Smith v. Brittenham

Mr. Justice Mulkey delivered the opinion of the Court: There are several distinct grounds upon which the decree in this case is erroneous, and it must therefore be reversed. It is a well recognized rule that in equity the party having the beneficial interest in the subject matter of the suit must sue in his own name for any invasion of his rights in respect thereto, although the legal title may be in another. (Frye v. Bank of Illinois, 5 Gilm. 332; Elder v. Jones, 85 Ill. 384; Moore v. School Trustees, 19 id. 83.) It is also well settled that no one, in the absence of some statute authorizing it, can maintain a suit in chancery with respect to real estate to which he has neither the legal nor equitable title. (Bowles v. McAllen, 16 Ill. 30; Hoare v. Harris, 11 id. 24.) If such an interest in the complainant is indispensable to the commencement of the suit, as will be conceded, the conclusion would seem to follow that where a party having such interest commences a suit, and before any hearing or disposition of the cause upon the merits voluntarily transfers all his interest to another, and the same is made to appear of record, as is the case here, the whole proceeding will become so defective for want of proper parties, that no valid decree can be entered in the cause until the complainant’s assignee, by supplemental bill, or otherwise, makes himself a party complainant to the suit,—and this, indeed, is the well recognized doctrine and practice in such cases. Mason v. York and Cumberland R. R. Co. 52 Maine, 82. The decree in this case, so far as it affects the title to the land in controversy, is based exclusively upon the amended bill of Mrs. Brittenham, which was not filed until the 10th day of March, 1882. At that time, as is clearly shown by the proofs, she had no interest whatever in the land, she having, on the 3d of April, 1879, conveyed all her interest in it to Husten. It was, therefore, error to proceed in the cause under the circumstances, as is abundantly shown by the authorities already cited. It is suggested, however, that inasmuch as Mrs. Britten-ham’s deed to Husten contains covenants for title upon which she is still liable, notwithstanding the transfer of the lands, she may, nevertheless, by reason of her liability on the covenants, maintain the amended bill, and authorities are cited in support of this position. We do not think any of the cases cited sustain this view, and as the amended bill does not proceed upon any such a theory, we deem it unnecessary to enter upon a discussion of them. Moreover, it would be going a long ways to proceed in the case to a decree, notwithstanding her conveyance, upon the presumption she still had an interest in the subject matter of the suit, when she herself swears she has no such interest. It would, at least, be more charitable to presume there has been a release of her liabilities or her covenants. But outside of this there are other reasons, as already indicated, why the decree should be reversed. When the case was here the last time the bill was held totally defective, for, among other reasons, it did not show a return, or offer to.return, the goods received by Brittenham in exchange for the land. In the present amended bill an effort has been made to relieve it of this objection, but in our opinion it has not been successful. The reason now assigned for not returning, or offering to return, the goods, is, that they were all sold and disposed of by Brittenham, or his assignee in bankruptcy, before the fraud of appellee was discovered. This is not a sufficient answer to the objection in a case like the present, where there has been a simple exchange of specific articles of property. In such a case it is a misapprehension to suppose that the right to rescind exists where both parties can not be placed in statu quo. To take the land from Smith and give it to Mrs. Brittenham, and give him in lieu of the goods a certain sum of money, such as a court or jury might think he was entitled to by way of compensation for his goods, would be, in effect, compelling him to sell his goods on terms he never consented to, and would not, in any legal sense, be a rescission of the contract. It would lack the essential element of mutuality. Compensation, as we understand it, has no place in the law of rescission. Where property has been exchanged, as in the present case, it must be restored in kind, otherwise there can be no rescission, and if the injured party is unable to do this, by reason of having sold or otherwise disposed of what he received under the contract, or any substantial part of it, he is simply in no position to ask a rescission, but must pursue such other remedies as the law affords him. The only exception to the general rule here stated,— if, indeed, it may be called an exception,—is where the thing received by the complaining party is worthless. In that case no return is required. This exception, however, is rather apparent than real; for where the thing is worthless, in a pecuniary sense, nothing is received, hence there is nothing to return. We have examined all the authorities in the briefs bearing on this question, and many others not cited, and find them entirely harmonious, and fully in accord with the view here expressed. Chitty on Contracts, (10th Am. ed.) 815, note b; Benjamin on Sales,' (1st Am. ed.) sec. 452, note b; 1 Leading Cases in Equity, p. 831, part 2; 2 Pomeroy’s Eq. Jur. sec. 910; Buckenau v. Homey, 12 Ill. 338; Wolf v. Dietzsch, 75 id. 205; Smith v. Brittenham, 98 id. 188. It follows, from what we have said, whatever equities Mrs. Brittenham, or those claiming under her, may have, growing out of the alleged fraudulent contract, neither she nor they have any right to have the contract rescinded, and it therefore follows the land belongs to Smith, unless by virtue of the master’s deed to Mrs. Brittenham, or the latter’s deed to Husten, or by reason of their united operation, he has been deprived of the title. The doctrine is well established, that one purchasing real estate under a judgment or decree to which he is not a party, will, where there is no defect of jurisdiction, and the purchase is made in good faith, hold the estate, notwithstanding a subsequent reversal on error of such judgment or decree. (Whitman v. Fisher, 74 Ill. 147; Mulvey v. Gibbons, 87 id. 367.) But this rule has no application where the plaintiff in the judgment or decree, or his attorney, is the purchaser. Jn such case the purchaser takes the title subject to be divested by a subsequent reversal. (McLagan v. Brown, 11 Ill. 519; Fergus v. Woodworth, 44 id. 374; Mason v. Thomas, 24 id. 285; Dickerman v. Burgess, 20 id. 266.) The case in hand js unlike any of those just cited, and the general rules established by them have but little, if any, direct bearing upon it. The title sought to be enforced by the bill in this case was not acquired at a judicial or execution sale, and no one connected with the suit is claiming through such a sale. The proceeding is in the nature of an equitable ejectment, brought by the complainant, to recover a tract of land, the legal title to which is conceded to be in Smith, or at least it is conceded to have been in him at the time of filing the original bill. It is not denied that if Mrs. Brittenham had made no conveyance to Husten she would hold the title to the property acquired by the master’s deed, subject to the final decision of the case in this court; hut it is claimed that Husten, her grantee, occupies a better position in this respect than she would, had no such conveyance been made,—in other words, that he is a bona fide purchaser for value, and as such is entitled to the protection of a court of equity, and Horner v. Zimmerman, 45 Ill. 14, and Wadhams v. Gay, 73 id. 415, are relied upon to sustain the position. Waiving, for the present, the questions whether Husten is to be regarded as an attorney in the case, also, whether he is chargeable with notice of Smith’s rights, and whether he has otherwise brought himself within the provisions of the law relating to bona fide purchasers, it may be stated in general terms, without stopping to point out all the differences between those .cases and the one before us, that we do not regard the latter as being controlled by them. There is one characteristic feature in this case that does not appear in either of the others, namely, the record in this shows a determined purpose on the part of Smith, from the day he first applied to have the default set aside, to assert his rights to the property by every legal means within his power, until successful, or until the highest judicial tribunal had decided against him, and at the very time Mrs. Brittenham conveyed to Husten, an appeal had been prayed and allowed to the Appellate Court, which was not determined till long afterwards. We can not sanction the claim that where one in the actual possession of land is in good faith defending against an adverse suit for the recovery thereof, he can, merely because there has been a recovery against him in an inferior court, be deprived of all the fruits of an appeal or writ of error, by the successful claimant suddenly transferring the estate to a third party. Before the owner of a freehold estate can be compelled to surrender it to an adverse claimant, he has a right, if he desires to do so, to be heard in the highest appellate tribunal of the State, and for this purpose, where an inferior court has rendered an adverse decision against him, he must have a reasonable time, at least, to avail himself of this right. Concede appellant’s counsel did not avail themselves of the most appropriate means of bringing the case to a final hearing in this court at an earlier day, yet this should not subject him to a loss of his estate. Had appellant ceased to contest appellee’s claim for any considerable length of time, or otherwise manifested a decided purpose of giving up the contest, there would be more plausibility in the position of appellee; but there is no just ground for any claim of that kind. But waiving this view of the matter altogether, we do not think Husten is in any better position than Mrs. Brittenham would have been had she made no conveyance. Notwithstanding the statement of Lodge to the contrary, we must, upon the record before us, hold that Husten, at the time of the execution of these conveyances, bore the relation of attorney to Mrs. Brittenham. Lodge seems to have labored under the impression that the firm name of Lodge & Husten only appeared on some of the briefs filed in the cause, and that it had been placed there without Husten’s knowledge or consent ; but upon an examination of the record before us, we find Lodge and Husten appear of record to be attorneys in this cause, and were acting as counsel for Mrs. Brittenham as late as the 25th of July, 1881, and as neither she nor Husten himself denies that he sustained that relation to her, we must regard the record itself as the most satisfactory evidence on that question. Except where there is a special understanding to the contrary, the employment of one member of a legal firm is the employment of all, and the client is entitled, whether he specially consults all or not, to have the benefit of their united skill and judgment in the management of his business; and a reasonably fair standard of professional ethics will not allow one member of a firm to have control of the suit of the client, while another is speculating in the fruits of the litigation. Husten can not be regarded as an innocent purchaser for another reason. At the time of the conveyance to him, Smith was not only contesting in court Mrs. Brittenham’s claim to the property, but he was in the actual possession of it, claiming it as owner, and this was constructive notice to all the world of his rights in the premises, whatever they might be. Bartling v. Brasuhn, 102 Ill. 441. There are other reasons why Husten is not entitled to protection as an innocent purchaser, but we will not stop to note them, as those already stated are amply sufficient for that purpose. Even assuming the amended bill had been so framed as to authorize the decree in the case, which, as we have already seen, it was not, we are clearly of opinion the case made by the bill is not sustained by the proofs. The substance of the charge in the bill is, that the goods were to be invoiced and taken at cost price, and that the goods actually received at the store at Montieello, thus rated, amounted to only about $6000. Now, while the testimony of Jameson, Rhodes and Donegan, the only witnesses relied on by appellee to show a breach of the contract with respect to the amount of the goods, fix their value at from $4000 to $5000, they do not, nor does either of them, state or express any opinion as to what the goods would have amounted to at the original cost price. What the goods were then worth, and what they originally cost, are two very different propositions. The remnant of a stock of goods purchased, for instance, in 1865, when goods were almost fabulously high, might well not be worth over $5000 in 1869, when, if estimated at cost price, it would amount to five times that sum. The only satisfactory evidence on this point is that of Smith. He says: “At the time this trade was made, goods were high. As a general rule, prices are based on Coats’ spool thread. Thread was then worth one dollar and ten cents; to-day it is fifty-five cents, or a trifle less. Prints and Indian Head sheeting were worth fifteen and a half cents, while to-day you can buy them for five or six cents. The stock was taken at cost prices. Some of the goods had been on hand three or four years. ” In another portion of his testimony he states the invoice thus made out amounted to $14,954.80. Upon this question we are clearly of opinion the decided weight of the testimony is with appellant, and the case not being made out upon this point, it is clear there is no right of recovery. But there is still another view arising upon the proofs which is fatal to appellee’s right of recovery in this case. While the bill is somewhat ambiguous with respect to whom the goods were sold, yet it is clear the theory upon which the suit is sought to' be maintained is, that the sale was made to Mrs. Brittenham, for there is no other possible view upon which such a bill could be sustained. If the goods were, in fact and in law, sold to the husband, and became absolutely his on delivery, it is very clear she could not, in a legal sense, have been injured by Smith’s failure to deliver any part of the goods stipulated for under the contract. In contemplation of law the party entitled to receive the goods alone would have been injured, which, of course, was her husband. When we look at the undisputed facts in the case, in the light of the conduct of Mrs. Brittenham herself, the conclusion is irresistible that the purchase of the goods was by the husband, and that she neither had, nor did she understand that she had, any claim to or interest in the goods after the purchase. The bill itself states that her husband, John A. Brittenham,—not she and her husband,—was about to start a general store at Monticello, Illinois, and that Smith made the proposition to trade the goods for the land, and it was known to all parties that Brittenham had already purchased, or was then about purchasing, two other stocks of goods, with which, so far as the record shows, his wife had no connection whatever, which were to be put into the establishment and business about to be started at Monticello, together with the Smith goods, which was subsequently done, without any interference or question on the part of Mrs. Brittenham. The business was carried on by him there for a year or two, and during all this time there is not the slightest proof that she had, or pretended to have, any interest in it. And even when her husband finally drifted into bankruptcy, and the remnant of these goods had passed into the hands of his assignee, she still, so far as this record shows, set up no claim to them, but quietly stood by and saw them administered in bankruptcy for the benefit of his creditors. It is hardly necessary to remark that such conduct on her part is wholly inconsistent with the idea she understood the goods to belong to her. The substance and legal effect of the transaction, as we understand it, is simply this: Mrs. Brittenham, for the purpose of aiding her husband to establish himself in the mercantile business, voluntarily contributed the land in question to pay for the stock of goods purchased by him from Smith. Such being the legal effect of the transaction, it is clear it does not sustain the bill or the decree. In any view we take of this case we think the law is with the appellant. The decree of the circuit court is reversed, and the cause remanded for further proceedings in conformity with this opinion. Decree reversed.