Powell v. Huey

Mr. Justice Dunn delivered the opinion of the court: The evidence was in direct conflict as to whether the contract bearing Huey’s signature was knowingly executed by him or he was deceived into signing it, believing it to be an application for a loan. The circumstances, aside from the testimony of the three witnesses who testified directly on the subject, which were relied upon by either side as corroborative of their respective contentions, were consistent with either view. The evidence was heard in open court, and under such circumstances the findings of fact by the chancellor will not be disturbed unless it is clearly apparent that they are wrong. (Amos v. American Trust and Savings Bank, 221 Ill. 100; Heyman v. Heyman, 210 id. 524.) It is not necessary, however, to determine the question, because, even if it be conceded that a binding contract was entered into, the judgment and decrees of the circuit court will not be affected thereby. The contract required Ira S. Powell to convey to Huey by a good and sufficient warranty deed. Such a covenant required the conveyance of a title free of encumbrance. (McCord v. Massey, 155 Ill. 123; Morgan v. Smith, 11 id. 194; Brown v. Cannon, 5 Gilm. 174.) On the day appointed for the delivery of the deed the land was encumbered by the Brown mortgage of $12,000 and the $7000 mortgage to Huey. There is no question that the latter mortgage stood as security for the Talbot note and the $5000 note. These encumbrances, with interest, amounted to $18,748. The purchase money, after deducting the Hancock County National Bank note, amounted only to $14,-208.63, leaving a difference of more than $4500 still a lien on the premises. The bill for specific performance alleged, as it was necessary that it should, that complainant had always been ready and willing to perform his part of the agreement on,.being paid the remainder of the purchase money and to deliver the deed to Huey and to let him into possession of the premises, but no evidence was offered of Ira S. Powell’s ability to convey the title agreed to be conveyed. On the contrary, it is to be inferred that he could not do so. The $12,000 mortgage was not due until 1908. It is true that the privilege existed of paying it on September 24, 1906 or 1907, but Ira S. Powell had not the money with wffiich to pay it, so far as this record shows. William A. Powell, with Huey, had applied to Fred Churchill, who represented the owner of the mortgage, to see if he could arrange to carry $4500 of the amount on the home place of ninety acres, and Mr. Churchill told them he thought he could do so, but later found that he could not furnish the money and told them he would have to let the loan stand as it was or they could take it up at interest-paying time. No further effort appears to have been made to remove the encumbrance. At any rate it was not removed and the record contains no indication that it could be removed. The complainant, being himself unable to perform, was not in a position to compel performance. It is, however, contended that Huey repudiated the contract and thereby put an end to the necessity of any further performance by Powell. The only evidence of any effort at performance by Powell after Churchill refused to divide the Brown mortgage is that he executed a deed and had Garnett tender it to Huey. Huey declined to receive it, and in response to Garnett’s statement, “You bought the farm or contracted to buy it,” said: “Well, I have no doubt you understood that from what I said; no doubt you thought so, but there are things to it you don’t know; there is more about the transaction you don’t know.” This is all the record contains as to what took place on that occasion, and it certainly indicated no waiver of anything on Huey’s part. This occurrence furnishes no excuse for anything less than full performance on the part of Powell, if he desired to enforce performance on the part of Huey. His contract required the conveyance of a title free from encumbrance, and even if Huey had denied the execution of the contract and its binding force upon him, this would not authorize the court to force upon him a title subject to an encumbrance for $4500. It is further insisted that the agreement nowhere shows that the Davis Brown mortgage was to be actually divided; that it could have been carried as a mortgage on the two farms, Powell and Huey each providing for his proportionate share of the debt. The written contract required the Coke farm to be conveyed to Huey free from encumbrance. If the parol evidence is to be considered, Garnett testified that Huey was to pay- the three notes for $800, $5000 and $4541.37, respectively, and for the balance of the purchase money was to assume so much of the Davis Brown mortgage; that his part was expected to be independent of Powell’s and to be on the Coke farm, while Powell would have $4500 on his farm; that the understanding was that the entire mortgage was to be paid, and Powell was to give a new mortgage for $4500 on his farm and Huey was to borrow the full $18,750 on the Coke farm and his home farm. Sidney Powell testified that Ira was to take care of the balance of the $12,000 mortgage; that they were to see if Churchill could divide it, and if not, they were to pay it off. There is, therefore, no evidence that it was agreed that any part of the $12,000 mortgage should remain against the Coke farm or that any modification of the written agreement was made in this respect. The question of the right to the specific performance of the contract is considered only because of its bearing on the -foreclosure and assumpsit cases. The decree dismissing the bill for specific performance is not properly before ús. The making of the contract and the right of the vendor to compel the vendee to accept a conveyance of his title are 'contested. A freehold was involved in that decree and the appeal from it was improperly taken to the Appellate Court. In regard to the foreclosure case, it is insisted that the proofs do not correspond with the allegations of the bill. The bill alleged the existence of a debt of $7000, the execution of the note and mortgage and default in the payment of interest, in the usual form. The proof showed that the mortgage was not given to secure an existing debt but for the purpose of protecting the mortgagee in signing as security for William A. Powell. The bill alleges a direct and absolute liability on the note and mortgage. The proofs show a collateral and indirect liability. This same question of variance arose in the case of Collins v. Carlile, 13 Ill. 254, where a bill was filed in the usual form to foreclose a mortgage given to secure a note for $500. In reality the mortgage was given to secure the price of goods to be thereafter sold, and goods were thereafter sold at various times to the amount of more than $2000. Payments made from time to time reduced the indebtedness to $400. The bill having been dismissed upon a hearing, the decree was reversed, the court saying (p. 260) : “Another objection to a recovery in this case has been raised, which is, that the bill being in the ordinary form of bills to foreclose, without setting forth the real consideration of the mortgage, the complainants must fail in this suit for the reason that the allegations and the proofs do not correspond. The bill shows a case in which the complainants would clearly be entitled to a decree. It was not necessary to set forth the consideration of the $500 note, because, prima facie, it imported a good and sufficient consideration. This was all that was requisite, in the first instance, on the part of the complainants. The defendants come in and inquire into the consideration of the note, which they had a right to do. The proof shows that the complainants are not entitled to a decree for the full amount claimed. It is surely no objection to their having a decree for what is due because they have claimed too much; and it is immaterial what the consideration of the note was, so it was good and valuable. The recovery is at last upon the mortgage as set forth in the bill, though the extent is limited by the facts disclosed by the testimony. The evidence does not show a different case from that stated in the bill, but it brings into the case facts not stated and not necessary to be stated in complainants’ bill to entitle them to a decree. There is not, in our opinion, such a variance between the allegations and proofs as to prevent a decree of foreclosure in this suit.” The further objection is made that the mortgage was not due. By its express terms the mortgagee was entitled to elect to declare the principal due, three of the annual interest notes being past due and unpaid when the bill was filed. He had paid about $10,000 of the indebtedness against which it was intended to indemnify him. The amount of the past due interest was therefore due, and not having been paid, the mortgagee might rightfully exercise his option to declare the whole amount secured by the mortgage due. It is contended that the note for $4541.37 to the Hancock County National Bank was not secured by the mortgage because it is not signed by Huey with Ira S. and W. A. Powell, but with Ira alone. This note was a renewal of previous notes, and the debt arose after the exe- ' cution of the agreement between William A. Powell, Ira S. Powell and Huey, dated September 13, 1905. The note was signed by Ira S. Powell and Huey and the money which it represented was received by William A. Powell. The agreement referred to is as follows: “Macomb, Ill., Sept. 13, 1905. “This is to certify that William A. Powell and Martha M. Powell have given Robert W. Huey a note and mortgage of $7000, dated September 24, 1903, to be held by said Robert W. Huey as security on notes given to him by Ira S. Powell and William A. Powell and also for notes endorsed or signed by him with Ira S. Powell and William A. Powell. It is agreed that when all the notes owed by W. A. or Ira S. Powell, or both of them, to Robert W. Huey, and also the notes endorsed or signed by Robert W. - Huey with Ira S. and W. A. Powell, are paid and canceled, then this mortgage and note are to be delivered to Ira S. Powell. R. W. Huey, I. S. Powell, W. A. Powell.'” This writing was made for the purpose of extending to the $5000 note executed the same day, the benefit of the security of the mortgage. It is manifest that it was also intended to apply to future transactions. So far as appears, Ira S. Powell never had anything to do with the management of the farms or with any financial transactions except in connection with his father. The relations of the parties, their methods of doing business and the nature of their transactions make it evident that whether such transactions were in the name of William A. Powell or Ira S. Powell, they were for the benefit of William A. Powell. The name of Ira S. Powell was inserted in the writing because the title to the land had been placed in him, and the writing was intended to extend to notes endorsed or signed by Huey with either of them. No defense was shown to the assumpsit suit, and the judgments of the Appellate Court affirming the judgment in that case and the decree in the foreclosure suit will be affirmed. The judgment of the Appellate Court in the specific performance case will be reversed and the cause remanded to that court, with directions to order the appeal transferred to this court. Reversed in part and remanded, with directions.