Chandler v. Ward

• Decision Date: 20 December 1900
• Citation: 58 N.E. 919,188 Ill. 322
• Parties: CHANDLER v. WARD.
• Court: Illinois Supreme Court

188 Ill. 322

58 N.E. 919

CHANDLER

v.WARD.

Supreme Court of Illinois.

Dec. 20, 1900.

Appeal from appellate court, First district.

Suit by Clara E. Ward against Frank R. Chandler. From a judgment of the appellate court affirming a decree in favor of the complainant (83 Ill. App. 315), the defendant appeals. Reversed.Stillman & Martyn, for appellant.

St. John & Merriam, for appellee.

This is a bill filed on May 7, 1896, by the appellee, Clara E. Ward, against the appellant, Frank R. Chandler, and one Peyton R. Chandler, deceased, composing the firm of Chandler & Co., doing a business of money lending in Chicago. The bill alleges that on October 1, 1895, the appellee owned three parcels of land in Chicago; that on November 25, 1895, she owned six other parcels of land in Chicago; that the same were unimproved; that she was desirous of erecting buildings thereon; that on the first date named she entered into three, and, on the second date named, into six, more agreements with said firm of Chandler & Co. for nine separate loans upon said parcels of land, to be evidenced and secured by separate sets of notes and trust deeds, executed by her and Alfred L. Ward, her husband; that seven of said nine agreements for loans were for the sum of $2,500 each, and two for $2,200 each; that, in pursuance of said agreement, several sets of notes, with semiannual interest coupons attached thereto, were executed by herself and her husband to the order of themselves, and were by them indorsed and delivered to said firm of Chandler & Co.; that trust deeds to secure said notes were executed by them upon said premises to Frank R. Chandler, as trustee, which trust deeds were also delivered to said trustee; that appellee was to erect buildings on said premises; that after the delivery of the securities appellee proceeded with the erection of a building on each of the nine parcels of land, and completed the same about April 15, 1896; that upon each of said loans Chandler & Co. charged a commission of 6 per cent. upon the first three thereof, and 5 per cent. on the last six thereof; that such commissions were high, exorbitant, and usurious; that in January, 1896, appellee called upon Chandler & Co. for a statement of the nine loan transactions, and the amount due her under each respectively; that they furnished the same in two statements, showing the balance due her as per statements to be $19,633.19; that the nine loans were evidenced by separate trust deeds and notes for separate amounts, and were separate transactions; that all of said notes were drawn to the order of Alfred L. Ward and the appellee, and by them indorsed, and became negotiable by delivery; that in April, 1896, appellee applied for and demanded the money due her upon said transactions, and each of them, and Chandler & Co. refused to pay the money due her on said notes and trust deeds; that appellee offered to release Chandler & Co. from their several undertakings to pay her the money called for by said notes and trust deeds, and proposed to pay them their commissions and expenses, if they would surrender her said notes and discharge said several trust deeds of record, but they refused to do so; that Chandler & Co. stated that the security given by appellee to them for certain other loans, which had been settled and accounted for between her and them, had become depreciated, and was not sufficient security, and claimed the right to hold said nine trust deeds, and the notes secured thereby, and the money due thereupon, as additional or collateral security to the said settled loans; that said previous loans are not germane to this litigation, and that her equities in the real estate covered thereby have been sold; that the transactions concerning said nine loans were conducted by appellee's husband, as her agent, for that purpose; that, in agreeing upon the kind of buildings to be erected upon said nine lots, Peyton R. Chandler referred to certain other buildings theretofore erected by appellee, and stated that the same were satisfactory, with certain exceptions as to size, which requirements were consented to by the appellee and complied with by her; that said buildings were erected in accordance with said understanding that the same should be erected of the exact size, kind, finish, and materials as the buildings theretofore erected; that, when appellee's agent called on Chandler to make the papers to secure said loans, Peyton R. Chandler told her that he intended to sell said papers, trust deeds, and notes to his customers and friends in the East, and would require appellee's agent to make a written application therefor; that said agent thereupon gave him estimates of the values of said grounds and buildings; that said Chandler increased the amount of said estimates for the purpose of aiding him in selling said securities to his customers in the East; that appellee has been informed that her husband, in signing said applications, gave some estimates in excess of those authorized by her, and in doing so exceeded his authority; that Chandler & Co. were the judges of said lands and buildings, and made the estimates themselves. The bill charges that said trust deeds are clouds upon appellee's title, and impair the value thereof, and ought to be set aside, canceled, and delivered up to her; that she owns said nine tracts of land, and is in possession thereof; that Chandler & Co. have her title deeds and abstracts, and refuse to surrender the same; that said trust deeds are liens, and said principal and interest notes are outstanding obligations against appellee, either in the possession of Chandler & Co., or sold by them, and the proceeds converted by them. The prayer of the bill is for a full accounting as to said nine loans, and as to the money withheld by the defendants, and as to the exorbitant commissions; and the further prayer of the bill is that said commissions may be declared to be an improper charge; that said trust deeds may be decreed to be clouds upon the title, and be set aside and delivered up; that said notes be surrendered and canceled; that defendants be compelled to deliver up to appellee her title deeds and abstracts; that should the court find that Chandler & Co. have sold said notes and trust deeds, or a part of the same, and that it is more in accordance with equity to allow the trust deeds to remain a lien upon the parcels of land, and the notes to remain obligatory upon appellee, then that Chandler & Co. be decreed to carry out the loans, and pay the complainant the several sums found due upon the accounting, and all damages suffered by her. The bill also prays for a receiver of said title deeds, and abstracts, notes, and trust deeds, and for such other and further relief as equity may require.

Peyton R. Chandler and Frank R. Chandler, individually, and on behalf of the legal holders of said notes, appeared, and answered the bill. They admit in their answer the negotiation of the loans, and the execution and delivery of the notes and trust deeds, and that, as a condition to the making of said loans, certain buildings were to be erected as part security therefor; they deny the agreement that the buildings were to be of the size, kind, finish, and materials thereafter erected on the land; admit that certain other buildings, theretofore erected by appellee and her husband, were referred to, but state that the same had never been inspected, but defendants relied upon the statements of appellee and her husband in regard thereto, and believed they had been erected according to applications in former loans; state that in the three loans of October 1, 1895, it was agreed that appellee should erect a two-story dwelling house upon each of said lots of agreed dimensions, hard-wood finish, and to cost $3,500 each, as is stated in the written application; and that the last six of said loans were made upon condition that buildings were to be erected upon each parcel to cost not less that $3,700 each, to be of certain dimensions, of hard-wood finish, Redford stone fronts, and according to the city ordinances, as stated in the written applications. The answer alleges that said agreements have not been complied with; that the buildings as erected are not of the dimensions, and according to the other specifications, or of the cost or value, mentioned in the application, and that the same are in an incomplete condition; that the buildings which were to cost $3,500 each did not cost over $1,000 each, and those that were to cost $3,700 each did not cost over $1,100 each. The answer avers that the commissions were the usual rates charged for loans in that locality. The answer further avers that, before making said loans, appellee negotiated 21 other loans upon 21 separate lots,-two for $2,200 each, and one for $2,500, on April 12, 1895, in each of which appellee and her husband agreed to erect a building on each lot to cost not less than $3,500; four for $2,200 each, and two for $2,500 each, dated July 1, 1895, in each one of which they agreed to erect a building on each lot to cost not less than $3,800; ten for $2,000 each, August 1, 1895, agreeing to erect a building on each lot to cost not less than $3,000; and two August 20, 1895, for $2,200 each, in which the buildings were to cost not less than $3,000 each; that defendants had known appellee and her husband for a number of years, and believed them to be honest; that from previous dealings they had come to regard Alfred L. Ward as a competent builder, and relied upon his representations; that they made payments of money to him without architect's certificates; that appellee and her husband drew money from defendants, directly and by checks, without designating what loans the sums should be charged against; that the same have been charged against any of said loans; that the said transactions constituted one running transaction and account, and should not be separated. The answer admits the...