Court Opinion

ID: 8870396
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:24:57.591761+00
Date Added: 2024-06-11T17:06:09.380425
License: Public Domain

O’Connor, P. J., dissenting in part: I agree with the conclusion reached in the foregoing opinion, namely, that the. property was . enhanced in value $5,980 by the work Mr. Cuzzone did in installing water mains, etc., in the property. But I am unable to agree that the master in chancery should be held liable for this sum or for any other sum. I think it is necessary to state a few facts which appear of record.. The trust deed which was given to secure the payment of $280,000, evidenced by 56 bonds of $5,000 each, was made June 16, 1926 by the Blakely Real Estate Improvement Corporation conveying the property to the Noel State Bank, as trustee. The bonds became due June 16, 1929, and bore interest at 6V2 per cent, payable semiannually. June 17,1926, the day after the trust deed was executed, the mortgagor, the Blakely Real Estate Improvement Corporation, conveyed the property to the Noel State Bank, as trustee under a trust agreement known as Trust No. 161. The bill of foreclosure was filed June 29,1929, and the decree of foreclosure entered May 29, 1930, in which it is found that the Noel Securities Corporation, an affiliate of the bank, is the legal holder and owner of all of the 56 bonds. That there is due and owing to the complainant, Noel State Bank, as trustee named in the trust deed “for the use and benefit of the legal holder and owner of the bonds” $354,254.96. The decree also finds four other mortgages on the property whose lien is subordinate to the lien of the bonds.- The amounts so found are: $7,905.09, $4,014.93, $41,927.61 and $6,928.12. The decree also finds that there is due to the lien claimant, Mr. Cuzzone, $5,980, and further, that April 4, 1928, the Blakely Real Estate Company was dissolved by a decree of the superior court of Cook county; that March 22, 1929, the Blakely Company entered into a contract with Mr. Cuzzone to install sewers and water mains in the property in question ; that Cuzzone began work and filed his claim for mechanic’s lien in the circuit court of Cook county and that no part of it had been paid; that while Blakely Company had been dissolved, as above stated, before .the making of the contract with Mr. Cuzzone, notice that the improvements were being made would be implied and it was decreed that Mr. Cuzzone was entitled to a lien for $5,980 and that the question of the priority of the lien as against the mortgage, which was being foreclosed, was reserved for further consideration. It was decreed that unless the indebtedness, as found due under the mortgage, including the master’s fees, was not paid within three days, the property to be sold for cash at public auction to the highest and best bidder after the master had advertised according to law, etc. Following this, July 11,1930, after notice to the parties, the master’s report of sale and distribution was filed and approved and the question of priority between the mortgage indebtedness and Mr. Cuzzone’s claim was to be rereferred to a master. The master’s report of sale recites that he sold the property to the highest and best bidder for cash on June 25, 1930, to the Noel Securities Corporation for its bid of $358,865.58, which was the highest and best bid. The master’s report then continues and recites that he received the amount and itemized how he distributed the money. That he paid the complainant, the Securities Co. the amount found due by the decree including $25,000 solicitor’s fees, the $2,500 trustee’s fees and that the master retained his fees and court costs aggregating $3,001.20. The master then continues and recites that he retained the $5,980, the amount found to be due Mr. Cuzzone, the priority of which was later to be determined. And further that there was no deficiency due complainant. The master attached vouchers to his report which were signed by himself which recite that he had retained the $5,980. There is also a voucher attached wherein the solicitors for complainant acknowledged receipt of $30,699.30, costs due complainant including the solicitor’s and master’s fees. As stated, this decree approving the master’s report of sale and distribution was entered July 11, 1930. Nothing further appears until nearly 11 years thereafter when on April 11, 1941, attorneys representing the heirs of Mr. Cuzzone, who died May 10, 1935, but who were not the attorneys who represented him in the foreclosure suit, filed their petition in which they set up the probating of their father’s estate in the probate court of Cook county; that the father died intestate leaving no debts; that an inventory was filed in which the following item appeared: “Judgment entered in the Circuit court of Cook county in favor of Dominic Cnzzone and against the Blakely Beal Estate Improvement Corporation in the sum of $5,980.” The master’s term had expired and his successor appointed and the prayer of the petition was that the master be required to turn over the $5,980 to his successor. The master in his answer, among other things, set up the sale by him of the property and that no part of the bid was ever paid with the following exception, $1,284.15 on account of the .master’s fees; leaving a balance due and unpaid. And further averred that Cuzzone was represented by a firm of attorneys in the foreclosure suit and that they were told, and knew before the master’s report of sale and distribution was approved, and at all times thereafter during Mr. Cuzzone’s lifetime, that nothing had been paid to the master when he sold the property except as above stated. That some time after the sale the master delivered to counsel for complainant a certificate issued by him upon the understanding that no disposition would be made of it unless adequate provision was made for the payment of fees, disbursements, commissions and Mr. Cuzzone’s claim. That after the master’s term had expired a master’s deed was issued January 3, 1933, by the master’s successor upon surrender to him of the master’s certificate; that in a case brought in the circuit court of Cook county entitled Faerstein v. Noel State Bank, a receiver was appointed “of the subject matter of said collateral trust indenture,” and that on August 28,1936, an order was entered in that suit that a lien be impressed upon the subject matter of the trust estate in favor of the master for $2,000, the amount remaining unpaid to him for his fees in the foreclosure suit, and that no transfer of title to the real estate or the master’s certificate of sale had yet been made because no money had been received when the property was struck off by the master. On the hearing of the petition involved in the instant case, the master testified to the averments in his answer that no money had been paid to him when he sold the property and that a few days thereafter and before the report of sale and distribution was approved, the then attorney for the claimant was apprised of this fact and that he made no objection to it at any time. That at the same time the matter was explained also to the attorney for the complainant in the foreclosure suit and it was agreeable to all three parties. The attorney who had represented Mr. Cuzzone in the foreclosure suit was called and testified but his testimony is somewhat evasive, although I think it clearly appears from his testimony that the matter was explained to him, and to which he agreed; that he never did anything in the matter at any time for a period of probably 10 years, and the first action was taken by other counsel who are retained by the heirs of Mr. Cuzzone. . Of course everyone knows that where the mortgagee at a foreclosure, buys the property he gives in payment the bonds or other evidence of indebtedness which is being foreclosed. In such case the cash is never paid, only sufficient to take care of some costs, etc. This is the universal practice and has been to my knowledge for more than 40 years. And this too, although the decree of foreclosure orders the master to sell the property for cash and he reports that he did sell it for cash and attaches receipts from the mortgagee — the purchaser — that the mortgagee had received cash. It would be absurd to say that where a master sells property at foreclosure to the mortgagee —which happens in almost every case — that the mortgagee be required to pay cash to the master and the next day for the master to turn the money back to the mortgagee. This is never done although the master reports that that is what, was done. In the instant matter the realities of the situation rather than technicalities are to be considered. From the record it is clear that Mr. Cuzzone and his attorney each knew of the fact.that no money had been paid and this is shown not only by the testimony but by the actions of the attorney and his client. And that they acquiesced in what was done as the best way to handle the matter so that the property might be put on the market and he might thereby get his money. Mr. Cuzzone lived for more than five years after the report of sale and distribution was approved. Neither he nor his counsel made any complaint that they were not getting their money and it is not until 11 years after the decree and the report of the master’s sale and distribution that any complaint is made. There is no justice in this claim so far as the master is concerned. He acted honorably in every way and there is no contention to the contrary by anyone. The record discloses that the property is still held by the successor of the purchaser at the foreclosure sale. No third party’s interests are involved; the bank (by a suit brought by the Auditor of Public Accounts), and its affiliate, the Securities Company, have long since gone out of business. In these circumstances I think the Cuzzone claim should attach as a lien to the property. Supplemental Opinion on Petition fob Rehearing. In its petition for rehearing the plaintiff trustee for the first time suggests that there is no basis in the record for determining the value of the property before and after the improvements for which the mechanic’s lien was allowed, and therefore no basis for determining the amount of the priority of the mechanic’s lien, citing Alexander Lumber Co. v. Kellerman, 271 Ill. App. 571. The evidence shows and we found that the sewer work enhanced the value of the property to the extent of the contract price, which was in excess of $8,000; at the foreclosure sale the premises, with improvements, sold for approximately $359,000. This is presumed to be the fair cash value. Ogle v. Koerner, 140 Ill. 170; People v. Anderson, 380 Ill. 158; Chicago Title & Trust Co. v. City of Chicago, 321 Ill. App. 271. As to the enhanced value of at least $8,000, without reference to the cost of the material and labor actually furnished, the mechanic’s lien had priority. Croskey v. Northwestern Mfg. Co., 48 Ill. 481, 483. Under authority of the Alexander Lumber Co. case, cited by plaintiff,- and the Croskey case, the mechanic’s lien claimants were entitled to 8/359 of the foreclosure sale price, and the mortgage lien claimants to the remainder. As to their respective proportions, each lien claimant had priority. Hence, the mechanic’s lien claimants were entitled to the $5,980 allowed them, notwithstanding plaintiff’s mortgage was not paid in full. The petitions for rehearing are denied. Rehearings denied. O’Conuor, P. J., and Hatchett, J., concur.