Spitzer v. Williams , 98 Ill. App. 146 ( 1901 )

Mr. Justice Waterman

delivered the opinion of the court.

Upon the making of the contract of sale between Earle and Jernberg, the property thereby agreed to be sold became in equity the property of Jernberg, with power to dispose of or incumber it as he might have done with land to which he held the legal title, subject to the rights of Earle, the vendor, under the contract. And so, too, upon the execution of the contract between Jernberg and Edward Williams, the property included therein, namely lots 9 and 10 of block 7, became equitably the property of Williams, subject to the rights of Jernberg, under that contract, and also to the rights of Earle, under his contract with Jernberg. Williams being in the open, notorious possession of the property so purchased by him from Jernberg, Earle was chargeable with notice of the rights which Williams acquired by virtue of his contract with Jernberg. Jernberg and Earle could not thereafter, by any contract between them made, vary or affect the rights which Williams had acquired by his contract, but Williams’ rights were subject to the rights which Earle had under his contract with Jernberg. "Williams not only knew, by reason of his having been, prior to the making of his contract with Jernberg, a tenant occupying lot 9, as the tenant of Earle, but was chargeable with notice of the fact that the record title of said lots was in Earle and that he was the owner thereof. Such being the case, Earle and Jernberg entered into an arrangement and executed new paper, by which the form, and the form only, of the agreement between them was changed. The deed made by Earle to Jernberg, and the trust deed executed by Jernberg to secure the unpaid purchase money of said premises, in no way or wise changed or affected the rights or obligations of Williams. Mor did such papers, upon their face, pretend to deprive Jernberg of any right which he possessed or add in the least to the burden resting upon him or the obligations which he had to discharge in order to obtain a complete and absolute title to the property, lots 9 and 10, which he had purchased from Jernberg. Such being the case, neither Williams nor those who claim under him can be heard in a court of equity to insist that by the mere change in the form of the security held by Earle, in respect to his contract of sale to Jernberg, was he (Williams) or the land purchased by him, discharged from obligations resting upon him or it under the purchase by Jernberg from Earle of lots 9 and 10.

The mortgage given by Jernberg to Earle, executed at the same time as the deed by Earle to Jernberg, was a transaction which did not for an instant vest in Jernberg any title to the premises divested of the lien which Earle had upon the premises for the payment of the purchase money contracted to be paid by Jernberg under the original agreement made between them. A purchase-money mortgage executed simultaneously with the deed of the property excludes any claim of lien arising under the mortgagor and no statement is necessary in order to effect this. In this case, the seizure of Jernberg being a merely transitory one, no lien or claim acquired under Jernberg could or can intervene as against the rights of Earle under the mortgage given to him, said mortgage being but a mere change of the form of security which Earle held under the original contract made between him and Jernberg. Hot even a right of dower or homestead rights, most jealously guarded by the courts, can intervene in such a case, to take precedence over the rights of a mortgagee by virtue of his contract and mortgage. Curtis v. Root, 20 Ill. 54-58; Flower v. Ellwood, 66 Ill. 438, 446; Shaver v. Williams, 87 Ill. 469-471; Roberts v. McNeal, 80 Ill. App. 536; Campbell v. Trotter, 100 Ill. 281-283; Roberts v. Doan, 180 Ill. 187; Bolles v. Carli, 12 Minn. 113; Morris v. Pate, 31 Mo. 315-317; Jones on Mtgs., 5th Ed., Vol. 1, Secs. 466 and 470-473; Am. & Eng. Ency. of Law, Wol. 19, page 583.

In the present case, Williams had paid to Jernberg at the time of the execution of the deed and mortgage but $250; the remaining $300 was paid by Williams to Jernberg after the execution of the deed and mortgage heretofore mentioned. In this case, appellees are claiming that although they had full notice of the rights of Earle in and to the premises under consideration, and knew that they could not acquire title to said premises, except upon performance of the obligation of Jernberg to Earle, under the contract originally made, that the premises they purchased are entirely rele'ased from the lien which Earle had thereon, by a mere change in the form of the security which Earle had, notwithstanding such change of form in no way or wise affected the right of appellants or Edward Williams, under whom they claim, and this claim is made in a court of equity.

It is sufficient to say that the claim of appellees, in this regard, has no foundation. Coming to this conclusion, we have not thought it necessary to comment upon the fact that no exceptions were filed to the master’s report finding the equities of the case with the complainants in the bill, and that the premises in dispute, lots 9 and 10, should be sold to satisfy the lien of Earle thereon.

The decree of the Circuit Court is reversed and the cause remanded with directions to enter a decree that the said premises, lots 9 and 10, in block 7, be sold to satisfy the deficiency decree entered by the Circuit Court in said cause on the 12th day of January, A. D. 1900. Reversed and remanded with directions.