Andrulis v. First Nat. Bank of Lake Forest

• Decision Date: 22 March 1972
• Docket Number: Gen. No. 71--13
• Parties: Joseph ANDRULIS (for whom Vera Andrulis, Executor of the Will of Joseph Andrulis, Deceased, has been substituted), Plaintiff-Appellee, v. FIRST NATIONAL BANK OF LAKE FOREST, Trustee, Trust 568, et al. First National Bank of Lake Forest, Trustee, Trust 568, Joseph J. Drobnick and Jerome P. Drobnick, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

Page 417

281 N.E.2d 417

4 Ill.App.3d 436

Joseph ANDRULIS (for whom Vera Andrulis, Executor of the

Will of Joseph Andrulis, Deceased, has been substituted), Plaintiff-Appellee, v. FIRST NATIONAL BANK OF LAKE FOREST, Trustee, Trust 568, et al.

First National Bank of Lake Forest, Trustee, Trust 568,

Joseph J. Drobnick and Jerome P. Drobnick,

Defendants-Appellants.

Gen. No. 71--13.

Appellate Court of Illinois, Second District.

March 22, 1972.

Rehearing Denied May 1, 1972.

Mark Drobnick, Waukegan, Robert J. Nolan, Owen N. Price, Chicago, for defendants-appellants.

John F. Grady, Waukegan, for plaintiff-appellee.

NASH, Justice.

Defendants Joseph and Jerome Drobnick appeal from a decree of the Circuit Court of Lake County in which an accounting was made and a winding up commenced of a partnership in real estate between defendants and the original plaintiff, Joseph Andrulis. Andrulis died during the course of this ten-year litigation and his executor, Vera Andrulis, was duly substituted in his stead.

The trial court determined the existence of the partnership, the liabilities of the partners to it and their respective interests in its property. It further found that the assets of the partnership consisted of certain real estate which could not be divided between the partners without destroying its value for development purposes and therefore, should be sold and the proceeds applied to the partnership liabilities and distributed to the partners as their respective interests were found to be in the decree.

Two issues are presented for review: 1) Do infirmities in the appointment of the master in chancery in this case require trial de novo? 2) Was a statutory partition of the partnership real estate decreed by the court?

A written partnership agreement was entered into between Joseph Andrulis and the defendants in 1946 (together with another person whose interest defendants have since acquired) for the purpose of dealing in real estate for a ten year term. After term, the partners not having been able to agree on a division of assets, Andrulis initiated this action for an accounting to him by his partners of his interest in the partnership and the partition of those properties found to be subject to division between the partners.

The trial court referred the matter to its then acting master in chancery, Daniel Dalziel, who conducted hearings on the issues during the years 1962 through 1965 and on November 7, 1967, by order of the trial court, filed his report and findings. Thereafter, on January 22, 1968, defendants moved the trial court to strike its order of reference to the master made in 1962, expunge the master's report and for trial de novo of the issues in this case. Defendants' motion was denied, the master's report confirmed, and the decree herein entered accordingly.

Defendants contend first that Daniel Dalziel was not a master in chancery when the order of reference was made in 1962, and, in absence of a further order of court extending his term for consideration of this case, he lost authority to do so after January 1, 1964, the effective date of the amendment to the Illinois Constitution of 1870 abolishing the office of master in chancery.

In their brief defendants rely upon citations of statute and various articles of the Illinois and United States Constitutions to support their view due process requires trial de novo of this case. No other citations of authority are suggested by defendants for our consideration.

It is not disputed that Mr. Dalziel had served as master of the trial court prior to the referral of this case, having been previously so appointed for a term commencing January 1, 1960, and extending to December 31, 1961, 'and until his successor shall have qualified.' He was next reappointed to that office by order entered November 6, 1963, for a period extending to November 6, 1965, 'and until his successor shall have qualified.' At each appointment the master duly filed his bond and oath.

It may fairly be seen from the record of this case that the trial court and all of the parties considered Mr. Dalziel to be the duly appointed, as well as acting, master of the trial court. The parties appeared before him for twenty-seven hearings over these years in which numerous witnesses testified, including the now-deceased partner, Joseph Andrulis. The master has certified to the court that he applied 317 hours to consideration of this case prior to filing his report in 1967 by order of the court. No objections to the master's status were made by defendants at any time before he filed his report in form substantially adverse to defendants' position in the case.

It has been well settled that an officer who holds over after expiration of his term is regarded as a de facto officer whose acts are as valid and binding where they concern the rights of third persons or the public as though he was a de jure officer. Title to such an office can only be decided in a direct proceeding brought for that purpose. (People v. Woodruff,9 Ill.2d 429, 437, 137 N.E.2d 809; 29 I.L.P. Officers § 5, page 60; 67 C.J.S. Officers § 141, page 444). In People ex rel. Jones v Beach, 77 Ill. 52, the court considered the status of a hold-over master in chancery, stating:

'Relator from that time (the expiration of his term) until appellee was appointed, was, no doubt, an officer de facto, and as such his acts would be binding as to all persons, including his sureties on his official bond, as his right to the office can only be questioned by a proceeding of this character (quo warranto)'.

In Pritchett v. People, 6 Ill. 525, the court considered a similar question in a suit on the bond of an administrator who had been appointed by a probate judge after the judge's term had expired and before his reappointment to that office. The court held the judge was a de facto probate judge, stating at page 529:

'It is sufficient for all the purposes of this case if he was de facto, the Judge of Probate. It is a general principle of law, that the ministerial acts of an officer de facto are valid and effectual when they concern the public, and the rights of third persons, although it may appear that he has no legal or constitutional right to the office. The interests of the community imperatively require the adoption of such a rule.'

The principles stated giving a de facto officer the same status as between the public and the parties for whom he acts as a de jure officer have, for good reason, been consistently followed in the reported cases. (People ex rel. Engle v. Kerner, 32 Ill.2d 212, 205 N.E.2d 33; Harvey v. Sullivan, 406 Ill. 472, 478, 94 N.E.2d 424; People ex rel. Chillicothe Tp. v. Board of Review, 19 Ill.2d 424, 167 N.E.2d 553; Howard v. Burke, 248 Ill. 224, 93 N.E. 775; People v. Severinghaus, 313 Ill. 456, 145 N.E. 220; Freese v. Glos, 248 Ill. 280, 93 N.E. 745.)

The amendment to the judicial article of the Constitution of 1870 abolishing the office of master in chancery effective January 1, 1964, did not alter the status of the master in this case. (Article 6, Section 8, Constitution of 1870; Paragraph 8, Schedule to Article 6, Constitution of 1870).

The implementing schedule of the amendment to the judicial article provided that a master in chancery in office on January 1, 1964, shall continue in that office to the end of his term, 'and may thereafter by order of court, wherever justice requires, conclude matters in which testimony has been received.' On that date, the master in this case was in office, by statutory appointment, in a term ending November 6, 1965. He had received the testimony of this case and, by order of court, he concluded his consideration of this matter and filed his report on November 7, 1967. The requirements of the schedule and the constitution were met. (Rules of Supreme Court, 1965, Rule 14--1, Masters in Chancery).

Defendants do not present any issue as to the conduct of the hearings before the master, the...