Lagger v. Mutual Union Loan & Building Ass'n

33 N.E. 946, 146 Ill. 283
CourtIllinois Supreme Court
DecidedMarch 31, 1893
StatusPublished
Cited by37 cases

This text of 33 N.E. 946 (Lagger v. Mutual Union Loan & Building Ass'n) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lagger v. Mutual Union Loan & Building Ass'n, 33 N.E. 946, 146 Ill. 283 (Ill. 1893).

Opinion

Mr. Justice Magbudeb

delivered the opinion of the Court s

The first question is as to the character of the title acquired by Augusta M. Spies through her sale as administratrix of the estate of her first husband, Joseph E. Lagger, deceased. Having married John Spies while she was administratrix of said estate, she applied to the Probate Court and obtained an order to sell the premises to pay debts. The only unpaid debt against the estate was her widow’s award, appraised at $1959.00, upon which, after applying all the personal property, there was due a deficiency of $1840.10. The object of petitioning for a sale of the real estate was to raise money to pay herself this deficiency. At the sale made by her as administratrix she struck off and sold the premises in question to her pwn husband, John Spies, .for an alleged consideration of $1650.00. Although she reported the sale to the Probate Court as a sale for cash, yet, as matter of fact, her husband paid nothing. She merely credited the amount of his bid upon the amount due her upon her widow’s award in her accounting as administratrix with the Probate Court. She executed a deed as administratrix to her husband on August 29, 1888, which was recorded on August 30, 1888. On September 5, 1888, she and her husband executed a deed of the property for a recited consideration of $1650.00 to Cora B. Hirtzel, which deed was recorded on September 11, 1888. Miss Hirtzel paid nothing for the property. She was a stenographer in the office of the attorney, who acted for Mrs. Spies in the Probate Court in filing the petition, and conducting the other proceedings. Under the direction of said attorney, Cora B. Hirtzel at once on the same day executed a deed of the property, conveying it back to Mrs. Spies, which latter deed was recorded on September 12, 1888. The latter deed, like the two others, was without consideration.

The evidence shows beyond question that John Spies acted for his wife in bidding for the property; that she was the purchaser of the premises at her own sale; that the petition for a sale, and the sale by her as administratrix, and the transfer of the title to a third person, and its reconveyance to her, were steps taken in pursuance of a previous arrangement between Mrs. Spies and her husband and her attorney, by which the title was to be vested in her, so that she could raise money to build upon and improve the property.

Trustees, and others occupying fiduciary relations, cannot purchase on their own account the property entrusted to their management. Administrators act in a fiduciary character in the sale of property and settlement of estates. The law forbids an administrator to purchase at his own sale, whether the purchase is in his own name, or in the name of another for his use. Even though, in such case, the intentions of the trustee are honest and there is no fraud in fact, the sale will be set aside, if the parties in interest object to it within a reasonable time. The purchase, however, is held to be voidable only, and not absolutely void. In a number of cases this Court has sustained the right of the heir to file a bill in equity to set aside a sale of land by the administrator where the latter has made the purchase for himself. (Thorp v. McCullum, 1 Gilm. 614; Miles v. Wheeler, 43 Ill. 123; Kruse v. Steffens, 47 id. 112; Ebelmesser v. Ebelmesser, 99 id. 541). It is manifest, therefore, that the present appellants, who are the children of Joseph E. Lagger, deceased, are entitled to have said sale by their mother, and the deeds executed subsequently thereto vesting the apparent title in her, set aside as between themselves and the said Augusta M. Spies, or Augusta M. Lagger.

The next question is whethfer or not the appellee, as the holder of the trust deed executed by Augusta M. Spies and her husband on October 15, 1888, can be regarded as a bona fide purchaser without notice, so as to be entitled to enforce said trust deed against the property in question.

When Mrs. Spies applied to the appellee for the loan secured by the trust deed, she delivered to it for examination an abstract of the title, which sets out all the proceedings in the Probate Court in the matter of the estate of Joseph E. Lagger, deceased, and all the deeds hereinbefore described. ,The petition of the administratrix for the sale of the property, as it appears in the abstract, contains the statement that “petitioner since her appointment as administratrix as aforesaid and on or about April 7, 1888, intermarried with John Spies, with whom she is living as his wife.” A party is bound to take notice of such recitals of fact as appear in the direct line of his title. (Brush v. Ware, 15 Pet. 93; Effinger v. Hall, 81 Va. 94). Here, the appellee was notified by the recorded proceedings in the Probate Court, that the purchaser at the sale was the husband of the administratrix who made the sale. The recital of this relationship in the petition, and the deeds showing the transfer of the title to a third person and its immediate re-conveyance to the administratrix herself, were circumstances sufficient to put appellee upon such inquiry as would have resulted in the discovery of the equities of the appellants. The policy of the law, which prohibits á person occupying a fiduciary relation from purchasing at his or her own sale of the trust property, equally forbids such purchase by the wife or husband of the seller. (Tyler v. Sanborn, 128 Ill. 136). The exclusion of the husband as a purchaser, where the wife sells as a trustee, is not so much for the reason that she may subsequently become entitled to some interest in his lands, as on account of the unity which exists between them in the marriage relation. (Bassett v. Shoemaker, 46 N. J. Eq. Rep. 538). Hence, we think that the appellee must be held to have had constructive notice of the real character of the sale made by the administratrix, and that the trust deed cannot be foreclosed against the interests of the appellants in the property, (2 Woerner’s Am. Law of Administration, sec. 487, p. 1086; Filmore v. Reithman, 6 Col. 120).

Where a sale made by an administrator to himself is set aside upon bill filed by the heirs for that purpose, it has been held in this State that the administrator is a trustee, and as such is entitled to have an account stated, and that, in stating the account, he should be charged with the rents and profits received from the property, and credited with monies paid out on the purchase and applied to the discharge of debts against the estate, and with monies paid out for taxes, necessary repairs and reasonable or “proper, lasting and valuable” improvements. (Thorp v. McCullum, supra; Ebelmesser v. Ebelmesser, supra). Whether or not the purchaser of land, whose purchase is set aside, can receive an allowance for the improvements made by him is a subject much discussed in the books. Ordinarily if a subsequent purchaser makes improvements with knowledge of a former purchase, he will be held to have done so in his own wrong. (Dart v. Hercules, 57 Ill. 446). The general rule is, that an allowance for reasonable improvements, which are of a permanent character and of benefit to the estate, will be made to a purchaser who makes them in good faith and under the belief that he is the true owner. (Cable v. Ellis, 120 Ill. 136). In some cases it has been held that the allowance will be made where the sale is fraudulent in law, but free from the suspicion of intentional fraud. (Filmore v. Reithman, supra).

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Bluebook (online)
33 N.E. 946, 146 Ill. 283, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lagger-v-mutual-union-loan-building-assn-ill-1893.