Greene v. Cook

Walker, J. The evidence in this case shows, that Thomas E. Greene, in his lifetime, was engaged in the entry of government land, for future sale, and for immediate sale, to persons not having the means to enter lands which they wished to obtain. The entries were all made in his own name, bonds for conveyances were given and notes taken for the purchase money, when sales were made. In February, 1849, he, through an agent, entered the forty acre tract in controversy, and gave a bond to Cook for a conveyance, upon the payment of sixty-six dollars and sixty-six cents. The note was payable in one year from its date. It appears that Cook wanted the land, and that it was entered, the bond given and the note taken, in pursuance of a previous arrangement of the parties. The note was not paid at maturity, and at that time the bond and note were canceled, and articles of agreement were entered into between the parties, for the conveyance of the land to Cook upon his paying to Greene the sum of $85, on the first day of October, 1850. The. performance of the covenants on the part of Cook are made a condition precedent, and time of the essence of the contract. After the time of the payment had expired, it appears that Brown, on the part of Cook, applied to Greene for an extension of time. This Greene offered to give, if Cook would pay forty per cent on the money, but this proposition does not appear to have been accepted. After Greene’s death, John S. Greene was appointed administrator of his estate, and in October, 1853, the heirs of Greene sold and conveyed this land and three other forty acre tracts, to Harrington, for $640, and executed to him a warranty deed. In January, 1854, Cook caused a tender of seventy-five dollars to be made to Greene’s administrator, and demanded a deed.- During that year, Cook broke about twenty acres of the land, and put it under fence the ensuing year. Harrington instituted proceedings in ejectment for the recovery of this land, when Cook filed this bill to restrain a recovery, and to redeem the premises, claiming that the transaction with Greene was a mortgage and not a sale. On the hearing, the court below decreed the relief sought, and'that the seventy-five dollars, previously tendered, be paid, either to the attorney of Greene or of Harrington. To reverse this decree, this writ of error >is prosecuted. If warranted in other respects, the decree that the money be paid to the attorney of either Greene or Harrington, was erroneous. If the evidence disclosed a case, authorizing a redemption, and that the proceedings at law should be restrained, no reason is perceived why either of these two defendants should be permitted to receive the money. The heirs of Greene had sold to Harrington and covenanted for title, in a much larger sum, and he had the right to rely upon his covenant, in case his title failed ; and the Greenes would have been entitled to receive it, to make good, in part at least, their covenant, if a redemption was authorized. The question of the extent of the liability of the Greenes, on their covenant to Harrington, was not in controversy, and the court manifestly erred, in rendering the decree for the payment of the money to Harrington. The question whether this transaction was a mortgage, and as such is subject to a redemption, still remains to be determined. On the face of the papers, it appears to have been an ordinary sale. The land was entered in the name of Greene ; he executed at first an ordinary bond, and then an article of agreement for its conveyance, upon the payment of what was expressed to have been the purchase money. So that if by any agreement of the parties, it was a mortgage, that agreement was not embraced in the written contract. Harrington, to be affected by it, must have had notice, or known of circumstances, which put him upon inquiry, leading to notice. When he examined the records, he found that Greene owned the land, but had given first a bond, and afterwards an article of agreement for its conveyance. But he also saw, that the covenant on the part of complainant for the prompt payment of the money, was made a condition precedent, and time of the essence of the agreement. He also saw that complainant had no deed on record, and had the right to infer that he had either forfeited or abandoned his purchase. He found nothing there which indicated, that the transaction was a mortgage from complainant to Greene, or that complainant claimed any other or different title than was disclosed hy the papers themselves. The records, then, afforded no notice of his claim. It was proved, however, that Harrington said that he knew that complainant held a bond for a deed, but that the time for its performance had expired. How, all this may be true, and yet Harrington may not" have known that complainant claimed to be a mortgagor, or the owner of the equitable fee in the premises. This is only evidence that he had notice of what appeared in the written contract, which provided for a forfeiture of the contract, if the money was not promptly paid.. Or, Greene, who had the option, might sell it at auction for the best price that could be obtained. This was, however, only at Greene’s option, and he might declare the contract forfeited, or sell it at auction, as he might choose. Greene’s heirs chose, after default in payment for two years and upwards, and without any steps being taken by complainant towards a performance, to exercise the right of declaring a forfeiture and selling the premises. This was not, however, a mortgage. The whole transaction shows, that it was the object of complainant to purchase the land. Hor does it appear, that it was a loan by Greene to him, of the land warrant. Hothing was said or done to indicate such a design. It is, however, said that complainant had a claim on the land, and that in equity it gives him rights that he otherwise would not have. If he. had any, it was merely a verbal declaration that he designed to purchase it of government. It was open to entry by any person who should first apply, for that purpose. Complainant claims to have had no pre-emption and improvements, except a few furrows broke on the edge of the tract, which had been done while breaking his adjoining land. Whether it was done intentionally or by mistake, does not appear, and even whether it was really on this land, is by no means certain. But even if the improvement had been valuable, the title was in the government, and they were not made under a contract for its purchase, and could have given no right to the land either in law or equity. The arrangement was, that the land should be entered by Greene, and that he should give a bond for a conveyance, upon the payment of the sum agreed upon by the parties, within a stipulated time. Greene paid his money for the land, received a deed in his own name, and agreed to sell to complainant. The latter never had any interest in the land to mortgage. Stephenson v. Thompson, 13 Ill. 186. If the parties had designed to have given it the character of a mortgage, it seems to us they would have made the entry in the name of complainant, and he would have executed a mortgage, in form, to Greene. Nor do the facts in this case establish a resulting trust in favor of complainant. To create such a trust, in the absence of fraud—and none seems to have existed in this case—it was necessary that complainant should have paid all, or at least some portion of the purchase money. This is the settled doctrine of this court. Alexander v. Tams, 13 Ill. 221, and Perry v. McHenry, 13 Ill. 227. These cases also establish the rule, that a resulting trust cannot be created by contract. Complainant paid no part of the purchase money to government, and all the rights he acquired was by contract with Greene. In any view of this case, no grounds are perceived why complainant should be entitled to relief. The decree of the court below is therefore reversed, and the cause remanded. Decree reversed.