APPEAL from the Circuit Court of Cook County; the Hon. L.
SHELDON BROWN, Judge, presiding.
MR. JUSTICE MCGLOON DELIVERED THE OPINION OF THE COURT:
Rehearing denied August 8, 1978.
Plaintiff Alcoa Building Products, Inc., sued defendant LaSalle National Bank, individually and as trustee, for failing to notify Alcoa of a foreclosure proceeding instituted against the res of a land trust. Alcoa claimed that LaSalle owed it this duty since LaSalle was aware that the beneficial interest in the trust had been assigned to Alcoa by the Elsters. LaSalle, on the other hand, refused to accept the assignment because a predated reassignment to the beneficial interest back to the Elsters did not satisfy certain requirements set by LaSalle.
Prior to trial, LaSalle made a motion to dismiss the complaint on the ground that it failed to state a cause of action. The motion was granted. Alcoa then filed a motion to vacate the order dismissing the complaint. This motion was denied and Alcoa appeals.
On appeal, Alcoa argues that the trial court erred in dismissing the complaint inasmuch as LaSalle had full knowledge of all assignments and Alcoa's claim against the trust.
In April of 1972, defendants Donald and Patricia Elster executed a land trust agreement with defendant LaSalle National Bank (hereinafter referred to as LaSalle). The trust property consisted of the Elster home and the real property associated with it. Title to the property was conveyed to LaSalle as trustee, while the Elsters retained the beneficial interest and power to direct LaSalle.
Sometime before July 13, 1973, the Elsters assigned their beneficial interest to Silas Boken. The assignment was made in order to secure a loan made to them by Boken. Upon repayment of the loan, Boken was to reassign the beneficial interest back to the Elsters.
On October 1, 1973, plaintiff Alcoa Building Products, Inc. (hereinafter referred to as Alcoa) obtained a judgment against the Elsters, jointly and severally, in the amount of $29,135.66. This judgment was released by Alcoa on November 15, 1974, when the Elsters executed a note payable to Alcoa. In order to secure the note, the Elsters assigned their beneficial interest in the trust property to Alcoa. In addition, or so Alcoa alleges, the Elsters also delivered to Alcoa a previously executed reassignment of the beneficial interest to them from Silas Boken. Subsequently, Alcoa was unable to produce a copy of the Boken reassignment, maintaining that it had somehow become lost. The Elsters, on the other hand, maintained that Boken never reassigned his interest in the property to them.
Subsequently, the Elsters defaulted on their note payable to Alcoa. On May 8, 1975, Alcoa's representative appeared before LaSalle's trust department with a copy of the Elsters-Alcoa assignment. Nevertheless, LaSalle refused to accept the assignment on the ground that its records indicated that Silas Boken still retained the beneficial interest in the trust property as security for a loan. At that time, Alcoa's representative informed LaSalle that Boken had reassigned the beneficial interest to the Elsters and that the Elsters had subsequently assigned that interest to Alcoa. Alcoa's representative further stated that the Boken reassignment had been fully executed and accepted in writing by the Elsters, but had inadvertently become lost. Nonetheless, LaSalle still refused to accept the Elsters-Alcoa assignment, but did place a copy of the assignment in the file it maintained in connection with the trust.
On May 9, 1975, Alcoa's attorney delivered a letter to LaSalle setting forth his understanding of the trust agreement as follows:
"It is my understanding that as a prerequisite to filing that [Elsters to Alcoa] Assignment, a reassignment of the beneficial interest from Mr. Boken to Mr. and Mrs. Elster must be filed. We shall endeavor to have this accomplished as soon as possible."
In September, 1975, Alcoa obtained Boken's signature on a duplicate of the Boken reassignment to the Elsters. This reassignment was predated July 13, 1973, the date of the purported original Boken reassignment. The newly executed Boken reassignment was then tendered to LaSalle for acceptance. Again, LaSalle refused to accept the reassignment or even to place it in its file, on the ground that its internal rules required that the Elsters re-execute the "Acceptance" portion of the Boken reassignment. Although Alcoa repeatedly attempted to obtain the Elsters' signatures on the document, the Elsters refused to sign.
On or about October 30, 1975, Palatine Savings & Loan Association, the first mortgagee of the trust property, commenced a foreclosure suit on the mortgage. LaSalle was made a party defendant to the action and served with summons. However, at no time did LaSalle take any steps to notify Alcoa of the pending suit, though fully aware of Alcoa's claim to the trust property. In order to avoid foreclosure, the Elsters sold their residence to a third party purchaser. As a part of that transaction, the Elsters and Boken directed LaSalle, as trustee, to issue a deed to the property to the ...