Bush v. Sherman

• Decision Date: 30 September 1875
• Citation: 1875 WL 8726,80 Ill. 160
• Parties: LOUIS BUSH et al.v.BENJAMIN F. SHERMAN,BENJAMIN F. SHERMANv.LOUIS BUSH et al.
• Court: Illinois Supreme Court

80 Ill. 160

1875 WL 8726 (Ill.)

LOUIS BUSH et al.

v.BENJAMIN F. SHERMAN,BENJAMIN F. SHERMAN

v.LOUIS BUSH et al.

Supreme Court of Illinois.

September Term, 1875.

OPINION TEXT STARTS HERE

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

On the 23d day of May, 1856, Winchester Hall, one of complainants, purchased of Ayers and Hamilton a block of ground, which included within its limits the lands involved in this controversy. A portion of the purchase money was paid down, and the remainder, represented by six promissory notes, was secured by mortgage upon the premises, containing a power of sale. The notes matured in sets of two, of equal amount, in one, two and three years from the date of the sale. According to the testimony of Bush, the real estate was bought on the joint account of himself, Hall, and Richard, since deceased, whose heirs, by an amendment to the bill, have been made complainants, and that an agreement, in writing, showing the interests of the several parties, was signed at the time, but, for convenience, the title was taken in the name of Hall, who resided, or was about to reside, in Chicago, the other partners both residing in the State of Louisiana.

It was not disclosed to the vendors any person other than Hall had any interest in the purchase, nor was the alleged agreement made a matter of record. So far as the public could know, or had any reason to believe, Hall was the sole owner. He treated the property as having the exclusive ownership, making contracts in relation thereto, and not disclosing that any one else had any interest in it.

On the 23d day of March, 1857, Hall sold the west half of the block to Joseph Smith, but the incumbrance created by the prior mortgage resting upon the entire premises, Smith would not consummate the purchase unless Ayers and Hamilton would agree that that portion he was proposing to buy might in some way be released from the mortgage indebtedness, so that he might acquire a clear title when he should pay for the same. Hall procured an agreement from Ayers and Hamilton, that, in the event of payment to them, at maturity, the installments to become due on the 23d day of May, 1857, they would agree to hold the west half of the block liable for only one-half of the residue of the unpaid purchase money, with the distinct reservation, however, that Hall was not to be released from the payment of any portion of the mortgage indebtedness. That arrangement was satisfactory to Smith, and was indorsed on the back of his contract with Hall, both of which were recorded on the following day. The installments maturing on the 23d day of May, 1857, were fully paid, and subsequently one half of the residue of the purchase money, but no application was made to have the holder apply it in discharge of the mortgage indebtedness on the west half of the block which had been sold to Smith, nor was it ever so applied.

In the meantime, Sherman had bought of Ayers and Hamilton such of Hall's notes as were unpaid, and took an assignment of both the notes and mortgage, and thereafter controlled them. After making some payments, Smith found he would be unable to comply with his contract, and, for a nominal consideration, reconveyed the property to Hall, losing all benefit of what he had paid. On the 5th day of June, 1860, Hall conveyed by deed all his interest in the premises to Bush, to be by him held in trust for the parties originally interested, except so far as Hall's interest was concerned--that was to be as security for his indebtedness to Bush; but that indebtedness has long since been adjusted, so that Hall now claims to be the equitable owner of one-third of the estate. Although this latter deed was upon record, it does not appear Sherman had any actual knowledge of its existence until about the time he was making the sales under the mortgage.

In April, 1861, all of Hall's notes given for the property, except one for $3445, had been paid either to Ayers and Hamilton or to Sherman after he became the owner. At the request of Hall, and for a consideration, Sherman extended the time of payment on this latter note until 1861, and, upon a like request, consented to a further extension until May 1, 1862, upon the positive agreement no further extension should be asked. Before the day of payment last agreed upon had arrived, open hostilities between the North and the South had commenced. Louisiana had, in the month of January, 1861, passed an ordinance seceding from the Union, which was a matter of public interest, and was, of course, known to Hall. Immediately after the fall of Fort Sumter, Hall left the State of Illinois for his former home at Thebadeaux, in Louisiana, with the avowed purpose to cast his lot with the people of the South.

Previous to his departure, Hall made no arrangements whatever for the payment of the balance due Sherman on the mortgage indebtedness. Perhaps in May, 1862, after New Orleans had come into the possession and under the control of the Federal armies, and communication had been established by rail and by water between Thebadeaux and New Orleans, Sherman wrote to Hall, at the latter city, to know if he could do anything towards paying his note. That letter was subsequently returned to him from the dead-letter office, with the post-mark of New Orleans upon it. One reason why Hall did not receive that letter was, he had previously entered the military service of the South, and passed within the rebel lines. Had he remained at Thebadeaux, his place of residence, he would have been within the Union lines all the time, except a period of about six weeks in the summer of 1863, and had he been loyal to the government, he could have been in constant communication with New Orleans, and with Chicago, where his property was situated.

After waiting many months, and hearing nothing from Hall, Sherman advertised the property, and by virtue of the power of sale contained in the mortgage, on the 3d day of February, 1863, sold part of the premises to D. C. Nichols, and made him a trustee's deed for the same. Upon a like notice, on the 10th day of March following, he sold another portion of the property to Eben Colfax, and also executed to him a deed. The aggregate amount of these sales was about sufficient to discharge the mortgage indebtedness--perhaps a small balance remained. Both Nichols and Colfax conveyed that portion of the property purchased by them, respectively, at the trustee's sale, to Mrs. Cleaver, and it is under titles derived from her that defendants claim the property involved in this litigation.

This bill was filed to have the trustee's deeds to Nichols and Colfax, and their deeds to Mrs. Cleaver, set aside, and complainants let in to redeem the property on payment of what was due on the mortgage, and if, for any reason, that specific relief could not be granted, they might have a decree for compensation. On the hearing, the court dismissed the bill as to all defendants except Sherman, and found that, under the bill, there was due complainants from him $6714.65, and that he was chargeable on the ground of constructive, but not actual, fraud. From that decree, Sherman, as well as complainants, appealed. Both appeals are now to be considered as one case, on errors assigned by the respective parties.

Mr. WILLIAM H. KING, and Mr. GEORGE F. BAILEY, for Benjamin F. Sherman and others.

Messrs. WAITE & CLARKE, for Aaron Gibbs and others.

Messrs. MONROE, BISBEE & BALL, and Mr. C. M. HARRIS, for Louis Bush and others.Messrs. HITCHCOCK & DUPEE, for the heirs of Victor Richard. Mr. CHIEF JUSTICE SCOTT delivered the opinion of the Court:

Although made a ground of relief in the bill, it is not insisted in argument it was any obstacle in the way of the execution of the power of sale contained in the mortgage, that the mortgagor was within the enemy's lines during the late war. His absence from the State was voluntary, and was with a view to cast his lot with a people then in rebellion against the government. Had he remained at the home he selected in the South after open hostilities had commenced, he would still have been within the Federal lines, and within access to his creditors. The question of the right of a creditor, under such circumstances, to enforce payment of his debt, has been put at rest by the former decisions of this court. Mixer v. Sibley, 53 Ill. 61; Willard et al. v. Boggs, 56 ib. 163; Harper v. Ely, ib. 179; Seymour v. Bailey, 66 ib. 288; Hall v. Connecticut Mutual Life Insurance Company, 68 ib. 357.

Unless, therefore, the mortgage had been released as to the west half of the property, no valid reason existed why the creditor could not exercise the power of sale contained in the mortgage to foreclose and cut off the mortgagor's equity of redemption. Sherman was the assignee of the mortgagee, the legal holder of the indebtedness secured, and hence was the only party that could rightfully execute the power of sale. Pardee v. Lindley, 31 Ill. 174; Strother v. Law, 54 ib. 413.

Had any portion of the property been discharged from the operation of the mortgage, it is very clear no sale could thereafter be made that would legally affect the title. Whether any portion of the property included in the mortgage had been released prior to the trustee's sale, depends upon the construction that shall be given to the agreement of Ayers and Hamilton, of the 23d of March, 1857. The position assumed is, that, by reason of the agreement, with the superadded facts of the payment of the installments due May 23, 1857, and the subsequent payment of one-half of the residue of the purchase money, the west half of the property became released, and was discharged from the effects of the mortgage, long before Sherman undertook to execute the power of sale. We do not think the position is warranted by any fair construction of the agreement--certainly not in view of what subsequently transpired between the parties. It will be...