Elliott v. Sackett

In February, 1876, George A. Sackett and John A. Elliott executed a written agreement under seal, which provided that if Elliott should first make the payments and perform the covenants thereinafter mentioned on his part to be made and performed, Sackett agreed to convey to him 'in fee-simple, clear of all incumbrances, except as stated, whatever,' by a warranty deed, 'the house and lot known as No. 166 Calumet avenue, the lot 50x127 feet,' in Chicago, Illinois, and to assign the insurance policy then 'on said improvements,' and to pay to Elliott $50; that Elliott agreed to pay to Sackett $15,000, 'subject to an incumbrance now on said property' of $9,000, 'in the manner following: Lots 8, 9, and 10, block 5, Pittner & Son's addition to So. Evanston, being 150 x200 feet, subject to an incumbrance of $1,750, and interest at 8 per cent. from June, 1873; also lot one, (1,) block seven, (7,) Grant's subdivision of So. Evanston, and 120 acres of land, palo Alto County, iowa; the two last-named pieces of property are clear of incumbrances; and title to pass by good and sufficient warranty deeds; and to pay all taxes, assessments, or impositions that may be legally levied or imposed upon said lots, except and after the fourth installment of South Park assessment;' and, in case of the failure of Elliott to make either of the payments, or perform any of the covenants on his part, the contract to be forfeited and determined, at the election of Sackett, and Elliott to fulfull all payments made by him on the contract, and such payments to be retained by Sackett in full satisfaction and liquidation of all damages by him sustained, and he to have the right to re-enter and take possession.

By a warranty deed dated March 8, 1876, acknowledged the same day, and recorded March 10, 1876, Sackett and his wife conveyed to Elliott the Calumet-avenue property, by a proper description. The deed expressed a consideration of $15,000, and contained this clause:

'This conveyance is made subject to a trust deed executed by     the parties of the first part [Sackett and wife] to John De      Koven, on the (10th) tenth day of May, 1870, securing the      notes of said George A. Sackett to Hugh T. Dickey, for nine      thousand dollars, due four years from that date, with      interest of ine per cent. per annum, interest payable     semi-annually; and a further extension of payment, commencing      on the tenth day of May, 1874, for same amount above      mentioned, (nine thousand dollars,) payable in five years      from said date, with interest of nine per cent., the interest      notes payable semi-annually, which debt, with its interest,      the said party of the second part [Elliott] assumes and      agrees to pay as part of the consideration of this      conveyance, or purchase price above stated. The covenants     hereinafter are subject to the above incumbrance.'

Then follow covenants of seizin and warranty, and against incumbrances.

The controversy in the present case arises out of the difference between the written agreement executed by the parties and the deed to Elliott, there being no question as to the conveyances by Elliott of the land which he agreed to convey. By the agreement the Calumet-avenue property was to be conveyed subject to the $9,000 incumbrance. By the deed the conveyance is not only made subject to the incumbrance, but Elliott is made to assume and agree to pay the $9,000 debt as part of the consideration of the conveyance, or purchase price of $15,000.

In April, 1877, Elliott filed a bill in a state court in Illinois against Sackett, praying that the deed be reformed by striking therefrom the words stating that Elliott assumes and agrees to pay the $9,000 debt, as part of the consideration. The bill alleges that the consideration for the agreement of Sackett to convey the Calumet-avenue property to Elliott was the agreement of Elliott to convey to Sackett the other property named in the written agreement; that one Hill, as agent of Sackett, solicited Elliott to purchase the Calumet-avenue property; that during the negotiations Hill and Sackett solicited Elliott to assume the payment of the incumbrance, but Elliott refused to assume any liability on account of it, and insisted that he would simply purchase the property subject to the incumbrance, and thereupon the written agreement was made; that the statement in the deed that Elliott assumes and agrees to pay the incumbrance as a part of the consideration for the premises was contrary to the mutual understanding between Hill and Sackett and Elliott, and contrary to the written agreement; that Elliott, when he received the deed, was suffering under physical infirmities and mental distress, and did not examine the deed as carefully as he should otherwise have done, but had the deed recorded, believing that Sackett had acted in good faith, and had made the deed in conformity with the understanding of the parties and the written agreement; and that Elliott had recently discovered the mistake in the deed.

In June, 1877, Dickey, the owner of the $9,000 note made by Sackett and secured by the deed of trust, was, by an order of the state court, on his petition, made a defendant in the suit, and allowed to file an answer and a cross-bill. His answer controverts the material allegations of the bill. A few days later, on the petition of Dickey, the suit was removed into the circuit court of the United States for the northern district of Illinois, and Dickey filed a cross-bill in the latter court, making as defendants Sackett and his wife, De Koven, the trustee, Mattocks, his successor in the trust, Elliott, and Underwood, the tenants of Elliott. The cross-bill alleges that the whole amount secured by the note and the trust deed is due, and that by the terms of the conveyance to Elliott he became liable to pay the debt to Dickey, and prays for a sale of the premises to pay the amount due, and a foreclosure of the equity of redemption of the defendants, and the payment of the debt out of the proceeds of sale, and a decree against Sackett and Elliott for any balance due beyond the proceeds of the sale.

Sackett answered the original bill. The answer admits that Sackett entered into an agreement in writing to convey the premises 'in a certain manner and on certain conditions,' the exact words and terms of which he does not remember. It admits that Sackett, at the time of the negotiation with Elliott for the sale of the premises, solicited Elliott to assume and agree to pay the incumbrance of $9,000. It then proceeds:

'And this respondent denies that the said complainant refused     the said solicitations and request of this defendant, but      this respondent avers and will, at the proper time and place,      prove the truth to be, that when the negotiations,      conversations, and details preliminary to the final      completion of the transactions upon which the suit was      brought were ended and the parties were ready to close the      transaction by the delivery of the deeds, it was fully and      fairly understood by the parties to the same that a warranty      deed conveying the said premises, 166 Calumet avenue, should      and would be accepted by the said Elliott with the condition      of conveyance therein provided, viz., that the said Elliott      did assume and agree to pay, as a covenant of said deed, the      before-mentioned $9,000, and interest semi-annually, and the      warranty deed of this defendant contained that provision      accordingly.'

The answer also avers that Elliott carefully read over the deed in the office of Hill, at the time of the delivery of the papers in the transaction, in the presence of Sackett, 'being fully aware of and noting especially, as this defendant believes, from his best recollection, the said clause in said deed which complainant now desires shall be expunged.'

In March, 1878, Elliott answered the cross-bill, setting up that the clause in the deed from Sackett and wife as to the agreement by Elliott to pay the incumbrance was inserted by mistake or fraud on the part of Sackett or his agent, and repeating the averments of his original bill.

Replications were filed to the answer of Sackett to the original bill and to the answer of Elliott to the cross-bill, and the cross-bill was taken as confessed as to the other defendants in it, and the cause was referred to a master to take proofs and report the same to the court, with the amount due to Dickey. Proofs were taken and the causes were brought to a hearing thereon. The court made a decree dismissing the original bill for want of equity, and adjudging that all the material allegations in the cross-bill are proved; that the equities are with Dickey; that there is due to him from Sackett $11,399.28, with interest; and that Elliott, for a valuable consideration, assumed and agreed with Sackett to pay the amount due on the mortgage to Dickey. The decree then provides that Sackett and Elliott, or one of them, shall pay to Dickey, within one day from the date of the entry of the decree, the amount so due to him, with interest and costs of suit, and that, in case the payment is not made, the premises be sold by a master, and that he report any deficiency in the proceeds of sale to pay the amount due. The decree concludes with providing that in case Sackett shall pay such indebtedness, or any part thereof, he shall have leave to apply to the court, on notice to Elliott, for a further order, at the foot of the decree, requiring Elliott to repay to Sackett the sum so paid on said indebtedness. Elliott has appealed to this court.

''Wm. E. Mason'', for appellant.

E. G. Mason, for appellees.

[Argument of Counsel from pages 137-139 intentionally omitted]

BLATCHFORD, J.