Williams v. Rhodes

• Decision Date: 31 January 1876
• Citation: 81 Ill. 571,1876 WL 10050
• Parties: ADELE WILLIAMSv.DANIEL P. RHODES et al.
• Court: Illinois Supreme Court

81 Ill. 571

1876 WL 10050 (Ill.)

ADELE WILLIAMS

v.DANIEL P. RHODES et al.

Supreme Court of Illinois.

January Term, 1876.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Cook county.

This was a bill in equity, by Adele Williams, against Daniel P. Rhodes, Thomas Dobbins, Richard Gregg, Robert Williams, Robert M. and Stephen A. Douglas, to set aside a sale of certain real estate made by Rhodes, as executor of the last will of the late Stephen A. Douglas. The cause was heard upon bill, answers of the several defendants, replication thereto and proofs. The court below dismissed the bill, and the complainant appealed.

Messrs. MCDAID, WILSON & PICHER, Mr. M. W. FULLER, and Mr. MAT. H. CARPENTER, for the appellant.

Messrs. MCCAGG & CULVER, for the appellees; Mr. JOHN N. JEWETT, for appellee Gregg; Messrs. HARDING, MCCOY & PRATT, and Mr. CHARLES H. MORSE, for appellee Dobbins.

Mr. JUSTICE SCHOLFIELD delivered the opinion of the Court:

On the 26th day of September, 1864, Rhodes, as executor of the last will and testament of Stephen A. Douglas, deceased, sold, at public auction, certain real estate to Dobbins. The sale was authorized by decree of the circuit court of Cook county, and no question arises as to the regularity, in form, of the sale. On the 6th day of January, 1865, the complainant, who was the widow of Douglas, and devisee under his will of one-half of his property, as well as guardian of his children, conveyed, by deed of quitclaim, to Dobbins, all her interest in the property purchased by him at the executor's sale.

Complainant claims that the purchase by Dobbins was, in fact, not for himself alone, but for himself, Rhodes and Gregg--each being interested therein to the extent of one-third; that she was ignorant of this fact when she executed her deed of quitclaim to Dobbins, and only learned it recently before filing her bill. She asks that Dobbins, Rhodes and Gregg be decreed to be trustees, holding one-half of the property so purchased, as trustees, for her use; that they account for the profits of such as has been sold, and that they convey to her the legal title in the undivided one-half of the residue.

The decree in favor of Robert M. and Stephen A. Douglas (the co-devisees of the complainant), under their cross-bill, is not before us, and the conclusion we have arrived at in nowise affects the merits of that decree.

The charge is made that Rhodes has been guilty of both actual and constructive fraud, and the questions thus raised will be first considered.

In support of the charge of actual fraud, it is claimed Rhodes sold certain portions of the property en masse, instead of by lots, into which it had been previously sub-divided; that he sold the property at a ruinous sacrifice; that he sold unincumbered property, when there was no necessity that it should be sold, to raise money to pay debts; that he and Dobbins induced complainant to execute a quitclaim deed, without disclosing what interest she then had in the property that would pass by the deed, by false representations, etc., and finally, that he has rendered false accounts of his administration of the estate.

We are not satisfied, from the evidence, that complainant has suffered any injury from the sale of the property en masse, since it does not appear that it would have sold for any more, in the aggregate, had it been offered in separate lots. The objection, at most, is such as can only be availed of in apt time by having the sale set aside, and is considered as waived by unreasonable delay. It might, indeed, be a circumstance, in connection with others, proper to be considered as tending to show a fraudulent design to waste the estate, but we do not, in the present instance, regard it as of controling significance in that respect.

The most valuable of the property was known as “Oakenwald and University subdivisions.” It had been mortgaged by Douglas, in his lifetime, to James R. Smith, of Connecticut. He foreclosed his mortgage subsequent to the death of Douglas, and, at a master's sale on the 21st day of November, 1863, purchased the property; so there were two months, lacking five days only, after the executor's sale, within which the purchaser could redeem. The amount actually paid, in redeeming from the sale to Smith, on the 21st day of November, 1864, was $92,664, which, we assume, it was necessary should be paid to effect a redemption. The property was, also, otherwise incumbered by a tax sale, and by a claim asserted in favor of one Mrs. Russell, and which has since been the subject of litigation--so far, however, resulting against the validity of the claim.

Dobbins' bid on the “Oakenwald” property was $13,000, and on the “University” property, two hundred and some odd dollars, and by his agreement with Rhodes, made prior to the sale, he was compelled to, and did, pay an additional sum sufficient to make the amount paid by him for the property $25,000, in addition to the amount necessary to redeem from Smith.

So far as we have discovered, but two witnesses express the opinion that the sum paid by Dobbins was not a reasonable estimate for the value of the property, at the time, encumbered as it was. These are N. P. Iglehart and James R. Smith.

Iglehart had been, previously, at his own request, appointed agent for complainant, in regard to the property. What was the precise extent of the authority conferred upon him in that behalf, does not appear, nor is it important here. At the instance of Rhodes, he prepared maps of the property, and made estimates of value, to induce persons to purchase. The estimates made by him aggregated $300,000, and, in his evidence, he says, in his opinion, they were reasonable. They are, however, subject to the very important qualification that the lots were to be “ judiciously sold, within five years.” To test the wisdom of his estimates, and they were based on that hypothesis, it was essential that money should be raised to relieve the property of the liens upon it; and he says, “I did not think it worth much if liens could not be raised-- thought it likely it would be swept off by the liens.” And in a letter written by him to Rhodes, under date of October 24, 1863, he uses this language: “Now, my idea is, for you to get an order of sale at once, and sell all the right there is in all the pieces of property. They would not bring much, but in Woods' case and James R. Smith, etc., I would give a few dollars for them to hold just for the benefit of widow and children.”

The order was obtained as suggested, the property sold, and Mr. Iglehart was at the sale, and purchased some property, but he did not, whatever the actuating motive may have been, deem it advisable to exceed Dobbins' bid for this property. The objection to his estimates is thus manifest--they rest upon an impracticable basis. If the estate had been possessed of the money necessary to relieve the property from the liens, which could have been devoted to that purpose, there would have been no necessity nor excuse for the sale by the executor. The fact that there was no money with which to redeem from the incumbrances, rendered the sale at once necessary--and it had to be sold with reference to existing incumbrances, and the condition of the market as it then was, and not disincumbered, and when, in the next five years, there should be the best market for such property.

Smith thinks the amount Dobbins bid was greatly less than the value of the property; but there are some circumstances which materially weaken the effect of his judgment. He was not a resident of Chicago, and was only advised of the value of property by inquiries that he made of others. The evidence shows the sale was extensively advertised, and strong personal appeals had been made to capitalists dealing in such property, and those who had been personal friends of Douglas, to be present and bid at the sale. If his judgment is accurate, it would seem that there ought to have been found some one who would have exceeded Dobbins' bid. He professed to have been a friend of Douglas in his lifetime, and to have been anxious to benefit his wife and children, and he thinks this may have had influence with him (he thinking Dobbins' bidding was for their benefit), in preventing his bidding what he otherwise would. This is hardly consistent with the fact testified to by Rhodes, and not contradicted, that Rhodes offered him $5000, to extend the time for the payment of the money secured by his mortgage for two years, which he declined, but proceeded to foreclose at a period when, as shown by the evidence, it was exceedingly difficult, if not impossible, to effect advantageous sales of such property; or with the fact, testified to by himself, that he did, for some time, bid on the property beyond the amount of his claim; nor with the fact, testified to by Meeker, that he (Smith) wanted Rhodes to stop the sale and agree upon a price,--offering $5000 beyond the amount due him on his mortgage.

David A. Gage, a witness for complainant, resident in and familiar with the prices of real estate at that time in Chicago, says he had been applied to to take an interest in Dobbins' purchase, and he uses this language in regard to it as a speculation: “It was a thing in the future; if a man had money to invest, and faith in Chicago, I thought it might be a big thing, but I did not think there was a great amount of money in it immediately. Real estate was dull at the time; it was hard to get money--to make a sale prior to that time.” And, again, he says: “The same amount of money invested in Chicago, anywhere, at these prices, would have realized as much as in this. I don't believe you could find many parties to give more for it at that time.”

Farwell, likewise a witness for complainant, says he was also applied to, to take an interest in Dobbins' purchase, and he declined, because he regarded it, as he phrases it, “a long winded speculation.”

John Forsythe, a capitalist and speculator, was at...