Walker v. Doane

Mr. Justice Bailey

delivered the opinion of the Court:

That this case involves a freehold, within the meaning of the statute fixing and limiting the jurisdiction of the Appellate-Courts, can not admit of serious question. The primary object of the suit was the recovery of a freehold. The original bill was filed by the complainant to obtain her dower in six lots of land in the city of Chicago of which her husband died seized, and dower, being an estate for the life of the tenant,, is a freehold estate. 1 Washb. on Real Prop. (2d ed.) 254; 2 Black. Com. 119, 129. It is true that as to five of the lots the complainant’s right to dower was not Contested, as all the answers admitted her marriage with Martin 0. Walker, the death of said Walker, and his seizin of the six lots during coverture, but as to one of the lots the answers allege an ex-tinguishment of the complainant’s dower by the sale of said lot for the satisfaction of certain mechanics’ liens, and the-decree sustains the averments of the answers in that respect,, and holds that her dower in said lot was thus extinguished. That portion of the decree was assigned for error in the Appellate Court. Not only then was the recovery of a freehold the primary object of the bill, but as to one of the lots the complainant’s right to such estate faas directly put in issue by the pleadings and was contested upon the hearing, and upon that issue the decision of the court was adverse to her, and her appeal to the Appellate Court was prosecuted, in part at least, for the purpose of reversing that decision. It is clear therefore that the Appellate Court had no jurisdiction, and that the appeal to that court was properly dismissed. C., B. & Q. R. R. Co. v. Watson, 105 Ill. 217; Sanford v. Kane, 127 id. 591.

. The record, however, is before us on writ of error to the Superior Court, and in that proceeding various portions of the ■decree of that court are assigned for error. The assignment ■of error to which the arguments of counsel are mainly directed relates to that portion of the decree which makes the dower ■estate of the complainant subject to the Tucker, Brown & Co. ■deed of trust, and holds that the judgment for $92,171.32 recovered by the surviving partners of the firm of Tucker, Brown ■& po. against Thro op and McClelland in the Circuit Court of the United States for the Northern District of Illinois is secured by said deed of trust, and is a lien upon the premises in question superior to the complainant’s right of dower.

The proper solution of the question thus raised must depend, in a very large degree at least, upon the construction to be placed upon the terms of the deed of trust. The circumstances •under which said deed of trust was executed fully appear in the statement which precedes this opinion, but they may be more succinctly stated as follows: Prior to the execution of said deed Walker, Throop, McClelland and others composing their firm, had become liable to Brown, Tucker & Co., as was ■claimed by the last named firm, in a large sum of money, upon the covenants of the lease of the Ohio coal lands, both for the royalties or rents reserved and for damages for a failure to mine the amount of coal stipulated for in the lease. While this liability existed or while it was being incurred, Throop and McClelland assigned their interest in the lease and in their firm to Walker, and Walker and the remaining "members of his firm entered into an agreement with Throop and McClelland to indemnify them against all liability upon the covenants of said lease. Subsequently a suit was brought :in the Circuit Court of Cook county by Tucker, Brown & Co. against Walker, Throop, McClelland and Mullins upon the covenants of said lease, and in that suit a judgment was re■covered against the defendants therein for $119,637 and costs, from which judgment an appeal was taken by said defendants to this court. While said appeal was pending, Walker became -desirous of having his other real estate in Cook county, of which he then seems to have been owning a considerable amount, released from the lien of said judgment; and to obtain said .release, he executed to a trustee, for the benefit of Tucker, .Brown & Co., the said deed of trust. In that instrument it was declared that the premises therein described were eon"veyed to said trustee in trust to secure to the owners of said .judgment, the payment of any execution that might be issued thereon, in case the judgment should be affirmed by this court, .and, in case of the reversal of said judgment, to secure the payment of any judgment that might be thereafter ultimately .rendered in said suit, “or ultimately rendered in any other •suit that may be hereafter brought, and founded on the cove"nants contained in the indenture of demise set forth in the ■pleadings in said suit, and upon which covenants the said suit •or action is founded.” Said judgment pending on appeal in this court was reversed, and the suit in which it was rendered was abandoned, and no further judgment was rendered therein. Walker in the meantime died, and the surviving members of the firm of Tucker, Brown & Co. thereupon brought another suit in the Federal Court upon the covenants of said lease .against Throop, McClelland and Mullins, the surviving members of Walker’s firm, and in that suit the judgment in controversy was recovered.

The contention is, that the last named judgment is neither within the terms nor meaning of the deed of trust, and should therefore be held to be no incumbrance upon the complainant’s-right of dower. The interpretation which the complainant seeks to put upon the above quoted language of the deed of trust is, that the “other suit” referred to must necessarily be-a suit to which Walker or his legal representative is a party, and that the judgment in such suit, in order to be within the-terms of the deed of trust, must be, technically, a judgment-against Walker or his legal representative. It seems very plain to us that this contention can not be sustained. To do-so would manifestly necessitate the interpolation of terms which the parties did not see fit to insert in their deed. It is not provided in the deed that the judgment to be secured should necessarily be a judgment against Walker or his legal representative, so as to be binding, as a judgment, upon him or his estate, the only limitation being, that it should be a judgment, ultimately recovered in the suit then pending or in some suit-to be thereafter brought, founded upon the covenants contained, in the lease. The grantors had an undoubted right to give-their deed of trust as security for such indebtedness as they saw fit to designate, and to prescribe the conditions upon which the security should become operative. We must therefore take-the deed as we find it, and ascertain the nature and description of the indebtedness secured from the language the grantors-have seen fit to employ. By securing the then existing judgment, or in case of its reversal, such judgment as should be ultimately rendered in the same suit, or such judgment as might be ultimately rendered in any other suit founded on the same cause of action, they manifestly secured and intended to secure the cause of action, itself, the security to become available- and enforcible only after its validity and amount should be ultimately established by a judgment in the pending suit, or in some other suit to be thereafter brought founded upon the same cause of action.

As the grantors did not undertake to say who should be parties to the judgment, that was necessarily left to be settled by those rules of law which determine the proper parties to a suit at law upon the covenants in a lease. In such suit the covenantees are the proper plaintiffs and the covenantors ■the proper defendants, and in ease of the death of a part of the plaintiffs or a part of the defendants, the suit must be prosecuted and the judgment recovered by or against the survivors. If Walker had lived, he would undoubtedly have been a necessary party to the judgment within the requirements of the deed ■of trust. That is so because he would have been a necessary party to such judgment by the rules of the common law. As he was dead, his surviving co-obligors were the proper parties -defendant to a suit on the covenants of the lease, and for that ¡reason they were the proper parties defendant to the judgment within the meaning of the deed.

It can not be doubted that if the suit which was pending on ■appeal in this court at the time the deed of trust was executed .had been re-instated in the court below and prosecuted to final judgment, such judgment would have been within the terms ■of the deed of trust. But as Walker died while the appeal was pending, the final judgment in that suit would necessarily have been rendered against his co-obligors alone. It would have "been in favor of precisely the same plaintiffs and against the ■same defendants who were parties to the judgment actually recovered in the subsequent suit in the Federal Court. The first suit was brought by the members of the firm of Tucker, Brown & Co. against Walker, Throop, McClelland and Mullins, Cutting, one of the members of Walker’s firm being then dead. "When the second suit was brought, Walker and a part of the members of the firm of Tucker, Brown & Co. were dead, and the suit was therefore brought by the surviving members of -the firm of Tucker, Brown & Co. against Throop, McClelland and Mullins. Mullins, it is true, was not served with process ■and did not appear, and no judgment was rendered against him, but that circumstance-, so far as we can see, has no bearing upon the question under consideration. The judgment-was rendered against Throop and McClelland, and they being the only defendants against whom, under the rules of law, a, j udgment in said suit could be rendered, it was clearly such, judgment as was contemplated by the deed of trust.

But it is claimed on behalf of the complainant that, even if her right of dower was originally subject to the lien of the deed of trust, it has since become discharged from such lien. As-bearing incidentally upon the question here raised is the further proposition which is insisted upon by the complainant, and which we will first consider, that she executed said' deed, of trust in the character of surety for her husband, and that her rights are to be determined in accordance with the rules, of law applicable to that relation. The deed of trust appears-to have been executed by both Martin 0. Walker and the complainant, but as the instrument contains no personal covenant-on the part of the grantors or either of them to pay the indebtedness secured, the relation of surety, if such was the relation assumed by the complainant, must result wholly from the fact that she, by joining with her husband in the execution, of the deed of trust, mortgaged her own property or property rights as security for her husband’s indebtedness.

The only right in the premises conveyed by the deed which-she could possibly claim at the time that instrument was executed, was an inchoate right of dower. The circumstances of this case, however, as they appear to us from the record, are-such, that we are not called upon to decide whether a wife, who, for the mere purpose of relinquishing her inchoate right-of dower, joins with her husband in the execution of a mortgage given to secure his debt, thereby becomes, in any legal sense, his surety. The record, as we are compelled to eonstrueit, seems to show that, át the time the complainant signed and acknowledged the deed of trust, she had, as against the parties-secured, no right of dower whatever. The deed of trust and. its acknowledgment by Martin 0." Walker both bear date nearly a month prior to the marriage of the complainant with said Walker. There is no evidence in the record, beyond what is-furnished by the instrument itself, showing the date of the delivery of the deed to the grantees, and under these circumstances the legal presumption must prevail that it was delivered on the day of its date. Hardin v. Grate, 78 Ill. 533; Hardin v. Osborne, 60 id. 93; Deininger v. McConnel, 41 id. 227; Jayne v. Gregg, 42 id. 413; Darst v. Bates, 51 id. 439. Adopting that presumption, as in the absence of countervailing evidence we must, it follows that at the date of the complainant’s marriage with Walker, the deed of trust had already been executed and delivered, and that she acquired by her marriage no right, of dower which was not subject and subordinate to the deed. She had therefore nothing to convey or relinquish. The fact that the parties apparently out of superabundant caution saw fit, after her marriage, to have her also execute the deed and. have her and her husband join in a new acknowledgment of it, added nothing whatever to its legal effect. As she therefore relinquished no legal interest in the premises conveyed, either present or prospective, there is no basis for the contention that in executing the deed, she assumed the position or acquired the rights of a surety.

Eliminating that claim then from our consideration, upon what ground can it be pretended that the complainant’s dower has been discharged from the lien of the deed of trust ? It is insisted, in the first place, that the decision of this court on the appeal from the first Tucker, Brown & Co. judgment was an adjudication that there was in fact a complete defense to-Tucker, Brown & Co.’s action upon the covenants of said lease, and, consequently, that they had no right to recover any judgment to which the security of the deed of trust could apply. A brief examination of the record will demonstrate that such, was not the effect of the decision, the question decided being as to the legal sufficiency of certain pleas interposed by the: defendants in the court below, and which had been held insufficient on demurrer.

In the trial court the defendants had pleaded certain pleas in bar, setting up, 1, an eviction of the lessees by the lessors from a portion of the demised premises; 2, an unlawful detention from the lessees by the lessors of a portion of the demised premises, and, 3, a plea of set-off of the rental value of the premises so detained from the lessees. To these pleas a demurrer was sustained by the trial court, and the question decided by this court was, that said pleas presented a good defense to the action, and that the trial court erred in sustaining the demurrer. There was no decision that said pleas were true in fact, or that they could be sustained by evidence. Those questions were left entirely open and subject to contest by the parties on any subsequent trial.

It may be observed that while said pleas' were sufficiently broad to answer the entire action, they were really intended, as we gather from the arguments of "the complainant’s counsel in this case, to apply especially if not wholly to that portion of the plaintiff’s demand which was based upon alleged breaches of the covenant as to the amount of coal which should be mined. On this subject counsel say: “It is probable that there was some indebtedness to Tucker, Brown & Co. to be measured by the amount of coal actually taken from the mines. The contest was against what seemed an unconscionable use of the covenants of the lease, under which payment was claimed for the full royalties reserved upon coal which had never been mined at all.” And counsel claim that more than $60,000 of the first judgment was made up of damages so computed. The evidence before us tends to show, and we think satisfactorily shows, that the judgment now in controversy is entirely made up of royalties upon coal which had been actually mined, and interest on the sum thus found due, and that no damages whatever were given for royalties on coal not mined, that portion of the plaintiffs’ claim, as it seems, having been abandoned.

It might perhaps he suggested, if necessary, that while said pleas, if sustained by proof, would, by the technical rules of the common law, constitute a defense to the plaintiffs’ claim, even for their royalties upon the coal actually mined, still the defense would be one which would not specially commend itself to the conscience of a court of equity. The evidence shows that the annual rental value of the portion of the demised premises detained from the lessees did not exceed $500, while the annual royalties on the coal mined were nearly $15,000. Now that the plaintiffs have established their claim to said royalties by the judgment of a court of law, a court of equity should be measurably reluctant to interpose for the mere purpose of enabling the parties in interest to avail themselves of a defense which, as applied to the cause of action for which the judgment was actually rendered, may justly be deemed unconscionable.

But it is insisted on behalf of the complainant as a further reason why said judgment should not be enforced against her, first, that it was entered by consent, and secondly, that it was obtained by fraud and collusion. It may be doubted whether, unless the judgment is shown to be of itself inequitable, the mere fact that it was entered by consent, if it was so entered, can be at all material. But we are unable to find from the evidence that it was entered by consent. The record evidence is directly the other way. So far as the record of the trial and judgment shows, it was essentially an adversary proceeding. It there appears that the parties waived a jury and submitted the cause to the court for trial; that evidence was thereupon heard, and that the court, having heard the evidence and being sufficiently advised in the premises, found the issue for the plaintiffs and assessed their damages at the sum for which the judgment was rendered. Nor do we find any extrinsic evidence which is in our judgment sufficient to make it our duty to hold, contrary to the finding of the court below, that the judgment was the result of any agreement or consent of the plaintiffs and defendants or their counsel. Some of the witnesses who were in a position to know the facts testify that no such agreement or consent existed, and no witness swears to such agreement, nor is it proved by collateral facts and circumstances. We are referred to a stipulation entered into-prior to the entry of the judgment between the plaintiffs and defendants, by which the plaintiffs agreed that no execution, upon said judgment should be levied upon the individual property of the defendants or either of them, and that the plaintiffs would, on request, release from said judgment any parcel'of' real estate in which the defendants or either of them had an interest, it being declared to be the understanding that said judgment should be satisfied out of the funds held by John N.. Jewett and B. A. Small as the proceeds of the mine described, in the declaration, and from the property belonging to Martin 0. Walker at the time of his decease. , There was nothing in this stipulation which can be construed into a consent by the-defendants to the entry of judgment. It amounted merely to-a voluntary recognition by the plaintiffs of the fact that the liability of Throop and McClelland, since the assignment of' their interest in the lease to Walker, was that of mere sureties and of their right, as such sureties, to have such judgment as-should be recovered, satisfied, first, out of a fund resulting-from the operation of the mines, and which had been specifically set apart by those primarily liable for the debt for its-payment, and, secondly, out of the estate of their principal and indemnitor, Walker. The stipulation was the embodiment of' an arrangement which was eminently just and equitable, since-it placed the equitable liability of the parties precisely where it had been placed by Walker’s contract of indemnity, and where a court of equity would have placed it had its aid been invoked. It therefore constituted no ground of complaint for the legal representatives of Walker or those claiming title-through him. If it be suggested that the consideration for the stipulation moving to the plaintiffs may have been an agreement by the defendants to forbear to make further opposition to the entry of judgment, or that they may in fact have been thereby induced to make no further defense to the suit, the answer is, that the evidence does not warrant us in holding that the Superior Court was in error in its finding that such was not the fact.

Nor does the evidence warrant the conclusion that the judgment was obtained by the plaintiffs by fraud or collusion. Much that has been said in discussing the point last considered applies here also. The fraud and collusion charged is sought to be inferred from the stipulation above referred to by which Throop and McClelland were discharged in advance from personal liability upon the judgment to be rendered; from the contract between Brown and Doane entered into immediately after the date of the judgment; and from certain arrangements between counsel for the respective parties in relation to bringing on the trial. Without stopping here to re-state the circumstances connected with the various matters here referred to, it is sufficient to say, that, in our opinion, no one of them or all of them combined can be held sufficient to stamp the transaction as fraudulent, so as to justify us in refusing to recognize it as a valid adjudication of the claim for which the suit was brought.

In this connection it may be remarked that no reason can be perceived why the complainant could not and should not have intervened for the purpose of having a proper defense interposed. She was fully aware of the pendency of the suit, and of the necessary effect upon her own rights of the judgment which might be recovered therein, as all those matters had been set up months before by Brown in his answer to her bill. Throop and McClelland, though necessary parties to the suit, were in fact but nominal parties, the real parties in interest being their indemnitors and those in the same interest. The complainant could doubtless have intervened for the protection of her dower right, and have seen to it that the proper defenses were interposed and the proper evidence in support of such defenses procured. This she did not do, and it is, to say the least, doubtful, whether she can now be permitted to allege the invalidity of the judgment recovered on the ground of a negligent or even intentional omission on the part of Throop and McClelland to interpose the defenses which she now claims should have been made.

We have next to consider the relations of John W. Doane to the property in question, and the rights of the complainant as affected thereby. After the death of Martin 0. Walker, claims were proved against his estate aggregating about $190,-000. Doane, having had his attention called to said property, seems to have joined Samuel O. Walker, one of the heirs, and the attorneys for the heirs and the administrator in an effort to buy up said claims. The motive for engaging in this enterprise, so far as Doane was concerned, seems to have been to use the claims as a means of ultimately obtaining title to said premises. The actual negotiations for the purchase of said claims 'seem to have been carried on by Samuel 0. Walker, and all of said claims, with the exceptions of a few amounting to about $5000 were bought up, and assignments thereof taken to Walker as trustee. Most of the money expended in said purchases was furnished by Doane. Subsequently the lots in controversy in this suit, and certain other real property belonging to the estate, were sold at administrator’s sale for the payment of debts, the lots in question being struck off ■and sold to George C. Eand for the sum of $5000, said purchase being made by Eand, as is admitted, in the interest of and as trustee for Doane. Doane, thereupon, with a view of ■perfecting the title thus conveyed to Eand, applied to and obtained from the heirs of Martin O. Walker the conveyance, through certain mesne grantees, to Eand, of their interest in said property. After the administrator’s sale, a dividend of eighteen and one-half per cent, was paid on the claims proved against the estate, and thereupon Samuel 0. Walker repaid to Doane all the moneys advanced by him to be used in buying up said claims, said payment being made partly in money and partly by the conveyance of the interest of said heirs in this and other property belonging to the estate. In the man- ■ ner above stated, Rayd, obtained the legal title to said lots, as trustee for Doane, said title being subject to the lien of the Tucker, Brown & Co. deed of trust, the mechanic’s liens on lot 19, and various claims for taxes and assessments, on the one hand, and the complainant’s right of dower on the other. The questions to be considered here grow out of the steps taken by Doane to protect his title as against the Tucker, Brown & Co. deed of trust.

It is strenuously claimed that the relation between Doane and the complainant is that of joint tenants, and that Doane is therefore subject to those duties and obligations to his co-tenant which that relation imposes. This contention, we think, is founded upon a misapprehension. Until dower is assigned, the dowress has no tenancy, but a mere right to have one-third of the land assigned to her in severalty. Her rights have no analogy to those of a joint tenant, and the rules applicable to that relation therefore do not apply. Doane was doubtless bound by the rules of common honesty to good faith and fair dealing, but we know of no qttinciple by which he was compelled to sacrifice his own legal or equitable rights in order to protect those of the complainant.

It is insisted that the fund in the hands of Jewett and Small was wrongfully applied, generally, to the reduction of the deed of trust, the claim being, if we understand it correctly, that it should have been in some way appropriated to the exclusive purpose of freeing the complainant’s dower from the burden of that incumbrance. There is no theory comprehensible to us upon which this contention can be sustained. Said fund consisted of moneys realized from the operation of its mines by the firm of which Walker was a member. It was consequently a part of the assets of that firm, and so was a trust fund for the payment of the firm indebtedness, of which the Tucker, Brown & Co. claim formed a part if not the whole. Neither Walker nor his estate could be entitled to a distribution of any part of it until the firm debts were all paid, and as it lacked many thousand dollars of being sufficient to pay this particular claim, no right to distribution on behalf of the Walker estate could possibly arise. And not only was it a trust fund for the payment of the Tucker, Brown & Co. claim, but it had been specifically appropriated and set apart by the firm for its payment. Mullins, the managing partner, who was also jointly liable with Walker upon said claim as well as upon the contract of indemnity with Throop and McClelland, having the money in his hands, deposited it with Jewett and Small, as he had a right to do, to be used for the specific purpose of discharging, so far as it would go, this very debt. There was then but one appropriation of the fund which was legally possible, and that was the one which was made by the decree.

It is still further insisted that the contract of October 8, 1881, between Doane and Brown was in contravention of the duties which Doane owed to the complainant and a fraud upon her, and that it should be held, as against both Brown an,d Doane, to constitute a satisfaction of the judgment, to the extent of releasing the complainant’s dower from the lien of the deed of trust. Without attempting to review the argument upon which this proposition is sought to be based, it is sufficient to say that we are wholly unable to feel its force. The object of Doane in entering into that contract seems to have been, to free his title to said lots from the deed of trust as cheaply as possible, and' at the same time to make use of the judgment and deed of trust for the purpose of extinguishing the complainant’s dower. It may be conceded that Doane should not be permitted to obtain from Brown, on behalf of his own title, a reduction of the amount of the lien, and at the same time procure an enforcement of the lien to its full amount as against the complainant. But that the decree does not permit him to do. The decree is so framed as to give her the benefit of the same reduction which Doane has obtained for himself. The balance due on the judgment after applying the Jewett and Small fund and the sum realized from the sale by Brown of the equity of redemption in the Sears lots, at the date of the decree, was $71,493.15. By the contract Brown agreed to accept $20,000 in full satisfaction of this balance, and Doane agreed to bid that sum at the sale. The decree extends the benefits of the contract to the complainant by allowing her also to become a bidder upon the same terms, thus giving her the same benefit of the contract which Doane acquired for himself. We think that the decree in this respect is strictly equitable.

Some complaint is made of the proceedings in the mechanics’ lien suits by which it is claimed that the complainant’s dower in lot 19 was extinguished. Without protracting this discussion farther, we will only say on that point, that we find nothing in those proceedings of which the complainant has any just ground of complaint, and further, that we are of the opinion that by said proceedings her dower was effectually extinguished.

Some other questions are raised by counsel which we have duly considered, but which we do not deem it necessary to discuss. After a patient investigation of the record, with the aid of the elaborate and able arguments with which counsel on both sides have favored us, we have reached the conclusion that there is no material error in the record or decree of the Superior Court. Said decree will accordingly be affirmed.

Decree affirmed.