Henschel v. Mamero

Citations

• 120 Ill. 660
• 12 N.E. 203

Syllabus

<p>1. Fraud—release of mortgage—procured by fraud—set aside in equity. As a general principle, a release or discharge of a mortgage obtained through mistake or fraud, will, as between the parties, be held inoperative, and no defence to a foreclosure.</p> <p>2. So where the holder of a promissory note secured by a deed of trust on property, is induced to surrender the note and release the security upon the verbal agreement of the debtor that the creditor, his father-in-law, shall enjoy the rents, issues and profits of the mortgaged premises during his life, and have the property itself sold and the proceeds applied to his use, if required, which agreement is made by the debtor without any intention of performing the same, and who refuses such performance, a court of equity will set aside the release of the trust deed, and enforce payment of the rióte by a sale of the property.</p> <p>3. Where a party repudiates his agreement, which is the sole consideration for the release of a debt due from him, and a mortgage securing the same, a court of equity, in order to prevent a failure of justice, will treat the mortgage as still subsisting, and place the parties in the same position they were before the release.</p> <p>4. Trust—legal title acquired by fraud. Where a person acquires the legal title to land or other property by means of an intentionally false and fraudulent verbal promise to hold the same for a certain specified purpose,— as, for example, a promise to convey the property to a designated person, or to reconvey to the grantor, and the like,—a court of equity will fasten a trust upon the property itself, and follow it into the hands of the wrongful owner.</p> <p>5. Statute oe Frauds—as to a trust arising out of a fraudulent procurement of the release of a mortgage. Where the purchaser of property induces his vendor to release his mortgage on the same for the purchase money, by his false and fraudulent promise that the latter shall, during his life, have the rent