counties not under township organization can not levy road taxes in the road districts of the county, to be used only in the district where collected, without doing so ? ” And adds: “The only difference between township levies and the one at bar is, that in the former case, the township, being provided by law with the proper officers, ascertains the amount needed, and certifies the fact to the county clerk, who extends it on the tax books, and it is collected the same as county and State taxes; while in this case, the county board, acting for the various districts of the county, determines the amount necessary, and the clerk extends it on the books in the same manner. In both classes of counties the boards ascertain and certify to the county clerks the amount necessary for county purposes proper, and that amount is extended also. ”

Taxation is one of the inherent powers of civil government, and its exercise is necessary to the maintenance of the State. It is exercised by the State for State purposes. Within the State, and as State agencies, counties are vested with this power for county purposes; and within the county, other agencies are created, as, incorporated cities, towns and villages, organized townships, and school districts, and vested with taxing power for the several purposes of their creation. These several State agencies are given the power of taxation to effect the particular objects of their creation, and for no other purpose. The county organization is, in importance and degree, next below the State. It has for its object, among others, the preservation of the peace, protection of the public health, the administration of public justice, preservation of the public records, the construction and maintenance of court houses, jails and work houses, relief of the common poor and insane, restraint of criminals, and the establishment and maintenance of public roads and ways. Under township organization, the county is subdivided, and the care and maintenance of roads and bridges vests in officers of the organized townships, and, save in exceptional cases, the county, as such, is relieved of the immediate care of roads.

The two systems of county government, by county commissioners or county court, and by township organization, existed in this State at the time the present constitution was adopted, and had so existed for many years,—the first named, from the organization of the State; and although, by the constitution, the legislature was required to pass laws whereby the people of a county might adopt township organization, the simpler form of county government, by the county court, was the form existing by operation of law. This was known to the framers of the constitution, and when section 8, of article 9, was incorporated into that instrument, it must have been intended as a general provision, applicable to all counties. When, therefore, it said, “county authorities shall never assess taxes” beyond a stated limit, it must have been understood and intended that the taxes to be assessed by the county authorities should be for county purposes, and for no other purpose. And as we have seen one of the objects of county organization was the establishment and maintenance of public roads and ways, it follows, that a tax assessed by the county board, in counties not under township organization, for roads and bridges, was a tax for county purposes,—a county tax; and section 8, of article 9, above quoted, is a limitation upon the power of the county board to assess taxes (including the road and bridge tax) exceeding, in the aggregate, seventy-five cents per one hundred dollars’ valuation.

If we are correct in this, that in counties not under township organization a road and bridge tax assessed by the county board on the taxable property within the county, and outside incorporated cities, towns and villages, is a county tax,— that is, a tax levied for county purposes, as contradistinguished from a State tax, school tax, etc.,—then, upon the authority of the McCleave case, it is true, that in counties under township organization, while the limitation of section 8, article 9, operates as to assessments of taxes made by the county boards (boards of supervisors) for county purposes, the organized townships in such counties may, as to property w’ithin their limits, levy taxes for township purposes, as may. be voted at their town meetings, and also a road and bridge tax not exceeding forty cents per one hundred dollars’ valuation, so that, practically, the property of the citizen in one of these organized townships may be subjected to a county tax of seventy-five cents per one hundred dollars’ valuation, and a tax for town purposes, and in addition, a road and bridge tax of not exceeding the rate of forty cents, while in counties not under township organization the rate of taxation for like purposes, including that for roads and bridges, can not exceed seventy-five cents.

We can not concur in the view, that in respect of road taxes there is no substantial distinction between an organized township in counties under township organization, and a road district in counties not under township organization. The distinction seems to us most clearly marked. The organized township is, as we have seen, a municipal corporation, with defined corporate powers, including the power to levy, without the aid of the county board, taxes on the property within its limits, including a tax for roads and bridges, and to control the expenditure of the same. Through this municipal machinery, the people of the township manage the affairs of the township, independent of county or other control, while the road district in counties not under township organization, is a creature of the county board, and in no sense a municipal corporation. That board prescribes its limits, and changes them at pleasure; appoints its only officer,— the supervisor of roads,—and removes him at pleasure; and although the road taxes collected within the district may be paid to and expended by the supervisor only within the district, any surplus goes into the county treasury. And again, in case of emergency, as, the sudden obstruction of roads, destruction of bridges, and the like, if the cost of removal or repair exceed ten dollars, only the county board can act, and to meet the emergency, orders upon the county treasury must be drawn by it. The people of the district have no voice in imposing or expending this road tax. The municipal machinery by and through which it is laid and expended is that of the county alone.

What is said herein in respect of counties not under township organization, is said in view of the state of the Eoad and Bridge law in force in such counties at the time this road tax was assessed, namely, the act of April 18, 1873, entitled “An act in regard to gateways, roads and bridges in counties not under township organization, ” and as the same had been amended. Hurd’s Stat. 1882, p. 966.

The considerations here expressed, are, to our minds, conclusive of the questions arising on this record. Finding no error therein, the decree of the circuit court is affirmed.

Decree affirmed.


text:
    John G. Lobstein v. Andrew Lehn et al.

      Filed at Ottawa May 12, 1887.

    1. Appeal—as to the amount involved. On creditor’s bill to set aside a conveyance of land and subject it to the payment of a judgment of $490, the grantees in the deed set up in their answers and cross-bill that the same was given to them to secure an indebtedness from the grantor to them of some $1500, and over $500 moneys advanced or assumed by them in respect to prior incumbrances, and the court sustained the cross-bill foreclosing the deed as a mortgage, and ordered a sale giving precedence to the claims of the grantees. It was held, that an appeal would lie from the judgment of the Appellate Court afSrming the decree below, there being over $1000 involved.
    2. In such case, the complainant in the creditor’s bill will stand in the same position in regard to an appeal, as if the cross-bill was a bill to foreclose, or his bill was one to redeem from a mortgage; and as the decree below required him to^pay a sum over $1000 beyond what he claimed to be due, the litigation involved over $1000.
    3. Fba'odtjlent conveyance—of the distinction in case there is fraud in fact, or the transaction is only constructively fraudulent. A deed fraudulent in fact, is absolutely void as against creditors of the grantor, and will not be permitted to stand as a security for any purpose of reimbursement or indemnity; but it is otherwise with a deed which is only constructively fraudulent. In the latter case, the grantee may hold the same as a security for a debi honestly due him.

      Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. Henby M. Shbpabd, Judge, presiding.
    Mr. Theodore H. Schintz, for the appellant:
    Lehn was insolvent at the time he executed the deed to Kasch & Van Deursen, and the lands conveyed were his only available assets. Kasch & Yan Deursen knew there were other debts of Lehn.
    An assignment for the benefit of creditors must be absolute and unconditional, and without reservation of any benefit to the assignor. The provision to pay the surplus to Lehn makes the transaction fraudulent. Harden v. Osborn, 60 Ill. 93; Gardner v. Bank, 95 id. 298.
    The provision that the property should not be sold for five years without the consent of the assignor, makes the conveyance fraudulent. Harden v. Osborn, 60 Ill. 93; Gardner v. Bank, 95 id. 298; Bump on Fraud. Con. 355.
    There is no difference, in principle, between fraud in fact and in law, when the direct and unavoidable effect is to hinder or defraud creditors. The law presumes that the illegal object furnished one of the motives for doing the act. Bump on Fraud. Con. 24, 25.
    Such an arrangement as is here shown is, as a conclusion of law, fraudulent and void, and the whole instrument fails for all purposes. Mackie v. Cairns, 5 Cow. 547; McClurg v. Lecley, 3 Pen. & Watts, 83; Grover v. Wakeman, 11 Wend. 187; Goodrich v. Downs, 6 Hill. 438; Barney v. Griffin, 2 Comst. 371; Hyslop v. Clark, 14 Johns. 458; De Beerski v. Gage, 36 N. Y. 537; Harris v. Sumner, 2 Pick. 129.
    There was a secret trust between the parties that Kasch & Van Deursen should hold the property, or a portion of the proceeds, for Lehn -himself, at the expense of his creditors. Power v. Alston, 93 Ill. 587; Moore v. Wood, 100 id. 541; Lurkin v. Aird, 6 Wall. 78; Passmore v. Elbridge, 12 S. & R. 198; Elias v. Farley, 3 Keyes, 398.

      If one purpose of making a mortgage is to put the property out of the reach of the mortgagor’s creditors, it is void as to creditors. 1 Jones on Mortgages, 627; Boies v. Hensey, 32 Ill. 131; Reed v. Noxon, 48 id. 323; Hansen v. Dennison, 7 Bradw. 73.
    Mr. Hugh L. Burnham, for the appellees Kasch & Van-Deursen:
    If a transaction is in fact a security, it is a mortgage, no matter what its form may be. Flagg v. Foster, 2 Sum. 523.
    A power of sale does not change the nature of the transaction. Eaton v. Whiting, 3 Pick. 484.
    Although the grantee may have had knowledge of the other debts, and of the insolvency of the grantee, a deed absolute in form, given to secure a preexisting debt, will be treated as a mortgage, as to other creditors. DeWolf v. Strader, 26 Ill. 225; Taintor v. Keyes, 43 id. 332; Sutphen v. Cushman, 35 id. 186.
    Malice, fraud, covin, collusion or guile, are necessary elements to make up the intent or purpose to delay, hinder or defraud creditors; and they must be entertained by both parties to the deed. Axtell v. Cullen, 3 Bradw. 527; Sackett v. Mansfield, 26 Ill. 21; Myers v. Kinzie, 26 id. 36; Hesing v. McCloskey, 37 id. 341.
    A fraudulent intent on the part of the mortgagor, alone, will not vitiate the instrument. Herkelrath v. Stookey, 63 Ill. 486; Millers. Kirley, 74 id. 242; Mather v. Dobschuetz, 72 id. 440; Hatch v. Jordan, 74 id. 414.
    A creditor violates no rule of law when he takes payment of his demand, though other creditors are thereby deprived of all means of obtaining satisfaction of their own equally meritorious claims. Axtell v. Cullen, 3 Bradw. 527; Gray v. St. John, 35 Ill. 222; Miller v. Kirley, 74 id. 242.
    Fraud is never presumed when transactions may be fairly reconciled with honesty; and if the weight of the evidence is in favor of that conclusion, it should always be adopted. Mey v. Gulliman, 105 Ill. 272; Hatch v. Jordan, 74 id. 414.
    The rule is well settled, in equity, that when a security or conveyance is set aside as constructively fraudulent, it may be upheld in favor of one n'ot guilty of any actual fraud, to the extent of the actual consideration, and be vacated only as to the excess. Phelps v. Curts, 80 Ill. 109, and cases cited.
   Mr. Justice Sheldon

delivered the opinion of the .Court:

This was a bill filed by John G-. Lobstein, to set aside a warranty deed made by the defendant Andrew Lehn, to his co-defendants, Helmut Kasch and Arie Van Deursen, on the ground of the same being fraudulent as against creditors, and to subject to a sale, under complainant’s execution, the lands thus conveyed. The bill was taken pro .confesso against Lehn, and Kasch & Van Deursen answered, denying any fraudulent intent, alleging that Lehn was indebted to them in the sum of $1458.29, and that the deed was accepted by them upon the trusts set forth in a certain agreement, a copy of which is attached to their answer. Afterward, Kasch & Van Deursen filed a cross-bill, setting out that the deed was given and received simply as security for a debt due them, and praying relief accordingly. The cross-bill went by default against Lehn, and complainant’s bill was allowed to stand as his answer to the cross-bill. Upon hearing, on proofs taken, a decree was entered, to the effect, that unless Lehn pay to Kasch & Van Deursen, by a certain day, the sum of $2084.11, composed of $527.01 due them under a trust deed made by Lehn in their favor to one Van Vlissengen, and $1557.10 paid by them for Lehn under the agreement or declaration of trust, and also satisfy the judgment for $490.91, and costs, which Lobstein had obtained against Lehn, the lands should be sold subject to the lien of the other above described trust deeds thereon, and the proceeds of sale be applied first in payment to Kasch & Van Deursen of said sum of $2084.11, and then of Lobstein’s judgment. On appeal to the Appellate Court for the First District, the decree was affirmed, and complainant appealed to this court.

A motion was made by appellees to dismiss the appeal because the amount in controversy is less than $1000, exclusive of costs. The value of the land was some $4500. It is said by appellees, that the amount in controversy is the amount of appellant's judgment, which, together with interest, is less than $1000. However it might have been under the original bill before the cross-bill was filed, after the filing of the cross-bill we think it became a matter in contest what sum of money should- be paid to the mortgagees, Kasch & Van Deursen, in order to redeem. Kasch & Van Deursen claim that they are entitled to $2084, and the decree upholds their claim. Lobstein, in order to preserve his rights as a judgment creditor having a lien on the lands, had a right to redeem. Lobstein was made a party to the cross-bill because of his right to redeem if the deed and instrument in question are a mortgage, and the contest between him and the parties claiming as mortgagees, as to the amount to be paid to redeem, involves an amount over $1000. We are inclined to the view that Lobstein should stand in the same position in regard to an appeal, as if the cross-bill had been an original bill to foreclose, or the complainant’s bill had been a bill to redeem; and the decree entered by the court below contained a provision for redemption by Lobstein, on payment to Kasch & Van Deursen of-a sum over $1000 beyond that claimed by him to be due. The motion to dismiss the appeal is overruled.

The circumstances attending the execution of the alleged fraudulent deed were, that Lehn was indebted to Helmut Kasch in the sum of $500, and to the firm of Kasch & Yan-Deursen, of $500, to secure the payment of which latter claim Lehn had before executed his notes to Kasch & Van Deursen for $500, and his trust deed to one Van Yiissengen to secure their payment on the premises in controversy, at the time of executing which trust deed there were three other prior trust deeds, liens upon said premises. In the month- of August, 1885, the interest on these notes to Kasch & Van Deursen being due and unpaid, they threatened to foreclose the trust deed made to Van Vlissengen. Several interviews were had between Lehn and Kasch & Van Deursen upon the subject, which resulted in the execution of the warranty deed in question by Lehn to Kasch & Van Deursen, and a writing by Kasch & Van Deursen to Lehn, whereunder they advanced to Lehn $233, and paid, or assumed to pay, and declared as paid, for Lehn, $658.29, composed of the amount of Kasch’s individual claim against Lehn, and interest due on the incumbrances on the property, and taxes; and Kasch & VanDeursen agreed, that if, after they had sold said premises, they should realize more than the amount of their claim against Lehn, and the costs of preserving the property and clearing off the incumbrances on it, together with interest on the total sum laid out by them, then, in that case, the balance should be paid to Lehn, they also agreeing not to sell within five years at a price which Lehn would not consent to. The warranty deed was recorded, but the writing was held unrecorded. Subsequently, appellant, Lobstein, took judgment by confession against Lehn, and after execution returned “no property found, ” filed his bill herein. Kasch & Van Deursen entered into possession of the premises, and have continued in possession ever since. They redeemed the premises from the sale of taxes for 1883, paid subsequent taxes, and every installment of principal and interest as soon as due, upon the indebtedness secured upon said premises. Lehn was at the time insolvent. The conveyance included all his property. His unsecured debts then owing to other parties seem to have been about $1300. Appellant insists, that as against creditors Kasch & Van Deursen are entitled to nothing except the amount due them under their trust deed for $500,—or, in other words, that the warranty deed and accompanying writing should stand for no purpose as against creditors.

A deed fraudulent in fact is absolutely void as against creditors, and is not permitted to stand as a security for any purpose of reimbursement or indemnity; but it is otherwise with a deed which is only constructively fraudulent. (Boyd v. Dunlap, 1 Johns. Ch. 402; Phelps v. Curts, 80 Ill. 109.) The solution of the question raised by appellant depends, then, upon whether there was actual fraud on the part of appellees in the transaction assailed.

It is clear, from the evidence, that it was a purpose of appellees, in entering into the transaction, to obtain security for a preexisting indebtedness due from Lehn; but that there was any purpose on their part to defraud or to hinder and delay other creditors of Lehn, there certainly is no direct proof. The creditors holding the secured claims could in nowise be injured, as theirs were prior liens. It was only those having the unsecured debts who were liable to be injuriously affected. But it can hardly be said a preponderance of the evidence shows that Kasch & Van Deursen even knew of the existence of any unsecured debts, except some which Lehn designated as some “small debts around, ” and which they understood, as they say, he was to pay from the money they at the time advanced to him. They themselves both testify they did not so know.

We are unable to say that the court was not justified in the finding that there was no actual fraud shown by the proof on the part of Kasch & Van Deursen. The deed to them, then, was but constructively fraudulent; and in accordance with the rule recognized and adopted in Phelps v. Curts, supra, the court did right in letting the deed stand as security for the moneys paid by and the indebtedness due Kasch & VanDeursen.

The judgment of the Appellate Court will be affirmed.

Judgment affirmed.