Linkemann v. Knepper

Mr. Justice Vickers

delivered the opinion of the court:

This being a chancery proceeding, questions of fact are reviewable by this court.

Appellant contends that the competent evidence does not sustain the findings of the court. It is insisted that John H. Knepper, husband of Mary Knepper, was an incompetent witness, and that with his testimony eliminated there is not a preponderance of the evidence in favor of appellees’ contention. We cannot agree with appellant that John H. Knepper was an incompetent witness. This litigation concerned the separate property of the wife, and the husband is therefore clearly a competent witness under the exception to section 5 of chapter 51. (Starr & Cur. Stat. p. 1837.)

Appellant cites and relies on Mitchell v. McDougall, 62 Ill. 498, in support of his contention that Knepper was incompetent. That was a case where the husband exchanged his Illinois homestead for real estate in Missouri and took the deed in his wife’s name. He and his wife were joined in a bill to rescind the contract on the ground of fraud, and it was held that the wife was not competent, since the suit in no sense concerned her separate property. The case of Funk v. Eggleston, 92 Ill. 515, also cited and relied on by appellant, is in point but is opposed to the view of appellant. It is there said: “A husband is a competent witness for or against his wife in cases where the litigation shall be concerning the separate property of the wife.” The case of Francis v. Roades, 146 Ill. 635, and Keithley v. Wood, 151 id. 566, are both cases where the wife was held to be an incompetent witness in a suit by the husband concerning property in which the wife had no interest. Neither case has any application to the question involved in the case at bar. The proposition is too well settled in this State to require extended discussion or the citation of authorities, that the husband may testify in all cases where the litigation concerns the separate property of the wife, unless the wife herself is incompetent by reason of the capacity in which the opposite party sues or defends. Among the many cases where this rule has been followed in this State the following may be cited: McNail v. Ziegler, 68 Ill. 224; Funk v. Eggleston, supra; Smith v. Long, 106 Ill. 485; Eads v. Thompson, 109 id. 87.

While appellant does not concede that the preponderance of the evidence sustains the decree if the testimony of the husband is to be considered, still his argument upon this point proceeds on the assumption that the husband was an incompetent witness. The appellant, John H. Knepper and Mary Knepper are the only persons who pretend to testify to the alleged agreement.- The two Kneppers testify to the agreement substantially as set out in the bill. Appellant positively denies that there was any agreement by which the appellees were to have a right to redeem, or any other right or interest in the land after the execution of the deed of April 6, 1900. Appellant’s testimony is very materially weakened by his admission on cross-examination. He says:

“I told her (Mary Knepper) that if ever the farm would give a good value and I could sell it I would give her part of her share.

The court: “What part ?

A. “The part that was coming to her.

The court: “How much? Any specific part'mentioned? Did you agree to give her all her part ?

A. “Yes, sir.”

Without entering into a detailed discussion of the evidence we are of the opinion that there is a clear preponderance in favor of appellees’ theory of the transaction.

Appellant insists that even if there was such an agreement made, the same was void for the want of mutuality; that there was no valid obligation on the part of appellees to re-pay appellant the money he had paid the bank, and the debt to the bank having been paid, appellees were therefore absolved from all liability by reason of tire bank’s indebtedness, and that there was no new undertaking to pay appellant. This contention resolves itself into the same question that has just been disposed of. If the theory of appellees be adopted, then as to them the original indebtedness had not been paid but was a continuing obligation 'due to appellant instead of the bank. In this view, as to appellees the note and mortgage were still outstanding obligations, and appellant became the equitable, if not the legal, assignee of the security which the bank held for the original debt, and we have no doubt he was entitled to subrogation and might have foreclosed the mortgage for his own benefit.

The case of Keithley v. Wood, 151 Ill. 566, is a case in many respects like this. There Keithley held a mortgage on Wood’s real estate for $566.50. After it became due Keithley advanced Wood $371 additional, making a total of $937.50. At this time Keithley took a warranty deed from Wood and canceled and delivered up to Wood the mortgage and note. Keithley agreed, however, that upon the re-payment to him of $937.50 within a specified time he would re-convey to Wood. The .point was made there, as it is here, that there was no obligation on Wood’s part to pay Keithley the $937.50. Wood did not execute a new note for the last sum. In disposing of this question it was said (p. 576) : “Here it is true that the $566.50 judgment held by appellant against Wood, and the mortgage previously given to secure the notes upon which judgment had been entered, were canceled; but after the execution of the warranty deed and the agreement to re-convey, was there no debt existing? While the debt assumed a new form, when all the facts and circumstances are considered we do not. • think it was paid and discharged, but, on- the other hand, it was enlarged by appellant advancing an additional sum, increasing the amount from $566.50 to $937.50.” In the case at bar the note and mortgage were not canceled and delivered to the makers, as was done in the Keithley case, but .appellant held the note and mortgage, and we are of the opinion they must be regarded as evidence of an outstanding indebtedness in the hands of appellant. Of course, upon appellant’s theory there was no debt or mortgage but the transaction was simply a bargain and sale.

Both parties introduced evidence as to the value of the premises at the time- the deed was executed and also at the time this suit was commenced, and each party claims that' his contention is corroborated by the evidence respecting the value of the property. We think, upon a fair consideration of the testimony bearing upon this question, that appellees’ equity in the premises was worth something at the time the deed was made, and considerably more after the improvement had been made by the levee district and by the government of the United States in rip-rapping the Mississippi river, which had a tendency to stop the erosion of the banks of the river near the land.

Appellant’s contention that the Statute of Frauds presents a defense to this action cannot be sustained. “As early as in the time of Lord Nottingham it was held where a man had procured a deed from another under an agreement to give back a defeasance, but refused, that a court would afford relief and treat it as though the defeasance had been executed, notwithstanding the Statute of Frauds was pleaded.” (Viner’s Abridgment, 523; Browne on Frauds, sec. 441.) In Union Mutual Life Ins. Co. v. White, 106 Ill. 67, it was said (p. 73) : “It was not intended by the adoption of the statute to facilitate the perpetration of and to protect fraud, but to prevent it, and the courts have never lent themselves to assist or protect fraud, which the statute did not sanction by its adoption. The courts will not permit the statute to be used as an engine of fraud, as its purpose was its suppression.” It has often been held by this court that a deed absolute in form, if intended as a security, is in equity but a mortgage and will be treated and enforced as such, even though the agreement for redemption rests only in parol and notwithstanding the Statute of Frauds. Scanlan v. Scanlan, 134 Ill. 630; Crane v. Chandler, 190 id. 584.

Finding no error in the decree the same is affirmed.

Decree affirmed.