Carey v. Rauguth , 1898 Ill. App. LEXIS 681 ( 1899 )

Me. Presiding Justice Windes

delivered the opinion of the court.

Appellant contends that the Blettner trust deed should have been declared a first lien, or that, second, he should be substituted to the Young and Murray mortgage to its full ■amount of $4,000, or, third, to the amount of $2,500.

It is not claimed that Mason Bros., or their representative, who did the business of making and closing the loan ■of $4,000 to Rauguth, were, by the public records, charged with constructive notice of the appointment of the receiver for the loan company, and the evidence is clear that they had no actual notice of the receivership.

The only question, then, so far as concerns the Young and Murray mortgage, is, had their agent, who closed the loan and paid the $2,500 to Blettner, knowledge of sufficient ■facts to charge them with the fact that, as to appellant, the Blettner trust deed was fraudulently released.

The statute regarding building and loan associations (Ch. 32, Sec. 87, Hurd) provides that “a borrower may repay a loan at any time,” and makes a building association mortgage or trust deed due at the option of the maker—places it in the same position of an ordinary incumbrance, which •has by its terms matured. The authorities cited in regard to the payment of incumbrances not matured are, therefore^ not applicable. They knew that the records showed due upon the incumbrance $5,000. Rauguth, who had made it, and of all persons should know, assured them there was ■ only $2,500. due on it; their representative went to the office of the company, and there met the vice-president of the company with Rauguth, who assented to Rauguth’s claim that only $2,5,00 was due; the president of the company was absent, the bond and trust deed were in the hands of the vice-president; the representative objected that the release was dated April 10, 1894, instead of about the time of the transaction; this was explained by Rauguth, that the release was made out at that time because he had made an arrangement to pay the bond at that time, and this explanation was assented to by the vice-president. But it is said the evidence shows the original trust deed and bond were not produced, but copies. On this the evidence is conflicting, and we are not prepared to say that it is manifestly against the evidence to have found, as the chancellor must have done, in order to render the decree he did, that the originals were produced by the vice-president and surrendered to Mason Bros.’ representative. We should sustain the decree unless it is manifestly against the evidence, and especially so where the chancellor has heard all the witnesses whose testimony relates to this point. Miltimore v. Ferry, 171 Ill. 219; Delaney v. Delaney, 175 Ill. 199; Ragor v. Brenock, 175 Ill. 494.

The possession of the bond and mortgage by Blettner, the vice-president of the company and the trustee, at the office of the loan company, was sufficient to justify its payment by Mason Bros.’ representative and the taking of the release made by him. Thornton v. Lawther, 169 Ill. 228.

It is claimed that the fact the bond and trust deed were canceled and marked paid, and the release dated so near the making of the trust deed, was sufficient to put Mason Bros.’ representative on inquiry as to the bona fides of the transaction. He did inquire of the very persons who, of all others, in the absence of the president of the company, could give him the information, and acted on the information they gave him. We are of opinion that he did all that a reasonably prudent business man would have done under the same circumstances, and that the decree of the chancellor was right in so far as concerns the Young and Murray mortgage.

That Elizabeth S. Eiversidge is entitled to the full pro*tection of an innocent purchaser for value, and without notice of appellant’s claim, follows without controversy, in view of the statement of facts above made. So far as concerns the Blettner trust deed, it being under the statute payable at any time at the option of the maker, she had a right to rely on the release which was shown by the abstract which her attorney examined. Jummel v. Mann, 80 Ill. App. 288, and cases there cited.

Had the attorney gone to the records to examine, he would have obtained no more information than was given him by the abstract. He was not bound to go to the records, they not being different from the abstract. We think the decree was right as to Mrs. Eiversidge, and it is affirmed.