| Ill. | Mar 24, 1892
delivered the opinion of the Court:
In the view that we take of this case it will be most convenient, in considering the several questions discussed in the arguments before us, to determine, first, whether there was a binding contract between the Equitable Trust Company and Edward G. Smith, whereby the former sold to the latter, for a named consideration to be paid by the lather, the certificate of sale which is the subject of the present litigation.
Without going into unnecessary details, it is sufficient to say that Smith had executed several mortgages to the Equitable Trust Company on distinct lots in the city of Chicago, designated by certain numbers, to secure different sums of indebtedness due from him to that company; that these mortgages had been foreclosed,—that for the greater amount of indebtedness on lot 1, and perhaps also that for one of the lesser amounts of indebtedness on one of the other lots, in the Circuit Court of. the United States for the Northern District of Illinois, and the other in the circuit court of Cook county; that there were sales of the lots under these decrees of foreclosure, and the property was purchased by the Equitable Trust Company, to whom certificates of purchase were issued, the fifteen months time allowed for redemption, in the case of lot 1 expiring on the 25th day of September, 1890, and that in the case of the other lots expiring at an earlier date; that the principal" office of the Equitable Trust Company was in New York City, where were its president and secretary, who alone had power to make absolute sales of its property, but it had a general agent for transacting its business in the west,— George W. Kendall,—whose office was in Chicago, who had power to negotiate sales of its property, etc., subject to the approval of the president or secretary of the company; that Smith believed that the property was worth much more than the amounts for which it was sold, and desired to redeem it, and frequently made known his desire, in that respect, to George W. Kendall; that Kendall, while protesting that he had no authority to sell the certificates of sale without the express sanction of the company, nevertheless assured Smith, from time to time,—first, before the expiration of twelve months from the day of sale, and again several times after-wards,—that he might purchase the certificates of purchase by paying the company the amount necessary to redeem from the sales, at any time before the expiration of fifteen months from the dates of the sales, and Smith testified, and he is not therein contradicted, that in February or March, 1890, he called at the office of the Equitable Trust Company in New York City, and told those in charge of the office that he was going to try to redeem the property, and they replied to him that when he got to the point that he had the money, to see Mr. Kendall.
The certificate here in controversy is on what is designated as lot 1. The Equitable Trust Company also held three other certificates of sales for the other lots, designated 4 and 5, which were for comparatively small sums. On the 6th of September, 1890, Smith informed Kendall that he had made arrangements to have those certificates redeemed, and that he would be ready the next week to redeem the certificate for lot 1, and requested Kendall to have the certificates sent to Mason Bros., the attorneys for the Equitable Trust Company, who had conducted the foreclosure proceedings, for that purpose. Kendall telegraphed the Equitable Trust Company to that effect, and on the same day wrote them the following letter, the words “ Smith-Kerfoot” meaning the property mortgaged by Smith:
“Chicago, September 6, 1890.
(Smith Kerfoot.)
“Equitable Trust Co., N. Y. City, N. Y.:
“Dear Sir—I telegraphed you to-day to ford to Mason Bros, the three Smith certificates in south quarter 4 and on lot 5, (Smith-Kerfoot,) assigned in blank. Newman was in and said they were ready to take them up. Newman holds the equity, but wants assignment so as to take out deeds under these certificates, so as to cut off Smith’s subsequent judgments. Say they will be ready next week to take up block 1.
“Yours, truly. G. W. Kendall.”
Pursuant to this request, the company forwarded to Mason Bros, the three certificates, and accompanied them with the following letter:
“September 8, 1890.
“Messrs. Mason Bros., Chicago, Ill.:
“Gents—We enclose three of the E. G. Smith master’s certificates, with blank assignments of the same, and at the request of Mr. Kendall, who says the parties owning the equity were ready to buy them from us. If so, we are willing to sell them at par, and interest. Please close up the matter, if possible, and let us have the money. We would also like to sell the other certificate on block 1, and understand that they will wish to buy it some time this week. As soon as they are ready please inform us, and we will execute an assignment and forward the certificate.
“Yours, truly. W. Emlen Roosevelt, Sec.”
And on the same day the company also wrote to Kendall, as follows:
“New York, September 8, 1890.
tin re E. G. Smith, etc.)
“G. W. Kendall, Esq., Chicago, Ill.:
“Dear Sir—We have to-day forwarded, as you requested, three master’s certificates of the E. G. Smith property. We suppose it was as well to do this, although we confess we should have liked to have had the other certificate go at the same time, and were a little inclined to hold these until they took the other, but suppose you have looked into that matter carefully. * * *
“Yours, truly. W. Emlen Roosevelt, Sec”
Kendall testified: "Mr. Newman was introduced to me by Mr. Smith * * * in relation to buying the three certificates. * * * With reference to the three certificates, I told Mr. Mason to deliver them to any person that either Mr. Newman or Mr. Smith designated.” Newman testified: "Whatever I did was in the interest of Smith.”
The money was paid to Mason Bros, by Newman for the three small certificates on the 18th of September, 1890, and on that day Mason Bros, telegraphed the Equitable Trust Company, as follows:
“Chicago, Ill., 9/ 18/ 90.
"Messrs. Roosevelt & Son, 23 Wall st., New York:
“We sell to-day at par, and accrued interest, the three Smith foreclosure certificates sent us September 8. Parties are now ready to buy certificate on block 1. Kindly mail it to us at once, and wire to that effect. Mason Bros.”
The testimony of Smith and Kendall is to the effect that on the evening of the 16th of September, 1890, Smith informed Kendall that he had arranged for all the money with which to pay for the certificate on block 1, and that Kendall thereupon wrote the following letter to the Equitable Trust Company, omitting the caption:
“Dear Sirs—Send the certificate block 1, Smith-Kerfoot, to Mason Bros., assigned in blank, with instructions to deliver to party designated by me, on payment of amount due.
“Yours, truly.
G. W. Kendall.”
To this the company made the following reply:
“New York, September 18, 1890.
"G. W. Kendall, Esq., Chicago, Ill.:
“Dear Sir—We are this morning in receipt of your favor of 16th inst., requesting us to send assignment of certificate to block 1 to Mason Bros., and we have done so to-day. Hope you will get the matter settled up soon, „ because we do not think it would be well to hold the certificate long after we can take out a deed. We hope you will have the matter settled before the 25th inst., which is the day on which the deed is^ due. We have also a letter * * *
“Yours, truly. W. Emlen Roosevelt & Son.”
And on the same day the company sent the following letter :
“September 18, 1890.
“Messrs. Mason Bros., Chicago, Ill.:
“Gents—We enclose you herewith master’s certificate on block 1, Smith-Kerfoot matter, with an assignment in blank, without recourse, which you may deliver to the parties designated by Mr. Kendall, upon receipt of amount due, which please remit to us.
“Yours, truly. W. Emlen Roosevelt, Sec.”
On the 20th of September, 1890, Smith sent a telegram to. the Equitable Trust Company, as follows, but, by mistake of the telegraph company, Smith’s name thereto was written “Howard” instead of “Edward
“Equitable Trust Co., New York:
“Three small foreclosures are paid. Cash absolutely ready block 1. Kendall in Indiana. Have you forwarded certificate assigned in blank, as per Kendall letter 16th inst. ? Wire answer, and oblige. Howard G. Smith.”
On the same day the company replied by telegraph, as. follows:
“Howard G. Smith, Chicago, Ill.:
“Blank assignment, block 1, sent Mason on 18th.
Roosevelt.”
But in consequence of the direction being to “Howard” instead of “Edward” G. Smith it was not received. On the 19th of September, 1890, Kendall being absent from Chicago, at Walnut, Indiana, Smith mailed the following letter to him:
“September 19, 1890.
“To Geo. W. Kendall, Walnut, Marshall County, Ind.:
“Small foreclosures are paid. Cash absolutely ready for block 1. Mason refused abstract to Handy. He acts queer, generally. Can I get assignment, or must I prepare for formal redemption ? When will you be here ? Answer promptly, and oblige. Edward G. Smith.”
This was received by Kendall about half-past eleven on the following day,—September 20, 1890,—and on the same day Kendall mailed the following reply to this letter:
“E. G. Smith, Adams Ex. Building, Chicago:
“Will be in Chicago Tuesday morning. Get ready to take-certificate and you shall have it. G. W. Kendall.”
We are clearly of the opinion that these several communications constituted a valid legal contract between the Equitable Insurance Company and Edward G. Smith. The request of Kendall to send the certificate to block 1, assigned in blank, to Mason Bros., with instructions to deliver it to the party designated by Kendall, on payment of the amount due, and the compliance on the part of the company with that request, necessarily invested Kendall with full power to sell and transfer the certificate to whom he pleased, for the amount due upon the certificate. The Mason Bros, were to have no discretion in the matter. The right to designate the party to whom the certificate is to be delivered, subject only to the restriction that the delivery shall be upon payment of the-amount due upon the certificate, necessarily implies the right, to make the negotiations, without which no designation of the-person could be made, and when that designation was once made it vested a right in the person designated, and the company could not thereafter withdraw the power under which Kendall had acted, or do any other act to impair that vested, right.
It is contended, in argument, that the power vested in-Kendall could not be exercised without the concurrence of the Mason Bros. This is very clearly a misapprehension of the meaning of Kendall’s request, and of the grant of that request by the company. The power of designation sought by him and granted by the company is to be exercised by him, alone. What the Mason Bros, are to do involves neither judgment nor discretion, and is purely mechanical. It relates, not to the making of a contract, but purely to the performance of a contract previously made, and, as between the parties to the contract, it adds nothing to the legal rights of the one nor detracts anything from the legal rights of the other. If the delivery ought to he made, the trust company could not be heard, in a court of equity, to say that it was not made, for equity will treat that as done which ought to be done.
The undertakings of the parties are mutual and concurrent. In consideration that Smith undertakes to pay the trust company the amount which would-be necessary to redeem from the sale, the trust company undertakes to transfer to him the certificate of sale,—in other words, to allow him to redeem from the sale notwithstanding the period within which' he could legally redeem has passed. The extension of the period of redemption beyond that fixed by law may as well form the subject of a contract as any other property right. The interest of the purchaser in the certificate' is property, and he may, in the absence of fraud, dispose of it as he pleases, and the former owner of the equity may therefore purchase a right of redemption previously lost, as well as any other right or title to the property. The fact that the amount agreed to be paid is precisely the same that would have been paid had a legal redemption been made by a judgment creditor, affects merely the amount of the consideration, and not the fact of consideration, for any agreement to give a right where none before existed, or to extend or enlarge a previously existing right, in consideration of any sum to be paid therefor, is by all the authorities, in the absence of fraud, ample consideration to support a contract.
On the 20th of September, 1890, Kendall was empowered to make a contract for the sale of the certificate for the amount of redemption. At that time the company had made no effort to withdraw this power nor to make any contract superseding its exercise. Smith’s offer was before him. Kendall accepted it by saying, “Gret ready to take the certificate -and you shall have it,” as effectually as if A were to say to B, "“I will give you $100 for your horse,” and B were to reply, '“Get ready to take him and you shall have him.” What more could he said to bring the minds of the parties together? We can conceive of nothing. The mailing of Kendall’s reply closed the contract then, and it is immaterial that the reply was not received by Smith until two or three days later. Haas v. Myers, 111 Ill. 421" date_filed="1884-11-17" court="Ill." case_name="Haas v. Myers">111 Ill. 421.
But it is assumed Smith could not have then been sued upon the contract had he refused to perform it, and it is argued that since it was not binding upon Smith it was not binding upon the trust company. But this assumption is wholly unwarranted. Although, until acceptance, Smith’s proposal in his declarations and letters was a mere offer, the moment that offer was accepted he became bound to carry it out, and he would have been held liable in an action at law for a refusal. Chitty on Contracts, (11th Am. ed.) p. 17, and notes, p. 12, and notes; Bishop on Contracts, (1st ed.) sec. 177, et seq.
But it is further insisted, in argument, that conceding there was a contract, the evidence fails to show that Smith was able and ready to perform it. We have carefully considered the evidence on this point, and without deeming it necessary to recite it and comment upon it at large, we think it proves that Smith ivas able and ready to perform his part of the contract. It is true that to enable himself to do so he had to make contracts with other parties, selling or mortgaging to them the rights he was to derive under this contract, but that concerned no one but him and those parties. It could not possibly concern the trust company what uses he should make of the property, nor what profits he or others should make out of it, by contracts of sale or otherwise, so long as that company should get what it was entitled to have under its contract.
Again, it is contended that Smith practiced a fraud upon the trust company by persuading Kendall to withhold from the company knowledge which he would otherwise have communicated to it, of the value of the property. We think it-very clear, from the evidence, that the value of the property in no degree affected the company in making this contract. While it is true that Smith had no legal right to redeem after the expiration of twelve months from the day of sale, it is equally true that the trust company could have no title in the property until it should receive a deed for it, which could not-be sooner than fifteen months from the day of sale. After the expiration of twelve months, and before the expiration of fifteen months, the property was liable to be redeemed by Smith’s creditors, of whom he had many, and the greater the value of the property the more certainly it would he redeemed by some of those creditors. It could make no possible difference to-the trust company whether the redemption within that period should be made by one person rather than by another, since the effect of any redemption would be to terminate the rights-of the company hy the payment of the same sum of money; and hence, in contracting to give Smith a right that might-otherwise he enjoyed by one of his creditors to his exclusion,, for the amount necessary to redeem from the sale, the company would get all it could get from the creditor, whatever might he the actual value of the property. Although Smith had no legal right, himself, to redeem through one of his creditors, he had the. clear and undoubted right to do all he-could to cause his creditors to redeem, for thereby he would cause the property to pay that much more of his indebtedness, and whatever rights he might acquire, by contract, from his creditors, after or in view of a valid redemption, could by no possibility concern any one but the parties contracting. The evidence proves that the company believed that the property would be redeemed within the fifteen months, and that it was .willing that Smith should have the benefit of the redemption— indeed, that it preferred that he should have it. There is no pretense that there was any concealment in this respect. As early as February or March, 1890, Smith informed the officers of the company that he expected to redeem, and instead of discouraging him they told him that when he got to the point that he had the money, to see Mr. Kendall,—thus making Kendall their agent for negotiations in that respect. Kendall knew that Smith expected to redeem the property, and knew how he expected to get the money, for Smith kept him fully informed in that respect, and Kendall encouraged him in his efforts. Kendall informed the company that the property would be redeemed, and there is not the slightest pretense that he acted in bad faith in that respect, or that Smith acted in bad faith in assuring him that the property would he redeemed; and we think it quite clear from the evidence, as a matter of fact, though not indispensable to a decision of the question before us, that had the company refused to sell the certificate to Smith, the property would have been redeemed by one of his creditors. We can not presume that had the company known that the property was- of far greater value than it was supposed by its officers to be, it would have been less willing that Smith should purchase the certificate rather than that his creditors should redeem from the sale.
The next question to be considered is, what right did Chytraus acquire in the property by virtue of his contract with Mason Bros., and their delivery to him of the certificate of sale, accompanied by a separate paper purporting to be an assignment of it in blank. Mason Bros, were simply the solicitors of the trust company in the foreclosure proceedings, and had no general authority to negotiate sale of the certificates of purchase. The only authority which it is claimed they had from the trust company to negotiate sale of the certificates in controversy was this: Mason Bros, sent the following letter to the trust company:
“Chicago, Ill., September 20, 1890.
“To Roosevelt & Son, 33 Wall st., N. Y.:
“Letter and foreclosure certificate received. Our last directions from Kendall were, to sell to the first party who would pay cash. Shall we still do so ? Kendall is out of town, and we don’t know his present address or time of return.
Mason Bros.”
To this the following reply was made, by telegram, on the date therein given:
“September 22, 1890.
“Mason Bros., Chicago, Ill.:
“Sell certificate to first man who will pay for it in full.
W. Emlen Roosevelt, Sec.
It will be remembered that the contract between Smith and the company was closed on the 20th of September, 1890, and it can need no argument to demonstrate that the company could not, two days thereafter, invest Mason Bros., or any one else, with authority to make any contract inconsistent with the contract with Smith.
The certificate of purchase was not assigned to Chytraus. It was simply accompanied by a blank assignment of the trust company. This did not even vest the legal title to the certificate in Chytraus, for the statute only gives the “person to whom the same shall be so assigned”—i. e., by indorsement on the certificate—“the same benefits therefrom” as the assignor would otherwise have had, (Rev. Stat. 1874, chap. 77, title “Judgments,” sec. 29,) and in no view could it have done . more than put Chytraus in the place of the trust company as respects rights by virtue of the certificate, and so whatever equitable defenses could have been interposed against it, could have been interposed against him. Roberts v. Clelland, 82 Ill. 538" date_filed="1876-09-15" court="Ill." case_name="Roberts v. Clelland">82 Ill. 538; Olds v. Cummings, 31 id. 188.
Whatever equity Chytraus acquired in the property by virtue of his contract with Mason Bros, was subsequent, in point of time, to that acquired in the property by Smith by virtue of his contract with the trust company, and therefore Smith’s equity, being the oldest, must prevail. (Schultze v. Hoafes, 96 Ill. 340.) The purchaser of a mere equitable estate is not embraced within the definition of a bona fide purchaser. 16 Am. and Eng. Ency. of Law, 833, and cases cited.
Upon a full and careful consideration of the case, in every view of which it is susceptible, we are unable to discover such error in the decree below as requires that we should reverse it. It is therefore affirmed. Decree affirmed.