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City of Chicago v. General Realty Corp.

JULY 14, 1971.




APPEAL from the Circuit Court of Cook County; the Hon. RICHARD A. NAPOLITANO, Judge, presiding.


Rehearing denied September 9, 1971.

This is an appeal from an order of the Circuit Court of Cook County entered May 26, 1969, placing an earlier demolition decree entered February 28, 1969, in full force and effect.

The property involved here was a three-story brick building containing 23 dwelling units and five stores, located at 1153-57 North Spaulding and 3253-59 West Division Street in the City of Chicago. On May 3, 1968, the building was investigated by a City building investigator, and on the basis of this investigation a complaint was filed by the City on June 19, 1968. The complaint alleged several violations of the Municipal Code of Chicago: (1) need for repair of walls and ceilings of the basement and second floor bathroom, (2) loose or broken plaster on ceilings and sidewalls in all apartments, (3) broken, missing and defective window panes, (4) basement units with inadequate separation from other parts of the building, substandard partitions and inadequate light and ventilation, (5) rats and unsealed rat holes, (6) no adequate garbage and refuse containers, and (1) accumulation of refuse and debris in basement and rear yard. The complaint was later amended to add defective porches as a violation. Count 2 of the complaint provides in part:

"That Sidney D. Smith, the duly appointed Commissioner of Buildings for the City of Chicago, has determined said building to be dangerous and unsafe or uncompleted and abandoned."

To determine the ownership of the building the City conducted a title search, which disclosed three names: General Realty, Chicago Title & Trust Company, and Al Abraham. The title search also showed that the 1966 taxes were paid by General Realty Corporation but the tax bills went to Al Abraham. On June 25, 1968, service was made on Chicago Title & Trust Company, but General Realty could not be found and Al Abraham had moved.

In April, 1968, General Realty had sold its interest in the property to the First National Bank of Blue Island. However, this transaction was not recorded in the tract book until August 28, 1968. The First National Bank of Blue Island held the title in a trust for Robert A. King, who was named as beneficiary, but the real beneficial owner was J. Edward Jones, who used King as his nominee. As of August 1, 1968, the deed in favor of King and Jones had not been recorded.

The summons was returnable on July 16, 1968, and on that date a hearing was held at which a City building inspector who had investigated the property testified the building contained the violations specified in the complaint. The court concluded the dangerous conditions on the property constituted an emergency, and the court thereupon appointed Number 2 Chicago Dwellings Association as receiver, to vacate the premises.

There was a hearing on August 1, 1968, at which all the parties were present, including King and Jones; first mortgagee, La Salle National Bank; and second mortgagee, Charles Kraut. The court noted the alleged violations were mainly "housekeeping items," but there was testimony the peeling paint, falling plaster, rats, and other violations created an emergency situation which justified the appointment of the receiver, especially since there were many children living there.

At the numerous hearings which followed, the court heard testimony from the tenants and the Department of Public Aid to allow the tenants to remain and to see that the building was repaired. At a hearing on August 30, 1968, the attorney representing Jones claimed a licensed contractor had agreed to put the building in compliance with the building ordinances for $5,375. This cost included repair of the porches, plastering, painting and electrical work.

The new first mortgage holder, North American Company for Life & Health Insurance, informed the court it would forego filing a petition for foreclosure for "two or three weeks" to allow Jones a chance to raise the money for the repairs.

At the September 26 hearing, North American told the court the contemplated repairs had not been done yet. The court suggested North American file a petition to foreclose so that a foreclosure receiver could be appointed to manage the property. The court then discharged the Chicago Dwellings Association as receiver for the property and continued the case, but did not set a specific date for the next hearing.

A chancellor, presiding over the foreclosure proceedings, appointed a new receiver, Tully Trainor, who took possession of the property. The first mortgage holder subsequently advanced approximately $3,200 for the repair of the porches and additional money for other repairs to maintain the building. At a hearing in the demolition court on February 21, 1969, a City inspector testified that three or four apartments had been rented out in violation of a court order. These apartments were among those in a deteriorated condition, and among the new renters were families with several children.

At the same hearing the inspector was asked whether there had been any progress during the period of proceedings since June of 1968:

"A. In regards to work in progress; at one time they had a couple of carpenters repairing the rear porches, and I would say that ...

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