Court Opinion

ID: 6967688
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:56:49.726078+00
Date Added: 2024-06-11T16:08:40.816033
License: Public Domain

Mr. Justice Cartwright delivered the opinion of the court: On September 1,1876, James S. Woolley owned and resided upon a farm of one hundred and thirty-seven acres in Christian county, and on that day executed, with his wife, a mortgage to the appellee, Lephia 0. Brown, to secure the payment of §1000 borrowed money five years after date, with interest to be paid annually, intending to mortgage a forty-acre tract of the farm which was situate in range 1, east of the third principal meridian, but by mistake the land was described as being in range 1, west. Woolley had also given an unsecured note for §600 to one Spaulding, who in 1889 gave that note to the appellant, Electa W. Yarnell, a daughter of Woolley. On July 22, 1889, Mrs. Yarnell began an attachment suit upon that §600 note against her father, who had become a non-resident, and caused the attachment writ to be levied upon the forty-acre tract which Woolley and Mrs. Brown intended to be, and supposed was, included in the mortgage. Woolley entered his appearance in the attachment suit, and on June 6, 1890, a general judgment was rendered against him in favor of Mrs. Yarnell for §1283.21, which she on the same day assigned to her attorney, William L. Gross, to secure him for services rendered and to be rendered for her as such attorney. Woolley paid the interest on his indebtedness to Mrs. Brown up to September 1, 1889, but the interest due September 1,1890, was not paid, and on November 7,1890, the original bill in this case was filed by Mrs. Brown for the foreclosure of her mortgage. At the March term, 1891, the appearance of Woolley was entered in writing in the foreclosure suit, his default was taken, and the judge entered on his docket the usual order for a decree of foreclosure and sale for $1138.35, with costs. Up to this time the mistake in the mortgage had never been detected, but it was discovered before the decree was entered by the clerk, and no decree was ever entered at large upon the records. The entire entry of record was a transcript of the judge’s minutes, without the description of any property or any of the usual provisions. An execution having been issued on the judgment in the attachment suit, the land in question was sold June 19,1891, to Gross for $1434.24, the amount due on the judgment with costs, and he received a certificate of purchase. The error in the mortgage having been discovered, the previous orders and decree in the cause were at the August term, 1891, on the motion of Mrs. Brown, set aside, with leave to amend the bill and make new parties. The bill was amended, setting up the mistake and asking a correction, and making Mrs. Yarnell and her husband and Gross defendants. They were served for the November term, 1891, and answered the amended bill. Their answers were afterward amended, and their defense was that the court had no right to set aside the former decree and that they had no notice of the mistake or of Mrs. Brown’s rights. Woolley answered admitting all the allegations of the amended bill. Pending the litigation Gross obtained a sheriff’s deed, January 4, 1895. On a hearing a decree was entered finding that Mrs. Yarnell had notice of the equities of Mrs. Brown; that her interest and that of Gross were subject to the mortgage lien, and that the husband, W. R. Yarnell, had no interest in the premises. The decree corrected the mistake and ordered a foreclosure and sale. Mrs. Yarnell and Gross appealed to the Appellate Court, where the decree was reversed and the cause remanded to the circuit court, with directions to ascertain the amount due Gross from Mrs. Yarnell and make his claim the first lien to that amount, to make the amount due Mrs. Brown a second lien and to order a sale accordingly. Prom that judgment Mrs. Yarnell has prosecuted this appeal, and Mrs. Brown has assigned cross-errors upon the record. It is insisted on behalf of the appellant that the circuit court had no power, at the August term, 1891, to set aside its decree of the March term preceding, on the motion of appellee, but that appellee misconceived her remedy and should have proceeded by a bill of review. That decree was against James S. Woolley, and he was the only one whose rights were in any manner affected by the method employed to set aside the former decree. It is no concern of appellant that it was done by a motion, rather than upon an issue formed or by default upon a bill of review. The only party interested in that question has found no fault with the method but is content with the order, and appellant cannot be heard to object for him. It is also claimed that appellant had no knowledge of the mortgage or of the land intended to be conveyed thereby; but we are well satisfied with the conclusion of the circuit and Appellate Courts that she had such knowledge and that her rights were subordinate to those of appellee. The remaining question is whether the equities of William L. Gross are superior to those of appellee, and if so, to what extent. A judgment is not assignable, at common law or under our statute, so as to vest a legal title in the assignee, and the purchaser obtains only an equitable interest. (McJilton v. Love, 13 Ill. 486; Hughes v. Trahern, 64 id. 48.) The purchaser takes the judgment subject to all equities existing between the parties to it. It has been the rule in this State that the purchaser of certain things in action will be protected against the latent equities of third persons of whose rights he could know nothing. Thus, in the case of mortgages it has been repeatedly held that an assignee is so protected against such equities. (Olds v. Cummings, 31 Ill. 188; Silverman v. Bullock, 98 id. 11; Himrod v. Gilman, 147 id. 293; Humble v. Curtis, 160 id. 193.) But in order to make that rule applicable the equities must be equal. If the assignee is a mere donee, or the lien acquired is inferior in its nature to another equity, he will not be preferred. The lien of an ordinary judgment is general, and not specific against any particular thing. It only extends to what the debtor really has, subject to the equities in it at the date of the judgment. A mortgagee deals with particular property, and in this case appellee parted with her money upon the security of a particular tract of land which was misdescribed, so that her right was equitable only, but the equitable interest was in that particular tract. Such an equity would be regarded as superior to that of appellant, so far as her judgment was a general lien upon the property of her father, James S. Woolley. The appearance of Woolley was entered in the attachment suit and a general judgment was rendered against him, and it is argued on behalf of appellee that the attachment was thereby abandoned and the lien of the attachment released, so that the lien of the judgment became a general one. We do not think that such is the effect of the judgment. It is true that execution might issue thereon, not only against the property attached but the other property of Woolley, and yet the lien as to the particular tract of land levied upon was preserved, and appellant was not put in a worse position by the appearance and general judgment than she would have been if Woolley had not appeared. It appears, therefore, that so far as the liens upon the land are concerned the equities are such that the same rule applied in the assignment of mortgages should prevail, and the rights acquired by Gross without notice should be protected. When the assignment was made to Gross he had rendered services to appellant which the judgment was assigned to secure, but it was also intended to secure payment for services and expenses to be rendered in the future, and he continued to render services and incur expenses after he and appellant were brought into this suit and had full notice of appellee’s equities. For these services and expenses subsequent to such notice, and in defending appellant’s claim and his own to priority over appellee in this .suit, he charged and claimed the right to payment out of the judgment. By this means there has been a very large increase in his claim after actual notice of appellee’s equities. The only valuable consideration actually passing between him and appellant prior to notice were the services performed and the expenses incurred up to that time. A valuable consideration is an essential requisite to secure an equitable right to precedence in such a case as this, and if notice is received before the consideration is actually parted with, it must he held a valid and binding notice, which will preclude an assignee from acquiring any right upon a subsequent consideration as against the prior equity. After such notice Gross was not bound to perform the services or incur the expenses upon the faith of the security, and would have had ample relief against his agreement on account of the failure of the security. To permit him, after notice, to go on and consume the whole or a large part of the value of the property in litigation, to the further impairment or destruction of the prior equitable right, would be most inequitable and unjust. He testified to his subsequent services and disbursements, and his charges therefor, as well as the continuing charges in this litigation, and the judgment of the Appellate Court directed the circuit court to ascertain the amount due him from appellant and allow the same as a first lien. We think that this was wrong. The judgment of the Appellate Court and decree of the circuit court are reversed and the cause is remanded to the circuit court, with directions to ascertain the amount equitably due to William L. Gross from appellant for services and expenses to secure which the judgment was assigned to him, up to the service of process on him under the amended bill in this case, and to make his claim a first lien for such amount and appellee’s mortgage a second lien, and to enter a decree of foreclosure accordingly. Reversed and remanded.