Karetzkis v. Cosmopolitan Nat. Bank

• Court: Appellate Court of Illinois
• Writing for the Court: MURPHY; BURMAN, P. J., and ENGLISH
• Citation: Karetzkis v. Cosmopolitan Nat. Bank, 186 N.E.2d 72, 37 Ill.App.2d 484 (Ill. App. 1962)
• Decision Date: 29 October 1962
• Docket Number: Gen. No. 48725
• Parties: Albin KARETZKIS, Appellant, v. COSMOPOLITAN NATIONAL BANK, etc., et al., Defendants below, Cosmopolitan National Bank, William H. Suchier and Arlyne Hamil, Appellees.

Page 72

186 N.E.2d 72

37 Ill.App.2d 484

Albin KARETZKIS, Appellant, v. COSMOPOLITAN NATIONAL BANK, etc., et al., Defendants below Cosmopolitan National Bank, William H. Suchier and Arlyne Hamil, Appellees.

Gen. No. 48725.

Appellate Court of Illinois, First District, First Division.

Oct. 29, 1962.

Arthur Abraham, Harry George, Chicago, for appellant.

Samuel S. Cohon and Wexler & Wexler, Chicago, for Suchier and Hamil.

Walter D. Gainer, Chicago, for Cosmopolitan National Bank.

MURPHY, Justice.

This is a proceeding for the foreclosure of a trust deed. Plaintiff, Albin Karetzkis, appeals from a decree, entered upon a master's report, dismissing the complaint for want of equity.

In January, 1953, plaintiff, in response to an advertisement and after consulting his friend and attorney, defendant Francis D. McGuire, purchased the subject $12,500 promissory note and trust deed for $6,000. The unpaid principal balance was $7,300. The trust deed and installment note, both dated February 22, 1950, were executed by Arthur C. Cimaglia. The security was 1367 North Sedgwick Street, Chicago, improved with a 4-story brick building, containing stores and apartments. A photograph in evidence indicates it was built in 1882. On January 8, 1953, plaintiff and Cimaglia entered into an extension agreement, providing for monthly installments.

On August 3, 1953, Cimaglia died intestate, and letters of administration for his estate were issued by the Probate Court of Cook County. Subsequently, on February 2, 1956, by way of a proceeding to sell real estate to pay debts, the interest of the decedent in the real estate was conveyed to defendant Walter D. Gainer, for $150, subject to outstanding obligations of $19,640.99, and unpaid taxes since 1948. Thereafter, the legal title was placed in a land trust, with defendants Walter D. Gainer and William H. Suchier as joint beneficiaries, and the defendant Cosmopolitan National Bank of Chicago as trustee.

In July or August of 1953, as the note was in default, plaintiff delivered to McGuire, as his attorney, the mortgage papers and a fee of $400, with instructions 'to start collecting on that debt for me,' and McGuire told him he was going to start foreclosure proceedings. McGuire never commenced foreclosure proceedings and, although plaintiff in the following three years frequently demanded his mortgage papers, McGuire never returned them.

Early in 1957, plaintiff retained another attorney, Harry George. He then, for the first time, learned that in August, 1956, McGuire had sold and delivered the mortgage papers to defendant Gainer for $5,000. Gainer had delivered to McGuire two checks, totalling $5,000. One check was a cashier's check, dated December 16, 1955, for $4,500, and was restrictively endorsed to plaintiff. The other check, for $500, dated August 6, 1956, and payable to plaintiff, has typed across the face thereof 'Balance in full for first mortgage on 1367-69 N. Sedgwick Street.' Plaintiff further learned that McGuire had foreged plaintiff's signature to the two checks and wrongfully appropriated the funds. In exchange for the checks, McGuire gave to Gainer the mortgage papers and an assignment of the trust deed, purporting to bear the signature of plaintiff. The assignment was dated and acknowledged before a notary public on August 6, 1956.

Plaintiff commenced the instant proceedings in March, 1957. He also filed a petition in bankruptcy against McGuire and went to the State's Attorney's office and complained about McGuire having forged his name on the two checks. He signed a complaint and a warrant was issued for McGuire in connection with the purported forgery of plaintiff's signature.

An amended and supplemental complaint, filed July 17, 1957, in substance alleges that defendant McGuire fraudulently sold the mortgage papers and forged plaintiff's signature to checks totalling $5,000, and wrongfully appropriated the funds; and that plaintiff had demanded, from certain of the defendants herein, the return of the mortgage papers. Primarily, the relief sought was in the alternative: (1) foreclosure of the trust deed and note, or (2) that McGuire be required to pay to plaintiff 'the sum of $5,000, interest and costs, as a result of the wrongful misappropriation of said funds and the failure to pay said funds to the true owner thereof.'

On July 17, 1957, an order was entered in the proceedings, which recited that it was entered in compromise and settlement of the claim of plaintiff. All defendants except McGuire were dismissed without costs, and judgment was entered against McGuire and in favor of plaintiff for $5,000, with a finding that malice was the gist of the action. Subsequently, on July 24, 1957, an order was entered, deleting that part of the prior order which dismissed all defendants except McGuire.

Thereafter, plaintiff's attorney, Harry George, accepted from McGuire's attorney, Herbert Wetzel, a cashier's check, dated August 5, 1957, for the sum of $5,000, and payable to plaintiff's order. This check, endorsed in blank by plaintiff, was deposited in the account of Harry George, plaintiff's present attorney. On August 8, 1957, garnishment proceedings, then pending in the instant case on the McGuire judgment, were dismissed by a stipulation entered into by Harry George, attorney for plaintiff, and Herbert Wetzel, who was the attorney for McGuire.

On March 4, 1958, the cause was referred to a master in chancery for hearing, and his report was filed June 13, 1961. A decree, entered December 6, 1961, approved and confirmed the master's report in all respects, and found that defendant Suchier was the legal and equitable owner of the subject note and trust deed, and 'that the said Trust Deed was properly released of record.' It also found that a tax deed for the premises, issued to Arlyne Hamil (nominee of Suchier) on October 5, 1959, created a new and paramount title to the property, in fee simple, in Arlyne Hamil, 'free and clear of all claims of every kind or nature by any of the parties to this proceeding.' The amended and supplemental complaint was dismissed for want of equity. It is from this decree that plaintiff has appealed.

The contentions of plaintiff are (1) that defendants Gainer and Suchier acquired no title to the trust deed and note from McGuire; as he had no authority to sell or assign; (2) that none of the circumstances relied upon to show apparent authority in McGuire were ever communicated to Gainer or Suchier, or relied upon by them; (3) that the attempt of plaintiff to collect $5,000 from McGuire, and its ultimate collection, has no tendency to show ratification of the sale of the trust deed and note to Gainer and Suchier; also, that plaintiff tendered the $5,000 to Gainer and Suchier in open court, for the trust deed, note, and assignment of rents; and (4) that Arlyne Hamil, as the nominee of Suchier, could not...