Rheinberger v. Security Life Ins. Co. of America

• Decision Date: 14 August 1943
• Docket Number: No. 11683.,11683.
• Citation: 51 F. Supp. 188
• Parties: RHEINBERGER v. SECURITY LIFE INS. CO. OF AMERICA.
• Court: U.S. District Court — Northern District of Illinois

51 F. Supp. 188

RHEINBERGER v. SECURITY LIFE INS. CO. OF AMERICA.

No. 11683.

District Court, N. D. Illinois, E. D.

August 14, 1943.

COPYRIGHT MATERIAL OMITTED

Lytton & Olson, of Chicago, Ill., for plaintiff.

O. D. Buckles, Corp. Counsel, and Mason & Mason, all of Chicago, for defendants.

LINDLEY, District Judge.

The trustee of Security Life Insurance Company, under administration in this court, having in his custody certain real property of the estate in the City of Evanston, described as follows: The South one-ninth of the Southwest Quarter of the Southeast Quarter and the South Sixteen feet of the East Ninety feet of the North Half of the South two-ninths of the Southwest Quarter of the Southeast Quarter of Section twenty-four. Township forty-one North, Range thirteen East of the Third Principal Meridian, subject to rights of the public and of the City of Evanston in and to that part of said South one-ninth of said Southwest Quarter lying west of a line Forty feet East of and parallel with the West line of said Southeast Quarter, condemned and taken for the widening of Dodge Avenue, in Cook County, Illinois, filed his petition April 23, 1940, averring that the City is illegally occupying a portion of said premises, viz., the east thirty-nine feet and the south thirty-three feet and using the two strips wrongfully as a part of Florence Avenue and of Oakton Street respectively, and that such occupancy constitutes a continued trespass. He prayed that the City be enjoined from withholding possession from him and from obstructing the two parcels and required "to compensate or reimburse petitioner and defendant's estate herein for withholding from said petitioner and obstructing said strips or parcels of land and depriving petitioner from the use, improvement and enjoyment thereof."

The City answered May 17, 1940, and, eventually, on January 15, 1941, the hearing was begun. However, after presentation of petitioner's evidence, at the City's request, it was adjourned to be completed later. On February 2, 1941, the answer was amended and still later, the cause came on for further hearing upon trustee's amended petition, the amended answer and the reply thereto.

I limited the testimony to the question of whether the trustee is entitled to an injunction as prayed, as I deemed it wise to adjudicate that issue before concluding evidence as to compensation. I excluded all evidence of events prior to 1931 when, in a decree of foreclosure and sale, the Circuit Court of Cook County, Illinois, at the suit of Security, in which the City of Evanston was party defendant, decreed and adjudged that complainant had a lien upon the premises here involved and certain other land and that any and all interests or claims of whatsoever character of the City and other defendants therein were inferior and subordinate thereto. In so ruling I held the decree an effectual adjudication of title as between Security and the City as of that date, and ruled that this court has no right, power or jurisdiction to review that decree; that all defenses raised at that time and all that might have been raised, as against the averment of title in plaintiff, were adjudicated by the decree; and that, therefore, this court is without right to consider any evidence upon defenses asserted to have arisen prior to the date of that decree. But the City has persisted in its contention that I should have considered evidence of events prior to 1931 and, for that reason, I have seen fit in this memorandum to discuss the legal questions thus raised.

On December 7, 1925, Carrie B. Barker, being indebted to Security for $25,000, "conveyed and warranted," by trust deed, the land first above described herein (excluding however the exception therein) to secure the debt. Upon default by the mortgagor on June 26, 1930, the mortgagee filed suit to foreclose, including the city as a party defendant and averring that the rights and interests of any and all defendants were "subject and inferior to" the lien of complainant. The city answered, denying that the "rights of the complainant in and to the property" were superior to those of that defendant and asserting superior title in it to that portion represented by the exception by virtue of a condemnation judgment entered subsequent to the mortgage and title in the other two strips by virtue of a quit-claim deed from Mrs. Barker to the City, subsequent to the mortgage, and by virtue of long continued possession by the City.

The master reported and the court found that all defendants' rights and interests in and to the mortgaged property were "subject and inferior to" complainants' lien. The decree, October 20, 1931, provided for sale and, in the absence of redemption, that "all defendants and all persons claiming under them or either of them," "be forever barred" from all "claims in and to said premises and every part and parcel thereof."^*

No appeal was taken; a master's sale was made to Security and duly approved, and master's deed issued on July 3, 1934 to the trustees of Security appointed by this court.

The Trustee seeks to restrain the City from using any of the property thus acquired and to remove the improvements on the north thirty-three feet of Oakton Street, and the west thirty-three feet of Florence Avenue. The City contends that the Circuit Court of Cook County had no power to determine in the foreclosure proceeding the City's right to the strips, since its title to the property, acquired by common law dedication and long and continuous use, was adverse and superior to that of the mortgagee and that as a result, the foreclosure court exceeded its jurisdiction and the City may now assert its title to the strips. The trustee insists that since the Circuit Court had jurisdiction of the subject matter and of the parties, including the City, and acted within the scope of its powers, the decree is binding and may be questioned only by direct appeal. Since no appeal has been taken, the trustee's position is that the City is forever barred from questioning the adjudication collaterally.

Obviously, a decree entered without jurisdiction, or in excess of jurisdiction, is void and subject to collateral attack. Armstrong v. Obucino, 300 Ill. 140, 133 N. E. 58; Leviton v. Board of Education, 374 Ill. 594, 30 N.E.2d 497; Chicago Title & Trust Co. v. Mack, 347 Ill. 480, 180 N.E. 412. However, if the court has jurisdiction of the subject matter and the parties and acts within its legal limitations, any error committed can be corrected only by appeal; otherwise it is silenced forever, Knaus v. Chicago Title & Trust Co., 365 Ill. 588, 592, 7 N.E.2d 298; Wolff v. Schwill & Co., 351 Ill. 28, 33, 183 N.E. 567; Miller v. Rowan, 251 Ill. 344, 96 N.E. 285. When a party asserting an interest adverse to the mortgagee is joined in a foreclosure suit, the court's question is not one of jurisdiction but one of propriety. A failure to appeal is vital, final and determinative; a collateral attack is futile. Sielbeck v. Grothman, 248 Ill. 435, 94 N.E. 67, 21 Ann.Cas. 229; Knaus v. Chicago Title & Trust Co., 365 Ill. 588, 7 N.E.2d 298; Johnston v. San Francisco Sav. Bank, 75 Cal. 134, 16 P. 753, 7 Am.St.Rep. 129; 1 Will. on Mortgage Foreclosures, 4th Ed., 547; see Waller v. River Forest, 259 Ill. 223, 102 N.E. 290; Chicago Theological Seminary v. Gage, 103 Ill. 175; Clark v. Zaleski, 253 Ill. 63, 97 N.E. 272; Crane v. Crane, 341 Ill. 363, 173 N.E. 352; Cromwell v. MacLean, 123 N.Y. 474, 25 N.E. 932.

In Chicago Theological Seminary v. Gage, 103 Ill. 175, the mortgagee made Gage a party, averring that he claimed some interest in the property but that such interest, if any, was subordinate to the rights of the mortgagee. Gage was served but failed to appear. The complaint was taken as confessed and a final decree entered, finding that Gage's claim under a tax deed was void. Gage appealed, and the Supreme Court, upholding the decision, said at page 182: "But suppose the bill showed upon its face that the tax deeds in this case were an independent outstanding title, and that as to them the complainant had a complete remedy at law, it does not follow the decree should be reversed. It would simply show that there were good two defences to the bill, if insisted on at the proper time and in the legal mode, namely, multifariousness, and that the complainant had a complete remedy at law, yet nothing is better settled than that neither of those defences can be availed of in the first instance, as is sought to be done here, in a court of review."

In Knaus v. Chicago Title & Trust Co., 365 Ill. 588, 7 N.E.2d 298, a trust deed secured a loan from a State Bank. Foreclosure proceedings were instituted, naming Knaus as defendant, he having purchased the property subject to the trust deed. A decree of foreclosure was rendered, the property sold to the Trust Company and, on failure to redeem, a master's deed issued. Subsequently Knaus filed a bill to set aside the decree, alleging that the Trust Company had no authority to purchase the bonds, that its action in doing so constituted a breach of fiduciary relation, and that in purchasing them it had voluntarily effectuated payment of them, and that thereby the lien was discharged. Knaus averred that these facts constituted such fraud as to deprive the court rendering the foreclosure decree of jurisdiction. The Supreme Court said, at page 592 of 365 Ill., at page 300 of 7 N.E.2d: "That the court had jurisdiction of the person cannot be denied, because appellants appeared and defended. There can be no question that the circuit court of Cook county had jurisdiction of foreclosure cases. * * * Jurisdiction of the subject matter is the power to hear and determine cases of the general class to which the proceedings in question belong. Such jurisdiction is conferred by the Constitution or by legislative enactment and does not depend upon the sufficiency of the bill of complaint in a particular case, the...