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In Re Application of County Treasurer

JUNE 6, 1969.

IN THE MATTER OF THE APPLICATION OF THE COUNTY TREASURER AND EX OFFICIO COUNTY COLLECTOR OF COOK COUNTY, ILLINOIS, FOR JUDGMENT AND ORDER OF SALE AGAINST REAL ESTATE RETURNED DELINQUENT FOR NONPAYMENT OF GENERAL TAXES FOR THE YEAR 1962 AND PRIOR YEARS. PETITION OF WILLIAM B. LEVY, TRUSTEE, FOR A TAX DEED. FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, A CORPORATION ORGANIZED UNDER THE LAWS OF THE UNITED STATES, PETITIONER-APPELLANT,

v.

WILLIAM B. LEVY, TRUSTEE, RESPONDENT-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. DANIEL J. McNAMARA, Judge, presiding. Reversed and remanded with directions.

ALLOY, J.

Rehearing denied July 3, 1969.

The record in this case indicates that Second Federal Savings and Loan Association of Chicago held a mortgage on certain real estate in Cook County. This mortgage was assigned by Second Federal to Federal Savings and Loan Insurance Corporation, a United States corporation. Prior to such assignment, the owner of the property had failed to pay the 1962 real estate taxes on the lots. On January 17, 1964, the 1962 Judgment, and Sale, Forfeiture and Redemption Record were filed in the Cook County Circuit Court and an order was entered directing a sale of all delinquent property. The tax sale was held on March 4, 1964, and Interstate Bond Company purchased the two lots and the certificates of purchase were issued to Interstate. Thereafter, Interstate paid the 1964, 1965, and 1966 taxes on the lots. The period of redemption, normally two years, was extended by Interstate until November 30, 1966. As noted, the assignment of the mortgage to the Federal Insurance Corporation was made after the tax sale on March 4, 1964, on July 16 of that same year. Following the assignment, the Federal Insurance Corporation foreclosed its mortgage and obtained a Master's Deed to the lots on April 29, 1966.

A few months later, on July 1, 1966, Interstate Bond filed petitions for Tax Deeds. Notice of such petitions was personally served on LaSalle National Bank as the party in whose name the real estate was last assessed for general taxes. It had no interest in the property at the time. Personal service was also made upon the occupant of the property, a Melvin Katz. Notice was also served on Federal Savings and Loan Insurance Corporation by service on one Janice Bell, an employee of Federal Savings and Loan Insurance Corporation, at its Chicago office at 7666 West 63rd Street, Summit, Illinois. Janice Bell made an investigation in her office to determine what interest the corporation had in these lots. The office in which Janice Bell was located only handled certain property and was not handling the particular property involved. Following her investigation in her own office, she returned the notice to Interstate Bond indicating her office had no record of any interest in the lots. The Washington, D.C. office of Federal Insurance Corporation was actually handling the property and had hired Second Federal Savings and Loan Association of Chicago to manage the property, which was improved with a garage-type building. The Summit, Illinois, office of the Federal Insurance Corporation, which was the only office of the corporation listed in the Chicago telephone book, had no information on the lots since it was not managing such real estate.

A federal statute creating the Federal Savings and Loan Insurance Corporation provided as follows:

"§ 1725. Creation of Federal Savings and Loan Insurance Corporation.

"(c) On June 27, 1934, the Corporation shall become a body corporate, and shall be an instrumentality of the United States, and as such shall have power —

"(1) To adopt and use a corporate seal.

"(2) To have succession until dissolved by Act of Congress.

"(3) To make contracts.

"(4) To sue and be sued, complain and defend, in any court of competent jurisdiction in the United States or its Territories or possessions or the Commonwealth of Puerto Rico, and may be served by serving a copy of process on any of its agents or any agent of the Federal Home Loan Bank Board and mailing a copy of such process by registered mail or by certified mail to the Corporation at Washington, District of Columbia." (Emphasis ours.)

The parties stipulated that no copy of any process was mailed to the Federal Insurance Corporation in Washington, D.C. No notice of any kind was served on Second Federal Savings and Loan Association of Chicago, as apparently Interstate Bond had no knowledge that it was involved in the management of the property for Federal Insurance Corporation. On December 7, 1966, the trial court entered an order directing the County Clerk to issue Tax Deeds to William B. Levy, Trustee, the assignee of Interstate Bond Company. The order contained a recital of a standard provision:

"5. That all notice as required by law has been given and petitioner, William B. Levy, Trustee, has complied with all the provisions of law entitling it to a tax deed to said parcel of real estate."

Thereafter, on April 5, 1967, Federal Insurance Corporation filed a petition under section 72 of the Civil Practice Act (1967 Ill Rev Stats, c 110, § 72). The action was filed to set aside the tax deeds issued pursuant to the order of December 7, 1966. It was alleged that the failure to mail the copy of process to the Washington, D.C. office of the Federal Insurance Corporation, made the proceedings void and deprived the trial court of jurisdiction to enter its order of December 7, 1966, and that the court should exercise its equitable jurisdiction in setting aside such order and granting relief to petitioner. The facts were stipulated by the parties hereto. The trial court denied the petitions to set aside the tax deeds and the Federal Insurance Corporation has appealed to this Court asserting that such relief should have been granted pursuant to the petitions filed under section 72 of the Civil Practice Act ...


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