Steinmetz v. Kern
| Decision Date | 18 February 1941 |
| Docket Number | No. 25966.,25966. |
| Citation | 32 N.E.2d 151,375 Ill. 616 |
| Parties | STEINMETZ et al. v. KERN. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Superior Court, Cook County; Donald S. McKinlay, judge.
Suit by Katherine Steinmetz and others against John J. Kern, to establish a constructive trust in real estate and for an accounting. From a decree in accordance with the prayer of the complaint defendant appeals, and from an unsatisfactory portion of the decree Katherine Steinmetz cross-appeals.
Decree affirmed in part, reversed in part and remanded with directions.William C. Scherwat, of Chicago, for appellant.
Campbell, Clark & Miller, of Chicago (Glenn G. Paxton, of Chicago, of counsel), for appellee.
The appellee Katherine Steinmetz, filed her complaint in the superior court of Cook county against the appellant, John J. Kern, to establish a constructive trust in certain real estate located in the city of Chicago and for an accounting. The cause was heard before the court and a decree was entered in accordance with the prayer of the complaint. Kern has appealed from that decree and appellee Steinmetz has filed a cross-appeal from that portion of the decree directing that Kern be given credit for the reasonable value of services rendered by him in connection with the transactions which led up to the filing of the complaint.
The pertinent facts are as follows: In 1930, Katherine Steinmetz and her husband purchased a thirteen-apartment building at 1424 Thome avenue in the city of Chicago at a price of approximately $99,000. It was encumbered by a mortgage of $51,500. Steinmetz died in February, 1931, and title then rested in Mrs. Steinmetz, solely, as the surviving joint tenant.
Mrs. Steinmetz was born in Luxemberg, came to America at the age of twenty-two and lived with her husband on a farm in Minnesota for a number of years. That farm was exchanged for greenhouse property in Chicago which was operated by her husband until the apartment building was acquired in 1930. Mrs. Steinmetz never learned to read English and never had any experience in business. She had two daughters, one married and living away from home, the other living with her during all the transactions which led up to this suit. This daughter had no business experience. Kern had acted as broker when the property was purchased by Mrs. Steinmetz and her husband and was thereafter retained by them to collect the rents and manage the property. After the death of Mrs. Steinmetz's husband, Kern continued to act as rental agent and received a commission of three per cent of the rents. A close and friendly relationship developed between the families and, in 1932, Kern with his family, moved into an apartment in the building.
Mrs. Steinmetz testified that after her husband died, Kern told her that he would take care of all her business for her and this statement is corroborated by the subsequent dealings of the parties. In 1932, a suit in foreclosure was started to enforce the lien of a bondholder against the apartment house in question and Kern promised Mrs. Steinmetz that he would take care of the matter and arrange for an extension of time. He did some work on this and continued collecting the rents. He paid Mrs. Steinmetz $50 per month and accumulated the balance until in February, 1936, he had approximately $4,000 belonging to her. On February 14, 1936, action was taken to proceed with the foreclosure. Kern then went to Mrs. Steinmetz and informed her what was going to happen but told her not to worry. A written agreement was entered into between Kern and Mrs. Steinmetz by which she was to give him a one-half interest in the property if he could save it for her by obtaining a new loan and paying off the old one. Pursuant to this agreement she signed a deed conveying a one-half interest to him but this deed was never recorded. The agreement which they signed was subsequently destroyed by him. Kern then bought some of the outstanding bonds with the money he was holding for Mrs. Steinmetz and, as he claims, with some of his own money. These bonds were transferred to an employee in Kern's office and that employee then proceeded with the foreclosure and Kern was appointed receiver. He claimed that these bonds were purchased with the understanding that he was to pay Mrs. Steinmetz off at the rate of $50 per month. This she denied.
On June 11, 1936, a decree of foreclosure was entered and on June 16, 1936, Mrs. Steinmetz signed a deed, at the request of Kern, conveying the property to one of his employees who subsequently conveyed it to one John T. Dieter, an admitted nominee of Kern. Kern claims that the consideration for that deed was that he would allow Mrs. Steinmetz to stay in one of the apartments at the rate of $50 a month until her equity, estimated by him at $500 was exhausted. This also was denied by Mrs. Steinmetz.
Mrs. Steinmetz testified that she did not know what the paper was that she signed and that Kern only told her that it was...
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