APPEAL from the Circuit Court of Cook County; the Hon. RAYMOND
E. TRAFELET, Judge, presiding.
MR. PRESIDING JUSTICE GOLDBERG DELIVERED THE OPINION OF THE COURT:
Janice R. Moore, administrator de bonis non (petitioner), filed a petition for citation to discover information and recover assets against Tricka McGaughey Hedgemon (respondent), the removed administrator of the estate of William McGaughey, (decedent). (Ill. Rev. Stat. 1975, ch. 3, par. 183.) At the close of petitioner's presentation of evidence, the trial court dismissed the petition on respondent's motion. Petitioner appeals.
The decedent died intestate on June 7, 1967. His widow (respondent) was appointed co-administrator on June 12, 1967, together with one of decedent's daughters. The latter resigned as co-administrator on May 10, 1968. The respondent was removed as administrator on June 6, 1972, and thereafter duly filed her final account. The petitioner is another daughter of the decedent.
The pertinent statute, section 183 of the Probate Act (Ill. Rev. Stat. 1975, ch. 3, par. 183) provides:
"Upon the filing of a verified petition therefor, the court shall order a citation to issue for the appearance before it of any person whom the petitioner believes (1) to have concealed, converted, or embezzled or to have in his possession or control any personal property, books of account, papers, or evidences of debt or title to lands which belonged to a person whose estate is being administered in that court or which belongs to his estate or to his executor, administrator, guardian, or conservator or (2) to have information or knowledge withheld by the respondent from the executor, administrator, guardian, or conservator and needed by the executor, administrator, guardian, or conservator for the recovery of any property by suit or otherwise.* * *."
The decedent had owned a real estate business on the south side of Chicago. The petition contains six counts, each alleging that respondent either converted or allowed others to convert various pieces of real estate or interests arising therefrom and other assets which had been the property of the decedent. As each of the counts involved separate factual situations, we will consider each separately.
Petitioner contends respondent failed to protect as an asset of the estate the beneficial interest in a land trust at Union National Bank (Bank). Instead, respondent allowed this interest to be sold pursuant to court order and the proceeds paid to the Bank in satisfaction of commercial loans obtained by decedent from the Bank and secured by a collateral pledge of the subject beneficial interest. Testimony by respondent and by an officer of the Bank established that decedent had borrowed $110,000 from the Bank and pledged to the Bank as collateral the beneficial interest in "Union National Bank Land Trust No. 487." This interest was encumbered by an assignment to the Bank. It was sold pursuant to an order of the probate division entered November 28, 1967, and the proceeds were paid to the Bank. A Bank officer testified that the date of sale was February 5, 1968. The gross selling price was $104,000 and the net proceeds of sale, after payment of closing expenses, were $85,051.39. The entire net proceeds were received by the Bank on account of the debt due from decedent.
It is this $104,000 which petitioner claims as an asset of the estate. It is petitioner's theory that when decedent died the Bank did not have a perfected security interest in the assignment as required by section 9-302 of the Uniform Commercial Code (Ill. Rev. Stat. 1969, ch. 26, par. 9-302). Petitioner contends that the Bank was therefore an unsecured seventh class creditor (Ill. Rev. Stat. 1975, ch. 3, par. 202) and was entitled only to share pro rata in the assets of the estate with all other seventh class creditors. Ill. Rev. Stat. 1975, ch. 3, par. 205.
Citing Levine v. Pascal (1968), 94 Ill. App.2d 43, 50, 52, 236 N.E.2d 425, appeal denied (1968), 39 Ill.2d 626, and Bank of Broadway v. Goldblatt (1968), 103 Ill. App.2d 243, 243 N.E.2d 501, petitioner argues that because the beneficial interest in an Illinois land trust is personal property, an assignment thereof creates only an interest in personal property. Therefore, petitioner contends it was necessary that the Bank perfect its security interest by filing a financing statement with the Secretary of State. *fn1 It is undisputed that the Bank did not file such a statement.
1, 2 We do not differ from petitioner's position that an assignment of the beneficial interest in a land trust creates only a personal property interest. However, in the case before us, the Bank not only was the assignee of the beneficial interest in the land trust but was the trustee of this same trust. As Levine v. Pascal so clearly explains, the trustee in an Illinois land trust "has both legal and equitable title" to the res of the trust. (Levine v. Pascal, 94 Ill. App.2d 43, 50; see also In re Romano (N.D. Ill. 1977), 426 F. Supp. 1123, 1127-28; Chicago Federal Savings & Loan Association v. Cacciatore (1962), 25 Ill.2d 535, 543, 185 N.E.2d 670.) The beneficiary of a land trust has nothing more than an interest in personal property. The trustee is absolute owner of the real estate at law. Marshall Savings & Loan Association v. Chicago National Bank (1965), 56 Ill. App.2d 372, 206 N.E.2d 117; Schneider v. Pioneer Trust & Savings Bank (1960), 26 Ill. App.2d 463, 466, 168 N.E.2d 808.
3 In our opinion, it follows necessarily that the Bank had an interest in the real estate exempt from the requirements of article Nine of the Uniform Commercial Code. (Ill. Rev. Stat. 1969, ch. 26, par. 9-104(j).) We conclude that respondent committed no act of conversion by proceeding in accordance with the probate division order of November 28, 1967, regarding sale of the trust res to satisfy the Bank's claims as a creditor.
Petitioner next claims respondent violated section 183 of the Probate Act by either converting or allowing her attorneys to convert $30,000 in rental payments allegedly collected by the decedent's real estate business during June and ...