Lagger v. Mut. Union Loan & Bldg. Ass'n

• Court: Illinois Supreme Court
• Writing for the Court: The facts fully appear in the following statement by MAGRUDER
• Citation: Lagger v. Mut. Union Loan & Bldg. Ass'n, 146 Ill. 283, 33 N.E. 946 (Ill. 1893)
• Decision Date: 31 March 1893
• Parties: LAGGER et al. v. MUTUAL UNION LOAN & BLDG. ASS'N.

146 Ill. 283

33 N.E. 946

LAGGER et al.

v.MUTUAL UNION LOAN & BLDG. ASS'N.¹

Supreme Court of Illinois.

March 31, 1893.

Appeal from circuit court, Cook county; B. R. Burroughs, Judge.Hofheimer & Zeisler, for appellants.

Eastman & Schumacher, for appellee.

The facts fully appear in the following statement by MAGRUDER, J.:

The original bill in this case was filed in the circuit court of Cook county on July 31, 1890, by the appellee, the Mutual Loan & Building Association of Chicago, against Augusta M. Spies and John Spies, her husband, and Daniel Corkery, trustee, to foreclose a trust deed dated October 15, 1888, executed by said Augusta M. and John Spies to said Corkery, as trustee, conveying lot 69, in Wallie's subdivision, etc., in Cook county, (being a lot 25 feet front by 100 feet deep, in Chicago, known as ‘No. 71, Twenty-Second Place,’) for the purpose of securing their bond of the same date for the payment of $4,200 to said association. It appears that on July 1, 1889, Augusta M. Spies obtained a divorce from her husband, John Spies, and was allowed to resume her former name, Augusta M. Lagger. That the said Augusta M. Lagger had intermarried with said Spies on April 7, 1888. That at the time of said marriage said Augusta was the widow of Joseph E. Lagger, deceased. That said Joseph E. Lagger died intestate on June 28, 1887, leaving him surviving his widow, the said Augusta, and six minor children,-William R., Minnie M., Frank J., Joseph L., Lucy K., and Rosa P. Lagger; the oldest son, William, having been born September 24, 1867, and the oldest daughter on April 12, 1872. That at the time of his death the said Joseph E. Lagger was the owner in fee of said lot 69. That when he died said lot was free from liens, and there were upon it a small brick house in front and a small frame cottage in the rear. That said premises were at the time of his death, and had been prior thereto, the homestead of the said Lagger and his family, and after his death his widow and children continued, and still continue, to occupy the same as their homestead. The original bill was amended by changing the name of Augusta M. Spies to Augusta M. Lagger, and the latter answered the bill, admitting the execution of the bond and trust deed. Upon their petition the said children were allowed to be made defendants. A guardian ad litem was appointed, and answered for the minors, and said William R. and Minnie M., having become of age on November 28, 1890, filed their answer, alleging that they were strangers to the transactions between complainant and said Augusta, as set up in the bill; denying the said premises described in the trust deed were ever owned in fee by said Augusta, or that she had any estate, except one of homestead, or that complainant was entitled to any relief; and charging that the children of Joseph E. Lagger, deceased, were the owners in fee, as tenants in common, of said premises by inheritance from their father; that said Augusta derived her pretended title thereto through a sale by her as administratrix under certain proceedings in the probate court of said county, but that said sale and proceedings were irregular and void as to said children. The said children filed a cross bill in the case against said association and said Corkery and Augusta M. Lagger and John Spies, praying that said proceedings and sale be set aside, and that the deeds based thereon and said trust deed be set aside and declared to be void as against them, and clouds upon their title. The cross bill was taken as confessed against Corkery and John and Augusta Spies. The association answered it, denying the material allegations, and alleging that the administratrix's sale was valid, and that Augusta M. Spies was the bona fide owner in fee of the premises when the trust deed was made; that its claim is for money expended for improvements upon the premises, which have enhanced the value thereof; and denying that it knew of the matters and things alleged as to fraud against cross complainants. The decree of the court below, after setting forth the death and heirship and the probate court proceedings, finds that the premises were sold on July 16, 1888, by the administratrix, to her husband, for an alleged consideration of $1,650, subject to the dower and homestead rights of the widow, but that no consideration was paid by John Spies or Cora B. Hirtzel or said Augusta for the deeds so made to them; that said August a gave the estate of Joseph E. Lagger a receipt for $1,650, which was credited on her widow's award; that the administratrix was the real purchaser at said sale; that no provision was made at said sale or by any order for setting aside to the children their homestead rights in the premises, nor for the release of the same; that said association, when it took the trust deed, had constructive notice that the land had been sold by the administratrix to her own husband, and upon inquiry would have learned that she was the purchaser at her own sale; that said premises when so sold were worth $2,840.10, and that said Augusta and her children had an estate of homestead therein of the value of $1,000; that almost all the money borrowed of said association and secured by said bond and trust deed was used in erecting a building on said premises, whereby the same have been improved in value at least $2,500; and it was thereupon ordered in said decree that said Augusta and John pay said association $4,777.30, with interest and costs, etc., within 30 days, and in default that said premises be sold by a master free of all liens by the parties to this proceeding, and that out of the proceeds the master pay the costs, next pay to said association $4,340.10, to be credited on the amount due to it, as aforesaid, from said Augusta and John, being the amount of the equitable interest of said Augusta in said premises, the balance to be paid to the cross complainants in equal shares. The present appeal is prosecuted by the said cross complainants, the children of said Joseph E. Lagger, deceased, who assign errors. Cross errors are assigned by the appellee, the Mutual Union Loan & Building Association.

MAGRUDER, J., (after stating the facts as above.)

The first question is as to the character of the title acquired by Augusta M. Spies through her sale as administratrix of the estate of her first husband, Joseph E. Lagger, deceased. Having married John Spies while she was administratrix of said estate, she applied to the probate court, and obtained an order to sell the premises to pay debts. The only unpaid debt against the estate was her widow's award, appraised at $1,959; upon which, after applying all the personal property, there was due a deficiency of $1,840.10. The object of petitioning for a sale of the real estate was to raise money to pay herself this deficiency. At the sale made by her as administratrixshe struck off and sold the premises in question to her own husband, John Spies, for an alleged consideration of $1,650. Although she reported the sale to the probate court as a sale for cash, yet as matter of fact her husband paid nothing. She merely credited the amount of his bid upon the amount due her upon her widow's award in her accounting as administratrix with the probate court. She executed a deed as administratrix to her husband on August 29, 1888, which was recorded on August 30, 1888. On September 5, 1888, she and her husband executed a deed of the property, for a recited consideration of $1,650, to Cora B. Hirtzel, which deed was recorded on September 11, 1888. Miss Hirtzel paid nothing for the property. She was a stenographer in the office of the attorney who acted for Mrs. Spies in the probate court in filing the petition and conducting the other proceedings. Under the direction of said attorney, Cora B. Hirtzel at once, on the same day, executed a deed of the property, conveying it back to Mrs. Spies, which latter deed was recorded on September 12, 1888. The latter deed, like the two others, was without consideration. The evidence shows beyond question that John Spies acted for his wife in bidding for the property; that she was the purchaser of the premises at her own sale; that the petition for a sale and the sale by her as administratrix, and the transfer of the title to a third person, and its reconveyance to her, were steps taken in pursuance of a previous arrangement between Mrs. Spies and her husband and her attorney, by which the title was to be vested in her, so that she could raise money to build upon and improve the property. Trustees, and others occupying fiduciary relations, cannot purchase on their own account the property intrusted to their management. Administrators act in a fiduciary character in the sale of property and settlements of estates. The law forbids an administrator to purchase at his own sale, whether the purchase is in his own name or in the name of another for his use. Even though, in such case, the intentions of the trustee are honest, and there is no fraud in fact, the sale will be set aside if the parties in interest object to it within a reasonable time. The purchase, however, is held to be voidable only, and not absolutely void. In a number of cases this court has sustained the right of the heir to file a bill in equity to set aside a sale of land by the administrator where the latter has made the purchase for himself. Thorp v. McCullum, 1 Gilman, 614;Miles v. Wheeler, 43 Ill. 123;Kruse v. Steffens, 47 Ill. 112;Ebelmesser v. Ebelmesser, 99 Ill. 541. It is manifest, therefore, that the present appellants, who are the children of Joseph E. Lagger, deceased, are entitled to have said sale by their mother, and the deeds executed subsequently thereto, vesting the apparent title in her, set aside, as between themselves and the said Augusta M. Spies, or Augusta M. Lagger.

The next question is whether or not the appellee, as the holder of the trust deed executed by Augusta M. Spies and her...