Court Opinion

ID: 6960992
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:45:32.581554+00
Date Added: 2024-06-11T16:08:26.368653
License: Public Domain

Mr. Justice Walker delivered the opinion of the Court: It is conceded by appellant that Miller and wife have a first lien on three of the tracts of land in controversy for the amount advanced by them to Alexander Grimes to redeem from the sale to Merrill under the foreclosure of Barrett’s mortgage. But it is insisted that there is nothing else that is prior to Pratt’s mortgage; that the sum paid to Phillips to prevent his obtaining a tax title on the land, and the note purchased by Miller and wife from Jacob Grimes on Russell Grimes, were not and could not be made prior liens to Pratt’s mortgage. As the taxes were paid to preserve the title to the land and prevent all liens from being cut off and lost, they are, of course, a prior lien. And the land having been sold to Phillips for taxes, and neither Russell nor Pratt having paid them or redeemed from the sale, Miller and wife, as lien holders, had the right to pay him a reasonable sum for an assignment of the certificate of purchase, if the time for redemption had expired, and if not, to have redeemed and to have the money refunded. The taxes were a paramount lien to all others, and when paid by any lien holder, he was, of course, subrogated to the rights of the State, etc., for the amount necessarily paid to extinguish the lien for taxes. It was as much the duty of Pratt to pay the taxes to protect his lien as for Miller and wife to preserve theirs. And hence, when paid by the Millers, that sum became a lien on the land, of the same character as that previously held by them. These Avere, therefore, a part of the prior liens held by the Millers, to Avhich the Pratt mortgage became subordinate. These lands had been sold under Barrett’s prior mortgage, and had been purchased by Morrill, and twelve months for redemption- had expired after the sale. But neither Russell Grimes nor P. B. Pratt had redeemed. Their right of redemption Avas cut off and gone. They thereby had lost all of their rights in the premises, although creditors had a right to redeem before the expiration of fifteen months. The Millers then held a note on Russell Grimes for $185, with a power of attorney to confess judgment thereon. Russell, the Millers, and Alexander Grimes thereupon entered into an agreement by which Alexander received an assignment of this note, had a judgment entered thereon, sued out execution and had it levied on the lands and redeemed from Morrill’s purchase, and he became the purchaser at the sheriff’s sale, and subsequently obtained a sheriff’s deed. To enable Alexander Grimes to redeem, the Millers advanced to him $1342.66, the amount of Morrill’s purchase, and interest. It was then arranged that Alexander should hold the title as security to the Millers for these advances, Pussell to refund the money, with interest, to the Millers, and then have the laud conveyed to him by Alexander. At about the same time, and as part of the arrangement, Alexander Grimes, on the 14th day of May, 1864, executed to Pussell Grimes a written obligation to convey the lands to him on his paying $1731.48, with nine per cent interest per annum; “also, the George Allen debt—about$141.” Bussell Grimes was to hold possession of the premises, and apply the net proceeds on these sums annually,—the whole amount to become due three years from the first of October, 1863. As the Millers and the two Grimes made this arrangement, these are, no doubt, the sums of money then due the Millers. The Morrill purchase and the $185 note and interest thereon, no doubt made $1731.48 then due the Millers. It may be assumed this was then the full amount of all advances made by the Millers to redeem these lands from Morrill’s purchase. The obligation of .Alexander Grimes to convey to the Millers, or to hold the lands for their indemnity, is not found in the transcript of the record, but its existence is not contested. The Millers and Pussell Grimes came to an accounting in April, 1871, when they found that for redemption money in trust and taxes there was $2742.98 due the Millers. Pussell assigned Alexander’s obligation of the 14th day of May, 1864, to the Millers, and Alexander conveyed the land to them. But they were still to permit Pussell to redeem. This settlement of April, 1871, we suppose, only embraced the $185 note, the $1342.66 advanced to redeem, and interest, and it may be the money paid to prevent the title from being endangered by a tax title. It could not have embraced the money paid on the note Jacob Grimes held on Russell, as it was less than the two former sums in the nine per cent interest, and, we infer from the record, the money was paid on that note at a later date. But in August, 1872, another settlement was had, when it was found that Pussell owed the Millers $4080.48, and we infer that this settlement embraced the money paid to Jacob Grimes and the $1731.48 and interest.' At this last settlement, the Millers, then holding the title to the lands by á previous conveyance from Alexander Grimes, gave to Bussell an obligation to convey the lands to Mrs. Pratt on her paying to them $4080.48, with interest at the rate of ten per cent, within one year from that date. Inasmuch as P. B. Pratt took his mortgage pending the bill to foreclose the Barrett mortgage, and under the decree in which case Morrill purchased, and, as no redemption was made from that sale within twelve months, Bussell and P. B. Pratt were both actually barred of their equity of redemption. And all of the rights they subsequently acquired were by means of the arrangement and redemption by Alexander Grimes as a judgment creditor. Pratt’s mortgage was as effectually barred as if he had been a defendant to that bill. But the question arises whether his mortgage was let in subject to the Barrett mortgage and the note of $185, by means of which the redemption was had; and, if so, whether, after the redemption was made, Alexander and Bussell Grimes, and the Millers, could make the note held by Jacob Grimes on Bussell, or the money paid for it by the Millers, a lien on the land, superior to that of the Pratt mortgage, or did the arrangement and redemption let that mortgage in absolutely, only subject to the amount used in effecting the redemption. We have seen that Bussell Grimes and Pratt’s equity of redemption was barred and lost, and could only be revived by contract between the parties effecting the redemption. There is nothing appearing in the record from which it can be inferred that either of the parties was acting for Pratt, or intentionally did anything for his benefit, or to revive his mortgage as a lien junior to the advances made to redeem. Bussell and Pratt’s rights, then, being barred, the property became freed from Pratt’s mortgage as to all persons but Bus-sell. The Millers were at liberty to deal in the property then as they might choose. They were under no equitable or moral obligation to protect Pratt’s rights. Their relations were not such as to impose any such duty. But nevertheless, when Russell obtained the right to redeem, that, by operation of law revived Pratt’s mortgage, subject to the lien of the Millers for the money advanced to redeem from Morrill’s purchase; and they, without Pratt’s consent, could not postpone his mortgage to the amount paid Jacob Grimes by the Millers. As to the Pratt mortgage, Russell Grimes had used the terms “grant, bargain and sell” in it, and they operate as a covenant, under the provisions of the eighth section of the Conveyance act, to Pratt, his heirs and legal representatives, that he was seized, etc., in fee simple, free from incumbrances, etc. And it has been held that under this statutory covenant a subsequently acquired title by the grantor inures to the grantee so as -to preclude its assertion by the grantor, his heirs or assigns. See D’Wolf v. Haydn, 24 Ill. 525; King v. Gilson, 32 id. 348; Gochenour v. Mowry, 33 id. 331; Wadhams v. Gay, 73 id. 415. In D’Wolf v. Haydn, supra, it was held the subsequently acquired title inured under such a covenant in a mortgage, to the benefit of the mortgagee. Here, Russell Grimes contracted for and procured the right of redemption, and it inured to Pratt’s benefit, and, as between them, it revived the mortgage, subject to the Millers’ advances to redeem, and to their advances of money to protect the title against the tax sale. Equity follows the law, and when Russell Grimes procured the right to redeem, equity will treat it as a revival of the equity of redemption cut off and barred by Morrill’s sale. And in analogy to the inuring of a subsequently acquired legal title at law under covenants for title, as soon as Russell acquired the right to redeem under his covenants in P. B. Pratt’s mortgage, it inured to him and revived his right to redeem or purchase, subject to the claim of the Millers for the money they had advanced to - redeem. His rights were such that he could then have filed a bill and foreclosed, and had the property sold, and had the proceeds applied, first, to the claim of the Millers, and, after its satisfaction, the balance applied to the satisfaction of his mortgage. These were his equitable rights as they then existed. Nor had Russell and Alexander Grimes and the Millers any power without his assent to change or impair them. It then follows that the subsequent arrangement between all of these parties but P. B. Pratt, that the Millers should pay the note held by Jacob Grimes on Russell Grimes, and hold a lien on the land for the money so advanced, did not affect or impair the lien of P. B. Pratt’s mortgage, as he never assented thereto. It became a lien, but postponed and subject to that mortgage. Pratt’s mortgage was on record, and the Millers must be held to have had notice of the covenants it contained, and to have known the effect of the right they were conferring on Russell to redeem; and they were thereby estopped from claiming that the money advanced to pay the Jacob Grimes note was a lien superior to Pratt’s mortgage. The rights of the parties, then, are that the Millers have a first lien on the lands for the $185 note, and the $1342.66 advanced to redeem, with interest on both sums; also, the necessary sum paid to preserve the premises from a tax title, with interest. Mrs. Pratt has a second lien on the land for any balance that may be due on her mortgage, with interest, and taxes paid, if any, deducting rents and profits, if any, received by her; and the Millers have a third and last lien on this land for the money paid to take up the note Jacob Grimes held on Russell Grimes, with accrued interest on the same. Did the agreement of the Millers to convey to Mrs. Pratt, on her paying to the Millers $4080.48, of the 2d of August, 1872, produce any change in his rights under the Pratt mortgage? She most emphatically denies that she ever authorized Russell to make any such purchase or agreement, or that she ever ratified it or ever knew of its existence for a long period of time after its execution. And in this she is fully corroborated by Russell. Nor is their evidence overcome by other testimony in the record. Had she authorized or assented to „ this agreement it may be it would have let in the lien for the money paid on the Jacob Grimes note as a prior lieu and postponed the Pratt mortgage. But she did not authorize or sanction the arrangement either expressly or by implication, and her rights were not affected thereby. We are unable to see that the case of Hickox v. Greenwood 94 Ill. 266, has any bearing on this case. There, Hickox’s first lien had always been in force. It had not been barred, foreclosed or postponed; but in this case Pratt’s mortgage was barred by failing to redeem. In that case, until Hickox’s lien was barred, others could not postpone his lien for the purchase money without his assent, but the mechanic’s lien, which was superior to a subsequent loan by Hickox to the purchaser, was superior to the lien created by the loan. But his lien for purchase money was superior to all other incumbrances. Had it been held that the mechanic’s lien when it attached cut off Hickox’s vendor’s lien, then, if governed by such a ruling, we would hold that when Bussell revived the lien of the Pratt mortgage, that cut off the prior liens of the Millers. But that case announces no such rule. Had Pratt’s mortgage not been barred when the Millers made the advance of the note on Bussell, Hickox’s case would have been in point. But it lacks that essential element to make the two cases alike. Pratt had lost all lien on the land, and when it was revived it was subject to all previous and intermediate liens. We now come to consider the question whether the evidence shows that the mortgage given by Bussell Grimes to P. B. Pratt was made to hinder and delay creditors. The notes and mortgage being fair on their face, the presumption is that they are valid and binding until that presumption is overcome by satisfactory proof. To create a mere suspicion of fraud is not sufficient, but if it exists, it must be satisfactorily shown. The policy of the law is opposed to overturning solemn written instruments and deeds and conveyances on slight evidence. The law designs that such instruments shall stand until overcome by evidence that convinces the understanding that they have been entered into for a purpose that is prohibited by the law. Whilst courts are vigilant in relieving against fraud, they are careful to protect fair and honest transactions. On the mere production, then, of the notes and mortgage, the presumption is that they are valid, and it devolves upon those challenging their validity to impeach their fairness. James Pratt alleges that this mortgage and these notes were contrived to hinder, delay and defraud creditors. Much and very contradictory evidence was heard on the question. Whilst the commencement of James Pratt’s suit was prior in date to P. B. Pratt’s mortgage, his recovery of a decree was several years afterwards. The suit was brought nearly ten years before, and the decree rendered about that period after the suit was instituted. It is therefore almost certain that this mortgage was not made with a view of defrauding James Pratt, as Russell subsequently to its execution bought and sold property and continued in business as he had previously. James Pratt swears to admissions made by Mrs. Pratt, which she positively denies. He testifies that she admitted or stated to him that the mortgage was satisfied, and this statement was made by her on several occasions. But she unqualifiedly denies that she ever made such statements at any time. The force of his testimony is greatly impaired, from the fact that on his cross-examination in this case he admits that when the case was previously tried, he had not testified to these statements. With a person of his evident intelligence, and when his pecuniary interest was so largely involved, it is almost inconceivable that if it was true she had made such vital admissions, he should have withheld them. He must have known that if true, the case would turn on establishing this fact. ¡Nor does he give any satisfactory explanation for withholding the evidence. If it was true, and knowing, as any one would have done, that they in all probability would control the issue, we can not suppose that he could have forgotten these facts. His testimony as to Philemon’s admissions in his lifetime can not be considered as evidence in determining this question, as they are not legitimate testimony, after Philemon’s death, against his administratrix. If he has made out his case it must be by other evidence than these supposed admissions. Langdon Miller testified a number of times in favor of James Pratt, and that in various conversations which he had with Mrs. Pratt she made no claim to the land, nor did she speak of this.mortgage until some time afterward. This witness also testifies that he received a fraudulent deed from Bussell, and went through a mere sham of paying for it in the presence of a witness called to see the transaction. Nor does it appear that Mrs. Pratt, on the occasions referred to by Miller, was under any legal or moral duty to assert her claims or speak of the mortgage. She was not required to proclaim the fact at all times and to all persons when conversing with her, even about the affairs of her husband’s estate. The mortgage was on record and apparently unsatisfied, and that asserted to him and all other persons that she held the claim as representative of the estate. But according to his own testimony she did afterward assert it to him. Again, Mrs. Pratt flatly contradicts Miller in almost every material portion of his evidence that seems to oppose her claim. And her evidence is corroborated in several material facts. The evidence of Bussell Grimes, William Pratt and Mrs. Pratt is that there was a valuable and large consideration for the notes to Philemon, to secure which the mortgage was given, and they specify the-items constituting the indebtedness. They substantially agree as to what they were, as nearly so as could be expected after the lapse of about fifteen years. Had they precisely agreed in all of the particulars and minute details, the evidence would not perhaps' be entitled to an equal degree of weight. We are clearly of opinion that the evidence in support of the theory that the mortgage was fraudulent does not overcome this evidence, with the presumption that the mortgage is valid until impeached. < There is much evidence, inharmonious and contradictory in its character, but when it is all considered we think it is apparent, that all or the greater part of the business transacted between the parties, who were near relatives, was loosely done, relying on the memory of the parties and their disposition to act fairly. Mrs. Pratt was the sister of Russell Grimes, and as is frequent in such cases, there seem to have been liberties taken by him with her property, that he would not have done with that of a stranger or person less nearly related. It seems to be uncontradicted that on the death of their father she inherited means from his estate, and the money was drawn by Russell, and that he purchased with it real estate in his own name, a portion of which he subsequently conveyed to her, and on a settlement he, to secure a balance he owed her, gave her the notes and a deed of trust which was foreclosed by Smith’s sale of the property which was purchased by Carpenter. Russell Grimes seems to have been pressed for means and struggling to retrieve his impaired fortune for many years before he finally had to yield to his fate. Under such circumstances what more natural than that he should apply to a brother-in-law for assistance, or that the latter should, if able, lend him aid, and there is no evidence that P. B. Pratt was not abundantly able. All the evidence considered, we are, therefore, of opinion that James Pratt has failed to make a case of fraud. As to the purchases by Worthington and Lyon, this mortgage was on record when they bought and received their conveyances. They were therefore chargeable with notice. ISlor does the fact that Russell Grimes, may have told them that it was satisfied, relieve them from its consequences. They should have applied to the holder of the mortgage to learn the truth of the statement. Having failed to do so, they must bear the burthen imposed by their want of prudence. All the evidence considered, we are of opinion that the circuit court erred in decreeing that the mortgage to P. B. Pratt was contrived with intent to defraud creditors of Russell Grimes,—and in decreeing the trust deed to Smith, and his deed to Carpenter, were void, as they were not parties to the suits or any of them,—and because the pleadings and evidence in this record were not sufficient to apply the Statute of Limitations to defeat that sale. The decree of the Appellate Court must therefore, so far as it affirms the decree of the circuit court, be reversed, and the cause remanded, that proceedings maybe had in conformity with this opinion. Decree reversed.