Crain v. Mcgoon

• Decision Date: 30 September 1877
• Citation: 1877 WL 9751,86 Ill. 431,29 Am.Rep. 37
• Parties: J. ADDISON CRAIN et al.v.RICHARD H. MCGOON.
• Court: Illinois Supreme Court

86 Ill. 431

1877 WL 9751 (Ill.)

29 Am.Rep. 37

J. ADDISON CRAIN et al.

v.RICHARD H. MCGOON.

Supreme Court of Illinois.

September Term, 1877.

APPEAL from the Circuit Court of Winnebago County; the Hon. WILLIAM BROWN, Judge, presiding.

Mr. J. A. CRAIN, for the appellants.

Mr. G. O. BARNES, for the appellee.

Mr. CHIEF JUSTICE SCHOLFIELD delivered the opinion of the Court:

On December 10, 1855, Chancellor Martin, since deceased, being indebted to Richard H. McGoon, as evidenced by his promissory note of that date, payable one year from date, for $2,000, money loaned, with interest at the rate of ten per cent per annum, executed his deed of trust, in the nature of a mortgage, on certain real estate to secure the payment thereof. Some payments of interest having been made, but the principal of the note and a part of the interest remaining unpaid, on or about March 1, 1863, Martin tendered McGoon, as the amount then due on the note, $2,000 in “greenbacks” and $40 in gold, which McGoon declined to accept. Subsequently, Richard H. McGoon assigned the note to his son, Henry S. McGoon, for a valuable consideration. Martin died intestate in March, 1864, and, soon thereafter, J. Addison Crain was appointed his administrator. Early in the year 1866 the trustee in the deed of trust, at the request of Henry S. McGoon, advertised the property for sale for the purpose of satisfying the amount claimed to be due on the note. Thereupon, on February 27, 1866, appellants filed their bill to enjoin this sale and for an account, etc. Answers were filed and replications thereto, and, after several continuances and a change of venue from Stephenson to Winnebago county, the court referred it to a jury to find:

1. What was the amount due on the note, March 1, 1863.

2. Whether Chancellor Martin, deceased, made a tender at that time.

3. Whether, if made, it was kept good.

The jury, after hearing the evidence, found by their verdict, in answer to these questions:

1. Amount due on the note, March 1, 1863, $2,040.

2. Tender made, March 1, 1863, $2,040.

3. Tender not kept good.

Before this, and on September 7, 1866, appellant Crain paid Henry S. McGoon, in open court, $2,040, which, it was agreed, was to be without prejudice to either party.

Subsequent to this finding by the jury, Henry S. McGoon filed his cross-bill, praying a decree of foreclosure of the deed of trust and a sale of the property to satisfy the amount due. Answer was filed to the cross-bill, setting up, in substance, the same facts relied upon in the bill as ground for relief. The court, on final hearing, dissolved the injunction, and found there was due Henry S. McGoon, on the note, $1,311.25, for which foreclosure was decreed. The principal grounds relied upon by appellants for reversing the decree are, first, that the tender made on March 1, 1863, discharged the mortgage, although the tender may not have been kept good; second, that the tender was kept good, and there should, therefore, have been no decree of foreclosure.

Kortright v. Cady, 21 N. Y. 343, Caruthers v. Humphreys, 12 Mich. 270, and Vanhusen v. Kanouse, 13 Id., cited by appellants' counsel, sustain them in their first position. It is, however, conceded in those cases that the common law doctrine was different, and that it required a tender at the time the debt is due, technically termed the “law day,” to discharge the mortgage, or an actual payment of the amount.

The doctrine of the common law was, that default in payment, at the time and place stipulated, forfeited absolutely the estate of the mortgagor; the land was thereby taken away from him forever. Co. Lit. 205 a. If, however, the mortgagor made a tender of the debt due, at the stipulated time and place, and the mortgagee refused to receive it, the mortgage was discharged. Co. Lit. 207 a. But a convenient time before sunset on the day of payment was the last time given to make the tender. Co. Lit. 206 b.

Courts of equity, acting upon these general principles, in order to prevent injustice to the mortgagor resulting from the common law rule, interposed and established the doctrine that the mortgage was but a security for the debt; that the mortgagee held the estate, although forfeited at law, as a trust; and that “the mortgagor had an equity of redemption which he might enforce against the mortgagee, as he could any other trust, if he applied within a reasonable time to redeem, and offered a full payment of the debt, and of all equitable charges.” 2 Story's Eq. Jur. sec. 1013.

It will be observed that it was the same rigid and technical common law rule which forfeited the estate of the mortgagor for non-payment of the debt at the stipulated time and place, and discharged the mortgage by a tender at the stipulated time and place -- the literal enforcement of the terms of the contract, without regard to circumstances.

We fail to appreciate why a court of equity, while interposing its authority to mitigate the rigor of the common law rule against the mortgagor, should, at the same time, extend and make more rigorous the rule against the mortgagee. We do not perceive how this can be said to be in pursuance of the natural principles of justice. If a tender is made but not accepted, and is kept good, it is plainly right that the mortgagee should have only the tender. The mortgagor has been deprived of the use of his money, and the mortgagee has had ample time to reflect upon his rights, and has been at liberty to have them, whenever he would, by the acceptance of the tender. But when the...