Leonard v. Springer

• Decision Date: 19 June 1902
• Citation: 197 Ill. 532,64 N.E. 299
• Parties: LEONARD v. SPRINGER.
• Court: Illinois Supreme Court

197 Ill. 532

64 N.E. 299

LEONARD

v.SPRINGER.

Supreme Court of Illinois.

June 19, 1902.

Appeal from appellate court, First district.

Action for deceit by Ella S. Leonard against Warren Springer. From a judgment of the appellate court (98 Ill. App. 530) affirming a judgment for defendant, plaintiff appeals. Reversed.Alden, Latham & Young, for appellant.

W. N. Gemmill, for appellee.

This is an appeal from the appellate court for the First district affirming a judgment rendered in the superior court of Cook county, June term, 1899, substaining a demurrer to appellate's declaration in an action for damages for fraud and deceit.

The declaration charges that on July 29, 1897, the defendant, Warren Springer, was the owner of a leasehold interest, with a building thereon, known as 188 East Monroe street, Chicago; that the ground rent to the amount of about $5,000 was past due on said lease, and the owner of the fee was threatened to forfeit the same; that defendant knew his interest in said real estate was worthless; that he conceived the scheme of conveying it for the fictitious sum of $100,000, and having the vendee execute a trust deed to the Chicago Title & Trust Company, a corporation, to secure the payment of notes amounting to $75,000, thereby representing, through the public records and abstracts of title, that the property had been sold for $100,000, and was therefore worth that sum, and thereby sought to impress upon the public that one-fourth of said purchase money had been paid, when in truth and in fact defendant had no idea that said leasehold interest could be sold for any sum to any person knowing the facts; that the defendant, for the purpose of cheating the plaintiff and others, conspired with John E. Maginnis, his brother-in-law, and Charles Z. Miller, whereby, on July 29, 1897, defendant conveyed the leasehold interest to Maginnis without receiving any consideration therefor, and on the 6th of August following the latter conveyed his interest therein to Miller, who was a man of no financial means or responsibility, and who, with Maginnis, was a mere tool in the hands of defendant; that the deed from Maginnis to Miller stated a consideration of $100,000, but in face there was no consideration; that on the same day, and as part of the same transaction, defendant procured Miller to execute to the Chicago Title & Trust Company a trust deed on his interest in the leasehold, securing the payment of 11 notes each for $500, 10 notes each for $750, due in one year, and 60 notes each for the sum of $1,000, due [197 Ill. 534]15 months after date, the notes being executed by Miller, payable to his own order, and by him indorsed and turned over to defendant, who paid Miller the sum of $500 for his services in said transaction; that defendant for the purpose of carrying out his design to cheat and defraud plaintiff and others, caused the deeds and trust deed to be filed for record, and caused the said Chicago Title & Trust Company to be named as trustee in said trust deed and in said notes, for the purpose of committing a fraud upon the plaintiff and others who might afterwards, in investigating the value of said notes and security, believe the transactions represented by said deeds and notes to be bona fide, when in truth and in fact said property was never sold to Maginnis nor to Miller for any sum; that defendant caused the trust deed to be made in such a manner that it would appear to be given upon the said entire premises known as 188 East Monroe street, Chicago, as a security for $75,000, when in fact the only interest said defendant or Maginnis or Miller had in said premises was a leasehold which defendant well knew to be entirely worthless; that defendant obtained an abstract showing the trust deed securing said notes, and placed the notes on the market in Chicago for sale. The plaintiff avers that subsequently she applied to a broker in Chicago to secure for her an investment, and was thereupon shown the abstract above mentioned, showing that the property in question had been sold by the defendant, through Maginnis, to Miller, and that the Chicago Title & Trust Company was the trustee named in the trust deed for $75,000 given by Miller to secure the notes above mentioned, and that she inferred therefrom that the amount stated in the deeds as purchase price was correct; that upon examining the trust deed she was made to believe that one-fourth of the purchase money had been paid, and therefore concluded the premises were worth $100,000, and that the trust deed was ample security to any party owning the notes; that thereupon plaintiff was shown four of the $1,000 notes, one of them being as follows:

‘$1,000. Chicago, Illinois, August 6, 1897. Fifteen months after date, for value received, I promise to pay to the order of myself the sum of $1,000 at the office of Chicago Title and Trust Company, Chicago, with interest thereon at the rate of six per cent. per annum. This note is secured by a trust deed to Chicago Title and Trust Company, trustee, of even date herewith, on seven-story and basement building, No. 188 East Monroe street, city of Chicago, county of Cook and state of Illinois, and is to bear interest at the rate of seven per cent. per annum after maturity. Charles Z. Miller. Trust No. ___. Loan No. ___.’

Written across the left-hand end was the following: ‘Chicago Title and Trust Company, 100 Washington street, Title and Trust Building, Chicago, Ill.’ It was indorsed on the back, as follows:

‘For and in consideration of the interest being paid in full the time is extended to May 1, A. D. 1899. Charles Z. Miller.

‘Trustee's Certificate. This is to certify that this note is one of the following eighty-three notes for the aggregate amount of $75,000: Eleven notes for $500 each, ten notes for $750 each, sixty-two notes for $1,000 each, secured by trust deed to Chicago Title and Trust Company, trustee, recorded in recorder's office of Cook county, Ill., as Doc. No. 2,586,840. Chicago Title and Trust Co., by Wm. C. Niblack, Secy.’

And plaintiff avers that, relying on the truth of the statement in the deeds and trust deed and the statement and representations appearing upon the said notes, she purchased four of the notes, paying therefor $4,000; that afterwards she learned that the pretended sales by the defendant to Maginnis and by the latter to Miller were bogus transactions, and that the trust deed was without consideration, and that all this had been done for the purpose of placing upon the market the fraudulent and valueless notes; that the notes are without value; that the leasehold interest of the defendant...