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in December, 1872, and the interest on the other notes, entered into an agreement with H., by which H. was to take the property off his hands, as he took it from H. T., pay the debt to D., and relieve the premises conveyed to H. T. from the lien of the trust deed to A. Under this agreement, M. T. conveyed the part of the property to which he held the title to H., by deed, for the expressed consideration of $16,000, and transferred to him all debts due for lots sold. This deed was dated December 28, 1872. H. at the same time orally assumed the payment of the debt to D., that being the only consideration for the transfer. At the time of this transfer, H. borrowed from R., through H. & B., his agents, $10,000, for which he executed two notes, payable three years from date,-one for $6,000 and the other for $1,000,-and secured them by two deeds of trust to H., one of the agents, as trustee, each upon different parts of block 2. Together these deeds covered the whole of the block. H. & B. were only authorized to make loans for R. on unincumbered property. They knew at the time they paid the money over to H. that block 2 was incumbered by the deed of trust to A., but H. promised to pay the past-due note and the past-due interest to D. out of the money he borrowed, and obtain a release from A. of that block. H. did pay the note and the interest past due, and also the note falling due in December, 1873; but, instead of getting a release from A. of block 2, he, without the knowledge of H. & B., took one of block 3, thus leaving block 2 still under the incumbrance of a lien, prior to that for the benefit of R., to the extent of the two notes to D., falling due four and five years from date. When the note maturing in December, 1874, fell due, H. was unable to meet it, but in January, 1875, he sold 19 lots in block 2, for which he received $6,000 in cash. With this, and other moneys advanced by H. & B., B. went to the bankers, to whom both the remaining notes due to D. had been sent for collection, and paid the money for them, and took them away uncanceled, they having been previously indorsed in blank by D. One payment of $6,000 was made on the fifteenth of January, and the other, being $5,611.87, on the 29th. On the day the last payment was made, and after the notes had been taken up, B. went to A. with them, and requested him to release block 2 from the lien of the trust deed to him. He stated to A. that he was the owner of the notes, and thereupon A. executed a release of block 2, which B. signed and acknowledged with him. In this release B. is described as the "legal holder of the unpaid notes." After this H. paid H. & B. the money they had advanced to take up the notes from the bank. Held, that R. was not a purchaser of the notes due to D., but that said notes were paid by H. with his own money, according to the agreement made with M. T., and that when said notes were taken up from the bank with the money of H., they were, in legal effect, paid, and from that time the lien on block 1 was discharged.
2, SAME-DEED-PAROL EVIDENCE-ORAL AGREEMENTS-CONSIDERATION.
That parol evidence of oral agreements is admissible to prove any other consideration not mentioned in a deed, provided it be not inconsistent with the consideration expressed in it.
3. SAME-PRACTICE SUBROGATION.
Where relief has been asked in a bill on some other different and distinct ground, equity will not relieve by way of subrogation. The doctrine of subrogation held not applicable to the facts of this case.
Appeal from the Circuit Court of the United States for the Northern District of Illinois.
F. C. Ingalls, for appellant. A. McCoy, for appellee.
WAITE, C. J. The facts, as shown by the testimony in this case, are these: On or about the nineteenth of December, 1870, Henry J. Traver, the ap'pellee, and Michael Traver, his brother, bought of John* Dickson a tract of land in the city of Chicago, containing about 16 acres. They paid to Dickson at the time a small part of the purchase money in cash, and for the balance gave their four joint notes, each for the sum of $5,373.67), payable respectively in two, three, four, and five years from date, with interest semiannually at the rate of 8 per cent. per annum. The notes were secured by a deed of trust of the property to Enos Ayres, trustee. After the purchase they laid the property off into blocks and lots, making three blocks, numbered 1, 2, and 3, respectively, and subdividing each block into lots. Previous to September, 1872, Michael Traver, who lived in Chicago and had the immediate charge of the property, sold some of the lots, partly for cash and partly on credit. On the fifth of September, 1872, an oral agreement was entered into between the two Travers by which Michael was to take all the cash and notes
that had been received from sales, and all the unsold parts of block 2, and all but eight lots of those unsold in block 3, pay the debt to Dickson, and give Henry all of block 1, and eight lots in block 3, clear of the incumbrance of the trust deed to Ayres. In part execution of this agreement Michael at the time conveyed to Henry his interest in block 1 and in the eight lots in block 3. Henry did not convey to Michael until December 20, 1872. On that day, for the consideration of $100 as expressed in the deed, he remised, released, sold, conveyed, and quitclaimed to Michael, in fee-simple, all his "right, title, interest, claim, and demand" in the unsold lots in block 2 and in block 3, except the eight which had been conveyed to him by Michael, and at the same time transferred to Michael all his interest in the moneys and securities which had been received for the lots sold. In his deed making the conveyance he covenanted that he had "not made, done, committed, executed, or suffered any act or acts, thing or things, whatsoever, whereby, or by means whereof, the above-mentioned premises, or any part or parcel thereof, now are, or at any time hereafter may be, impeached, charged, or incumbered in any way or manner whatever." Michael, finding himself unable to pay the note to Dickson which fell due in December, 1872, and the interest on the other notes, entered into an oral agreement with James C. Hyde by which Hyde was to take the property off his hands as he took it from Henry, and pay the debt to Dickson, and relieve the premises conveyed to Henry from the lien of the trust deed to Ayres. Under this agreement Michael conveyed the part of the property to which he held the title to Hyde by deed, with full covenants of warranty expressing a consideration of $16,000, and transferred to him all debts due for lots sold. This deed was dated December 28, 1872, but the transaction was not finally ended until some days after that date. Hyde at the same time assumed orally the payment of the Dickson debt, that being the only consideration for the transfer. At the time of this transfer Hyde borrowed from Richardson, the appellant, through Hammond & Bogue, his agents in Chicago, $10,000, for which he executed two notes, payable three years from date, one for six thousand and the other for four thousand dollars, and secured them by two deeds of trust to Hammond as trustee, each upon different parts of block 2. Together these deeds covered the whole of the block. Hammond & Bogue were only authorized to make loans for Richardson on unincumbered property. They knew at the time they paid the money over to Hyde that block 2 was incumbered by the deed of trust to Ayres, but Hyde promised to pay the past-due note and the past-due interest to Dickson out of the money he borrowed, and obtain a release from Ayres of that block. Hyde did pay the note and the interest past due, and also the note falling due in December, 1873, but, instead of getting a release from Ayres of block 2, he, without the knowledge of Hammond & Bogue, took one of block 3, thus leaving block 2 still under the incumbrance of a lien prior to that for the benefit of Richardson to the extent of the two notes to Dickson falling due four and five years from date.
When the note maturing in December, 1874, fell due, Hyde was unable to meet it, but in January, 1875, he sold 19 lots in block 2, for which he received $6,000 in cash. With this and other moneys advanced by Hammond & Bogue, Bogue went to the bankers to whom both the remaining Dickson notes had been sent for collection, and paid the money for them and took them away uncanceled, they having been previously indorsed in blank by Dickson; that falling due in 1875 being "without recourse. One payment of $6,000 was made on the fifteenth of January, and the other, being $5,641.87, on the 29th. On the day the last payment was made, and after the notes had been taken up, Bogue went to Ayres with them and requested him to release block 2 from the lien of the trust deed to him. He stated to Ayres that he was the owner of the notes, and thereupon Ayres executed a release of block 2, which Bogue signed and acknowledged with him. In this release Bogue is described
as the "legal holder of the unpaid notes." After this Hyde paid Hammond & Bogue the money they had advanced to take up the notes from the bank. Hammond, also, at different times, released a part of the lots in block 2 from the lien of the deed of trust to him for the security of Richardson. The 19 lots which had been sold, and from the proceeds of which the $6,000 came that was paid to the bank upon the notes on the fifteenth of January, were released when that sale was made. The other releases were executed when the advances of Hammond & Bogue were repaid by Hyde.
Henry J. Traver first heard of the release of the lien on block 2 under the trust in favor of Dickson a short time before the fifth of April, 1875, and at that date he brought suit in the circuit court of Cook county against Michael Traver, Hyde, Bogue, Ayres, Hammond, and others who had become interested in the property, not, however, including Richardson, to obtain a release of block 1 from the lien under the Ayres trust deed, on the ground that the Dickson notes had been paid. In this suit he obtained a preliminary injunction restraining Hyde, Bogue, and Ayres from enforcing the trust deed, or selling or disposing of the two Dickson notes. On the thirtieth of June, 1875, while this suit was pending, Hammond & Bogue sent Richardson, in Boston, where he resided, a draft for $400 "in paym't of coupon of James C. Hyde due 28th inst. to 1st prox." In their letter to Richardson inclosing the remittance, Hammond & Bogue made no mention of any change in the form of his securities, or of the suit which had been *begun by Henry J. Traver. On the seventh of October, 1875, Hyde and Hammond & Bogue answered the bill of Traver, and on the 8th Ayres filed his answer. In the answer of Hammond & Bogue they state that "on or about the time when the first of said two Dickson notes became due, the said Hyde requested these defendants to allow him to pay up said notes for $6,000 and $4,000 then held by said Richardson, and to purchase the said two Dickson notes. And these defendants, acting as the agents of said Richardson, at the request of said Hyde, agreed to and did receive payment of said $6,000 and $4,000 notes, secured by the deeds of trust to this defendant Hammond on said block 2, and this defendant Hammond released the greater portion of said block 2 from the lien of said trust deeds, made to this defendant Hammond as trustee, there being about 10 lots yet remaining not formally released, but this defendant Hammond was and is ready to release the same at any time at request of said Hyde, unless enjoined by the court. And the said Hyde, having paid up the interest on said two Dickson notes and a sufficient amount of the principal to reduce the same to the sum of $10,000, these defendants agreed to and did take said notes by purchase, acting for and in behalf of said Richardson, and the said Richardson is now the legal and equitable owner of the same for full value. And these defendants, as such agents, consented to extend the time of payment of said Dickson notes first becoming due for the period of one year. And these defendants, also at the request of said Hyde, consented to the release of said block 2 from the lien of said trust deed to said Ayres as trustee, and this defendant, Bogue, signed said release, joining with said trustee, but these defendants at that time supposed and believed that said Hyde was the owner of both block 1 and block 2, and knew nothing of the said agreement between said complainant [Henry Traver] and said Michael Traver, and between said Michael Traver and said Hyde. And these defendants, for and in behalf of said Richardson, extended the time of payment of said Dickson note first payable for the term of one year; and the said Dickson notes are now in the hands and possession of these defendants as the agents of the said Richardson, who is the legal and equitable owner of the same, and who paid full value therefor." The answer of Hyde was in substance the same.
On the eighth of December following, Hammond & Bogue wrote Richardson as follows: "With regard to the Traver loan, we have to say, from pres
ent appearances we do not think there is a prospect of any payment being made at present; but we are of opinion it will be for your interest to institute prompt proceedings to forclose, if nothing is paid. The security on this loan was modified by us from the form as originally taken as follows: At the time of negotiating for the loan there was existing a prior purchase-money security of the same character as that taken by us. Our first arrangement, at the time of the negotiation of the loan, was to have this original incumbrance released, in order that your loan should be a first lien. Instead of the release, we had the original security (being the purchase-money paper secured by deed of trust) transferred to us, for your account, in substitution of the security first taken, and which we hold for your security as a first and prior lien, and we think it advisable, in case no payment is made this month when the payment is due, (December 19th,) that proceedings for foreclosure in the United States court be commenced immediately. We are legally advised and believe that this course will result in procuring an early settlement, but, if not, it will be a speedy proceeding by which a final result may be reached much sooner than is the case in the other courts. We would like you to advise and direct us in regard to immediate proceedings to foreclose, as we may deem necessary for our interest. An early reply is important. Send all papers of both loans." Richardson at once sent forward the two notes and deeds of trust, and their receipt was acknowledged by Hammond & Bogue, under date of the thirteenth of December. On the twenty-eighth of December suit was begun by Richardson, in the circuit court of the United States for the Northern district of Illinois, against the Travers, Ayres, Hammond, and certain purchasers of the property, to enforce the lien of the Ayres deed of trust on block 1 for the security of the two Dickson notes. In the bill Richardson stated that "on or about the fifteenth of January, 1875," he had, "for a good and valuable consideration, purchased from the said John Dickson the two notes aforesaid." Thereupon Henry J. Traver filed a supplemental bill in his suit in the state court, under which he brought in Richardson as a party. Richardson appeared, and, on his petition, the case was removed to the circuit court of the United States for the Northern district of Illinois. When it got there, it was consolidated with the suit which had been begun by Richardson. The circuit court, on final hearing, dismissed the bill of Richardson, and rendered a decree in favor of Traver, canceling the lien of the deed of trust to Ayres on block 1. From that decree Richardson has appealed.
After a careful consideration of the evidence we are satisfied with the decree below. To our minds it is clear that the Dickson notes have been paid by Hyde, not bought by Richardson. Richardson never heard of the transaction in reference to the Dickson notes until nearly a year after it occurred. He held all the time his original notes and the deeds of trust which were given for their security. Long after the time when it is claimed the notes were paid, Hyde, through Hammond & Bogue, remitted him the interest when it fell due, according to the terms of the notes he had in his own hands, and did not intimate in any way that those notes had been paid and others substituted for them. The books of Hammond & Bogue contain nothing to connect Richardson with the taking up of the Dickson notes. The $6,000 which Hyde handed to Bogue, and which he used in taking up the notes on the fifteenth of January, was neither entered to the credit of Hyde nor Richardson. In fact, it nowhere appears in any account on the books. The $5,641.87 which Hammond & Bogue did advance was charged directly to Hyde, and his payments on that account were passed to his credit. In all the conversations with Bogue which have been testified to, he did not intimate that Richardson was the owner of the notes. It is, no doubt, true the parties supposed that by keeping the notes uncanceled they might be so used as to make the lien under the Ayres trust on block 1 available as additional security for the ultimate payment of the Richardson notes; but as Hyde, not Richardson, paid
the bank for them, if Hyde could not charge Henry Traver's property with their payment, Richardson cannot. Michael Traver bound himself to Henry to pay the notes, and discharge block 1 from the lien of the trust created for their security. Hyde bound himself to Michael Traver to carry out this agreement which had been made with Henry. When the notes were afterwards taken up from the bank, where they were sent for collection, with the money of Hyde, they were, in legal effect, paid, and from that time the lien on block 1 was discharged. Hyde could not himself enforce them against that property; neither can Richardson. Although Hammond & Bogue advanced a part of the money to take up the notes, it was afterwards repaid to them by Hyde, and that made all the money paid for the notes his own. Hyde, Hammond, and Bogue all swear, with more or less directness, that Hyde paid the Richardson notes, and that this money was used to buy the Dickson notes; but this is contradicted by the well-established facts in the case, and it is apparent, from their own testimony, taken as a whole, that, until long after the Henry Traver suit was begun, they had no idea that they were doing anything more than keeping the Dickson lien alive, as additional security for Richardson. The testimony satisfies us beyond doubt that both Hammond and Bogue knew all about the obligation of Hyde to discharge the lien of those notes on block 1, and that the pretense of a payment of the Richardson notes, and the use of the money so paid to buy them, was all an after-thought. There is not a single act or fact which appears in the transaction to indicate that anything of the kind was in the minds of the parties at the time.
It is said, however, that parol evidence of the agreements between Henry and Michael Traver and between Michael Traver and Hyde is not admissible, because the "agreements were contradictory to the acknowledgments and in opposition to the plain import of the covenants contained in the deeds. If, by possibility, they could be held as of force between the original parties, they were ineffective and nugatory as to third parties. Neither Michael Traver nor Hyde deny that the parol agreements were made precisely as charged in the Traver bill, and it is elementary learning that evidence may be given of a consideration not mentioned in a deed, provided it be not inconsistent with the consideration expressed in it. 1 Greenl. Ev. 286; 2 Phil. Ev. 353. In both these deeds a valuable consideration is expressed, and it is not inconsistent with the considerations so expressed to show that the actual considerations were the agreements to pay the Dickson notes. The question here is not as to the liability of Henry J. Traver or Michael Traver upon the covenants in their respective deeds. Undoubtedly their covenants, such as they are, run with the land, but Richardson is not now claiming under the conveyances. The title, if any, which he has to the land embraced in those conveyances is not now disputed. He is suing to collect the Dickson notes by enforcing their lien on property not included in his original security, and the question in the case is whether they have been paid, and in that is involved the further question, whether Hyde, through whom he got the notes, was bound to pay them. To show that Hyde was so bound, his agreement to that effect, as the consideration for the conveyance to him, was proven. As Richardson does not, in this suit, claim anything under that deed, the covenants cannot be used as an estoppel in his favor. The actual facts may therefore be shown.
It is also claimed that "Richardson is entitled to hold the Dickson security by way of subrogation.' But relief is not asked, either in the bill of Richardson or in his answer to the Traver bill, on that account. In both his bill and answer he puts his claim entirely on the ground of the purchase and ownership of the Dickson notes, and makes no mention whatever of his original loan to Hyde, or of the security which was taken therefor. In the answers of Hammond, Bogue, and Hyde it is distinctly stated that Richardson's notes were paid and the Dickson notes bought with the money realized