Gibbons v. Hoag

Mr. Justice Scholfield delivered the opinion of the Court: The mortgage executed by Embree to Joseph W. Wiltberger contains the following: “Provided, always, if the first party shall pay said sum at the time and in the manner specified, then these presents shall be void. But it is further provided, that if default be made in the payment of either of said notes, and in case either note for $2400, numbered one in red ink, shall remain unpaid thirty days, or either note for $2400 numbered two shall remain unpaid ninety days, or if $12,000 of the note for $48,000 is not paid in thirty days after January 1, 1868, then the whole sum remaining unpaid shall immediately become due, and this mortgage may be immediately foreclosed at the option of the second party, or the second party, after publishing notice thirty days, may sell at public auction all the right and equity of redemption of Jesse Embree, and as attorney of said first party, execute and deliver a good deed of conveyance in fee simple, and out of the proceeds pay the notes, interest, taxes, costs and charges,—which sale so made, either by and under a decree of foreclosure or by notice and publication, shall be a perpetual bar, both in law and equity, of all right and equity of redemption.” The deed from Joseph W. Wiltberger to Egbert Wiltberger contains this language, after reciting the condition and power of the mortgage: “And whereas, default has been made in the payment of $13,800, and interest since maturity, secured to be paid by several notes, the last two of which matured January 1, 1862, the others long prior thereto: How, I, Joseph W. Wiltberger, did on May 9,1862, cause a notice to be published thirty days, consecutively, that said premises would, on June 10, 1862, at 10 o’clock A. M., at the court house door in Chicago, be sold at public auction, for cash, by virtue of the power in said mortgage vested; and whereas, at the time and place aforesaid, in pursuance of said notice, said first party offered for sale, at public auction, said premises, and said second party bid $48,000 for said land, which was the highest and best bid made therefor: “Now, therefore, in consideration of the premises and the sum of $48,000 in hand paid, I, as mortgagee as aforesaid, do hereby remise, release and quitclaim to said second party, his heirs and assigns forever, all the right, title and interest which I have acquired by virtue of said mortgage of, in and to all the certain tracts (describing the 120 acres), together with all appurtenances, and also all interest of said first party to the same. To' have and to hold the same as fully and absolutely as said first party can by virtue of the power and authority in him, in and by said mortgage vested, convey the same unto said second party, his heirs and assigns forever.” Acknowledged June 10, 1862, and recorded Sept. 16, 1862. On the 4th of September, 1862, Egbert W. Wiltberger, by deed of that date, which was recorded September 17, 1862, reconveyed to Joseph Wiltberger, and Joseph W. Wiltberger, on the 31st of January, 1863, by deed of that date, which was recorded February 5, 1863, conveyed that part of said real estate which is described as lots Nos. 2, 3, 25, 26 and 27, in block.2 in Yerby’s subdivision, to the appellee, Mary Hoag. It is apparently conceded that appellee was a purchaser in good faith for full value paid for these lots,—at all events the proof establishes this to be the fact. There is no proof tending to impeach the recitals in the deed in regard to the sale from Joseph W. Wiltberger to Egbert W. Wiltberger, but, upon the contrary, the abstract prepared by appellants shows that, on the hearing, evidence was introduced showing that Joseph W. Wiltberger, “ because of default in payment of about $13,800 on said notes, ad vertised said premises for sale, under the power in said mortgage, and at said sale said premises were struck off and conveyed by said Joseph W. Wiltberger to Egbert W. Wiltberger.” The objections taken to appellee’s title are: 1st. The attempt of the mortgagee to exercise the power of sale contained in the mortgage was not sufficient to divest the title of the mortgagor, and invest title in the mortgagee. 2nd. But if the power of sale contained in the mortgage was properly exercised by the mortgagee at the sale on the 10th of June, 1862, then, thereafter, he had no further power in that regard, and that sale did not embrace the interests of Charles L. Wiltberger, Joseph S. Wiltberger and Laura Ann Wiltberger, who were then minors, and who respectively subsequently, on their becoming of lawful age, conveyed their several interests to him,—but that those conveyances, when made, inured to the benefit of the title of Jesse Embree. 3d. That the mortgage was never treated as foreclosed by the sale on the 10th of June, 1862. > 4th. The sale was void, because the purchase by Egbert W. Wiltberger was not made in good faith, but was in reality for the mortgagee, Joseph W. Wiltberger. 5th. The deed from Joseph W. Wiltberger to appellee, Mary Hoag, conveyed neither an interest in the land nor an interest in the debt. 6th. As respects lot 2, waiving all other objections, it was held by a paramount title, based on contract between Yerby and Hickok. These will be examined and passed upon in the order in which they are stated. 1st. The last note due, secured by the mortgage, is as follows : “ $48,000.00. Chicago, November 18, 1858. “ On the first (1st) day of January, A. D. 1868, I promise to pay to the order of Joseph W. Wiltberger forty-eight thousand dollars. Value received. “This note is given subject to the ratification of the sale and conveyance of their part, being one-quarter of a part of section Ho. 15, in township 38 north, range 14 east of the third principal meridian, described in a deed bearing even date herewith, between Joseph W. Wiltberger and others to Jesse Embree, by the minor heirs of Joseph W. Wiltberger, named as follows: Charles Lewis, Joseph Samuel, and Laura Ann Wiltberger, and is to be paid when due, if said minors before that time shall have conveyed their interest so as to pass all their right, title and interest in and to said premises, in said deed described, to the said Jesse Embree, his heirs, executors, administrators or assigns, and is to be paid any time thereafter when said minors shall well and truly convey their interest in fee, as above described, to said Jesse Embree, his heirs, executors, administrators .or assigns, or so that it will inure to his or their benefit. Jesse Embebe.” And the point attempted to be made is, that inasmuch as this note is expressly referred to in the mortgage, it is to be read as if inserted at large in the mortgage, and that the condition of the note is to be construed as a proviso in the power of sale—and that, therefore, until the mortgagee shall have procured the conveyances specified in this note, there can be no sale, and hence the sale on the 10th of June, 1862, being before such conveyances were made, was premature and a nullity. This construction is not tenable. The condition of this note relates solely to the $48,000, which, by its terms, is promised to be paid on the first day of January, 1868. That period was after each of the parties named in the condition would be of lawful age, so that there was and could be no ambiguity as to the time of the maturity of the note. It was conditional, but payable January 1, 1868. But the other eighteen notes are not conditional. Each is payable absolutely for $2400 on the day named on its face, and which day, as to several of them, is before the parties named in this condition would be of lawful age. And the mortgage expressly provides that “if default shall be made in the payment of either note for $2400, numbered one, in red ink, for thirty days, or either other note for $2400, for ninety days,” * * * then the whole sum unpaid should become due, etc., and said mortgage might be foreclosed, etc. As to these notes, clearly default would be made in payment if payment should not be made within the designated number of days after the day named as the time when the notes are payable. But as to the $48,000 note, default could only occur after tender of deeds by the parties named, and the expiration of the designated period after the day named for the payment of the note, without payment. The default declared was not on account of the $48,000 note, but on account of the $2400 notes, which were due and payable without reference to the condition annexed to the $48,000 note, and the sale, therefore, was not premature. 2d. The mortgage given by Embree to Joseph W. Wiltberger uses the language that the party of the first part (Embree) “ has granted, bargained, sold and conveyed, and by these presents doth grant, bargain, sell and convey unto the party of the second part” (Wiltberger) “and his heirs and assigns forever.” Then follows a description of the same property embraced in the deed of Wiltberger and others to him. The mortgage was given to secure the payment of the purchase money, and it seems quite clear from all the circumstances that it was designed every interest which Embree acquired by his deed, to the benefit of which any subsequently acquired title could possibly inure, should pass by that mortgage and any sale that might be made pursuant to its terms. And conceding it to be true that the deeds subsequently made to Wiltberger inured to the benefit of Embree’s title, it must be observed this has no reference to Embree’s person, but only to the title which Wiltberger undertook to convey to Embree, and which Embree mortgaged back to Wiltberger; and hence, if Embree’s title was sold at the sale on the 10th of June, 1862, it inured to the benefit of the title sold and purchased at that sale. And so we have ruled in former cases. DeWolf et al. v. Haydn, 24 Ill. 525; Bybee v. Hageman, 66 id. 519; Taylor v. Kearn, 68 id. 339. In the last named case a person having only a contract, of purchase of land, mortgaged the same, using as is here used, the words “grant, bargain and sell,” and it was held that afterwards, upon payment and a deed being made to him, the title so acquired, under the statute, inured to the mortgagee, and that, in equity, such title will inure to an assignee of his rights under the contract, without any covenants in the assignment. 3d. We do not regard it of controlling importance that Wiltberger-, after his sale and conveyance to appellee, treated the mortgage as not foreclosed by the sale of June 10, 1862. There is no proof that appellee treated the mortgage thus, nor that she had reason to believe or did believe at the time of her purchase, that the mortgage was not foreclosed by the sale of June 10, 1862. No subsequent act of Wiltberger, without her consent and approbation, could affect her rights. She is entitled to stand by the record as it was when she purchased. 4th. Conceding it to be true that the purchase by Egbert W. Wiltberger was not in good faith for himself, but was, in fact, for Joseph W. Wiltberger, as was said in Farrar v. Payne et al. 73 Ill. 86, that fact would not render the sale void. It would only be voidable, subject to be set aside while the estate was in Wiltberger’s hands, but not after its transfer to a bona fide purchaser. See, also, McHany v. Schenk, 88 Ill. 358. No effort was made here by Embree or those claiming under him to set aside this sale or repudiate it for a period of more than five years, during which time appellee had become a purchaser in good faith, relying on the validity of the sale, and was suffered from year to year to expend money in payment of taxes, etc. Embree, it will be borne in mind, conveyed to Tompkins on August 19, 1859, and Tompkins then expressly assumed the payment of the amount of the mortgage from Embree to Wiltberger. Tompkins thenceforward continuously resided in the city of Chicago, at no very remote distance from this property, yet made no movement towards setting aside or repudiating the sale or releasing from the mortgage. This laches precludes all inquiry into mere irregularities, which would but render the sale voidable, if availed of by the proper parties in apt time and before the intervention of the rights of third parties. Farrar v. Payne, supra; Bush v. Sherman, 80 Ill. 173; Hamilton v. Lubukee, 51 id. 420; McHany v. Schenk, supra; Munn et al. v. Burgess et al. 70 id. 604. 5th. This same mortgage was before us in Mulvey v. Gibbons et al. 87 Ill. 367. Among the questions there raised was the sufficiency of the sale of the 10th of June, 1862, to pass an equitable title, conceding that the deed from Joseph W. Wiltberger to Egbert W. Wiltberger, by not strictly conforming to the power, did not convey a fee simple title, valid in a court of law, on the authority of Speer v. Hadduck, 31 Ill. 439, and the court said: “Another foreclosure claimed is under the power of sale in the mortgage. The objections taken to this foreclosure are, that the property was bid in at the sale indirectly for the mortgagee, and that the deed executed pursuant to the sale was made in the name of the mortgagee, and not in the name of Embree, the mortgagor, the mortgage providing that upon the sale the mortgagee might, as the attorney of the mortgagor, for that purpose by the mortgage duly authorized and appointed, execute and deliver to the purchaser a good and sufficient deed, etc. The first objection would render the sale voidable only at the option of the mortgagor, to be determined in apt time. But neither he nor his grantees have ever taken any steps to set aside the sale. * * * * “ The mortgage gives the power, in default of payment, to sell the land and all right of redemption at public auction, and declares that the sale shall be a perpetual bar to the right and equity of redemption. The sale itself, duly made, would seem to be the principal thing, and the substantial foreclosure of the right to redeem; and however, in case of such a form of mortgage, the deed made in the name of the mortgagee, and not in the name and as the attorney of the mortgagor, may be regarded as not conveying a good title in fee simple to the purchaser, as seems to have been held in Speer v. Hadduck, 31 Ill. 439, in an action of ejectment, we must regard such a proceeding for foreclosure as not to be disregarded in its bearings upon the equities in this case.” In Watson et al. v. Sherman et al. 84 Ill. 263, there, was a power to an attorney to sell and convey, which the attorney proceeded to execute by selling and conveying, but the power was not under seal. It was held the power to sell was good without a seal, but that the conveyance was invalid' because of the want of a seal to the power. And it was also held, that notwithstanding the defective deed, the purchaser at the sale obtained an equitable title, which would be conclusive in all proceedings in a court of equity. The case, in all essential points, is analogous to the present. As has been shown in the first part of this opinion, there is no proof tending to impeach the recitals in the deed from Joseph W. to Egbert W. Wiltberger; and the tendency of all the proof is, to show that the sale was after proper notice published, and in all respects strictly pursuant to the terms of the power. Necessarily, therefoi'e, the sale passed to Egbert W. Wiltberger the equitable right to have a deed to the property, subject, however, to the right of Embree and those claiming under him, (which was never exercised,) to have the sale set aside in apt time, because it was secretly intended that the purchase was for the benefit of Joseph W. Wiltberger. This is not a proceeding at law to test the strength of ■ strictly legal titles, but a proceeding in equity to establish a title, and the inquiry relates to the equities, only, of the parties. Mulvey v. Gibbons et al. supra. At most, appellee is chargeable only with notice, when she purchased, that this property had been regularly and lawfully sold under the power, but that the deed was defective in form and insufficient as an instrument of conveyance. The deed from Egbert W. to Joseph W. Wiltberger was regular in form and assumed to convey the entire estate, and the same is to be said of the deed from Joseph W. Wiltberger to her. All these deeds, including the defective deed from Joseph W. Wiltberger to Egbert Wiltberger, which correctly recited a valid sale of the property, were put on record in apt time, so as to affect those now claiming as against appellee, with constructive notice; and this was sufficient notice to them that there had been a valid sale under the power in the mortgage. Farrar v. Payne et al. supra; Heaton v. Prather et al. 84 Ill. 330. It is enough, for the present, that appellee is entitled to a deed. 6th. The claim to lot 2 is derived thus: It appears that prior to the conveyance by Wiltberger and others to Embree, George W. Yerby had contracted with Wiltberger to purchase the property, which was finally conveyed to Embree. Subsequently, Embree took Yerby’s place under this contract, and, pursuant thereto, the deed was made to him, instead of to Yerby. Before the conveyance to Embree, and after the making of the Yerby contract, Yerby made the subdivision of the property into lots, which has been before repeatedly alluded to, and on the 25th of August, 1857, entered into a written contract with one W. O. Hickok, whereby he sold and agreed to convey to him said lot 2 on payment by Hickok of $790, within ten years from date, and interest, payable annually in advance, on that amount, at the rate of eight per cent per annum, and the time of payment of said principal, and each installment of interest, was made of the essence of the contract. This contract was recorded January 9, 1861. November 18, 1858, Yerby assigned this contract to Embree; September, 9, 1859, Embree assigned it to Tompkins; and November 7, 1859, Tompkins assigned it to Gibbons; June 3, 1869, Tompkins made a deed to Daniel H. Carpenter in fee for said lot and other lots; July 6, 1870, Carpenter conveyed said lot in fee to Hickok; October 5, 1870, Hickok reconveyed said lotto Carpenter; September 20, 1870, Carpenter conveyed said lot, with other lots, to Gibbons. It appeared that $63.20 was paid on said contract August 25, 1857, and that no other payment was ever indorsed thereon. On the other hand, appellee’s title is thus deraigned: Jesse Embree conveyed this lot, with the other lots in controversy, to Tompkins, August 19, 1859, Tompkins assuming and agreeing to pay off the mortgage to Wiltberger. Tompkins conveyed the lot, together with others, to Gibbons, January 7, 1861, subject to the mortgage and contract of sale. September 9, 1862, Joseph W. Wiltberger conveyed said lot 2, and other lots, to Gibbons. On the 6th of December, 1862, Gibbons reconveyed said lot 2, and other lots, to Joseph W. Wiltberger, and warranted the title against his own act and all persons claiming under him; and on January 31, 1863, Joseph W. Wiltberger sold that lot, and the other lots in controversy herein, to appellee, for their full value then paid, and conveyed the same to her by warranty deed of that date. It is manifest Tompkins’ conveyance to Gibbons, January 7, 1861, left no title in him to the lot, so that his attempt to convey the same lot again to Daniel Carpenter, June 3, 1869, was a mere nullity; and the conveyance by Carpenter to Hickok, July 6, 1870, and by Hickok back to Carpenter, October 5, 1870, and by Carpenter to Gibbons, September 20, 1870, resting as they do for their validity upon that conveyance, were also nullities. The deed of Tompkins to Gibbons, the deed of Gibbons to Wiltberger and the deed of Wiltberger to appellee, were all recorded shortly after they were executed, and long before the conveyance by Tompkins to Carpenter; and hence, Carpenter, Hickok and Gibbons all had notice, by the record, when they received their respective deeds, that the title had been legally conveyed to and was then held by appellee. But it is claimed, at all events, the court should have decreed a payment of the amount due on the Hickok contract; but there is no claim in the pleadings that would justify such a decree. Ho one therein claims the payment of money on account of that contract. Besides, by the terms of that contract, time is made of the essence of it. Ho payment has ever been made on account of it, except the payment of $63.20 made August 25, 1857; nor has any tender therein since been made. In the face of such inexcusable and long delay, no court of equity would be authorized to decree a specific performance of such a contract or a rescission of it and a return of the money paid thereon. So far as appears, the fault is all on Hickok and those claiming under him. It is entirely too stale for any present use. The claim that appellee has been guilty of laches which should bar her right, is destitute of merit. Mere delay alone, short of the period fixed as a bar by the Statute of Limitations, will not preclude the assertion of an equitable right. It is only when by delay, and neglect to assert a right, the adverse party is lulled into doing that which he would not have done, or into omitting to do that which he would have done in reference to the property, had the right been' promptly .asserted, that the defence of laches can be considered. There is no pretence of any prejudice resulting to appellants by reason of the non-action of appellee, in any respect. In conclusion, there is a defence as against Gibbons, who claims all the property in controversy except the north 134 ■feet of lots 2 and 3, which would be entirely effectual, which we have not yet noticed. “Among other facts found by the court below, and which we think fully authorized by the evidence, is the following: And the court finding that at the time of said purchase of said five lots by Mary Hoag, said J. G. Gibbons acted as her counsel in said transaction, he then being an attorney-at-law; that he, as such counsel, received from her said $900 purchase money, and paid the same over to J. W. Wiltberger, and received from him said deed and filed the same for record, and received the same from the recorder’s office, and delivered the same, together with an abstract of the title to said five lots, to said Hoag, but wholly failed and neglected to inform or notify her of any defect in her said title; and that she was led to believe, and did believe, from the conduct of said Gibbons on that occasion, that she acquired a perfect title by said deed; that after such purchase, said Gibbons, as her agent, paid taxes on said lots for several years; that in 1868, pending the Andrews foreclosure suit, said Gibbons stated to said Hoag, then a resident of Cincinnati, that her title was involved, and that her interests ought to be represented, and that she, believing said statements, retained said Gibbous to represent her, and paid him $100; and said Gibbons agreed with her that he was to be paid $100 more when her title to said five lots was perfected; that Gibbons proceeded to Chicago and examined the papers and files in said suit, and shortly returned and represented to her that her title to said lots was perfected by the decree of strict foreclosure rendered in said suit.” If the defence which he now seeks to interpose had any existence, it was his duty to notify his client fully and unreservedly. If the proceedings which he claimed perfected appellee’s title did not, in fact, do so, it was his duty to so notify her. It is not to be tolerated that an attorney shall advise or encourage a client in investing in a bad title, and himself, afterwards, buy up the better title and assert it as against his former client. Such a practice would open a door to endless wrongs and villainies, and bring great and just reproach upon the profession. Story says, in his work on Equity Jurisprudence, sec. 219: “If an attorney employed by the party should designedly conceal from his client a material fact or principle of law, by which he should gain an interest not intended by the client, will be held a positive fraud, and he will be treated as a mere trustee for the benefit of his client and his representatives ; and in a case of this sort it will not be permitted to the attorney to set up his ignorance of law or his negligence as a defence or an excuse. It has been justly remarked that it would be too dangerous to the interests of mankind to allow those who are bound to advise, and who ought to be able to give good and sound advice, to take advantage of their own professional ignorance, to the prejudice of others. Attorneys must, from the nature of the relation, be bound to give all the information which they ought to give, and not be permitted to plead ignorance of what they ought to know.” The park commissioners are purchasers having constructive notice of appellee’s rights, and their claim, consequently, must yield before her’s. . The decree below is affirmed. Decree affirmed.