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Peo. Ex Rel. Knight v. O'brien

OPINION FILED JULY 11, 1969.

THE PEOPLE EX REL. JOSEPH E. KNIGHT, PETITIONER,

v.

DONALD J. O'BRIEN, JUDGE, RESPONDENT.



ORIGINAL PETITION for mandamus.

PER CURIAM:

Joseph E. Knight, statutory receiver for liquidation of Apollo Savings & Loan Association, has filed this original petition for writ of mandamus to require the respondent, the Honorable Donald J. O'Brien, Judge of the Circuit Court of Cook County, to authorize certain transactions respecting the receivership properties, presented to that court by Albert E. Jenner, Jr., as counsel retained by the receiver.

The essential issue presented by the petition for writ of mandamus is whether a receiver, appointed by the Commissioner of Savings and Loan Associations, pursuant to the Illinois Savings and Loan Act, to liquidate such an association, has authority to select legal counsel in connection with the discharge of his statutory duties, or whether the selection and appointment of the receiver's counsel rests exclusively with the circuit court.

The facts are not in dispute. On April 26, 1968, pursuant to the Illinois Savings and Loan Act (Ill. Rev. Stat. 1967, chap. 32, par. 921), hereinafter referred to as the Act, the Commissioner of Savings and Loan Associations, Justin Hulman, appointed Joseph E. Knight as statutory receiver, to take custody of and to liquidate Apollo Savings. On the same day, the statutory receiver, with the approval of Commissioner Hulman, retained Albert E. Jenner, Jr., as attorney for the receiver.

On May 2, 1968, the Attorney General, at the request of Commissioner Hulman, as provided in section 10-2 of the Act, filed a statutory complaint for the liquidation and dissolution of Apollo Savings, and for an injunction against its officers and directors, enjoining its continued operation.

On May 3, 1968, the Honorable Donald J. O'Brien, to whom the cause was assigned, entered a decree ordering the liquidation of Apollo Savings, and directing that the receiver, Joseph E. Knight, take custody and control of its assets and records for the purpose of liquidating the Association. The decree also authorized that an injunction issue as requested, and provided that the court retain jurisdiction "for the purpose of granting such other and further relief * * * as said receiver * * * may require and in the judgment of the Court merit."

At that hearing, the respondent Judge commented — although the issue was not involved — that in his opinion neither the statutory receiver nor the Commissioner of Savings and Loan Associations had authority to choose and retain counsel for the receiver, inasmuch as that function was within the exclusive power of the court.

On May 14, 1968, Albert E. Jenner, Jr., as attorney for the receiver, presented to the respondent Judge a petition for authorization to complete two mortgage loans which Apollo Savings had committed itself to make prior to the receivership, alleging that such action was necessary to conserve the receivership estate, since the Chicago Title & Trust Company would not issue title guarantee policies to the receiver without court approval of the transactions.

The respondent Judge, however, refused to hear or determine that petition, or to even rule whether the petition was deemed filed, denied or dismissed, on the ground that Jenner had no authority to act as attorney for the statutory receiver, Joseph E. Knight, because Jenner had not been chosen by respondent.

Thereupon, the statutory receiver, Joseph E. Knight, by his attorney, Albert E. Jenner, Jr., filed in this court, a motion for leave to file a petition for writ of mandamus and for certain other relief in the interest of expediting a hearing on the merits of the mandamus petition at the May term. We granted the motion on May 22, 1968.

The petition for writ of mandamus sets forth the foregoing sequence of events. In addition, it recites the details and urgency of the two mortgage transactions involved in the petition presented on May 14, 1968, and the further facts that the receiver (referred to therein as "the relator") has numerous urgent legal problems in connection with the receivership estate of over 21,000 separate accounts and assets in excess of $84,000,000, which require the day-to-day advice of counsel. A partial list describing some of the matters confronting the receivership and requiring legal services is enumerated in the affidavit of the receiver, which is attached to the petition for writ of mandamus along with other exhibits, including the transcript of the proceedings on May 14.

The petition for writ of mandamus also asserts that respondent's refusal to consider matters presented on behalf of the receiver by his attorney on the ground that the receiver, rather than the court, had chosen the attorney, constitutes a failure on the part of the respondent Judge to perform his judicial duties and an arbitrary interference with the conduct of the receivership. This interference with the discharge of the receiver's duties by depriving him of counsel of his own choosing and refusing to recognize his counsel, it is alleged, will also subject innocent third parties to undue hardship. That situation will continue until this court determines this mandamus proceeding.

The mandamus petition also alludes to similar conduct by another judge to whom the Lawn Savings & Loan Association receivership has been assigned, and asserts that the refusal by that judge to recognize relator's choice of counsel impairs relator's discharge of his duties as statutory receiver of that association.

The petition thereupon requests this court to issue its writ of mandamus directing the respondent, the Honorable Donald J. O'Brien, as judge of the circuit court, to hear and determine, upon presentation by the attorney chosen and retained by the statutory receiver, not only the petition for authorization to complete certain mortgage loans, submitted on May 14, ...


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