51 F. 117 -

EDLElt V. CLARK.

117

affirmed. Harmon v. AdamlJ, 120 U. S. 363, 7 Sup. Ct. Rep. 553. For these reasons the bills of complaint in both cases are dismissed for want of equity.

EDLER

v.

CLARK

et al.

et ale

GREENHaW

V. EDLER

(C1n'cuit Court, N. D. Illinois. March 1, 1892.)
1.

ACOOUNT STATED-IMPEACHMENT-EQUITY.

Where a father and son make a settlement of the accounts between them, in pursuance of which the son gives his note for the balance found due from him, and such settlement is made a little more than a yeaI' after the transactions occurI'ed, and is afteI'wards reaffirmed by the son, such settlement should not be set aside after the father's death in the absence of any clear showing of fraud or mistake. Where land is conveyed by a deed absolute on its face, but in reality a mortgage, the mortgagee's interest in the land to the extent of his mortgage debt is superior

i;

MORTGAGE-ll!IECRANIO'S LIEN-PRIORITIES-ExECUTION PURCRASER.

liens against the mortgagor.

to that of a pUI'chaser under sales made on subsequent judgments and mechanics'

In Equity. Bill by Frederick Edler against George Clark, executor of James Greenhaw, deceased, and Richard Greenhaw, and cross bill by Richard Greenhaw against Frederick Edler and George Clark, executor. The executor excepts to the master's report. M. Eo Loomis, for F. Edler. Cook & Upton, for R. Greenhaw. Hiram Cody, for Clark, executor.
BLODGETT, District Judge. The original bill in this case was filed by Edler to establish title to a farm of 265 acres of land in De Kalb county, in this state, as against the heirs at law and executors of James Greenhaw, ,deceased. The cross bill was filed by Richard Greenhaw to set aside certain liens held by the executor and heirs of James Greenhaw on said land, and also to have Edler declared to hold whatever title he holds in trust for Richard Greenhaw, subject only to the small amount of indebtedness from Richard to Edler. The case is now before the court for final hearing on exceptions by Clark, the executor, to the master's report. The essential facts necessary to be considered in passing upon these exceptions, and as they appear from the testimony, are these: In November, 1871, Richard GreenhaW, being then the owner of the farm in question, gave to his father, James Greenhaw, his note for $1,000, for money the father had advanced to him, and secured the payment thereof by a mortgage on 160 acres of the farm in question. There is no controversy between the parties as to the validity of this mortgage, the note drawing interest at the rate of 10 per cent. per annum. In Novrillber, 1874, Richard Greenhaw, having become deeply involved in dEbt, .conveyed his farm and his personal property to his father, with the un-

118

51.

derstandiIlg thBtthe fa-ther was to dispose of the personal property, and: dE-bts, and advance sufficient more money to pay whatever of Richard's debts should remain unpaid from the proceeds of the personal property, and hold the farm as security for whatever indebtedness he should have against Richard. On the 9th of March, 1876, Richard and his father had an accounting as to the disbursements the father had made in the payment of Richard's debts, 'arid struck a balance of $2,194, which included, not the principal, but the. interest on the thousand-dollar note of November, 1871, uptb that time, Lmd Richard gave his note to his father for this balance of $2,194. On the 31st of August, 1876, James Greenhow died, leaving a will, in which the defendant Clark was named as executor, and he has qualified, and is acting as such. On the 5th of September, 1876,-less than a week after James Greenhaw's deltth,"';""the wido.w of'J ames GreenhQw, Richard GrElenhow, and some of his sisters, who were heirs to the father's estate, · met at the house of the widow, and. t!Jere they looked over the accounts between the lather and Richard from the time of the settlement of the 9th of Marchpl'eviously tip .to the time of the f/tther's death, and finally struck a balance of $1,007 as: having been paid by the father, on account of Richard, after the settlement in March, for which amount Richard gave a note, which was dated back to th625th of August previously, so that the settlement might appear to have been made during the father's lifetime. It was also agreed between Richard anel his mother and sisters :that the heirs should reconvey the farm to Richard, and that Richard should give a mortgage upon the farm for the entire amount of the indebtedness, which was figured- up to amount at that time to the sum of $4,201. This adjustment included the thousand-dollar 'note of November,1871, the note for $2,19/! of March 9, 1876, and the'note of August 25, 1876, which was made and agreed upon on the 5th of September, all these notes drawing interest at the rate of 10,per cent. pf!r annum. This was substantially carried out. The heirs gave deeds to Richard, which deeds were recor-ded on the 26th ofFehruar.y, 1878. Richard gave a mortgage to Clark, executor, dated March 9, 1877, for $4,474.95, with interest at 10 per cent. per annum, payable ill three years, and this mortgage was recorded ,April 25, 1878. Richard made 'clefault in the payment of this last note and mortgage. On the 24th ofSeptember, 1880, the'complainant Edler filed the original bill in this case, asserting title by virtue of a sale made under a decreein a mechanic's lien proceeding in De Kalb county, to which neither James Greenhow nor his executor or heirs were parties; to 80 acres of the160 acres of which-was covered by the mortgage of Richard to his father of 1871, to seeure the first thousand dollars; and by the supplemental ·billfiledOctober 12,1880; Edler set up title to theentire farm under certain ' sheriffs' deeds made on sales on executions against Richard; also attacking the mortgage whieh Richard had given to' Clark, executor, as having beEm given without consideration. Thecase was SUbsequently removed by: the oomplainant Edler to thiseourt,.
aPPly the proceedlhllS far as they would go, in payment of Riohard's

EDLER

v.

CLARK.

119

"'here default was taken, 'and a decrMentel.'ed.. This default was su'" sequently set aside, and the defendants allowed to come in and make defense. Defendants then answered the original bill and the supple.mental bill, insisting that the mortgage was a first and valid lien and deDying Edler's title as against their mortgage. Richard, after having llnswered, filed a cross bill, se'tting up an arrangement between Edler and himself, by which Edler was to purchase these claims against Richard, and attempt, through them, to obtain title to the farm for Richard's benefit. He also, by his crossbill, attacked the mortgage he had given to Clark, alleged that he did not owe his father's estate the amount named in the mortgage, and asked that an accounting be had as to the amount actually due from him to his father's estate, insisting that the balances struck by the settlements of March 9 and September 5, 1876, were incorrect, and that he was entitled to much larger credits than he had received. The cross bill was dulyanswererl, and its claims to an accounting were denied and put in issue, and replication was filed, the case referred to a master; before WhOll1 voluminous testimony was taken, and the 'master has made his report, to which only the executor, Clark, and the heirs of Richard Greenhow have excepted. The'master finds by his report that, as between Richard and Edler, there is $1,690.70 due Edler, on payment of which, without interest, Edler ·shall reconvey to Richard whatever title he (Edler) holds in the farm. rrhat there is due from Richard to his father's estate $2,578.49, for which the mortgage of March 9, 1877, should stand as security, 'subject to the amount found due to Edler; and that on payment by Richard of the amount found due Edler, and the amount found due the executor, he should have a reconveyance of the farm, and a release of the mortgage. The exceptions by Clark, execntor, and the heirs of Richard Greenhow g() to the credits .which the master has allowed to the balances struck in the. settlements of March 9 and September 5, 1876. The master has found errors and omissions of items in the settlements between Richard and his father on March 9, 1876, which should be credited to Richard, and applied in reduction of the mortgage as follows: Proceeds of sale of personal property not accounted for 9Y James Greenhow in the settlement of March 9th, - , · $1,195 00 BorrowM from the bank. and chargpd to Richard by James, 300 00 Proceeds of threshing machine, 350 00 Rent of Richard's farm received by Jatnes Greenhow for 1875-76 580 50 $2,425 50 So that at the time of the settlement'in March, 1876, according to the finding of the master, there was actually due Richard, without considering the thousand·dollar note of November, 1871. thesum of $231. He further finds that in the settlement of September, 1876, between Richard and his mother and sisters, the sUm of $430, reeeivedfor rent of the farm by his father, was overlooked, which should have been credited to Richard, and it was therefore improperly included in the

,1.20

FEDERAL REPORi$R, vol. 51.

note fOJ: $1,007, and then carried into the computation by which the sum of$4,474.95 was reached, which made up the note and mortgage of March, 1877. . As I have already said, the testimony in this case is voluminous. and very much of it. as it seems to me, wholly immaterial and inconclusive James Greenhow. the fllther, seems from upon the issues in the th.e proof to have been a careful. methodical, and right-intentioned man. There is no evidence that he ever intended to impose upon Richard, or in any way take an unfair advantage of him; on the contrary, all the (jvidence is the other way·. He was Qot a trained accountant, and seems to have been a man with very little bOok education, but. he was evidently 8. wan who had very correct notions and methods. In attacking the mortgage thus solemnly made' by him, which was· the result qf various settlements and conferenoes, Richard Greenhow, the complainant in.the crossbill,has the burden of proof. He is bound to establish the wistakes and overcharges which he complains of by clear and convincil;lgevidence. Settle{Q8Ilts made .between parties where each has ,opportuniity to examine and consider the claims or accounts of the others should not be disturbed by courts, except for grave reasons, and where, light of the proof, the court can feel assured that it is better advised as to the state of the accounts ,adjusted than. the parties themwere at the time theY made the adjustment. It is said by Mr. Justice WALKER, in Peddicord v. Connard, 85 Ill. 102: "The business affairs of tile country must be protected against reopening accounts ·for a neW agjustment after such qelaysand long acquiescence in set· tlements and payments." And ChiefJllstice MARSHALL, in Ohappedelaine v. Dechenaux, 4 Cranch, 309,said: , "N'o practice could that of opening accounts which the parties themselves have adjusted. oli suggestion supported by doubtful or by only probable testimony. Buti! palpable errors be sbown,-errors ,which cannot be misunderstood,-tbe settlem.ent must so far be considered as ;made upon absolute mistake or imposition. alld ought not to be obligatory on ,the injured party or his representatives, because such items cannot be supposed to have received his assent. The whole labor of proof lies upon the party objecting to the account. and errors which he does not plainly establish cannot be supposed to exist." , ' The proof shows that James Greenhow kept a book in which he set down theitems of his account with Richard. At the settlements made with Richard,he made his statement of the account upon the basis of the entries in his' book. Richard does not seem to have kept any book account with his fllther, but depended mainly upon his memory and the entries in his father's book.. Jt is true this book is. ,somewhat crudely kept. and that it requires study to undersf!and the methods of the deceased in keepiIlg it, but the fact remains., that, with this book before them, with all the traJils,actions fresh in their lllinds j within a Ii tHe more than a year after they had all occurred, Richard Greenhow and his father sat down, and, after more than a day spent in the examination of the various

EDLER 11. CLARK.

121

items of the account, arrived at the balance, and Richard gave his father the note of March 9th for that balabce of 82,194. Much weight is attempted to be attached to certain words and figures found upon these notes. but, in my estimation, they are worthy of no particular weight as evidence in the case. They do not prove any of the facts which Richard insists upon, and are not, it seems to me, of sufficient significance to justify disturbing the conclusions the parties themselves arrived at. Therefore, upon a carefnl review of the proofs, I am far from satisfied that the items, or any of them, which the master has found were not credited to Richard in the settlement between him and his father of March 9, 1876, and for which the master finds he should be credited, are so clearly established as to justify disturbing the balance struck at that time. In the settlement between Richard and the widow and heirs, resulting in the giving by Richard to the executor of the note and mortgage for 84,474.95, there is an indorsement upon the note for $425.75 for reDt received by the executor, partially erased. This indorsement should stand, reducing the note to $4,049.20 at its date, as the amount then due thereon from Richard to his father's estate, which he still owns, with interest thereon according to the terms of the note. The eighth exception to the master's report goes to the finding that the amount due Edler should have priority over the mortgage to Clark, executor. In this I think the master erred. The title to the farm was in James Greenhaw long before either the mechanic's lien suit was brought or the judgments rendered under which Edler claims title. While the title in James Greenhaw was in form an absolute deed in fee, it is at the same time admitted that it was in the nature of a mortgage for whatever indebtedness should accrue to James from Richard.... At the time the sales were made on this mechanic's lien decree and the judgments, Richard's only interest in the property was this equity after the payment of whatever was due his father, and this equity is all that Edler took by his sheriff's deeds, and hence these deeds held by Edler cannot cut or be given preference over the mortgage. All the exceptions to the master's report are snstained. I think a re-reference hardly necessary to recompute the amount due on the mortgage on the basis I have indicated, but, if the parties cannot agree as to the computation, I will send the case again to the master.

nDERAL .·
, ;/..:,:i

",ol.51.

',dJ

0'

,;....

.',

(C7Irct* Court qj' .AP'Pealf, Etgh.th OircuU. .Tune SO, I . '

No..loo.

'A:'t.elitator, after-directing ·the pliyment of his debts, bequeathetl to .bls wife all ·· «hpses in action, .lllnc;l&, and personal to be bers dy.ring ber natur,alIifetime or widowhood." .tie rurthe.rprovided'tliat a sutllcleD'll portiou of lUs eatawsbould be appropriated to thesuppor\ i.' · · educatlQn of.,ll.is qlUldren,an4tbat at. the death of Ilis .wifean equal division qt ,ldeestate should ,Qe made tobls children. Held, that the wife did not take a mare'll1e estate wlthTEimainder to the ohildren, but she bad full power to ., . stU tbelper&onalty, by FijJ,. for the purpose of carryjng out its provi! .·
i

DJSPONJINDt.

' .

hta.1& lfQods,

LB4··: . . ..; . ' Where the wIfa.Ncelvea land in pa;,:m.ent for the peraonaitYSQspld"ahe.oanooJ,lIn ,fee simple fo.t:value, free from any cJai,m or interest on the !>art 'oftha cbUdreJil. . . '. . . ' ,
(i'g"" "

i

aioJ¥',.

,

I

.

'

';:,l'-

'

AP'Il'eil ffum the Court'ofthe United, StatelJ' for the Eastern District,of .Arltansas. Affirmed.' ", ' " .. It;'jlliam'{J; Whipple', for appellants· .,:.Danitl W. Jones, (A: p. Williaw and R. B. William:a, on the brief,) for appellees. '. '.. . ". . .,' CirCuit Circuit JUdge, and SHIRAS. .,Before
... '

J ' ·

SHlRAs,pistrict . The' ,bill in the present cause was filed by J. D·. the pU,rpose quieting the title to certain realty situate4, ill Jlempstell,dcounty; Ark., claims asserted tllere1;t) ,RY' .F. Smith. 3,oel' 0;. W. Yowell, and Minnie Yowell, yowell, minor cbildre4alid beirs at law of Eliza P. Yowell, deceased.. . The. record, sbows the follOWing to be the material facts out ofwhicll the controversy between the: parties arises: .' "WUliam'lt. Rect01',.a'residentofHempstMd county, Ark., on the ,oCJapt/ary,1868', executed hi!l last will, which: reads as follows. oriiittitig 'tbet6rmal "ftem 2d. That I do hereby require that all my' just debts be paid, including my funeral expenses, out of my estate; that after which I do hereby give and bequeath to my beloved wife, Augusta M. Rector, all my estate, including all my goods, chattels. merchandise, moneys, choses in action, lands, and personal property, to be hers during her natural lifetime or widOWhood, and no longer. "Item 3d. It is my wlll that a sufficient portion of my estate be appropriated for the support and education of my children, namely, Martha Ellen, George Lafayette. Eliza Prudence, Mary Cordelia, and Jesse Nathaniel, and that said appropriations be made as nearly equal as possible, including what has already been expended for the benefit of the older ones of said children by my wife or executor of my estate. " Item 4th. And. I furthermore will that at the death of my wife, or at hel' marriage, that an equal division of my estate be made to each of myabov.. lUUIled children by the executor of said t:state.

'or