Toman, Cnty. Treasurer v. Park Castles Apartment Bldg. Corp.

• Decision Date: 05 February 1940
• Docket Number: Gen. No. 40732.
• Parties: TOMAN, COUNTY TREASURER, v. PARK CASTLES APARTMENT BUILDING CORPORATION ET AL.
• Court: United States Appellate Court of Illinois

303 Ill.App. 205

24 N.E.2d 868

TOMAN, COUNTY TREASURER,

v.PARK CASTLES APARTMENT BUILDING CORPORATION ET AL.

Gen. No. 40732.

Appellate Court of Illinois, First District, First Division.

Jan. 22, 1940.

Rehearing Denied Feb. 5, 1940.

Appeal from Cook County Court; Edmund K. Jarecki, Judge.

Proceeding by John Toman, county treasurer and ex officio county collector of Cook county, Ill., as successor to Joseph L. Gill, against the Park Castles Apartment Building Corporation for the appointment of a receiver to collect rents and apply them to the unpaid taxes levied against the property of defendant, wherein the Metropolitan Life Insurance Company made a special and limited appearance. From a decree, complainant appeals, and defendant Metropolitan Life Insurance Company cross-appeals.

Reversed in part, and affirmed in part and remanded, with directions. Thomas J. Courtney, of Chicago, for appellant.

Follansbee, Shorey & Schupp, of Chicago, for appellee.

O'CONNOR, Justice.

July 10, 1933, the County Collector of Cook county filed a complaint in the County court of Cook county, praying that he be appointed receiver of certain improved real estate in Chicago to collect the rents and apply them to the unpaid taxes levied against the property. An order was entered thirteen days thereafter as prayed for. The County Treasurer entered upon the discharge of his duties as receiver and collected the rents from the date of his appointment, July 23, 1933, to July 23, 1934, during which period he collected $38,885.47, out of which he disbursed “$17,513.87 for miscellaneous expenses” and applied $9,564.24 to the payment of delinquent taxes and penalties, leaving remaining in his hands $11,807.36.

The proceeding was brought under the Skarda Act passed by the legislature in 1933 (Laws 1933, p. 873, Smith-Hurd Stats. c. 120, § 238a et seq.) and on June 20, 1934, the Supreme court held that county courts did not have jurisdiction of such proceedings because they were not specifically mentioned in the act but jurisdiction was in courts of chancery. McDonough v. Gage, 357 Ill. 466, 192 N.E. 417.

June 27, 1934, seven days after the Supreme court handed down its opinion, the cause was transferred to the Circuit court of Cook county where a petition was filed by the County Collector, by which court the County Collector was appointed under the provisions of the Skarda Act and continued until April 14, 1935. In 1935 the legislature passed an act in lieu of the Skarda Act which, among other things, authorized the County court to appoint the County Collector receiver for delinquent property to collect the rents, etc., and apply them in payment of the taxes levied against such property. Laws 1935, p. 1166. Pursuant to this act the County Collector, on December 3, 1935, filed his petition in the County court setting up the necessary facts and he was appointed receiver of the property. February 10, 1936, the Park Castles Apartment Building Corporation, the owner of the property which was made a defendant, filed its answer which, among other things, averred that the County Collector or his agent had on hand, from rents collected as receiver, more than sufficient to pay the taxes in default. More than a year afterward, February 15, 1937, an order was entered by the County court granting leave to the Metropolitan Life Insurance Company to file its “special and limited” appearance which was accordingly done the same day in which it questioned the jurisdiction of the County court to make any order as to the disposition of the rents derived from the property and averred that it was the owner of a note made by the Building Corporation June 15, 1929, for $500,000 which was secured by a trust deed on the property and that the rents were pledged as security for the indebtedness as well as the property; that on February 28, 1934, it had filed its bill in the Superior court of Cook county to foreclose the lien of the trust deed which suit was still pending, where it made a motion for the appointment of a receiver and that court on April 12, 1934, entered an order which recited that the premises were in charge of the County Collector who had theretofore been appointed receiver by the County court of Cook county; that the insurance company intended to pay the balance of the delinquent taxes and to have the tax receiver discharged; that the building corporation desired to again take possession of the property after the delinquent taxes were paid and the tax receiver surrendered possession, and was willing to furnish a bond in lieu of the appointment of a receiver and when the building corporation had collected the rents and after deducting necessary expenses it would turn over a sum sufficient to reimburse the insurance company for moneys it had advanced toward the payment of the delinquent taxes and the balance to the insurance company to be applied on the indebtedness. The order further recited how the property was to be managed by the building corporation, etc. Other matters were set up in the special and limited appearance tending to show the history of what had taken place in the management of the property, including correspondence passing between counsel for the parties.

April 6, 1937, the insurance company filed its verified petition in the County court proceeding stating that in view of the facts set up in its special and limited appearance, that the Superior court having first acquired jurisdiction, the matter should there remain in accordance with the order of that court, which it was alleged fixed the rights of the parties to the funds collected by the County Collector; and further, that the building corporation was a party to the foreclosure suit and had elected to take the benefits of the order of April 12, 1934. The petition further set up that if the County court made any disposition of the funds in the hands...