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In Re Application of County Collector





APPEAL from the Circuit Court of Cook County; the Hon. LAWRENCE I. GENESEN, Judge, presiding.


This is an appeal from an order which granted the motion of respondent-appellee, Sidney R. Olsen, Cook County registrar of titles, to strike and dismiss the petition of Jaci L. Burdash, appellant, for a rule to show cause why Olsen should not be held in contempt of court for refusing to comply with the provisions of a certain tax deed order. The tax deed order directed the registrar to issue a new owner's certificate of title to the subject property to appellant Burdash. The registrar refused to do so on grounds that Cook County had acquired an interest in the subject property by way of a prior condemnation proceeding.

On March 20, 1967, the County of Cook filed a petition to condemn the subject property for use in construction of the West Leg of the Dan Ryan Expressway, also known as Interstate Route No. 57. The property had been registered under the Torrens System, the registered certificate of title showing Margaret Talcott to be the owner. The court found just compensation for the taking of fee simple title to the premises to be $53,245. Judgment to that effect was entered on September 15, 1967, and on October 4, 1967, the award was duly deposited with the Cook County Treasurer.

However, no document indicating the pendency or completion of the condemnation proceeding was filed with the registrar of titles or memorialized on the certificate of title. The property continued to be assessed for taxes, which went unpaid. No objection to these assessments was made, and no exemption certificate was filed with the assessor's office. In December, 1970, pursuant to the county collector's application, a judgment and order of sale was entered against the property for the 1969 general taxes. The property was purchased for those taxes at a public sale on February 23, 1971, by Interstate Bond Company (hereinafter Interstate), petitioner-appellant Burdash's predecessor in title. The certificate of purchase was registered on January 13, 1972.

Interstate filed a petition for a tax deed order on July 9, 1973. On the day the extended redemption period expired, November 23, 1973, Interstate assigned for value its certificate of purchase to petitioner-appellant Burdash (hereinafter appellant). Appellant paid the general taxes due for 1970, 1971, and 1972. Interstate filed its application for an order on the petition on December 3, 1973, and appellant was substituted as petitioner of record. An affidavit with supporting exhibits, dated November 23, 1973 and attached to the application, recited that the property was "unimproved" and unoccupied, that a search of the appropriate records in the office of the recorder of deeds and clerk of the circuit court had revealed Margaret Talcott to be the sole owner, and that all notices required by law had been given to interested parties, including Margaret Talcott and Sidney R. Olsen, registrar of titles. However, at a hearing on the application for a tax deed order, on February 8, 1974, Allan Blair, counsel for appellant, testified that he knew that the subject property had been in use as part of Interstate Route No. 57 since the summer of 1973. Nevertheless, on May 15, 1974, an order was entered, in amended form, directing the issuance of a tax deed and a new certificate of title in appellant's name. In August 1974, appellant presented a tax deed to the property, together with other necessary documents, at the office of the registrar of titles. The registrar refused to complete the transfer of title, informing appellant that Cook County had acquired an interest in the land by virtue of a prior condemnation proceeding.

Appellant filed a petition for a rule to show cause why the registrar should not be held in contempt of court for his refusal to comply with the terms of the tax deed order. The registrar filed a motion to strike and dismiss appellant's petition, arguing that the subject property had become exempt from taxation by virtue of its condemnation and subsequent use as a public highway, that the judgment and order of sale, being thus rendered against exempt property, was void, and that the tax deed order based on that judgment was therefore also void and subject to collateral attack. In her answer to the motion to strike and dismiss, appellant argued that Cook County had acquired no interest in the subject property by way of the condemnation, that even if it had so acquired any such interest the property remained subject to taxation at all times, and that, in any case, the fact that the property had remained subject to taxation had been conclusively determined and could not be relitigated by the registrar. The court granted the motion to strike and dismiss, finding that "* * * the completion of the eminent domain proceeding terminates the right of a tax deed buyer to receive a deed." Further, the court vacated its earlier tax deed order and set aside the tax sale as a sale in error, pursuant to section 260 of the Revenue Act (Ill. Rev. Stat. 1973, ch. 120, par. 741), ordering that all tax payments made by the appellant be refunded.

• 1 The first issue on appeal is whether, by way of its condemnation and subsequent use for a public highway, the subject property was rendered exempt from taxation in 1969. Pursuant to the authority granted in the Illinois Constitution (Ill. Const. 1870, art. IX, § 3) the legislature, by enacting the various subsections of section 19 of the Revenue Act (Ill. Rev. Stat. 1967, ch. 120, par. 500 et seq.) has exempted certain types of property from taxation. The specific provision herein relevant, section 19.9 (Ill. Rev. Stat. 1967, ch. 120, par. 500.9) exempts "All market houses, public squares and other public grounds owned by a municipal corporation and used exclusively for public purposes * * *." The term "municipal corporation" as used here includes counties. (Perkins v. Board of County Commissioners (1916), 271 Ill. 449, 111 N.E. 580.) We find that the requirements of ownership by a municipal corporation and exclusive use for public purposes were satisfied, and that accordingly the property was exempt from taxation under section 19.9 of the Revenue Act.

As regards the ownership of the subject property by a municipal corporation, the relevant facts appear in the record and are not disputed. Rather, we are presented with the purely legal issues of what if any interest in the property was obtained by the county through the condemnation, and whether such interest was sufficient to render the property "owned by a municipal corporation" for purposes of the exempting statute.

• 2 Appellant contends that the county acquired no interest whatsoever in the subject property by way of the condemnation. We recognize that the Torrens Act (Ill. Rev. Stat. 1967, ch. 30, par. 45 et seq.) controls essentially all dealings with registered lands. (People v. Mortenson (1949), 404 Ill. 107, 88 N.E.2d 35; Ill. Rev. Stat. 1967, ch. 30, par. 90.) Further, it is clear in the present case that there was no compliance with the specific provisions of the Act regarding the transfer of title following a condemnation. Section 58a of the Torrens Act (Ill. Rev. Stat. 1967, ch. 30, par. 102.1) indicates that such transfer is complete when, after a certified copy of the order determining just compensation and proof of payment or deposit of the award are filed with the Registrar, a new owner's certificate of title is issued to the condemnor. (See Ill. Rev. Stat. 1967, ch. 30, pars. 93, 98.) There was, then, no full transfer of title as contemplated by the Torrens Act. However, we find that the taking by condemnation, in all other respects complete, effectively transferred equitable title to the county.

• 3 The question of the effect of an unregistered condemnation is not specifically dealt with in the Torrens Act. Appellant contends that section 85 of the Act (Ill. Rev. Stat. 1967, ch. 30, par. 122) renders the condemnation a complete nullity. Section 85 provides that "No judgment or decree or order of any court shall be a lien upon or affect registered land * * *" until it is properly memorialized. We find this section, however, to be inapplicable to the present case. In a condemnation proceeding, the final judgment of the court does not amount to or directly result in a transfer of title, even as to unregistered land, nor does the judgment itself "affect" the land in any real sense. The judgment merely establishes that compensation which must be paid should the condemnor then determine to exercise its statutory or constitutional right to take the property. (See County of Cook v. Malysa (1968), 39 Ill.2d 376, 235 N.E.2d 598.) Only when the award of compensation is paid or properly deposited for payment does title, relating back to the time of the petition to condemn, vest in the condemnor. (Board of Junior College District 504 v. Carey (1969), 43 Ill.2d 82, 250 N.E.2d 644; Chicago Park District v. Downey Coal Co. (1953), 1 Ill.2d 54, 115 N.E.2d 223.) Section 85 of the Revenue Act, having reference only to rights or interests in registered land arising as a direct result of a court order, judgment, or decree, has no relevance in the context of a condemnation.

• 4 We think that the effect of an unregistered condemnation is instead indicated by section 54 of the Torrens Act (Ill. Rev. Stat. 1967, ch. 30, par. 98). Analysis of the language of section 54 as well as the overall structure and purpose of the Torrens Act supports this conclusion. Section 54 provides that any "deed, mortgage, lease or other instrument purporting to convey, transfer, mortgage, lease, charge or otherwise deal with registered land * * * shall take effect * * * by way of contract, between the parties thereto * * *" unless and until it is duly registered. Thus, it has been held that a properly executed and delivered deed to Torrens property will effectively convey equitable title even if it is not registered. (Kostelny v. Peterson (1960), 19 Ill.2d 480, 167 N.E.2d 203.) Section 54 lies in that portion of the Torrens Act entitled "Transfers and Charges," and by its language clearly purports to deal generally with all such transfers and charges. A condemnation is certainly viewed as involving a "transfer" of land, since section 58(a), dealing with title passage by condemnation, is also found in the "Transfers and Charges" portion of the Act. Hence, it would appear that section 54 of the Torrens Act was intended to apply to transfers of property by condemnation.

• 5 Moreover, this interpretation of section 54 is most consistent with well-established principles regarding the basic policy and purpose of the Torrens Act. The Torrens Act is fundamentally designed for the protection of good faith purchasers, and judgment creditors, who do not advance funds in reliance on record title, do not in general enjoy an equal measure of protection. (Hooper v. Haas (1928), 332 Ill. 561, 164 N.E. 23; Echols v. Olsen (1976), 63 Ill.2d 270, 347 N.E.2d 720.) Recognition of equitable interests in all who in good faith purchase interests in registered land, by condemnation or otherwise, while denying the same benefit to unregistered judgment creditors, is then entirely consistent with the basic policy of the statute. We conclude that the proof of deposit of the condemnation award constitutes an "* * * instrument purporting to * * * deal with registered land * * *" within the meaning of section 54 of the Torrens Act, and that accordingly, equitable title passed to the county upon the deposit of the award despite the failure to register that document.

• 6 Further, we find that the equitable interest thus obtained by the county was sufficient to satisfy the requirement of ownership set forth in section 19.9 of the Revenue Act. On this point, appellant contends that section 19.9a of the Revenue Act (Ill. Rev. Stat. 1975, ch. 120, par. 500.9a) indicates a contrary legislative intent. Section 19.9a provides exemption for "All property that is being purchased by a governmental body under an installment contract pursuant to statutory authority and used exclusively for the public purposes of the governmental body." Appellant argues that this provision, by its very existence, implies that such installment contract purchases constitute the only case in which equitable title may be sufficient ownership for purposes of a tax exemption. We are, however, not persuaded by this contention. The thrust of section 19.9a is simply that where property is used exclusively for public purposes, tax exempt status is not to be denied simply on the basis that the public holds equitable but not legal title. As the court said in People ex rel. Williamson v. City of Toulon:

"By paragraph 9 of the same section [now Section 19.9 of the Revenue Act] `all market houses, public squares or other public grounds used exclusively for public purposes; * * *' shall be exempt from taxation. When interpreted in the light of the constitutional provision aforesaid, all of the foregoing property, to be exempt, must be owned by a ...

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