Hubbard v. United States Mortgage Co.

• Decision Date: 31 October 1883
• Citation: 14 Bradw. 40,14 Ill.App. 40
• Parties: HENRY J. HUBBARDv.UNITED STATES MORTGAGE COMPANY ET AL.
• Court: United States Appellate Court of Illinois

14 Ill.App. 40

14 Bradw. 40

HENRY J. HUBBARD

v.UNITED STATES MORTGAGE COMPANY ET AL.

Appellate Court of Illinois, First District.

October Term, 1883.

OPINION TEXT STARTS HERE

ERROR to the Circuit Court of Cook county; the Hon. WILLIAM H. BARNUM, Judge, presiding. Opinion filed November 16, 1883.

Mr. CHARLES L. EASTON, for plaintiff in error; as to the relation of trustee and cestui que trust, cited Perry on Trusts, § 920.

By the terms of the mortgage on foreclosure, the proceeds of the sale are to be applied on the whole debt: Humphreys v. Morton, 100 Ill. 592.

The remedy of the complainant is only adequate and complete in a court of chancery: Hearne v. Hearne, 55 Me. 445; Himes v. Keighblingher, 14 Ill. 469; Dias v. Brunell, 24 Wendell, 8; Pardoe v. Price, 16 M. & W. 450; Bartlett v. Dimond, 14 M. & W. 49; Curtis v. Smith, 6 Blatch. 537; State v. Digges, 21 Md. 240; Dorsey v. Garey, 30 Md. 489; Hukell v. Page, 6 Bissell, 183; Brooks v. Brooks, 11 Cush. 18; White v. Sheldon, 4 Nev. 280; Perry on Trusts, § 843; Hill on Trusts, § 42; Story's Eq. Jur. § 962.

The Statute of Limitations will be a bar only when the trustee repudiates the express trust by clear and unequivocal acts or words, and claims to hold thenceforth the estate as his own, not subject to any trust, and such repudiation and claims are brought to the notice of the cestui que trust in such manner as to require him to act upon a clearly asserted adverse title: Merriam v. Hassam, 14 Allen, 522; Baker v. Whitting, 3 Lunn. 486; Albretch v. Wolf, 58 Ill. 186; O'Halloran v. Fitzgerald, 71 Ill. 53; Perry on Trusts, §§ 863-4; Bigelow on Estoppel, 3d ed. 427.

Where a demand is necessary, the Statute of Limitations will not commence to run until a demand is made: Lillie v. Hoyt, 5 Hill, 400; Baird v. Walker, 12 Barb. 298; Hitchcock v. Hitchcock, 13 Barb. 632; Stafford v. Richardson, 15 Wend. 305.

Messrs. DEXTER, HERRICK & ALLEN, for defendants in error; that complainant had a complete and adequate remedy at law, cited R. S. 1881, Ch. 2; Hancock v. Harper, 86 Ill. 449; Barnes v. Johnson, 84 Ill. 95; Belden v. Perkins, 78 Ill. 449; Claflin v. Godfrey, 21 Pick. 1; Cook v. Basley, 123 Mass. 396; Rogers v. Dashiell, 8 Allen, 343; Pomeroy's Eq. Jur. 164; Crooker v. Rogers, 58 Me. 339; Catlin v. Birchard, 13 Mich. 110; Eddy v. Smith, 13 Wend. 488; Taylor v. Turner, 87 Ill. 296.

When courts of law have concurrent jurisdiction with courts of equity and the party proceeds in equity, if barred at law, he will also be barred in equity: Manning v. Warren, 17 Ill. 267; Sloan v. Graham, 85 Ill. 26; Hancock v. Harper, 86 Ill. 445; Kane v. Bloodgood, 7 Johns. Ch. 90; Pratt v. Northam, 5 Mason, 95; Etting v. Marx, 4 Fed. R. 673; Hall v. Russell, 3 Sawy. 515; 2 Story's Eq. Jur. § 1520; Tiernan v. Rescariere, 10 G. & J. 217; Breckenbridge v. Churchill, 3 J. J. Marsh, 11; Wood on Limitations, § 58; Godden v. Kimmel, 99 U. S. 201.

Where the Statute of Limitations is a bar to a complainant's case in equity and this bar appears on the face of his bill, advantage may be taken of it by demurrer: Ilett v. Collins, 103 Ill. 74; 1 Dan. Ch. Pr. (5th ed.) 560-1.

A plaintiff who relies on an exception from the Statute of Limitations must plead and prove it; the defendant did not negative the exception: Wood on Limitations, 17; Bevan v. Cullen, 7 Barr. 281; Moore v. Capps, 4 Gilm. 315.

If the company had agents here who could have been served with process, the Statute of Limitations would run in its favor: Penn. Co. v. Sloan, 1 Bradwell, 364; McCabe v. R. R. Co. 14 Rep. 450; Guinn v. I. C. R. R. Co. 14 Rep. 463.

Complainant is barred by his laches: Furlong v. Riley, 103 Ill. 628; Story's Eq. Pl. §§ 484, 751; Lansdale v. Smith, 15 Rep. 385; Munn v. Burges, 70 Ill. 606; Dempster v. West, 69 Ill. 613; Burr v. Borden, 61 Ill. 389; Cox v. Montgomery, 36 Ill. 396.

BAILEY, J.

The writ of error in this case brings up for review the decree of the court below, sustaining a demurrer to and dismissing the bill for want of equity. So far as material to the questions urged by counsel in their arguments, the case made by the brief is briefly as follows: On the 2d day of August, 1872, Almon G. Sanford being indebted to the United States Mortgage Company, a corporation created by the legislature of the State of New York, in the sum of $10,000, for money loaned, executed and delivered to said company, as evidence of said indebtedness, his bond in the penal sum of $20,000, conditioned for the payment to said company, its successors or assigns, said principal sum of $10,000 on the first day of October, 1877, with interest at the rate of nine per cent. per annum, payable semi-annually, on the 1st day of April and October in each year, until said principal sum should be paid, said interest being further evidenced by eleven interest coupons, the first for $150 and the residue for $450 each.

To secure the payment of said bond and coupons, said Sanford and wife, on said 2d day of August, 1872, executed to said mortgage company a mortgage upon certain real estate in Cook county, Illinois. In said mortgage it was provided that if said company should expend any money, either in effecting insurance on the mortgaged premises, or in payment of taxes or assessments, or in redemption from sales therefor, or to protect the title or possession of said premises, or any part thereof, the moneys so paid should be a charge on said premises, and be secured by said mortgage, and draw interest at the rate of ten per cent. per annum. Also, that if default should be made in the payment of any of said interest for one month after the same should become due, according to the condition of the bond, the principal sum, together with all arrearages of interest thereon, should, at the option of said company, thereupon become due and payable, and collectible immediately or at any time thereafter, and in case of default in the payment of the principal, or of the interest, or any part thereof, at the time the same should become due according to the condition of the bond, said company, its successors, or assigns, might sell said mortgaged premises at public auction after giving certain notice, and out of the proceeds pay: (1) the costs, charges and expenses of the advertisement, sale and conveyance; (2) all moneys paid by said company for insurance, taxes, assessments, or to protect the title or possession of said premises; (3) all of said principal money and accrued interest thereon that should, at the time of the sale, remain unpaid, and (4) render the surplus, if any, to said Sanford, his heirs or assigns.

On the fourth day of December, 1874, Henry J. Hubbard, the complainant, purchased of said mortgage company, coupons numbered 4 and 5, maturing respectively the first day of April and October, 1874, paying said company therefor the sum of $954.43, the amount then due on the same, and received said coupons from said company, said coupons being so purchased by the complainant on the faith of their being secured by said mortgage. Said company afterward, claiming that default had been made, for more than one month, in the payment of the eighth interest coupon, which matured April 1, 1876, and claiming to act under the power contained in said mortgage, elected to declare the whole of said mortgage due, and advertised the mortgage property for sale, and sold the same on the 28th day of December, 1876, to Samuel D. Babcock, its president, for $10,000, and caused a deed of said property to be executed to said Babcock, said deed being recorded January 30, 1877. The complainant is still the owner of said coupons 4 and 5 and has owned them ever since he purchased them, and no part of them has ever been paid or satisfied. Shortly before filing the bill, the complainant demanded payment of said coupons of said mortgage company, which was refused, the company claiming that the complainant did not purchase said coupons, but acted as the agent of said Sanford, in paying to said company the amount due thereon. The purchase of said premises, at said mortgage sale, by said Babcock, as the bill alleges, was made by him for and on behalf of said mortgage company, and the title thereby obtained is held by him for said company. The bill further alleges that there was no provision in said mortgage empowering the mortgagee to become a purchaser at said mortgage sale, and claims that the sale for that reason was inoperative, and conferred no title upon the purchaser.

The bill as originally filed, prayed that the complainant be decreed to have a lien on the mortgaged premises prior to that of the mortgage company, and that said Sanford be decreed to pay the amount due the complainant, and in default of such payment that the mortgaged premises be sold, and the proceeds applied to the satisfaction of the same; or if it should be deemed more equitable that an account be taken of the amount, the mortgage company and the complainant be allowed to pay the same, and on such payment that said Babcock and said company be ordered to convey to the complainant their interest in said premises, and that said premises be sold to pay the amount due the complainant, and the amount so paid by him to said company and costs, and that the defendants be foreclosed of their equity of redemption and for such other or further relief as might be equitable. An amendment to the bill was afterward filed, charging the insolvency of said mortgage company, and alleging a fraudulent conspiracy between said company and said Babcock to acquire title to said premises in the manner stated in the bill, with the intention of cheating the complainant out of the amount due him, and praying for a decree against said Babcock therefor.

Counsel for the appellees urge in support of the decree, 1, that the complainant is shown by the bill to have an adequate and complete remedy at law, and therefore, that a court of equity has no jurisdiction, and 2, that upon the face of the bill, the complainant's action...