The Int'l Bank of Chicago v. Bowen

• Decision Date: 30 September 1875
• Citation: 80 Ill. 541,1875 WL 8793
• Parties: THE INTERNATIONAL BANK OF CHICAGOv.JOSEPH H. BOWEN et al.
• Court: Illinois Supreme Court

80 Ill. 541

1875 WL 8793 (Ill.)

THE INTERNATIONAL BANK OF CHICAGO

v.JOSEPH H. BOWEN et al.

Supreme Court of Illinois.

September Term, 1875.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Cook county; the Hon. E. S. WILLIAMS, Judge, presiding.

This was a bill in chancery, by the International Bank of Chicago, against James H. Bowen, Ira Holmes and others, to foreclose a deed of trust. The material facts of the case are stated in the opinion of the court.

Messrs. ROSENTHAL & PENCE, for the appellant.

Mr. JONAS HUTCHINSON, for part of the appellees.

Mr. GEO. W. SMITH, and Mr. CHARLES W. THOMAS, for appellee Pieper.

Mr. JUSTICE SCHOLFIELD delivered the opinion of the Court:

The purpose of this appeal is, to procure the reversal of a decree of the court below refusing to foreclose a certain deed of trust, and dismissing the bill at the complainant's costs.

The instrument, of which foreclosure is prayed, was executed by James H. Bowen to Henry M. Ketchum, as trustee, on the west 53 1/3 acres (or one-third) of the north-west quarter of section 10, township 37 north, range 14 east of the third principal meridian, in Cook county, to secure the payment of two promissory notes for $5000 each, executed by the said Bowen on the 9th day of June, 1871, payable to himself or order, one in one year and the other in two years from date, with interest at eight per cent per annum, and by him indorsed and delivered to Nathaniel F. Moore and James M. Phillips, being for part purchase money of the property described in the deed of trust.

On the 30th day of June, 1871, Benjamin F. Guyton executed a deed of trust to Clinton C. Clark, on the east 106 2/3 acres (or two-thirds) of the same quarter section, to secure certain promissory notes executed by him, payable in installments, in one, two and three years from that date, and amounting, in the aggregate, to $32,100.

On the 22d day of May, 1872, Bowen and Guyton sold and conveyed the entire quarter section to Henry E. Pickett, who assumed the payment of both the Bowen and Guyton notes so respectively secured by deeds of trust. Ira Holmes negotiated the sale, and paid whatever was paid to Bowen at the time; and, although the conveyance was to Pickett, he was, in fact, part owner of the land; and, afterwards, on the 4th day of June, 1872, Pickett and wife conveyed to him the undivided half of the quarter section, and he assumed the payment of $14,250 of the indebtedness so secured by the deeds of trust.

On the last of July or first of August, 1873, Pickett obtained a loan from the complainant, the International Bank of Chicago, of $5000, and pledged the Bowen notes, of which he had obtained possession, as collateral security for its payment; and that debt not having been paid, the present bill is filed to enforce the payment of the Bowen notes, by foreclosing the trust deed, with the view of appropriating the proceeds to the payment of the $5000 loan, and accruing interest, to Pickett, and, also, certain other indebtedness held by the complainant against Pickett, for which, it claims, the Bowen notes were also held as collateral security under a general verbal agreement. Subsequent to the pledging of the Bowen notes, by Pickett, with the complainant, and about the 5th day of August, 1873, Pickett executed ten promissory notes of $5000 each, payable to his own order, with ten per cent interest, payable semiannually, and indorsed by him, and, to secure their payment, executed a deed of trust on the undivided half of the quarter section owned by him and Ira Holmes, as before described, to Joseph Holmes, as trustee, and the notes, thus secured, he negotiated to the Manufacturers' National Bank, of which Ira Holmes was, at the time, president, and Joseph Holmes, cashier. These notes were, pursuant to negotiations previously had, and in view of which they had been taken by the Manufacturers' National Bank, sold to the People's Bank of Belleville, and are now held by the defendant, Fred. H. Pieper, as its representative. The Manufacturers' National Bank guaranteed the notes, for a commission of two per cent, but it has become bankrupt, and Pickett is also bankrupt.

It is claimed by the defendants that the Bowen notes had been paid before they were pledged by Pickett with the International Bank, and that the deed of trust executed by Bowen to Ketchum was thereby released and extinguished.

It appears, from the evidence, that when the Bowen note first due, matured, it was held by the State Savings Institution, and Pickett, not being ready to pay, obtained an extension for one year, by executing to the State Savings Institution his own note for $5000 payable in one year, and leaving the Bowen note as collateral security for its payment. At the end of the year, when his note matured, he gave the State Savings Institution his check for the amount due on the note, on the Manufacturers' National Bank, and directed that the Bowen note, his note and the check, be pinned together and all sent into the clearing house and it would be paid. The direction was observed, and they went through the clearing house to the Manufacturers' National Bank.

The Bowen note last due was presented, at its maturity, to Pickett by Ketchum, the trustee. Pickett drew a check on the Manufacturers' National Bank for the amount due on that note, in favor of Ketchum, and also directed him to pin the note and check, and a release of the deed of trust, together, and send them through the clearing house and it would be paid. This direction was likewise observed, and the note, check, and release of the trust deed, also passed through the clearing house to the Manufacturers' National Bank.

If no other question were presented than whether these facts constituted a payment of the Bowen notes, we should have no difficulty in determining they were paid, and as a necessary consequence, that the deed of trust to Ketchum was extinguished before the deed of trust to Holmes to secure the $50,000 was executed.

But the point is made, by the complainant, that notwithstanding this may have been true in fact, the complainant had no notice of it, and that the parties interested in the payment of the notes, and the release of the deed of trust, by their representations and acts, induced it to believe, and those...