Union Mut. Life Ins. Co. v. University of Chicago
| Decision Date | 23 March 1881 |
| Citation | 6 F. 443 |
| Parties | UNION MUTUAL LIFE INSURANCE CO. v. THE UNIVERSITY OF CHICAGO and others. |
| Court | U.S. District Court — Northern District of Illinois |
Leonard Swett, E. R. Bliss, and J. L. High, for complainant.
Charles A. Gregory, for the University of Chicago.
Decker Douglas & Kistler, for the Douglas heirs.
In 1856, Stephen A. Douglas was the owner of a tract of land in the south part of the city, which he proposed to convey to certain parties or to a corporation for an institution of learning. A contract was made between him and Dr. Burroughs who represented the institution, on the second day of April 1856. This conveyance was to be made on certain conditions which were expressed in the contract, among which were that there should be a building erected on the property, and that a certain amount of money should be contributed. On November 10, 1850, it appears that Dr. Burroughs ascertained that he was not able to comply with the conditions of the grant, and accordingly application was made to Mr. Douglas for the purpose of obtaining an extension of the time, during which certain things were to be done,-- for instance, the laying of the foundation of the university,-- and accordingly Mr. Douglas then made a memorandum by which he extended the time for laying the foundation of the university until the first day of May, and for expending the first sum of $25,000 until the first day of October, 1857. All the other conditions annexed to the grant were to remain in full force. This clause terminated the memorandum of agreement which was at that time made: 'This extension of time is granted on the condition and with the understanding that the title of said land shall forever remain in said university, for the purposes expressed in said agreement, and that no part of the same shall be ever sold or alienated, or used for any other purpose whatever. ' Dr. Burroughs transferred all interest that he had in this contract, and in this memorandum, to the trustees of the University of Chicago; and on the thirtieth day of January, 1857, the legislature of this state passed an act incorporating the university, and on August 13, 1858, Mr. Douglas conveyed the land, which was the subject of the contract between him and Dr. Burroughs, to the board of trustees of the University of Chicago absolutely. There was no condition or qualification named in the deed such as is contained in the articles of agreement made between him and Dr. Burroughs. The Chicago University took possession of the property, a building has been constructed upon it, and the institution has been carried o, with more or less success ever since.
February 8, 1876, the university executed a mortgage or deed of trust to the plaintiff in this case, the Union Mutual Life Insurance Company, to secure the sum of $150,000. These are all the facts necessary to refer to before mentioning what has taken place in the courts.
On the eighteenth of February last a bill was filed in the circuit court of Cook county by Mr. Mills, the state's attorney of the county, who appears on behalf of the state; by Carter H. Harrison, mayor of the city, and ex officio one of the regents of the university, and by Isaac N. Arnold, also a regent of the university, for the purpose of declaring that the mortgage or deed of trust which was executed by the board of trustees to the plaintiff in this case was inoperative, on the ground, I infer, of the clause contained in the memorandum of Mr. Douglas of November 10, 1856, which has already been referred to. The prayer of the bill is that Levi D. Boone, the trustee in the deed which was executed by the board of trustees for the benefit of the plaintiff in this case, the University of Chicago, and John C. Burroughs, and the board of regents, who are made parties defendant, may be required to make full and direct answer to the same, etc. The bill asks that Boone and the Mutual Life Insurance Company may be perpetually restrained from attempting to foreclose the mortgage, and that the said trust deed or mortgage may be set aside and declared void as against the said University of Chicago, as a cloud on its title, and that the said deed may be delivered up to be cancelled.
On the same day, the eighteenth day of February last, the Union Mutual Life Insurance Company filed a bill in this court to foreclose the mortgage or deed of trust, claiming that default had occurred in the payment of the interest, and that the principal and interest were due, and that they had a right to foreclose the mortgage; claiming also that the university had failed in performing many of its contracts about keeping the property insured, etc. That bil...
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