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Sampson v. Village of Stickney

MARCH 22, 1961.

JOYCE SAMPSON, APPELLANT,

v.

THE VILLAGE OF STICKNEY, A MUNICIPAL CORPORATION, WILLIAM LOEFFLER, WILLIAM J. SVOLBA, CHARLES LEJSEK, CHARLES HADAC, WALTER J. JICHA, FRANK DUS, JERRY CIBULKA, JOSEPH BLAHA AND EMIL KOVARIK, APPELLEES.



Appeal from the Superior Court of Cook county; the Hon. GROVER C. NIEMEYER, Judge, presiding. Reversed and remanded with directions.

MR. JUSTICE MCCORMICK DELIVERED THE OPINION OF THE COURT.

Rehearing denied April 14, 1961.

This appeal was taken by plaintiff from a decree of the Superior Court of Cook County entered March 1, 1960 sustaining certain exceptions to the master's report and entering judgment for plaintiff in the sum of $11,179.50, together with master's fees and costs. The master had taken an accounting following a reference made to him of plaintiff's petition, as amended, for an accounting pursuant to the decree previously entered in this suit on October 20, 1937.

The case grew out of the purchase by one Lenora Schnitzer of certain special assessment bonds issued by the Village of Stickney to anticipate the collection of special assessment No. 6 levied for improvements in said village. She had bonds in series B, E, F, G, H and I. The face value of the bonds was $49,500. The bonds had interest coupons attached thereto representing the annual interest on each of said bonds at the rate of six per cent per annum. There is no question that the village complied with all the statutory requirements in order to validly issue the said bonds. A suit to enforce payment by the village of sums allegedly collected by it on the assessment and for an accounting was filed by Lenora Schnitzer in 1937 in the Superior Court of Cook County. A decree was entered finding that as of April 30, 1937 she was entitled on her bonds to a pro rata amount of the collections made, which sum the court found to be $4,470.20 on account of principal, and $1,492.56 on account of interest, a total of $5,962.76, and the village was ordered to pay the said sum to her. The decree further provided: "The defendant Village of Stickney shall pay annually, commencing on May 1, 1938 and on the first day of May in each year thereafter, the proportion of any moneys collected and applicable on said bonds and interest coupons until they have been paid in toto until further order of court; that plaintiff is granted leave to examine the books and records of said village relating to said assessment No. 6; that jurisdiction is hereby reserved for the purpose of enforcing the payment of the above mentioned sums and any future sums that may be applicable on said bonds and interest coupons and to carry out the other provisions of this decree. . . ." No further payment was made by the defendant village on account of the principal or interest on said special assessment bonds of the plaintiff, nor was any accounting ever made by the defendant of any amounts collected by it on said bonds and coupons after April 30, 1937.

By successive assignments Joyce Sampson became the owner of the bonds and interest coupons. On March 9, 1954 a petition for an accounting pursuant to the October 20, 1937 decree against the Village of Stickney was filed. The petition admits that in accordance with the provisions of the decree payments of $4,470.20 on account of the principal of the bonds and $1,492.56 as interest were made, and alleges that no other payments were made and that the sum of $45,029.80 was due on the bonds in addition to the interest thereon. It also alleges that the village has made no accounting since the entry of the said decree, and that it has since the entry of the decree commingled money collected on the special assessment with the general funds of the village and has used such funds, properly due on the bonds, for its general corporate purposes. The petition prays for an accounting to determine the extent of the commingling, misapplication or misappropriation of the funds by the village, and for an order upon the village to pay to the plaintiff what shall appear on such accounting to be due to the plaintiff from the defendant.

The Village of Stickney filed an answer to plaintiff's petition, in which it denied that it had collected any money applicable to plaintiff's bonds and interest coupons. It later filed an amended answer, again denying that it had made any collections on the assessments levied by special assessment No. 6, and asserting that it has in its answers to interrogatories theretofore filed made a full account of the moneys collected which are affected by these proceedings. The amended answer was verified by Joseph Lustfield, attorney for the village.

The plaintiff propounded interrogatories to the village at three different times. The answers of the village to the interrogatories are contradictory and inconsistent. Among other things the village states that the amounts collected by the village collector on principal and interest on the bonds and special assessment No. 6 are not available for an answer; that the village collector did not report his collections to the Village of Stickney, and that the records are not available for any payments made by the county treasurer to the Village of Stickney. Again it says that the village does not have on hand the amount collected on account of special assessment No. 6, and that such funds were paid out on account of other bonds and interest coupons of the said special assessment. Again it says that the liens created by the said special assessment of the Village of Stickney were foreclosed in July of 1949 and that no moneys have been received by the Village of Stickney from any source on the special assessment bonds owned by plaintiff from July of 1949 to date. Again it says that the judgment liens were not foreclosed but were sold at a public auction on September 1, 1949 at the village hall in the Village of Stickney, and that notice was given by publication in the Stickney Life, published by Cicero Life, of Cicero, Illinois. (The plaintiff at the hearing introduced a notice published in The National Corporation Reporter.) The defendant states that all the delinquent assessments at that sale, held in accordance with an ordinance passed on August 9, 1949, were sold to the Suburban Bond and Service Company of Riverside, Illinois for $1,448.00, that the moneys received were deposited with the village collector of the Village of Stickney, and that proper certificates of assignment were issued and are presumably in the possession of the Suburban Bond and Service Company. Again it states that some of the money collected by the Village of Stickney on account of the special assessment was applied to bonds and interest coupons and some of it was paid for collection fees etc. and the balance deposited in the account of the village, and to that answer were attached two documents in the handwriting of the then attorney for the village, Joseph Lustfield, which documents were later introduced in evidence before the master by the plaintiff. The exhibits indicated, among other things, that the village collected from April 30, 1937 to July 1, 1949 $4,367.71 in principal and $1,289.75 in interest, which were applicable to the bonds and coupons owned by the plaintiff.

The amended answer to the petition and the answers and amended answers to the interrogatories were signed and verified by Joseph Lustfield, attorney for the village.

The plaintiff also by order of court filed a notice on the defendant to admit certain facts. In that notice plaintiff set out a schedule purporting to be a true and correct statement of the pro rata payments due on some of the special assessment No. 6 bonds owned by the plaintiff on account of principal which the village had collected up to July 1, 1949 and from which no payments were made to the plaintiff. In the schedule are set forth certain amounts allegedly collected by the village as determined from a decree entered in the Superior Court July 1, 1953 in the case of Chalberg v. Village of Stickney (to which we will refer later), and which decree sets out the principal collected by the village prorated on special assessment No. 6 bonds owned by Chalberg in series B, E, F, G and I. (The amount found due on those bonds in the decree was paid and a satisfaction of judgment was entered.) The decree was marked "approved" in the handwriting of Joseph Lustfield, attorney for the Village of Stickney, and under the word "approved" appears the signature of said Joseph Lustfield. In answer to the notice to admit facts the Village of Stickney denied that the schedule setting forth the pro rata payments due on some of the bonds owned by the plaintiff on account of principal collected by the village up to July 1, 1949 on the special assessment is a true and correct statement of the principal due. The village admits that the amounts shown in the schedule as principal collected to July 1, 1949 were established with reference to certain bonds in the Chalberg decree, and the village further admits that the prorated amounts shown in the schedule under the column marked "Principal Paid" are the amounts paid by the village to the plaintiff's assignor with respect to the numbered bonds listed therein pursuant to the decree of October 20, 1937, but says all the bonds listed in the decree are not included.

By order of court the matter was referred to a master in chancery to take an accounting and to hear the issues raised by the petition and the answer. The master held hearings, and on October 7, 1959 filed his report, which included his finding of facts. In his findings he set out the decree of October 20, 1937, the payment of $5,962.76 thereunder, and found that no further payments as provided for in that decree were ever made on the said bonds or interest coupons by the Village of Stickney. The master further found from the "interrogatories and evidence offered" that from April 30, 1938 to July 1, 1949 the village had admittedly collected the following amounts applicable to the plaintiff's bonds and coupons: principal $4,367.71, interest $1,289.75, making a total of $5,657.46, which sum the defendant misappropriated and converted to its own use. From the present accounting of the village it was found that there was collected on the bonds concerned, for each $1,000 bond, the following:

Collected Collected Total for Series and paid but unpaid $1,000 bond

B $ 42.40 $ 25.63 $ 68.03 E 200.70 90.48 291.18 F 125.20 94.02 219.22 G 39.20 90.80 130.00 H 130.02 68.65 198.67 I 114.10 114.10

The master further found that in the Chalberg case, which involved special assessment No. 6 bonds in the series held by the plaintiff here except one (series H), the decree established that the village actually collected to July 1, 1949 the following amounts on each $1,000 bond, which amounts are not in accord with the records of the village:

Principal Collected per $1,000.00 Bond As found by the As acknowledged in Series Chalberg ...


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