Apollo Sav. & Loan Ass'n v. Burow
| Decision Date | 19 February 1963 |
| Docket Number | Gen. No. 11629 |
| Citation | 188 N.E.2d 900,39 Ill.App.2d 273 |
| Parties | , 11 A.F.T.R.2d 1033, 63-1 USTC P 9386 APOLLO SAVINGS AND LOAN ASSOCIATION, an Illinois corporation, Appellee, v. William E. BUROW et al. Appeal of UNITED STATES of America. |
| Court | United States Appellate Court of Illinois |
James P. O'Brien, John Hieber, Chicago, Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, Joseph Kovner and David I. Granger, of Dept. of Justice, Washington, D. C., for appellant.
Fischel, Kahn, Heart & Weinberg, Chicago, for appellee.
The plaintiff, Apollo Savings and Loan Association filed its complaint in the Circuit Court of DuPage County on May 15, 1961, to foreclose a mortgage held by it, executed by the defendants, William E. Burow and Joan S. Burow. Attached to the complaint were the promissory obligation and the mortgage securing the obligation. Both provided for a reasonable attorneys' fee for the mortgagee in the event of default and court proceedings.
On July 14, 1961, the plaintiff filed an amendment to its complaint reciting that the defendants, had executed a trust deed dated May 13, 1958, on the property involved, to J. R. Willens, but asserted that this lien was inferior to its own. The trust deed also provided for reasonable attorney's fee. The amendment to the complaint also recited that the United States possessed a lien on the property involved by virtue of a notice of tax lien filed May 24, 1960, on an assessment made May 29, 1959, in the amount of $525.41, and a notice of tax lien filed November 23, 1960, on assessments made on June 7, 1957, and May 29, 1959, in the respective amounts of $125.12 and $512.14. The amendment to the complaint also asserted that this lien of the United States was inferior to that of the plaintiff.
The United States filed its answer to the complaint and amendment thereto, on September 5, 1961. It recited therein that assessments for unpaid federal income taxes were made on June 7, 1957, and May 29, 1959; that notices of said liens were filed November 23, 1960, and May 24, 1960, respectively; that there was no outstanding balance under the June 7, 1957, assessment; that the outstanding balance on the May 29, 1959, assessment was $529.26, plus interest, and denied that its lien was inferior to plaintiff's lien.
On December 4, 1961, the trial court filed its decree of foreclosure and sale and allowed the plaintiff a first and prior lien for principal and interest due, for advances made pursuant to the terms of the mortgage and obligation note for real estate taxes and insurance and for costs including an attorney's fee of $1,215.00. The trial court also decreed foreclosure of the trust deed held by J. R. Willens and allowed an attorney fee of $300.00.
The decree further found that the defendant, United States of America, is the owner and holder of a tax lien against the premises in question by reason of the District Director of Internal Revenue Services having recorded a Notice of Federal Tax Lien on May 24, 1960, with the County Recorder of DuPage County, Illinois, against William E. Burow, Jr., and Joan Burow for the sum of $525.41 for federal income taxes for the year 1958, said income tax having been assessed on May 29, 1959, in the amount of $525.41; and there is now due and owing to the United States of America by reason of said lien the sum of $529.26, plus interest at the statutory rate of six percent from September 12, 1961, to the date of payment.
The decree provided that said lien of the United States of America is in all respects subject, inferior and subordinate to the lien of the plaintiff's mortgage and the lien of the note held and owned by Joseph R. Willens, as trustee, and secured by the trust deed made in favor of Joseph R. Willens, trustee under said trust deed.
The United States admits that the principal amount secured by the mortgage and trust deed and the interest thereon have priority over the government's lien for taxes, but contends that the tax lien of the United States has priority over attorney fees allowed for plaintiff's attorneys because the claim for attorney fees was inchoate and subsequent in time to the lien for federal taxes and that the trial court erred in holding the government tax lien inferior to the lien for attorney fees.
The question of priority of lien for federal taxes is governed by the statutory provisions and must be construed according to federal law. United States v. Security Trust and Savings Bank, 340 U.S. 47, 71 S.Ct. 111, 95 L.Ed. 53.
Section 6321 of the Internal Revenue Code of 1954 imposes a lien in favor of the United States...
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Johnson v. Town of City of Evanston
...question raised by the pleadings was one of statutory construction which was a question for the court. (Apollo Sav. & Loan Ass'n v. Burow (1963), 39 Ill.App.2d 273, 188 N.E.2d 900.) By cross motioning for judgment on the pleadings, each of the parties has admitted the facts well-pleaded in ......