185 N.E.2d 670 (Ill. 1962), 37093, Chicago Federal Sav. & Loan Ass'n v. Cacciatore

Docket Nº:37093.
Citation:185 N.E.2d 670, 25 Ill.2d 535
Party Name:CHICAGO FEDERAL SAVINGS AND LOAN ASSOCIATION, Appellee, v. Frank S. CACCIATORE et al., Appellees. (United States of America, Appellant.)
Case Date:September 28, 1962
Court:Supreme Court of Illinois
 
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Page 670

185 N.E.2d 670 (Ill. 1962)

25 Ill.2d 535

CHICAGO FEDERAL SAVINGS AND LOAN ASSOCIATION, Appellee,

v.

Frank S. CACCIATORE et al., Appellees. (United States of

America, Appellant.)

No. 37093.

Supreme Court of Illinois.

September 28, 1962.

As Modified Nov. 19, 1962.

[25 Ill.2d 536] Louis F. Oberdorfer, Asst. Atty. Gen., and Lee A. Jackson and Joseph Kovner, Attys., Dept. of Justice, Washington, D. C. (James P. O'Brien, U. S. Atty., of counsel), for appellant.

William H. Avery, Walter J. Cummings, Jr., William H. Thigpen and David H. Ward, Chicago (A. Edmund Peterson, Daniel S. Wentworth, J. Leonard Higley, and Sidley, Austin, Burgess & Smith, Chicago, of counsel), for appellee.

UNDERWOOD, Justice.

On May 25, 1950, the Mutual National Bank of Chicago, as trustee under a trust agreement dated December 22, 1944, known as trust no. 1371, acquired title from one Jerry C. Lorenz and his wife to a single-family residence in Chicago. On March 8, 1957, Mutual National, as such trustee borrowed $28,500 from Chicago Federal Savings and Loan Association evidenced by its promissory note dated March 8, 1957, and

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secured by a mortgage and rent assignment on the real estate and acknowledged by an authorized officer [25 Ill.2d 537] of the trustee on March 11, 1957, which mortgage and rent assignment were recorded March 15, 1957. On June 3, 1958, Mutual National as such trustee borrowed $10,000 evidenced by a note payable to bearer, and secured by a trust deed conveying the real estate to Chicago Title and Trust Company as trustee, acknowledged June 5, 1958, and recorded June 10, 1958. This trust deed was specifically subject to the Chicago Federal mortgage. On December 4, 1958, Mutual National as such trustee borrowed $4,535, evidenced by a note payable to bearer, and secured by a trust deed conveying the real estate to Chicago Title and Trust Company as trustee, dated December 4, 1958, and recorded December 17, 1958.

Default having been made in the payments due under the first mortgage, Chicago Federal filed its complaint to foreclose its mortgage on July 21, 1959, making parties defendant Mutual National as trustee under the land trust, Chicago Title and Trust Company as trustee under the second and third mortgages, Frank S. Cacciatore and Lucille M. Cacciatore, as being in possession of the premises and as beneficiaries under the Mutual National trust agreement of December 22, 1944, and numerous other defendants possibly having some interest as judgment creditors, lien claimants or the like, and unknown owners, including the owners of the bearer notes secured by the second and third mortgages. The United States of America was made a defendant as claiming some interest in the premises by virtue of a tax lien for $7,911.57 against Frank Cacciatore, notice of which lien was filed by the Collector of Internal Revenue with the Cook County recorder on July 29, 1957.

The United States of America filed its answer on August 18, 1959, denying its lien is inferior to the lien of Chicago Federal, and asking the court to determine the rights and priorities of the respective parties. Chicago Title and Trust Company as trustee under the second mortgage, and one David J. Peilet as owner of the note secured by the second [25 Ill.2d 538] mortgage, answered admitting the priority of the Chicago Federal mortgage but alleging the second mortgage to be superior to all other claims. One Stephen L. Ruff was added as a party defendant as an assignee of the beneficial interest under the Mutual National trust. He answered admitting his ownership of the beneficial interest in Mutual National trust No. 1371. Thereafter, on October 28, 1959, all other defendants were either defaulted or dismissed, and the cause was referred to the master in chancery. On December 23, 1959, an amended complaint was filed adding additional defendants, none of whom are involved here. At the hearing before the master, all three notes and mortgages and the Federal tax lien were proved and admitted in evidence, and the master in his report found Ronald Wayne & Co., Inc., an Illinois corporation, to be the owner of the Chicago Federal note, mortgage and rent assignment by assignment of February 18, 1960, and Wayne & Co. was substituted as plaintiff.

On July 26, 1960, a decree of sale was entered by the circuit court of Cook County approving the master's report, overruling the exceptions to the report, and directing the sale of the premises by the master. The decree further found Wayne & Co. entitled to $38,903.49 for principal, (including $663 advanced for 1958 real-estate taxes), interest, attorneys' fees and court costs; Peilet, as owner of the second mortgage note, to be entitled to $12,426.64 for principal, interest, attorneys' fees and court costs, subject only to the prior rights of Wayne & Co.; Sam and Vita Dattulo as owners of the third mortgage note, to be entitled to $5,254.33 for principal, interest, attorneys' fees and court costs, subject only to the prior rights of Wayne & Co. and Peilet. The decree further found that Ruff had been the owner of the sole beneficial interest of the trust (Mutual National No. 1371) since December 19, 1958; 'subject however to the interest of the United States

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of America, in said beneficial interest, in the sum of $4,826.31, plus interest at 6% [25 Ill.2d 539] per annum from March 8, 1957, which interest of the United States had attached to the beneficial interest of the trust herein at the time of the recording of the federal tax lien on July 29, 1957, * * *.' In default of payment, sale by the master was...

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