McCabe v. Hebner

• Decision Date: 27 November 1951
• Docket Number: No. 31953,31953
• Citation: 410 Ill. 557,102 N.E.2d 794
• Parties: McCABE et al. v. HEBNER et al.
• Court: Illinois Supreme Court

Page 794

102 N.E.2d 794

410 Ill. 557

McCABE et al. v. HEBNER et al.

No. 31953.

Supreme Court of Illinois.

Nov. 27, 1951.

Rehearing Denied Jan. 21, 1952.

Paul G. Sullins, of Oak Park, for appellants.

Andrew J. Farrell, of Chicago, for appellees.

MAXWELL, Justice.

This is a suit seeking to impress two lots in the city of Chicago, upon which is located a three-story 21-family apartment building, with a resulting trust. The suit was instituted by plaintifss, Gertrude McCabe and Marion Fitzpatrick, sisters against defendants, Grace Hebner, another sister, and Harry J. Hebner, her husband, and Jack Joseph Ibold, a nephew of the other parties hereto, a son of a predeceased brother. The cause was heard by the master in chancery to whom it was referred, after being brought to issue upon the amended complaint, the amended answer thereto of defendants Grace Hebner and Harry J. Hebner and the separate answer of the defendant Jack Joseph Ibold. The master made his report recommending a decree finding the issue for the defendants Hebner and against the plaintiffs, McCabe and Fitzpatrick, and made no specific finding as to the defendant Ibold, and assessed costs two thirds against the plaintiffs and one third against the defendants. To such report 294 objections were filed, 291 by plaintiffs and 3 by the defendants Hebner, which objections were by the court ordered to stand as exceptions. Plaintiffs were given leave to, and did, file 6 additional exceptions to such report. The court below sustained plaintiffs' exception number 292 by allowing a small reduction in master's fees and defendants' exception number 2 by substituting a finding of fact, overruled all other exceptions of the parties, found the issues against the plaintiffs and in favor of the defendants Hebner and entered a decree dismissing the amended complaint for want of equity. From this decree plaintiffs appeal generally, and the defendants Harry J. Hebner and Grace E. Hebner appeal from that portion assessing one third of the costs against the defendants.

The lots in question, known as the Greenview property, were conveyed to Harry J. Hebner and Grace E. Hebner, as joint tenants, by a quitclaim deed executed and placed in escrow with the Chicago Title and Trust Company on March 16, 1933. After certain objections to the grantors' title had been met to the trust company's satisfaction, the deed was delivered and recorded on May 2, 1934. The defendants Harry J. Hebner and Grace E. Hebner contend that the Greenview property was a gift to them from John J. Mehlem, father of Mrs. Hebner, while the plaintiffs allege that the Hebners took the legal title but that a trust resulted in favor of John J. Mehlem to the entire interest in the property. Mehlem died intestate on May 9, 1945, and plaintiffs claim that they, the defendant Grace E. Hebner and the defendant Ibold are the owners as heirs of Mehlem.

Briefly, the facts leading up to the conveyance are as follows: John J. Mehlem, on March 13, 1930, purchased a $70,000 note secured by a trust deed on the Greenview property, through his attorney, Raymond A. Cavanagh. By January 6, 1933, the note had been defaulted and Mehlem instructed one Charles R. McCabe, husband of the plaintiff Gertrude McCabe, and the defendant Harry. J. Hebner to seek a settlement without foreclosure. As a result of a conference in January, 1933, between McCabe, Hebner, Cavanagh and the owners and mortgagors, a tentative agreement was reached but, when submitted by mortgagors in writing, it was found to be unacceptable. After a further conference, another agreement was prepared and executed on March 16, 1933, by Harry J. Hebner and the owners, whereby $1000 was to be paid for the equity, the note and interest notes secured by the trust deed were to be cancelled and the property was to be conveyed by quitclaim deed to the Hebners. On the same date an additional memorandum of agreement was executed by the Hebners and the owners relating ownership of the notes by the Hebners and providing for their cancellation upon delivery of the deed. On May 2, 1934, the day the transfer was completed, the notes were cancelled and legal title was vested in the Hebners as joint tenants.

John J. Mehlem entered into an unsuccessful marriage in 1927, which resulted in a divorce in 1935. He had moved to the State of Florida, purchased a home there, lived in that State most of the time during, the transactions in question and there died intestate in May, 1945. He had considerable property, the disposition of which may have been a bone of contention between him and his wife. His correspondence with his daughters and their husbands clearly indicates that he was anxious that his wife learn nothing about his business affairs. He showed great affection for, and liberality to, his family, with the exception of the grandson, who had been adopted by the second husband of his deceased son's wife. He made various gifts to Marion Fitzpatrick, including $10,000 toward a home in Glencoe, a $30,000 note upon which she realized $10,000, certain furniture and a car, in addition to smaller gifts to Marion's children. He gave Gertrude McCabe a home in Indiana, a valuable lot in Winnetka and a property in Chicago, the total value of which was between $20,000 and $30,000. He made lesser gifts of substantial value to Grace E. Hebner, beginning in the year 1922.

Mehlem placed great reliance in his sons-in-law, McCabe and Hebner, and they acted as his agents in a number of transactions. It is plain from the record that his great distance from Chicago, the situs of most of his investments, was the primary reason for delegating authority to them. He had a clear grasp of his business affairs and gave minute directions, instructions and advice. In fact, his business judgment seems to have been considerably more acute than that of those who were handling the details for him. He kept up a constant stream of correspondence and a number of his original letters written in longhand between February, 1933, and January, 1940, are in a bold, legible hand and indicate an alert, clear mind.

Plaintiffs devote much argument to the question of the relationship between Mehlem and Hebner, as to whether it was of a confidential or fiduciary nature. This would indicate that they seek a constructive rather than a resulting trust, although plaintiffs' counsel, in an objection to one of the findings in the master's report, stated specifically, 'This is a resulting trust case, not a constructive trust case. Plaintiffs have not pleaded any theory of fraud or undue influence.' The pleadings bear out their statement. While there was a special confidence shown in Hebner, the record shows no domination or influence by him over Mehlem.

Admittedly, the $1000 consideration for the purchase of the equity was paid from the funds of Mehlem, as was the title company's fee. Furthermore, there is no contention in the record that the Hebners bought the property or the note and trust deed. It is evident, therefore, that they either held title for the convenience and benefit of Mehlem, in which event the property was impressed with a resulting trust in favor of Mehlem, or it was a gift to them.

The law with respect to resulting trusts is well settled. A resulting trust does not depend on contract or agreement but is founded on a presumed intent which arises out of the acts of the parties. Tuntland v. Haugen, 399 Ill. 595, 78 N.E.2d 308; Kane v. Johnson, 397 Ill. 112, 73 N.E.2d 321. In its most common application, a resulting trust arises from the fact that one person furnishes the consideration for the purchase of land while the conveyance is taken in the name of another. The burden of proof rests on the parties seeking to establish a resulting trust, and the evidence must be clear, strong, unequivocal, unmistakable and so convincing as to lead to but one conclusion. Houdek v. Ehrenberger, 397 Ill. 62, 72 N.E.2d 837; Jones v. Koepke, 387 Ill. 97, 55 N.E.2d 154; Hille v. Barnes, 399 Ill. 252, 77 N.E.2d 809; Heineman v. Hermann, 385 Ill. 191, 52 N.E.2d 263. Where land is purchased by a husband and title is taken in the name of his wife or child a presumption obtains that the property was conveyed to the wife or child as a gift or advancement. This presumption is not conclusive and may be rebutted by proof, but the burden of proof is upon the party seeking to establish the resulting trust and the...