Neagle v. Mcmullen

• Decision Date: 03 April 1929
• Docket Number: No. 18476.,18476.
• Citation: 334 Ill. 168,165 N.E. 605
• Parties: NEAGLE et al. v. McMULLEN et al.
• Court: Illinois Supreme Court

334 Ill. 168

165 N.E. 605

NEAGLE et al.

v.McMULLEN et al.

No. 18476.

Supreme Court of Illinois.

Feb. 20, 1929.

Rehearing Denied April 3, 1929.

Commissioners' Opinion.

Suit by Julia Neagle and others against Elizabeth Neagle to establish a constructive trust in certain real estate, in which Mary A. McMullen, personally and as executrix of the will of Elizabeth Neagle, deceased, and others were substituted as defendants after Elizabeth Neagle's death. From a decree dismissing the bill, complainants appeal.

Affirmed.Appeal from Circuit Court, Cook County; Ira Ryner, Judge.

George E. Sankstone, George F. Ort, and Edward H. S. Martin, all of Chicago, for appellants.

Thomas J. Young and William H. Holly, both of Chicago, for appellees.

PARTLOW, C.

Appellants, Julia Neagle, Mary Manning, and Agnes Carroll, who are sisters, filed their bill in the circuit court of Cook county against their sister-in-law, Elizabeth Neagle, to establish a constructive trust in certain real estate at the corner of Halsted and Polk streets, in the city of Chicago.Upon issue being joined, the cause was referred to a master to take the evidence and report his conclusions. After she had testified, but before the final determination of the case, Elizabeth Neagle died, and appellees Mary A. McMullen, personally and as executrix of the will of Elizabeth, and Alice Atkinson, Agnes A. Ducey, and William T. McMullen, were substituted as defendants. The master found that Elizabeth paid $20,500 for the property, which was valued at $25,000; that she had no actual notice of the alleged trust, but that she had constructive notice thereof through her attorney, Frank P. Reynolds; that she was equitably vested with an indefeasible title to 82 per cent. of the property, and the other 18 per cent, was impressed with a trust in favor of appellants. Exceptions to the report were sustained, a decree was entered, dismissing the bill for want of equity, and an appeal has been prosecuted to this court.

The questions for determination are: (1) Was a trust created in John F. Neagle in the property in question under a deed to him from his father, Francis C. Neagle, dated March 6, 1895? (2) If such a trust was created by said deed, did it continue to exist and did Elizabeth Neagle acquire title to the property subject to it and with notice of its existence? (3) Were appellants guilty of such laches as barred a recovery under their bill?

The evidence shows that Francis C. Neagle died testate in Cook county on July 20, 1895, leaving as his only heirs at law his widow, Johanna Neagle, three daughters, who are the three appellants, and two sons, John F. and Frank H. Neagle. The widow and Frank died intestate in 1899, leaving appellants and John as their only heirs at law. Prior to his death Francis C. Neagle was the owner of the real estate in question, subject to two mortgages on separate parts thereof, one for $9,000 and the other for $6,000. On February 9, 1895, he made a will, in which he devised to John in fee a piece of real estate not in controversy. He devised the real estate in question to John as trustee, to hold for 21 years after his death, when it was to become the property of appellants. The trustee was to collect the rents, pay expenses, and use such part of the income as might be necessary for the support of the widow, appellants and Frank. On the same day the will was executed the testator executed a quitclaim deed, conveying to John the real estate devised to him in fee by the will. On March 6, 1895, the testator conveyed the real estate in question to John, without reservations or conditions in the deed. This deed is the basis of appellants' claim in this case.

The testator and his sons had been engaged in general contracting in Chicago under the firm name of F. C. Neagle & Son Company. On March 8, 1895, this business was incorporated, all of the stock being owned by the father and his sons. The evidence shows that the firm and corporation were financially involved and several suits were pending against them. After the death of the testator the will was filed for probate. The inventory showed $537.75 of personal estate and no real estate. Claims were allowed amounting to $5,293.91, which were not paid. On March 6, 1896, John conveyed the real estate in question to the corporation for a stated consideration of $20,000, together with the real estate which he acquired in fee on February 9, 1895, from his father, the consideration being stated as $5,000. Foreclosure suits were filed on the two mortgages. John was made a defendant in each, and was represented by Frank P. Reynolds, his solicitor. Appellants were not defendants, and did not appear in the cases. There was a sale under the $9,000 mortgage to the complainants in that case for $10,000, with a deficiency of $498.60. The certificate was assigned to Reynolds and he secured a deed on April 25, 1901. Under the $6,000 mortgage there was a sale to complainants in that case for $7,400, with a deficiency of $301.50. A master's deed was issued to the complainants on March 23, 1901, and there was a subsequent conveyance of this property to Reynolds on April 20, 1901, for a stated consideration of $6,500.

Reynolds had been attorney for the Neagle family for a number of years. He had represented Elizabeth Neagle just prior to her marriage to John. Elizabeth was the widow of Eugene Keogh, who died May 23, 1888. She married John on February 12, 1901. She was the owner of one-sixth of an estate valued at $500,000, which she inherited from her father. She was introduced to John by Reynolds. She testified that a few days before her marriage she went to the office of Reynolds by appointment with John, their offices being together. Reynolds told her she had some money in the bank which he could invest for her, and that he had a good investment at the corner of Polk and Halsted streets. Later John came in and said it was a good investment. She decided she would purchase the property. She testified that a few days afterwards she was married, and on her wedding day, at the depot, shortly before taking the train, she delivered a check for $10,000 either to John or Reynolds. She could not recall upon what bank it was drawn, but it was either on the Graham & Sons Bank or the Merchants' Loan & Trust Company. As further consideration for the purchase, on April 9, 1901, she conveyed to Reynolds a house and lot on Green street, in Chicago, which she testified was worth $3,500. On February 7, 1901, she received $9,426 from the clerk of the circuit court, through her attorney, Reynolds, by virtue of a court order entered just prior thereto. Reynolds, in consideration for the assignment of the certificate and the making of the deed to the property to him, paid part cash and conveyed the Green street property for $4,500. Afterwards he executed two trust deeds on the property in question to the Merchants' Loan & Trust Company, totaling $7,000. On December 15, 1902, he conveyed the real estate to Elizabeth for a stated consideration of $25,000, subject to the $7,000 trust deeds, which she assumed and agreed to pay.

There is evidence tending to show, that immediately after the marriage of John F. Neagle and Elizabeth Keogh, he and his sister Julia, one of the appellants, assumed the management and control of all of Elizabeth's real estate and business affairs, including her bank account. Julia collected a part of the rents, not only from the Halsted street property, but from all of the property belonging to Elizabeth. Elizabeth signed checks, notes, leases, and mortgages at the dictation of her husband. She put mortgages on her property, and she never received the proceeds. From 1901 to 1911 the average rental from the property was $590 per month, out of which Julia claims John paid her and her sister Agnes about $65 a month. From 1911 to 1918 Julia collected rents ranging from $250 to $590 a month. She claims she retained for her sister and herself from $75 to $100 a month, and at the direction of John deposited the balance in the name of Elizabeth. John and his wife lived in Chicago until 1911, when they moved to Florida, where they lived until the death of John, on April 5, 1922.

J. J. Sankstone, the notary public who acknowledged the warranty deed of March 6, 1895, from Francis C. to John F. Neagle for the property in controversy, testified that Francis was ill in bed at his home on Park avenue, in Chicago, at the time the deed was executed; that John said: ‘Father, I have brought Mr. Sankstone. I had a deed prepared to the Halsted and Polk street property at your suggestion, to avoid probating this property-put the title in me. I will hold it for the girls, as you requested.’ Mrs. Johanna Neagle said: ‘That would be a good suggestion.’ Frank said: ‘Now, John, of course, you have had a good deal of my support, and I have taken care of you pretty well. Now this property I intend should go to my children. [mentioning the three girls and Frank]. Mother will have the home here.’ The father handed the deed to John and said: ‘I know you will take care of it.’ The family lived on the premises until a home was built on Park avenue. They lived on Park avenue until the death of the testator. When foreclosure proceedings were instituted against the Park avenue property the family moved elsewhere.

In corroboration of the testimony of Sankstone, evidence was offered of conversations between Francis and John, in which the father, some time after the date of the deed, is alleged to have stated that he had arranged so that his wife and children would be taken care of out of the Halsted street property, and John replied that the income from that property would be enough, and he would take care of them. Daniel S. Ellsworth testified that he talked with John many times during a period of about 12 years, and John always told him the income from the property was for his sisters, and they did not care to sell the property. Upon...