Schaeppi v. Glade

Mb. Pbesiding Justice Adams delivered the opinion of the court. Appellant’s counsel rely for a prior lien on lots 4 and 5 on the document number of appellant’s first trust deed, and on the proposition that Dreyer & Co. acted merely as the agent of the grantors in the trust deeds. The trust deeds owned by appellant, Glade and Bartholomae were all filed for record March 10, 1894, at ten o’clock a. m., and appellant’s trust deed was numbered 2,006,782, Glade’s 2,006,733 and Bartholomae’s 2,006,734. Section 30 of the act in regard to conveyances provides in substance that deeds, mortgages, etc., “ authorized to be recorded, shall take effect and be in force from and after the time of filing the same for record, and hot before, as to all creditors and subsequent purchasers without notice; and all such deeds and title papers shall be adjudged void as to all such creditors and subsequent purchasers without notice, until the same shall be filed for record.” Section 11 of the act in relation to recorders is as follows : “ Sec. 11. When any instrument in writing is recorded in the recorder’s office, the recorder shall indorse upon such instrument a certificate of the time (including the hour of the day) when the same was filed for record (which shall be considered the time of recording the same), and the book and page in which the same is recorded, which certificate shall be signed by the recorder, and shall be evidence of the facts therein stated.” Section 12 of the same act provides: “ Every recorder shall keep the following books: First: An entry book, in which he shall, immediately on the receipt of any instrument to be recorded, enter, in the order of its reception, the names of the parties thereto, its date, the day of the month, hour and year of filing the same, and a brief description of the premises, indorsing upon such instrument a number corresponding with the number of such entry.” “ Then follow clauses in section 12 providing for a grantor’s index, a grantee’s index, an index to each book of records, and, when required by the county board, an abstract book. Section 11, quoted supra, provides that the time of filing an instrument, indorsed upon t'he instrument by the recorder, “ shall be considered the time of recording the same.” The three trust deeds in question, having been filed at exactly the same time, no one of them can claim priority over either of the others by reason of a prior filing for record, Noakes v. Martin, 15 Ill. 118; Deininger v. McConnel, 41 Ib. 227; Stafford v. Van Renssalaer, 9 Cowen, 315. But “ there may be facts and circumstances which will entitle one of two mortgages, recorded at the same time, to an equitable priority over the other. Jones on Mortgages, 2d Ed., Sec. 607, citing Stafford v. Van Renssaelar, supra. Appellant’s counsel contends that the lowest number having been indorsed by the recorder on his trust deed, is a fact which entitles him to equitable priority. This we can not concede, being of opinion that section 12 of the recorder’s act, requiring the recorder to indorse on the instrument received for record a number corresponding with the number of the entry in the entry book, is merely for convenience of reference, just as evidently are the provisions in the same section requiring grantors’ and grantees ’ indexes and a record index to be kept. Three deeds are presented for record at precisely the same instant of time; so far, clearly, no one has precedence over either of the others. The recorder takes them all up at the same time. He must comply with section 12 of the recorder’s act by entering them in the entry book and numbering them. He can not give the same number to all three. He must therefore give them three consecutive numbers, which he does, and indorses these numbers on the deeds, respectively. Being disinterested, he makes no discrimination between them, so that it is a mere matter of chance on which of the three deeds he indorses the lowest number. Under such circumstances, how can it be seriously urged that the haphazard action of the recorder can determine the relative rights of the parties, or that any one of them has, by such action, acquired any equitable right to priority over the others? In Brookfield v. Goodrich, 32 Ill. 363, relied on by appellant, a mortgage was made to secure payment of seven $1,000 bonds, and another, of the same premises-, to secure payment of fourteen $500 bonds, and the question was, which was entitled to priority. The mortgages were handed to the recorder for record on the same day. It appeared from the evidence that the mortgage securing the $1,000 bonds was first handed to the recorder, and subsequently the other one, and a clerk in the recorder’s office testified that he was the receiving clerk at the time, and that it was his custom when two deeds were handed to him successively, to record first the deed first handed to him, and it appears from the opinion of the court that the trust deed securing the $1,000 bonds was actually recorded first. The decision is not applicable to the facts in the present case. Appellant’s counsel also cite Fischer v. Tuohy, 186 Ill. 143. In that case one Luetgert, desiring to borrow $50,000, executed two notes, one for $30,000, dated October 29,1892, secured by mortgage of the same date, of certain real property; the other of date November 3, 1892, secured by mortgage of same date of the same property. The notes were payable to Nissen, an employe of Dreyer & Co. The notes and mortgages were delivered to Dreyer & Co., who were employed as agents of Luetgert, to procure the loan, and were recorded November 4, 1892, at the same hour. October 30,1892, Tuohv, the appellee, purchased from Dreyer & Co. the $30,000 note, paying that amount for it, Dreyer & Co. still having in their possession the $20,000 note. Subsequently Dreyer & Co. purchased for the appellant, Fischer, whose money they held for investment, as his agents, the $20,000 note. Held, that Tuohy, the first purchaser, had a prior lien, the court saying : “When Gen. Leake, acting for the appellee, paid to Dreyer & Co. the money of appellee and received the $30,000 note, a lien at once attached on the property described in the mortgage in favor of the appellee. Dreyer & Co. then held the $20,000 note, now owned by appellant as the agent of Luetgert, to be sold by them for his benefit. They held also the mortgage drawn to secure the payment of such note, but the note was in the hands of Dreyer & Co. as agents of Luetgert, the maker, to be sold for the benefit of tiie maker. It had not been sold, and as between Luetgert, the maker, and Hissen, the payee, and appellee, no lien had attached, for the reason there was no indebtedness to Hissen to be secured by the mortgage. A debt or mortgage obligation of some character is an essential element in a transaction to create the relation of mortgagor and mortgagee. (Freer v. Lake, 115 Ill. 662.) The payment of appellee’s money to Dreyer & Co. for Luetgert created the relation of mortgagor and mortgagee between appellee and Luetgert, and the lien of the mortgage securing the note purchased by appellee at once attached to lot one. Ho lien then existed in favor of Hissen, as to the $20,000 note, 'which he could have enforced against appellee. As between appellee and Hissen the lien in favor of appellee ivas paramount.” 186 Ill. 143, 148. In the present case Dreyer & Co. did not act as agents in securing the loan, as in the case cited, but made the loan themselves, as principals. In Maldener, Exr., etc., v. Ruesch et al., 91 Ill. App. 391, unreported, the court relied on both the lower document number, and the earlier date of the note and mortgage, as giving priority. Ho case has been cited, nor are we aware of any, in which it was held that a deed or mortgage ivas entitled to priority by reason of the single circumstance of the indorsement on it by the recorder of a lower number. We must, therefore, look for some other circumstance determinative of the question of priority. The $8,000 note and mortgages are dated March 8, 1894, and the $2,000 note and mortgage March 9,1894. The presumption is, in the absence of evidence to the contrary, that a deed was delivered on the day of its date, even though it appears to have been acknowledged after that day. Deininger v. McConnel, 41 Ill. 227, 231; L. E. & W. R. R. Co. v. Whitham, 155 Ib. 514, 521. There is no evidence sufficient to rebut that presumption in the present case. Edward J. Bode, one of the grantors, testified that he signed the three trust deeds at the same time, but it does not appear when the other three grantors signed. It is stated in the abstract, doubtless bv inadvertence, that Langworthy, a notan7 public, testified that the first three trust deeds were executed at the same time, but the record shows that he was examined and answered as follows: Q. “Were you present when the first series of'deeds were executed and acknowledged ? A. No, sir; I was not.” The last three trust deeds were acknowledged before Langworthy, but the first three were not, and it is evident from his testimony that the trust deeds which he says were executed at the same time are the last three which were acknowledged before him. There is no evidence beyond the dates of the notes and mortgages, to, show the order of their delivery to Dreyer & Co. The master and court both found that the first three trust deeds were delivered on the days of their dates, respectively. And among the objections to the master’s report, which were ordered to stand as exceptions, there is no objection to this finding. Edward J. Bode, who negotiated the loan, testified that the money was left with Dreyer & Co. subject to his order. Therefore, the $8,000 notes and mortgages having been delivered March 8, 1894, the grantors then had a credit of $16,000 in the bank of Dreyer & Co., and Dreyer & Co. had then a lien on the mortgaged premises for that amount. The lien of Dreyer & Co., by virtue of the $2,000 mortgage, did not attach till the delivery of that mortgage, March 9, 1894. Fischer v. Tuohy, supra. The purchasers of the notes and mortgages from Dreyer & Co. acquired, respectively, the liens which Dreyer & Co. had, in their order of priority. Appellant Schaeppi testified that he asked Mr. Berger, a partner in the firm of Dreyer & Co., for a first mortgage for $2,000, and that Berger handed him the $2,000 mortgage in question, saying it was a first mortgage. This certainly, if true, could not affect the rights of Glade and Bartholomae. In Brookfield v. Goodrich, 32 Ill. 363, a similar claim was made by the complainants, of which the court say : “ If they took the assurances of the seller, that these bonds were secured by a first lien, that was their own folly.” lb. 368. As between all the parties, the equities are to be determined with reference to the first set of trust deeds. If a bill or bills had been filed alleging the mistake in the description of the premises in the first trust deeds, and praying a reformation in accordance with the intention of the parties, and for foreclosure of the deeds as reformed, all parties conceding the mistake, a decree would have been made accordingly. Instead of pursuing that course, new deeds were made, of the same date, properly describing the premises intended to be conveyed, for the purpose of correcting the mistake, and both sets of deeds were set up by the pleadings, and the decree is the same, in effect, as to priority, as it would have been had the former course been pursued. It is noticeable that in the second set of trust deeds appellant’s $2,000 trust deed has the highest number, illustrating what has been said, that when-two or more deeds are presented for record at the same time, it is mere chance as to which will have the lowest number. The evidence is that Glade purchased his note and trust deed March 10, 1894, and appellant and Bartholomae their notes and trust deeds April 4, 1894. When appellant purchased, both the first and second sets of trust deeds were on record, and appellant might have learned from the record that the $8,000 trust deeds had the earlier date, and were, presumably, first delivered; and we are of opinion that he is chargeable with constructive notice of what was apparent of record when he purchased. Brookfield v. Goodrich, 32 Ill. 363; Van Aken v. Gleason, 34 Mich. 477. The court, by the decree, allowed to Glade $600, and to Bartholomae $500, as solicitors’ fees, and counsel for appellant object that these allowances should not have been made, for the reason that the cross-complainants could have had all the relief to which they are entitled on their answers, citing Soles v. Sheppard, 99 Ill. 616, in which case the bill was filed by a senior mortgagee, and a junior mortgagee, made a party defendant, filed a cross-bill. The court held that, the cross-bill being unnecessary, solicitors’ fees were erroneously decreed in favor of the cross-complainant. In the present case the cross-complainants had each a prior trust deed, and we are of opinion that appellant, who held a junior trust deed, could not, by filing a bill and making the holders of the prior trust deeds parties, deprive them of their rights, under their trust deeds, to be indemnified against the expenses of foreclosure. Shaffner v. Appleman, 170 Ill. 281; Town v. Alexander, 185 Ib. 254. The decree will be affirmed.