Smith v. Heirs of James Jackson.

• Decision Date: 31 January 1875
• Citation: 76 Ill. 254,1875 WL 8184
• Parties: ALBERT SMITHv.HEIRS OF JAMES JACKSON.
• Court: Illinois Supreme Court

76 Ill. 254

1875 WL 8184 (Ill.)

ALBERT SMITH

v.HEIRS OF JAMES JACKSON.

Supreme Court of Illinois.

January Term, 1875.

APPEAL from the Circuit Court of Logan county; the Hon. LYMAN LACEY, Judge, presiding.

April 15, 1870, James Jackson, being under indictment in the Logan county circuit court for an alleged criminal offense, and required to give bail in $1000, being the owner of the quarter section of land situate in that county, and having retained the law firm of Wyatt & Hackney to defend him, entered into an arrangement with his counsel, or Hackney, whereby the latter should become bail, and Jackson was to secure him as such bail, and the firm, for their costs and fees in his defense, by mortgage upon said land. Accordingly, Hackney had him execute a deed, in form absolute, of the land, reciting a consideration of $3000, he (Hackney) giving a formal defeasance upon a separate paper. Hackney filed the deed for record on the day of its date, being that above mentioned. The defeasance was not filed for record, but Jackson remained in possession of the land by his tenants, who continued afterwards paying rent to him. July 20, 1870, there having been no breach of condition, and Jackson being in possession by his tenants, in fact paying rent to him, Hackney and wife executed a deed of the same land to Smith, who had never seen it, who bought without making any inquiry, and, as he claims, paid Hackney for the land the sum of $3500, that being the consideration recited in his deed. Jackson having appeared to the indictment, saved his bail harmless. The prosecution having been dismissed by the court, and Wyatt & Hackney paid their costs and charges by Jackson, in full, he brought this bill in the court aforesaid to have said deeds set aside, on the ground that his conveyance to Hackney was but a mortgage, and had been fully satisfied; that, although the defeasance was not recorded, yet the circumstance of his being in possession by tenants, and Smith having bought without seeing the property or making inquiry, was sufficient to charge him with notice of complainant's equities; also on the ground of fraud. Hackney absconded, but he and his wife were made parties defendant with Smith-- were brought in by publication and their default entered. Smith answered. Before hearing, Jackson died, and his administrator and heirs were made parties by supplemental bill. Upon the hearing on pleadings and proofs, a decree passed, declaring the mortgage satisfied and canceled, and setting aside the conveyance to Smith. He brings the record to this court by appeal.

Messrs. HAY, GREENE & LITTLER, for the appellant.

Messrs. BEASON & BLINN, for the appellees. Mr. JUSTICE MCALLISTER delivered the opinion of the Court:

The only question in this case is. whether the circumstances in evidence were sufficient to warrant the court below in holding that Smith, the purchaser from Hackney, was affected with constructive notice of Jackson's equities.

The deed from Jackson to Hackney was, in form, an absolute warranty deed, and by the latter filed for record on the day of its execution. It was, however, given under an arrangement for a mortgage, and a formal defeasance was executed by the grantee. The transaction being between attorney and client, and the former having, as the evidence clearly shows, conceived the design of cheating his client out of the property at an early stage of the business, it was put in a form to enable him to accomplish that result, and the defeasance was not filed for record.

It is a justifiable inference that a party thus dealing with his confidential legal adviser acts upon his advice. But Jackson remained in possession by his tenants and was in the receipt of rents from them at the time of Hackney's conveyance to Smith. As between Jackson, the grantor, and Hackney, the grantee, and between the grantor and Smith, the alleged bona fide purchaser, if he is affected with constructive notice, Jackson's possession at the time of the conveyance to Smith was that of a mortgagor before condition broken, and was consistent with the actual state of the title. But counsel for appellant say, that when their client purchased, the records showed an absolute warranty deed from Jackson to Hackney, from whom he purchased; that possession will be considered as following ownership; that, although, by the common law, the vendor must, himself, have obtained possession by livery of seizin before he could pass any interest in land, yet, by force of our statute, livery of seizin is dispensed with, and by the Statute of Uses the possession is transferred in all cases to the use of the cestui que use, who may, if there is no adverse possession, make a lease for years, or absolute conveyance, without actual entry.

They further insist, that it follows, from this view, the possession of the occupants was consistently and apparently that of Hackney; that, in order to affect their client with constructive notice, it must be adverse in the sense required to ripen into a bar under the Statute of Limitations.

It is unquestionably true, that a vendor who has not obtained possession by livery of seizin may, if there is no adverse possession, make a lease for years, sell and convey without entry; and it is a legal inference that the ownership carries with it the possession. But does such legal presumption ever arise except in cases where the land is vacant and unoccupied? Or, in other words, can it arise where another is in the actual occupation?

It must be borne in mind, that there is a distinction between actual possession and the right of possession, and...