Court Opinion

ID: 6962368
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:47:48.070258+00
Date Added: 2024-06-11T16:08:29.067734
License: Public Domain

Mr. Chief Justice Sheldon delivered the opinion of the Court: This was a bill in equity to redeem from two trustee’s sales of real estate in Chicago, made, respectively, on the 19th day of February, and the 24th day of March, 1879, under two separate trust deeds upon separate pieces of property, which had been given by the complainant to secure the payment of loans of money to him by the defendant insurance company. The bill alleges that complainant having made default in the payment of interest on the loans, and taxes on the property, he, in April, 1877, turned over to the defendant the possession of the premises, the rents from which since then had been received by the defendant; that after the advertisement of the sale of the property under the trust deeds, and before the sale, complainant, with his attorney, made application to the defendant for an accounting of such rents, and demanded that the sales should not be made until after such accounting and an ascertainment of the amount due; that said accounting was promised, and after several interviews the demand that the sale should not be made was waived, and an agreement entered into whereby the property was all to be sold and bought in by the defendant, and held in trust for the complainant until an accounting could be had, whereupon, if it should appear that complainant was still owing defendant any sum of money, a new consolidated loan for that sum was to be made to complainant upon all of the property on ten years’ time, or less, at his election; that in pursuance of such arrangement all the property was sold at the times mentioned in the notices of sale, and was bought in by the agents of defendant. The bill further alleges that in violation of said agreement, the defendant, on the 22d day of July, 1879, caused to be entered against complainant, in the Superior Court of Cook county, a judgment by confession, for a pretended deficiency between the amount due on the loans and the amount of the bids at such sales, and upon execution issued, bought in certain other property than that described in said trust deeds, for the sum of $254, for which was issued a certificate of purchase. The circuit court, on hearing, decreed in favor of the complainant, and the defendant appealed. The proof quite satisfactorily establishes that previous to the trustee’s sales there was made such an arrangement, substantially, as that alleged in the bill, and showing the existence of such a state of facts that defendant, under the sales that were made, must be taken to hold the property purchased but as security for the payment of the sums of money mentioned in the trust deeds. There is really no attempt at denial, by the evidence, that the alleged arrangement which was testified to by complainant and his attorney, or at least some arrangement to the effect that the property was to be bid in by the company, and be held but as security for their mortgage debt, was in fact made with Mr. Warfield, the defendant’s agent at Chicago for the collection of moneys loaned in this State, but it is denied that the agent had authority to make such an arrangement. The agent appears to have been acting under a written agreement between him and the company, as follows: “The party of the first part (Warfield) hereby agrees with the party of the second part (the defendant) to act as its agent at Chicago, for the collection of moneys loaned by it in the State of Illinois aforesaid, and have the general management of the affairs of said company in relation to its loans and securities therefor, according to such written instructions as shall be from time to time given to him by the said party of the second part, or its executive officers.” It is said that under this agency the arrangement agreed upon could have been made only under written instructions to make it, and none such are here shown. It does not appear that this written agreement was ever brought to the knowledge of the complainant or his attorney. Mr. Warfield himself testifies' that he had general instructions to renew loans by making new papers at six per cent interest, provided the parties would pay one-twentieth of the principal sum every six months until the whole indebtedness was paid. It was testified to that at the first interview with Warfield upon the subject, he stated that he would communicate with the home office in regard to the proposition made, and that afterward, at a subsequent interview, he said he was ready to make the arrangement, and he did enter into the arrangement. We think, from all this, the complainant might very properly infer that Warfield had received the company’s sanction for entering into the arrangement which he made, and that complainant was justified in his reliance upon the agent’s authority to make it. The court below found “that said trustee’s deeds of Levi D. Boone (the trustee) to the defendant are, in equity, mortgages, and that the complainant, by reason of the premises, has a right to redeem under the said two original trust deeds, and the deeds of said Levi D. Boone to the defendant, computing the interest as provided for in said trust deeds until they were merged into the deeds of Levi D. Boone to the defendant, and from that time at a legal rate of interest. ” We are satisfied with the correctness of the decree in respect of the right of redemption, but think the decree incorrect in the particular of allowing, in the computation of interest, only the legal rate of interest from the time of the making of the trustee’s deeds to defendant. We are of opinion the stipulated rate of interest named in the trust deeds, and the notes they were given to secure, should have been computed'uninterruptedly. There was no merger of the trust deeds and the notes they were given to secure in the trustee’s deeds, which Boone, the trustee, executed to the defendant, so as to stop the running of the stipulated rate of interest. There was a mere change in the form of the security, and the property still remained in defendant’s hands as a security for the indebtedness secured by the trust deeds, and the complainant had but the right of redemption upon the payment of such indebtedness according to its tenor and effect. The reduction of interest from the stipulated to the legal rate/ could only be justified as in the enforcement of the specific performance of a contract to re-loan the money at that rate. But the claim or proceeding of complainant is not at all of that nature. The written declaration of complainant in the matter filed and recorded in the recorder’s office of Cook county is, that the trustee’s deed made to the defendant, although absolute in form, is but a mortgage to secure their mortgage debt, which the trust deeds were given to secure. The object of the bill is to redeem, it offering to pay whatever may be found to be due upon an accounting. The right of redemption is the claim which is made and asserted, and the condition of its allowance should be upon the payment of the mortgage debt in accordance with "its terms. For the error indicated in respect of the computation of interest the decree will be reversed, and the cause remanded for further proceedings in conformity with this opinion. Decree reversed.