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Statement of the Case.

tiffs, and on the 4th of January, 1883, the plaintiffs filed an amendment to their amended and supplemental bill, wbich averred that Peabody, in order to conceal the time of the sale from the plaintiffs, caused the notice of sale to be published in “The Chicago Weekly Journal,” a newspaper which was not read in the city of Chicago and had no circulation in said city or in Cook County; that the premises sold were composed of three separate lots; that the north 44 feet of the property was separated from the south portion, fronting on West Madison Street, by an alley or court 12 feet wide; that such north 44 feet were divided into two lots of 22 feet each, on each of which stood a brick dwelling-house 22 feet wide and fronting on Sheldon Street, which were used for private dwelling-houses, and were entirely distinct from the hotel part of the premises; that Peabody sold the property in bulk to Greene, at half its value, when it was his duty to have sold it in separate lots; and that, if he had so offered it, the part of it used for a hotel, and fronting on Madison Street, south of the alley or court, would have brought more than sufficient to pay off the debt, interest and costs.

On the 6th of January, 1883, the defendants answered this amendment, denying its allegations; and, on the 29th of January, 1883, they amended their answer by averring that, as to so much of the bill, amended bill, and supplement, as alleged any agreement between Greene and Robertson for the redemption or repurchase of the premises by Robertson, such supposed agreement was not in writing, signed by Greene or by any person by him authorized in writing, according to the statute of Illinois in such case made and provided.

On the 27th of October, 1883, the master reported the proofs to the court, and the cause was heard before Judge Blodgett, in November, 1883; and, on the 14th of April, 1884, he filed an opinion, which is reported in 21 Fed. Rep. 209, deciding the case in favor of the plaintiffs.

A motion for a rehearing was made and overruled on the 7th of July, 1884, and on the 29th of July, 1884, an interlocutory decree was entered, finding that the equities of the cause were with the plaintiffs; that they were entitled to redeem the

Statement of the Case.

premises in question from the indebtedness secured thereon in favor of the heirs and representatives of the estate of David R. Greene, deceased, upon such terms as might be thereafter fixed by the court; and that a reference be had to a master, who was named, to take and report to the court an account of what was due to such heirs and representatives, for principal and interest, on the debt secured by the trust deed to Peabody, and of the amounts paid for taxes, assessments and charges provided for in such trust deed, and an account of what had been paid by said defendants for necessary repairs and improvements, and an account of the rents and profits of the premises, and to report such accounts with the evidence.

Those accounts were taken, and the master filed his report on the 15th of July, 1885, finding due to the defendants on the 12th of June, 1885, on the principles stated in the interlocutory decree, $45,641.66. Both parties filed exceptions to this report. Before they came on for hearing, and on the 4th of January, 1886, the defendants moved for leave to amend their answer, so as to set up the limitation of actions provided by the bankruptcy statute. The consideration of the motion was postponed until the final hearing of the cause.

The case came on to be heard on the 1st of April, 1886, and on the 3d of April, 1886, the court made an order allowing the defendants so to amend their answer, and also granting leave to the plaintiffs to amend their bill, and ordering the replication to the original answer to stand as a replication to such amendment thereto, and giving leave to either party to put in before the master further evidence on the subject matter of such amendments, directing the master to continue the account from June 12th, 1885, to April 1, 1886, and ordering that such additional evidence and statement of account be considered as if taken before the hearing, and that all exceptions to the former report of the master be considered as exceptions to such supplemental matters.

In pursuance of such leave, the plaintiffs amended their amended and supplemental bill, by averring that neither they nor the assignee in bankruptcy had any knowledge that the sale by Peabody had been made, until the 24th of April, 1880;

VOL. CXXXII-28

Statement of the Case.

that they did not have any knowledge of such collusive agree ment between Robertson and his agents, and Peabody as trustee for Greene, until on or about September 13, 1881; that the details of such agreement did not come to their knowledge until the taking of the evidence in the cause ; that such sale and agreement were purposely concealed by all parties there to, notwithstanding all due diligence was used to discover the same; that Peabody having been, prior to the making of the sale, placed in possession of the property as agent and trustee, and there being no apparent change in the possession of the property thereafter, there was nothing to advise the plaintiffs of the sale, unless they had accidentally discovered the record of the deed from Peabody to Greene, and they made no examination for that, for the reason that, by the conduct of Robertson and his agents and of Peabody, they had been lulled into the belief that no foreclosure or sale would be made, at least prior to April 2, 1880, when the debt secured by the trust deed to Peabody would mature ; that the sale made by Peabody, October 7, 1878, was made after the filing of the petition of Robertson in bankruptcy, August 31, 1878, and before the appointment of his assignee, July 24, 1879, and while there was no representative of the estate of Robertson and of his equity of redemption in the property, on whom the notice of sale could operate, or who could protect the estate and the creditors; that the sale was, therefore, void as against the rights of the plaintiffs, and as against the assignee in bankruptcy and the plaintiffs as purchasers of the title and right of such assignee, under the provisions of the bankruptcy statute; that such sale, made under such circumstances, should not in equity be allowed to cut off the plaintiffs from their right to redeem from the trust deed notwithstanding the sale and the deed thereunder; and that the plaintiffs should be decreed to have taken the title of Robertson in and to the property in the same condition as it was on the 31st of August, 1878, unaffected by the sale by Peabody, and with full right to redeem from the trust deed as if no sale had been made. The defendants filed the proposed amendment to their

As to the allegation that the sale by Peabody took

answer.

Statement of the Case.

place, and his deed to Greene was made, pending the proceedings in bankruptcy, and before the election of an assignee, or at a time when the power of sale under the trust deed was suspended, and as to any other irregularity in the notice of sale, or any right in the plaintiffs or in said Pratt, derived from the assignee in bankruptcy, to set aside the deed from Peabody to Greene for any matter alleged, it said that the right to do so, if it ever existed, belonged to the assignee and the provisional assignee, as representing the creditors in the bankruptcy proceeding; that the assignees and the plaintiffs waived such claims and equities and failed to assert them; that at the time Peabody made the deed to Greene, on October 7, 1878, Hancock was provisional assignee in the bankruptcy matter, and on the 24th of July, 1879, became assignee; that the supposed equities and claims under which the plaintiffs pretended to have derived a right, under such assignee, to vacate such foreclosure and redeem the premises, did not accrue within two years next before the bringing of the amended and supplemental bill of September 17, 1881, wherein the defendants, excepting Peabody, were for the first time impleaded in this suit, and wherein, as to all of the defendants, said pretended rights were for the first time asserted; and that those claims and equities, if they ever existed, were barred by such laches and by the statute at the time when the supplemental bill was filed. The amendment set up such laches as an equitable bar and defence to so much of the bill as rested upon such pretended equities, and averred that, by the bankruptcy act, the plaintiffs, by reason of such lapse of time and of the said facts, were barred from claiming any relief by reason of such pretended equities, and set up said bar and limitation of two years. The amendment to the answer also denied the allegations contained in the amendment so filed by the plaintiffs to the amended and supplemental bill.

The master, on the 12th of April, 1886, filed a supplementa) report, bringing down the account to the 1st of April, 1886, and finding to be due to the defendants on that day $45,342.86.

The case was brought to a hearing before Judge Blodgett,

Citations for Appellants.

and he filed his opinion on the 24th of May, 1886 ( 27 Fed. Rep. 537). He adhered to his former views.

On the 28th of May, 1886, Robertson, Templeton and McAllister filed an answer disclaiming all interest in the property in controversy, admitting that the plaintiffs were entitled to the relief prayed by them, and consenting to the entry of such decree as might seem proper to the court.

The court, on the 1st of July, 1886, made a final decree, adjudging that there was due to the defendants, the widow, heirs and representatives of the estate of David R. Greene, deceased, on their lien on the premises in question, $45,342.86, with interest thereon from April 1, 1886, at six per cent per annum; that the plaintiffs pay to them that sum, with the interest, within 90 days, in redemption of all lien of the defendants on the premises; and that, on such payment being made, the defendants convey the premises to the plaintiffs by a quitclaim deed.

The widow, heirs and representatives of the estate of David R. Greene, deceased, with Peabody & Cummings, appealed to this court from that decree.

Mr. John Lowell and Mr. George L. Paddock, for appellants, cited: Anderson v. Strauss, 98 Illinois, 485; Strother v. Law, 54 Illinois, 413; Bergen v. Bennett, 1 Caines' Cas. 1; S. C. 2 Am. Dec. 281; Hall v. Bliss, 118 Mass. 554; Ilunt v. Rousmaniere, 2 Mason, 244; Sargent v. llelton, 115 U.S. 348; Bank v. Sherman, 101 U. S. 403; Gifford v. Helms, 98 U. S. 248; Jenkins v. International Bank, 106 U. S. 571; Wisner v. Brown, 122 U. S. 214; Miller's lleirs v. McIntyre, 6 Pet. 61; Phelps v. Illinois Central Railroad, 94 Illinois, 548; Dunphy v. Riddle, 86 Illinois, 22; Crowl v. Nagle, 86 Illinois, 437; Norton v. De la Villebeuve, 1 Woods, 163; McIver v. Ragan, 2 Wheat. 25; Phelps v. Elliott, 29 Fed. Rep. 53; Nugent v. Boyd, 3 IIow. 426; Jerome v. McCarter, 94 U. S. 734; Eyster v. Gaff, 91 U. S. 521; In re Grinnell, 9 Nat. Bankr. Reg. 137; Sedgwick v. Grinnell, 9 Ben. 429; In re Moller, 8 Ben. 526, affirmed 14 Blatchford, 207; Bradley v. Adams Ex. Co., 3 Fed. Rep. 895; Goddard v. Weaver, 6 Nat. Bankr. Reg. 440;

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