Harland v. Staples

Mb. Pbesiding Justice Windes delivered the opinion of the court. Appellants contend, first, that Staples was not in a position to set up the $2,000 or Cannell trust deed against the note and trust deed of $1,500 given by him to Edward Harland; and second, that the compromise agreement was voidable at the suit of appellant Edward Harland, because it was not authorized and it was obtained by false and fraudulent representations of Staples. It is argued under the first proposition, that there was error in allowing the oral evidence of Staples as to what occurred between him and Harland at the time of and before the making of the two trust deeds, for the reason that it tended to vary the trust deeds and that the pleadings were not sufficient to justify the evidence. An examination of the evidence in this regard shows that it did not tend to vary, but rather to affirm, the trust deeds, and was therefore not objectionable for that reason. We think the allegation in the bill that it was agreed that Staples should take up and discharge this $2,000 trust deed so as to make the $1,500 trust deed a first lien, was sufficient to make the evidence competent. The remaining arguments under this proposition, to ivit, that the evidence was not sufficient to overcome the trust deeds, and that Staples, by taking title to the $2,000 trust deed could not keep it alive and thereby defeat the $1,500 trust deed- given to Edward Harland, it is unnecessary to consider, in view of what has been said, and of the compromise agreement between them. Whether the compromise agreement set out in the answers was authorized by Edward Harland, and whether it was obtained by the false and fraudulent representations of Staples, presented questions of fact which, by the decree of the chancellor, after hearing the witnesses testify in open court, has been determined adversely to appellants. Edward Harland, among other things, testified that he authorized Gilbert, his solicitor, to negotiate with Bussey arid Staples a settlement of the matter; that Gilbert’s instructions were not in writing, and that he had no definite instructions; but does not state, nor is there any proof that either Staples, Bussey or their solicitors, knew anything as to the extent of Gilbert’s or Annabel’s authority. They could, therefore, assume that it was not limited. Harland, on cross-examination, said he could not remember that Gilbert told him what was in the stipulations, and admits that he had some whispers from Annabel about the time the stipulations were made, that he did not think that Bussey was a bona fide party in the case, but couldn’t tell when he first heard it; also, that Gilbert probably told him about the time it occurred that his answers and cross-bill had been withdrawn. Gilbert testified that the stipulation for the withdrawal of Harland’s answer and cross-bill, consenting to his default and a release of the $1,500 trust deed, and agreeing to the amount due Cannell, trustee, and decree in his favor, is 0 K’d by Harland, and while he, Gilbert, is not familiar with Harland’s handwriting, he thinks it is Harland’s handwriting; also, that he, Gilbert, believed that Harland knew of that stipulation; that Annabel acted for Harland, carried information to Harland, and would come back to him, Gilbert, with instructions on which he, Gilbert, acted; also, that Harland placed in witness’ possession a check for $350, payable to Staples; also, that Annabel occupied the relation of confidential man, general agent—something of that sort; that the matter of the stipulation was talked over and fully understood as he progressed in the matter. Harland, being recalled, said, first, that he did not sign the stipulation as testified by Gilbert, but added, “ if I did, it was all conditional on the loan, every bit of it.” Staples testified, among other things, that Harland told him “ a number of times that Annabel was his agent, and any dealings that I had with him was all right, and said, ‘ Go ahead and fix it with Annabel; ’ ” also, that Harland told him that Gilbert and Annabel had full charge over the matter, and he would not deal except through them. Annabel and Gilbert together closed the transaction in which the deed to Harland was delivered and Harland’s check of $350 was turned over to Staples. • Annabel testified that he was to place a loan on the property to pay Staples $2,000, and that he talked to Harland about that at various times, thus showing that Harland knew the money was to go to Staples and not to Bussey; that he told Harland he, witness, would have to get around the difficulty of getting the loan in some manner, could not tell just how, on account of a judgment against Harlan & Hinchliff, thus showing, inferentially, that the agreement was made for the deed of the real estate to be to Edward Harland and not to Edward T. Harland,-as claimed by complainants. This evidence, with numerous other matters and circumstances testified to by the witnesses, which, to enumerate, would unduly extend this opinion, justified the court in finding and decreeing as it did with regard to the compromise agreement. At least, the finding is not manifestly against the weight of the evidence. Moreover, there were other matters in controversy between Staples and Harland besides the $2,000 trust deed, viz., the $1,500 trust deed, the judgment of $850 in favor of Staples against Harland, the two judgments of $500 each against Staples, which Avere liens on other property conveyed by Staples to Harland, as Avell as the conveyance of the real estate covered by the íavo trust deeds, which, in the original trade between Staples and Harland, by Avhich Staples acquired the title, was estimated as of the value of $8,000. By the compromise agreement Harland got this real estate which he had valued at $8,000, subject to the two trust deeds of $3,500, for the payment of $550, and also procured the release of the judgment against him, and of the two judgments against Staples, which were liens on Harland’s property. That the judgments and the $1,500 trust deed -were proper subjects of compromise between the parties, is not and can not be questioned, and as to the $2,000 trust deed, the fact that its validity in favor of Staples was questioned by Harland and in litigation' between them, does not make it any the less a subject of compromise. If Staples believed it was superior to the $1,500 trust deed—and we think the evidence fairly tends to establish that fact—then it was a proper subject of compromise. 1 Chittv on Contracts, 46, note m (11th Am. Ed.); McKinley v. Watkins, 13 Ill. 140; Miller v. Hawker, 66 Ill. 185; Parker v. Enslow, 102 Ill. 278; Jackson v. Horton, 126 Ill. 576; Stoehlke v. Hahn, 158 Ill. 85. In the Jackson case, supra, which was a foreclosure suit in which defendants set up in good faith an equitable claim to the land as superior to a trust deed, the court say : “ It is unnecessary to discuss the question whether the claim to the seventy acres set up by the defendants in the foreclosure suit was valid or not. It may be, if that suit had gone to hearing, such claim would have been held tobe invalid. It is sufficient to say that the parties relying upon it did so in good faith, believing that their equities were superior to the trust deed. Therefore the agreement for settlement had a sufficient consideration, in that it was the compromise of a doubtful right and put an end to a litigated dispute.” In the Stoelke case, supra, which was a bill against the members of a mutual insurance company to recover for a fire loss, the court, in commenting upon the claim of appellant to the effect that Hahn, the appellee, had not even an apparent claim against the company, stated that the law from Lord Hardwicke’s time had been “ that an agreement entered into upon a supposition of a right or of a doubtful right, though it afterward comes out that the right was on the other side, shall be binding, and the right shall not prevail against the agreement of the parties,” and said, “ we are of opinion that if there was not a clear legal right on the part of Hahn to recover $1,300 (the full amount of his insurance), there was a doubtful right, which was a sufficient foundation for an agreement of compromise,” and affirmed a decree in Hahn’s favor, based upon the compromise of his claim against the company, on which, in the opinion of the writer, who tried the case below, there never could have been a recovery against the company on the original claim. So in the case at bar, while it may be conceded that Harland would have prevailed in his defense of the foreclosure of the $2,000 trust deed, there is sufficient in the evidence to show that Staples in good faith believed that it was a superior lien, and therefore the compromise agreement was not invalid. The decree is affirmed.