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Rago v. Cosmopolitan Nat. Bank

NOVEMBER 10, 1967.

IRENE RAGO, AS ADMINISTRATOR OF THE ESTATE OF JOSEPH L. RAGO, DECEASED, PLAINTIFF-APPELLANT, CROSS-DEFENDANT-APPELLEE,

v.

COSMOPOLITAN NATIONAL BANK, AS TRUSTEE, CHICAGO TITLE & TRUST COMPANY, AS TRUSTEE, ROBERTA E. DALE, JOHN R. WINTERBOTHAM, AS TRUSTEE, AND UNKNOWN OWNERS, DEFENDANTS-APPELLEES, ROBERTA E. DALE, CROSS-PLAINTIFF-APPELLANT.



Appeal from the Circuit Court of Cook County; the Hon. WALKER BUTLER, Judge, presiding. Affirmed in part, reversed in part and remanded with directions to proceed in a manner not inconsistent with this opinion.

MR. PRESIDING JUSTICE LYONS DELIVERED THE OPINION OF THE COURT.

This was an action in equity to foreclose a junior mortgage brought by plaintiff, Irene Rago as administratrix of the estate of the decedent-mortgagee, Joseph Rago, her husband, wherein the mortgagor and principal defendant, Roberta Dale, filed a cross-complaint to have her promissory note, together with the mortgage securing it, declared void and removed as a cloud upon title. Defendant, Roberta Dale, was the beneficial owner of the encumbered premises, an apartment building located at 2128 North Cleveland Avenue in the City of Chicago, pursuant to a land trust agreement with the defendant, Cosmopolitan National Bank under Trust No. 10143.

Plaintiff appeals from that portion of the decree which overruled her exceptions to the Master's Reports dismissing the foreclosure for want of equity, which granted the prayer of defendant's cross-complaint, and which assessed certain costs and fees against plaintiff. It is the theory of plaintiff's case: (1) that defendant failed to rebut plaintiff's prima facie case under the applicable provisions of the Uniform Commercial Code, and (2) that the Chancellor erred in assessing improper as well as excessive elements of costs against plaintiff.

Defendant cross-appeals from that portion of the same decree which assessed one-half of the Master's fee ($600) against her. Relative to plaintiff's appeal, it is the theory of defendant's case: (1) that the evidence offered manifestly supports the decree entered, and (2) that the charges assessed plaintiff for attorney's, trustee's and court reporter's fees were reasonable in amount and proper. As to her separate cross-appeal, it is defendant's theory that the Chancellor erred in assessing one-half of the Master's fee against her.

No questions are raised on the pleadings. Save the errors assigned to the assessment of costs and fees, the pivotal issue involved in this appeal is, essentially, whether or not defendant has proven a failure of consideration for the junior trust deed. The facts as they pertain to that single question will be limited accordingly.

The extent of the evidence offered by plaintiff in support of her contentions before the Master consisted of Plaintiff's Exhibits 1 through 5 inclusive. Exhibit 4 is a letter of direction, dated November 7, 1962, authorizing Cosmopolitan, as trustee, to sign the installment note and subject trust deed, with an attached receipt for said documents' delivery, all bearing defendant's signature. Exhibit 3 is the trust agreement with Cosmopolitan, dated August 23, 1960, which designates defendant as the sole beneficiary thereof. Exhibits 1 and 2 are the junior trust deed and installment note respectively, both of which are dated November 7, 1962, and made payable to bearer in the principal sum of $22,000. The mortgage and note recite that the first payment thereunder was due on January 1, 1963.

Plaintiff testified that she had first become cognizant of the note and mortgage about a month after the mortgagee's death on January 16, 1964, but admitted, on cross-examination, that she did not know whether the decedent had paid any money for the mortgage. Thereupon, plaintiff rested her case.

Defendant admits execution of the mortgage and note by and through Cosmopolitan. She alleges, however, that both instruments are null and void for failure of consideration. In support of that contention by defendant, the following testimony was offered.

John Iacono, the attorney who had prepared the trust deed and note in behalf of the decedent, Joseph Rago, testified that after he had delivered the instruments in their final form to his client, he had never been requested to collect any payments thereunder.

Phillip Dindia testified to having known both the decedent and the defendant for several years. He stated his relationship with the two stemmed primarily from periodic social engagements he and his wife would share with the decedent and defendant, whom the witness stated were having a love affair. Dindia acknowledged that he had been aware of the mortgage between the two, and that he had understood it had been intended to finance some remodeling work in defendant's multidwelling apartment building. Defendant, in this conjunction, offered into evidence Defendant's Exhibit 2, a set of plans for the proposed renovation. Thereafter, Dindia testified to certain remarks made by the decedent-mortgagee in response to Dindia's inquiries regarding the mortgage.

These conversations were alleged to have taken place in May and December of 1963, at which times the decedent is purported to have said:

"Phil, I am afraid of losing Bobbie (the defendant). Her and I aren't getting along too well, . . . . I created the mortgage scheme or bit, . . . in order to hold some sort of clout or object ...


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