The PhŒnix Mut. Life Ins. Co. v. Batchen

• Decision Date: 31 March 1880
• Citation: 6 Bradw. 621,6 Ill.App. 621
• Parties: THE PHŒNIX MUTUAL LIFE INSURANCE COMPANYv.JAMES BATCHEN ET AL.
• Court: United States Appellate Court of Illinois

6 Ill.App. 621

6 Bradw. 621

THE PHŒNIX MUTUAL LIFE INSURANCE COMPANY

v.JAMES BATCHEN ET AL.

Appellate Court of Illinois, First District.

March Term, 1880.

OPINION TEXT STARTS HERE

APPEAL from the Superior Court of Cook county; the Hon. S. M. MOORE, Judge, presiding. Opinion filed August 5, 1880.

The record in this case shows the institution of several suits for the establishment and foreclosure of mechanics' liens upon the same property, their subsequent consolidation, and a final hearing of the consolidated cause on pleadings and proofs, resulting in a decree in favor of the petitioners. The condition of the title to the property in dispute, as shown by the record, is substantially as follows:

On the 31st day of July, 1875, Mary K. Barnes was the owner in fee, subject to the incumbrance of a deed of trust in favor of one Dickerman for $16,000, of certain premises situated on the corner of Wabash avenue and Thirty-fourth street, Chicago, known as lots 1 to 14, block 8, Barnes' addition, etc. Of these lots those numbered from 1 to 11 front on Wabash avenue, and the residue on Thirty-fourth street. On the day above named, J. Spencer Barnes, the husband of said Mary K. Barnes, entered into a written contract on behalf of his wife, which contract seems to have been subsequently carried out by her, to sell and convey said premises to John C. McCord, clear of incumbrances, for the sum of $40,000, of which sum $1,000 was to be paid in cash at the date of the contract, and $6,000 on delivery of the deed, and the remaining $33,000 was to be secured by eleven deeds of trust, viz: one for the sum of $3,000 on each of the eleven lots fronting on Wabash avenue. The contract further provided that said McCord should, within nine months from that date, erect on said eleven lots a block of eleven houses, costing not less that $50,000, and for that purpose he was authorized to place on said lots, incumbrances to the amount of $45,000, viz: $4,000 each on lots 1 to 10, and $5,000 on lot 11, and it was agreed that such incumbrances should have priority over said eleven trust deeds for said $33,000 of the purchase money.

The conveyance under this contract, instead of being made to John C. McCord, was, at his request, made to his brother, Joseph T. McCord. So far as the eleven lots on Wabash avenue are concerned, it is admitted that said Joseph T. McCord took the title merely as trustee for his brother. As to the character in which he took the title to the three lots on Thirty-fourth street the evidence is conflicting, there being testimony on the one hand tending to show that he acquired said title in his own right, and on the other, that as to those lots also he was a mere trustee for John C. McCord.

For the purpose of raising a fund to be expended in erecting the buildings on Wabash avenue, said John C. McCord, obtained from the Phœnix Mutual Life Insurance Company of Hartford, Conn., a loan of $45,000. For this loan said John C. and Joseph T. McCord executed their eleven joint bonds, bearing date March 13, 1875, payable to the Phœnix Mutual Life Insurance Company, ten of said bonds being for the sum of $4,000 each, and the remaining bond being for the sum of $5,000, and to secure said bonds, said Joseph T. McCord and wife executed to Lyman Baird, as trustee, eleven deeds of trust on said eleven lots fronting on Wabash avenue, the ten of said deeds of trust securing said ten $4,000 bonds, being on said lots numbered from 1 to 10, and the one securing said 5,000 bond being on said lot 11. All of said deeds of trust bore date August 13, 1875, and were recorded September 13, 1875. The eleven deeds of trust to secure the $33,000 of purchase-money were also executed by said Joseph T. McCord and wife, to John W. Marsh, as trustee, bearing date August 13, 1875, and recorded September 14, 1875, the last mentioned trust deeds being by their terms made subject to those given to secure the loan from the Phœnix Mutual Life Insurance Company.

The deed from Mary K. Barnes and husband to Joseph T. McCord, conveying the fourteen lots, is shown to have been recorded September 30, 1875, but there seems to be no evidence in the record as to its precise date. It is proved, however, that it was not actually executed until some time after September 14th, the date of the recording of the latter of the two series of trust deeds. The first installment of the purchase-money, viz: $1,000, is shown to have been paid down when the contract was signed, and the $6,000 payment was made at or about the time of the execution of the deed.

On the 11th day of November, 1875, said Mary K. Barnes, in order to induce said Dickerman to release his incumbrance on said property, executed to him for the indebtedness thereby secured, deeds of trust on certain other property, and as a further security assigned and delivered to him five of said eleven $3,000 deeds of trust, viz: those covering lots 7, 8, 9, 10 and 11. These deeds of trust were held by Dickerman at the time of the final hearing of the cause.

During the progress of the litigation, the Third National Bank of Chicago, and Huntington W. Jackson, the receiver of said bank, appeared and filed their answer, claiming that on the first day of February, 1876, and before the filing of any of the petitions herein, said Mary K. Barnes, for a valuable consideration, assigned and delivered to said bank the remaining six of said $3,000 deeds of trust, viz: those covering lots 1 to 6, and that said bank and its receiver had ever since continued to be the owner and holder thereof. On the hearing before the master, said deeds of trust and the promissory notes accompanying the same, were produced by the receiver, but there is no evidence beyond the mere possession of said securities at that time, fixing the date of the assignment thereof to the bank.

On the 28th day of December, 1875, John C. McCord obtained from the National Fire Insurance Company of Hartford, Conn., a further loan of $9,000. For this loan said John C. and Joseph T. McCord, on the same day executed their three joint bonds for $3,000 each, payable to Francis Bradley, and to secure said bonds said Joseph T. McCord and wife also executed to Lyman Baird, as trustee, three several deeds of trust on said lots 12, 13 and 14, which deeds of trust were recorded on said 28th day of December, 1875. Said bonds were thereupon endorsed by said Bradley, and together with said deeds of trust, delivered to said National Fire Insurance Company.

Shortly after the execution of the contract of July 31, 1875, said John C. McCord proceeded to the erection of a block of eleven houses on lots 1 to 11, all under one roof, and sometime afterwards he also commenced the erection of another block of three houses on lots 12, 13 and 14, also under one roof. According to the testimony of John C. McCord, this second block was erected by him, not for himself, but for his brother, and under a contract with him. On this subject, however, the evidence is conflicting.

Sometime in the summer of 1875, the precise date not being fixed by the evidence, Johnson Shaul, one of the petitioners, entered into a verbal contract with said McCord to furnish a quantity of brick at a stipulated price, to be used in erecting said buildings. No time of payment was fixed, but there is evidence tending to show that it was the usual custom and course of dealing on the part of said Shaul to collect all bills for brick delivered during any month at the expiration of such month, and that such custom was known to McCord at the time the contract was made Shaul commenced delivering brick under this contract about September 1, 1875, and finished sometime in the following November. A further contract for an additional quantity of brick was then made, which was immediately filled, the delivery being completed December 2, 1875. The brick delivered under the first contract were principally used in the Wabash avenue building, a small portion only being used in the Thirty-fourth street building. Those delivered on the second contract were used in the last named building.

The evidence shows that some time prior to these contracts said Shaul and one John B. Legnard were co-partners in business under the firm name of Legnard & Shaul, but that said Legnard had retired from the firm, the business being thereafter carried on by Shaul alone, the firm name, however, being retained. Legnard was thereupon employed in the business by Shaul as salesman, on a salary, and was so employed at the time said contracts were made and said brick delivered.

A considerable balance of the money due on these contracts remaining unpaid, a petition for a mechanic's lien on both buildings was filed May 22, 1879, by John B. Legnard and Johnson Shaul, as co-partners under the firm name of Legnard & Shaul. February 13, 1878, this petition was amended by striking out the name of Legnard, and by so changing its phraseology as to make it a petition on behalf of Shaul alone. It also appears that during the pendency of the litigation and before final hearing, the entire claim of said Shaul in suit was by him sold and assigned to one D. J. Hubbard, who, at the time of the final decree, continued to be the owner of the same.

The decree establishes a lien in favor of Shaul, for the use of said Hubbard, on each of said buildings for the balance due on the brick used therein respectively, and declares said liens, as to both pieces of property, superior, both as to the lots and buildings, to the several trust deeds thereon.

On the 14th day of September, 1875, the firm of Homan, Brown & Co., consisting of Joseph Homan, David S. Brown and William Tothill, entered in a written contract with said John C. McCord, by which they agreed to furnish for said buildings certain door and window frames, doors, blinds, stairs, mouldings, mill-work and various other materials specified in the contract, for which said McCord agreed to pay them the sum of $12,000, of which sum $5,000...