On appeal from the Superior Court of Cook County; the Hon.
JOHN J. LUPE, Judge, presiding. Affirmed.
MR. JUSTICE BURMAN DELIVERED THE OPINION OF THE COURT.
This is an appeal from a decree entered in the Superior Court on May 28, 1963, holding that the demolition lien of the City of Chicago is superior to prior encumbrances on the subject premises including the prior existing mortgage lien of the appellant, Supreme Savings and Loan Association. On the theory that the determination of the validity of a statute was involved the Supreme Savings and Loan Association, counterplaintiff, appealed directly to the Supreme Court. The motion of the City of Chicago to transfer the cause to this court on the grounds that "no constitutional issue had been presented and passed upon by the trial court" was allowed and therefore we consider in this appeal only the construction and application of the involved sections of the Statute.
The sole question for us is whether the decree of the Superior Court confirming the Master's findings correctly held that the demolition encumbrance of the City of Chicago has priority over all prior existing encumbrances and liens.
Briefly, the pleadings reveal that on March 2, 1961, E.N. Radford, not a party to this appeal, filed a complaint in case No. 61S 4305, to foreclose a mechanic's lien against the involved premises located at 2638 West Homer Street, Chicago, Illinois. Supreme Savings and Loan Association filed its answer and countercomplaint to foreclose its first mortgage which was recorded on September 14, 1960.
On June 26, 1961, the City of Chicago commenced proceedings in case No. 61S 12073 for the demolition of the subject property, and amongst other things alleged that the building erected on said premises was, on January 3, 1961, substantially destroyed by fire. The Supreme Savings and Loan Association was not a party to this suit. On July 10, 1961, a decree was entered granting the City the right to demolish the building because it was unsafe and after the building was demolished on August 21, 1961, the City recorded its demolition lien on August 25, 1961.
On January 12, 1962, the Supreme Savings and Loan Association amended its counter complaint in case No. 61S 4305 naming the City as an additional party defendant alleging that its first mortgage was superior to the City's demolition lien. The City filed its answer and counterclaimed to foreclose its demolition lien, alleging also that its lien was superior to the prior recorded liens of the first mortgage and of the mechanic's lien. The two cases were then consolidated and the matter was referred to Master in Chancery Harry S. Stark to take evidence and to report his findings and conclusions. The Master found that the City's demolition lien should be given priority over all prior existing encumbrances and liens by virtue of what we shall later refer to as the 1961 Amendatory Act, Chap 24, Sec 23-70.2, as amended, of the Illinois Revised Statutes. The decree entered on May 28, 1963, approved and confirmed the Master's Report in all respects and the Supreme Savings and Loan Association, the owner of the first mortgage lien, appealed.
The first question to be resolved is, which one of a number of statutes governing lien priority is to be applied in the case at bar. In order to answer this question we must first decide what is the operative date at which priority is to be determined. From an examination of the record and the various dates of importance we find August 25, 1961, to be the date at which the parties' rights became fixed. It was at that date that the City recorded its demolition lien. It was only then, that any claim which the City had was finally determined and made a matter of record. Prior to that date, one of the other parties with an interest in the building could have had it demolished and thus made the City's actions unnecessary. After that date, the City's right to a demolition lien of a specified amount had matured. With August 25, 1961, in mind, we will set out a summary of the statutory language here at issue. (All references are to c 24, Ill Rev Stats.)
August 15, 1941: Section 23-70.2 was enacted, providing that, "the cost of such demolition . . . shall be a lien . . . subordinate to all prior and existing encumbrances . . ." (emphasis added).
July 1, 1961: Legislature enacted the "repealer" Section 1-9-8 which repealed along with other sections, Section 23-70.2.
July 1, 1961: Legislature enacted Section 11-31-1 of the new Illinois Municipal Code which copied verbatim the words of the repealed Section 23-70.2.
There was, however, another piece of legislation which went into effect on July 1, 1961, ...