Gary v. Newton

66 N.E. 267, 201 Ill. 170

• Court: Illinois Supreme Court
• Decided: February 18, 1903
• Status: Published

Opinion

Mr. Chief Justice Magruder

delivered the opinion of the court:

The main question, presented by the record in this case, relates to the validity of the oral agreement, alleged by appellants to have been made between James F. Gary and his father, Thomas E. Gary, in the lifetime of the latter, by the terms of which it is claimed that Thomas E. Gary paid to his son the sum of §500.00 on November 27, 1893, and that, in consideration of such payment, James Frederick Gary agreed to convey, assign and release to his father all his right, title, share and interest in and to any and all estate, of which his father might thereafter die seized. It will be observed that the agreement is executory in character. It provided that, in consideration of the sum of 8500.00 so paid to him, James Frederick Gary would release his expectancy in his father’s estate. So far as relates to this agreement, the bill is a bill for the specific performance thereof. The bill prays that a decree may be entered, divesting James Frederick Gary of his interest in said lands by virtue of said agreement, and that the levies, so made upon his interest by the judgment creditors, be vacated and set aside. The controversy is wholly between the judgment creditors of James Frederick Gary and the heirs of Thomas E. Gary. So far as the public records show, James Frederick Gary, upon the death of his father, became vested by inheritance with the title to an undivided one-seventh part of the three hundred and sixty acres in controversy. No question is made as to the validity of the judgments, or of the levies thereunder, or of the' sale made by one of the judgment creditors. The only question, therefore, is whether, by virtue-of the oral agreement made between James Frederick Gary and his father, his one-seventh interest in the estate was extinguished in such a way, that the other six children and heirs are entitled each to one-sixth of the premises in question, leaving nothing in said James Frederick Gary for said judgments to take effect upon.

First-—The .alleged contract, made between James: Frederick Gary and his father, Thomas E. Gary, by the terms of which James Frederick Gary agreed to release his expectancy, or his future interest in his father’s estate-as heir by reason of the payment to him of §500.00 by his-father, was merely an oral contract, and not in writing.

This court has held in a number of cases that an estate in expectancy is an appropriate subject of contract, and that agreements by expectant heirs in regard to-their future contingent estates, when fairly made upon a valuable consideration, will be enforced in equity. (Parsons v. Ely, 45 Ill. 232: Bishop v. Davenport, 58 id. 105;. Galbraith v. McLain, 84 id. 379; Kershaw v. Kershaw, 102 id. 307; Simpson v. Simpson, 114 id. 603; Crum v. Sawyer;, 132 id. 443; Bartmess v. Fuller, 170 id. 193). Upon a careful examination, however, of all these cases, it will be observed that, where release's of an heir’s expectancy have-been upheld, such releases, so far as they apply to real estate, were in writing. It is true, that in Galbraith v. McLain, supra, there was an oral agreement, made by a son with his father to release all claim in expectancy to-what was left of the father’s estate after the execution of a certain deed to the son. It appeared in that case, that the father executed a deed to the son, conveying to-him a certain portion of his land, and possession of the-property, so conveyed by the deed, was taken by the son. There was only an oral agreement that the property-conveyed by the deed was accepted in lieu of all claim,. which the son might have in the residue of his father’s estate upon the death of the father, but the transaction was justified upon the ground that the deed was executed and delivered, and possession was taken by the son under and by virtue of the same. Thus, in Riggles v. Erney, 154 U. S. 253, it was said that, although the Statute of Frauds avoids parol contracts for lands, yet the complete execution of the contract in that case by Carrington by conveying to Williams the lands he had agreed to give him in exchange, prevented the operation of the statute. In Kershaw v. Kershaw, supra, we said (p. 313): “A parol promise of an heir to accept a deed of certain property in lieu of his expected interest in his father’s estate, followed by the execution and delivery of the deed and possession of the property, was held to be sufficient,” referring to the case of Galbraith v. McLain, supra. No such state of facts exists in the present case, as operated to sustain the validity of the parol agreement in the case of Galbraith v. McLain, supra. We are of the opinion, that the agreement in question, alleged to have been made between James Frederick Gary and his father, Thomas E. Gary, is void under the Statute of Frauds, as not being in writing. (See also Quarles v. Quarles, 4 Mass. 680; Kenney v. Tucker, 8 id. 142; Fitch v. Fitch, 8 Pick. 479; Nesmith v. Dinsmore, 17 N. H. 515).

The money, amounting to @2150.60, paid to James Frederick Gary by his father in the lifetime of the latter cannot be regarded as an advancement within the meaning of that term as used in our statute. This is so, because it was not evidenced by any writing. Section 7 of chapter 39 of the Illinois Revised Statutes in regard to descent provides as follows: “No gift or grant shall be deemed to have been made in advancement unless so expressed in writing or charged in writing, by the intestate, as an advancement, or acknowledged in writing by the child or other descendant.” (2 Starr & Curt. Ann. Stat. —2d ed.—p. 1432). In view of this statute, this court has held in a number of cases that an advancement, which is not evidenced in the manner required by the statute, t is, in legal effect, no advancement at all, however clear it may appear that it was so intended. (Long v. Long, 118 Ill. 638; Wilkinson v. Thomas, 128 id. 363; Bartmess v. Fuller, 170 id. 193; Marshall v. Coleman, 187 id. 556). In the case at bar, the bill itself admits upon its face that the advancements, alleged to have been made as such to the children of Thomas E. Gary, “are not charged in writing as required by the statute in such cases made and provided.” The bill in the present case is somewhat inconsistent in its allegations, for the reason that it charges the sum of $2150.60, alleged to have been paid by Thomas E. Gary to his son James Frederick Gary, to have been intended as-an advancement. If this was true, then the item of $500.00, which constituted a part of the sum of §2150.60, was a part of the sum intended to be an advancement. It could not, however, be valid as an advancer ment, because the gift or payment of such money was not expressed in any way in writing. In a subsequent part of the bill, however, it is alleged that the last item of $500.00, constituting a part of the whole sum of $2150.60, was the consideration of a verbal agreement, by which James F. Gary agreed to release his expectancy in his father’s estate. It would seem to be impossible that the payment of the $500.00 should have been intended as part of an advancement to James F. Gary, and at the same time should have been the consideration of an agreement for the release of the son’s expectancy in the father’s estate. This payment of $500.00, viewed as a part of the alleged advancement, was invalid under section 7 of the act in regard to descent, independently of the Statute of Frauds, for the reason that it was not expressed in writing. Indeed, a contract, by the terms of which an heir agrees to release his expectancy in his father’s estate in consideration of a sum of money advanced to him by his father, is not the less an advancement because he thereby gives up the whole of his interest in his father’s estate. An advancement has been defined to be “the giving by a parent to the child or heir by way of anticipation the whole or a part of what it is supposed the donee will be entitled to on the death of the party making it.” (Wallace v. Reddick, 119 Ill. 156; Cawthon v. Coppedge, 1 Swan, 487; 1 Am. & Eng. Ency. of Law,—2d ed.—p. 760). By the terms of this definition an advancement is not only the giving by a parent to a child or heir by way of anticipation of a part of the expectant estate, but of the whole of it. It follows that the release of all his interest in his father’s estate by James Frederick Gary in consideration of the payment to him of §500.00 by his father, was nothing more than an attempted advancement, and, as such, was void under section 7 of the Statute of Descent without reference to the Statute of Frauds, which requires a contract in regard to real estate to be in writing.

Second—On the part of the appellant it is claimed that, even if the verbal contract here set up is void under the Statute of Frauds, the appellees, who are judgment creditors of James F. Gary, cannot take advantage of it. Undoubtedly, a verbal contract respecting land is not absolutely void, but voidable only at the will of either party, and it may be as bbligatory upon the parties to it as a written contract, where the parties themselves make no objection that it is not in writing. In other words, a third person cannot object for the parties to such a contract that they are not bound by it. (Collins v. Thayer, 74 Ill. 138; Kelly v. Kendall, 118 id. 650.) It has been said that the Statute of Frauds, which is a statu: tory defense, “is personal and cannot be interposed by strangers to the agreement. Like usury, infancy and a variety of other defenses, it can only be relied upon by parties or privies. Mere strangers have no right to plead or insist upon it for the benefit of others.” (Chicago Dock Co. v. Kinzie, 49 Ill. 289; Singer, Nimick & Co. v. Carpenter, 125 id. 117; Wilson v. Mason, 158 id. 304).

The bill in this case seeks to enforce the verbal agreement,' alleged to have been made between James Frederick Gary and his father, against James Frederick Gary himself, and four other heirs of his father, and also against the judgment creditors already mentioned of James Frederick Gary. The position of the appellants is, that, while James Frederick Gary himself might, if he chose, plead the Statute of Frauds, as a defense to the enforcement of the agreement, because it is verbal and not in writing, yet that the other defendants below, his judgment creditors, being third persons, cannot plead the Statute of Frauds as a defense, such defense being only personal to him. This may be true. But, in the present case, the Statute of Frauds is not pleaded as a defense either 'by James Frederick Gary, or by his judgment creditors. The bill itself, brought to enforce the verbal agreement, recites, upon its face, that the agreement is oral. The amended bill alleges “that said agreement or conveyance was not then,-nor is the same now evidenced by any writing, then or since executed by the said James Frederick Gary.” The question as to the validity of this agreement arises upon demurrer to the bill, which contains the allegation thus quoted. It is well settled that “whenever it appears from the face of the l declaration, bill or complaint that the agreement sued upon is within the Statute of Frauds, and fails to comply with the-requirements thereof, the appropriate mode of taking advantage of the defect is by demurrer.” (9 Ency. of Pl. & Pr. p. 704; Dicken v. McKinley, 163 Ill. 318; Cloud v. Greasley, 125 id. 319; Randall v. Howard, 2 Black, (U. S.) 589). In Cloud v. Greasley, supra, we said: “The rule is, where it appears upon the face of the bill that the agreement to convey is oral, it may be taken advantage of by demurrer to the bill.” In Dicken v. McKinley, supra, we also said: “Where a bill shows affirmatively that a contract or promise to make a will is not in writing, the defense of the Statute of Frauds may be raised by demurrer.”

Most of the cases, already referred to, where the question has arisen as to the validity of an agreement by an heir to release his expectancy in his ancestor’s estate, have been cases where the controversy was between the ancestor, or his heirs, and the heir so agreeing to release his expectancy. Here, however, the controversy is between all the heirs and the judgment creditors of the one, who has agreed to make the release. The heirs of Thomas E. Gary, except James Frederick Gary, set up no defense against the agreement, because it is for their interest that it should be enforced. By its enforcement they each get one-sixth of the property, instead of one-seventh. James Frederick Gary himself is not opposed to the enforcement of the agreement, and his interest lies in that direction because, if it is not enforced, he must be held to be the owner of an undivided one-seventh of the property, which will be subjected to the payment of the liens held against it by his judgment creditors. The bill seeks to enforce a void agreement in such a way as to deprive 6ona fide creditors of the right to collect their debts. An application for the specific performance of a contract is always addressed to the sound legal discretion of the court. In Hamilton v. Harvey, 121 Ill. 469, we said (p. 473): “Courts of equity will decree a specific performance where the contract is in writing, and is certain, and is fair in all its parts, and is for an adequate consideration,- and is capable of being performed, but not otherwise.” (See also Bowman v. Cunningham, 78 Ill. 48.) A court of equity will never become a party to the enforcement of a contract by which wrong and injustice will be perpetrated. “To entitle a party to relief he must come with clean hands, and a cause that appeals to equity for relief.” (Tamm v. Lavalle, 92 Ill. 263; see also Long v. Long, 118 id. 638; Mitchell v. King, 77 id. 462).

It w*ould certainly be laying down a dangerous precedent to hold that, after the title to an interest in property had vested in an heir by descent, he could deprive his judgment creditors of their liens upon his interest by-setting up an oral agreement, made years before between himself and his deceased ancestor, to the effect that he was to have no interest in the property.

There is no allegation in the bill, that the judgment creditors in this case had any notice of the existence of the oral agreement here insisted upon prior to the rendition of their judgments, of prior to the existence of the liens acquired' by them under their judgments. Section 30 of the Conveyance act provides that'“all deeds, mortgages and other instruments of writing which are authorized to be recorded, shall take effect and be in force from and after the time of filing the same for record, and not 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.” (1 Starr & Curt. Ann. Stat.—2d ed.—p. 944). In interpreting- this statute it has always been held in this State, that judgment creditors are within the protection of this section 30, “and stand as purchasers, and are to be regarded as such.” (McFadden v. Worthington, 45 Ill. 362.) In Illinois, a creditor, who has obtained a lien upon land by virtue of his judgment and execution thereunder, occupies the same position with respect to prior unrecorded instruments of writing, or conveyances, as does a purchaser. (Massey v. Westcott, 40 Ill. 160; Martin v. Dryden, 1 Gilm. 187; Milmine v. Burnham, 76 Ill. 362; Columbus Buggy Co. v. Graves, 108 id. 459). The judgment creditors here stand in the position of subsequent purchasers, having no notice of the alleged oral agreement between James F. Gary and his father.

The title to one-seventh of the land, so far as the record shows, and so far as these judgment creditors were able and bound to take notice of it, stood in Janie's Frederick Gary. If the oral agreement be considered as valid and binding, then he held the legal title to an undivided one-seventh of the property in trust for the benefit of his brothers and sisters, the other six heirs of Thomas E. Gary. The trust, upon which he thus held the title when the judgment liens were acquired, was a secret trust, undisclosed by anything upon the records, and of which the judgment creditors here concerned had no notice. Inasmuch as they had no notice, that secret trust cannot be enforced as against them. A dona fide purchaser of the legal estate—and the judgment creditors here are to be regarded as dona fide purchasers—will be protected against the prior equitable title of another, of which he had no notice; and although an heir, holding the legal title to an interest in property by descent, may so hold it in trust for others, still a third person may acquire the title from him, if such third person has no notice of the trust, and acts in g'ood faith. (Robbins v. Moore, 129 Ill. 30). After the death of the original owner, the apparent legal title is in the heir, and the policy of the law which is to make patent all legal titles to lands, so far as practicable, that strangers may' safely purchase, equally requires that the dona fide purchaser from the heir should be protected. (Burton v. Perry, 146 Ill. 71; Kennedy v. Northup), 15 id. 148). If, therefore, the agreement set up in the bill in this case should be enforced, it would lead to the inequitable result of postponing the liens of the judgment creditors to a secret unrecorded trust, of which they had no notice. A court of equity will not enforce such an agreement, as that which is here under consideration, under the circumstances thus indicated.

We are therefore of the opinion that the court below decided correctly in sustaining the demurrer to the bill, and in dismissing the same as to the portion thereof which was demurred to.

Accordingly, the decree of the court below is affirmed.

Decree affirmed.