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Lesser v. Village of Mundelein

OPINION FILED DECEMBER 22, 1975.

HERBERT LESSER ET AL., PLAINTIFFS-APPELLANTS,

v.

THE VILLAGE OF MUNDELEIN, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Lake County; the Hon. HARRY D. STROUSE, JR., Judge, presiding.

MR. JUSTICE DIXON DELIVERED THE OPINION OF THE COURT:

Rehearing denied April 5, 1976.

Plaintiffs brought this action in the Circuit Court of Lake County against the Village of Mundelein. The action sought an accounting and damages with respect to funds received by the Village from special assessments. The plaintiffs are the owners of special assessment bonds issued by the Village in anticipation of the receipt of proceeds of special assessments. The trial court entered summary judgment in favor of the defendant Village and it is from such judgment that the plaintiffs have appealed.

During the years 1924 et seq., the Village of Mundelein issued special assessment bonds payable out of special assessments levied for local improvements. The bonds were payable in yearly installments together with interest over a period of 10 years. The plaintiffs are the holders of the bonds and interest coupons. The complaint alleges numerous violations of its duties by the Village as trustee including commingling of funds, etc. This gist of the complaint is that the Village, after collecting and receiving payments of the special assessments, did not distribute the same according to law in that the Village failed to pay plaintiffs their share of the collections. The action sought declaration of existence of an express trust and an accounting to determine whether the trustee had defaulted in its obligations.

Defendants filed a motion for summary judgment setting forth the allegations of paragraphs 11 and 13 of the complaint and attaching a deposition of plaintiff Lesser. Paragraph 11 alleges that beginning with the year 1924 and continuing to date the defendant collected moneys on each installment of the special assessments involved. Paragraph 13 alleges that upon an accounting it will be found that the Village has failed and refused to pay upon said bonds their distributive shares in violation of the duties imposed upon the Village as trustee of the funds, although said bonds have been presented for payment as they became due.

The deposition of plaintiff attached to defendants' motion contains no admission that the Village refused to pay the sums collected to the knowledge of the bondholders. It shows that inquiries directed to the municipality did not elicit responses of refusal but merely responses of no funds available for payment. Late in 1968 a second letter from the Village stated that there would be no further payment on the bonds, that final payment had been made.

This second letter in 1968 from the Village might be interpreted to be a repudiation of the trust but the original complaint was filed in July 1969 and the first amended complaint of plaintiffs was filed February 3, 1970, well within any limitation period.

The prayer of the motion requested that the court find that the action was barred by the 5-year statute of limitations. The theory apparently of the motion is that the trust was repudiated.

Plaintiffs filed a brief in opposition to the motion setting forth their theory of active express trust, the requirements of repudiation and an analysis of paragraphs 11 and 13 of the complaint pointing out that there was no admission of knowledge of repudiation and pointing out that the Village by its sworn answer to the complaint had stated that it did not have knowledge or information of the facts alleged in paragraphs 11 and 13.

The trial court found that the statute of limitations applied as to all funds collected prior to July 15, 1964, and allowed the motion for summary judgment in that respect but gave leave to plaintiffs to file, and they filed, a second amended complaint (verified), which in paragraph 13 alleged that from Exhibit "A" attached it would be found that the Village from time to time had made partial payments; that plaintiffs had from time to time made inquiries of the Village and that in response the Village did on occasion pay over some money, and that the Village had advised the plaintiffs from time to time that no money was available. The court did not consider this second amended complaint.

• 1 It is well settled that a municipality is by statute a trustee with respect to the levy, collection and disbursement of special assessment funds. (Rothschild v. Village of Calumet Park, 350 Ill. 330; Kay v. Village of Palatine, 126 Ill. App.2d 308, 312; 9 Ill. L.&Pr. Cities, Villages etc. § 978 (1954); 10 Ill. L.&Pr. Cities, Villages etc. §§ 1521, 1522, 1531 (1955).) And further that by virtue of the Local Improvement Act the trust is an express trust because the statute places the duty on the municipality to hold the money for a specified purpose. Schreiner v. City of Chicago, 406 Ill. 75, 90.

• 2 Generally, an action to enforce an express trust is not barred by a mere lapse of time, at least where the trustee has not repudiated, disavowed or acted in hostility to the trust under such circumstances that the cestui que trust has, or should have, knowledge of such improper conduct on his part. 35 Ill. L&Pr. Trusts § 231 (1958).

A motion for summary judgment should be granted where there is no genuine issue as to any material fact. The court is to determine the existence or absence of a genuine issue as to any material fact from the affidavits, depositions, admissions, exhibits and pleadings in the case. Pleadings may constitute admissions or be statements of fact, especially where verified.

• 3 Does the allegation "that upon an accounting it will be found that the Village has refused to pay upon such bonds their distributive shares in violation of the duties imposed upon the Village as trustee, although said bonds have been presented for payment as they became due," amount to a binding admission that the ...


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