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M.l.c. Corp. v. Pallas

OPINION FILED APRIL 21, 1978.

M.L.C. CORPORATION, INC., ET AL., PLAINTIFFS-APPELLEES,

v.

IRENE E. PALLAS ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. JOSEPH M. WOSIK, Judge, presiding.

MR. JUSTICE MEJDA DELIVERED THE OPINION OF THE COURT:

Defendant, Irene E. Pallas, appeals from orders denying her petition under section 72 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 72) and her subsequent petition for rehearing. The section 72 petition sought to vacate an order of default and a decree of foreclosure entered against the defendant in an action to foreclose a trust deed which secured a promissory note.

The sole issue on appeal is whether the trial court erred in denying the petitions. Defendant contends: (1) that the plaintiff's failure to submit a responsive pleading to the section 72 petition precluded it from challenging the petition's sufficiency, and (2) that the defendant's petition set forth facts sufficient to show that she is entitled to relief under section 72 and thus the petitions should have been allowed.

Plaintiff, M.L.C. Corporation, Inc. (hereinafter MLC), filed a complaint on September 5, 1974, to foreclose a trust deed on the defendant's home. The caption on the complaint shows the defendants as "Irene E. Pallas and `Unknown Owners.'" Paragraph 3.H. of the complaint reads:

"Face amount of indebtedness and manner of payment: $13,200.00 payable to M.L.C. Corporation, Inc. in sixty monthly installments as follows: $220.00 on the 12th day of May, 1974 and $220.00 on the 12th day of each month thereafter until the entire sum is paid, except that the final installment, if not sooner paid, shall be due on the 12th day of April, 1979."

Attached to the complaint as an exhibit is the promissory note secured by the trust deed. The note was signed "Mrs. Irene E. Pallas." Under the signature appear the words: "Irene E. Pallas d/b/a Pallas Antiques." The note also states that, in addition to the trust deed, it is secured by "a security agreement covering all presently existing and hereinafter acquired machinery, equipment, fixtures, inventory, accounts, accounts receivable and other items." No other references to the defendant's doing business as "Pallas Antiques" appear in any of MLC's pleadings or elsewhere in the record until the proceedings on the section 72 petitions upon which this appeal is based.

Substitute service was made upon the defendant's sister at the defendant's residence on September 11, 1974. The defendant filed no responsive pleadings and did not appear on the matter. Pursuant to statute (Ill. Rev. Stat. 1975, ch. 95, par. 22b), MLC filed an affidavit prepared by its attorney which stated in pertinent part:

"8. There is now due and owing on said Note the following amounts:

Unpaid Principal Balance $12,980.00 Late charges @ $22 per month for 8 mos. for period from 6/12/74-1/12/75 inclusive 176.00 __________ Total Due on Note $13,156.00 9. * * * Total Costs and Expenses $1,339.56

so that there is due and owing to the Plaintiff herein, M.L.C. CORPORATION, INC., for principal, interest, court costs and other expenses, including attorney's fees herein, the total sum of $14,495.56."

On February 5, 1975, the trial court entered a decree of foreclosure against the defendant for $14,495.56, in accordance with MLC's affidavit. A sheriff's sale was held on March 4, 1975, and MLC was the successful bidder with a bid of $13,000. The sheriff's report of the sale was approved on March 6, 1975, a deficiency judgment of $1,843.80 entered against the defendant, and a receiver appointed. *fn1 On October 22, 1975, after the expiration of the period for redemption, MLC filed a petition for a writ of assistance, with the defendant being notified by mail of the hearing on the petition. The trial court granted the writ of assistance on October 22, 1975.

On November 5, 1975, the defendant, represented by counsel, filed a petition to vacate the order granting the writ of assistance, to enter and continue MLC's petition for writ of assistance, and to allow defendant's counsel leave to file its appearance. The petition alleged that the notice of motion was received by the defendant on the date it was set for hearing and after the time set. Her petition further alleged that although the notice of motion stated it was mailed on October 16, 1975, and its envelope showed a postmark of October 20, 1975, and that the service was contrary to rules of the circuit court of Cook County. The envelope was attached to the petition as an exhibit. Finally, the petition alleged that more time was needed by the defendant and her counsel because of the possibility of the existence of a defense to the action. The court denied the defendant's petition but stayed the execution of the writ of assistance to December 2, 1975.

On February 4, 1977, the defendant filed a verified petition under section 72 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 72) to vacate the default order and foreclosure decree of February 5, 1975, and to allow her to respond to MLC's complaint. The petition stated, in part:

"10. That the complaint failed to include the fact that the note signed by Petitioner to Plaintiff was wholly founded upon a personal loan made by Plaintiff to Petitioner ...


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