Commercial Loan & Building Ass'n v. Trevette

Mr. Chief Justice Craig delivered the opinion of the court: , This case presents a question as to the priority of liens. The recording of the deed of trust given by the Millers to appellant was constructive notice of the appellant’s rights under the same, and the dealings of the parties were such as to bring actual notice home to the appellees. The appellees held a contract with the owners of the mortgaged premises for the erection thereon of a building, except the third story, for which they were to receive from appellant the sum of $8000 as the work progressed. This amount appellant was willing to advance out of the loan, to the contractors, but the record fails to show that appellant was willing to assume any greater or other liability than such sum. Appellees being chargeable with notice of all of appellant’s rights and equities, and having concealed from appellant all knowledge that they had any claim under a contract of April 12, asserting that the total amount of their contract was §8000, and no more, at the time they received five successive payments after they made the contract of April 12, could not acquire any additional rights or claims upon the mortgaged premises except in subordination to appellant’s rights. The decision of the case may be placed upon the doctrine of equitable estoppel. Appellees obtained payment upon the contract of §8000 by drawing moneys to the amount of §4500 from the appellant at various times between April 1,1893, and June 16,1893, upon certificates of the architect bearing the orders of the mortgagors thereon, and requesting the appellant to pay out said moneys, and the appellees presented these orders bearing upon their face a false statement as to the amount claimed to be due and owing to them for the carpenter work on the premises. Appellees not only failed to aprise the mortgagee of having acquired an additional contract—that of April 12, 1893,—with the owners of the premises for other and different work confined to the third story of the building, and for which the appellee was to receive §1738, but, on the contrary, suppressed the knowledge of such later contract from appellant by continuing to present vouchers for payment in which the total amount was still shown to be §8000, less the money which had been actually paid. Upon the assurance of appellees to appellant, growing out of the order or certificate, the latter was misled and paid out the entire §8000, when the sum would not have been paid if the appellant had not been deceived. If the appellant is required to take a second lien as to the §1738 instead of the prior lien, it will be deprived of a right without any act or fault of its own. Any act which will render it inequitable for a party to enforce Ms lien may operate as an estoppel in equity, and if the party act falsely, and Ms act in fact constitutes a fraud upon the other party, it will be immaterial whether the particular injury inflicted was intended or not. Heidenbluth v. Rudolph, 152 Ill. 316. We think that the Appellate Court erred in reversing the decree of the circuit court, and that the decree of the circuit court is right. The decree of the Appellate Court will therefore be reversed and that of the circuit court will be affirmed. decree reversed.