Appeal from the Circuit Court of Cook County; the Hon. HAROLD
P. O'CONNELL, Judge, presiding. Affirmed.
MR. JUSTICE ENGLISH DELIVERED THE OPINION OF THE COURT. This case is here on appeal of the United States from a decree of foreclosure and sale in which the government contends that its tax lien was not given adequate priority.
The facts are undisputed and will be set forth in chronological order.
By trust agreement in 1944, a land trust was created with Mutual National Bank of Chicago as trustee and Frank S. Cacciatore as sole beneficiary during his life, remainder to his wife. The pertinent provisions of this agreement will be detailed later in this opinion.
In 1950 the real estate concerned in this foreclosure suit was conveyed to Mutual National as trustee under the land trust.
On March 8, 1957 the land trustee gave a first mortgage to Chicago Federal Savings & Loan Association to secure a note for $28,500. This mortgage was recorded March 15, 1957.
Also on March 8, 1957 federal withholding taxes, penalties and interest were assessed against Cacciatore and on July 29, 1957 a notice of federal tax lien was filed against Cacciatore in the office of the Recorder of Deeds of Cook County.
On June 3, 1958 the land trustee executed a second mortgage trust deed to Chicago Title & Trust Company, as trustee (recorded June 10, 1958) to secure a note for $10,000 owned by David J. Peilet.
On December 4, 1958 the land trustee executed a third mortgage trust deed to Chicago Title & Trust Company, as trustee (recorded December 17, 1958) to secure a note for $4,535 owned by Sam and Vita Dattulo.
On December 19, 1958 the Cacciatores assigned their beneficial interest in the land trust to their attorney, Stephen L. Ruff.
On July 21, 1959 Chicago Federal instituted this action to foreclose the first mortgage, and the second and third mortgagees answered requesting foreclosure of their mortgages also. The government's answer asserted its tax lien in the amount of $4,826.31, plus interest, and sought satisfaction through priority over the mortgages.
On July 28, 1959 the first mortgagee paid the 1958 general taxes on the real estate in the amount of $663.
In February, 1960 Ronald Wayne & Company, Inc., purchased the first mortgage and related paper, and was substituted as plaintiff.
In the foreclosure suit there was a reference to a Master in Chancery who, after hearing all the evidence, filed his report in June, 1960. On July 26, 1960 the court approved the master's report and, over the government's objection, entered a decree of sale establishing the following priorities for payment out of the proceeds of sale:
1. Ronald Wayne & Company, Inc. For amount due under first mortgage, including amount paid on 1958 ...