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Park Ave. Lumber v. Nils A. Hofverberg

OCTOBER 27, 1966.




Appeal from the Circuit Court of Cook County; the Hon. WALKER BUTLER, Judge, presiding. Order modifying decree affirmed.


Rehearing denied November 18, 1966.

This is an appeal from an order entered in a proceeding under section 72 of the Civil Practice Act. The order modified a decree previously entered in a mechanic's lien suit by vacating and setting aside that portion thereof which undertook to bar Nils A. Hofverberg, Inc. (Hofverberg, Inc.), the appellee defendant, from making any claim for a mechanic's lien or for money due it for work, labor or material furnished to the premises described. The principal issue is whether it is proper in a proceeding under section 72 to modify a decree which has granted relief against a defaulted defendant far beyond that prayed for in the complaint.

As all the issues in this case are to be resolved on the averments in the pleadings filed in the mechanic's lien suit, the findings of the court in the decree entered therein, the averments in the petition under section 72 and the findings of the court in the order entered therein, we will first examine those pleadings and findings. To avoid confusion, we will adopt the suggestion of counsel for appellants and call the initial pleading in the mechanic's lien suit filed by Park Avenue Lumber & Supply Company (Park Avenue Lumber) the "complaint" and the initial pleading in the section 72 proceeding filed by defendant Hofverberg, Inc. the "petition," and we will refer to the final order in the mechanic's lien suit as the "decree," and to the final order in the section 72 proceeding as the "order." A third suit which has some pertinence to the issues was filed by Hofverberg, Inc. after the filing of the Park Avenue Lumber suit, but before the decree entered therein.


The complaint in the mechanic's lien suit filed by Park Avenue Lumber sought to establish a mechanic's lien for $3,848.01 for lumber supplied and services performed in connection with the construction of certain buildings on land held in trust by defendant Exchange National Bank of Chicago (Exchange Bank). Additional defendants to that suit were the Marshall Savings & Loan Association as mortgagee, Morton Shapiro and Sidney Boyansky, co-partners doing business as Morton Management Company, Nils A. Hofverberg, Inc., the appellee, and a number of other defendants alleged to have had claims for mechanic's liens. This complaint averred that Exchange Bank as trustee had contracted with defendants Shapiro and Boyansky as general contractors for the construction of buildings and that the latter had in turn contracted with Hofverberg, Inc. for carpentry work and materials and with other claimants for other materials and services. Hofverberg, Inc., as subcontractor, placed orders with Park Avenue Lumber and with other claimants for work and materials. The complaint further averred that Hofverberg, Inc. contracted with it to supply lumber at a price of $3,848.01; that it furnished the lumber, and that the owner and/or contractors were indebted to Hofverberg, Inc. in excess of the amount due plaintiff when, on November 20, 1963, it served notice of lien on the owner. The prayer of the complaint asked that plaintiff be decreed to have a mechanic's lien on the premises, that a receiver be appointed, and that the defendant subcontractor (Hofverberg, Inc.) and/or the defendant owner be decreed to pay plaintiff the amount found due, and that in default of such payment, the premises be sold, and that plaintiff have other and further relief.


An answer was filed by the Exchange Bank and Marshall Savings & Loan Association, in which the Exchange bank as trustee alleged that it dealt with the property on direction of the beneficiaries and that it held a naked legal title, but could not exercise any dominion over the property. It admitted that Morton Management Co. was the general contractor, denied that Shapiro and Boyansky were beneficiaries of the trust, and alleged that it was advised, but had no direct knowledge, that Hofverberg, Inc. entered into a contract with Morton Management Co. to supply lumber and carpentry. So far as appears, there was no contest in the mechanic's lien suit.


The decree provided that Park Avenue Lumber should be paid the amount of the indebtedness due it, to-wit: $2,129.98; that it had a mechanic's lien for that amount, and that defendant Hofverberg, Inc., together with Morton Shapiro and Sidney Boyansky had defaulted for want of appearance and that the decree should be taken as confessed against them, and provided that Hofverberg, Inc. "should be barred from making any further claim in this or any further proceeding for any alleged mechanic's lien or mechanics' liens or for any claim for moneys alleged to be due by reason of furnishing any work, labor or material to the premises aforedescribed." (Emphasis added.) No execution for costs was served on Hofverberg, Inc., until after the thirty-day period had expired.


On March 4, 1965, Hofverberg, Inc. filed its petition in the section 72 proceeding, charging that the decree entered on December 30, 1964, in the mechanic's lien proceeding was improperly entered because the complaint in that cause sought no relief against the petitioner other than a money judgment; that it did not allege that Hofverberg, Inc. claimed any interest either by mechanic's lien or otherwise; that Hofverberg, Inc. had never been served with or had any notice of counterclaims filed; that all the counterclaims were dismissed before the entry of the decree; that the decree undertook to bar Hofverberg, Inc., from claims against Shapiro and Boyansky, notwithstanding the fact that both of them were defaulted in the same mechanic's lien suit for failure to appear or plead; that at the time the decree was entered, on December 30, 1964, there was pending in the same court a mechanic's lien foreclosure suit brought by Hofverberg, Inc. against Shapiro and Boyansky as general contractors; that defendants-appellants had been personally served with summons in that suit and were obliged to apprise the court of the pendency of the other litigation; that petitioner did not know or discover the facts until about February 11, 1965, when it was served with a notice of motion to dismiss the pending mechanic's lien action brought by it and to bar the petitioner from making any claim. It alleges it had a valid mechanic's lien in the sum of $77,000.

It should be noted that Exchange Bank denied having any interest in the property involved in the litigation, except as the holder of legal title to the real estate, and that Morton Shapiro and Sidney Boyansky were both defaulted. Thus, it would appear that the real parties in interest, that is, the owners of the beneficial interest, are not before the court. Counsel for the Exchange Bank also represented the general contractors Shapiro and Boyansky and while they appeared for the Exchange ...

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