Chicago & Eastern Illinois Railroad v. Hay

Mr. .Justice Sheldon delivered the opinion of the Court: It appears from the evidence that the Chicago, Danville and Vincennes Railroad Company had, in the fall of 1870, in the construction of its line of railroad from the city of Chicago, reached the county of Iroquois; that it had built its track and was operating its road to a point in that county about three-fourths of a mile north of the property in controversy in this ease, where it had established a temporary station, and that it had graded its road over the quarter-section of land mentioned in the pleadings; that one Alexander D. Hay became desirous of having a station located about the centre of the said quarter-section, and in December, 1870, an arrangement was made between him and the person engaged in procuring the right of way for the company, by which the railroad should be located over this quarter-section of land, and a station should be located at or near the centre of the same, and that in consideration of such location said Hay was to give the railroad company, for its use for main track and side-tracks and depot grounds, a strip of land two hundred and fifty feet in width, through the quarter-section. During the month of March, 1871, Hay consummated the arrangement with Mr. J. E. Young, the contractor and general manager of the railroad, in the presence of Mr. Burton, a citizen of the neighborhood, who was deputy county surveyor and had an interest in the location of the station. The evidence goes to show, though with less distinctness than the making of the contract is shown, that at this time a memorandum of the agreement was made and signed by Hay, but that it is lost or can not be found. In the spring of^lSTl the railroad company built its line of railroad over this quarter-section, locating its station at about the centre of the same, where it has ever since been. The company removed a couple of buildings it had at the temporary station just north, on to these premises. While the side-track was being built thereon, Hay was present on several occasions, and made suggestions to the contractor as to its location, and stated over to him the contract. On June 1, 1871, said Hay and Daniel K. Cornell caused a plat to be made by said Burton, surveyor, which was filed in the clerk’s office of Iroquois county on August 1, 1871, laying out the entire north-east quarter of said quarter-section, and the south-east quarter of its northwest quarter, as a town, known as Papineau, on which the railroad is designated, and two hundred and fifty feet in width of ground is set apart and designated as railroad property. There was much other testimony of admissions of said Hay, of the making of such a contract. At the time the contract was made, said Alexander D. Hay was not the owner of the legal title of the quarter-section. The Illinois Central Bail-road Company had sold the quarter-section, in lots of forty acres each, and executed contracts therefor, but no deeds. On March 31, 1871, the Illinois Central Railroad Company, the then owner, made a deed for the north-east quarter of said quarter-section, to Alexander D. Hay, and Daniel K. Cornell, his son-in-law, and on May 18, 1871, Cyril Tebo, the grantee of the Illinois Central Railroad Company, made a deed for the south-east quarter of the north-west quarter of said quarter-section to said Hay and Cornell, the land, in each instance, having been purchased by said Hay, and the entire consideration paid by him. In December, 1870, said Hay purchased the south-west quarter, and in April, 1871, the south-east quarter, of the said quarter-section. The evidence of the making of the contract alleged is satisfactory and conclusive. There is no evidence in contradiction, and but some two or three circumstances which are relied upon as showing there was no such contract made. Mr. Young testified that it was part of the contract with Hay that Young & Co., the railroad contractors, were to have a half interest in the town lots of Papineau. Mr. Donovan, the right of way agent, testified that he had an interest in the lots Young & Co. were to receive; -that he did not receive any of the lots in Papineau, and did not know that Young & Co. had; that if they had, he thinks he would have received his share. This is insisted upon as showing there was no such contract. It might go to show that Hay did not give the full consideration for the location of the depot, but it is not inconsistent with having made the contract. Another circumstance relied on, is some vague testimony as to proceedings for condemnation of this land before one McNeil, who was a county judge and justice of the peace. Nothing more is shown than statements that such proceedings were commenced and commissioners appointed. No papers were produced, and nothing ■ further shown. Such testimony would be of more or less weight, according to whether the condemnation proceeding was commenced before or after the time of the making of the alleged contract. If after, it would be strong evidence against such a contract. All that the testimony shows in this respect of time, is the statement of Young, that, as he thinks, in the early part of '1871 he had a conversation with the attorneys in reference to the condemnation proceeding; that the condemnation proceedings had occurred when he had that conversation. The complainant states, merely, that he saw the papers in that proceeding in 1872, giving no intimation as to the time when the proceeding was commenced. A further circumstance is, that in October, 1878, one Blakeley, who, from December, 1876, until November, 1882, was in the employ of the parties having charge of the railroad, and acted in settling up matters pertaining, to the right of way, on October 3, 1878, procured from Daniel Hay, defendant, a deed to the complainant for one hundred feet in width of this two hundred and fifty feet strip, through the north half of the said quarter-section. This deed having been obtained in ignorance of the alleged contract, weighs but little in disproof thereof. All these circumstances are far from being of weight sufficient to countervail the strong body of evidence which so satisfactorily establishes the making of this alleged contract. The contract proven, then the equitable title of the ground in question was in the Chicago, Danville and Vincennes Bail-road Company, from which company it passed to the present complainant. There was after, but the bare legal title in Hay, who made the contract, which he held in trust for the benefit of the railroad company, and all subsequently taking such title under him, took it charged with the same trust, being affected with notice thereof from the occupation and use of the ground for the railroad. The objection of laches which is made, so far as respects the remedy for specific performance, is without application to such a case as this. (Pomeroy on Specific Per. of Contracts, sec. 404.) The railroad company had entirely performed on its part, and was in the full possession and enjoyment of the property, with the consent of Alexander D. Hay. Nothing remained to be done but for the former owner to make conveyance of the legal title. The doctrine is, that from the time of the contract for the sale of land, the vendor, as to the land, becomes a trustee for the vendee, and the vendee, as to the purchase money, becomes a trustee for the vendor, who has a lien upon the land therefor. No lapse of time is a bar to a direct trust, as between trustee and cestui que trust. (Decouche v. Savetier, 3 Johns, Ch. 190.) At least, time begins to run against a trust only from the time when it is openly disavowed by the trustee who insists upon an adverse right or interest which is fully and unequivocally made known ■to the cestui que trust. (Oliver v. Piatt, 3 How. 411.) The railroad was built and operated over the premises with the consent and acquiescence of Alexander D. Hay, who made the contract, until his death, in June, 1873, and subsequently was operated, without question of the- railroad company’s right, till in the spring of 1878, when Blakeley, the right of way agent, applied to defendant Hay for the deed of one hundred feet. There is manifestly no laches to bar specific performance. There is a sort of claim of estoppel against the railroad company to assert its right, attempted to be set up in the proof and argument, although there is no such claim by the answer, arising from the company’s alleged disclaimer of interest in the premises, and defendant Hay’s purchase of the same afterward. All the foundation for this, is the statement of Blakeley when the deed of the one hundred feet was obtained, testified to by Hay, that the railroad company disclaimed to have right to anything more than the one hundred feet. This alleged statement of Blakeley was made in ignorance of the company’s rights. He was but a mere employe in settling up right of way matters, under the orders and supervision of his superior officers, and had no authority to release any right the company had in its lands, or to bar it, by estoppel, from the assertion of any of its rights thereto. Without further pursuing this point, we find no support in the evidence of any equitable claim in Daniel Hay, founded upon estoppel or waiver, or upon being a purchaser for a valuable consideration without notice. The only serious question we find, is whether the judgment in the ejectment suit is an obstacle to the complainant’s claim of relief. On March 29, 1883, a judgment in an ejectment suit theretofore brought by said Daniel Hay against the complainant, for the recovery of the possession of one hundred feet in width on the east side of, and being a part of, said strip of land of two hundred and fifty feet in width, was recovered by said Hay, against complainant, for the possession of said one hundred feet. Though the general rule be that the legal title must prevail in a court of law, in an action of ejectment, yet there are decisions of this court, that when a purchaser of land is in possession, by consent of the seller, with the purchase money all paid, he may defend successfully against an action of, ejectment brought by the vendor. Stow v. Russell, 36 Ill. 36; Sloan v. Petrie, 16 id. 262; Staley v. Murphy, 47 id. 241; Kilgour v. Gockley, 83 id. 109. Under these decisions, we think the defendant in the ejectment suit (this complainant,) had a good defence, as shown by the evidence in the present case, which might, if then known, have been successfully made to that suit; but the defendant was in ignorance of the facts which made the defence. It is of the common jurisdiction of courts of equity to relieve against mistakes in matters of fact, and to set aside judgments at law and allow a new trial, on the ground of newly discovered testimony. Story, in his work on Equitable Jurisprudence, (section 110,) in speaking of mistakes, says: “This is sometimes the result of accident, in its large sense, but, as distinguished from it, it is some unintentional act or omission, error arising from ignorance, surprise, imposition or misplaced confidence. ” In the note thereto it is remarked: “Mr. Jeremy defines mistake, in the sense of a court of equity, to be ‘that result of ignorance of law or of fact which has misled a person to commit that which, if he had not been in error, he would not have done.’ ” (3 Jeremy on Equitable Jurisprudence, 2358.) And in speaking of the relief granted by courts of equity from the effect of a judgment at law, (section 140,) the author first named says: “So if a party has, bona fide, entirely forgotten the facts, he will be entitled to relief, because, under such circumstances, he acts under like mistake of the facts as if he had never known them. ” In Vennum v. Davis, 35 Ill. 568, this court said: “A party sued at law, having a defence of. which he does not know, or of which he can not avail himself at law, either for the reason that it is purely equitable in its nature, or because, by the rules of law, he can not avail himself of it, may enjoin the judgment by bill in equity.” And on page 576 : “Here, then, is a plain case, where the complainant did not know of any defence to the suit at law. It may be likened unto the case of newly discovered testimony, on' a motion for a new trial. Such motions, if well supported, are seldom refused.” The proof is, that the facts of the defence were learned for the first time between July and October, 1884. There is no question as to their being material,—they are conclusive. There is much in the ease in excuse of their not haying been learned sooner, and to free from the imputation of negligence in that respect. There had been many changes in the management of the railroad, which, naturally, would cause more or less of confusion and liability to loss of papers, and of unacquaintance by the present managers of the road with the doings of the original company in the starting of the railroad. It was operated for some time by the original company that built the road; then by a receiver and a subsequent receiver; it was then sold under a mortgage foreclosure, and operated for some time by the purchasing committee, and after one or two consolidations it came into the ownership of the present complainant, and there was the considerable lapse of time, and the death of the party who made the grant of the right of way. A large part of the1 papers of the original railroad company were destroyed by the Chicago fire, in 1871. Complainant’s counsel became its general solicitor, with charge of all its legal matters, in October, 1881, and then found the ejectment suit of Daniel Hay against the complainant pending, it having been commenced January 18, 1881. He immediately began looking through the files, and all the papers of the various offices of the companies which had been connected with the management of the road, and of the receiver, but failed to find anything with reference to the right of way through this property. The judgment which was rendered March 30, 1883, was one in an ejectment suit. It is not the policy of the law, that in an ejectment suit a party should be concluded by one' trial and judgment, and it is an express provision of the statute that a party against whom judgment is rendered in an action of ejectment, shall, at any time within one year thereafter, upon payment of the costs of the former trial, be entitled to have the judgment vacated, and have a new-trial. Here, the costs were paid within the year, but, for some cause not explained by the record, the judgment does not appear to have been vacated." Thus the defendant had performed the condition entitling it to' have the judgment vacated, and so was entitled to have it vacated, which would have been done, of course, on mere motion. Had the discovery of the defence which existed have been made before the expiration of the year, "no doubt the judgment would, in form, have been vacated. Under the circumstances which this case presents, it would be highly inequitable that complainant should lose its land, which has been bought and paid for, and been for so many years in the undisturbed use and enjoyment of the purchaser and those under it, from lack of a formal .entry of vacation of the judgment, which the party was entitled, under the statute, to have made on mere motion, the not making of which, we must think, came solely from excusable ignorance of the facts of the defence. We are of opinion the judgment should not be held.a bar to the-maintenance of the bill, and that the complainant is entitled to the relief prayed for in the amended bill, and that the injunction be made perpetual. The decree will be reversed, and the cause remanded for further proceedings in conformity with this opinion. Decree reversed. Mr. Justice Mulkey : I dissent from the opinion in this ease.