Fast v. Mcpherson

• Decision Date: 30 June 1881
• Citation: 98 Ill. 496,1881 WL 10505
• Parties: DANIEL F. FAST et al.v.SUSAN M. MCPHERSON.
• Court: Illinois Supreme Court

98 Ill. 496

1881 WL 10505 (Ill.)

DANIEL F. FAST et al.

v.SUSAN M. MCPHERSON.

Supreme Court of Illinois.

Filed at Springfield May 13, 1881.Rehearing denied June Term, 1881.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Livingston county; the Hon. FRANKLIN BLADES, Judge, presiding.

Mr. H. B. HURD, for the appellants:

When a conveyance is made to defraud creditors, a court of equity will refuse to interpose, in any way, to aid the party intending to defraud creditors, but will leave him in the position he has placed himself. Dunaway v. Robertson, 95 Ill. 419.

To render a deed fraudulent, it need not be made to avoid the payment of liabilities. It is enough if it is intended to, in anywise, hinder or delay them. Phelps v. Curts, 80 Ill. 109; Quarles v. Kerr, 14 Gratt. 48; Wheldon v. Wilson, 44 Me. 1; Borland v. Mayo, 8 Ala. 104; Bump on Fraudulent Conveyances, 19-20.

The appellee held Whiteside, or allowed him to appear as the owner of, or as having full power of disposition over, the property, and innocent parties dealing with such apparent owner will be protected. Anderson v. Armstead, 69 Ill. 452; Dunning v. Balkrech, 41 Id. 425.

Where one of two persons must suffer loss, he who by his negligent conduct made it possible for the loss to occur must bear it. Anderson v. Warne, 71 Ill. 20; Pursley v. Forth et al. 82 Id. 327; Gavagan v. Bryant et al. 83 Id. 376.

The rule in reference to constructive notice does not impose upon the purchaser the necessity of searching for all possible contingencies,-- reasonable and ordinary diligence is all that is required. When Hurd and Bates found the title of record in Fast, and Fast's tenants in possession, and that they claimed no rights beyond a tenancy for a year, that was as far as they were required to go. City of Chicago v. Witt, 75 Ill. 211; Beatie v. Butler, 21 Mo. 321; Wade on Law of Notice, 121; Wright v. Wood, 23 Pa. St. 120; Flagg v. Mann et al. 2 Sumner, 557; Bank of Montreal v. DeWar, 6 Bradw. 294; 2 Sugden, 293.

Messrs. JUDD & WHITEHOUSE, for the appellee:

Where there is any written evidence showing that the person apparently entitled is not really so, parol evidence may be admitted to show the trust under which he actually holds the estate. Kingsbury v. Burnside et al. 58 Ill. 310.

As to the jurisdiction of equity to enforce trusts, see Steele et al. v. Clark, 77 Ill. 471; 1 Greenl. Cruise on Real Prop. 396, and note.

To make a purchaser of a legal title a trustee for the cestui que trust, it is not necessary that he should have notice of the particular cestui que trust. He must inquire and search out the cestui que trust. Maples v. Medlin et al. 1 Murphy, (N. C.) 219.

If a subsequent purchaser acts in bad faith, and willfully and negligently shuts his eyes against those lights which, with proper observation, would lead him to a knowledge of facts affecting the subject of his purchase, he will be held to have notice of such facts. Chicago, Rock Island and Pacific Railroad Co. et al. v. Kennedy et al. 70 Ill. 350.

Whatever puts a party upon inquiry, amounts, in judgment of law, to notice, provided the inquiry becomes a duty, as in the case of purchasers and creditors, and would lead to a knowledge of facts by the exercise of ordinary diligence and understanding. Harper et al. v. Healy et al. 56 Ill. 179; Henneberry v. Morse et al. Id. 394.

Whatever is notice enough to excite attention, and put a party on his guard and call for inquiry, is notice of everything to which such inquiry might have led, and every unusual circumstance is a ground for suspicion, and prescribes inquiry. Russell et al. v. Ranson, 76 Ill. 167.

It is common doctrine that what is sufficient to put a purchaser upon inquiry, is good notice of whatever the inquiry would have disclosed. Watt v. Scofield, 76 Ill. 261.

It will, in general, be presumed that every purchaser has investigated his ““vendor's title” before completing his purchase, and if the title can not be made out but through a deed which gives or leads to notice of a trust, he will be assumed to have notice of that trust, unless, indeed, he can show why he had not inquired into the title with a view to his protection. And if the deed which carries notice of the trust be found in the possession of the purchaser, that will, prima facie, be sufficient to fix him with notice. Hill on Trustees, 801.

Fast, in dealing with Whiteside, was dealing with the agent and trustee of Mrs. McPherson, and Hurd and Bates, in dealing with Fast, were also dealing with a trustee of Mrs. McPherson. By the least exertion, he or they could have learned the whole truth of the matter, and the facts would have led to notice. McConnell v. Reed, 4 Scam. 117.

That possession of land is notice of the possessor's title, see McConnell v. Reed, supra; Davis v. Earley, 13 Ill. 192; Turney v. Chamberlain, 15 Id. 271; Wilson v. Byers et al. 77 Id. 77; Hill on Trustees, 798, 802; Tiffany & Bullard on Trusts, 821, and cases cited.

A trustee can not claim adversely, or derive any benefit to the prejudice of the cestui que trust. O'Halloran v. Fitzgerald, 71 Ill. 54; Gilman, Clinton and Springfield Railroad Co. v. Kelly et al. 77 Id. 434.

Hurd and Bates, in taking a mortgage to indemnify themselves as sureties of Fast, are not innocent purchasers. They do not stand even in the relation of purchasers. They are mere volunteers, not having paid consideration to the amount of a penny for their deed. There can be no innocent purchaser when no payment is made; and this is the law even as against latent equities or interests in real estate. A party holding land under a recorded deed, to defend his title against a claimant under a previous unrecorded equitable title, must show that he has an equitable as well as the legal title; and this must be sustained by proofs that he purchased the land in good faith, and actually paid for it before notice of the previous equitable title or interest. It is not sufficient that he may have secured the payment of the purchase money. Brown et al. v. Welsh, 18 Ill. 343; Worden et al. v. Williams, 24 Id. 67; Storey v. Windsor, 2 Atk. 630; Bassett v. Nasworthy, 2d vol. Pt. 1; Leading Eq. Cases, 61, et seq. notes of Hare & Wallace; 1 Story's Eq. Jur. 76.

Mr. A. E. GUILD, also for the appellee.

Mr. JUSTICE SCHOLFIELD delivered the opinion of the Court:

The bill, in the present case, alleges that appellee was the equitable owner of certain lands, therein specifically described, located in Livingston county; that Wirt Dexter, Esq., in the first instance, held the legal title thereof for her, but subsequently, at the request of her agent, Thomas C. Whiteside, Dexter conveyed the same to one Daniel F. Fast; that Fast took the legal title in trust for her, executing and delivering to her agent, Whiteside, the following declaration of trust:

“Whereas, the premises hereinafter described were conveyed to me by deed dated March 9th, A. D. 1876; now, therefore:

Know all men by these presents, that I, Daniel F. Fast, of the city of Chicago, in the county of Cook, and State of Illinois, hereby certify that I hold the premises hereinafter described, in trust for ______ ______, of the city of Chicago, in the county of Cook, and State of Illinois, subject to the legal charges on the same, and all expenses and costs accrued and to accrue. (The premises are then here described).

Dated 9th day of March, 1876.

+--------------------------------+
                ¦Signed,¦DANIEL F. FAST. [SEAL.]”¦
                +--------------------------------+
                

Acknowledged before Henry V. Smith, Notary Public, March 9, 1876.

It is alleged that Fast took the title, in trust, for appellee, and paid no consideration whatever for the land.

It is also alleged, that it was subsequently discovered that there was some mistake in the description of the property intended to be conveyed in Dexter's deed, and that upon such discovery he executed a quitclaim deed to Fast, to correct that mistake, but that such corrected deed conveyed the property only subject to the same trust to which it was intended to be subject by the former deed; that Fast has been requested to convey to appellee, but refuses to do so, and denies his trust.

The prayer of the bill is, that Fast may be decreed to hold as trustee for appellee, and convey the property to her.

The answer of Fast admits the conveyance by Dexter, and the execution of the declaration of trust set out in the bill; but alleges, that at the time of the execution of the same nothing was said about filling the blank, or as to who was interested in the premises, and that no intimation was given to defendant on that subject, and he denies that he had any knowledge that appellee claimed to be the cestui que trust. He then sets up that appellee's agent, Whiteside, desiring a loan on his own account, on the 14th of May, 1877, proposed that if he (Fast) would loan him $2000 on thirty days' time, he would surrender the declaration of trust to him, and he might hold the premises in controversy, together with certain other designated property, as security for the $2000; that thereupon he did loan Whiteside the $2000, taking his note for the same; that he also made certain other loans, and incurred certain debts, specifically named, to and for Whiteside, for all which Whiteside agreed he should hold the premises in controversy as security.

The answer further alleges, that Fast conveyed the property to Hurd and Bates, as security for their being sureties on his bond as guardian for his minor son.

And it is also further alleged, that until after the accruing of the rights of Fast, in the way alleged, he always supposed the property belonged to Whiteside, and it is charged that if Dexter held the property in trust for appellee, it was upon a corrupt and unlawful agreement, and for the purpose of hindering and defrauding the creditors of the estate of the husband of appellee, which had the only equity or interest in the premises, and was indebted to creditors to the amount of $50,000, and...