Kramp v. Kramp

Mr. Justice Gbidley

delivered the opinion of the court.

The contentions made by counsel for defendants before the court upon exceptions to the master’s report, and now here made, are, in substance; (1) That when on July 29,1911, Thomas IT. Kelley received said warranty deed from John Kramp and recorded the same, the said trust deed of John Kramp to Edwin L. Waugh, trustee, sought by these proceedings to be foreclosed, was void and was not then a lien upon the premises, and that, therefore, said Kelley then took title to the premises free from any lien of the trust deed, notwithstanding the fact that said warranty deed contained the recital that the conveyance was made “subject to two incumbrances, the principals thereof aggregating the sum of $42,000, upon which $1,000 has been paid”; and (2) that Louis Thexton, who subsequently received a warranty deed from said Kelley, is in the same position as his grantor, Kelley, and that Thexton took title to the premises also free from any lien of said trust deed, notwithstanding the recital in the warranty deed to him that the conveyance was made “subject to incumbrances now aggregating $41,000 and accrued interest thereon. ’ ’

After careful consideration, we are of the opinion that, under the somewhat peculiar facts of this case, the contentions cannot be sustained.

We do not think that as to Thomas H. Kelley the trust deed was void. It is disclosed by the evidence that Edwin L. Waugh was Kelley’s attorney; that John Kramp, the owner of the premises subject to a first mortgage upon which $24,000 remained unpaid, had negotiations with Kelley relative to Kelley’s purchase of Kramp’s equity in the premises; that Waugh drafted the $17,000 note which was signed and indorsed by Kramp on July 1, 1911; that on this date John Kramp was actually indebted to the complainant, Michael Kramp, in the sum of $6,025; that Waugh also drafted the trust deed conveying the premises to himself as trustee'and purporting to secure said note; that during the negotiations John Kramp and Kelley entered into a written contract wherein it was stated, in substance, that the consideration for the sale of Kramp’s equity in the premises, over and above the mortgages aggregating $4.1,000, was 350 shares of the capital stock of a certain Illinois corporation, and the interest from August still on the incumbrance; that Waugh made the indorsement on said note that the interest thereon had been paid to August 1, 1911; that Kramp subsequently received said shares of stock; that Waugh drafted the warranty deed from Kramp to Kelley and took Kramp’s acknowledgment thereto; that the warranty deed contained the recital that the conveyance was made subject to two incumbrances aggregating the net sum of $41,000; that said two incumbrances formed a part of the consideration of $65,000 recited in said deed; that Kramp and Kelley went together to the recorder’s office when the trust deed and the warranty deed was filed for record, and that they were both filed for record on July 29, 1911, at the same hour and minute and that the trust deed has the lower document number. While it is true that John Kramp did not deliver said note o'f $17,000 to the complainant, Michael Kramp, until about August 7, 1911, or about nine days after John Kramp delivered the warranty deed to Kelley, the evidence discloses that the complainant, in consideration of the transfer of the note to him, cancelled the indebtedness of $6,025 owing him by John Kramp, paid the latter $475 in currency and ultimately delivered to the latter 100 shares of the capital stock of Swift & Company, which was worth ££a little above par” and was taken at an agreed valuation of $10,500,—all of which sums amount in the aggregate to the face of said note, $17,000. Under all the facts and circumstances in evidence we think that, when Kelley took the warranty deed from John Kramp, he did so with the understanding or agreement that there was a bona fide incumbrance upon the premises, in addition to said first mortgage of $24,000, to the extent of $17,000 with interest from August 1,1911; that these incumbrances formed a part of the consideration for the property, in that the amount which he was required to pay to John Kramp at the time of the delivery of said warranty deed, either in money or property, was lessened to the extent of the amount of said incumbrances; and that, were Kelley now here seeking to have the premises freed from the lien of said trust deed, he would be estopped from questioning its validity. Lang v. Dietz, 191 Ill. 161, 166; Pidgeon v. Trustees of Schools, 44 Ill. 501, 502; Essley v. Sloan, 116 Ill. 391, 398; Valentine v. Fish, 45 Ill. 462, 468; Ray v. Lobdell, 213 Ill. 389, 395; Foy v. Armstrong, 113 Iowa 629, 631. And we do not think that the case of Crawford v. Nimmons, 180 Ill. 143, relied upon by counsel for defendants, is authority for a different conclusion under the facts of the present case.

And we are of the opinion that the master’s finding, confirmed by the court, that the charges of conspiracy and fraud, as contained in the answer of Thexton and wife, were not proved, is fully warranted by the evidence. And it appears that the $17,000 note, secured by said trust deed, was delivered to the complainant, Michael Kramp, about August 7, 1911; that part of the consideration for said note was then paid to John Kramp and the balance of the consideration, viz., the other 50 shares of the Swift & Company’s stock, was delivered to him by complainant during the first part of October, 1911; that the warranty deed from Kelley to Thexton was not delivered until November 18, 1911; that at that time there was shown of record against the property two trust deeds, one securing a net first mortgage indebtedness of $24,000, and the other being the trust deed in question securing said note of $17,000, and that there were no other trust deeds or mortgages of record upon the property and unreleased, and that in said warranty deed to Thexton it was recited that the consideration was $65,000, and that the conveyance was made “subject to incumbrances now aggregating $41,000 and accrued interest thereon.” And in the answer of the defendants it is alleged that Kelley represented to Thexton, before the warranty deed was delivered, that the property was worth “more than the apparent incumbrance upon the same, that the incumbrance was placed upon the property in good faith, and that the incumbrance represented actual value in the property,” and that Thexton purchased the fee and gave in trade therefor clear lands of the value in excess of $15,000. Our conclusion is that the said trust deed, as against the Thextons, is a valid lien upon the premises, and that the court did not err in entering the decree of sale appealed from.

And we do not think that, under the facts of this case, the court erred in ordering that the receiver theretofore appointed remain in possession to collect the rents, etc., until the further order of the court.

The appellees have here assigned cross-errors, in which they contend that they should have been allowed interest upon said principal note from the date of the filing of the bill to foreclose at the rate of seven per cent, per annum, instead of at the rate of five and one-half per cent., as allowed by the master and confirmed by the court, and further contend that they should have been allowed a larger sum than $100 as solicitor’s fees. Without discussion, we deem it sufficient to say that in our opinion, under the facts of this case, the contentions are lacking in substantial merit.

The decree of the Superior Court is affirmed.

Affirmed.