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In Re Estate of Ito





APPEAL from the Circuit Court of Cook County; the Hon. ANTHONY J. KOGUT, Judge, presiding.


This is an appeal from an order directing the executor of the estate of Kazuto Ito to pay $3,700 to respondent Chicago Title Insurance Co. (Title Co.) from the proceeds of the sale of certain real estate. The counsel general of Japan, appearing on behalf of Ito's devisees, appeals the order, contending that section 204 of the Probate Act (Ill. Rev. Stat. 1971, ch. 3, par. 204) bars the participation of the Title Co. in the distribution of inventory assets.

Ito's will provided that his real estate be sold by his executor as soon as possible after his death and that the funds be sent to the devisees in Japan. Should a sale of the land not be made within one year after his death, it was provided that the executor dispose of the same by auction.

Ito died on May 10, 1970, and on August 2, 1971, his will was admitted to probate and the person named in the will was appointed executor. On December 8, 1971, the trial court approved an inventory which included two parcels of real estate. On January 7, 1972, the executor petitioned the court for a private sale of the real estate. The petition recited that the land was encumbered with a recorded $3,700 demolition lien in favor of the city of Chicago, a $4,083.54 first mortgage, and an agreed real estate commission of $500. It also stated that Oscar Mayer Company had offered to purchase the real estate for $7,000, and it prayed that an appraisal by a James J. Maloney be adopted and the executor authorized to accept the offer to purchase. A sale was apparently consummated with Oscar Mayer, although the record fails to disclose any order entered authorizing the sale. Neither does the record reveal the terms of the sale, other than what may be inferred from the allegations contained in the executor's petition to sell.

On April 7, 1976, the executor petitioned for instructions from the court representing that the estate was ready for distribution and stating that a demolition lien was filed against the real estate in question; that the property was sold, pursuant to the order of court, but the lien was never paid; that no claim for said lien had been filed; and that the Title Co. had guaranteed the title to the purchaser and might have to satisfy the lien. In the petition, the executor requested instructions "as to whether he should make payment either to the City of Chicago to satisfy said lien, or to the Chicago Title & Trust Co. if they have made payment on said guarantee, or distribute the estate regardless of said pending claims." In reply, the Title Co. stated that the property had been sold pursuant to order of court and conveyed by an executor's deed dated February 16, 1972; that it had guaranteed title to the purchaser, Oscar Mayer; that when Oscar Mayer tendered to it the lien claim of the city of Chicago on April 19, 1974, it paid the amount of the lien to the city; that when the lien was released on May 2, 1972, the proceedings by the city to satisfy the lien were also dismissed; and that the estate was unjustly enriched by reason of its payment of the lien. It prayed for reimbursement from the assets of the estate. The counsel general responded that because neither the city of Chicago nor the Title Co. had filed a claim for satisfaction of the lien within seven months of the issuance of letters testamentary, the Title Co. was barred by section 204 of the Probate Act in the distribution of assets inventoried within the seven month period.

On June 7, 1976, the trial court found that the claim for lien "has never been filed against the estate and therefore is solely against the real estate involved" and that the executor "is authorized to distribute the proceeds of said estate * * *, and pay from the proceeds of the sale of the real estate the sum of $3,700 to the Chicago Title & Trust Company for sums paid to the City of Chicago." A motion to vacate was denied on June 16 with a finding of no just reason for delay of appeal.


• 1 The counsel general contends that the trial court erred in failing to bar the Title Co.'s claim, which he argues was mandated by section 204 of the Probate Act. At that time, this section provided in pertinent part:

"All claims against the estate of a decedent, except expenses of administration and surviving spouse's or child's award, not filed within 7 months *fn1 from the issuance of letters testamentary or of administration, are barred as to the estate which has been inventoried within 7 months from the issuance of letters." (Ill. Rev. Stat. 1971, ch. 3, par. 204.)

The Act defines the term claim as including "any cause of action." (Ill. Rev. Stat. 1971, ch. 3, par. 2(j).) A claim is not absolutely barred by failing to file it within the statutory period, but any right to participate in the distribution of inventoried assets is lost. (Messenger v. Rutherford (1967), 80 Ill. App.2d 25, 225 N.E.2d 94.) No exceptions to section 204 may be engrafted upon it by judicial decision (Pratt v. Baker (1964), 48 Ill. App.2d 442, 199 N.E.2d 307, cert. denied (1967), 389 U.S. 874, 19 L.Ed.2d 157, 88 S.Ct. 165), and its application may neither be waived nor may the doctrine of estoppel be applied (In re Estate of Newcomb (1972), 6 Ill. App.3d 1094, 287 N.E.2d 141). Moreover, where a legal claim should have been, but was not, filed against the estate within the statutory period, relief will not be accorded by the application of equitable principles. Wingate v. Pool (1860), 25 Ill. 102; Abrams v. Schlar (1960), 27 Ill. App.2d 237, 169 N.E.2d 583; Austin v. City Bank of Milwaukee (1936), 288 Ill. App. 36, 5 N.E.2d 585; Alderson v. Estate of Alderson (1922), 226 Ill. App. 176.

Here, no claim for satisfaction of the demolition lien was made within seven months of the issuance of the letters testamentary, and the real estate in question had been inventoried in compliance with section 204. Had compliance with section 204 been the trial court's only grant of power authorizing its order of payment out of the proceeds of the sale of the inventoried real estate, we and indeed the Title Co. would agree that the order was erroneous. However, the Act further provides that the trial court may order payment of a lien out of the proceeds of the judicial sale of a decedent's real estate. (Ill. Rev. Stat. 1971, ch. 3, par. 234(b).) In its order, the court ordered that the Title Co. be paid $3,700 "from the proceeds of the sale of the real estate * * * for sums paid to the City of Chicago." Thus, we see the issue on appeal to be whether the trial court properly ordered the payment under other powers granted by the Act.

Initially, we note that the will gave the executor the power to sell the property in question but limited its exercise to a sale at auction if the property was not sold within one year of his death. A power not exercised within the parameters delineated by the testator lapses. (Keller v. Schobert (1973), 13 Ill. App.3d 637, 300 N.E.2d 800, aff'd (1974), 58 Ill.2d 137, 317 N.E.2d 510.) The executor apparently recognized his power to conduct a private sale had lapsed when, more than a year after testator's death, he petitioned the court to authorize such a sale.

• 2-4 A court may grant a petition for sale where the personal assets are insufficient to pay debts, costs of administration, or legacies charged by will upon real estate. (Ill. Rev. Stat. 1971, ch. 3, pars. 225-26; Rosen v. Rosen (1938), 370 Ill. 173, 18 N.E.2d 218; Moore v. Chandler (1871), 59 Ill. 466.) Where, as here, the testator shows a definite intention that the real estate devised be sold by the executor and that it is the proceeds of the sale which should be distributed to those named by the will, the effect is a legacy of personally rather than a devise of realty. (Keller; Joslin v. Ashelford (1961), 29 Ill. App.2d 202, 172 N.E.2d 806.) At the time of the petition, the personal estate consisted of $600 worth of ceremonial swords and a cause of action against an insurance company of undetermined worth. Thus, it appears clear that the trial court had the power to order the sale of the property to satisfy legacies charged by the will against the real estate.

Looking to section 225 et seq. of the Act, which set forth the procedures to be followed in judicial sales, we note that section 234(b) provides that, in a proceeding to sell, the court may "direct the sale or mortgage of the property free of all mortgage, judgment or other liens that are due, provide for the satisfaction of all those liens out of the proceeds of the sale or mortgage, and settle and adjust all ...

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