Court Opinion

ID: 6991732
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:26:09.012853+00
Date Added: 2024-06-11T16:09:38.244709
License: Public Domain

Gary, P. J. The facts of this case as established by a preponderance of the evidence, are that in May, 1871, the insurance company loaned $60,000 to the complainant and plaintiff in error and her husband, Julius Kirchoff, and her mother, Angela Diversy, uj on their note secured by a trust deed conveying many parcels of land belonging to them in severalty, among which were lots 2 and 4 in block 21 of. the Canal Trustees’ subdivision of the south fractional quarter, Sec. 3, T. 39 N., R. 14, E. 3d P. M., which were the property of the complainant. In 1878 there was default in payment. Reasons which are not very clearly shown by the record, led to negotiations which resulted in the conveyance by the mother of all her lands included in the deed, except forty acres which the company released to her, and by the complainant and her husband of all their lands included in the deed, which conveyances the company accepted in satisfaction of their debt. But as to a part of the transaction, it was agreed that the complainant might purchase from the company the two lotsfor 810,000, the terms for the payment of which are involved in considerable uncertainty, except that they were to extend over a period, probably of nine years, but which certainly has now elapsed, and the rate of interest was to be six per cent. She filed her bill to have the benefit of this agreement. The bill was dismissed upon the hearing. As was said in Sargent v. Howe, 21 Ill. 148, the deed of trust in this case “only differs from a mortgage with power of sale in its being executed to a third person instead of the creditor,” and therefore the dealings between the parties are within the rule applicable to mortgagors and mortgagees, “that the courts look upon their transactions with jealousy.” 1 Jones Mtg., 711. The evidence as to the agreement is by the testimony of Julius Kirchoff, E. A. Warfield, then general agent, and R. B. Kendall, then attorney of the company, and it was made between Julius Kirchoff, acting for the complainant, and Warfield, with some participation by Kendall, acting for the company. The authority of Warfield to act for the company under circumstances as shown by this record, has been affirmed by the Supreme Court in the cases of this company v. White, 106 Ill. 67, and v. Slee, 110 Ill. 35. The testimony of Julius Kirchoff, in regard to the agreement, is much weakened by the inconsistency of his conduct afterward, but it is so corroborated by Warfield and Kendall, that there is sufficient proof of the agreement. Before the conveyance to the company, it had commenced foreclosure proceedings, in which they sought to reform the description of part of the lands of Mrs. Diversy; she had answered, contesting it, and alleging a defense which, if successful, would have invalidated most, if not all, of the papers she had executed. The company understood, whether correctly or not is immaterial, that they could make no adjustment with her without the assent of the Kirchoffs. There were, therefore, considerations to induce the company to make the agreement, and that they did make it, is satisfactorily proved, and they have had from it all the benefit they proposed to obtain by it. The foreclosure proceedings went on after the conveyances, to cut off an intervening title, but with the agreement that it should not affect the agreement as to the lots described. The company obtained deeds under the foreclosure in January, 1882, but refused to perform the agreement made by Warfield. As to the effect of this agreement, the rule in equity “once a mortgage, always a mortgage,” applies. As was said in Ennor v. Thompson, 46 Ill. 214: “When the mortgagor has conveyed the mortgaged premises to the mortgagee, it only operates as a bar to the equity of redemption, when it clearly and unequivocally appears that both parties so understood and intended it should.” Here the contrary, as to the two lots, clearly and unequivocally appears. And it does not affect the complainant’s right to redeem those lots, that as to the residue of the mortgaged property, there is no redemption, and that she proposes to pay but a small part of the original debt. When, by the operation of law upon the facts, or by the agreement of the parties, the debt has been apportioned, and a part of it made the sole burden upon a part of the incumbered property, that part may be redeemed by paying that part of the debt apportioned to the part redeemed. Meacham v. Steele, 98 Ill. 135; Mutual Mill Ins. Co. v. Gordon, 121 Ill. 366. The complainant filed her bill to redeem in June, 1882. The lots she was to redeem and the principal sum she was to pay, as well as the rate of interest, are definitely fixed by the agreement. The time at which the interest was to begin, and the amount and time of payment of the installments, are left uncertain. But this is not a bill for a specific performance. It is an appeal to a court of equity by the complainant that she may have her property restored to her upon the terms that she shall discharge the burden upon it, fixed in amount by agreement, and which, if that agreement had been executed and performed, would have been discharged in the time that has elapsed. She is now entitled to the benefit of that agreement, upon the terms that she, within a short time after the amount is ascertained, pay it. The decree is therefore reversed and the cause remanded to the Circuit Court with directions to that court to have an account taken of the amount due the company, crediting them with the principal sum of §10,000 and interest thereon at six per cent from September 10,1879, the day of the delivery of the deed of the complainant and her husband to the company, together with whatever the company has paid for taxes, assessments, insurance, repairs and other expenses upon the property so far as the same may be found to have been reasonably necessary, and charging them with the rents and profits which they have, or by ordinary care and diligence ought to have received from the property, interest to be allowed upon the disbursements if not repaid by the rents and profits (but there is to be no compounding of interest), and when the amount due the company is ascertained, to enter a decree that upon the payment of that amount with interest thereon within ninety days thereafter, the company convey to her, and that in that event she recover her costs. But if she do not so pay, the bill to be dismissed at her costs. Bremer v. Canal & Dock Co., 127 Ill. 464. Reversed and remanded with directions. Gaknett, J., does not concur in the conclusion reached.