Dayton v. Citizens National Bank

Davis, P. J. On the 27th of August, 1868, Joseph Dayton executed a note to his mother, Mary E. Dayton, for the sum of $3,500, borrowed money, payable one year after date, with interest at the rate of ten per cent, per annum, and to secure the same, on the same date executed and delivered to her a mortgage deed in the usual form, intending to convey to her the following described piece of land, to wit: “ A part of lot Ho. twenty-five, in block three in the original town of Charles-town, commencing thirty-eight and one fourth feet west of the southeast corner of said lot, thence running west eighteen and one fourth feet, thence north to the alley; then east eighteen and one fourth feet, thence south to the place of beginning.” But by a mutual mistake of all the parties, the piece of land intended to be mortgaged was erroneously described as commencing thirty-eight and one fourth feet west of the southwest corner of said lot. The mortgage as executed was duly acknowledged, and on the day after its execution was recorded in the recorder’s office of Coles county, Illinois. The piece of land intended to be mortgaged was purchased by Joseph Dayton on February 1,1864, from James M. Miller and conveyed to him by a proper description by deed recorded m said recorder’s office May 24, 1865. Immediately after the purchase, Dayton took possession of the land and built thereon a two story brick building, which he occupied as his place of business from that time until in the year 1876, and since that time has been in the uninterrupted possession thereof, by his tenants. On the 5th day of January, 1876, The Citizens Hational Bank of Indianapolis obtained a judgment in the United States Circuit Court, for the Southern District of Illinois, against the said Joseph Dayton, for the sum of $2,213.30, on which executions have been issued, returned nulla bona, and the judgment remains wholly unpaid. The note with the accrued interest not having been paid, appellant commenced this suit in chancery, to obtain a correction and reformation of the mortgage, so that it shall conform to and express the true intent and meaning of the parties thereto, and also for a foreclosure of the mortgage. The bank alone defends the suit, and in its answer to the bill, of complaint, denies all knowledge of the mistake, and all knowledge or notice that the mortgage was intended to convey any property other than that described therein, and sets up that the note secured by the mortgage has been fully paid, and the mortgage thereby satisfied and discharged. On the hearing, the court below found that a mistake had been made in the description of the land intended to be mortgaged as indicated above, found the amount due appellant on the note and mortgage, and decreed that as against all the defendants to the bill except the said Citizens National Bank, the said mortgage be reformed and corrected so as to express the true intent of the parties thereto, and so that the same shall be and operate as a mortgage upon the property intended to be described, and that on default of payment of the sum found due, the property intended to be described in the mortgage be sold, and the proceeds ot‘ sale after payment of costs, be applied to the payment of the sum found due appellant, but that said property should be sold, subject to the lien of the said judgment obtained by the said bank, which is declared to be a first lien upon said property intended to be mortgaged . To reverse the decree so rendered, appellant prosecutes this appeal. It seems well settled in this State that a party having notice of such facts as would puta prudent person on inquiry, is chargeable with a knowledge of other facts to which by diligent inquiry and investigation lie would have been led. Bent v. Coleman, et al. 89 Ill. 364. In the case cited it is said: “A person about to purchase a tract of land would naturally inquire into the title of the vendor; he would ascertain his source of title.” A judgment creditor has no equities superior to a bona fide purchaser. The notice which would affect the latter would in like manner affect the former. One wishing to purchase the land involved in this case, upon • inquiry into the title of Joseph Da}'ton, from whom he proposed to purchase, would have discovered by turning to the records, that Joseph Dayton purchased such lands of James M. Miller and received a conveyance of the same by the description of “A part of lot 25, block 3, in the town of.Ohariestown, commencing 381 feet west of the southeast corner of said lot, thence running west 181 feet, thence north to the alley, thence east 181 feet, thence south to the place of beginning.” lie would also have discovered that afterward, in 1868, Joseph Dayton executed to Mary E. Dayton a mortgage to secure a note given for $3,500, on apart of the same lot 25, described precisely as the lot which w.is conveyed to him by James M. Miller, except that the mortgage described it as commencing 381 feet west of the southwsi corner of said lot, instead of 381 feet west of the southeast corner of the same lot, and he would have discovered that there was necessarily a mistake in the description of the land as described in the mortgage, because as described it could not possibly be a part of lot 25 and commence 381 feet"'west of the south miss# corner of said lot, as 381 feet west of the southwest corner of lot 25 would place the land in some other lot than 25, and yet it was evident from the face of the mortgage that a part of lot 25 was intended to be mortgaged. Further inquiry, such as a prudent person would have made, would necessarily have led to the discovery that the land he proposed to purchase was the lot which was intended to be covered by the mortgage executed to Mrs. Dayton. We are of opinion these facts were sufficient to charge the bank with notice of the mortgage and with the mistake made in the description of the land intended to be conveyed, and therefore the court' below erred in decreeing that the judgment obtained by the bank was a first lien upon the property intended to be mortgaged and that such property should be sold subject to the lien of said judgment. For this error the decree must be reversed and the cause remanded. Decree reversed.