The Portland daily press., 1888-04-23
THE CHICAGO UNIVERSITY.
The United States Court concurs
With the state Court.
The Union Mutual Life Insurance
company's Title Established.
Litigation over Land once a Gift
from Stephen a. Douglas.

A decision has Just been announced in re-
lation to the Chicago University, and the
case has been Of such remarkable charac-
ter that condensed history Of it will be Of
interest.
On March 2nd, 1856, Hon. Stephen A.
Douglas, then owning large tract OF land
in Chicago, made a written contract with
certain parties by which he agreed to give
ten acres Of land for the erection Of a uni-
Yersity. The tract was then four miles out
Of the city, but now is In the part Of the city
exceedingly desirable for dwelling houses,
and the cable cars run directly by 1t, so that
the land itself has become very valuable.
The other parties to the agreement were
to procure an act Of incorporation from the
Legislature Of Illinois, organize. and erect
upon the premises buildings at a cost Of
notlless than one hundred thousand dol
lars, TO be expended in instalments from
time to time soon after, Douglas agreeing
that upon the completion Of the building he
would give deed Of the land to the trustees
of the university.
The execution Of the plan being delayed
somewhat, Mr.. Douglas on the tenth Of NO
vember following extended the agreement
until the first day of October. 1857, making
the extension upon the condition that the IL
tie Of the land should forever remain In the
university for the purposes expressed in the
agreement, and that no part Of 1t should ever
be sold, or used for any other purpose what
ever.
A charter was obtained, and the trustees
organized under it with Mr.. Douglas as pres
ident. The parties who held his agreement
assigned 1t to the trustees, and they pro-
ceeded to carry out their plan. Donations
were made by other parties but not in suffic-
lent amount to enable them to proceed In ac-
cordance with the agreement that had been
made. Still ON the sOth Of August, 1853, such
progress had been made that Mr.. Douglas
gave to the corporation a warranty deed Of
the premises without any restrictions or
limitations whatever.
The buildings had then been only partial
ly completed. The institution needed
money, and two days after Mr.. Douglas
conveyed the property to the institution,
the corporation borrowed $4,000 and Sc
cured it by mortgage upon the premises
signed by Mr.. Douglas as president. The
bIuobtCo Mcub Dn WIN WVAh ohhAA -AAAs
Douglass death in 1871, when they again
borrowed $4,000 to repay the first loan.
Three years afterwards more money was
wanted, and loan Of $4,000 was obtained
from the Union Mutual Life Insurance
Company. But more money still was want
ed, and on September 1st. 1866 the Insur-
ance Company loaned the University S75,-
900 with which the two preceding loans were
paid.
But the college was not a success fnan-
cially. Its managers made the great mistake
of not securing an endowment in advance.
They failed to pay interest on their bonded
debt, and continued to borrow more money,
piling mortgage on mortgage, until finally
the Insurance Company, March Sth, 1876,
loaned the institution S150,O00, secured by a
mortgage Of the property.
Little If any, interest was paid on this
mortgage, and the result was that on the
18th Of March. 1881, the Insurance Company
commenced proceedings for foreclosure cf
the mortgage in the United states Circuit
| Court for the northern district Of Illinois.
Various grounds Of defense were set up by
| the University, among them that the mort
gage was void on account OF the limitations
| upon the use of the property, inserted in the
| extension Of the first agreement above mem
| toned. Another was that the University
| had no power to mortgage.
The case was very sharply contested and
the Insurance Company prevailed, obtaining
a decree for the foreclosure Of the mortgage.
The amount due thereon was so great that
the University was unable to redeem, and
the title became absolute In the Insurance
Company.
While this case was pending an Astrono-
mical Society, an institution existing in Chi
cagO which had an observatory on the land,
also interviewed against the Insurance Com
pany, but the proceedings were dismissed.
the Company surrendering such part Of the
property as could possibly be considered
personal property.
The heirs Of Mr. Douglas filed a bill In
the Circuit Court of the United States, claim
ing that the conditions, upon which their
father granted the land, had been violated,
and that the property reverted to them, but
the bill was dismissed without any hearing
upon its merits. After the Insurance Compa-
ny obtained its decree OF foreclosure, the
Douglas heirs commenced proceedings in
the State court of Illinois against the Unl-
yersity, alleging that the University had sold
the land contrary to the conditions upon
which it.was granted, and thereby forfeited
it. By supplemental bill the Insurance
Company was made party to the proceed
ings.
ing In court some time, believing tnat the
purpose Of the counsel for the Douglas
heirs was to protract the proceedings, and
perhaps thereby force a settlement with the
Insurance Company, began a cross action
against the said heirs to compel nearing
upon the merits. as their counsel had threat
ened to have the case dismissed II the action
was pushed for trial.
The filing of a cross-bill prevented dis
missal Of the action, and the case presented
by the proceedings Of the Douglas heirs and
the cross proceedings Of the Union Mutual
Life Insurance Company came to hearing.
Decision was rendered last Monday, the
Judge holding that the University took an
unlimited fee simple title 10 the land con-
veyed by Judge Douglas, the limitation In
the extension contract being fully waived by
the deed, and that In addition the execution
of the first mortgage by Judge Douglas
himself was an irreVocable license to the
University to mortgage sif they needed any
further power than they already had; that
tine University under its charter had full
power to mortgage the property. to raise
money, and ordered decree made In accord
ance with the decision.
His decision agrees precisely with that OF
Judge BlOdgett Of the United States court
in the foreclosure case, so that both the Uni
ted States and State courts concur In the
final result which has been reached.
Thus the Insurance Company after more
than seven years Of litigation, conducted
against It with great ability and earnestness
not to say bitterness, has finally succeeded
in establishing its rights and enabling 1t to
put upon the market property which during
all that time has paid no Income.