Spies v. De Mayo

• Decision Date: 22 January 1947
• Docket Number: No. 29804.,29804.
• Citation: 72 N.E.2d 316,396 Ill. 255
• Parties: SPIES v. DE MAYO et al. SAME v. DRESSOR.
• Court: Illinois Supreme Court

396 Ill. 255

72 N.E.2d 316

SPIES

v.DE MAYO et al.

SAME

v.DRESSOR.

No. 29804.

Supreme Court of Illinois.

Jan. 22, 1947.

Appeal from Circuit Court, Bond County; Ralph L. Maxwell, judge.

Suit by Albert N. Spies against Frank De Mayo and others to recover damages for reasonable value of oil produced from an oil well on a tract of land, wherein defendants Samuel J. Dressor and others filed counterclaims. From a decree the plaintiff and others appeal, and a motion was made to dismiss the appeal.

Motion denied and decree affirmed.

M. J. Brown, of Hillsboro, and Herbert W. Dey, of Litchfield, for appellant Albert N. Spies.

Calvin & Kimbrell, of Kansas City, Mo., for appellants Frank DeMayo et al.

Glen B. Wilson and Robert F. Smith, both of Greenville, for appellees.

WILSON, Justice.

A decree of the circuit court of Bond county adjudged a warranty deed, dated July 9, 1924, from Albert N. Spies and his wife, Isadore, to Samuel J. Dressor an absolute conveyance of the property and not a mortgage, reformed the deed to include a tract, four by nine rods, and determined the respective rights of several parties to $1127.64, representing the proceeds of the sale of 1252.92 barrels of oil produced from an oil well on the small stirp. From this decree, Spies prosecutes a direct appeal. Five defendants have joined in the appeal and filed a separate brief relating to one branch of the case.

From the pleadings and the evidence it appears that, on January 28, 1920, Albert N. Spies purchased approximately 134 acres of land in Bond county from Henry Otto for $8000. He paid $4000 in cash and borrowed another $4000, securing his indebtedness by a mortgage on the farm. Thereafter, he borrowed $4000 from the Federal Land Bank of St. Louis, this indebtedness being secured by a mortgage on the farm, and, from the proceeds, fully paid his original mortgage debt. Without narrating details, Spies found himself in serious financial difficulties in the summer of 1924. On July 9, 1924, he owed G. W. Merry, familiarly referred to as ‘Pud’ or ‘Pude,’ approximately $3600, evidenced by a promissory note signed by Spies. Merry was demanding better security. Spies owed $2800 to the Bradford National Bank of Greenville, represented by notes for $2300 and $500. At this time, Spies was in default on a quarterly installment of principal on his debt to the Federal Land Bank. He also owed lesser sums to other persons. During this period of financial stress, a grand jury investigation involving a forgery charge against Spies was in progress. No indictment was returned against him. In addition to the farm property, Spies owned personal property worth about $1800. Placing a generousvaluation of $8000 on the farm, his assets were insufficient to meet his obligations and, indeed, he was in arrears in payments on each of the loans described. At this juncture, on July 8, 1924, Spies, accompanied by Herman Riedemann, an officer of the bank, repaired to the home of Samuel J. Dressor, seeking the latter's financial assistance. A conference followed, the participants being Dressor and his wife, Christiana, a sister of Spies, Riedemann, Spies and his wife, and his attorney, the professed purpose being to persuade Dressor to come to his brother-in-law's financial rescue. There was much discussion and many conferences of two or more of the persons thus far named. The net result was that Riedemann prepared a warranty deed conveying the farm to Dressor. Riedemann apparently did not have in his possession the correct legal description of the land plaintiff then owned. The small strip, four by nine rods, comprising 7/32 of an acre, was omitted from the description of the property. The next day, July 9, a justice of the peace, Lafeyette Busby, took the deed to Spies. He and his wife executed the deed and, also, a chattel mortgage note for $2300 secured by a chattel mortgage on personal property belonging to Spies, consisting of live stock, farm equipment, growing crops, household furnishings, and 10,000 feet of hard lumber. Several promissory notes were signed at this time. It appears that, on July 8, 1924, Dressor, Spies and the latter's wife, executed a note payable to the order of the Bradford National Bank for $2300, due 180 days after date and that, on the day named, a credit of $500 was entered on the note, the payment being made by Dressor. A second note, dated July 8, 1924, for $500, payable to the order of the bank, was signed by Spies and his father, Charles Spies. A sale of the property described in the chattel mortgage took place on October 6, 1924, and, from the proceeds of the sale, amounting to $1814,07, $1000 was applied as a credit on the chattel mortgage note by Dressor. The balance of the proceeds of the sale was applied to expenses of the sale and attorney's fees. Dressor also paid $1000 to the Bradford National Bank on October 6, 1924, and this amount was credited on the note. Possession of the farm was given to Dressor shortly after the chattel mortgage foreclosure sale. Dressor, together with his family, occupied the farm as its owner, paid all taxes, made contracts with tenants, and executed oil-and-gas leases. On January 5, 1925, the note for $500, signed by plaintiff and his father, Charles Spies, was combined with the balance on the $2300 note, and a renewal note for $1300, payable 180 days after date, was executed by plaintiff, his wife and Dressor. When this note became due on July 8, 1925, Dressor and his wife renewed it but Spies did not sign the renewal note. In due course, Dressor paid this note in full. From the foregoing, it appears that the notes to the Bradford bank originally totaling $2800 were satisfied by Dressor paying $1800 out of his own funds, and applying $1000 from the chattel mortgage sale. Plaintiff personally made no payments on these notes. It further appears that on September 16, 1924, Dressor joined with Spies, his wife, his father, and four others in signing a note payable to the order of G. W. Merry for $3637.18, and that, subsequently, Dressor paid about $1200 on this note. There is no competent evidence in the record that Dressor was repaid this $1200, either in whole or in part. In addition, Dressor assumed the Federal Land Bank mortgage indebtedness, paid all interest thereon, and satisfied taxes and insurance requirements until March 8, 1941, when he sold the land to his son, Sherman S. Dressor.

The evidence warrants the statement that there was no discussion with respect to the legal description of the property incident to the execution of the deed. Spies testified, ‘I knew I was signing a deed,’ and that he ‘sure’ thought it was on his farm. He also knew that the small tract, four by nine rods, was a part of the farm. Isadore McCullah (Spies's wife in 1924) testified to the same effect, expressing her understanding that the farm was ‘to be turned over to Dressors.’ Spies did not assert any right of dominion over the property until shortly before commencing this litigation on June 10, 1942. Indeed, the evidence discloses that he had not been on the farm until after filing the complaint. Distance was not a deterrent as he lived nearby and knew that an oil well was being drilled on the property. During this long interval, he never talked with Dressor concerning the matter of redeeming the property. As he puts it, he did not discuss the deed during this time, did not claim it was a mortgage, never offered to pay him (Dressor) any money nor talked with him about redeeming and, further, at no time, told anyone about the deed being a mortgage. When asked if the first time he ever claimed the deed to be a mortgage in equity was in the complaint filed in this action, Spies replied in the negative. To the further query, ‘Did you claim it before that time?’ he answered, ‘Yes, in my own mind. You don't have to claim it to anybody else.’ He testified further that while the well was being drilled he did not make it known that he had any interest in the property and made no objection to anyone drilling on his land.

Between the execution of the deed in July, 1924, and the hearing commencing in November, 1944, Dressor's wife, with whom he consulted before entering into the challenged transaction, died. Riedemann is now deceased, as is the justice of the peace who took the deed to Spies and his wife for their signatures and acknowledgment. The agent who acted for Merry, and Merry himself, have both died, and Spies's father, a cosigner on at least two notes, is also now deceased. Of those present and involved in the negotiations, Dressor, eighty-one years of age when he testified, his son, Sherman, who manages his business affairs, Spies and his former wife, are the only persons remaining who can throw any light upon the disposition of plaintiff's financial troubles in the summer of 1924. Sherman Dressor testified that his father's hearing was impaired, that he was nervous and ‘you might say his memory is gone.’ Sherman Dressor was a boy sixteen years of age in 1924. Isadore McCullah, wife of Spies on July 9, 1924, testified that her recollection of the transaction was ‘dim.’

In the interim, on August 11, 1937, Dressor and his wife executed an oil-and-gas lease to Frank DeMayo covering the entire farm, including the four-by-nine-rod tract. On January 24, 1938, Dressor and his wife sold and conveyed by mineral deed to Emanuel J. Coyle an undivided one-half interest in and to the oil, gas and other minerals underlying the entire farm. Coyle, in turn, conveyed to William J. Conners and Raymond Moore. On August 19, 1939, DeMayo released of record the oil-and-gas lease which he had obtained from Dressor and, on September 7, 1939, Dressor and his wife executed on oil-and-gas lease covering the entire farm to H. McClure. This last lease was subsequent to the date on which Coyle had acquired a one-half interest in the oil and gas underlying the farm, but the lease was not signed by Coyle. The lease to McClure was, in...