Gordon v. Johnson

• Decision Date: 21 June 1900
• Citation: 57 N.E. 790,186 Ill. 18
• Parties: GORDON et al. v. JOHNSON et al.
• Court: Illinois Supreme Court

186 Ill. 18

57 N.E. 790

GORDON et al.

v.JOHNSON et al.

Supreme Court of Illinois.

June 21, 1900.

Error to appellate court, Third district.

Suit by Henry R. Johnson against John Gordon and others. A cross bill was filed by said Gordon against said Johnson and another. A decree against defendants was affirmed by the appellate court (79 Ill. App. 423), and they bring error. Reversed.J. M. Riggs, for plaintiffs in error.

Morrison & Worthington, for defendants in error.

The original bill in this case was filed on March 19, 1894, and the amended bill was filed on July 12, 1894, by the defendant in error Henry R. Johnson against the plaintiff in error John Gordon and others hereinafter named, to enforce a vendor's lien upon 94 acres of land situated partly in Scott county and partly in Morgan county, said 94-acre tract having been sold and conveyed by Johnson to John Gordon on August 23, 1890, by a deed of that date, which in the body of it expressly reserved a vendor's lien. Mary E. Gordon, the wife of John Gordon, the grantee in the deed, was made defendant. Elizabeth Stryker, who held a mortgage to secure $14,000, dated February 4, 1884, executed to her by John Gordon and his wife on that day upon said tract of 94 acres, and about 400 other acres of land located in said counties, and owned by said Gordon, was also made a party defendant to the original and amended bills. Certain children of John Gordon, to wit, John B. Gordon, Frank T. Gordon, Harry C. Gordon, Virginia C. Vasey, and Lillie Agee, and one William Gordon, trustee,-to whom John Gordon had executed a deed of trust on November 16, 1883, conveying 160 acres of the land included in the Stryker mortgage, but not including said 94 acres, and providing therein that John Gordon should have the possessionof said land during his natural life, and that after his death the same should be conveyed in equal parts to his said six children,-were also made defendants to said bills. Answers were filed to the original and amended bills by some of the defendants thereto, default was entered against some of the defendants, and a guardian ad litem was appointed for one of the defendants, who was a minor, and filed an answer for him. The answer of John Gordon set up the fact that the title to the tract of 94 acres, and to other lands hereinafter mentioned, which had been conveyed to H. R. Johnson, was really held by Johnson in trust for the Jacksonville National Bank, and that said lands were, as matter of fact, owned by said bank, and not by said Johnson. Mrs. Stryker filed her answer on June 12, 1895, setting up her mortgage, and on June 15, 1895, she filed a cross bill asking for the foreclosure of her mortgage for $14,000, dated February 4, 1884, due in five years after date, drawing 7 per cent. interest, secured, together with the principal note, by five interest notes, each for $580, payable in one, two, three, four, and five years after date. The Jacksonville National Bank was not made a party to the original bill, or the amended bill, or to the cross bill filed by Mrs. Stryker. John Gordon had been a member of the mercantile firm of John Gordon & Co., doing business in Linnville, in Morgan county, and also a member of the mercantile firm of Loar & Gordon, doing business at Jacksonville, in said county. He was indebted in large amounts to said bank, both individually and as a member of said firms. On February 6, 1884, he paid to the bank, out of the $14,000 borrowed from Mrs. Stryker, his individual indebtedness to the bank amounting to $8,240.04, or thereabouts, but paid nothing upon the firm debts due to the bank. The proof tends to show that the balance of the $14,000 was deposited in said bank. On July 5, 1895, John Gordon filed in the case a cross bill against Henry Johnson, which was demurred to, and the demurrer was sustained. The cross bill was then amended by leave of court, and a demurrer was filed to it as amended. The demurrer to the cross bill as amended was sustained, and the cross bill was dismissed. The Jacksonville National Bank, as well as H. R. Johnson, was made a defendant to the cross bill. The cross bill filed on July 5, 1895, by John Gordon against the Jacksonville National Bank and the defendant in error H. R. Johnson set up substantially the following facts: On account of the indebtedness of the firms of John Gordon & Co. and Loar & Gordon to the bank, the bank, on February 22, 1886, sued out an attachment against John Gordon, and levied upon all the lands embraced in the mortgage to Mrs. Stryker, being about 500 acres, and including the 94 acres above mentioned, and also levied the attachment writ upon $4,000 worth of property belonging to John Gordon. A few days afterwards, to wit, on March 10, 1886, Gordon settled this indebtedness to the bank by conveying the tract of 94 acres above mentioned, which was subject to the Stryker mortgage, to H. R. Johnson, and also by procuring Samuel W. Heaton, his brother-in-law, to convey to H. R. Johnson other lands, amounting to 284 acres, not embraced in the Stryker mortgage. The firm indebtedness to the bank, upon which the attachment suit had been brought, was thus settled by the conveyance to Johnson of the 378 acres of land above mentioned. Subsequently, on May 29, 1886, the bank entered up judgment in the attachment suit against John Gordon for $19,437.11. The cross bill filed by John Gordon charged that the conveyances made to Johnson, who was a director of the bank, and represented the bank in the settlement of the indebtedness, were made for the benefit of the bank; that the bank represented the firm indebtedness to itself to be about $20,000, and took the 378 acres of land at the gross sum of $19,820; that, in consideration of the conveyances so made to Johnson, the bank promised to surrender to Gordon all the obligations it held against him, either individually or as a member of said firms, and to give him a receipt in full of all its demands against him; that he had not had his bank book balanced for a long time, and did not know the condition of his indebtedness, either individually, or his partnership indebtedness, and relied upon the statements of the bank in relation thereto; that the bank's agents misrepresented to him the amounts which he owed; that the notes were not presented at said settlement, and although he often applied for them, as well as for a statement of his account, he was put off with excuses coupled with promises; that he did not succeed in getting his notes from the bank, and did not find out the error or mistake in the representations as to the amount of his indebtedness until November 21, 1892; that he then notified the bank of the error, and demanded correction, which it refused to make; that on August 23, 1890, when he bought back the tract of 94 acres from the bank, represented by Johnson, he had no knowledge of the mistake which had been made in March, 1886, when the settlement took place; that after his discovery of the mistake, in November, 1892, he refused to make any more payments to Johnson upon the purchase of the tract of 94 acres, which had been deeded to him by Johnson, and upon the purchase of which he had paid $2,815.50 in cash, and given his notes for sums amounting altogether to $6,862.50, said notes being due, respectively, on the 1st days of March in the years from 1892 to 1897, inclusive, the first note for $962.50 due March 1, 1892, having been paid; that he paid the bank, as rent for the said 94 acres, about $500 every year for five years up to March, 1891; that a correction of his account with the bank would show no indebtedness existing from him to the bank on account of the purchase of said 94 acres; that the bank entered up judgment in the attachment suit in violation of its agreement of settlement, made on March 10, 1886; that after said settlement he deposited with said bank a note on one Elliott, which in January, 1892, with interest, amounted to $1,600, but that said bank refused to account to him for the proceeds of the collection of said Elliott note; that when he succeeded in getting his bank book and checks he found sums charged to him which he never drew, and checks which he never signed and knew nothing about; that the firm of John Gordon & Co. was dissolved, and Samuel W. Heaton, who with John Gordon was a member of that firm, agreed to pay all the debts which the firm owed, including its indebtedness to the bank; that a note for $4,000, which Gordon had executed to the bank, was paid or discharged by Heaton, who, being responsible, gave his individual note for $4,000 to the bank to be substituted in place of Gordon's note for $4,000; that the note so made by Heaton was accepted by the bank in lieu of Gordon's note, but that the bank retained Gordon's note, and added it in, with interest, to the amount of its indebtedness against Gordon without the knowledge of Gordon; that Gordon did not know of the transaction in regard to said note for $4,000 until he succeeded in getting from the bank his notes held by the bank; that at the settlement Gordon was furnished with no items by which the mistake in charging him with $4,222, the amount of the principal and interest due upon the note for $4,000, could be known; that the said sum of $4,222 was on March 10, 1886, erroneously paid to the bank by the conveyance of the lands aforesaid; that he (Gordon) did not learn, until long after that date, that Heaton had given his own note in lieu of Gordon's note; that Heaton was then, and is now, perfectly solvent. The cross bill, as originally filed and as amended, prays for an accounting between the bank and the plaintiff in error Gordon, and that the amount of indebtedness due from Gordon to the bank be definitely ascertained, and that there be entered upon the records a full release of the vendor's lien sought to be enforced by the original and amended bills herein, as being a cloud upon the title of plaintiff in error ...