Davidson v. Iwanowski

• Decision Date: 05 June 1950
• Docket Number: Gen. No. 44648
• Citation: 93 N.E.2d 139,341 Ill.App. 152
• Parties: DAVIDSON et ux. v. IWANOWSKI.
• Court: United States Appellate Court of Illinois

Page 139

93 N.E.2d 139

341 Ill.App. 152

DAVIDSON et ux. v. IWANOWSKI.

Gen. No. 44648.

Appellate Court of Illinois, First District, First Division.

June 5, 1950.

James B. McKeon, Chicago, for appellants.

Thomas G. McBride, Chicago, for appellee.

TUOHY, Presiding Justice.

Plaintiffs Lawrence A. Davidson and Doris Davidson, his wife, filed their complaint in the Superior Court of Cook County seeking a declaratory judgment that they, as bona fide purchasers, acquired title to certain real estate. Defendant Antonette Iwanowski filed her cross-complaint for an accounting and a reconveyance of said real estate. The master in chancery, to whom the cause was referred, found the issues of facts in favor of plaintiffs and against cross-complainant. From a decree sustaining exceptions to the master's report, entered July 1, 1948, ordering plaintiffs to reconvey said property to defendant upon the payment to them by defendant of the sum of $2,495.54, the amount found due on an accounting taken by the court upon stipulation of the parties, plaintiffs appeal.

Complaint is made that the trial court erred in finding (1) that a confidential relationship existed between the parties hereto, and (2) that the deed here under consideration, absolute on its face, was intended to operate as a mortgage. In view of the conclusions reached by us, we deem it unnecessary to determine whether or not a confidential relationship with all its legal implications existed between the decedent and plaintiff, Lawrence Davidson, but shall limit our observations to a consideration of whether or not the deed, absolute on its face was in fact a mortgage.

Paragraph 13, Chapter 95, Ill.Rev.Stat. 1949, provides as follows: 'Every deed conveying real estate, which shall appear to have been intended only as a security in the nature of a mortgage, though it be an absolute conveyance in terms, shall be considered as a mortgage.'

It thus becomes apparent that the determination of the disputed issue necessitates the ascertainment of the intention of the parties to this conveyance.

That the burden of proof rests upon the party asserting a deed, absolute in form, to be a mortgage, that he must so establish by clear and convincing proof, and that parol evidence is admissible for such purpose, are well settled. Totten v. Totten, 294 Ill. 70, 128 N.E. 295. It has further been held that positive evidence of intention is not required. It is sufficient if the evidence is clear and convincing, even though conflicting. Kulik v. Kapusta, 303 Ill. 208, 214, 135 N.E. 402.

In the case under consideration the essential evidence was all adduced by interested witnesses, defendant and her daughter on the one hand, and plaintiff Lawrence Davidson on the other. Testimony as to conversations had prior to the execution of the conveyance in question, by the contending parties, was sharply conflicting, and, in view of their important bearing upon the issue here to be decided, it is advisable to review them carefully, as well as the facts and circumstances out of which they arose.

Prior to June 29, 1940, the defendant and her husband, Anthony Iwanowski, since deceased, were the owners in joint tenancy of a home located at 14227 Wabash Avenue, Riverdale, Illinois, subject to a Home Owners Loan Corporation mortgage dated May 31, 1934, securing an indebtedness of $4,700, payable in monthly installments of $39.17 and interest, plus taxes, repairs and maintenance. On June 29, 1940, the balance due on the mortgage was approximately $3,484. Defendant and her husband had purchased the lot upon which the home was built in 1927 for $2,500, and the building cost was $10,000.

Sometime in the year of 1930 defendant and her husband met plaintiff Lawrence Davidson at a civic club meeting. Davidson had been a precinct captain and after he and Iwanowski attended political meetings together they would frequently return to the Iwanowski home for a cup of coffee and sandwiches or lunch after the meeting. Iwanowski was a carpenter by trade; Davidson was a civil engineer for the Forest Preserve District of Cook County, for the Ivanhoe Park District, and for the Village of Dolton. He and Iwanowski became very close friends. During the depression Davidson got Iwanowski jubs as foreman for the P. W. A., judge of election and various odd jobs as a carpenter from time to time. In 1934 the mortgage above referred to was placed on the property. In 1935 Iwanowski was badly injured and was in the hospital for some time.

The Iwanowski home was a 7-room face brick bungalow. The attic was roughed in and no room was completed at the time of the original construction. There was a 2-car brick garage of the premises. In 1938, in the hope of additional income, Iwanowski finished the uncomplete second floor by building a 5-room apartment so that the Iwanowskis could move upstairs and rent the downstairs apartment. Iwanowski himself did all the work of building this apartment over a period of several months with materials purchased by a son, George. Another son, Fred, occupied the first floor for a few months prior to June, 1940. Davidson testified that sometime in 1938 Iwanowski called at the Davidson home and said he was going to adopt Davidson; that Iwanowski said his natural son did not want the home and he was going to let Davidson take it over; that he told Iwanowski it was a poor idea and that he had better sell it; that a few months later Iwanowski wanted to know if Davidson would take it over and Davidson again told him he should sell it; that Iwanowski told Davidson it cost between $75 and $100 a month to keep it up and that he was unable to carry the payments on the Home Owners Loan Corporation mortgage and was not able to earn enough money to pay taxes and keep the house out of default; that there were further talks along this line three or four different times in the next couple of years; that in the early part of June, 1940, Iwanowski said, 'I am going to give you one more chance and this is the last. It is either now or never. I have got to get rid of my property.' Davidson testified that around June 20, 1940, Iwanowski came over to his house and at that time he asked Iwanowski what the latter meant by 'turning the property over' to him; that Iwanowski told him he would give him a deed with the right of Iwanowski and his wife to lave upstairs; that he told Iwanowski he did not know whether such an arrangement could be worked out; that he said he would like to talk to an attorney and Iwanowski said, 'Let's go over to an attorney.' These conversations, according to Davidson, were unattended by any third party, and Iwanowski having died long before the trial, the court did not have the benefit of his testimony.

Subsequent to this last conversation Davidson consulted and hired as his attorney one P. P. Flick. Flick was active in political affairs in the community with Davidson and was also acquainted with Iwanowski. Flick suggested that instead of a joint tenancy arrangement between Iwanowski and the Davidsons that there be an absolute conveyance by the Iwanowskis to the Davidsons, with a lease to the Iwanowskis of the upstairs apartment. It was originally suggested that the lease be for 10 years at $1.00 per year, and subsequently an option for an additional 10-year period was agreed upon.

About the middle of the last week of June, 1940, Davidson, Flick and Iwanowski went to the Home Owners Loan Corporation to determine the situation with reference to the loan. Davidson expressed surprise to learn that the past due payments on the mortgage amounted only to $117.51. They looked up the taxes and found that the 1938 taxes had been paid and that, although the first installment of the 1939 taxes was due, it was not yet in default. There were no other liens or encumbrances of any kind upon the property. In checking Iwanowski's deed they found that it was held in joint tenancy by Anthony and the defendant Antonette Iwanowski. Up until this nothing had been said to Mrs. Iwanowski about the plans of Davidson and Anthony Iwanowski. Davidson testified that the only conversation he had with her on the subject was about three o'clock one afternoon, a few days before the deal was closed. Davidson testified that he went to her home and explained the matter to her and she said she thought it was all right. Davidson testified, 'Mrs. Iwanowski was agreeable to it at the time that we were in the kitchen. She said she thought it was all right. She did not ask me what I was paying for the property. Nothing was ever said about my reconveying the premises to them in the future. * * * The only occasion that I talked to her was this one upstairs in the kitchen.' This conversation took place the last week in June, a few days before the conveyance was executed.

The substantial dispute in the testimony involves the conversations that took place between Davidson, decedent and Mrs. Iwanowski, some in the presence of the daughter Amelita Iwanowski, during the few days before the signing of the deeds, commencing on the afternoon that Davidson, Flick and decedent had gone to the HOLC office. Mrs. Iwanowski testified that sometime before six o'clock on an evening in the last week in June decedent came home with Davidson; that the daughter Amelita was there; that the four of them had supper together; that her husband introduced the conversation by saying, 'We was today in the city.' Mrs. Iwanowski testified, 'My husband started to tell he went with Mr. Davidson and Mr. Flick to the Home Loan to see if there isn't any lien, mortgage, something. They find out there was three payments that wasn't paid. And then they went to the City Hall. * * * So Mr. Davidson says (to decedent), '* * * You going to give me your deed as security and I going to pay all expenses and repairs and heating so you could live upstairs.' He said something about paying the mortgage, he say, 'Any time you wish to get your home back,' he said 'you pay...