Court Opinion

ID: 6963082
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:48:59.908824+00
Date Added: 2024-06-11T16:08:29.910101
License: Public Domain

Mr. Justice Scholfield delivered the opinion of the Court: On the 10th day of January, 1871, W. F. Brink, who was then owner, executed a deed of trust of the land in controversy, and other land, to Henry D. Hatch, to secure $5000 indebtedness to John W. Southerland. Subsequently the land was conveyed to Jonathan Jones, and he thereafter conveyed it to Charles H. Jackson, and the latter, on the 23d' day of August, 1873, conveyed the land, in trust, to John W. Johnson, to secure one principal note for $6000, due three years after date, and six interest notes for $200, each, executed by Jackson, and by him delivered to Jones, and by Jones delivered to Brink, for payment, in part, of purchase money. Some time after this, but in the same year, Clark Whittier, in a transaction between him and Brink, bought the Jackson notes, as thus secured, and assumed the payment of the amount secured by the trust deed to Hatch. On the 14th day of December, 1874, Jackson, having paid nothing on his notes, entered into an agreement with Whittier, whereby he agreed to convey the land in controversy, by warranty deed, subject to the Hatch deed of trust, to Whittier, in full payment and satisfaction of his notes in the hands of Whittier, and Whittier agreed to accept such conveyance in full payment and satisfaction of Jackson’s notes. The deed was accordingly then made by Jackson, and delivered to and accepted by Whittier, and the same was placed on record on the 22d of the same month. Whittier then delivered to Jackson his notes, and it was agreed between them that Jackson should take the notes to the trustee, Johnson, and have him execute and place on record a formal release of the trust deed. On the 18th day of April, 1876, Whittier paid the amount due on the trust deed to Hatch, and Hatch executed a final release of that deed, which was placed on record on the 10th of June, 1876. Jackson neglected to notify the trustee, Johnson, of-the payment of his notes, and to obtain a release of that deed of trust, but on the contrary, he afterward placed these notes, uncancelled, in the hands of one Henderson, or, at least, in some way Henderson obtained their "possession, and Henderson, on the 3d of July, 1876, placed them in the hands of one Stagg, as collateral security for Henderson’s individual note for $215. In October, 1876, Stagg sold the Jackson notes for $906, to Judlin, appropriating the proceeds, as far as necessary, to the payment of Henderson’s note, and the balance to the payment of an individual account -of Henderson. Judlin pledged the notes as collateral security for his own note for a loan of $1000, to John N. Temple. On the 26th of November, 1878, Johnson, the trustee, on the request of Temple, assumed to sell the property described in the deed of trust, for the payment of the Jackson notes. Temple being the only bidder, Johnson conveyed to him on the same day. On the 23d of October, 1879, Temple conveyed the property to Abijah Johnson. On the same day, Johnson conveyed the property to James M. Pearce, and on the 22d of October, 1880, Pearce conveyed to Joseph Sliippen. The bill is filed by Whittier to set aside the deed of the trustee, Johnson; to Temple, and the subsequent deeds in that line, because, .being void and colorable, they are clouds upon his title. The court below decreed in conformity with the prayer of the bill. The fact that Jackson’s notes were payable to himself, and not indorsed by any one but himself, and were not due when pledged by Henderson as collateral, though important in an action upon the notes, 'is unimportant here. The assignee of a mortgage or deed of trust does not occupy the position of an assignee of commercial paper, but takes and holds it subject to all the equities that-could have' been urged against it in the hands of the original holder. Olds v. Cummings, 31 Ill. 188; Walker v. Dement, 42 id. 272; Cramer v. Willetts et al. 61 id. 481; Haskell v. Brown, 65 id. 29. In this case, John W. Johnson had no interest in the land. He had a mere power to sell and convey. The conveyance-was to him and his successor in trust, and the sheriff of Madison county was empowered to act in the event.he declined, or was absent, or unable to act. It was expressly stipulated, “if the party of the first part, or any one for him, shall well and truly pay off and discharge the debt and interest expressed in said notes, and every part thereof, when the same become due and payable, according to the true tenor, date and effect of said notes, then this deed shall be void.” The rule is familiar, and strictly applicable here, that a purchaser under a power purchases at the peril of the sale being void if a material condition precedent to the exercise of the power does not exist. A sale without the existence of such material condition precedent is a sale not authorized by the power, and no title can pass by it. (See Perry on Trusts, sec. 785.) Payment of the debt extinguished the power of sale. In the language we have quoted from the trust deed, that instrument was thenceforth “void. ” Lycoming Ins. Co. v. Jackson, 83 Ill. 307; Wood v. Colvin, 2 Hill, 566; Cameron v. Irwin, 5 id. 272; Jackson v. Morse, 18 Johns. 441; Breckenridge’s Heirs v. Ormsby, 1 J. J. Marsh. 257; Towner v. McClelland, 110 Ill. 542; Redmond v. Packenham, 66 id. 434. See, also, Jones on Mortgages, sec. 1899; Walker v. Carleton, 97 Ill. 582; Ryan v. Dunlap, 17 id. 40; Harris v. Mills, 28 id. 44. “It is a general principle, ” said Marshall, C. J., in Williams v. Peyton's Lessees, 4 Wheat. 79, “that the party who sets up a title must furnish the evidence to support it. If the validity of a deed depends on an act in pais, the party claiming under that deed is as much bound to prove the performance of the act as he would be bound-to prove any matter of record on which its validity might depend. It forms a part of his title. It is a link in the chain which is essential to its continuity, and which it is incumbent on him to preserve. These facts should be examined by him before he becomes a purchaser, and the evidence of them should be preserved as a necessary muniment of title. ” As applicable to the present case, it was incumbent on Shippen to show the existence of a debt at the time of the claimed trustee’s sale at which Temple bought. In the first instance, the production of the note described in the deed of trust, unattended by any suspicious circumstances, would be prima facie sufficient; but that is entirely rebutted and overcome by the evidence that the note had been paid, and was afterwards fraudulently put in circulation. It is true, the conveyance of the mortgagor’s estate to the mortgagee does not operate as a merger, in equity, unless it was intended to have that effect. (Campbell v. Carter, 14 Ill. 288; Jarvis et al. v. Frink, id. 396.) But here it was intended to have that effect, and so the merger was complete. Jackson’s debt was paid, and Whittier was the owner of the entire property, subject to the Hatch deed of trust, which he subsequently paid. This case is not analogous to those where a title passes which is subject to be defeated on the ground of the fraudulent acts of the parties, and in which it is held that a bona fide purchaser, without notice, is to be protected. In this case no title passed. What appears to be a conveyance is not a conveyance, any more than the deed of a person in nowise connected with the title to the property. We find no sufficient evidence of any fact creating an equitable estoppel to conclude Whittier on that ground. He is not shown to have had any knowledge of Jackson’s fraudulent conduct. The law does not require that he should examine the record subsequent to the timé that Jackson’s deed to him was placed on record, and that deed was constructive notice to all subsequently acquiring title, of the rights which it assumed to vest in him. It is a general warranty deed, covenanting that these lands “are free and clear from all former and other grants, bargains, sales, liens, taxes, assessments and incumbrances, of what kind or nature soever, * * * except a certain deed of trust for $5000 on this and other lands, which the party of the second part assumes to pay. ” The excepted deed of trust is, of course, that to Hatch; and so it is clear that it was assumed in some way, as between the parties, that the trust deed to Johnson was out of the way. By applying to Whittier, the extent of his claim would have been ascertained, and since it is incumbent on those who claim under the sale by Johnson, to know that, at the time of the sale, he had the'power to sell, it is clear no conclusive presumption could ‘arise from'the negligence of Whittier to cancel the notes and obtain and place on record the release of the deed of trust. The possession of the notes by Temple, and the absence of a release from the record, were simply strong circumstances tending to prove that the notes were unpaid; but it was competent to rebut and overcome these circumstance's, and this was done. It is claimed the evidence does not sufficiently prove that Whittier was the owner of the Jackson notes, and that the deed by Jackson to him was delivered in payment and satisfaction of them. We think otherwise." The decree is affirmed. -n Decree affirmed.