Mcclelland v. Bartlett

• Decision Date: 31 May 1883
• Citation: 13 Bradw. 236,13 Ill.App. 236
• Parties: JOHN M. MCCLELLANDv.ICHABOD S. BARTLETT ET AL.
• Court: United States Appellate Court of Illinois

13 Ill.App. 236

13 Bradw. 236

JOHN M. MCCLELLAND

v.ICHABOD S. BARTLETT ET AL.

Appellate Court of Illinois, Second District.

May Term, 1883.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Kane county; the Hon. C. W. UPTON, Judge, presiding. Opinion filed July 27, 1883.

Mr. R. N. BOTSFORD, for appellant; that where the proof shows an agent's acts to be general, the law will infer a general power to act in relation to the subject-matter of the agency, cited Hurd v. Marple, 2 Bradwell, 402; Hodgen v. Kief, 63 Ill. 146; 2 Kent's Commentaries, 620; Doan v. Duncan, 17 Ill. 274; N. S. Life Ins. Co. v. The Advance Co. 80 Ill. 549; Mason v. Bauman, 62 Ill. 76; McGregor v. McDevitt, 64 Ill. 261.

When the maker of a note pays to one not the holder without requiring the production of the note, he pays at his peril: Holmes v. Fields, 12 Ill. 429; Myers v. Moore, 28 Ill. 428; Coffman v. Bank of Ky. 41 Miss. 217; Elgin v. Hill, 27 Cal. 373; Story on Promissory Notes, §§ 375, 382.

Where a mortgage is on the public records, all parties dealing with the property are bound to take notice: Morrison v. Brown, 83 Ill. 562; Brown v. Welch, 18 Ill. 347.

Where a mortgage secures negotiable notes and the notes are assigned before maturity, to a bona fide indorsee, payment by the maker to a person not the holder is not a good payment: Ogle v. Turpin, 102 Ill. 148; Keohane v. Smith, 97 Ill. 156.

The former opinion of this court is res adjudicata: Ogle v. Turpin, 8 Bradwell, 454.

Mr. J. W. RANSTEAD, for appellees; that authority to receive payment of notes, does not give power to assign them, cited Ryhiner v. Feickert, 92 Ill. 311; Thompson v. Elliott, 73 Ill. 221; Taylor v. Atchison, 54 Ill. 200; Padfield v. Green, 85 Ill. 529; Ames v. Drew, 31 N. H. 475; Story on Agency, §§ 96, 98, 126.

Whatever puts a party on inquiry, amounts, in judgment of law, to notice, provided such inquiry becomes a duty: C. R. I. & P. R. R. Co. v. Kennedy, 70 Ill. 350; Harper v. Ely, 56 Ill. 179; Henneberry v. Morse, 56 Ill. 394; Babcock v. Lisk, 57 Ill. 327; Flint v. Lewis, 61 Ill. 299.

Any defense which could be availing to appellee Bartlett as against the payee or previous holder of these notes would be equally so as against the complainant, as assignee: Olds v. Cummings, 31 Ill. 189; Haskell v. Brown, 65 Ill. 29; Bryant v. Vix, 83 Ill. 12; Melendy v. Keen, 89 Ill. 404; White v. Sutherland, 64 Ill. 186: Walker v. Dement, 42 Ill. 277; Fortier v. Darst, 31 Ill. 215; Sumner v. Waugh, 56 Ill. 531; Keohane v. Smith, 97 Ill. 156; Silverman v. Bullock, 98 Ill. 11; Ogle v. Turpin, 102 Ill. 148.

A fraudulent vendor may convey a better title than he has, and his grantee will be affected by the fraud of the grantor, only where by the exercise of ordinary prudence and caution, he could have ascertained the fact of such fraud: Morrison v. Kelly, 22 Ill. 625; Hunter v. Stoneburner, 92 Ill. 75; Prevo v. Walters, 4 Scam. 35.

LACEY, P. J.

On October 21, 1870, appellee Bartlett purchased the ten acres of real estate in question from E. S. Wilcox and wife taking a warranty deed and giving back a mortgage to secure the unpaid purchase money, one thousand dollars having been paid in cash. There were two $500 notes due in one and two years, and two $800 notes due in two and three years from date, bearing the same date with the deed, all drawing ten per cent. interest. The deed was filed for record October 26, and the mortgage November 15, 1870. The appellant became as he claims, the bona fide purchaser of the two last unpaid notes from J. S. Wilcox the indorser of the notes from E. S. Wilcox and has filed this bill in equity to foreclose the mortgage on a portion of the real estate described in the mortgage. After the purchase Bartlett divided the land into 40 town lots, a part of the city of Elgin. After subdivision and before 1873, Bartlett sold lots one, two, three, four, five, six and seven, and in the spring of 1873 entered into a contract with one James Coleman, a lawyer, selling him an interest in the lots unsold, and gave him a written agreement of sale which is lost. As Coleman testifies he agreed to pay for Bartlett the two $800 notes in question in this suit with interest, and to pay him directly $700 on or before October 25, 1873. The title still remained and was to remain in Bartlett, and he was to pay the notes from the proceeds of the sale of the lots. By an arrangement there was to be a public sale of the lots by Coleman, and after the sale Bartlett was to make out the deeds and leave them with one Kribs, a lawyer, to deliver to the purchasers upon their complying with the terms of the sale, one third cash in hand and the balance on time; the notes and mortgages for balance were to run to Bartlett, and Kribs was to pay off the two $800 notes and the $700 to Bartlett and balance of the unsold lots to be Coleman's. Coleman and John S. Wilcox not being on good terms, the former suggested Kribs to do the business and Bartlett consented. The latter then saw Wilcox and told him the arrangement, and that Kribs would pay the notes from the sales and Wilcox consented to this arrangement.

J. S. Wilcox had purchased the mortgage and notes about two years prior to that time, and E. S. Wilcox had indorsed the notes to him in blank and assigned the mortgage to him, and gave him at the same time a blank release of the mortgage, to enable J. S. Wilcox to satisfy the mortgage when it should be paid off.

We are inclined to think that the release was blank in respect to the description of the land, that having been left blank in order that the land might be described in whole or in part, as occasion required by the party holding the mortgage, enabling him to release a portion or all the mortgaged premises. This, however, is disputed by counsel for appellee, who claim that the release was one in full and completely filled up, and left with Kribs by J. S. Wilcox, to be put on record or delivered to interested parties when and as soon as the two $800 notes in question were fully paid, and that this release was held by Kribs after he had received a sufficient amount of money from the proceeds of the sale of lots and notes taken for the deferred payments of the purchase money of the lots. But after a careful perusal of all the evidence we are inclined to think that if J. S. Wilcox ever delivered any release to Kribs it was a blank one. He testifies that he does not remember that he had a release but he thinks he had; that his recollection is not distinct; that he left the notes and mortgage with Kribs, but was not sure about the release and assignment; that he had no distinct recollection about them. E. S. Wilcox testifies positively about the matter and states that he made the assignment of the notes to his brother, and made a blank release; that he made another release at the request of Kribs who enclosed to him a blank claiming the original had been lost or mislaid, and made still another release under the same circumstances. There are two releases executed by E. S. Wilcox in evidence. One dated October 10, 1873, releasing lots 15, 21, 22, 23, 31, 32, 33, 36, 37, 17 and 19, and filed for record November 10, 1873, also another one, executed by the same party releasing lots 10, 12, 14 and 16, recorded February 2, 1874; this last one was made at the special demand of James Lynd who received a deed from Kribs for those lots dated January 8, 1874, and recorded July 2, 1874. The circumstances of the execution of this last named release is told by W. H. Wing, an attorney, who examined the title for Lynd, who says he made the negotiation with Bartlett and Kribs was there. “They had a release from E. S. Wilcox in Kribs' office, a long form and some lots filled in it. They proposed to have the Lynd lots put in that release of this mortgage and I objected.” The witness identified the release first above described as the one he saw. The witness then had a separate release got from E. S. Wilcox which is the one last above described. It is true that Bartlett testifies that he saw a release for the whole ten acres of land in Kribs' office between the 10th and 15th of October, 1873, and asked Kribs to have it recorded. Coleman also testifies that he also saw a release for all the land by E. S. Wilcox in Kribs' possession with the two notes and mortgage; that he never saw a partial release of the property before the commencement of this suit. Yet Bartlett testified as reported in the certificate of evidence filed herein and used on the former trial of this case and in evidence here as follows: “Kribs said he had a release of the mortgage from Wilcox (release shown witness). I think that it is the release he had. I understood it to be a release of all the property; asked him to have it recorded. I don't remember that there was any particular description in the release; it was a short one; it was signed by E. S. Wilcox, think it was a short form; saw it between the 10th and 15th of October, 1873,” Coleman also testified in his former examination in regard to the release: “I saw release of mortgage in Kribs' hand about October 10, 1873. The abstract showed the Wilcox mortgage but the release was with Kribs.”

On cross-examination he testified: “There was a release in Kribs' possession; will not swear it was not one of the releases in evidence; it was not the understanding that a release should be prepared in blank to put lots in as they were sold. I will not swear that there was not such an arrangement.” On re-examination he said: “Kribs had one release; may have had two.” Weeghtman said, “think Coleman showed him a release of the lots in connection with other property adjoining, I had nothing to do with Kribs.”

This was all the evidence on the subject of the release and it seems to us that it can not be considered that it has been formally established that any release other than the ones in evidence was ever in the hands of Kribs. Kribs had been sent to the penitentiary for his crime in...