Walker v. Chicago, Madison & Northern Railroad

199 Ill. App. 610, 1916 Ill. App. LEXIS 324
CourtAppellate Court of Illinois
DecidedJune 19, 1916
DocketGen. No. 20,926
StatusPublished
Cited by2 cases

This text of 199 Ill. App. 610 (Walker v. Chicago, Madison & Northern Railroad) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Walker v. Chicago, Madison & Northern Railroad, 199 Ill. App. 610, 1916 Ill. App. LEXIS 324 (Ill. Ct. App. 1916).

Opinions

Mr. Justice O’Connor

delivered the opinion of the court.

This is an appeal from a decree of the Circuit Court of Cook county, decreeing the foreclosure of a trust deed. The facts are these; On February 19, 1870, Samuel J. Walker, now deceased, and Henry H. Walker (appellee) executed and delivered to one Albert Price their promissory note for $40,000, payable on or before three years after date, with interest at eight per cent, per annum until maturity, and thereafter at ten per cent, per annum and to secure the payment of the same executed a trust deed conveying the property involved in these proceedings. The trust deed was filed for record in the recorder’s office of Cook county April 17, 1871. As to the entire transaction, it is conceded that Samuel J. Walker was the principal and Henry H. Walker the surety.

On or about May 20, 1871, a payment of $18,000 was made upon the note and a part of the premises released from the lien of the trust deed. Subsequently, October 13, 1874, Albert Price died testate, and Andrew B. Price became the duly qualified executor of his estate. There being a balance of $22,000 due and unpaid, the executor filed a bill to foreclose the trust deed April 9, 1878. In 1879, Samuel J. Walker and Henry H. Walker were both discharged in bankruptcy by order of the United States District Court, Northern District of Illinois, Northern Division. The balance remaining due and unpaid on said note was scheduled by each of the Walkers as a liability. Afterwards, August 12, 1887, Henry H. Walker accquired the note and trust deed from the executor and heirs at law of Albert Price, deceased, paying therefor, in property and money, $27,050, and took an assignment of the same in the name of Granville W. Browning who was authorized by the assignment to carry on the pending' foreclosure suit. The assignment to Browning was merely for the purpose of convenience, he at the time being attorney for Henry H. Walker. In 1903, Henry H. Walker filed a supplemental bill in the foreclosure suit, setting up his ownership of the note and trust deed.

The cause was referred to a master, who found, inter alia, that by the terms of the note there was, on January 10, 1913, a balance due of $42,747.54; that Henry H. Walker purchased the note; that as he was surety on the same his sole right was to be indemnified for the amount he had paid for the note; that he had already received more than this amount, and was not therefore entitled to a foreclosure of the trust deed, and recommended a dismissal of the suit. Exceptions to the master’s report were sustained by the chancellor, and a decree of foreclosure entered for the full amount due on the note in accordance with the prayer of the supplemental bill. This appeal is prosecuted to reverse the decree.

Appellants first contend that appellee, Henry H. Walker, being one of the makers of the note, to secure which the trust deed sought to be foreclosed was given, even though he signed as surety, is not entitled to a decree of foreclosure, for the reason that he has already received more than he paid for the note; and that this is true whether Walker, when he acquired the note, intended to pay or purchase it; that when he obtained the note and trust deed they were extinguished as a matter of law, and that his only right was a claim for indemnity, which he could enforce in an action at law against Samuel J. Walker, if living, or by being subrogated to the rights of the mortgagee in the security to the extent of enforcing the mortgage to recover the amount paid by him for the note, with legal interest thereon. In support of this contention, appellants cite, among others, the cases of Gillett v. Sweat, 6 Ill. 475; New Bedford Inst. for Savings v. Hathaway, 134 Mass. 69; Coggeshall v. Ruggles, 62 Ill. 401; Reed v. Norris, 2 M. & C. 362; Fitch v. Hammer, 17 Colo. 591; Swem v. Newell, 19 Colo. 397; Frevert v. Henry, 14 Nev. 191; Burrus v. Cook, 215 Mo. 496; Waldrip v. Black, 74 Cal. 409; Snell v. Davis, 149 Ill. App. 391; Curley v. Ford, 168 Ill. App. 525.

In Gillett v. Sweat, supra, it was held that payment of a note by one of the joint makers extinguished it, and therefore the joint maker who paid it could not maintain an action thereon in the name of the payee for his úse against the comaker.

In Reed v. Norris, supra, it was held that where a surety compounds a debt for which his principal and himself had become jointly liable and takes an assignment of the debt to a trustee for himself, he can only claim as against his principal the amount which he actually paid.

In Coggeshall v. Ruggies, supra, Buggies, as principal and Coggeshall as surety, executed a promissory note. Default in payment having been made, judgment was entered against both. Afterwards Coggeshall paid the judgment and arranged that the judgment should not be satisfied, as Coggeshall desired that Buggies’ land be sold to satisfy the judgment. The land was sold under execution, and the title bought by Coggeshall in a roundabout way. Buggies filed his bill to set aside the sale. It was decreed that the sale be set aside upon condition that Buggies reimburse Coggeshall for the amount the latter had paid in satisfying the judgment.

Fitch v. Hammer, supra, was an action at law brought against the principal by. sureties who had paid a note and had taken an assignment of it to themselves. The defense was that the note was extinguished. The court held that the plaintiffs could not recover in an action on the note, but could maintain an action for reimbursement. To the same effect are Swem v. Newell, supra, and Frevert v. Henry, supra.

In New Bedford Inst. for Savings v. Hathaway, supra, one of two sureties was dead and the principal was insolvent. The holder of the note, by arrangements with the living surety, proved the note against the estate of the deceased surety and then assigned the note and claim to the living surety who paid the full amount to the creditor. It was held that the note was paid and that the living surety was entitled to recover against the estate of his cosurety one-half of the amount paid. The court there say (p. 71):

“Payment by one of several joint debtors, although it be made by him in the form of a purchase, and be accompanied by an assignment of the debt, is still a discharge of the debt. * * * Where the payment thus made is by a surety, as he is entitled in equity to be subrogated to the right which the creditor may have in the securities which have been given him by the principal debtor, so that he may enforce them for his own benefit, the debt is there treated as still existing, so far as it may be required for that purpose.”

In Burrus v. Cook, supra, a note was executed by a principal and two sureties. Judgment was recovered against all. One of the sureties paid the judgment and took an assignment of it. Subsequently he brought suit in equity against his cosurety to enforce contribution. The court there held that the cosurety’s right of contribution was based on “an implied promise which the law raises up from principles of natural justice and right,” and that this right arose upon payment of the judgment and was barred in five years.

In Waldrip v. Black, supra, Waldrip signed a note as surety, and at the time the other two makers of the note gave him a mortgage to secure him in the reimbursement of any payment he might be compelled to make. Waldrip paid the note and brought suit to foreclose the mortgage.

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Bluebook (online)
199 Ill. App. 610, 1916 Ill. App. LEXIS 324, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walker-v-chicago-madison-northern-railroad-illappct-1916.