APPEAL from the Circuit Court of Fulton County; the Hon. KEITH
F. SCOTT, Judge, presiding.
MR. JUSTICE STOUDER DELIVERED THE OPINION OF THE COURT:
This is an appeal from a judgment of the circuit court of Fulton County granting the motion of Matt Burroughs and Robert Burroughs, Defendants-Appellees, for judgment in their favor made at the close of the evidence introduced by Plaintiff-Appellant, Charles Burroughs, Conservator of the estate of Lena Burroughs, incompetent. This action originally commenced by Lena Burroughs was brought in three counts, the first sought to have a deed absolute in form declared to be a mortgage, the second and third counts sought recession on the basis of fraudulent misrepresentation and the violation of a fiduciary duty respectively. After this case was filed but prior to the hearing, Lena Burroughs was judged to be incompetent, Charles Burroughs, her son, was appointed her conservator, and as such conservator was substituted as party plaintiff.
In April, 1967, Lena Burroughs a widow, was the owner of 240 acres of farm land in Fulton County Illinois, the land being farmed by her son Charles Burroughs. The farm had been acquired by Lena Burroughs' husband in 1957 and he did in 1958. There had been no mortgage on the premises since its acquisition by the Burroughs.
In 1961 Lena Burroughs executed a coal lease on the premises which provided for advance royalty payments of $100,000. Such advance royalty payments were payable at the rate of $3000 per year for the first nine years of the lease and the balance of $73,000 was due at the end of the tenth year. The coal company had the option to terminate its lease at any time. At the time of the hearing the annual payments for nine years totaling $27,000 had been paid and the final payment of $73,000 would be due March 1, 1971, if the option were to be exercised by the company. According to a representative of the coal company the coal seams underlaid about 55 per cent of the farm in the northwest corner thereof.
Two real estate appraisers testified that in their opinions the value of the 240 acre farm in April 1968, was $71,000 and $78,000 respectively. Such appraisals did not include any valuation attributable to the coal lease.
In April, 1967, Lena Burroughs in order to assist her son Charles, who was in financial difficulties, joined with Charles in executing a mortgage and note secured thereby to the Canton State Bank in the sum of $45,000, the mortgage included the 240 acre farm and two homes owned by Charles. Additionally Charles' farm machinery was included as security. The proceeds of this loan went solely to Charles or for his benefit. The note required that $5,000 on principal plus interest be paid annually for the next three years with the final balance of $30,000 due April 26, 1971.
When April 26, 1968, approached, Charles did not have sufficient funds to make the payment then due. The amount due at the time was approximately $5,200, the bank having received $3,000 from the coal company as its annual payment (the coal lease also had been assigned as security for the loan.) Additionally Charles had $2,000 but the bank refused to accept anything less than the full payment due and insisted that the payment be made or foreclosure proceedings would be instituted.
In April and May of 1968, Lena Burroughs was 85 years old (87 years of age at the time of trial) and was hard of hearing. As indicated earlier Lena was adjudged incompetent prior to the hearing in this litigation and resided at a nursing home. Such incompetence raised the question of her competency to testify as a witness and defense counsel initially objected to her testimony but later withdrew the objection.
From the testimony of Lena Burroughs and her son Charles it appears that during the last part of April or the early part of May, 1968, they visited relatives in Washington, Illinois for the purpose of getting a loan but were unsuccessful in this regard. On the way back to Canton they stopped to see Matt Burroughs the defendant, a nephew of Lena's deceased husband. Charles testified that the purpose of going to see Matt Burroughs was to see about a loan to which response the court sustained an objection, it being the position of defendants' attorney that only conversations could be testified to. Although both Lena Burroughs and Charles refer to this initial conversation with Matt Burroughs their account of the conversation is sparse. It appears that they talked over their problems with Matt Burroughs and that he said "give me a few days to think it over", "I'll let you know".
A few days later Matt Burroughs came to Canton to Lena's home. Charles was there. They had some conversation. There was testimony by Charles that "we just talked about what the loan would be" which was objected to, and objection was sustained. That day at Lena's home, Matt simply said, "I think I'll take the whole mortgage up; just take the whole thing off of your hands". Thereafter, the three of them proceeded to the Canton State Bank.
At the bank the three Burroughs met with bank officials. At the time Matt Burroughs had two checks totaling the amount of the loan. The bank accepted the checks giving a receipt therefor but declined to do anything else until the checks had cleared. According to Lena and Charles Burroughs they inquired at the time whether or not they should have an attorney but according to Charles they were advised by C.C. Mason, the bank officer and Matt Burroughs that they would not need an attorney. There is evidence tending to show that at this meeting James Van Sickle, the bank's attorney, was present and was instructed with regard to the preparation of necessary documents although it does not appear that either Lena or Charles Burroughs had any idea what the documents would be. The parties then returned to Lena's home and had further conversations which included the reiteration as in a former conversation that Charles could buy the property back when he had the money. It also appears that during this conversation arrangements were made for Charles to continue farming the farm for the next year.
Two days later Matt Burroughs returned to Lena Burroughs' home and took her to the Canton Bank to finish the details. According to Lena, Charles was not there at the time and when she asked that he accompany them Matt declined.
According to Lena Burroughs' testimony she signed many documents at the bank including a deed although a deed is the only document about which she had any knowledge either signed by her or by anybody else. From the exhibits it appears that a warranty deed dated May 13, 1968, recorded May 15, 1968, was signed by Lena Burroughs conveying the property to Robert Burroughs (the son of Matt Burroughs). Another exhibit dated May 13, 1968, recorded May 15, 1968, was the assignment of the mortgage by the Canton State Bank to Robert Burroughs, the assignment reciting that the note for $45,000 secured by the mortgage had also been assigned to Robert Burroughs, the expressed consideration for the assignment of the mortgage being $45,375.67. Other exhibits dated May 13, 1968, included what was purported to be an accord and satisfaction and release of the mortgage (unrecorded) executed by Matt Burroughs as to the farm and also an agreement for warranty deed which recited that the mortgage note had been assigned to Matt Burroughs and that the consideration for the transfer of the farm property described therein was the release of the mortgage of the farm property.
James Van Sickle, testiled that he was the attorney for the Canton State Bank, that he had prepared the documents described above and was probably present when they were signed. Although he testified they were prepared according to instructions objection was interposed and sustained so that the record does not reveal who gave the instructions. According to his testimony he charged ...