99 Ill. App. 345 | Ill. App. Ct. | 1901
delivered the opinion of the court.
It is contended by appellant, first, that under the written agreement of April 11, 1895, an equitable lien or mortgage was given Moss Eoberts upon the land in question, whereby equity will enforce the payment of the $500 specified in the agreement, as a first lien upon the land; second, that appellants are subrogated to all rights of Moss Eoberts under the agreement by virtue of his assignment thereof to George Yaniman.
While, as a general rule, any written contract entered into for the purpose of pledging property or some interest therein as security 'for a debt, which is informal or insufficient as a common law or statutory mortgage, but which shows that it was the intention of the parties that it should operate as a charge upon the property, will constitute an equitable mortgage and may be enforced as such in a court of equity, yet a mere promise to pay out of the proceeds of the sale of the property is not sufficient to create an equitable mortgage upon the property itself.
“ The intention must be to create a lien upon the property, as distinguished from an agreement to apply the proceeds of a sale of it to the payment of a debt.” Jones on Liens, Sec. 32; Gibson v. Decius, 82 Ill. 304; Hamilton v. Downer, 46 Ill. App. 541.
We are unable to see in the written contract involved in this case an intention on the part of Anthony Roberts to create a lien or charge upon the land. It did not obligate him to sell the land and clearly contemplated that he might or might not sell it, as he saw fit. It only provided two events in which there should be due his son the $500; one in case he should sell the land and the other in case he should die leaving no will under which his son should become owner of the land. In the former case the son was to be paid out of the proceeds of sale, and in the latter he should be paid out of the estate of Anthony Roberts. As we view it, the import of the contract was more to fix events for the maturity of an obligation than to pledge the land for its payment.
It is evident that there was no intention that Moss Roberts should have a lien on the land for the money in the event of his father dying intestate, because the language of the contract is, that in that event, he should be paid out of his father’s estate. Again, the provision that in the event of sale by Anthony Roberts, the money should be paid Moss Roberts out of the proceeds of the sale, fully recognizes the right of the former to sell, and that right carried with it the power to invest his purchaser with the title free from any lien arising out of the contract. If the contract created no equitable lien in favor of Moss Roberts, none, of course, can be held to exist in favor of his assignee.
The evidence shows that the $500 note to Gardner represented a Iona fide debt, and there is nothing in the record to warrant a suspicion, even, that the giving of the mortgage to him had any other than an honest purpose to secure the debt. Decree affirmed.