Duncan v. Dazey

• Citation: 318 Ill. 500,149 N.E. 495
• Decision Date: 02 December 1925
• Docket Number: No. 16098.,16098.
• Parties: DUNCAN v. DAZEY.
• Court: Supreme Court of Illinois

318 Ill. 500

149 N.E. 495

DUNCAN

v.DAZEY.

No. 16098.

Supreme Court of Illinois.

Oct. 28, 1925.

Rehearing Denied Dec. 2, 1925.

Error to Appellate Court, Third District, on Appeal from Circuit Court, Shelby County; William B. Wright, Judge.

Bill for an accounting by Martin K. Duncan against J. Ed. Dazey. A decree entered in the circuit court for complainant was modified in part on appeal to the Appellate Court, and defendant brings certiorari.

Judgment modified and affirmed.Brown & Burnside, of Vandalia, and Whitaker, Ward & Pugh, of Shelbyville, for plaintiff in error.

C. C. Martin, of Decatur, Ulys Pyle, of Carmi, and J. R. Fitzgerald, of Decatur, for defendant in error.

DE YOUNG, J.

Martin K. Duncan, on October 16, 1915, filed his bill for an accounting against J. Ed. Dazey in the circuit court of Shelby county. While the suit was pending, after testimony had been taken, on March 26, 1917, the complainant filed an amendment to his bill. The bill as amended alleged, in substance, that Duncan was on September 22, 1903, the owner in fee simple and in possession of 180 acres of land in Shelby county; that the land was incumbered for $4,000, and its net value above the incumbrance was $18,500; that for many years he had been intimately acquainted with Dazey, who was engaged in banking and other large business interests in and around Findlay, Ill.; that Duncan had been a patron of Dazey's bank and had co-operated with him in other enterprises; that Duncan was a man of limited business experience and judgment, and in the conduct of his affairs had followed Dazey's advice and counsel; that a fiduciary relationship, in which Duncan implicitly trusted and confided in Dazey, had grown up between them; that among the matters concerning which Duncan consulted Dazey was a divorce suit by Duncan's first wife; that in the settlement of the property rights involved in that suit she received certain incumbered real estate; that the incumbrance was the joint obligation of Duncan and his wife. but that in the settlement she had assumed and agreed to pay it; that she failed to keep her agreement, in consequence of which foreclosure proceedings followed, and the proceeds of the sale lacked $1,130.40 of discharging the debt; that Dazey advised Duncan that he (Duncan) was not liable for the deficit, and that he ought not to pay it; that about August 18, 1903, a suit was instituted by Laura E. Graybill against Duncan to recover the deficit; that on September 22, 1903, Dazey came to the home of Duncan and informed him that he (Dazey), while at Shelbyville, had learned of the institution of the suit; that Duncan had no prior knowledge of the suit, nor had he been served with process; that Dazey further stated that the suit would involve Duncan in a long litigation and ruin him, and that he would better transfer his property to Dazey, and to avoid service of process in the suit should immediately leave the state; that Dazey stated the amount claimed in the suit was $3,300, although only $1,130.40, exclusive of interest, was demanded; that on September 22, 1903, Dazey first designed to defraud Duncan out of his property and took the suit by Mrs. Graybill as his pretext; that, confiding and trusting in Dazey, and acting upon his advice, Duncan on the evening of September 22, 1903, at Dazey's bank, executed a deed, by which he conveyed his 180-acre farm to Dazey without and consideration; that at the instance of Dazey, Robert N. Peadro, an attorney, was present when the deed was executed, and advised Duncan that his action was in all respects regular and proper; that, continuing to act upon Dazey's advice and counsel, Duncan immediately thereafter left Shelby county and within a few weeks located at St. Louis, Mo.; that at the time Duncan left the state there was a matured crop on the land, of which Dazey took charge and collected the proceeds, amounting to $1,500; that in the ensuing year Dazey also received $1,500 in rents from the land; that during the years 1905, 1906, and 1907 the land was held in the name of John S. Fry for the benefit of Dazey, and that he should be compelled to account to Duncan for the fair cash rental value of the land for that period, which was $1,500 per year; that for a long period after the farm was conveyed to him Dazey recognized that he held the land in trust for Duncan and for several years rendered accounts of his acts to him; that afterwards Dazey represented to Duncan that it was necessary to sell the land, because he (Dazey) feared that a creditor's bill might subject the property to the satisfaction of the claim made by Mrs. Graybill; that on or about February 15, 1905, Dazey transferred the land to Fry and represented to Duncan that he had sold it for $90 per acre, although the land was then worth $125 per acre; that Fry held the title to the land for the benefit of Dazey and sold the land to John Boyle on December 14, 1907, for $23,400, or at $130 per acre; that Duncan had no knowledge that the sale by Fry to Boyle was for Dazey's benefit until the fact was disclosed upon the hearing of this cause; and that Dazey should be required to account to Duncan for the sale price to Boyle, with interest.

The bill as amended further alleges that, shortly after the conveyance to Boyle, Duncan's father died, and Duncan inherited a share of his father's estate; that at that time the suit by Laura E. Graybill was still pending, and, to defeat that suit, by Dazey's advice Duncan, on March 28, 1905, assigned to Dazey his interest in his father's estate; that the assignment purported to secure a note for $3,015, dated October 21, 1904, a note for $700, dated September 17, 1903, and an overdraft on the First National Bank of Findlay for $1,465; that there was a note for $700, but the alleged overdraft and note for $3,015 were nonexistent; that on April 6, 1905, without consideration, Duncan executed and delivered a judgment note to Dazey, antedated to meet the description in the assignment; that on April 7, 1905, by Dazey's advice, judgment was taken upon the note by confession in the circuit court of Shelby county, and execution was issued; that the judgment remains in force, and Dazey has recently claimed the right, notwithstanding his written acknowledgment to the contrary, to enforce the judgment, and has issued scire facias thereon; that Dazey took the judgment for the sole purpose of defeating the claim of Mrs. Graybill until a transfer of Duncan's interest in his father's estate to one Herron, who was Dazey's agent, could be filed for record; that Dazey induced Duncan to convey by deed and assignment to the same Herron all Duncan's interest in his father's estate, and that on or about April 10, 1905, by virtue of the deed and assignment, Dazey received $2,053.43; that in the suit by Mrs. Graybill judgment was rendered against Duncan on December 31, 1907, for $1,724.36, and that it remained unsatisfied until the summer of 1915, when it was paid by the sale in partition of Duncan's interest in certain land; that during all these years Dazey represented to Duncan that Mrs. Graybill's suit was still pending and that he could not account to him until that suit was finally terminated.

The bill as amended further alleges that upon Duncan's departure from Illinois Dazey took charge of Duncan's bank account, drew checks in his name, settled his affairs, and paid his debts; that Dazey honored Duncan's checks out of moneys realized from the sale of Duncan's property; that in honoring such checks Dazey recognized Duncan's claims; that Duncan received $8,000 from Dazey, for which Dazey is entitled to credit upon an accounting; that Dazey has possession of the bank books, checks, and accounts and nearly all of the memoranda relating to the property placed in his hands and the payments made by him, and that Duncan is therefore unable to state a true account. It is also alleged that, immediately after the judgment in favor of Mrs. Graybill was paid, Duncan resumed his residence in Shelby county; that until that time Duncan, by Dazey's advice, continued to reside out of Illinois, and had no knowledge of his fraudulent design nor any ground for suspecting it; that Dazey, to defraud Duncan, urged him to go into bankruptcy, although Dazey well knew that such proceedings would not benefit Duncan, and that his property in Dazey's possession far exceeded in value the aggregate of his debts; that Dazey, in furtherance of his design, advised Duncan to go to Argentine, proposing to pay his expenses, and warned him of the danger of arrest, and that he should remain beyond the jurisdiction of the courts of Illinois; that he advised Duncan to address him in plain envelopes; that he induced Duncan to transfer property to him worth $25,000, and for many years practically to remain a fugitive from the state for the sole purpose of defeating a claim which amounted, in principal, to $1,130.40, and with interest to $1,724.36; that Dazey accomplished this result by the mastery which he gained over Duncan, by the great confidence which Duncan reposed in him, and by the unfounded fears which he inspired in Duncan; that Duncan acted in good faith and in the belief that he was following the proper and lawful course to protect himself from unjust and unlawful demands upon him; that he acted solely upon the advice and under the direction of Dazey, without any intent to hinder or delay his creditors, and that he is not in pari delicto with Dazey. In addition to an accounting, the prayer of the bill as amended asks that the collection of the judgment rendered on April 7, 1905, be enjoined.

Dazey by his amended answer admitted that he took title to the land, but denied every other material allegation of the bill as amended. He averred that he had overpaid Duncan, and that Duncan did not come into court with clean hands, and he interposed, as additional defenses, laches, the statute of limitations (Smith-Hurd Rev. St. 1923, c. 83),...