Court Opinion

ID: 6968006
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:57:21.130562+00
Date Added: 2024-06-11T09:12:06.812961
License: Public Domain

Mr. Justice Wilkin delivered the opinion of the court: Objection is made by counsel for appellant Hazle that the bill of Schnur should have been dismissed because “prematurely filed,” and the relief prayed by Mrs. Bondy and her husband in their cross-bill denied on the ground that they had a complete remedy at law. While it is difficult to see why Schnur should have filed his bill at the time he did, and conceding the Bondys had an adequate remedy at law as against Hazle, yet all parties having, without objection, submitted their claims to a court of equity, these objections will not now be entertained. Counsel for appellees contend that “the decree of the Superior Court should be affirmed for want of a transcript of the record certified by the clerk of the court to be a true, perfect and complete copy of the record.” We do not reg'ard this point as meritorious. The transcript is in substantial conformity with the requirement of the statute and the rules of this court. No objection was made to it prior to the submission. The substantial questions in the case will therefore be considered on their merits. First—What are the rights of the appellant Hazle, as holder of the mortgage indebtedness due from the Bondys to Delia Metzler? Of course, he occupies no better position than would his assignor if she had continued to hold the notes and mortgages,—not merely, as suggested, because he purchased them after maturity, but because they could not be assigned in equity so as to cut off any valid defenses against the original holder. The Bondys, the mortgagors, claim that Haerther, their grantee, agreed to pay the indebtedness, and that under such agreement the land is liable for the debts, and should be exhausted before recourse should be had to them, and other property belonging to them sold on execution. It cannot be seriously doubted that the mortgagee or her assignee was entitled to pursue either of the several remedies afforded by the law for the satisfaction of the indebtedness, and that the right to resort to an action at law against the makers of the notes was in no way qualified or limited by agreements or transactions between the mortgagors and their grantees, unless the assignee or his'assignor in some way assented to such agreement or transaction. An agreement like that claimed to have been made would, if properly entered into, have given the mortgagee an addi-tional remedy by way of an action at law against Haerther, the grantee, (Thompson v. Dearborn, 107 Ill. 87,) but would in no way have affected his right to hold the mortgagors liable in an action against them, or proceed directly against the mortgaged property. It is not claimed that Delia Metzler or Samuel Hazle knew or assented to any such agreement between the Bondys and Haerther, much less that they, by reason thereof, waived the right to pursue any legal remedy for the satisfaction of the mortgage. Suit on the notes against the makers, or taking judgment against them by confession, was a proper remedy, and, as we have frequently held, might be pursued concurrently with a proceeding to foreclose. Certainly, a court of equity would not enjoin the action at law merely because the grantee of the mortgagors had assumed and agreed to pay the debt. But it is contended that Hazle was attempting, in the judgments by confession, to collect §1500 more than the amount due. Assuming this to be a sufficient ground for equitable jurisdiction to enjoin the collection of the judgments, the facts do not sustain the contention. The certificate of deposit for the §1500 given by Loeb & Co. to Haerther shows on its face that it was not, as contended, deposited or received as a payment on the mortgages. The notes were in the hands of Loeb & Co., and if the money had been intended as a payment on the debt it would have been credited upon the notes in the usual way. If a payment, why agree to refund the money to Haerther? The certificate itself explains. The money was “deposited as security on account of release deeds on a portion of the premises described in the trust deeds.” Another significant fact tending to show it was not intended as a payment is, that the indebtedness was not then due, and did not mature until about two years thereafter. It also appears that neither Haerther, Loeb & Co. nor the Bondys at any time treated the indebtedness as reduced by that or any other amount in the matter of accrued interest. Whether the certificate of deposit was transferred by Haerther to Boos, and by him to Ward, in good faith, for a valuable consideration,—as we think the evidence shows it was,—is to the Bondys a matter of no concern. Nor can it be said that the release of the thirty-three feet deeded to Bertha Harder operated as a release of the mortgage indebtedness against other parts of the mortg'aged premises, to the extent of the pro rata value of the part released. William Loeb & Co. were the agents of Delia Metzler, the mortgagee, and held the notes and trust deeds for her from the time of their execution until after maturity, when they were assigned to Hazle, and had authority to authorize the trustee to execute a release for any part or the whole of the mortgaged premises. The evidence shows the release of the thirty-three feet was made without any notice whatever to Delia Metzler, her agent or the trustee that third parties had become interested in other parts of the lots. In fact, at the time of the release,—April 25, 1894,—the records showed no transfer of other parts by Haerther, Schnur’s deed not being placed upon record until May 18 following. In the absence of such notice the mortgagee had the lawful right to make the release and retain her lien on the remaining part for the whole indebtedness. Stuyvesant v. Hayne, 1 Sandf. Ch. 419; 3 Pomeroy’s Eq. Jur. sec. 1226; McMillan v. McCormick, 117 Ill. 79. We think the Superior Court erred in finding that $727 had been paid on the notes secured by the trust deed on lot 21, and that $1742.73 only remained due thereon. The decree should have been for the amount shown to be due, without credit. Second—What are the rights of Schnur, the owner of the east thirty-four feet of this lot, as against the Bondys, the mortgagors ? As we have seen, he took whatever title he has subject to the incumbrance. The fact that he was ignorant of the existence of the mortgage was the result of his own carelessness or misplaced confidence in Haerther. His property being liable for the whole amount due on the note secured by the trust deed on lot 21, (the release of the thirty-three feet to Bertha Harder, which included the west sixteen feet of this lot, as we have seen, in no way affecting the mortgagee’s right to enforce the lien for the whole amount due ag'ainst the remainder of the property,) what is his remedy? Ordinarily, the most direct and simple relief afforded him would be by an action ag'ainst his grantor, Haerther, for a breach of his covenants against incumbrances. But he is not limited to that remedy, and may also resort to any covenants in the deed by his remote grantee, Mrs. Bondy, to Haerther. We do not regard the destroyed warranty deed, as it is called, as practically affecting the rights of any or either of the parties to this controversy. It is true, the general rule is, that where a deed of conveyance is executed and delivered its subsequent destruction or surrender will not have the effect to re-invest the title to the property conveyed in the grantor. (Duncan v. Wickliffe, 4 Scam. 452, and authorities there cited; Oliver v. Oliver, 149 Ill. 542.) Here, however, the original deed was returned and destroyed by mutual consent of the parties, not for the purpose of re-investing the title in the grantor, but in order that the property might be conveyed by three deeds instead of the one. The return and destruction of the deed, and the making of the new ones, were in the nature of correcting the original deed, so as to make the conveyance conform to the wishes of the parties. Under these facts it will scarcely be claimed that either Haerther or the Bondys could be heard to insist upon the original deed being in force and effect. Schnur neither knew of nor in any way relied upon it in taking title from Haerther, and is in no better position than he would have been to claim rights under it. Of course, if Haerther had obtained no other conveyance of the property, or if it had been shown in any way that reliance was placed upon that deed by Schnur when he purchased, he would be in a position to avail himself of its covenants. But no such claim- is made. For still stronger reasons the Bondys, having consented to the destruction of that deed and executed and delivered others in its stead, cannot now insist upon the alleg'ed agreement contained in it binding Haerther to pay the mortgage debt, as against Schnur, who is admittedly an innocent purchaser without notice, actual or constructive, of any such agreement. The proof that the original deed contained such an agreement as would bind Haerther and his grantees to pay the incumbrances upon the property is by no means satisfactory, but in the foregoing view as to the rights of the parties it is not necessary to determine that fact. Nor do we think Schnur should be bound in any way by the quit-claim deed of November, 1894, by the Bondys to Haerther, in which was written the agreement that the latter should pay the mortgage debt. He neither accepted that deed nor consented to its terms and conditions. It is said he claims title under it. Not necessarily so. He holds the legal title to the east thirty-four feet of lot 21 by deed from Haerther, who got possession of it by purchase from Mrs. Bondy, and the legal title to the west seventeen feet thereof, which was covered by her warranty deed. By the same deed Haerther also obtained the equitable title to the east seventeen feet of the thirty-four feet, and his grantee, Schnur, may at any time in a court of equity obtain the legal title thereto by a decree correcting the admitted mistake in the deed from Mrs. Bondy to his grantor. If Schnur should be compelled to pay the whole amount due against his property he could only have an action at law against Mrs. Bondy on the covenants in her deed to Haerther, in proportion to the value of the west seventeen feet to the whole, because her warranty deed only covers so much of the thirty-four feet. In equity, however, we are unable to see why he is not entitled, if compelled to pay the debt in order to protect his property, to be subro“gated to the rights of the holder of the mortgage and notes against the Bondys. The debt is theirs, and they are primarily liable to pay it by the terms of their contract. Having failed to do so, if Schnur, their remote grantee, is compelled to pay the debt in order to protect his property, no reason is perceived why he should not have his remedy against them. “One of the most familiar instances of the application of the doctrine of subrogation is where the purchaser of incumbered property, without having assumed the incumbrance, pays it off in order to protect his own interest or to perfect his own title. In such cases it is uniformly held that he is entitled to be subrogated to the position of the incumbrancer in respect of all the latter’s securities, rights, remedies and priorities.” (24 Am. & Eng. Ency. of Law, 253, and authorities cited in note 2, including the case of Stiger v. Bent, 111 Ill. 328.) Also, Chaplain v. Williams, 9 Pa. St. 341, as holding: “A purchaser, by parol, of a part of a tract of land, who pays off a mortgage on the whole to prevent a sale, will be subrogated to the benefit of the mortgage, and the judgment recovered thereon.” “The test of the right of subrogation is found in answer to the inquiry whether the person who paid the mortgage debt is the one whose duty it was to pay it first of all. If the debt was not primarily his, and he only occupied a position as surety to the mortgagor, he is entitled to be subrogated to the position of the mortgagee, when he has paid the debt.” Jones on Mortgages, (4th ed.) sec. 876; Young v. Morgan, 89 Ill. 199. There is not sufficient evidence in this record to sustain the claim of appellees that they are not primarily liable for the payment of this debt, and certainly nothing upon which to hold Schnur, an innocent purchaser, bound to pay it, whatever might be the rights of the appellees against Haerther. The decree below should have been that if Schnur was compelled to pay the incumbrance against his property he should be subrogated to the rights of the holder of that indebtedness against appellees. The release of the trust deed as to the west thirty-three feet of lot 20, as shown by the evidence, was with the consent of Hazle, holder of the indebtedness against it, and we see no reason for disturbing the finding of the court 'below that thereby the lien was discharged. There is nothing in the testimony tending to show that it was not released for a good and sufficient consideration. We are not to assume by the language, “one dollar and other g'ood and valuable consideration, ” that a mere nominal consideration was paid for the release. For the errors indicated, the decree of the Superior Court must be reversed except as to lot 20. The cause will be remanded, with directions to dismiss appellees’ cross-bill and dissolve the injunction granted upon it, with leave td appellant Hazle to suggest damages as provided by the statute in such case; and if said appellant Hazle shall proceed upon his cross-bill to foreclose, and a decree is entered in his favor for the amount found due him under the foregoing opinion, or any part thereof, against the property of Schnur, that the latter be subrogated to that extent to the rights of said appellant Hazle upon the judgment against appellees upon the notes secured by the trust deed against lot 21. The decree below as to lot 20 is in all things affirmed. Appellant Hazle should therefore pay one-half of the costs of this appeal and appellees the other half. Reversed in part and remanded.