Williams v. Merriam

The opinion of the court was delivered by Smith, J.: The petition failed to state that the defendants Merriam and the National Life-insurance Company, in case No. 14,290, had any knowledge of any fraudulent misrepresentations on the part of William E. Lodge or of any mistake of facts that induced the plaintiff to execute the agreement of 1879, and did allege in substance that these defendants paid a valuable consideration for the mortgages held by them. The ruling of the court in sustaining the demurrers of these defendants is affirmed. The court erred in the seventh and eighth so-called findings of fact, which were really conclusions of law, and in the first and second conclusions of law. The transaction detailed by the findings of fact was in no sense an assignment of dower. The plaintiff was entitled, as dower, to one-third of the use of the Illinois land during her lifetime, and commenced an action to have such dower assigned to her. The heirs — 322 — to the fee had parted with their interest in the land and it was desired to unite with the fee title the entire use and right of possession. She had a right in action for such dower, but, instead of pursuing her action and having her portion assigned and taking the annual income, she compromised. She released and sold to the owner of the fee all her rights for a lump sum, as she would have sold a life lease or a mortgage upon the land. For this she received $6000, through her agent or trustee — not the use of $6000 during her life. Nor did the amount she was to receive depend upon whether she lived one year or fifty years. No statute of the state of Illinois upon the subject was offered in evidence, and it is -not to be presumed that it had any. By the common law, however, which was in force in that state, a dower right could not, at least before assignment, be sold or conveyed by deed. Nor could it be released to any one not the owner in whole or in part of the fee, or not so related to the fee that the release thereof would unite it with the fee. Such release could be purchased by the fee owner or by any one so related thereto, and could be made by the dowress for any consideration agreed upon by the persons interested. (Hart v. Burch, 130 Ill. 426, 22 N. E. 831, 6 L. R. A. 371; 10 A. & E. Encycl. of L. 146, et seq.) A release sold to one capable of purchasing was in no sense an assignment in bulk, and the purchase-price did not remain a part of the deceased husband’s estate. Indeed, as in this case, the price frequently was paid' by one who had no interest in such estate, and it became the absolute property of the dowress, as did the $6000 paid to plaintiff’s agent in this case. The writing given by plaintiff to William E. Lodge authorized him to sell and release this dower right, and the court found that he did sell it at a price authorized by her and to a person empowered by law to buy it. The court also found that William E. Lodge advised the plaintiff that she had only a life-interest — 323 — in the money to be obtained for such dower; that she was ignorant of the law; and that she believed and relied upon such advice in executing the writing of 1879. There is no suggestion of bad faith or of illegitimate personal gain on the part of William E. Lodge in giving this advice, nor in the subsequent handling of the $6000 for more than twenty years. It is impossible to tell, and idle to speculate, how far this mistake of the plaintiff and her attorney influenced her action in making the agreement of 1879; whether she would otherwise have sold her right for $6000, or what disposition she would have made of the proceeds. She received more than one-third of the selling price of one-third of the land. For the use of the $6000 she has received $400 annually, free of all expenses, from 1879 to the commencement of this suit. It seems not to have been a bad settlement, and certainly has resulted in a fair income on the amount received. But the trial court erred in its conclusions of law, and on the facts found the plaintiff is entitled to relief. The facts being found, it is the duty of this court to direct what judgment is to be rendered when the case is remanded. What should that judgment equitably be as between all parties in interest? The plaintiff asks that the contract between herself and William E. Lodge, made in 1879, be set aside, and that she be adjudged the owner of the land bought, in part, with the money which came into Lodge’s hands by reason of the contract, free of all encumbrances except sufficient of the mortgage lien to equal the purchase-price of the land in excess of the $6000 which was paid. Would this be equitable? The situation, briefly stated, is this: The written statement of 1879 was executed by plaintiff and William E. Lodge not through any intended fraud but under a mutual mistake of law and fact. He sold and released her dower and received the proceeds, $6000, and used and invested the same so that she received the amount of the income stipulated ($400 annually) — 324 — for over twenty years. Much of the time it was invested in the land in question. He is directed by the writing that at her death the $6000 is to go to the sons of her deceased husband. Lodge got these sons to go upon the land in question and tried, apparently without any self-seeking, to put them in a position to pay the $400 annuity and the mortgages, and to become the absolute owners of the land on the death of plaintiff. They failed, as they failed to keep their father’s estate in Illinois. The mortgage liens upon the land grew larger and larger. Lodge then, as “trustee,” conveyed these lands to his own sons, the defendants in this suit, who assumed and agreed to pay the mortgages and also delivered to him their unsecured, non-negotiable promissory notes for $3000 each, bearing interest at seven per cent, annually, the principal to be paid at the death of the plaintiff to the Williams sons. This was a breach of the trust imposed in William E. Lodge and a violation of the agreement which authorized him to invest the $6000 “in improved lands or in mortgage loans on improved land.” His sons also knew this was a breach of the trust and participated in it. The interest was paid, and, about three years after this transfer, Lodge took from his sons a mortgage on the land in question, subject to the prior mortgage for $12,000, and a first mortgage on another 160 acres of land, to secure two other notes for $3000 each, given in lieu of the unsecured notes. A few years later William E. Lodge died, evidently unconscious, as was the plaintiff, that a mutual mistake had been made by them in 1879. His death in a sense ends the contract between him and the plaintiff. Assuming that the mortgagees, who took liens on the land in question for moneys loaned, and Lodge’s sons, who bought the land and assumed to pay the mortgage thereon, gave their notes for $6000 and for years paid interest thereon, and finally secured the payment of the $6000 and interest by mortgages on — 325 — this and other lands owned by them, knew the conditions and provisions of the writing of 1879 but knew nothing of any mistake or mistaken advice, should they suffer by reason of such mistake, for which they were in no wise responsible? The answer must be in the negative. Nor must they profit by the mistake. As to the Williams sons and their heirs the provisions of the agreement were a gratuity. They have paid no consideration therefor, but have derived benefits instead of being placed in a worse position by reason thereof. The plaintiff by her petition has revoked such provisions, as at all times she had a right to do. In the absence of proof or a finding that the $400 paid annually to the plaintiff was derived from the rent of the land — and the circumstances indicate the contrary — she is not entitled to interest on her money invested in the land and to the advance in the value of the land also. Under certain circumstances she might take her choice either to reclaim her money with interest or to affirm the investment and take the land with its increased value. She cannot equitably be entitled to both. She has received the interest on her money up to the time she brought the suit and repudiated the agreement of 1879, and has made no offer to repay or relinquish the money so received. Equity will now give her the principal and nothing more. Case No. 14,447 is remanded, with instructions to the district court to render a decree that plaintiff is the equitable owner of the two $3000 notes executed by James P. Lodge and Charles V. Lodge in 1895 and of the mortgage given to secure the same, and that neither John F. Williams nor Edward M. Williams nor the heirs of either have any interest in the same; that judgment be rendered in favor of plaintiff against James P. Lodge and Charles V. Lodge for the amount' of $6000, and interest thereon at the rate of six per cent, per annum from the commencement of the suit, the judgment to bear six per cent, interest till paid, and for costs; that the mortgage given to secure the — 326 — payment of the notes be foreclosed and plaintiff adjudged to have a lien, subject only to the mortgage for $12,000 and interest held by the National Life-insurance Company on the land covered by its mortgage, and a first lien upon the other tract of 160 acres; that said lands be sold and the proceeds applied as above indicated. The costs in case No. 14,290 in this court will be taxed against the plaintiff in error, and in case No. 14,447 against James P. Lodge and Charles V. Lodge, defendants in error. All the Justices concurring.