Chicago Title & Trust Co. v. Wolchinovesky

• Decision Date: 18 May 1945
• Docket Number: Gen. No. 42761.
• Citation: 61 N.E.2d 264,326 Ill.App. 194
• Court: United States Appellate Court of Illinois
• Parties: CHICAGO TITLE & TRUST CO. v. WOLCHINOVESKY et al. GILLMER v. COHEN.

326 Ill.App. 194

61 N.E.2d 264

CHICAGO TITLE & TRUST CO.

v.WOLCHINOVESKY et al.

GILLMER

v.COHEN.

Gen. No. 42761.

Appellate Court of Illinois, First District, Third Division.

May 18, 1945.

Appeal from Circuit Court, Cook County; Walter J. LaBuy, Judge.

Action by Chicago Title & Trust Company, successor trustee, against Joseph Wolchinovesky and others for foreclosure of a mortgage. After the mortgage was foreclosed, Abigail Gillmer filed a petition alleging she was owner of equity of redemption and had redeemed and had requested leave to deposit a certain sum and that possession of premises be delivered to her. Harry Cohen, owner of first mortgage bond, filed an answer and counterclaim. From an order striking the answer and counterclaim and dismissing it for want of equity, Harry Cohen appeals.

Affirmed.H. J. Rosenberg, Irving S. Berman, and Samuel B. Barnett, all of Chicago (Abraham Miller, of Chicago, of counsel), for appellant.

Maurice H. Kamm and Maurice L. Davis, both of Chicago (Maurice L. Davis, of Chicago, of counsel), for appellee.

LUPE, Justice.

This is an appeal by Harry Cohen, counterclaimant, from an order striking his answer and counterclaim and dismissing the same for want of equity.

A decree of foreclosure and sale was entered in this cause on June 26, 1937. This decree found that there was due to complainant Chicago Title & Trust Company, a corporation, as successor trustee, from defendant Joseph Wolchinovesky the aggregate sum of $493,100.11, and ordered the sale of the premises in the event said amount had not been paid. The same not having been paid, a sale was had and on June 17, 1942, an order was entered approving the sale pursuant to said decree. On September 24, 1942, the master's report of distribution was approved by the court and a deficiency decree entered against Becky Clemitz, as administratrix of the estate of Joseph Wolchinovesky, deceased, in the sum of $557,880.21. In this order the court reserved jurisdiction of the matters which were reserved by the decree of June 26, 1937, wherein the court reserved jurisdiction to enter such orders not inconsistent with the decree as might seem necessary or proper to execute or enforce the terms of the decree, and to enter a personal decree against Joseph Wolchinovesky for any deficiency on the sale. The order entering the deficiency was declared by the decree to be a lien upon the rents, issues and profits from the premises foreclosed upon, during the statutory period of redemption. The record discloses an order was entered on June 27, 1936, that all further proceedings in the cause hereafter be governed by the provisions of the Civil Practice Act.

On December 15, 1941, Abigail Gillmer filed her suit in the Superior Court of Cook County for a strict foreclosure of a second mortgage on the same premises; on March 17, 1942, a decree of strict foreclosure was entered, and on June 19, 1942, pursuant to said decree, a master's deed was issued, conveying title to the premises to Abigail Gillmer. On November 9, 1942, Abigail Gillmer redeemed from the first mortgage foreclosure sale. On January 8, 1943, Gillmer filed her petition in this cause alleging that she was the owner of the equity of redemption and had redeemed from the sale under the first mortgage foreclosure decree; that she was the owner of the premises subject only to the rights of the first mortgage bondholders who were entitled to receive the net income derived from the premises during the remaining portion of the period of redemption. Gillmer requested the court for leave to deposit the sum of $6500 with the complainant Chicago Title & Trust Company, successor trustee, in full for the net rents, issues and profits that might accrue from the premises during the remaining period of redemption, from February 1, 1943, to August 31, 1943, and that possession of the premises be delivered to her.

On January 15, 1943, Harry Cohen, the owner of three first mortgage bonds in the sum of $500 each, filed his answer and counterclaim to Gillmer's petition. The chancellor treated the counterclaim as an additional answer, so that the allegations of both of Harry Cohen's pleadings were treated as an answer by him to the petition of Gillmer. Counsel for Cohen contends that the chancellor held the proceedings herein were not governed by the Civil Practice Act and therefore no counterclaim could be maintained by Cohen. With this contention we can not agree.

The written opinion of the chancellor was made part of the record in this case. We find upon an examination of the opinion the chancellor construing the applicable provision of the Civil Practice Act found:

‘Under Section 38 of the Civil Practice Act [Ill.Rev.Stat. c. 110, § 162] any demand by one or more defendants against any one or more plaintiffs or against any one or more defendants may be pleaded as a counter-claim. Under this section it is not contemplated that rights of parties not parties to the record may be settled and determined upon a counter-claim filed after the issues have been disposed of on the main case, and with reservation of jurisdiction only as to distribution of the amount collected during the statutory period of redemption. The counter-claim filed herein is not filed against the plaintiffs nor is it filed against any of the defendants to this cause, but said counter-claim seeks the adjudiciation of the rights of one Harry Brainin who is not a party defendant herein except as it is attempted to make him one by said counter-claim.

‘The court, therefore, holds that no counter-claim can be maintained herein and said Harry Brainin cannot now be made a defendant herein and compelled in this cause to try the issues raised by said counter-claim. The court, however, will pass upon the answer of said Harry Cohen, and will treat the counter-claim of Cohen as an additional answer to the petition of Abigail Gillmer.’

We are of the opinion that the chancellor was correct in his ruling. This counterclaim is not between the parties to the suit and therefore was not proper under the provisions of the Practice Act. Countiss v. Whiting, 306 Ill.App. 548, 552, 29 N.E.2d 277.

At the time Gillmer filed her petition herein, the court had long prior thereto entered decrees with reference to the foreclosure of the first mortgage trust deed, and approval of the sale and distribution of the proceeds of sale, so that the only jurisdiction the court retained was with reference to the collection of rents, issues and profits from the premises during the redemption period and distribution of the same to the parties entitled thereto.

The trial court therefore had jurisdiction to pass upon any question which would affect the distribution of the moneys collected during the period of redemption, but had no jurisdiction to pass upon any question which had previously been determined by the decree of the foreclosure and sale, the decree approving the sale and the decree approving the distribution of the proceeds of the sale. All of these decrees were final in their nature and all questions determined by these decrees could not again be passed upon by the trial court in this proceeding. No matter what pleading Cohen might file, or by what name he should designate it, the trial court could only pass on the questions which would affect the distribution of moneys received from the rentals of the property during the redemption period.

The questions raised by Cohen's pleadings which refer to the distribution of moneys collected during the redemption period are: (1) The question of merger of the $200,000 of bonds claimed to be owned by Harry Brainin with the title also claimed to be owned by Brainin; and (2) the question of the subordination of Brainin's bonds. Under the reserved jurisdiction of the court the trial court had no...