SUPREME COURT OF ILLINOIS, THIRD GRAND DIVISION, APEIL TEEM, A, D, 1867, FRANKLIN PARMELEE, et al, APPELLANTS. vs. DANIEL LAWRENCE, APPELLEE. BRIEF FOR APPELLEE ON RE-HEARING. MAY IT PLEASE YOTJK HONORS: The argument made in the petition for a re-hearing in behalf of Mr. Lawrence seems to be all that need be said on the subject of the fraud in the procurement of the release being such a fraud as a court of equity will take cognizance of. Neither in the oral argument on the re-hearing, nor in their printed argument, have the counsel for the appellants attempted to contravert the positions we have assumed, and they seem to be so fully impressed with the equity and legality of Mr. Lawrence's claims that they urge not a word against them, except to say that there are technical points upon the pleadings in this case which present insuperable obstacles to the decree for a foreclosure which we so confidently ask your honors to direct. To their te.cb.mcal arguments I shall reply after calling at- tention to a few authorities additional to those which I cited in the petition, to the proposition that " If one party was in fact ignorant of the law, and the other party knowing him to be so, and knowing the law, took advan- tage of such ignorance to mislead him by a false statement of the law, it would constitute a fraud." This is a proposition universally announced and acted upon in courts of equity. In Broadwell vs. Broadwell (1 Gilm. 608) the court states as settled law that fraud may as well be committed in an intentional misrepresentation of the law as of the facts. The case of Cathcart vs. Robinson (5 Peters, 264) is another case directly in point. It is cited by Judge Caton in the case of Broadwell vs. Broadwell and approved. If Judge Caton, (1 Gilm., 609,) referring to Cathcart vs. Robinson correctly states the law, it is decisive against the appel- lants ; change the names of the parties, and his words are : "There could have been no middle ground in Bigelow's conduct, between impropriety and fraud, because if Bigelow had the same understanding of the effect of the release which Mr. Lawrence had, his silence was in no wise blameable, while if he was, in fact, aware of its true legal effect, his suppression of that information was a clear fraud." The case would be much stronger if the party made actual suggestions to create the mistake. Such was Bigelow's con- duct. Actual suggestions may be made as well by acts as words, and the proofs show the production of several releases under the pretence that the last was entirely different in its oper- ation from the first. This was an actual suggestion, and this is proven without reference to Lawrence's sworn answer. The evidence, which in Cathcart vs. Robinson, was thought by Marshall, C. J., to prove that Robinson did know the true effect of the agreement in question in that suit, was very much less direct and positive than the evidence in the case at bar which proves Bigelow's knowledge. Besides the testimony of Mr. Gregory wnich is direct to show that Bigelow was well advised of the effect of a release; and the fact of his having the appellants' attorney with him, all the circum- stances Bigelow's interview with Mr. Gregory aj Iris office, and his mendacious statements to Mr. Gregory before the Master in Chancery, denying that he had counsel to assist him in drawing the release, and the clandestine meetings of Bigelow and McAllister in New York and Boston, and the various releases put at Lawrence, and the immediate use of the release for a purpose contrary to Mr. Lawrence's declared intention and understanding of its mean- ing, clearly show a deliberate purpose to defraud. The following cases in Illinois imply (though they do not decide the point) that misrepresentation or mistakes in the law, accom- panied with imposition practiced upon the mistaken party, are ground of relief for cause of fraud : Ruffner vs. McCounel, 17 Ills. 216 ; Gordere vs. Downing, 18 Ills. 493 ; Shatter vs. Davis, 13 Ills. 398. In "Wheeler vs. Smith, 9 Howard 55, a release of title was declared void on bill filed by the heir, because the executors mis- represented the law to him. See Sparks vs. White, 7 Hump. 8(5 ; Bank of F. S. vs. Daniel, 12 Peters 56, And this rule of equity that a party will be relieved against a contract made in consequence of fraudulent misrepresentation of law, is not confined to the confidence incident to the formal rela- tions of attorney and client, etc., it is applicable to all cases where confidence on one hand and influence on the other exist, from whatever cause. McCormick vs. Malin, 5 Blackf. 523, citing several cases to the point. These cases are cited, not with a view to show that the Court will give any affirmative relief to Lawrence ou his answer, further than that which results from the application of these cases in de- termining what a Court of Equity regards as fraud, and in pro- curing the dismissal of the complainant's bill on the ground of fraud. This rule of law was not recognized by this Court in its opin- ion in this case as announced at the last term ; and the fact of fraud, though in issue, was not distinctly found ; and should the case rest upon that opinion, the litigation between the parties to this record might be prolonged most needlessly. The law and the evidence established the fraud, and it is but justice to Lawrence that the Court should find the fact, and de- clare the rule of law which governs the case. All the parties will then know it and rest satisfied. The practice of the Court is to state their reasons, and in these reasons to lay down the law upon which the case ought to be disposed of. This practice is so common that I cite the first c?.se that comes to hand, to show that the court will be careful not to prejudice any of the parties by a failure to assign tho true ground of dis- missal. See Piersoll vs. Elliott, 6 Pet., 100. This is precisely our case in principle. If this court had said, as the Lord Chancellor said in Ker vs. Dungannon, cited by appellants' counsel, " the instrument is void for the fraud, which is shown to have been used by the plaintiff in suppressing the truth, or in expressing a falsehood, and the bill is dismissed therefor," can it be doubted that this matter of the release, so far as the ejectment suit is concerned, would be settled ? But the court took a middle ground, and said what is apparent to any, even an unenlightened conscience, that the case was unconscionable and iniquitous, but did not put its decision plainly on the ground of fraud. Now, if ejectment should be brought, and no further decision on this matter be had, the parties in the suit at law would be ignorant as to what was res adjudicata in this suit. If Lawrence had filed a bill to set aside the release, solely on the grounds proven in this case, these authorities go to show that the court would have set it aside as void for fraud. Hence these cases have been cited ; and not because it is expected that any decree will be made in the original and supplemental cause in Lawrence's favor ; which is represented by Mr. Beckwith in his argument on the re-hearing to be what the appellee expects this court to do. He represents such to be our motion, and then cites his author- ities to show that the court will not grant affirmative relief upon an answer The cases therefore, which he cites to this effect, have no im- portance, except to be used to knock down this man of straw which he has set up. II. Answer to argument of Appellants' counsel on the re-hearing: Much that is said by the adverse side needs no reply, further than the allusion already made to it. The sophistry of appellants' argument is too glaring to need pointing out. As one instance of this sophistry, it represents this court as granting a re-hearing " at the instance of a defendant after a decree dismissing the complainants' bill upon the merits ;" and then the counsel, not awai'e of the bad taste in so doing, mistakenly represent the court as placing the parties in a "ridiculous position" by grant- ing such re-hearing. Mr. Lawrence, the complainant, for the purpose of getting that affirmative relief, without circuity, which his case legally and equitably demands in this suit, asks the court to modify their opinion, and rescind their order dis- missing his cross-bill, and ' to give him a foreclosure ; and this position is represented by appellants' counsel as a defendant complaining because the court had granted all he asked. Mr. Beckwith says, " the petition for a re-hearing insists that the release in controversy was obtained by fraud and misrepre- sentation ; and that by reason thereof the appellants should in some unknown manner be restrained from using it." Then he adds, " the record is so framed that no adjudication can be had on the matter of fraud." His argument is that " Lawrence's answer was sufficient to put in issue the execution of the release, but it was not sufficient to defeat its operation ; a deed once established is always acted up- on by a court of equity until it is set aside." The attempt is made to keep out of view the fact that the answer of Lawrence put in issue the fraud in the release. That it was in issue in the original cause I shall waste no words to show. III. The fraud being in issue and proven, and the original and sup- plemental bill dismissed, it only remains to see : 1st. Was there any need of another issue of fraud between Bigelow, Gage and Parmelee, and Lawrence, in the cross cause ? 2d. Was ther.e need that Lawrence thould file a cross-bill to set aside the release ? It is apparently conceded by the adverse side that if the an- swer to these two questions shall be in the negative, Mr. Law- rence is entitled to have the order of the court set aside by which his cross bill was dismissed, and a decree for foreclosure, and that his debt should be paid by the original complainants and Johnson. These questions must both be answered iu the negative. The first we answer in a later part of the argument. We will now notice the cases cited in the affirmative of the second question. It is insisted for appellants that Lawrence must file a cross- bill to rescind the release. I will not needlessly enlarge this brief by citing cases, but content myself with saying that the position is absurd ; that no necessity in reason is shown for the application of a rule which may well be followed where a case is made to which the rule applies. They cite : Jacobs vs. Richards, 18 Beavan 300; Eddlestone vs. Collins, 3 De G. McK & Gord. 1; Hartshorn vs. Day, 19 How. 211; Ker vs. Lord Dungannon, 1 Dr. & War. 509; O'Roy vs. Warner, Hayes 571. These were cited to show that a cross bill was necessary ; if examined they will be found not to bear the counsel out. Eddleston vs. Collins, was a case of a foreclosure suit brought by Eddlestone. The Vice Chancellor had decided that the mort- gage was valid and the defendants appealed. Upon the appeal the Lord Chancellor stated the case to be that the defense at- tempted was that the mortgage (a surrender of the copyhold estate by way of mortgage) was void, because the deputy steward who took the surrender was an infant under the age of twenty- one years. The Lord Chancellor examined this proposition, and decided that there was no legal invalidity in the surrender for that cause, though the infancy was a fact. " The defendants next say," he proceeds, "that supposing there be no objection by reason of the infancy of the deputy steward and that the power given by the surrender has been from time to time properly executed, still it has only been properly execu- ted in form, for that in truth Mrs. Collins was imposed upon and did not know what she was executing ; that the surrender was never explained to her, and that she did not moan to do more - 7 than authorize the raising of the additional 100 beyond the first 50, which was ex concessis a good advance. " If that were so, though perhaps the more strict course would have been to file a cross-bill to set aside the transaction, yet I conceive the point may be raised by way of defence by saying for what sum the plaintiff is to be considered as a mortgagee" His Lordship examined the evidence of fraud, and concludes " I therefore think on this point, the defendants have failed, and that there is nothing leading to the conclusion that any fraud was practiced." Then Lord Justice Turner said he concurred with the Lord Chancellor in the foregoing so far as regards the validity of the surrender and the lack of proof of fraud, and upon the attempt of defendants to impeach the mortgage security, he said he felt great doubt whether it is competent to them to do so, and then uses the language quoted in appellants' brief on page 5, and finally remarks that it is competent for the court to grant the defendants the indulgence to file a cross-bill ; but holds that there are circumstances in the case which disentitle them (the debtors) to any indulgence from the court, and he concurs in the opinion that the appeal ought to be dismissed. The point therefore was not raised in the case, hence it fur- nishes no illustration of the conditions under which the rule alluded to is applied. The counsel miss the point. The only important question is does any such rule apply to the case at bar? The case also differs from the case at bar. In Eddleston vs. Collins, the title to the land had been passed to the plaintiff, by a deed of conveyance : The instrument which is impeached in the case at bar is but a pretended evidence of payment and does not convey title, and therefore the complainants at bar asked the court for an active decree to put the title out of Lawrence and into them in violation of the express intention of the release! The cases would be more analogous if Bigelow had fraudu- lently succeeded in obtaining a conveyance of the title from Lawrence to appellants. Then it might be admitted that it would have been necessary for Lawrence to file a bill to set aside the conveyance, before he could get a foreclosure. The objection of the Lord Chief Justice above referred to is precisely this, that a decree for conveyance from the plaintiff' to the defendant, would be an anomaly, if granted upon an answer merely. 8 Jacbbs vs. Richards, does not bear out the counsel, if examined. Richards mortgaged some property to Jacobs in 1848. In 1852, Richards was found by inquisition to have been a lunatic from 1825. One of the defenses was that the mortgage being exe- cuted by a lunatic was invalid. The Master of the Rolls stated : " I apprehend there are two principles upon which this court acts and which are rather prin- ciples of practice than of law, and have been adopted for the convenience of conducting suits. One is, that when a deed prima facie good at law is brought before it, this court in the exercise of- its ordinary functions and jurisdiction, acts on it until it has been set aside. The other is, that this court does not give the defendant active relief." Then he examined the ques- tion whether the mortgage deed had been proven in the case, and decided that it had been proven by the subscribing witness, and prima facie it was valid. " The only question to be asked is whether the party executed the deed in the witness' presence. The defendants have not thought fit to cross-examine the witness which might have destroyed his evidence, and I have therefore a deed proved in the ordinary way by the attesting witness. "The defence, however, is that this is no deed : first, because it is overreached by the finding in lunacy ; and secondly, because the plaintiff is bound to prove, and has not proved the sanity of the person who executed it. I have not found any case in which it said that this court will not act on a deed overreached by an inquisition of lunacy, where it is proved by the attesting wit- ness, and where there is no evidence that at the time when the deed was executed the person was not competent to execute the deed." The case of Ker vs. Lord Dungannon, 1 Dru. & War. 509, is an instructive case on this subject, but unfortunately for the appellants, it does not support the position assumed by appellants' counsel. The case may be briefly stated thus : Lord Duugannon brought ejectment against Ker for the purpose of defeating a lease made by Lord Dungannon's great grandfather under wlii/h Ker held possession. Ker filed a bill to enjoin the proceeding at law, claiming under the lease and stating a case which raised a question of the construction of the will of the former Lord Dungannon, the lessor. The defendant to the bill, by his answer, submitted that he was entitled to the premises, etc., and among other things "impeached the lease as having been unduly and improperly obtained for under value." No cross-bill was filed to set aside the lease. The Lord Chan- cellor decided that the taking of the lease in that case was a fraud, and that Ker was to be treated as a paid agent, receiver and trustee, attempting to reap the benefit of a fraudulent dealing with the tenant for life. He therefore declared the lease void and said " although, therefore, no cross-bill has been filed, I shall unhesitatingly refuse all relief, and this independently of the question of construction, I therefore dismiss the bill with costs." See page 541. Ib. The Lord Chancellor says, " but I consider it to be a well-set- tled principle, that if a man has an actual interest, and has come into this court for the removal of legal temporary bars, and the defendant in his answer sets up as a defence that the original grant ought not to have been executed, in general he will not be allowed to impeach the grant (i. e. the title or actual interest] in such a way, but must file a cross-bill;" but here the parties ask your honors, upon a fraudulent release, to remove, (not a tem- porary legal bar) but the equities and title of Lawrence. Now, if the argument of Mr. Beckwith were carried to its legitimate result, and were carried to the point to which he insists it goes, then in Lord Dungannon's case the complainant ought to have prevailed so far as the case stood independent of the con- struction of the will, for the lease was established and no cross- bill was filed to set it aside. I do not forget that no court will give affirmative relief on a fraudulent instrument in favor of the party setting it up to reap the benefit of his fraud, and that the Chancellor dismissed Ker's bill on that ground, and that this court dismissed appellants' sup- plemental bill on a similar ground. But counsel have cited it to show that a cross-bill is necessary, and I say that neither Ker's case, nor any of the cases cited, is authority for saying that in this case at bar there is the slightest reason for Lawrence's filing ;i bill to rescind the release. 10 But I apprehend it will always be found that where the deed relied on by the complainant is shown to have been fraudulently obtained, he will get no advantage from it in a court of equity, even though it be not set aside by an active decree in favor of the party against whom it is sought to be used ; more especially is this true when the fraud comes out in the evidence which the complainant adduces to prove the execution of the deed as is true in the cause at bar. Hartshorn vs. Day is not in point, it states a familiar rule at law ; is a law case, and throws no light on the question as applied to such an instrument as the one at bar, pleaded as this is. The counsel also says gratuitously, it is admitted that the release must operate pro tanto ! Where does he find this admis- sion? We have contended that it is void for the fraud and operates not at all. So far as the payment of money on account is concerned, Mr. Lawrence admits that fact in his answer. Bigelow's payment was only a part payment of a debt justly due, and he did only what the law would have compelled him to do in making this payment ; the money was Lawrence's ex eqiio et bono. Hence Lawrence cannot be called on to repay the money. If Lawrence were in a position to be called upon to make restitu- tion before the release could be treated as null, then he ought to be required to file a bill and tender what would be equitable on his part. But such is not the case at bar. It is only a question of the amount of the debt remaining unpaid. Upon page 6 of their brief, the counsel for appellants crave the court to disregard the effect of the evidence which the appel- lants themselves introduced into both the original and the cross- cause as to the circumstances under which the release was obtained. They were not able to prove their release without showing the ear-marks of fraud, and now they ask the indulgence from the court to excuse them from the effects of such evidence. Whether they can ask any grace and indulgence of this court in face of their iniquitous claims, iniquitous from the first exhibi- tion of their bill till their crowning shame, I leave the court to determine. There is some hardihood in the request, it seems to me ; nor do I understand how the court could disregard the evi- dence tending to prove the issue. It is unnecessary to refer to the counsel's remarks upon the power of the court to make a declaratory order, since we do not 11 desire any such order. All we want is a foreclosure decree in this suit. IV. Can Lawrence have a foreclosure. I shall no\v answer the second part of the appellants' argument. The court is asked to bear in mind that the sole argument of the learned counsel is a technical one ; that a mere technical objec- tion is raised here in favor of parties, whose " whole cause is tainted and corrupted with injustice and iniquity," to quote the language which the court applied to this case. Therefore I shall assume that if the court can give Mr. Law- rence the relief which he asked to have in this suit, without doing violence to any invariable rule of practice or principle of law, the court will gladly seize the occasion to do so. With the purpose to show that Lawrence cannot have a fore- closure in this cause the positions of counsel for appellants are: 1. (a) The cross cause is a separate, independent, and distinct suit. (b) And this is so because all the parties to the cross-bill are not parties to the original and supplemental bill. 2. Johnson, the new party, properly pleaded the release by supplemental answer, and y. (c) The question of fraud in the release was not in issue as against Johnson. (d) The question of fraud was in no way in issue as against any of the defendants to the cross-bill. 4. That it was necesssary there should be a cross-bill brought by Lawrence to rescind the release. 1 a.b. No objection could be made to the cross-bill of Lawrence as not being a pure cross-bill if it were not that Johnson was intro- duced as a new party. But I apprehend it is too late to overturn the repeated affirmance by this court of the rule laid down in Jones vs. Smith, 14 Ills. 229, and in Kurd vs. Case, 32 Ills. 49, as to introducing a new party into a cross-bill. Under our practice such a bill is by reason of such new party none the less to be 12 treated as a pure cross-bill as to those who are parties to both the original and cross-bill. What is said about the practice of Courts of Chancery of other States need not be answered. It is an instance of irrevelant discussion on the part of the adverse counsel, indulged in not alone on this point but on others also. In Fleece vs. Russell, 13 Ills. 31, it is held that under our statute (Rev. Stat. ch. 21, 24 to 30) no process is necessary to summon the parties to an original bill, to answer to a cross-bill, and that the latter is an adjunct or part of the original suit, the whole together constituting but one case. It is also there held that an order dismissing a cross-bill is interlocutory, and such an order is not subject to review until the whole case is disposed of. The provisions of our statute were passed since the decision in the case of Ballance vs. Underbill, 3 Scam. 454, which appellants counsel rely on; and irrespective of the statute the cross-bill and original bill is regarded as one suit. This case only means that the rules ot pleading should be observed in all the parts of the cause. The cross-bill is but auxiliary, to set the court in motion to do complete justice between plaintiff and defendant in the suit. The position of the opposite counsel is at variance with all authorities on this point. Daniels Ch. PI. and Pr., Ch. xxxiv, p. 1647 et seq., new ed., 1742 old ed. 2 & 3 c - Johnson never pleaded the release in such a way that he could avail himself of it in the cross suit. The release was a fact that arose after the answer to the cross-bill was filed by Johnson. See p. p. 70 and 40 printed abstract. Johnson, to avail himself of its use, should have filed a bill in the nature of a supplemental bill. Taylor vs. Titus, 2 Edw. Ch. 135; Daniels Ch. PI. and Pr. 1, p. 781, Notes; Story Eq. PI. 903; Miller vs. Fentou, 11 Paige Ch. 19, and cases there cited. It so happens in this case that the opposite counsel have gone into much irrevelant discussion, so far as Johnson is concerned, from want of acquaintance with the record, and from want of candor and accuracy in stating the rules of practice. Parties who come to courts for remedies are required to do so in a. mode allowed by law. For wise reasons the law has pre- scribed modes in which the rights of parties are to be asserted, 13 and a rigid adherence to established rules in this respect is not only matter of convenience in the administration of justice, but is essential .to protect the rights of parties. A more signal instance of the irrevelant discussion into which counsel may fall by a disregard of this rule can hardly be adduced than is shown in the argument of the opposite counsel. The positions asserted by the adverse side, in this case, may lead this court to establish a precedent pregnant with mischief in future suits, and unjust to Mr. Lawrence in this suit unless caution is observed. It is not important to decide whether it was within the discretion of the court to permit Johnson to plead the release by a supplemental answer; since Johnson did not even ask the leave of court to set up the release in any way. But the question, as one of prac- tice, is important. I cite some authorities to show that an answer is not the proper mode. The question arises as to Gage, Par- melee & Bigelow's answers ; as to those, we say they were super- fluous as well as improper in point of practice. It is an invariable rule that leave of court must first be obtained before a supplemental answer can be filed. Fulton Bank vs. Beach, 6 Wend. 36; Thomas vs. Doub., 1 Md. 323; 1 Daniels, Ch. PL & Pr., 785 ; or an amended bill filed. The motion for leave to file :i supplemental answer must be accompanied with an affidavit. Thomas vs. Doub., 1 Md. 323 ; McKim vs. Thompson, 1 Bland. 150. In case the answer is filed without leave of court, or impro- perly filed, the proper motion on the part of the complainant is to move to take the answer from the files unless he is willing to accept it and join in issue. 1 Daniels, Ch. PL & Pr., p.p. 784, 785, and authorities in the note, 3d Am. ed. A supplemental answer improperly filed is treated as a nullity. Fulton Bank vs. Beach, Ib. Johnson never moved for and never obtained any leave of court to file his pretended supplemental answer, but on Septem- ber 22, 1865, Johnson by his solicitors, Goodrich, Fai'well and Smith, who were not the solicitors of the other parties, foisted into the cause a paper purporting to be a separate supplemental answer, of Johnson, setting up the release in his behalf alone. See page 70 printed abstract. No affidavit was ever filed laying the foundation for this sup- plemental answer so far as Johnson was concerned, and no notice 14 was given to Lawrence's solicitor of any intention of Johnson to file a supplemental answer. Lawrence did not treat this paper as a pleading; in the case, and filed no replication thereto, but on the llth of January, 1866, before the cause was heard, Lawrence filed his motion in writing to strike the said paper from the files, and on the 12th of January, made his motion in court orally for this purpose. See Record, p. 324. The court took this motion under advisement after argument, and decided it, among other questions, by rendering a decree against Johnson. It will be found by reference to printed abstract, p. 09, that Gage, Parmelee