State Life Ins. Co. v. Freeman

• Decision Date: 06 February 1941
• Docket Number: Gen. No. 41409.
• Citation: 31 N.E.2d 375,308 Ill.App. 127
• Parties: STATE LIFE INS. CO. v. FREEMAN ET AL.
• Court: United States Appellate Court of Illinois

308 Ill.App. 127

31 N.E.2d 375

STATE LIFE INS. CO.

v.FREEMAN ET AL.

Gen. No. 41409.

Appellate Court of Illinois, First District, Third Division.

Jan. 22, 1941.

Rehearing Denied Feb. 6, 1941.

Appeal from Circuit Court, Cook County; George F. Rush, Judge.

Suit by the State Life Insurance Company against Victor L. Freeman and others to foreclose a trust deed, wherein William Byrnes and others were impleaded as “unknown owners”. William Byrnes and others, impleaded as “unknown owners”, filed a counterclaim, and from a decree of foreclosure, William Byrnes and others, impleaded as “unknown owners”, appeal.

Affirmed.

Charles A. Churan, of Chicago, for appellants.

George H. Batchelor, of Indianapolis, Ind., and Poppenhusen, Johnston, Thompson & Raymond, of Chicago, for appellee.

HEBEL, Presiding Justice.

This is an appeal from a decree of foreclosure entered in the Circuit Court of Cook County, Illinois, on February 16, 1940, by certain defendants who are appellants here, and who were made parties by an amendment to the complaint. The original complaint was filed on August 1, 1938, by the plaintiff, the State Life Insurance Company, a corporation of Indiana, against Victor L. Freeman and others to foreclose a certain trust deed dated June 10, 1927, from Emma W. Meschke and her husband, August F. Meschke, to Chicago Title and Trust Company, Trustee. The trust deed was made to secure an original indebtedness of $7,500, evidenced by three principal notes, A, B and C. Notes A and B were subrogated to Note C which was for $7,000 and of which the plaintiff was the legal holder. This note was for five years.

The premises mortgaged are located at 6239 Evans Avenue, Chicago, on the south side of the city in what is commonly known as the Washington Park Restricted Area, or Washington Park Subdivision. Note C not having been paid, an extension agreement in writing was entered into on June 9, 1932, between one Virginia V. Freeman, the then owner of the premises as party of the first part, and the plaintiff as party of the second part, extending the payment of the unpaid balance of principal note C for the term of five years from June 9, 1932. Said extension agreement contained the following provision: “And whereas, this extension agreement may be declared void by the party of the second part within ninety days after date of recording, if subsequent investigation shows that the title to the above described property is not as herein set forth, or that there are any liens that affect the validity of this trust deed as extended.”

On June 10, 1937, another extension agreement in writing was executed between the defendant, Victor L. Freeman, the then owner of said premises, as party of the first part, and the plaintiff as party of the second part, extending the time of payment of the unpaid balance (then $5,000.) of said principal note C, to June 1, 1942. Both of said extension agreements were recorded. The second extension contained the following clause: “And whereas, this extension agreement may be declared void by the second party without notice to the first party within ninety days after date of recording, if subsequent investigation shows that there are any liens that affect the validity of this trust deed as extended, or that the title to the above described property is not as herein set forth.”

On March 9, 1939, by leave of court the plaintiff filed an amendment to its complaint, alleging that subsequent to the making of the trust deed and on or about September 30, 1927, said Emma Meschke and August F. Meschke, her husband, together with certain of the owners of adjoining and adjacent property entered into agreements or covenants prohibiting the use of or sale of the premises involved to negroes, said agreements or covenants being dated September 30, 1927, and recorded February 1, 1928, in the office of the Recorder of Deeds of Cook County as Documents Nos. 9914711 to 9914714, both inclusive.

The amendment further alleges that the rights and interests of the parties to said covenants were at the time of the signing thereof and now are subordinate, subject, junior and inferior to the lien of the trust deed being foreclosed; states that the parties to said agreements and covenants are more than 250 in number; that it is impracticable to make all the owners and persons interested in the properties covered by said agreements parties to the complaint; that it is necessary that the signers and parties interested in said restrictive agreement be brought into court either in person or by representation so that all the parties interested or claiming any interest may be bound by each and every determination made by the court with respect to the matters presented to the court in connection with said foreclosure. The amendment then names ten property owners in the Washington Park Subdivision, being either parties who signed said restrictive agreement or their successors in title, as parties defendant as representative of and for all signers of said agreements and covenants and all other persons who do or may claim some interest in or lien upon the real estate therein described as signers of said agreements or covenants restricting the use or sale of the premises described in said agreements or covenants to Negroes, as parties under the name and description of “Unknown Owners”. Publication was had against “Unknown Owners” having or claiming to have an interest or lien upon the real estate described in said complaint by reason of said agreements.

On June 3, 1939, appearance, answer and counterclaim were filed by Charles A. Churan on behalf of defendants (appellants) William Byrnes, Margaret Byrnes, his wife, Ethel W. Olson, Henry Mallman, William Fahsbender, Henrietta Fahsbender, Della L. Fanselow, William Turner, Robert N. Griffin, Mayme Griffin, Charles Sorge, Mary Sorge, Charles Will, Emily Will and Rose Davis, impleaded herein as “Unknown Owners”, and on July 13, 1939, an order was entered which provided that the answer and counterclaim of these defendants impleaded herein as “Unknown Owners” on behalf of themselves and on behalf of all other signers of said restrictive agreement dated September 30, 1927 (describing same), should be included within those defendants heretofore impleaded as representatives of the class, and the court finds that these defendants (appellants here) naming them are representatives of and sufficient to implead as a class all the signers of said agreements and covenants, and of all parties having or claiming any interest in any of the properties described.

In substance, the defendants admitted the execution of the restrictive agreement pleaded by the plaintiff's amendment and recorded February 1, 1928, but say that more than 500 white persons owners of real estate in the area known as Washington Park Subdivision between Cottage Grove Avenue on the east, South Park Avenue on the west, Sixtieth Street on the north and Sixty-third Street on the south executed and acknowledged said restrictive agreement, which was a covenant running with the land for the benefit of the land; that the defendant Emma W. Meschke, and her husband executed said agreement and that said covenant provides that it should remain in full force and effect until January 1, 1948, and thereafter until abrogated by a written recorded agreement of the owners of 75 per cent of the frontage, and assert that said restrictive agreement is now in full force and effect and binding upon them and the plaintiff, and on the premises being foreclosed and deny that it is subject, junior and inferior to the lien of the trust deed. They pray that the restrictive agreement be found by the court to be in full force and effect and binding on the premises being foreclosed and whatever relief the plaintiff is found to be entitled to should be subject to the covenants and restrictions contained in said restrictive agreement.

By their counterclaim these defendants pray that the decree of foreclosure and any sale thereunder should be made subject to the restrictions and covenants contained in said restrictive agreement. The cause was referred to a Master in Chancery who filed his report finding against the contentions of these defendants and counter-claimants over objections filed, which were made exceptions in the Circuit Court, and decree of foreclosure was entered on February 16, 1940, by the Circuit Court sustaining the Master's Report and finding and decreeing among other things that the rights and interests of all the signers of said agreement and persons taking through or under them and all parties interested in said agreement or covenant are junior, inferior, subject and subordinate to the lien of the plaintiff. The decree further orders the sale of the premises and if no redemption be made from the sale that “the grantee or grantees in such Master's deed of conveyance * * * take the premises free and clear of all liens, encumbrances, covenants and obstructions created or appearing of record from and after the recording of the trust deed foreclosed herein, etc.” A sale of said premises to the plaintiff reported by the Master for the full amount of the decree, and Master's certificate was issued. Sale was approved by the court by order entered April 29, 1940.

The counter-claimants filed a counterclaim asking for affirmative relief. It set up the restrictive agreement and the covenants against sale, use or occupancy by Negroes and other pertinent provisions. It was alleged that in the agreement the signers thereof agreed, that “said covenants and restrictions should be appurtenant to and running with the land, and might be enforced by any of the parties thereto by any permissible legal or equitable proceedings including proceedings to enjoin violation and for specific performance.” The counter-claim further alleges that said agreement was signed by more than 500 white persons, owners of land on Evans, Langley, Champlain, St. Lawrence, Rhodes,...