Gemkow v. Link

• Decision Date: 08 February 1907
• Citation: 225 Ill. 21,80 N.E. 47
• Parties: GEMKOW et al. v. LINK.
• Court: Illinois Supreme Court

225 Ill. 21

80 N.E. 47

GEMKOW et al.

v.LINK.

Supreme Court of Illinois.

Dec. 22, 1906.

Rehearing Denied Feb. 8, 1907.

Appeal from Appellate Court, First District.

Suit by Roman Link against Therese Gemkow and others. From a decree of the Appellate Court affirming a decree for plaintiff, defendants appeal. Affirmed.

John Stelk, for appellants.

Jule F. Brower and Samuel B. King, for appellee.

FARMER, J.

This suit was begun by appellee filing a bill in the circuit court against Charles Gemkow, his wife, Therese, and other defendants, for the foreclosure of a trust deed on certain real estate therein described.

The trust deed sought to be foreclosed was executed on September 30, 1892, by Gemkow and wife to Charles C. Schumacher, trustee, to secure a note of even date for $1,100, signed by Charles Gemkow, payable to his own order three years after date, with interest at 6 1/2 per cent. per annum, payable semiannually. It appears from the evidence that Schumacher sold the note to O'Brien; that it afterwards came back into Schumacher's possession, who sold it to appellee in the spring of 1896. The bill of appellee admits the payment of $100 on the principal of the note, and claims there was due on said note $1,000 principal and interest from March 30, 1903. On September 9, 1898, Gemkow made and delivered to Schumacher another note for $1,100, payable to his own order three years after date, with interest at 6 per cent. per annum, interest payable semiannually, and evidenced by six interest notes. This note was secured by a trust deed to Schumacher, as trustee, on the same property described in the trust deed sought to be foreclosed. September 9, 1901, Gemkow borrowed from Austin E. Morey, one of the defendants to the bill to foreclose, $1,200, for which he executed his note, payable to the order of himself five years after date, with interest at 6 per cent. per annum, and secured the same by a trust deed executed by himself and wife to Pauling, as trustee, upon the same real estate described in complainant's bill and trust deed. Gemkow testified he borrowed the money from Morey to pay off the note given Schumacher September 9, 1898, and that he did pay off and take up said note. Schumacher executed a release of the trust deed given to secure the note of September 9, 1898, on the 18th of September, 1901, which was recorded the same day. The answer of Gemkow and wife admits the execution and delivery to Schumacher of the note described in the bill, and also the trust deed, but avers the payment of $100 on the principal to Schumacher and all interest on said note to September 30, 1898; that on September 9, 1898, respondent Charles Gemkow gave Schumacher another $1,100 note, for which he received $100 cash and the remaining $1,000 was applied as payment of the note of September 30, 1892; that he never received the 1892 note, but that Schumacher told him he had destroyed it, and executed and gave to him a release of the trust deed, which he caused to be recorded; that September 18, 1901, he paid off and took up the 1898 note and Schumacher executed a release of the trust deed given to secure it. Respondents aver that they never had any notice or knowledge of the assignment of the 1892 note to appellee; that all their dealings were with Schumacher, and they were led to believe he was the owner of said notes. They deny having ever defaulted in the payment of said note; deny there is anything due thereon; but aver it was paid with the loan secured from Morey September 9, 1901. The parties made defendants by reason of their interest in the Morey note and trust deed answered the bill, setting up their interest in the premises, and also filed a crossbill. The cause was heard by the court and a decree entered finding that the Morey trust deed was a prior lien on the premises, and finding that there was due appellee on the note of September 30, 1892, of principal and interest, $1,122.08; also allowing appellee $100 solicitor's fee. The decree ordered the payment to appellee, by Gemkow, of $1,222.08 within three days, and that, in default thereof, the premises be sold, subject to the lien of the trust deed given to secure the Morey note. From that decree Gemkow and his wife prosecuted an appeal to the Appellate Court, where the decree of the circuit court was affirmed, and an appeal is prosecuted from the judgment of the Appellate Court to this court.

No question is raised as to the correctness of the decree so far as it relates to the Morey note and trust deed given to secure it. The only contest is as to the note and trust deed of September 30, 1892.

It is contended by counsel for appellants that all of their dealings were with Schumacher under the belief that he was the owner of the note and trust deed, that they had no knowledge of any assignment or sale of them to any one, and that in the absence of such notice Charles Gemkow had a right to deal with Schumacher as the owner and to pay the note off and take from him a release of the trust deed given to secure it. September 30, 1895, Gemkow signed an agreement extending the time of payment of the note three years. On that date he paid $100 on the principal, and by the agreement the interest was reduced to 6 per cent. September 30, 1898, Gemkow signed another agreement extending the time of payment two years; September 29, 1900, another one extending the time of payment two years; and September 30, 1902, another one extending time of payment three years. When appellee became the owner of the note and trust deed, the note had something near 2 1/2 years to run under the first extension. This extension agreement and the interest notes were turned over to him with the principal note and trust deed. By said extension agreement the note would mature September 30, 1898. On September 9, 1898, as above stated, Gemkow gave Schumacher another note for $1,100, due three years after date and secured by a trust deed on the same property as the first one. September 30th of the same year, the day the first note matured under the extension agreement of September 30, 1895, Gemkow executed another agreement extending the time of payment of the note dated September 30, 1892, two years, or until September 30, 1900; the interest being evidenced by four interest notes for $30 each. This extension agreement gave the holder of the note the option to declare it due for a default in the payment of interest, and provided that the trust deed given to secure the note should remain in full force till the note was paid. September 29, 1900, another agreement was executed extending the time for the payment of said note two years more, and September 30, 1902, another one extending time of payment three years, and at the same time notes were given for the semiannual installments of interest. Each of these last two extensions contained similar options of declaring the principal sum due for a failure to pay interest, and provisions for the remaining in force of the trust deed, as the extension agreement of 1900. The name of appellee was written as payee in the interest notes that were executed at the time the last extension was made, and which were introduced in evidence on the hearing; but this the decree finds was done...