Forthman v. Deters

69 N.E. 97, 206 Ill. 159

• Court: Illinois Supreme Court
• Decided: December 16, 1903
• Status: Published

Opinion

Mr. Justice Magruder

delivered the opinion of the court:

First—The first reason, urged by the appellant for the reversal of the decree of the trial court, is that the contract was not signed by appellee, Deters, and, therefore, is not such a contract as a court of equity will specifically enforce. It is true, that the contract was signed only by Reka and Ferdinand Huckstead, the vendors, and was not signed by appellee, Deters, the vendee. But the evidence shows clearly that, after the execution of the contract-by Reka and Ferdinand Huckstead, it was delivered by them to appellee, and appellee accepted the contract, and on Maj^ 10, 1902, recorded the same. The evidence is also clear that he paid a part of the $2100.00, named in the contract as the purchase money of the land, to-wit, $902.72, to pay off and take up the amount of principal and interest, due upon the mortgage resting upon the land.

It is well settled by the decisions of this and other courts that, where a party accepts and adopts a written contract, even though it is not signed by him, he shall be deemed to have assented to its terms and conditions and to be bound by them. (Memory v. Niepert, 131 Ill. 623; Ames v. Moir, 130 id. 582; Lowber v. Connit, 36 Wis. 176; Plumb v. Campbell, 129 Ill. 101). In Memory v. Niepert, supra, it was claimed that the contract there under consideration, because it was signed by one party only, lacked mutuality, that is, failed to show that it received the assent of the party not signing it, and, therefore, was no evidence of any contract whatever, but this view was held to be unsound. There, as here, the party, signing the contract, stated that he had “sold” to the party, not signing the same, the property, therein described, upon the terms therein set forth. The same is true of the contract in the case at bar, which contains the following words: “We have sold to. one Joseph Deters” the eighty acres in question, describing the land. By these words Reka and Ferdinand Huckstead declared and acknowledged, that they had sold the premises in question to Deters, and this declaration or acknowledgment was binding upon them. As we said in the Memory case, supra: “The word ‘sold’ imports, not a mere proposition to sell, but a consummated contract of sale. * * "x" The writing in this case is the acknowledgment of a contract, in which there is complete mutuality—a buyer and a seller—a purchase and a sale. It is clear that the execution and delivery of such a writing by the seller to the buyer is not the submission of a mere proposition, but the execution of a contract capable of being enforced, as such, against him.” The contract here also recites “that said Joseph Deters agrees to pay all of said purchase money on the delivery of a good title to said described land,” etc. By these words Reka and Ferdinand Huck-stead further declared and acknowledged that Deters had agreed with them to pay the purchase money.

It is claimed, however, that the contract lacks mutuality, so as to render it enforceable as a written agreement, upon the alleged ground that it could not be enforced against Deters, the purchaser, if the breach had been on his part. In Ames v. Moir, supra, however, where a similar contract was signed by the purchaser, and suit was brought against him by the sellers for the purchase money, we said: “When the sellers accepted the paper as a contract, they became bound by its terms and conditions as completely as if they had in form signed the paper.” In Lowber v. Connit, supra, it was said by the Supreme Court of Wisconsin: “Where the contract has been accepted and adopted by the party not signing it, he does assent and agree to it on his part, and the law implies a promise to perform.” In the Memory case we further said: “The delivery of a writing and its acceptance and adoption by the party, to whom it is delivered, are necessarily facts dehors the writing itself, and must, therefore, be proved by extrinsic evidence; and where mutuality is established by proof of the acceptance of the writing, the contract is, notwithstanding such resort to parol evidence, a contract all of which is in writing. * * * But where the writing on its face purports to be a consummated contract, the mere acceptance and adoption of the writing establishes mutuality, and makes the contract binding on both parties.” We see no reason, therefore, why, if there had been a breach of the contract by the appellee, it could not be enforced against him, even though it was not signed by him. The contract in the case at bar was made under seal, and, hence, must be regarded as having been made upon a sufficient consideration. (Guyer v. Warren, 175 Ill. 328; Hayes v. O'Brien, 149 id. 403). The terms of the contract are criticised by counsel, but it gives the names of the contracting parties, a proper description of the premises sold, the time for the delivery of possession, the price and mode of payment, the character of the title to be conveyed, and the terms which go to make up a contract of sale.

Second—In a proceeding for specific performance the complainant must prove that he has been ready, willing and eager to perform, and the burden is upon him to show a full and complete performance, or offer to perform on his part. (Morse v. Seibold, 147 Ill. 318; Tryce v. Dittus, 199 id. 189). It is claimed by the appellant, that the appellee in this case has not proved his willingness to perform the contract, or any offer on his part to perform it. We do not think that this claim is sustained by the evidence. The appellee, Deters, not only paid the principal and interest due upon the mortgage upon the property within two days after the execution of the contract, but he tendered and offered to pay the balance of the purchase money, over and above the amount due on the mortgage, to-wit, $1197.28, as soon as a deed, showing good title, should be given to him, as required by the contract. It will be observed, that the contract for the sale of the eighty acres to Deters was made before any administration was taken out upon the estate of the deceased, Christopher Huckstead. The real estate, belonging to the deceased testator, was liable to be sold by the administrator for the payment of the claims to be allowed against the estate, and the appellee insisted that whatever claims there might be against the estate should be paid off, in order to relieve the land from its liability for their discharge. We have held in a number of cases, that the lands of a decedent are liable to be charged with the debts of the estate. (Noe v. Moutray, 170 Ill. 169, and cases there cited). The proof shows that appellee was desirous of going abroad to Germany, and that he did leave for Germany on May 11, 1902, and did not return until August 6,1902. Before his departure, and on February 3,1902, Charles Schmidt was appointed administrator of the estate. On March 3, 1902, the report of the appraisers, fixing the widow’s award at §807.00, was approved by the court, and, on April 11 and June 7,1902, claims against the estate were allowed to the amount of §172.00, making a total, including the widow’s award, of §979.00, which, after deducting §446.00 of personal property, left §533.00 as the amount of the claims due from the estate. The appellee proposed to pay the money, including the amount necessary to discharge these claims, and offered, as he was obliged to leave the country, to place the money in the hands of his own attorney, or in the hands of the attorneys of Reka and Ferdinand Huck-stead, the vendors, in order that a portion of it might be applied to the payment of the claims allowed, and the balance be paid over to the vendors. As we understand the evidence, the money was left in the hands of appellee’s attorney for such purpose, or left in such a way that the attorney had the power to pay the §1197.28 as soon as a deed, conveying good title, was delivered to him. Appellee left for Europe with the understanding that the claims, when allowed, would be paid off with a portion of this amount. As soon, however, as appellee had left the country, and on June 2, 1902, the vendors, Reka and Ferdinand Huckstead, in violation of the agreement, made a deed of the land to the appellant for a nominal consideration of §2350.00, which deed was never recorded. Upon the return of appellee on August 6,1902, he ascertained that this deed had been made to the appellant, and he tendered the money, and demanded a deed, which demand was refused. We discover nothing in the evidence to indicate that appellee did not do everything, which he could do, to show his willingness to perform the contract on his part, nor anything to show that he did not offer to perform it.

The decree of the court is criticised, upon the alleged ground that creditors would have two years within which to file their claims, and that the vendors could not be compelled to wait two years for all the claims to be filed before receiving the purchase money for the land. The decree is not capable of the construction thus placed upon it, but provides that the clerk shall keep the money, until the premises are released “from all liens of said claims allowed against said estate of Christopher Huck-stead.” The claims allowed, and which were to be paid out of the money, by the terms of the decree, amounted to the sum already mentioned.

It is further said by the appellant, that the mode, provided by the decree for the extinguishment of the liability of the land to pay the claims allowed, was not a specific enforcement of the contract as made, but was tantamount to the insertion therein, and the enforcement, of new terms, so as to create a new contract for the parties. The decree in all its material provisions is substantially the same as the decree, approved by this court in Hunt v. Smith, 139 Ill. 296. By the terms of the contract the vendors agreed to give “a good deed free from all encumbrance with abstract of title up to date.” The obligation, thus created by the contract, involved the duty of removing the liability of the land for the payment of the claims allowed. In Hunt v. Smith, supra, where it appeared that, at the time of the decree, the lien of a mortgage, held by an insurance company, had not been removed, we held that the obligation on the part of the vendor to convey an unencumbered title necessarily involved the legal obligation or duty to remove the lien of the mortgage, and we there said: “This is in no sense a creation of a new contract "for the parties, but only a mode, and we think an appropriate mode, of enforcing the legal obligations imposed by the contract, which the parties have made for themselves.”

Third—It is further claimed, on the part of the appellant, that the appellee, Deters, did not pay off the mortgage upon the premises, but that he obtained an assignment to himself of the note and mortgage from the original mortgagee, Wyatt, and held it uncanceled against the land. In this connection it is also insisted, that the note and mortgage were not surrendered. The appellee produced upon the trial the original mortgage, and the assignment thereof to himself, and the unpaid principal and coupon notes, secured by the mortgage, transferred to himself. Appellee allegues in his bill, that he paid the principal and interest due on the mortgage to Wyatt,1 and the decree rendered by the court finds that he paid the mortgage and interest. This allegation in the bill as to payment would estop appellee from asserting the mortgage claim against the property,' and the finding of the decree, that the mortgage was paid, protects the vendors and their grantee; and they have no reason to complain.

Appellee being the holder of the mortgage—when the original vendors in the contract, or their grantee, the appellant, should execute to him a deed—there would unquestionably be a merger in appellee of the two estates, the legal estate of mortgagor and the equitable estate of mortgagee. It is well settled that, at law, when a greater or lesser, or a legal and equitable estate, coincide in the same person, the lesser, or the equitable estate, is immediately merged, and annihilated. (15 Am. & Eng. Ency. of Law,—1st ed.—p. 314). It is true that the question, whether or not a merg'er takes place in equity, depends upon the intention of the parties, and a variety of other circumstances. (Ibid). But, “a merger will be prevented by equity only, however, for the purpose of promoting substantial justice; it will not prevent a merger, where such prevention would result in carrying a fraud or other unconscientious wrong into effect.” (15 Am. & Eng. Ency. of Law,—1st ed.—p. 315). Pomeroy, in his work on Equity Jurisprudence, (sec. 794) says: “Whatever may be the circumstances, or between whatever parties, equity will never allow a merger to be prevented and a mortgage or other security to be kept alive, when this result would aid in carrying a fraud or other unconscientious wrong into effect, under the color of legal forms. Equity only interposes to prevent a merger, in order thereby to work substantial justice.” In this case, it would be an injustice to the original vendors in the contract, and to appellant, their grantee, to permit appellee to hold the mortgage, as a subsisting encumbrance, and the note, as a subsisting indebtedness, after a deed had been executed to the appellee by Eeka and Ferdinand Huckstead, and the appellant. Hence, upon the execution of the deed, required by the contract, to appellee, there would be a merger, which would protect the interest of appellant, and the vendors in the contract. Although a conveyance of the mortgagor’s estate to the mortgagee does not operate as a merger in equity unless it was intended to have that effect, yet when the holder of the notes, secured by the mortgage, accepts a conveyance from the mortgagor of the lands, and gives the notes up to the maker, or, as here, deposits them in court, and no reason exists for keeping the encumbrance alive, there will be a complete merger, and the mortgagee will acquire the entire title. (Shippen v. Whittier, 117 Ill. 282).

The contract is capable of the construction, that the appellee, Deters, assumed the payment of the mortgagee upon the property, because the purchase price of the property is stated in the contract to be $2100,00, and the $2100.00 included the principal and interest due upon the mortgage. The rule is that, where the' grantee of the mortgagor takes a conveyance of the land subject to the mortgage, and expressly assumes and promises to pay it as a part of the consideration, the assignment of the encumbrance to the owner of the property works a merger thereof, because such grantee is thereby made principal debtor and the land is the prijnary fund for payment, so that, if he pays off the charge, it becomes extinguished. (Clark v. Glos, 180 Ill. 556; 2 Pomeroy’s Eq. Jur. secs. 797, 793.) Inasmuch, therefore, as an execution of a deed to appellee in accordance with the terms of the decree would create a merger, no injury could result to appellant, if the terms of the decree should be carried out.

Fourth—The evidence in the case shows clearly that, before appellant accepted his deed from the heirs or devisees of Christopher Huckstead, deceased, he had notice both actual and constructive of the contract of sale, made with appellee on January 20, 1902. That contract was on record as early as May 11, 1902, and appellant did not obtain his deed until June 2, 1902. In addition to this, the proof shows that appellant went to the recorder’s office, and saw the contract with appellee, as there recorded. He, therefore, had full notice and knowledge of the rights of appellee under the contract before accepting his deed. Consequently, appellant, not being a bona fide purchaser without notice, will be compelled to perform the contract of his vendors, Reka and Ferdinand Huckstead. He stands upon the same equity as they did; although he is not personally liable, yet he is properly decreed to convey the land in the same manner as his "vendors; in other words, he is treated as a trustee of appellee, the first vendee. “The general principle, upon which this doctrine proceeds, is that, from the time of the contract for the sale of the land, the vendor, as to the land, becomes a trustee for the vendee, and the vendee, as to the purchase money, a trustee for the vendor, who has a lien upon the land therefor. And every subsequent purchaser from either, with notice, becomes subject to the same equities as the party would be from whom he purchased.” (1 Story’s Eq. Jur.—12th ed.—sec. 789). In Pomeroy on Specific Performance, (sec. 465) it was said: “When the vendor, after entering into a contract of sale, conveys the land to a third person, who has knowledge or notice of the prior agreement, * * * such grantee can be compelled, at the suit of the vendee, to specifically perform the agreement by conveying the land in the same manner, and to the same extent, as the vendor would have been liable to do, had' he not transferred the legal title.” (See also Bryant v. Booze, 55 Ga. 438; Hunt v. Smith, supra; Chicago and Eastern Illinois Railroad Co. v. Hay, 119 Ill. 507; Wollensak v. Briggs, 119 id. 453; Bishop v. Newton, 20 id. 175).

For the reasons above stated, we are inclined to think that the decree of the circuit court is correct, and, accordingly, it is affid.

rmeDecree affirmed.