Franklin v. McDonald

Mr. Justice Baker delivered the opinion of the court: There was no error in the judgment of the Appellate Court affirming the decree of the Superior Court. The question whether the loan and investment company had notice of the written order signed by McDonald and addressed to it, directing it to pay to appellant the moneys due on the loan, and the further question whether appellee had any notice otherwise that such moneys were so to be paid, were both controverted questions of fact at the hearing. The evidence of the witnesses upon these questions was conflicting and wholly irreconcilable. It was simply a matter of the credibility of witnesses and the weight of evidence. The record shows that when the cause was heard by the chancellor the witnesses were all examined orally in open court. Under such circumstances the chancellor has the same facilities for judging of their credibility that a jury has in a trial at law, and the error in finding as a matter of fact, when the testimony is conflicting, must be clear and palpable to authorize a reversal. (Coari v. Olsen, 91 Ill. 273; Johnson v. Johnson, 125 id. 510; Rackley v. Rackley, 151 id. 332; Ellis v. Ward, 137 id. 509.) There was no such error here. It seems to be supposed by counsel that the doctrine of the case of McLaurie v. Thomas, 39 Ill. 291, when applied to the case at bar, necessarily leads to the conclusion that the bare fact that the warranty deed from Franklin was delivered to the loan and investment company by the agents of Franklin, charges appelj.ee with notice of the rights and equities of appellant under his contract with McDonald. The case named, which is so largely relied on by appellant, is an authority against him, and not an authority in his favor. There, Thomas, the first vendor, sold land to Barnes and gave to him a bond for a deed upon payment of §2000. Afterwards, at request of Barnes, Thomas conveyed parcels of the land directly to Lincoln, and to Leal and others, respectively, and thereafter McLaurie purchased from Barnes the remaining nine acres of the tract, taking either a bond for a conveyance or an assignment of the bond of Thomas. It was held that all of the purchasers were chargeable with notice of the lien of Thomas for purchase money, —Lincoln, Leal and others because, on their purchases from Barnes, they received their deeds from Thomas, the original vendor; and McLaurie because he took either an assignment of the bond held by Barnes or his bond for a conveyance, either of which would be notice. But it was also held in the same case, that Thomas, by executing deeds to Lincoln, Leal and others, released his lien as to the portions conveyed to them, because he made deeds to said purchasers from Barnes without giving them notice of his lien, and thereby enabled Barnes to collect from them the full purchase price of the land. So, here, appellant, the first vendor, by delivering to appellee, at the request of McDonald, vendee of appellant and vendor and mortgagor of appellee, a warranty deed conveying the lots to said McDonald, together with the abstract of title and the insurance policy on the house standing on said lots, the latter with' the words, “My interest in the within has ceased,” and his signature endorsed thereon, enabled McDonald to obtain from appellee the money secured by the trust deed that he, McDonald, executed to Tuthill, as trustee. Of course, this is assuming the truth of the fact found by the decree, that appellee had no actual notice that the moneys raised by the trust deed were, by arrangement between appellant and McDonald, to be paid to appellant instead of McDonald. It is true, appellee had in its possession and had notice of the trust deed of McDonald to appellant to. secure $300, and that it contained a clause to the effect that it was given to secure a part of the purchase money of the lots; but this fact is of no importance when it is considered that it was the understanding and intention of all parties that this trust deed for $300 should be postponed to the trust deed to appellee for borrowed money, and be recorded only as a second mortgage on the lots. If appellee had no actual notice of the order given to appellant, or of the arrangement between appellant and McDonald that the former should receive the money borrowed from appellee, then the evidence afforded by the warranty deed and abstract of title, and the endorse-a ment on the insurance policy, and the trust deed for $300, obviated any occasion for further inquiry by appellee, and was amply sufficient to justify the payment of the money to McDonald. The judgment of the Appellate Court is affirmed. Judgment affirmed.