Appeal by petitioners from the Circuit Court of Douglas
county; the Hon. GROVER W. WATSON, Judge, presiding. Heard in
this court at the May term, 1952. Affirmed in part and reversed
in part with instructions. Opinion filed June 10, 1952. Rehearing
denied September 22, 1952. Released for publication September 22,
MR. JUSTICE REYNOLDS DELIVERED THE OPINION OF THE COURT.
Rehearing denied September 22, 1952
This cause comes to this court on appeal from the circuit court of Douglas county. The appeal was first taken to the Supreme Court of Illinois, but that court held that it was wrongfully appealed to the Supreme Court and by its order of October 8, 1951, transferred the cause to this court.
The original proceeding was a foreclosure by the Illinois National Bank of Springfield, as Trustee v. A. Lee Gwinn, Trustee, et al. Since the proceedings in that case bear directly upon the issues in this case, some of the pertinent facts must be set forth.
The property involved in that proceeding was formerly owned by Elmer E. Gwinn and on April 24, 1922, Elmer E. Gwinn conveyed the property by warranty deed, joined by his wife, to A. Lee Gwinn, as trustee. This deed after reciting that there were mortgages and other liens against the real estate conveyed, and that the said Elmer E. Gwinn was heavily involved financially and was unable to meet his obligations, authorized and directed A. Lee Gwinn, as trustee to take possession of the property and to manage and control the same, either by personal supervision or by renting the same. The trustee was given power to extend the existing obligations, and to make new notes and mortgages and to sell, if necessary in order to discharge the obligations of Elmer E. Gwinn. The trustee was to retain a fee and out of the income of the trust, the grantor should receive an amount necessary to support him and his family in a reasonable way during the term of the trust. If all indebtedness was paid before the death of Elmer E. Gwinn, then the trustee, after paying all expenses and fees, should convey one-third of the property to the said Janice Gwinn if she was then living and the widow of him, the said Elmer E. Gwinn, for her life only, and the balance to his bodily heirs, excluding one Andrew Burkey Gwinn, a son, on the ground that he had received his share of his father's estate. There were other provisions of the trust, but they are not important here. Elmer E. Gwinn died April 2, 1941, leaving surviving him only Andrew Burkey Gwinn and Elmer Ellsworth Gwinn, Jr. Janice Gwinn, who was on April 24th, 1922, the wife of Elmer E. Gwinn, the grantor, had on March 15, 1928, obtained a divorce from Elmer E. Gwinn and was at the time of the death of Elmer E. Gwinn, married to and the wife of one Mack Portwood.
The trustee A. Lee Gwinn, in pursuance of the powers granted him by the trust, made his trustee note to the Illinois National Bank of Springfield in the principal sum of $32,000 payable five years after date, with interest at the rate of six per cent, together with mortgage on the trust property securing same.
On May 5, 1941, the Illinois National Bank of Springfield, filed its complaint for foreclosure of the $32,000 mortgage, making among others, Andrew B. Gwinn, Elmer Ellsworth Gwinn, Jr., Janice Gwinn Portwood, parties defendant. Decree for foreclosure and sale was entered January 9, 1942. On February 16, 1942, the master reported sale for $43,000 to the plaintiff, the Illinois National Bank of Springfield, with deficiency of $7,205.03. The sale was approved with finding that there was still due plaintiff the sum of $7,205.03 but no deficiency judgment was entered. The certificate of purchase was assigned to one W.T. Burnside.
On February 16, 1943, Andrew Burkey Gwinn, although he had a junior mortgage note of the trustee, secured a judgment note from A. Lee Gwinn, Trustee and reduced this note to judgment by confession. An execution was issued and placed in the hands of the sheriff with $45,594.36 for the purpose of making redemption from the master's sale of February 16, 1942. A certificate of redemption was issued February 18, 1943; the sheriff made a levy under the execution, and on March 19, 1943, the property was sold to W.T. Burnside for $51,616.32. There being no further redemption, the sheriff on October 25, 1943, delivered his deed to Burnside who then took possession of the property. On June 8, 1943, the foreclosure case was ordered stricken from the docket.
On April 24, 1944, on motion of Elmer Ellsworth Gwinn, Jr., the foreclosure proceedings were re-instated on the docket. Elmer Ellsworth Gwinn, Jr., at the time of the commencement of the foreclosure proceedings and continuously until the time of the motion to re-instate and afterwards, was a member of the U.S. Navy and in the armed forces of the United States and as such service man was entitled to all rights and relief afforded men in service under the Soldiers and Sailors Civil Relief Act, as amended. Elmer Ellsworth Gwinn, Jr., tendered in open court the sum of $49,049 and asked to redeem the property. On August 22, 1944, the court ordered that the master accept the tender and issue a certificate of redemption. That order was appealed to the Supreme Court of the State of Illinois and that court, in Bank of Springfield v. Gwinn, 390 Ill. 345, held that while the trustee, A. Lee Gwinn, held the legal title, the equitable title under the terms of the trust was vested in Elmer Ellsworth Gwinn, Jr. That under the Soldiers and Sailors Civil Relief Act, no part of the time of service of Elmer Ellsworth Gwinn, Jr., could be included in computing the time allowed for redemption and that Elmer Ellsworth Gwinn, Jr., was entitled to redeem.
While the appeal to the Supreme Court was pending, the trustee and Elmer Ellsworth Gwinn, Jr., brought a suit in the circuit court of Douglas county for accounting and other relief against W.T. Burnside, for the profits and issues of the farm while held by said W.T. Burnside, from the time he took possession until the time of the redemption. Before this suit was decided by the trial court, Elmer Ellsworth Gwinn, Jr., was reported missing in action and later by letter of the Navy Department declared probably dead. His mother Janice Conkey Portwood was appointed administrator of his estate and substituted in the action. The original trustee, A. Lee Gwinn had died and Emerson L. Gwinn was appointed successor trustee.
On October 9, 1945, Perry M. Chadwick and John R. Chadwick, filed their motion to intervene in the accounting suit, setting out that they held two notes in the amount of $500 each, with interest, which notes were secured by second mortgage to one H.E. Conover, against the land conveyed in the original trust to A. Lee Gwinn. The mortgage to Conover was a second mortgage and that the amount due the Chadwicks was $1,969.62.
It appears that the original trustee A. Lee Gwinn had made other loans besides the note and mortgage to the Illinois National Bank of Springfield and had secured these other loans by a second mortgage on the trust property, the second mortgage securing the Chadwick notes, one note to R. Allan Stephens and Logan Hay in the amount of $1,000 and one to Andrew Burkey Gwinn in the amount of $1,972.75, or a total of notes and liens of $3,972.76. These loans were also for the purpose of paying off indebtedness of Elmer E. Gwinn, the grantor.
Stephens and Hay had assigned their interest to W.T. Burnside. The Andrew Burkey Gwinn judgment had been paid by W.T. Burnside, so that Burnside was subrogated to the rights of Andrew Burkey Gwinn.
The Illinois National Bank of Springfield had assigned all its interest in the deficiency resulting from the original master's sale in ...