Windett v. Union Mutual Life Insurance Company/Opinion of the Court

by Horace Gray

United States Supreme Court

144 U.S. 581

Windett  v.  Union Mutual Life Insurance Company

This was a bill in equity by a corporation of Maine against a citizen of Illinois to foreclose a deed of trust in the nature of a mortgage of land in Chicago, made by the defendant to the plaintiff on July 12, 1869, to secure the payment of his note of that date for $7,500, payable in five years, with interest at the rate of 8 per cent.; and containing covenants that the premises were 'free and clear of all liens and incumbrances;' and that the mortgagor would 'in due season pay all taxes and assessments on said premises, and exhibit once a year receipts of the proper persons to said party of the second part, showing payment thereof;' and a power to sell on any breach of condition, and out of the proceeds, after paying all expenses, 'including all moneys advanced for taxes, insurance, or other liens and assessments, with the interest thereon at the rate of ten per cent. per annum from the date of payment, all which advances shall be secured by this trust,' to pay the principal and interest of the note to the mortgagee, and any surplus to the mortgagor.

This bill was filed February 10, 1882, after default in payment of principal and interest of the mortgage debt. The master, to whom it was referred to state the account between the parties, reported that there was due to the plaintiff the sum of $20,556.11. The defendant excepted to the master's report in two respects, and appealed from a final decree rendered for the plaintiff in accordance with that report.

1. The defendant failed to pay the taxes assessed on the land from 1869 to 1879, and the land was sold and conveyed for nonpayment of these taxes to Asahel Gage. The plaintiff's president urged the defendant to redeem the land from the tax sales, (as he might, under the Revised Statutes of Illinois, c. 120, § 210, by paying the amounts for which the land was sold, with interest at the rate of 10 per cent., and certain penalties,) and told him that otherwise the plaintiff would be obliged to take steps to protect itself. The defendant promised to pay the taxes and interest, but insisted that the tax deeds were void, for want of previous notice to the tenants of Gage's purchases as required by chapter 120, § 216, of the same statutes. The defendant never paid the taxes, or took any steps towards redeeming the land. After waiting two years, the plaintiff, on August 1, 1881, bought in Gage's tax titles for the sum of $3,750, which exceeded the amount of unpaid taxes and interest by the sum of $300 only, equal to a very small part of the penalties accrued. The master allowed the plaintiff this sum of $3,750, with interest at the rate of 10 per cent., amounting to $1,809.24.

The defendant argued that the plaintiff could not be allowed for the taxes, because they had been extinguished by the tax sales and deeds; and could not recover on the tax titles, because they were void, and because equity would not enforce them.

But the plaintiff did not set up the tax deeds as a ground of suit, but only as evidence of clouds upon his title, arising out of the mortgagor's own neglect to pay the taxes. It is at least doubtful, upon the evidence, whether Gage did not give notice to the tenants of the tax sales; and there is no evidence whatever of any invalidity in the taxes, the sales, or the deeds, in any other respect. In this state of things, the mortgagee was not bound to take the risk of contesting the tax titles, and the sums paid to extinguish those titles were reasonable expenses chargeable to the mortgagor by the terms of the mortgage.

2. The defendant, who is an attorney at law, claimed by way of set-off the sum of $2,500 for professional services, and the further sum of $5,000 for a general retainer, by reason of the president having, as the defendant testified, said that he 'wished to engage him professionally in behalf of the company with reference to fifteen or twenty cases,-litigated or complicated cases,-growing out of their foreclosure proceedings and claims upon property.'

The master allowed the defendant the sum of $600 for professional services actually rendered, and the evidence does not satisfy us that they were worth more.

The defendant's claim for a retainer for services in suits to be brought in the future was rightly disallowed by the master. No express agreement to pay a retainer was proved, and an agreement to pay a retainer for services which are never performed is not to be implied.

Decree affirmed.

Notes