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First Lien Co. v. Marquette National Bk.

OPINION FILED NOVEMBER 20, 1973.

FIRST LIEN CO., APPELLANT,

v.

THE MARQUETTE NATIONAL BANK OF CHICAGO ET AL., APPELLEES.



Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County; the Hon. Helen F. McGillicuddy, Judge, presiding.

MR. JUSTICE SCHAEFER DELIVERED THE OPINION OF THE COURT:

Rehearing denied January 29, 1974.

At a sale for delinquent taxes, the appellant, First Lien Co., purchased a parcel of real property which was sold for nonpayment of an installment of a special assessment, and at the appropriate time petitioned the circuit court of Cook County for an order directing the county clerk to issue a tax deed. The court denied the petition on the ground that Frank and Anna Petrauskas had not been given the notice required by sections 263 and 266 of the Revenue Act of 1939 (Ill. Rev. Stat. 1967, ch. 120, pars. 744, 747), and the appellate court affirmed (4 Ill. App.3d 517).

The property in question consists of a lot at 3432 South Hamilton Avenue, Chicago, which is improved with a two-flat building. Title was held by Marquette National Bank, as trustee. When the land trust was created in 1960, the entire beneficial interest was in Anna Petrauskas during her lifetime, and was to go to Frank Petrauskas, her husband, on her death. The trust agreement provided that the name of the beneficiary was not to be disclosed to the public. On January 2, 1968, the entire beneficial interest was assigned to Charles Petrauskas, the son of Frank and Anna, who lived in California. Frank and Anna managed the premises as agent for Charles, collected the rents, and made the monthly mortgage payments.

Chicago Savings and Loan Association held a mortgage on the property, executed by the trustee. Frank and Anna Petrauskas had guaranteed payment of the mortgage note, but that fact did not appear of record. The property was also subject to a junior encumbrance evidenced by a trust deed to William Sebastian, as trustee, to secure the payment of $600. This trust deed was also executed by the Marquette National Bank, as trustee.

On April 20, 1966, First Lien Co. purchased for $84.54 a delinquent first installment of a special assessment levied on the premises in question. Thereafter, First Lien Co. extended the period of redemption to January 10, 1969. On August 19, 1968, First Lien Co. filed in the circuit court of Cook County a petition for an order directing the county clerk to issue a tax deed.

Section 5 of article IX of the 1870 constitution provided:

"The right of redemption from all sales of real estate for the nonpayment of taxes or special assessments of any character whatever, shall exist in favor of owners and persons interested in such real estate, for a period of not less than two years from such sales thereof. And the general assembly shall provide by law for reasonable notice to be given to the owners or parties interested, by publication or otherwise, of the fact of the sale of the property for such taxes or assessments, and when the time of redemption shall expire: Provided, that occupants shall in all cases be served with personal notice before the time of redemption expires."

Section 263 of the Revenue Act provided in part:

"* * * Such purchaser [of real estate sold for nonpayment of general taxes or special assessments] * * * shall serve, or cause to be served, notice of such purchase, not less than 3 months prior to the date when the time of redemption, or extended time of redemption as hereinafter provided shall expire, upon the following persons: upon occupants or persons in actual possession of such real estate; upon the person in whose name the real estate was last assessed for general taxes, if, upon diligent inquiry, he or she can be found in the county; and upon the owners of or parties interested in such real estate, including trustees and mortgagees of record, if they can upon diligent inquiry be found in the county." Ill. Rev. Stat. 1967, ch. 120, par. 744.

Section 266 of the Revenue Act provided in part:

"* * * Notice of the fact of filing the petition and the date on which the petitioner intends to make application for an order on the petition that a deed issue if the real estate is not redeemed from the sale shall be given to occupants, owners and persons interested in the real estate in the same manner as provided in Section 263, * * * The purchaser or his assignee may, if he desires, insert in the notice or notices required by Section 263 the fact of filing the petition for a tax deed and the date on which he intends to apply in the circuit court * * *, in which case the notice provided by this Section shall not be required." Ill. Rev. Stat. 1967, ch. 120, par. 747.

First Lien Co. adopted the latter procedure.

First Lien Co. contends that the circuit court erred in holding that "Frank Petrauskas and Anna Petrauskas are interested parties in the real estate and entitled to notice in accordance with the provisions of Sections 263 and 266 of the Illinois Revenue Act." The appellate court took the position that this contention had not been made at trial and was therefore not available on appeal, saying: "It is evident that respondents would be prejudiced if First Lien Co. were not required to adhere to the theory on which the case was heard in the trial court. [Citation.] For example, had the contention now made in this court been made in the trial court and fully litigated, respondents may have been able to show that ...


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