Court Opinion

ID: 6964492
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:51:23.384863+00
Date Added: 2024-06-11T16:08:32.970567
License: Public Domain

Mr. Justice Baker delivered the opinion of the Court: Plaintiff in error at one time had a valid lien upon the one hundred and sixty acres of land in Macoupin county, to secure the moneys which he had loaned to Bauch, and his mortgages were subordinate to the prior mortgage of Heaton, and to that alone. By the mortgage deeds Bauch had conveyed and mortgaged to him the equity of redemption. Unless the plea of res judicata should prevail, or some valid bar to his right otherwise be shown, it is manifest that if he was not a party to the Heaton foreclosure suit, then his equity of redemption still subsists, and he is entitled to relief in the chancery court. Plaintiff in error was named as a defendant in the Heaton bill of complaint, but he claimed, either in his pleadings which were filed, or in the amendments thereto which the court denied permission to file, or in both, (and it is unnecessary for the purposes of this decision to critically examine the somewhat voluminous pleadings actually filed and offered to be filed, for the purpose of ascertaining just when and where such claims were made,) that he never entered or authorized any entry of his appearance in said foreclosure suit; that his supposed answer in said suit was filed by an attorney of the court without any right or authority, and that said attorney was not employed or requested to act for him, or in any manner to look after his rights or interests, and that he had no knowledge or information an answer had been filed in his behalf until after the sale by virtue of which the defendant in error James W. Patton claims to have obtained title, and that he was never served with process in said suit; that the supposed return endorsed on the summons therein, issued to Jersey county, purporting to have been made by the deputy sheriff, was a forgery, and that he had no knowledge or information of such supposed return of service until after the aforesaid sale to Patton. If these allegations are true, and if plaintiff in error is not barred by the adjudication in the Smith suit, then, it would seem, he- has a good ease, calling for the interposition of a court of equity. It was also claimed in the original and amended hills, that defendant in error Patton was the attorney for Bauch in the suit wherein was recovered the judgment for $1425.05 against said Bauch and his co-partners; that Bauch was insolvent, and that such fact was known to Patton, and that by fraudu•lent collusion and conspiracy between said Patton and Bauch, said judgment was, through Mathew Patton, Jr., .brother of said Patton and brother-in-law of said Bauch, purchased at twenty-five cents on the dollar, and said judgment assigned to said James W. Patton, and that the object of such eonspiracy and'the assignment of the judgment, and the subsequent proceedings and sale thereunder, were for the purpose of aiding Bauch and defrauding plaintiff in error in respect to the collection and enforcement of his mortgages. If these allegations of plaintiff in error are true as matters of fact, then it would seem that a court of equity should not permit an attorr ney to thus, by fraudulent collusion, purchase the land of his client, to the injury of the creditor of such client, but that the court of conscience would, under such circumstances, hold the attorney to be a trustee for such creditor. It is to be remarked, however, both in regard to the above mentioned matters and in regard.to other matters pleaded by plaintiff in error in avoidance of the claim of Patton that his title to the lands is absolute, that they are matters of which Henry J. Smith could have availed himself in the former suit brought to foreclose the mortgages, upon which the bill in the present case is predicated. See Patton v. Smith, 113 Ill. 499. This brings us to a consideration of the plea interposed by Patton and wife to so much of the bill as seeks to foreclose the mortgages in respect to the lands in Macoupin county. The rule applicable to pleas in equity is, that the same strictness and exactness are required in them that are required . in pleas at law,—if not in matters of form, at least in matters of substance. (Story’s Eq. Pl. sec. 658.) One requisite of such plea is, that it should clearly and distinctly aver all the facts necessary to render it a complete equitable defense to the case made by the bill, so far as the plea extends. (Ibid, sec. 665.) Where its allegations, being taken as true, do not, so far as it purports to go, make out a full and complete defense, or where the necessary facts are to be gathered by inference, alone, it will not be sustained. (Ibid. sec. 652; 2 Darnell's Ch. Pr. 103; Puterbaugh’s PI. and Pr. Ch. 131.) It must be specific and distinct, and must be perfect in itself, so that, if true, it will make an end of the case, or of that part of the ease to which it applies. Allen v. Randolph, 4 Johns. Ch. 693. If the adjudication in the suit brought by Smith to foreclose the mortgages was, in respect to plaintiff in error, simply res inter alios acta, and if he is not in privity with Smith, then it is manifest that he is not bound by the result of that litigation. It is admitted by the plea that plaintiff in error was not a party to the Smith suit to foreclose, and the extent of the allegations of the plea to show any connection between him and that suit are the averments, “that on the 24th day of May, A. D. 1880, one Henry J. Smith, as assignee and holder of the notes and mortgages in complainant’s bill mentioned, from the complainant, exhibited his bill of complaint in the circuit court in the county of Macoupin, State of Illinois, against the defendants herein, for the foreclosure of said mortgages in satisfaction of said promissory notes, thereby stating that each and all of said notes, with the said mortgages, had been duly assigned and transferred to him, the said Henry J. Smith, by the said complainant, Prentiss D. Cheney, before the maturity of said notes, for a valuable consideration, and that the same were then held and owned by him, the said Smith.” It is further averred in the plea, that “this defendant, James W. Patton, on the 4th day of October, A. D. 1880, put in his answer, denying that said notes and mortgages were in good faith, for a valuable consideration, assigned and transferred by the complainant herein to the said Henry J. Smith, as alleged in the said bill of complaint of said Smith.” We think that these allegations are insufficient to show that plaintiff either had any connection with or interest in that litigation, or to show any privity between him and Smith. It may well be that Smith sued as or in the capacity of assignee and holder of the notes and mortgages from Cheney, and Smith may have claimed that the notes and mortgages had been assigned and transferred to him by Cheney, and that they were held and owned by him; but, non constat, that Smith was in fact assignee and holder, or that Cheney had assigned and transferred the notes and mortgages to him, or that he held and owned them. To say one exhibited a bill as assignee is not equivalent to saying he was assignee, and any conclusion therefrom that he was assignee is a mere matter of inference. The answer that was filed in the suit by Patton put in issue the alleged fact of transfer and assignment, and as Smith failed in his suit, the presumption might well be that the attempted foreclosure failed simply because it appeared from the proofs that the notes and mortgages had not been assigned and transferred to him, and that he had no interest. therein. One of the assignments of error upon the record is, that the circuit court erred in sustaining the plea of defendants ■James W. Patton and wife to complainant’s bill, and one of the contentions urged by plaintiff in error is, that his rights were not concluded by the decree in Smith v. Patton, and that therefore there was error in allowing the plea. We can not look out of the record, and since it does not appear from the : plea that Cheney was a party to the suit of Smith v. Patton, or that that suit was prosecuted at his instance, or with his : knowledge and consent, and in his interest or for his benefit, , or that there is or ever has been privity in respect to the notes ¡ and mortgages between Cheney and Smith, we are forced to the conclusion that the plea was defective, and that, too, in regard to a matter of substance. All that is stated in the plea may be true, and yet the fact be, that Smith, in prosecuting his suit to foreclose, was acting in fraud of the rights of Cheney, and was a mere trespasser with reference to him and in respect to the notes and mortgages. If Smith was such wrongdoer, yet Cheney could not safely and without peril have taken issue on the plea by filing replication. If, as matter of fact, the Smith suit was prosecuted at the instance of plaintiff in error, and for his benefit, then the adjudication in that case is binding and conclusive upon him. (Cole v. Favorite, 69 Ill. 457; Bennitt v. Wilmington Star Mining Co. 119 id. 9.) So, also, if Smith, at the time of his suit, was owner of the notes and mortgages, and plaintiff in error has since been re-invested with title, then he must necessarily have derived such title through Smith, and be in privity with Smith’s title, and bound by the final decree rendered in the Smith case. In either of the events above supposed, the conclusiveness of the adjudication in the Smith case will include, not only what was determined in that suit, but also all other matters properly involved, and which might have been raised and determined in it. See Bennitt v. Wilmington Star Mining Co. supra, and authorities there cited. What we have already said obviates the necessity of any further discussion of the errors assigned. For the error committed in holding the plea to be sufficient, and allowing it, the decree is reversed. The cause is remanded, with directions to give plaintiff in error leave, if he shall be so advised, to further amend his bill, and to give like leave to defendants in error to amend their plea. Decree reversed. Magruder and Craig, JJ., dissenting.