Clohesey v. Spencer

Mr. Justice Smith delivered the opinion of the court. Plaintiffs in error contend that the decree is contrary to the evidence and the law; and that the bill and intervening petition should have been dismissed for want of equity. The record shows that there is but little controversy' over the facts. The'complainants and the intervening-petitioner, Joseph Grove, trustee in bankruptcy of the estate of David T. Clohesey, called as their witnesses the plaintiffs in error, defendants below, as to the facts out of which the equities of complainants’ case are claimed to arise. Aside from the plaintiffs in error, complainants and intervening petitioner called Sadler, a mason, .Burns, an architect, Hoppe, a carpenter, as to the real estate standing in the name of Catherine. Clohesey and Timothy C. Clohesey, the mother and father of David T. Clohesey, but tibe court found in its decree in favor of plaintiffs in error as- to the real estate and as to that dismissed the bill for want of equity. No cross-errors are assigned. We therefore need pay no attention to the testimony of these witnesses. It appears from the evidence that in 1885 complainant Spencer, George H. Wallace and David T. Clohesey were co-partners in the printing business and conducted the business for about a year. Wallace and Clohesey then purchased the interest of Spencer and continued to run the business for another year when Wallace, who attended the finances of the firm, became insane and disappeared. At the time Spencer’s interest in the firm was purchased there were two chattel mortgages upon their plant. The first mortgage was dated September 15, 1885, and was given to W. II. Kretsinger to secure the notes of Spencer, Wallace and Clohesey, aggregating $1,500. The other mortgage was dated December 17, 1885, and was given to O. N. Blomgren to secure their note for $1,593.06. After the purchase of Spencer’s interest and the-disappearance.of. Wallace, David T. Clohesey informed his father Timothy C. Clohesey of the condition of the business, and of the existence of the chattel mortgages, and that Wallace had taken what money they had, and that the business would have to be closed out. Without the knowledge of David T. Clohesey, his father purchased the chattel mortgages and acting under legal advice caused the mortgages to be foreclosed, and purchased the printing plant at the foreclosure sale. The business was closed for a time, but Clohesey, Sr., put his daughter Catherine in the office as cashier and bookkeeper and with her assistance and the assistance of his sons, David T. and Timothy J. Clohesey, opened np the business and conducted it from that time until the bill in this case was filed, December 28, 1904. When Clohesey, Sr., foreclosed the mortgages and commenced the business, he opened a bank account in his own name and authorized his daughter to sign checks. During the entire period of about eighteen years that Clohesey, Sr., conducted the business in this manner, there was no formal agreement between him and his sons and his daughter as to their wages, but each drew from five to ten dollars per week for spending money. They all lived at home with their parents and received his or her board and clothing. Thirty-five dollars were drawn each week for family expenses. The father was hot a practical printer and left the details of the business largely to his sons and his daughter. The daughter, however, was mainly relied upon as the sons were more or less dissipated and were in a habit of absenting themselves from the business many times a year for three weeks or longer at a time, while the daughter attended to the business all the time. The receipts from the business and rents derived from his real estate were all deposited by Clohesey, Sr., in the bank account, and any buildings erected or repairs or improvements made were paid for out of this account by checks drawn upon it. The evidence shows that this was a general bank account and that Clohesey, Sr., had no other. 441 the witnesses testified that no one had any interest in the business except the father, Timothy C. Clohesey. The evidence tended to show that in 1886 the plant was worth about $6,000 and that at the time of the hearing of the case it was worth from $10,000 to $15,000. The complainant obtained judgment against Wallace and David Clohesey in December, 1896, on their note given to him. This judgment was revived on May 12, 1904, for $1,226.25, and execution was duly issued and returned no part satisfied. Defendants in error urge that the chancellor’s findings of fact will not be lightly disturbed, and will only be disturbed when manifestly against the weight of the evidence. It is true that where there is a sharp conflict in the evidence over controverted questions qf fact, and the trial court has an opportunity of seeing the witnesses and hearing their testimony as it is delivered orally, the findings of the court upon mere questions of fact will not ordinarily be disturbed on appeal unless such findings are clearly and manifestly against the preponderance of the evidence. In this case, however, plaintiffs in error were called by the complainant and intervening petitioner and their testimony constitutes the only evidence, substantially, upon which the alleged equity of the case rests. It is therefore a case where there is no conflict in the evidence and there was no occasion for the chancellor to judge of the credibility and weight of evidence of the respective witnesses. The chancellor was required to draw conclusions simply from the testimony of the witnesses. This, we think, can be done as well by an appellate tribunal as by the chancellor in this case, and the reason of the above rule does not exist in the case at bar. We consider ourselves free therefore to draw our own conclusions from the evidence without attaching any special weight to the findings of the.chancellor. It is contended further on behalf of defendants in error that in considering the evidence in the record we cannot consider the question of laches on the part of the complainant, because it is not pleaded as a defense. If that defense had been pleaded, it is urged, the complainant could have amended his bill so as to show fraudulent concealment. We think, however, where the delay of eighteen years in asserting the alleged equitable right appears on the face of the bill and in the evidence of complainant offered in support thereof, we cannot dismiss that fact from our consideration, for it is in this case something more than a technical defense. It cannot be ignored in considering the complainant’s case. It is a distinctive and peculiar feature of his case which is wholly unexplained and unaccounted for in the bill or in the evidence. In Benson v. Dempster, 183 Ill. 297, it does not appear that the defense of delay was set up by answer or otherwise by the defendant. It does appear by the bill, -as in the case at bar, that the father of the complainant was guilty of gross laches, and the court considers the inexcusable delay on the part of complainant’s ancestor, .and his heirs, and holds that “a court of equity will refuse relief on the ground of lapse of time and its inability to do complete justice.” In Brown v. Brown, 154 Ill. 35, the laches of complainants appeared from the bill and it does not appear that it was set up and relied upon in any pleading of the defendant. There it was sought to set aside a deed made in August, 1865, and recorded in the following December. It appeared that for a period of over twenty-six years complainants acquiesced in the conveyance, and it was held that where a party had slept upon his rights, or acquiesced for a great length of time, a court of equity should refuse- relief. And so in Walker v. Carrington et al., 74 Ill. 446, the long delay in filing the bill, showing acquiescence in the adverse rights of appellant, barred the claim. It is true that in the Walker case, supra, the defense was claimed in the answer, but no specific facts were pleaded constituting the defense, which did not appear in the bill. We think, therefore, that inasmuch as the unexplained delay of complainant for eighteen years in taking the necessary steps to assert his claim appears in his bill and the evidence offered to sustain it, the court in considering his case must' view it in the light of all the circumstances, and particularly in the light of his action or acquiescence in the long continued, open and notorious possession by plaintiff in error Clohesey, Sr., of the plant and business which he now seeks to subject to the payment of his judgment. Spencer was a party to the chattel mortgages which were foreclosed. He made no effort to contest the title of Clohesey, Sr., under the foreclosure for more than eighteen years, during all of which period he knew that Clohesey, Sr., was claiming title to the property in the most notorious and open manner. Spencer’s claim and the claims of the other creditors represented by the trustee in bankruptcy must be regarded, in our opinion, as tainted with staleness, and a court of equity should refuse relief on the ground of lapse of time and its inability to do complete justice. Independently, however, of the question of laches, we do not think the complainant is entitled to relief on the evidence. No fraud on the part of Clohesey, Sr., is shown. There is nothing of a suspicious nature in his conduct in connection with the printing plant and business. What was done by him can as well be attributed to honest motives and fair dealings as the reverse, and when that can be done, it will be so considered. When the affairs of the firm of Wallace and Clohesey came to the point that their business could not be continued it was natural that Clohesey, Sr., should endeavor to save something from the wreck, and perhaps the business'itself. He had loaned to his son $1,000 to start him in the business, and this was totally lost unless he could save the business and continue it successfully. While it is insinuated that he purchased the plant at his own sale and that the sale was therefore void, no definite evidence was offered to show any fraud in that regard. The exact method and steps taken to foreclose the mortgage do not appear in the record. In the nature of things it was impossible to show the details of the foreclosure proceedings, owing to the great lapse of time. The mortgages were not assigned to Clohesey, Sr., and the mortgagees therefore became trustees for the holder of the notes. It was for them to sell the property-described in the mortgages under the powers contained in the mortgages for the payment of the indebtedness represented by the notes. This was done under the advice and direction of able and experienced counsel. Blomgren, one of the mortgagees, was called as a witness, but he could remember nothing about the transaction except that he had a mortgage and that “we got the money in trust and paid it out to the different concerns—other concerns.” He did not remember any transaction with the elder Clohesey or what was doné with the mortgage. He parted with the paper, but did not remember to whom he transferred it. The inference from the testimony in the record is that at the time the notes were purchased by Clohesey, Sr., some arrangement was made with the mortgagees for the foreclosure of the mortgages and that a sale of the property was had under the mortgages. In our opinion that sale should not be set aside for mere irregularities, if any, and held for naught at this late day on the evidence in the record. It is urged on behalf of defendants in error that David T. Clohesey had no right to make a gift of his labor, skill and intelligence- to his father in fraud of his creditors, and inasmuch as his father has received the benefit of his services, and the greater part of his earnings remained in the business, the printing plant should be sold as the decree provides. We cannot yield assent to this proposition from a legal point of view; nor do we think the evidence shows that David T. Clohesey?s services, considering his habits and the uncertain and intermittent character of his services, were reasonably worth more than the evidence shows he received. For the reasons given, the decree of the Superior Court is reversed and the cause is remanded with directions to dismiss the bill and intervening petition for want of equity. Reversed and remanded tvifh directions.