Court Opinion

ID: 6965072
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:52:24.717914+00
Date Added: 2024-06-11T16:08:34.788094
License: Public Domain

Mr. Justice Craig delivered the opinion of the Court: Two alleged errors are relied upon to reverse the judgment of the Appellate Court: First, it is claimed that the decree is erroneous in requiring complainant to repay the $19,280 which the court found the defendant had advanced on the purchase of the premises; and second, it is insisted that the court erred in decreeing that in ease default should be made in the payment of the money advanced by defendant, on or before March 2, 1891, then the conveyance executed by the complainant to the defendant should become absolute. The complainant, as appears from the evidence, was a corporation, with an apparent capital of $100,000. J. Louis Pfau, Jr., owned stock amounting to $999,800, Jean L. Pfau owned $100 in stock, and George Campbell owned a like amount. No money, however, had been paid into the company on account of stock, and the corporation, therefore, was one without means. Pfau, who owned the most of the stock, in the month of February, 1890, met the defendant, Scully, and undertoook to induce him to invest in the stock of the company. Various representations v?ere made as to patents, real estate and plants owned by the company, after which the following proposition was made: “Chicago, March 1, 1890. “Daniel B. Scully, Esq., City: “Dear Sir—I hereby make you the following proposal: If you will invest $25,'000 as a stockholder in the Chicago and Calumet Rolling Mill Company, on the plans outlined in our prospectus, I agree, as a holder of a controlling interest, to vote my stock in your favor as president of the company, the salary being $5000 per year, and will further contract not to sell or dispose of my controlling interest, and to vote same with you in all matters of control, or of any policy favorable to the stockholders and to the company. I will also deposit $12,500 of my present preferred stock in your hands as sec'urity that you shall receive, in dividends on your investment, at least ten per cent per annum for five years, or fifty per cent; when you have received fifty per cent,, my stock to be returned to me. All of which is most respectfully submitted. J. Louis Read, Jr.” Upon the representations and promises made, it seems, from the evidence, that Scully did become interested in the company, but how far or to what extent it is not necessary to a decision of the case to inquire, as the question presented on this branch of the case is, whether the $19,280 advanced by Scully was paid on account of stock subscription or on account of the purchase of the premises, the complainant insisting that the money was paid on account of stock subscriptions, and was not to be repaid, while on the other hand the defendant claims he merely advanced the money, as purchase money for the premises, which the complainant agreed to repay within a certain specified date, and upon default of payment he was,to hold, absolutely, the premises. After Scully had received the proposition of March 1, and before he had determined what he would do, it became necessary to pay $5000 to secure the contract for the purchase of the premises. Scully, on March 5, 1890, advanced the $5000, and it was paid on the purchase of the premises. At the time this money was advanced it does not appear in what manner or by whom he was to be repaid, but on the 17th of March it became necessary to -pay $14,280 more, to complete the first payment on the property, and before that time arrived Scully became satisfied that the representations made to him in regard to the company were not true, and that the company was worthless. He therefore notified Pfau that he would not pay any more money into the “concern” unless he received a deed of the premises. Pfau saw at once that the company would lose the property unless some arrangement was made to raise the amount required to make the first payment. He therefore agreed with Scully, that if he would pay the balance due on that day, and give the company thirty days to sell stock and repay the amount, the company would give him a deed. A meeting of the directors and stockholders of the company was called, and Pfau prepared a letter to be addressed to the company, which Scully signed. The directors met, and adopted a resolution authorizing the vice-president to execute a deed to Scully. The letter and resolution of the hoard are as follows: “Chicago, March 17, 1890. “To the Chicago and Calumet Rolling Mill Co.: “Gentlemen—I have subscribed for $25,000 worth of the capital stock of this company, upon which I have paid $5000, and have agreed to pay the balance as soon as needed by the company. The $5000 paid in by me has been - used as a payment on the east half of section 10, Lyons, and another payment of nearly $15,000 must be made to-day. As this company has been disappointed in placing other stock up till the present time, and as my money alone is being used for the first payment on the 320 acres of land, I hereby request that in consideration of my making this payment to-day, this company execute to me a quitclaim deed to said 320 acres of land about to be conveyed to it, the same to be held by me in case no other stock is sold. As soon as the company shall acquire title to the west half of said section 10, and receive other cash subscriptions, I stand ready to transfer said property back to your company. “Yours, truly, D. B. Scully.” “Resolved, That the proposition contained in this letter be accepted by the company, and that the vice-president of the company be and he is hereby authorized to execute such deeds as may be necessary to convey the interest of said company in said real estate to said D. B. Scully, and in ease said company’s stock shall not be taken and paid for within thirty days from this date, then said conveyance shall be an absolute conveyance, and said company shall have no further interest in said land, or any part thereof.” After the resolution was adopted, Scully advanced the remaining $14,280, which completed the first payment for the premises, and the premises were conveyed to him, as contemplated in the resolution. From the resolution of the board of the company, and from other evidence in the record, it is apparent that Scully received a conveyance of the property as security for the payment oi the $19,280 which he had advanced on the purchase price of the land. The finding of the court that the $19,280 was advanced by Scully on the agreement that it was to be repaid to him, and that he received a deed of the premises, to be held until such time as complainant would repay the money advanced, is fully sustained by the evidence. We find no satisfactory evidence in the record that Scully paid this money for stock in the company, as is claimed by the complainant. Indeed, it is plain, from the evidence, that Scully informed the company, before the arrangement under' which the deed was made, that he would rather lose the $5000 which he had advanced than put any more money in the company,, unless he received a deed of the property. We now come to the second question. It will be remembered that the court found that the defendant had advanced on the premises $54,215.57, and the decree required complainant to pay that sum to defendant on or before March 2, 1891. The decree also provided, upon such payment being made, defendant convey the premises to complainant, but in default of payment the deed conveying the premises to the defendant should become an absolute conveyance. It is insisted, in the argument, that this part of the decree is erroneous, because it deprives the complainant of the right of redemption provided by the statute,—in other words, that it was the duty of the court to order the premises sold for the amount found due, with the right of redemption provided by statute. On a bill to redeem from a mortgage, as a general rule, the court should decree that complainant be allowed to redeem upon payment of the sum found to be due within a reasonable time to be fixed, together with costs, and in default of such payment the bill be dismissed. (Decker v. Patton, 120 Ill. 464; Bremer v. Dock Co. 127 id. 464.) But whether that rule should apply to this case or not, it will not be necessary to determine, as this was not a bill to redeem. The sole purpose of the bill in this case was to set aside the deed made by the complainant to the defendant, on the ground of fraud. There was no allegation that the deed was a mortgage, nor did the bill pray for leave to redeem. If, therefore, the complainant, under a proper bill, might be entitled to have the premises sold for the amount found due, with the right of redemption provided by statute, he had no such right here, as no such case was made by the bill. The decree rendered by the court allowing complainant the right to redeem upon payment within a specified period was far more favorable to complainant than it was entitled to ask under the allegations of its bill, and it has no just ground for complaint. The judgment of the Appellate Court will be affirmed. Judgment affirmed.