Hardin v. Eames

• Decision Date: 31 October 1879
• Citation: 5 Ill.App. 153,5 Bradw. 153
• Parties: ISAAC N. HARDIN ET AL.v.HENRY F. EAMES ET AL.
• Court: United States Appellate Court of Illinois

5 Ill.App. 153

5 Bradw. 153

ISAAC N. HARDIN ET AL.

v.HENRY F. EAMES ET AL.

Appellate Court of Illinois, First District.

October Term, 1879.

OPINION TEXT STARTS HERE

APPEAL from the Superior Court of Cook county; the Hon. S. M. MOORE, Judge, presiding. Opinion filed February 4, 1880.

Messrs. DENT & BLACK, for appellants; that the conveyance was in reality a mortgage, cited Reigard v. McNeill, 38 Ill. 400; Hanford v. Blessing, 60 Ill. 352; Price v. Karnes, 59, Ill. 276; Ewart v. Walling, 42 Ill. 453; Wynkoop v. Cowing, 21 Ill. 570; Klock v. Walter, 70 Ill. 416; Strong v. Shea, 83 Ill. 575; Dennis v. McCagg, 32 Ill. 429; Smith v. Cremer, 71 Ill. 185; Russell v. Southard, 12 How. 139; Sutphen v. Cushman, 35 Ill. 186; Davis v. Hopkins, 15 Ill. 519; Heytle v. Logan, 1 Marsh. 529.

The two thousand dollars taken by defendants in excess of the amount of the loan, was usurious: Delano v. Root, 1 Gilm. 690; Heytle v. Logan, 1 A. K. Marsh. 529; Davis v. Hopkins 15 Ill. 519; Tyler on Usury, 102.

The sale of the trust property without consent of the mortgagor was wrongful: Hart v. Ten Eyck, 2 Johns. Ch. *101.

If any assent was given, it was revocable at any time before being acted upon: Kimball v. Custer, 73 Ill. 389; Tanner v. Volentine, 75 Ill. 624; Ruggles v. Lesure, 24 Pick. 187.

Upon such wrongful sale, the mortgagees must account for the full value of the property, regardless of the price obtained: Waite v. Dennison, 51 Ill. 319; Freeman v. Cook, 6 Ired. Eq. 373; Ames v. Downing, 1 Bradf. Sur. 321; Dennis v. McCagg, 31 Ill. 429; Johnson v. Lewis, 2 Strobh, Eq. 157; Moore v. Titman, 44 Ill. 367; Norman v. Cunningham, 5 Gratt. 64; Mansell v. Mansell, 2 P. Wm. 678; Hill on Trustees *522; Perry on Trusts, § 847.

Such disposition of the property would operate to the satisfaction of the mortgage debt, to the full value of the property disposed of: Perry v. Barker, 8 Ves. 527a; Burpee v. Parker, 24 Vt. 567; Sutphen v. Cushman, 35 Ill. 186.

The mortgagees are bound to account to the sureties for the full value of the property sold: Phares v. Barbour, 49 Ill. 370; Kirkpatrick v. Howk, 80 Ill. 122; Wharton v. Duncan, 83 Pa. St. 40; N. H. Savings Bank v. Colcord, 15 N. H. 119; Everly v. Rice, 20 Pa. 297; Owen v. Homan, 3 Mc. & Gor. *378; Mayhew v. Boyd, 5 Md. 102.

The court erred in decreeing costs against complainants on the original bill: Constitution, Art. II. § 19.

The whole transaction is to be construed as one contract: Bailey v. Cromwell, 3 Scam. 71; Duncan v. Charles, 4 Scam. 561.

Messrs. MCCAGG, CULVER & BUTLER, for appellees; that to constitute usury there must be a loan in fact, cited Tyler on Usury, 92; Crane v. Hendricks, 7 Wend. 569; Rapleye v. Anderson, 4 Hill, 472; Lloyd v. Scott, 4 Pet. 205; Moore v. Hoagland, 4 Denio, 264; Thurston v. Cornell, 38 N. Y. 281; Smith v. Marvin, 27 N. Y. 137.

The intent is an essential ingredient in usury: N. Y. Firemen's Ins. Co. v. Ely, 2 Cow. 678; Gale v. Grannis, 9 Ind. 140; Fursey v. Robinson, 1 Met. 663; 2 Parsons on Notes, 405; Condit v. Baldwin, 21 N. Y. 219; Lloyd v. Scott, 4 Pet. 205; Bank of U. S. v. Waggener, 9 Pet. 399; Hammet v. Yea, 1 Bos. & Pul. 144; Hogg v. Ruffner, 1 Black. 115; Brooks v. Avery, 4 N. Y. 225; Jones v. Berryhill, 25 Iowa, 295; Ketchum v. Barber, 4 Hill, 224; Clark v. Sheehan, 6 Alb. Law Jour. 126; De Forest v. Strong, 8 Conn. 513; Murray v. Harding, 2 W. Black. 859.

Indorsing a note for a premium is not usurious: Kitchel v. Schenck, 29 N. Y. 515.

Extra compensation for making a loan is not usury: Thurston v. Cornell, 38 N. Y. 283.

Revocation of consent to sell must be brought to the knowledge of the party to be affected by it: 16 Vin. Ab. 4; Story on Bailments, § 208; Salte v. Field, 5 Tenn. R. 211; Bowerbank v. Morris, Wallace, 118.

Mere forbearance of the creditor to sue, will not discharge the sureties: 2 Am. Lead. Cas. 388; P. & F. W. R. R. Co. v. Schaeffer, 9 B. F. Smith, 350; Adams Bank v. Anthony, 18 Pick. 238.

The creditor is bound to good faith, but his laches, not amounting to fraud, will not discharge the surety: U. S. v. Kirkpatrick, 9 Wheat. 720; State Bank v. Chetwood, 3 Halst. 1.

Limiting the time for redemption to three months was not error; the terms of such redemption are in the discretion of the court: Perine v. Dunn, 4 Johns. Ch. 140; Heald v. Wright, 75 Ill. 17; Crain v. Bailey, 1 Scam. 321; Mellish v. Richardson, 9 Bing. 126; White v. N. W. Stage Co. 5 Oregon, 99; Bailey v. Williams, 6 Oregon, 71; 1 Jones on Mortgages, § 342.

There being no necessity for a cross-bill, the court could dismiss it of its own motion: Harris v. Galbraith, 43 Ill. 309.

As to costs: Harper v. Ely, 70 Ill. 581.

BAILEY, P. J.

The complainants, Isaac N. Hardin, Gertrude H. Hardin and Betsey N. Holbrook, exhibited their bill in chancery against Henry F. Eames and Jesse Spaulding, the defendants, praying for an accounting in relation to a certain incumbrance which the defendants held on lands of the complainants, and in case anything should be found due, to be permitted to redeem therefrom.

The bill alleges, in substance, that, on the 23d day of February, 1877, said Isaac N. Hardin was a part owner of the equity of redemption in lots numbered from 4 to 13, inclusive, in block 1, Bowen and Smith's subdivision, etc., in Cook county, said lots having been previously sold under an incumbrance, and the redemption being about to expire; that said Hardin, being particularly desirous of saving said equity of redemption, in view of an advantageous contract subsisting for the sale of said lots, had shortly before that time applied to said Eames for a loan of money with which to make the redemption, and that the negotiation with said Eames resulted in an arrangement between Hardin of the one part, and the defendants Eames and Spaulding of the other part, by which Eames and Spaulding agreed to advance the money necessary to redeem seven of said lots, taking the title in their own names as security for the re-payment of their advances.

That as to lots 11, 12 and 13, a redemption was effected by Spaulding, as a judgment creditor of Hardin, but solely with money borrowed by Hardin from one Winslow, and placed for the purpose in Spaulding's hands, under an arrangement that after obtaining the title, Spaulding should convey said lots to said Winslow; that under said arrangement, said lots were really held in trust for Winslow, but that after obtaining the title Spaulding refused to convey them to Winslow, and still holds said title in his own name.

That said Eames and Spaulding, under their arrangement, advanced $14,800, and therewith purchased the certificates of sale of lots 4 to 10, inclusive, and thereafter acquired, in their own names, the title thereto; that in making said redemption, Eames and Spaulding required Hardin to put up additional real estate security for the payment within ninety days, of their advances, together with the additional sum of $2,000 demanded by them as a bonus and by way of usurious interest, and ten per cent. interest on both the advances and bonus, and also as indemnity against certain unpaid taxes on said seven lots, and, accordingly, Gertrude H. Hardin, the wife of said Isaac N. Hardin, together with her said husband, conveyed to them a tract of land in said county, containing eighty acres, of the value of $30,000, being her individual property, as such additional security, they well knowing it to be hers.

That said indebtedness was permitted to run until July 6, 1877, when a computation was had of the amount then claimed to be due, including interest on the advances and bonus, and that Hardin thereupon executed and delivered to Eames and Spaulding his two promissory notes, due ninety days after date, each for one-half of the amount so found due, with ten per cent. interest, and that in consideration of such extension, and as a further security for the payment of said money, Hardin, on the request and demand of Eames and Spaulding, induced and procured Betsey N. Holbrook to convey to them six lots in Johnson's addition, etc., of the value of $5,000, said lots being, as Eames and Spaulding then knew, the individual property of said Betsey N. Holbrook; that said notes are still held by Eames and Spaulding, and have never been fully paid, but that in February, 1878, the sum of $4,500 was realized on a judgment against one Cushman, and turned over to them to be credited thereon.

That the title to said property, except said lots 11, 12 and 13, which are held in trust for Winslow, was taken by them solely by way of mortgage, and that under the circumstances Eames and Spaulding could rightfully sell the same only under the decree of a court of equity; that, disregarding their duty in the premises, Eames and Spaulding, a few days prior to the filing of the bill, made a secret sale of said lots 4 to 10, to one Elias Trumbo for $30 a front foot, making $10,500 in all, and threaten to make further sales of the property still held by them; that said sale was without the approbation or consent of the complainants, and at a grossly inadequate price, said lots being worth $60 to $75 a front foot, and being alone more than sufficient to fully pay Eames and Spaulding the amount of their claim, and that they are chargeable in equity with the full value of the property so sold, and ought to pay the excess to Hardin and re-convey all the other property.

That Hardin was induced to resort to Eames in the first instance on account of the friendly relations theretofore existing between them, said Eames, at the time, professing great friendship for him, and also because Eames was president of the Commercial National Bank of Chicago, where Hardin had been and was then doing business; that Eames proposed associating Spaulding with him in the matter, suggesting that Spaulding could give his paper for half the money to be advanced, which the bank would discount, and that he, Eames, would advance the remainder; that the payment of said $2,000 was not originally...