German-American Nat. Bank of Lincoln v. Martin

• Decision Date: 18 April 1917
• Docket Number: No. 10993.,10993.
• Citation: 277 Ill. 629,115 N.E. 721
• Parties: GERMAN-AMERICAN NAT. BANK OF LINCOLN et al. v. MARTIN et al.
• Court: Illinois Supreme Court

277 Ill. 629

115 N.E. 721

GERMAN-AMERICAN NAT. BANK OF LINCOLN et al.

v.MARTIN et al.

No. 10993.

Supreme Court of Illinois.

Feb. 21, 1917.

Rehearing Denied April 18, 1917.

Appeal from Circuit Court, Logan County; Sam Welty, Judge.

Suit by the German-American National Bank of Lincoln and others against John B. Martin and others. From a decree for complainants, defendants appeal. Reversed and remanded, with directions.King & Miller, of Lincoln, and Uri Kissinger, Fred I. Edgell, and David H. Harts, Jr., all of Lincoln, guardians ad litem, for appellants.

Covey & Woods, McCormick & Murphy, C. E. Smith, A. D. Cadwallader, Evan Worth, and Beach & Trapp, all of Lincoln, for appellees.

COOKE, J.

This is an appeal prosecuted by John B. Martin, John J. Martin, Lillie E. Russell, Violet B. Malerich, Isa Marie Wigginton, and Marian D. Martin, and certain infants by their guardians ad litem, from a decree of the circuit court of Logan county setting aside, as against the German-American National Bank of Lincoln, Ill., and certain other judgment creditors of John B. Martin, voluntary deeds made by John B. Martin to his children and their descendants.

John B. Martin, a widower, is the father of seven children, viz. Zachariah, John J., George, Lillie E., Isa Marie, Violet B., and Marian D. On April 26, 1912, and for several years prior thereto, he was the owner in fee simple of about 874 acres of land in Logan county, Ill. He was then 65 years of age, had retired from active farming, and was living in the residence on a portion of his lands which he called the home place, with his four daughters and his son George, all of whom were then unmarried. The other two sons, Zachariah and John J., were married and each was farming a portion of the lands owned by their father, as his tenants. The remainder of the lands, including the home place, was farmed by his son George, as his tenant. Some time prior to April 26, 1912, John B. Martin determined to divide his lands among his children, and with that end in view requested his children to meet with him at his residence. The two sons Zachariah and George failed to attend the meeting. The other children were present, and John B. Martin, who could neither read nor write, except to sign his name and recognize his signature, designated the particular tract or tracts which he desired to give to each of his children, and at his request John J. Martin made out a list of the lands to be given to each child. In the contemplated division each child was to receive 80 acres of good farming land, worth approximately $250 per acre, and 40 acres of less valuable timber land. After this meeting,and on April 26, 1912, John B. Martin, in company with his son John J., went to Lincoln, which is about 5 miles each of the residence of John B. Martin, and called upon an attorney, who, under the direction of John B. Martin and in accordance with the memoranda made by John J. Martin, prepared seven deeds, which John B. Martin thereafter, on May 3, 1912, signed and acknowledged before a notary public in the office of the attorney. All of these deeds were in form the same. Each, after reserving to the grantor a life estate, purported to convey to one of the children of John B. Martin for life and the remainder in fee to certain remaindermen therein specified 120 acres of the land owned by John B. Martin, the conveyances being in accordance with the division of his lands theretofore announced by John B. Martin at the meeting with his children and in accordance with certain promises theretofore made by him to certain of his children, as hereinafter more particularly set forth. The deed to Marian D. Martin contained the following provisions:

‘To have and to hold for the period of the natural life of said Marian D. Martin, and with remainder after the death of the said Marian D. Martin to the lineal descendant or descendants of said Marian D. Martin surviving her per stirpes in fee. If the said Marian D. Martin leaves no lineal descendants her surviving, then the remainder in said real estate shall vest in such one or ones of the lineal descendants of grantor as said Marian D. Martin may by will or deed appoint. In default of all lineal descendants of said Marian D. Martin her surviving, and in default of appointment by her, as aforesaid, said remainder after the death of the said Marian D. Martin shall vest in all the lineal descendants of the said grantor per stirpes in fee. This deed is one of a series of deeds by means of which grantor disposes of his land to his children, reserving a life estate in all of said real estate. * * * Said Marian D. Martin shall occupy said land as a tenant during the life of grantor, rendering to grantor yearly a rent of $400 per annum, payableon the last day of each year. Grantee, Marian D. Martin, shall pay the taxes on said land each year and retain the amount so paid out of the sum of $400 rent.’

The deed to each of the other daughters contained the same provisions, with the exception that the name of the grantee in the deed was substituted wherever the name of Marian D. Martin appears in the provisions above quoted. The deed to each of the sons also contained the same provisions, substituting the name of the grantee wherever the name ‘Marian D. Martin’ appears in the provisions above quoted, with the exception that, after the termination of the life estate of the son, remainder was given to his widow for the period of her natural life, and the remainder, after the death of the widow, to the lineal descendant or descendants of the son, and with the further exception that the deeds to John J. and Zachariah provided that the yearly rental to be paid by each should be $600, and the deed to George provided for a yearly rental of $500, and contained a reservation by the grantor of the right to use and occupy, for the period of his natural life, the old family home dwelling house, and all lots and garden plots adjoining and appurtenant thereto.

After the deeds were executed the attorney who had drawn them advised John B. Martin to place the deeds in a bank, with directions to the bank to deliver them to the respective grantees after the death of Martin, and the attorney inclosed the deeds in an envelope, sealed the same, and indorsed thereon the following:

‘These deeds are placed in escrow by the undersigned with the German-American National Bank of Lincoln, Illinois, with directions to said bank to safely keep until my death and then deliver the several deeds herein to the several grantees named therein, if living, or to the remaindermen in each case entitled, if said grantees or any of them be dead.

‘Dated this 3d day of May, A. D. 1912.’

To this indorsement John B. Martin subscribed his name. Shortly thereafter the attorney took these deeds, inclosed in the sealed envelope with the above indorsement on the outside of the envelope, to the German-American National Bank of Lincoln, Ill., and gave the same to the cashier of the bank, at the same time stating that they could not be withdrawn. The cashier wrote the words ‘Cannot be withdrawn’ in red ink upon the outside of the envelope and placed the package in a box in the bank where customers' papers were kept, and it there remained until removed therefrom by the cashier as hereinafter stated.

At the time these deeds were executed certain promissory notes executed by John B. Martin were outstanding, viz.: Two notes for the aggregate principal sum of $695 signed by John B. Martin alone, payable to Kahn Bros.; five notes for the aggregate principal sum of $4,100 signed by Zachariah and John B. Martin, payable to Kahn Bros.; three notes for the aggregate principal sum of $2,600 signed by John J. Martin and John B. Martin, payable to Kahn Bros.; two notes for the aggregate principal sum of $4,925.25 signed by George and John B. Martin, payable to the Lincoln State Bank; and one note for the principal sum of $5,000 signed by John B. Martin alone, payable to George Martin, and held by the Lincoln State Bank, the same having been negotiated at the bank by George Martin. All of these notes, except the two notes payable to Kahn Bros. for the aggregate principal sum of $695 and the note for $5,000 payable to George Martin, were notes which John B. Martin had signed as surety for his sons. The note for $5,000 was given to George Martin by John B. Martin on April 2, 1912, in order to obtain funds at the bank for John B. Martin and his sons George and Zachariah. From the proceeds of that note, obtained at the Lincoln State Bank, John B. Martin received $1,000, George Martin received $1,500, and George and Zachariah, jointly, received $2,500. All of the notes above mentioned were subsequently paid except the two notes for the aggregate principal sum of $695 signed by John B. Martin alone, payable to Kahn Bros., and the five notes for the aggregate principal sum of $4,100 signed by Zachariah and John B. Martin, payable to Kahn Bros.

At the time the deeds were executed John B. Martin was the owner of 36 acres of land, of the value of about $2,600, which was not included in any of the deeds. He also had on deposit with the Lincoln State Bank $916, and held a mortgage on 20 acres of land belonging to George Martin to secure to payment of $2,500. At the same time Zachariah Martin owned 71 acres of land, valued at $250 per acre, and personal property valued at several thousand dollars, and George owned 20 acres of land, valued at $250 per acre, subject to the mortgage held by his father to secure the payment of $2,500, and also owned several thousand dollars' worth of personal property.

Beginning November 2, 1912, and continuing until the fall of 1915, John B. Martin signed numerous notes as surety for his son George and some notes as surety for his son Zachariah. Some of these notes made from time to time were renewal notes, but the majority were for original loans obtained by George Martin through brokers, upon the credit of ...