Union Mut. Life Ins. Co. v. Kirchoff

• Citation: 133 Ill. 368,27 N.E. 91
• Parties: UNION MUT. LIFE INS. CO. v. KIRCHOFF.
• Decision Date: 12 June 1890
• Court: Illinois Supreme Court

133 Ill. 368

27 N.E. 91

UNION MUT. LIFE INS. CO.

v.KIRCHOFF.¹

Supreme Court of Illinois.

June 12, 1890.

Appeal from appellate court, first district.

Bill by Elizabeth Kirchoff against the Union Mutual Life Insurance Company. The circuit court dismissed the bill for want of equity. The appellate court reversed the decree, and defendant appeals.

Grosscup & Wean, (P. S. Grosscup, of counsel,) for appellant.

W. S. Harbert and Geo. R. Daley, for appellee.

CRAIG, J.

This was a bill in equity, brought by Elizabeth Kirchoff on the 12th day of June, 1882, against the Union Mutual Life Insurance Company, to redeem lots 2 and 4, block 21, in Canal Trustees' subdivision of a certain quarter section of land in Cook county, to which the company acquired title under a quitclaim deed from complainant and her husband, and under certain foreclosure proceedings in which she, her husband, and others were defendants. The record is quite voluminous, but the facts, briefly stated, are substantially as follows: On the 8th day of May, 1871, Julius Kirchoff, complainant's husband, borrowed of the insurance company $60,000, and to secure the payment he and Elizabeth Kirchoff and her mother, Angela Diversey, executed their joint note. Kirchoff and wife executed a deed of trust on all real estate they owned, including the two lots,-their homestead. Mrs. Diversey also executed a deed of trust on lands owned by her to secure the loan. In 1877, default having been made in the payment of the money, negotiations were commenced with a view of a renewal of the loan on long time at a reduced rate of interest. These negotiations did not prove successful, and an effort was then made for a settlement by having the mortgagors surrender all or most of the property in payment of the debt. In the mean time judgment was rendered against Mrs. Diversey on the note by confession, and in July, 1878, bills were instituted in the circuit court of the United States to foreclose the two trust-deeds. In the trust-deed executed by Mrs. Diversey a part of the premises belonging to her was incorrectly described, and in the bill to foreclose the company sought to correct the error. Mrs. Diversey put in an answer, denying any mistake in the description, and set up other matters of defense. On January 1, 1879, Kendall, the attorney of the insurance company in Chicago, wrote the company that in his opinion an offer to Mrs. Diversey to let her retain 40 acres of the land would induce her to give the company a deed of the balance of the property; that Kirchoff would surrender all his property, and make an arrangement to buy back his homestead at a liberal price; but ‘I do not dare to settle with him without settling the whole case, as Mrs. Diversey's matters may be complicated by any settlement with Kirchoff.’ To this the company replied: ‘If settlement can be made of all complications with quitclaims from all parties we will consent to let her keep 40 acres.’ A short time after this-about the 9th day of June, 1879-a settlement was made, and in September, 1879, Mrs. Diversey conveyed to the company all the land named in the trust-deed which she owned, except the 40 acres, and that was released to her. At the same time, complainant and her husband, by quitclaim deed, conveyed to the company all the land named in the trust-deed they had executed to the company. Thus far there seems to be no substantial dispute between the parties, but in reference to what arrangement was made between the complainant and the insurance company under which she quitclaimed all the property described in the deed of trust to the company, and allowed a subsequent decree of foreclosure to be entered, the parties do not agree. The complainantinsists that during the preceding negotiations it was agreed in consideration of her quitclaim deed the appellant would reconvey to her two lots heretofore described, one of which was then occupied as her homestaed, the other cornering upon it; that the price at which the reconveyance should take place was their valuation at a previous appraisement by James H. Rees, namely, $7,500 and $2,500 respectively; and that complainant was to execute in payment therefor her notes for $10,000 extending over a period of 10 years, bearing interest at 6 per cent., and secured by a mortgage upon the two lots. The insurance company, on the contrary, contends that no such agreement was ever concluded; and that, if it was, complainant is not, under all the facts, entitled either to redemption or a decree for specific performance. During the time the negotiations were in progress which resulted in the settlement under consideration Edwin A. Warfield was the financial agent of the Union Mutual Life Insurance Company at Chicago, and Robert B. Kendall was the attorney of the company, in charge of its business. After the settlement had been concluded it turned out that certain incumbrances existed against some of the property which were subsequent to the trust-deed, but which would take priority to the quitclaim deed executed by complainant and her husband. It therefore became necessary, in order to obtain a perfect title, to go on with the foreclosure proceedings, which was done. A decree was rendered, the property was sold, and upon the expiration of the time of redemption a master's deed was executed.

In order to establish an agreement under which the complainant was entitled to redeem, reliance is placed mainly upon the evidence of three witnesses,-Julius Kirchoff, Edwin Warfield, and Robert B. Kendall. The first-named witness testified that he had authority from his wife to settle the matter for her, and in all he did he acted as her agent; that the company filed a bill to foreclose the mortgage in July, 1878. He further testified: ‘About the time the bill was filed to foreclose the trust-deed I made a contract with the defendant looking towards a settlement. They wanted a quitclaim on the consideration of the two lots known as the ‘Homestead,’ and we gave a quitclaim deed in 1879, we agreeing to pay them for the homestead whatever the appraisal should be. The corner lot was appraised at $7,500, and the other at $2,500,-total, $10,000; to be paid in ten years,-$1,000 a year. They agreed to it, and we gave them a quitclaim deed. Some time after that they tried to foreclose. I asked Mr. Warfield what they meant. He said: ‘It is exactly the same as we made the contract, and is all right. It is better to have it foreclosed, to keep the mortgage safe for us.’ I saw Mr. Kendall, the lawyer of the company. He said there were some judgments against that property, and to make it safer they had to foreclose; and that I need not be afraid; it would be all right. They told me they made out the deeds and sent them to their main office. When they came back during that year, they were to be delivered to us on payment of $1,000. It took some time, on account of the foreclosure. It was at six per cent. interest. Mr. Warfield first saw me in relation to getting a quitclaim before the foreclosure proceedings were commenced. We were to relinquish everything except the homestead,-give them a quitclaim and keep the homestead,-the two lots. We were to give a quitclaim deed to everything, including the homestead lots, and redeem the homestead at the appraised value,-$7,500 for one lot, and $2,500 for the other. They were to make a deed out, and send it to the company, and upon its return deliver it to us at any time during the year; and we were to pay $1,000, and $1,000 a year thereafter until $10,000 was paid, with six per cent. interest. I agreed with the company's agent that Mr. Rees should make the appraisal. Warfield, Kendall, and myself went with him. He appraised the corner lot at $7,500, and the other at $2,500; total, $10,000. The terms of payment were ten years' time,-$1,000 the first year, or upon the delivery of the deed, whenever the deed was ready, and $1,000 each year thereafter, until $10,000 had been paid, with six per cent. interest.' Warfield testified: ‘There was an interview at which a proposition was made for the Kirchoffs to make and deliver a quitclaim deed to the company, covering all the property embraced in the trust-deed; the company to reconvey to the Kirchoffs their homestead. I believe the proposition embraced the lot cornering on the homestead. The conveyance to be made at an appraised value to be placed on the property by James H. Rees. The appraisement was made. The terms, as I now remember them, were $1,000 cash on delivery of the deed from the company, and $1,000 a year until the property was paid for, together with interest at 6 per cent. on deferred payments. Subsequently Mr. Kirchoff came with a carriage, and took Mr. Rees, Mr. Kendall, and myself to look at the property, for the purpose of making the valuation. As near as I can remember, the price fixed was $7,500 for the homestead, and $2,500 for the Pine-Street lot,-making $10,000.’ The witness also testified that the proposition came from the president, vice-president, or chairman of the finance committee, while some one of them was in Chicago. He thought Mr. De Witt, president of the company, made it. The witness also testified: ‘Personally, as agent of the company, I did not make the agreement heretofore testified to. What I did was to submit to the Kirchoffs propositions coming from the company.’ Kendall testified that he commenced the foreclosure suit in July, 1878. There had been negotiations before that in regard to...