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Lakeview Trust & Sav. Bank v. Estrada

OPINION FILED JULY 3, 1985.

LAKEVIEW TRUST & SAVINGS BANK, TRUSTEE, PLAINTIFF-APPELLEE,

v.

JUAN ESTRADA, D/B/A GRANO DEL ORO, A/K/A GRANO DEL ORO, INC., A/K/A EL GRANO DEL ORO, INC., ETC., DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County; the Hon. Joseph M. Wosik, Judge, presiding.

JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

Lakeview Trust & Savings Bank (Lakeview Bank), as trustee under trust agreement No. 4769, filed an action in the Cook County circuit court to quiet title in property located in the 4300 west block of 26th Street in Chicago which it held pursuant to the land trust agreement. A corporation by the name of El Grand del Oro, Inc., of which Luis Quezada (Quezada) was specified as president, was named as beneficiary of the trust.

Lakeview's action named "Juan Estrada, d/b/a Grano del Oro, a/k/a Grano del Oro, Inc., a/k/a El Grano del Oro, Inc." as defendant in the suit. Estrada's answer to the complaint denied that he (Estrada) claimed title to the property in his individual capacity. Instead, in his capacity as president of Grano de Oro, Inc., he claimed title to the property on behalf of that corporation in his counterpetition for declaratory relief and an injunction which he filed with his answer to Lakeview's pleading.

Pursuant to Lakeview's motion for judgment based upon the pleadings, the trial court entered an order which inter alia dismissed Estrada's counterpetition and found that title to the property rested in Lakeview Bank as against Estrada as the named defendant in Lakeview's complaint. Roughly a month later, Estrada as president of Grano de Oro, Inc., and the administrator of the Small Business Administration sought to intervene in Lakeview's proceeding for quiet title. The trial court denied the motion. No appeal was taken from either order.

About three years later, Lakeview Bank filed a motion in the Cook County circuit court to enforce the trial court's order which quieted title in Lakeview. The pleading sought enforcement not only against Estrada but also against Marshall Villarreal (Villarreal), whom Lakeview alleged to be the current corporate officer and sole shareholder of Grano de Oro, Inc. (not El Grano del Oro, Inc., the original defendant in Lakeview's proceeding for quiet title) by reason of Villarreal's purchase of Estrada's stock in Grano de Oro, Inc.

The trial court entered an order which inter alia joined Villarreal and Grano de Oro, Inc., as party-defendants in Lakeview's action to quiet title and permanently enjoined them from asserting any right, title or interest in the property at issue. Some three weeks later, Villarreal and Grano de Oro, Inc., motions the trial court to vacate this order. The trial court denied the motion.

Villarreal and Grano de Oro, Inc., now appeal from the trial court's order which denied their motion to vacate the trial court's order against them by which the court enforced its previous order of December 1980.

For the following reasons, we reverse and remand. We find that:

1. The trial court's order against Villarreal and Grano de Oro, Inc., was:

a. void as against Grano de Oro, Inc., for failure to serve summons upon it;

b. reversible error as against Grano de Oro, Inc., and Villarreal for failure to afford them their due process right to answer the claim against them;

c. reversible error with regard to Grano de Oro, Inc., and Villarreal as being against the manifest weight of the evidence.

2. The trial court's order against Estrada d/b/a Grano del Oro, Inc., was void for failure to join Grano de Oro, Inc., who was a necessary and indispensable party to the proceeding.

BACKGROUND

In order to provide sufficient clarity to the factual history of the action presently before us, we deem it appropriate to state first the nature of the parties and the documents of record which indicated their interests, if any, in the subject premises. Thereafter we set forth a summary of the actions taken by the parties below.

A. CLARIFICATION OF THE NATURE OF THE PARTIES AND DOCUMENTS OF RECORD PERTAINING TO THEIR INTERESTS

Much of the dispute between the parties results from a confusion of the name (or names) of the business entity (or entities) which purchased the property in question, took the property pursuant to warranty deed, executed a mortgage on the property with the SBA, and placed the property into the land trust with Lakeview Bank. These business names, and their possible variations, are "[EL] GRANO DEL ORO" or "[EL] GRANO DE ORO," and "[EL] GRAND DEL OR" or "[EL] GRAND DE ORO." The spanish phrase "[el] grano de [del] oro" means essentially "[the] grain of [the] gold" in English. The term "[el] grand de [del] oro" has no commonly understood meaning in Spanish because there is no word "grand" in Spanish; consequently the phrase is not susceptible of translation into English. See Cassell's Spanish Dictionary 455 (grand, grande), 456 (grano), 593 (oro) (1968).

There are no documents in the record to indicate whether a business entity named "Grano del Oro" was ever incorporated in the State of Illinois. Lakeview's original petition for quiet title alleged that (1) there was no Illinois corporation known as "El Grano del Oro, Inc." registered with the Secretary of State of the State of Illinois; (2) there was no Illinois corporation known as "Grano del Oro, Inc." so registered; (3) there was no listing in the Cook County clerk's office "pursuant to the assumed names act" of any of the following names — "Grano del Oro; Grano del Oro, Inc.; El Grano del Oro, Inc." In his verified answer, Estrada denied each of these allegations.

A document of record establishes that a business entity named "Grano de Oro, Inc." was incorporated in the State of Illinois by certificate of incorporation dated June 18, 1976.

Although Lakeview Bank alleged in its action to quiet title that a business entity entitled "El Grand del Oro, Inc." was an Illinois corporation in good standing, there is no document in the record to establish the allegation. Estrada's verified answer to Lakeview's complaint to quiet title neither admitted nor denied this allegation, because he stated he did not have sufficient knowledge to form a belief as to the truth thereof. The subsequent motion of Villarreal and Grano de Oro, Inc., to vacate the trial court's later order of enforcement of the December 1980 order did state that "El Grand del Oro, Inc." was incorporated in the State of Illinois in 1980.

There are no documents in the record to show whether an entity named "Grand de Oro" was ever incorporated in Illinois. Further, although Luis Quezada claimed to be a corporate officer of "El Grand del Oro, Inc." and Juan Estrada and later Marshall Villarreal claimed to be a corporate officer of "Grano de Oro, Inc.," there are no corporate documents in the record to establish whether they were indeed such corporate officers. In fact there are no corporate documents in the record with regard to any corporation or other business entity with the exception of the certification of incorporation of "Grano de Oro, Inc."

With regard to documents relating to ownership of the premises at issue, the record contains the following. First, there is no copy in the appellate record of any real estate sales contract between the Avilas (the previous owners of the property) and Quezada, Estrada, any other individuals, or any of the businesses.

On August 10, 1984, Villarreal and Grano de Oro, Inc. filed a motion with this court to supplement the appellate record to include a copy of an executed real estate sales contract between the Avilas and Quezada and Estrada as officers of "Grano de Oro, Inc." Lakeview Bank objected to the motion on the ground that the contract was not presented to the trial court and consequently Lakeview had had no opportunity to test the genuineness or authenticity of the document. The motion was denied by this court by order dated August 16, 1984, and will not be considered here.

The record shows that two deeds were recorded in Cook County. Both deeds were identical in that they were executed by the Avilas on February 18, 1978. The first recorded deed conveyed title to the property to "El Grand del Oro, Inc." It was recorded in Cook County on May 8, 1978. A second warranty deed was re-recorded in Cook County on June 22, 1978. It named "El Grano de Oro, Inc." as grantee.

Documents of record establish that after the Avilas transferred the property, but before either deed was recorded, Quezada and Estrada obtained a purchase money mortgage on the property with the SBA. The mortgage named a business entity of "Grano de Oro, Inc." as mortgagor. The document was dated March 30, 1978, and was signed by Quezada and Estrada. It was recorded in Cook County on April 11, 1978.

Roughly two years after the property was sold by the Avilas, on April 26, 1980, a business entity named "El Grand del Oro, Inc." placed the property in land trust pursuant to trust agreement with Lakeview Bank. The warranty deed conveying the property to Lakeview was signed by Luis Quezada as president and another individual whose name is unclear, as secretary. (The document shows clearly only "Fran---- ----Quezada" as the name of this other individual.) There is no copy of the trust agreement in the appellate record (although Lakeview Bank's complaint for quiet title stated that a copy of the trust agreement was attached to the pleading and incorporated therein by reference).

There is no clear proof in the record as to who has been making payments on the SBA mortgage, real estate taxes, or other costs and expenses relating to the property. Apparently Estrada, and later Villarreal, have been in continuous possession of the property since 1978.

B. SUMMARY OF ACTIONS TAKEN BELOW

1. ACTION TO QUIET TITLE

Lakeview Bank filed its action to quiet title in Cook County circuit court on August 18, 1980 (i.e., approximately four months after the property was placed in a land trust and two years after the warranty deed conveying the property to Lakeview Bank was recorded). The complaint named "Juan Estrada d/b/a Grano del Oro, a/k/a Grano del Oro, Inc., a/k/a El Grano del Oro, Inc." as defendant. It made no reference to "Grano de Oro, Inc." or any of its variations ("El Grano de Oro, Inc.," etc.).

The complaint alleged in pertinent part that the current beneficiaries of the land trust were "Luiz Quezada and El Grand del Oro, Inc., an Illinois corporation" in good standing in Illinois and that the res of the trust was property commonly known as 4344 West 26th Street, Chicago.

The complaint further alleged that Quezada and El Grand del Oro, Inc. had obtained title to the property pursuant to warranty deed from the Avilas executed in February 1978 and recorded in May 1978 (i.e., the first warranty deed recorded in Cook County). It stated that Estrada claimed to be owner of the subject real estate under color of title of the warranty deed recorded in June 1978 (i.e., the second warranty deed recorded in Cook County) and that he was currently in possession of the premises.

Lakeview Bank requested the following relief: (1) an order that Estrada's color of title be declared to be null and void giving him no title to the property; (2) an order that the June warranty deed be declared null and void as an altered instrument; (3) an order that title to the subject real estate be quieted and declared to be in Lakeview Bank exclusive of any claim of Estrada; and (4) an order assessing fees and costs against Estrada.

Estrada filed his verified answer to the complaint on October 16, 1980. In material substance he admitted that Quezada claimed title but denied that he (Estrada) as an individual claimed title to the property. Estrada also filed as a separate pleading a "counter-petition for declaratory relief and injunction" which he brought in his capacity as president of ...


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