Towle v. Ambs.

• Decision Date: 19 January 1888
• Citation: 123 Ill. 410,14 N.E. 689
• Parties: TOWLE et al. v. AMBS.
• Court: Illinois Supreme Court

123 Ill. 410

14 N.E. 689

TOWLE et al.

v.AMBS.

Supreme Court of Illinois.

January 19, 1888.

Appeal from circuit court, Cook county; C. EPLER, Judge.

Frederick Ambs, complainant, filed a bill against Marcus M. Towle and W. H. Gostlin, defendants, impleaded, etc., to set aside certain deeds made by Towle, and compel a conveyance to complainant. Decree for complainant, and defendants appeal.

SHELDON, C. J., and SHOPE, J., dissenting.

Alonzo Stephens

and McCagg & Culver, for appellants.

John Woodbridge and Francis Lackner, for appellee.

MAGRUDER, J.

Stated generally, this is a bill filed by appellee, as cestui que trust, against the appellants, for the purpose of setting aside, on the ground of fraud, a certain sale made by the appellant Marcus M. Towle, as trustee, and also for the purpose of compelling the conveyance to appellee by appellants, or some of them, of certain lands alleged to have been transferred by Towle and his grantees in violation of the trust. Towle held the title to the land in trust under an arrangement by which he was to sell it, and, after reimbursing himself for advances of money made by him, was to divide the proceeds of sale equally between himself and appellee. The circuit court found that the disposition of the property by Towle was fraudulent as against appellee, and decreed that the transfers made by Towle and by his grantee should be set aside, and that all the land, except a small portion which had been conveyed to innocent purchasers, should be reconveyed to appellee. It was also decreed that a certain amount found to be due from appellee upon an account stated should be paid into court for the benefit of appellants as their interests should appear, and that the trust should cease, and the interest of appellant Towle in the land so ordered to be reconveyed to appellee should no longer exist. The decree so entered is brought before us for review by appeal from the circuit court of Cook county.

Stated more in detail, the facts out of which the contention arises are as follows: Prior to July 1, 1879, the appellee had been the owner of an undivided one-half of a tract of 84 acres in Cook county, situated near the Indiana state line, and adjoining the town of Hammond. The other undivided half of the tract was owned by the appellants Godfrey Snydacker, and Bertha Snydacker, his wife. Appellee had borrowed about $4,000 from Snydacker Bros., and, to secure the same, had executed a trust deed to Moses Snydacker upon his undivided 42 acres. This trust deed was foreclosed, and the property was sold by the trustee, Moses Snydacker, on July 1, 1879, to Louis Frank. The trustee's deed to Frank was recorded May 6, 1880. Appellee had no means. Appellant, Towle, was a prominent and wealthy business man of Hammond, a thriving manufacturing town in Indiana, bordering on the Illinois state line, and says that, besides being in the real-estate business, he was president of the First National Bank of Hammond, vice-president of the Tuthill Spring Company, proprietor of the Chicago Carriage Company, president of the Chicago Steel Manufacturing Company, president of the Western Salt Association, and president of S. D. Latham & Co., a corporation engaged in the construction of railroads. It also appears from the evidence that appellant Towle was a stockholder and director in the corporation known as George H. Hammond & Co., engaged in the packing business at Hammond, and having a packing-house on the state line, and that he continued to be a director therein until 1885, and was the superintendent of George H. Hammond & Co. until the fall of 1883. Appellee was desirous of setting aside the trustee's sale of his land, and of recovering back the title from Frank. Towle agreed to help him. Accordingly, on February 3, 1880, a written agreement was entered into between appellee and Towle, by the terms of which, after reciting the trust deed and trustee's sale above mentioned, ‘it is agreed that the said Towle shall investigate the said title of the said Ambs; and if the said Towle, after such investigation, should decide that the interest of the said Ambs in said land is in such shape that the incumbrances thereon can be cleared off, and that the title to said land can be perfected, and if, after such investigation, the said Towle should conclude to clear off such incumbrances, and perrect said title, then, in that event, the said Ambs agrees and binds himself that he will convey, or cause to be conveyed, to said Towle, his (the said Ambs') interest in said land. Whereupon the said Towle shall proceed to clear the said land of incumbrances, and perfect the title thereto, and sell, dispose, or make such use of such land as he (said Towle) may see proper; but, in case of said conveyance, the said Towle shall take out of the first proceeds of said land all the money paid or spent by him in clearing off said incumbrances, and in perfecting said title, and in making, and causing to be made, all investigations of said title, and all his other expenses in connection with the handling of said land, and, after all such payments by the said Towle, the residue of the proceeds of said land shall be equally divided between the said parties.’ This contract was recorded in the recorder's office of Cook county on October 20, 1880. On April 10, 1880, Towle, having decided that the title to the land could be perfected, executed under his hand and seal to appellee a bond, the condition of which is as follows: ‘The condition of the above obligation is such that, whereas, the said Frederick Ambs has this day sold to Marcus M. Towle, the above obligor, the undivided one-half part of the north half of the south-east fractional quarter, and the north-east fractional quarter, (lying south of the Grand Calumet river,) of section 8, town 36 north, range 15 east, of the 3d P. M., in Cook county, Illinois, which said sale is made subject to one certain trust deed to Moses Snydacker, which said Marcus M. Towle will endeavor to pay and redeem from any sale which may have been made under said trust deed, and, if such redemption is made, said Marcus M. Towle will hold the afore-described land, and will make a sale thereof so soon as he shall, in his judgment and discretion, deem best, and will account to and pay over to the said Frederick Ambs an undivided one-half of the proceeds of the sale of the before-mentioned land, after deducting therefrom all and every part of the money paid by said Marcus M. Towle for the redemption of said land from the aforesaid trust deed, with the interest thereon from the date of payment until the repayment thereof by such sale, at the rate of eight per cent. per annum; it being hereby expressly agreed and understood that this bond is only for an accounting, and that it is not intended hereby to convey, or agree to convey, and interest whatever in the within described land.’ On the same day, April 10, 1880, appellee executed a deed to Towle conveying to him the undivided half of the 84-acre tract for an expressed consideration of $4,000; which deed was recorded June 1, 1880. On June 8, 1880, Towle filed a bill against Frank and the Snydackers to set aside the sale under the trust deed, making Ambs a co-complainant with himself in the bill. The suit so begun was settled before it came to a hearing. The settlement took place on July 22, 1881. By the terms of it, Towle paid Frank or the Snydackers $7,000, and received from Frank a deed to the premises. Thus, on July 22, 1881, by the deeds from appellee and from Frank, towle had become the holder of a clear, unincumbered title to the property in question, and appellee owed him at that date, for advances made, the $7,000 paid to Snydacker, and about $129 laid out for taxes, costs, etc. After this date it was the duty of Towle to sell the land, and, after deducting his advances, and 8 per cent. interest thereon, to pay over to appellee one-half of so much of the proceeds of the sale as should remain. After holding the title for over three years, Towle and his wife made a deed of the land on October 2, 1884, to one Charles C. Smith, which deed was recorded on October 6, 1884. The consideration named in the deed was $14,000. Smith says that he paid $2,000, in cash, assumed a mortgage of $5,000 which Towle had given on the premises to Snydacker, and executed a mortgage to Towle to secure $7,000 in notes; three of the notes being each for $2,000, and payable in one, two, and three years, respectively, and one of them for $1,000, payable in four years. The mortgage for $7,000 was recorded on October 6, 1884. On November 19, 1884, Smith and wife executed a deed conveying the land to William H. Gostlin for an expressed consideration of $14,500; which deed was recorded November 24, 1884. Gostlin says that he assumed the two mortgages above named of $5,000 and $7,000, respectively, and paid Smith $500 in cash, and gave him his note for $2,000, payable in 60 days. On November 25, 1884, six days after Gostlin obtained the title, he and Snydacker, who owned the other undivided half of the 80-acre tract, sold five acres to George H. Hammond & Co. for $7,500, or at the rate of $1,500 per acre. In May, 1885, Gostlin and Snydacker sold one acre and a half to Mayer and Dracket for $3,800, or at the rate of $2,500 per acre. The decree of the circuit court, rendered on March 29, 1887, recognizes the validity of the two sales last named, amounting to six and one-half acres out of the whole tract, or three and one-quarter acres out of the land in dispute.

In the accounting between appellee and appellants, appellee was given credit for $3,750,-one-half of the $7,500,-and for $1,900,-one-half of the $3,800; and these credits, with interest thereon, were applied in appellee's favor in ascertaining the amount decreed to be paid into court for appellants. So that, as we understand the matter, neither party questions, upon this appeal, the bona fides of the sales by...