Flagg v. Geltmacher

• Decision Date: 21 March 1881
• Citation: 98 Ill. 293,1881 WL 10479
• Parties: MAGGIE R. FLAGGv.JOHN GELTMACHER.
• Court: Illinois Supreme Court

98 Ill. 293

1881 WL 10479 (Ill.)

MAGGIE R. FLAGG

v.JOHN GELTMACHER.

Supreme Court of Illinois.

Filed at Springfield Mar. 21, 1881.

OPINION TEXT STARTS HERE

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

Mr. WILLIAM E. HUGHES, for the appellant:

1. If the power of sale contained in a mortgage be extinguished by payment of the debt, or otherwise, no title will pass by sale under it even to a bona fide purchaser. Redmond v. Packenham, 66 Ill. 434; Wade v. Harper, 3 Yerger, 383; Prenny v. Cook, 19 Ia. 538; Cameron v. Irwin, 5 Hill (N. Y.) 272.

2. If the debt be paid, the power of sale in the mortgage, and the mortgage itself, are extinguished and no longer have effect. Redmond v. Packenham et al. supra; Emory v. Keighan, 94 Ill. 543.

3. If the principal debtor pay the mortgage debt, the mortgage is thereby extinguished. Kinley v. Hall, 4 Watts & Serg. (Pa.) 426; Thompson v. Van Vetchen, 27 N. Y. 568.

4. A mortgage is only an incident to the debt. Whatever extinguishes or bars the debt, operates in like manner on the mortgage. Pollock v. Marson, 41 Ill. 516; Perkins v. Steam, 23 Texas, 561; Brigg v. Seymour, 17 Wis. 255; Anderson et al. v. Neff, 11 Serg. & Rawle, 108.

5. Whitmer, after he received the notes from Holmes, could not have recovered upon them in a suit against Geltmacher, because the latter and not the former had really paid them, and it therefore follows, that when Holmes sold them there was no mortgage under which to sell.

Subrogation is not extended, in Illinois, to one paying his own debt. Rogers v. Meyers et al. 68 Ill. 92.

Mr. H. G. REEVES, and Messrs. FIFER & PHILLIPS, for the appellee:

We maintain that the mortgaged premises are a primary fund for the payment of the debt. Lilly v. Palmer, 51 Ill. 331. Geltmacher having sold the property in such manner as to bind his grantees for the payment of the Holmes debt, not only is the property holden as to Geltmacher's immediate grantee, but also as to all subsequent grantees. Geltmacher could have directly paid the debt of Holmes and still have kept alive the trust deed, or he could have had the bonds assigned by Holmes to an assignee of his own choosing, which he did do, and thus more clearly indicate his intent to keep alive the lien of the trust deed, and, in either event, Geltmacher or the assignee is subrogated to all of Holmes' rights, and a sale under the trust deed is valid. Johnson v. Zink, 51 N. Y. 333.

Geltmacher stands, as between himself and his grantees, and all claiming under them, as mere surety for the payment of his debt, and has unquestionably the right to be subrogated. Matthews v. Aiken, 1 N. Y. 595; Hoy v. Bramhall et al. 4 N. J. 573; Hall, Admr. v. Hoxsey et al. 84 Ill. 716; Jones on Mortgages, §§ 878, 879.

Geltmacher, being pressed for payment, could have these notes of Holmes taken up and enforce their payment, by a sale of the property. Stanford v. McLean, 3 Paige, 117; Jummell v. Jummell, 7 Id. 591; Holsey et al. v. Reed et al. 9 Id. 446; Maosh v. Pike, 10 Id. 595; Cheny v. Manro, 2 Barb. Ch. 618; Comell v. Prescott,Id. (S. Ct.) 15.

The doctrine of subrogation, applicable to this case, is clearly set forth, as we think, in Billings v. Sprague, 49 Ill. 509; Fisher v. Dillon, 62 Id. 379; City National Bank v. Dudgeon, 65 Id. 11; Darst v. Bates et al. 95 Id. 493; Beaver v. Slanker, 94 Id. 175.

Mr. JUSTICE WALKER delivered the opinion of the Court:

Appellee was, on the 17th of February, 1873, the owner of lots 7 and 10, in block 1, in Durley's addition to the city of Bloomington. He, on that date, borrowed of Rufus E. Holmes $3000, and gave him three bonds of $1000 each, with interest coupons attached, and the debt, by the terms of the bonds, matured on the 17th of February, 1878. To secure the payment of these bonds, he executed a trust deed to Henry C. Wilson, with G. W. Toms as Wilson's successor in the trust, which was duly recorded.

Afterwards, on the 25th of March, 1873, appellee conveyed these lots to Deborah and Elizabeth Simmons, by warranty deed, but it contained this clause:

“This deed is made, notwithstanding the covenants of warranty hereinafter expressed, subject to the incumbrance of one certain trust deed, executed by said first parties to Henry C. Wilson, trustee, for the use of Rufus E. Holmes, to secure three bonds of $1000 each, with coupons attached for semi-annual interest, at the rate of ten per cent, which is made due five years after date, and dated February 17, 1873, and duly recorded in the recorder's office of McLean county, Illinois, in book 49, at pages 128 and 129, said second parties hereby agreeing to pay off said incumbrance as part of the purchase money of said premises.”

On the tenth of April, 1874, Deborah and Elizabeth Simmons sold and conveyed these lots to Sophia E. McCaughey, with the same stipulation in the deed as that in the deed to grantors from appellee to them.

On the first of November, 1875, Sophia E. McCaughey conveyed the lots to William F. Flagg, the husband of appellant, but subsequently his name was erased as grantee, and that of Maggie R. Flagg inserted. This conveyance is, in the same manner, made subject to the Holmes incumbrance, but has these words: “Wm. F. Flagg agrees to pay off the same.”

When the bonds to Holmes became due, Peter Whitmire, president of the People's Bank of Bloomington, at the request of appellee, and being secured therefor by appellee, paid Holmes $3150, the amount due on the bonds, and took from Holmes an assignment of the debt to himself, and demanded payment from appellant, but she refused to pay. Afterwards, and before the property was sold under the deed of trust, appellee paid to the bank the money advanced by the president, and paid Holmes; and on the 17th of February, 1879, Toms, the trustee, sold the property under the trust deed, and appellee became the purchaser and received a deed. He then arranged with the tenant of appellant, then in possession of the property, to recognize him as landlord.

Appellant thereupon instituted a proceeding in forcible detainer, and recovered judgment for possession. Thereupon appellee instituted this action of ejectment for the recovery of the property. The case was tried by the court and a jury, resulting in a verdict in favor of plaintiff, upon which a judgment was rendered against defendant, and a writ of possession was awarded, and she appeals to this court and assigns errors on the record.

It is urged that the tenant in possession, and sued in this suit, was in under appellee and not under appellant, and, therefore the suit will not lie. We think this position is not sustained by the evidence. Appellant sued in forcible detainer and recovered judgment for the possession of the property, and Cowen, who was then in, went to appellant's attorney and paid him $20, a month's rent, for her, and it was arranged that he should deposit the next month's rent in the bank. Cowen made an arrangement with appellant to deposit all rents in the bank.

But it is claimed that she consented to the arrangement on the false assurance that such an arrangement had been...