Doxey v. Western State Bank

Mr. Presiding Justice Adams delivered the opinion of the court. Counsel for both parties have argued the cause on the hypothesis that the decree can only be sustained, if at all, on the theory that the complainant, the Western State Bank, on payment of the amount secured by the first trust deed, which was owned by the Millers, became subrogated to the rights of the Millers under that trust deed. This, although such wras not the theory of the learned chancellor who heard the cause, as evidenced by the decree. It is not decreed that the bank is entitled to be subrogated to the right of the Millers. There is no hint of the doctrine of subrogation in the decree; and to apply that doctrine to the facts of the case is difficult, if not impossible. It was proved, and the court finds, that December 20,1894, John W. Doxey was adjudged insane by the County Court of Cook County. The court also finds, and counsel agree, that the second trust deed executed August 23, 1895, was and is void. This, on the presumption that the insanity of Doxey, deceased,' continued till August 23, 1895, when he executed the trust deed of that date. If the deed of that date was void, no interest in the premises which it purports to convey passed by it to the bank, and therefore the bank had no interest in the premises to protect by the purchase of the prior trust deed. If a third person, having no interest in mortgaged premises, voluntarily pays the indebtedness secured by the mortgage, he is not entitled, merely by such payment, to be subrogated to the rights of the mortgagee. Pearce v. Bryant, 121 Ill. 590, 597; White v. Cannon, 125 Ill. 412, 416; Boughton v. Cameron, 99 Ill. App. 600, 621. The theory of the decree is that the bank was a purchaser of the first trust deed. The court finds that the bank was ignorant, in fact, that Doxey, deceased, had been adjudged insane, and loaned its money in good faith, believing that the second trust deed was valid; that it so believed when it purchased the indebtedness secured by the first trust deed, and that it caused the first trust deed to be released by a mistake of fact, namely, the mistake in believing that Doxey, Jr., when he executed the second trust deed, was sane, it having no actual knowledge that he had been adjudged otherwise. It is contended by defendants’ counsel that the court’s finding that the bank had no actual knowledge of the insanity of Doxey, deceased, is not sustained by the evidence. The application by Doxey for the $1,000 loan was in writing signed John W. Doxey. That the signature is genuine was proved by the witness Krusemarck. The same witness was in the employ of the bank, his business being to appraise real estate and take applications for loans. He testified that he took the acknowledgment of Doxey, Jr., to the trust deed August 23, 1895, the date of its execution; that August 24, 1895, he went to the house of Doxey, deceased, number 5426 Wentworth avenue, to procure the signature of his wife, Mrs. Doxey, to the deed, and saw him there; that he was in the room where his wife signed and acknowledged the trust deed, and told her that witness had come to have her sign the deed; that Doxey did nothing to attract witness’ attention, and that he, witness, thought Doxey had sufficient mental capacity to protect his own interest, and that Mrs. Doxey said nothing about his being mentally unsound. A transcript of the proceedings in the County Court “In the matter of the alleged insanity of John W. Doxey ” was put in evidence, and shows that, on his being adjudged insane, he was ordered to be committed “ to the Illinois Hospital for the Insane at Kankakee.” The testimony of the witness Krusemarck, together with the fact that John W. Doxey was found at his residence in Chicago, after having been adjudged insane by the County Court, and committed to an hospital for the insane, is not only evidence tending to prove that the bank had no actual knowledge of his insanity, but tends to prove actual belief on the part of the bank that he was sane. That, under the circumstances, the bank should be regarded as a purchaser of the first trust deed, is equitable and just to the bank, and works no injustice to the defendant, Louis J. Doxey, or any one. The bank paid its money in discharge of the indebtedness secured by the deed. The defendant, Louis J. Doxey, is not a purchaser, but takes by descent, as heir, and the property which he so takes was pledged to secure the $600 loan by Peterson and Bay to his father, and he now seeks to avoid payment of that loan. In his answer to the bill he substantially admits that the bank purchased the $600 note, as follows : This defendant, further answering, says, that the said complainants in the amended bill of complaint had no interest in the real estate mentioned in said trust deeds on the 23rd day of August, 1895, which warranted them in purchasing said note and being subrogated to the rights of the holders of said jiote and because the said purchase was made with the money contracted by them to the said John W. Doxey. Jr., and, by reason thereof, the said complainants became invested with no interest in the said $600 note and trust deed securing the same.” The bank, as the purchaser of the $600 note, was entitled to a foreclosure of the trust deed executed to secure its payment. The decree will be affirmed. Affirmed.