Baldwin v. Sager

• Citation: 70 Ill. 503,1873 WL 8635
• Parties: JOHN BALDWIN, JR. et al.v.WINNIE J. SAGER.
• Decision Date: 30 September 1873
• Court: Illinois Supreme Court

70 Ill. 503

1873 WL 8635 (Ill.)

JOHN BALDWIN, JR. et al.

v.WINNIE J. SAGER.

Supreme Court of Illinois.

September Term, 1873.

OPINION TEXT STARTS HERE

APPEAL from the Superior Court of Cook county; the Hon. JOSEPH E. GARY, Judge, presiding.

Messrs. GRANT & SWIFT, for the appellant Baldwin.

Messrs. HITCHCOCK & DUPEE, for the appellant Company.

Messrs. COOPER, GARNETT & PACKARD, for the appellee.

Mr. JUSTICE WALKER delivered the opinion of the Court:

In March, 1872, appellee filed his bill to establish a mortgage, which had been executed by A. G. Morey and wife to Daniel Sager, on certain real estate owned by the Chicago City Railway Company, or that Baldwin should pay the balance due complainant as a pledgee of the mortgage.

It appears that, in August, 1867, one George A. S. Crooker owned the premises in question, and, at that time, executed a trust deed to George R. Clarke, to secure two promissory notes for $1333.32, which were payable to T. S. Dobbins. This deed was recorded December 19, 1867. By several mesne conveyances, the title of Crooker passed, subject to this mortgage, to Albert G. Morey, by a deed from Marcus Walker, dated the 20th of January, 1869, which was recorded the 3d of February, 1869, and Morey assumed the payment of the notes secured by the trust deed to Clarke.

On the 1st of February, 1869, Morey executed a mortgage to Daniel Sager, for $4000, which was afterwards assigned to complainant, and by him to appellant Baldwin, by a deed absolute in form, which was duly recorded; and on the 8th day of October, 1870, Morey conveyed the equity of redemption to Baldwin, and that deed was recorded on the same day. On the 15th day of the same month, Clarke sold the premises, under the power in the trust deed, to Baldwin. In December following, Baldwin conveyed to the railway company, by a deed delivered at that time, but bearing date in the previous October.

From these facts, it appeared that Baldwin was the holder of the legal title, absolute and free from these various mortgages. Such was the record, and such the apparent title upon which all persons not being charged with other notice could most assuredly rely; but it was claimed in the court below, and it so held, that Sager had, in fact, only pledged the lien he held, as second mortgagee, to Baldwin, to secure a debt the latter held against the former; that the deed by which he assigned it, although absolute on its face, was, in fact, only transferred as a pledge to secure the payment of $2000 he had borrowed of Baldwin, and that neither the sale by Clarke, under the prior deed of trust, to Baldwin, nor his sale to the railway company, deprived him of his right to enforce payment of the Morey mortgage; and the court below decreed that the Morey mortgage was not satisfied, but was a subsisting lien on the premises, and ordered the payment of $2214.53 in twenty days, and if not paid, that the master sell the premises.

We have been referred to no evidence, nor have we found any in the record, that the railway company had any other notice than such as the record discloses; and there can not be the slightest doubt that, if the company had paid all instead of but one-half of the purchase money before this bill was filed, they would hold the title, free from all incumbrances; but it is urged, that, inasmuch as the purchase money was not all paid, they hold subject to any lien that is disclosed by complainant's bill; and on this question, we are referred to the cases of Brown v. Welch, 18 Ill. 343, and Mosier v. Knox College, 32 Ill. 155. In the former of these cases, it was said that a subsequent purchaser must have received a deed and paid the purchase money before he receives notice, to be entitled to protection as a bona fide purchaser; but it will be observed that the answer in that case did not set up or claim that any portion of the purchase money had been paid. In such a case, there can be no question as to the rule contended for, as, to postpone such a purchaser to a prior equity could not injure him in the slightest degree. The prior equity in such a case can be enforced without doing any wrong to the subsequent purchaser, as, if he remove the incumbrance, he may set up the amount paid against the payment of so much of the purchase money, or he may rescind the contract and avoid the payment.

In the latter of these cases, the subsequent purchaser took with notice from the record, and, although he executed his note for the purchase money, it was with notice, and there was no right to invoke the protection of a court of equity. He purchased and gave his note in his own folly, unless he expected to redeem from the prior mortgage; but in this case, the railway company, before there can be any pretense of notice to them of appellee's claim, had received a deed of conveyance for the premises; had paid $2860, being one-half of the purchase money, and had given their negotiable notes for the balance. This, then, presents a different case from either of those to which reference has been made.

The question is, shall appellee be permitted to make a transfer of his mortgage, absolute and unconditional in form, which is recorded and relied upon by a purchaser, as extinguishing his claim and lien upon the land--be permitted to subsequently set up a secret understanding that his transfer...