Appeal from the Circuit Court of Edwards County; the Hon.
Robert W. Whitmer, Judge, presiding.
PRESIDING JUSTICE JONES DELIVERED THE OPINION OF THE COURT:
The instant action was brought to partition real estate that had been found in a previous action, Hocking v. Hocking (1979), 76 Ill. App.3d 29, 394 N.E.2d 653, to be held by Ashlie Hocking as trustee in resulting trust for his three brothers, his sister and himself. Burton Hocking, not a sibling to the aforementioned Hockings, was joined as a party defendant because he held a contract for deed on the property involved. Burton Hocking subsequently filed a counterclaim for specific performance of his contract for deed, and the trial court entered summary judgment in his favor. We reverse.
On March 5, 1976, an agreement for warranty deed was entered into between Ashlie and Olive Hocking, husband and wife, as sellers, and Burton Hocking, as buyer, for certain described real estate in Edwards County, Illinois, comprising approximately 103 acres. By its terms the contract provided for a down payment of $4,000 upon execution of the contract and for payment of the balance of $36,000 in January 1977, at which time Burton Hocking would gain possession of the property.
On November 12, 1976, a notice of lis pendens covering the described property was filed and recorded in the office of the Edwards County recorder of deeds. A complaint was filed simultaneously, alleging that the property was held by Ashlie Hocking in resulting trust for the benefit of his three brothers, Kenneth, Burl and Dennis Atwood Hocking, his sister, Harriett Hocking Chamberlin, and himself. The case was tried and a resulting trust was imposed. On appeal, this court affirmed the finding of a resulting trust, holding that the evidence demonstrated that the property, although legally titled in Ashlie Hocking, had been purchased, possessed and controlled by Ashlie's father, Dennis Ashlie Hocking, during his lifetime and that Ashlie Hocking thus held this property in resulting trust for the benefit of the heirs of Dennis Hocking. Hocking v. Hocking (1979), 76 Ill. App.3d 29, 394 N.E.2d 653.
The contract for deed between Ashlie and Olive Hocking and Burton Hocking was recorded on April 11, 1978, after the complaint for resulting trust was filed in November 1977, but before judgment was entered in that cause on August 28, 1978. Burton Hocking was not made a party to the resulting trust action and did not seek to intervene during the pendency of that cause.
On August 28, 1978, upon entry of judgment in the resulting trust action, plaintiffs Kenneth and Burl Hocking and Harriett Hocking Chamberlin filed the instant action for partition of the real estate in question, naming as defendants their brother Ashlie, his wife Olive, and Burton Hocking. A fifth brother, Dennis Hocking, was joined as a defendant but did not answer or participate in the cause. In their complaint the plaintiffs alleged that the contract for deed held by Burton Hocking was void as to them and prayed that it be set aside and removed as a cloud upon their title to the real estate.
Burton Hocking subsequently filed a counterclaim against the plaintiffs and co-defendants Ashlie and Olive Hocking in which he sought specific performance of his contract for deed with Ashlie and Olive Hocking. In his countercomplaint Burton Hocking alleged that he had paid the $4,000 down payment as provided by the contract and had tendered the balance of the contract price in January 1977 but that Ashlie and Olive Hocking had refused to receive this sum or to deliver a deed to the property in question. Burton Hocking further alleged that he had entered into the contract for deed with Ashlie and Olive Hocking without notice of the alleged resulting trust and before the action for resulting trust was filed in November 1976.
Motions for summary judgment were filed by both the plaintiffs and defendant-counterplaintiff Burton Hocking. In affidavits accompanying his motion for summary judgment, Burton Hocking again asserted that at the time of execution of the contract for deed, he had been unaware of any dispute as to the ownership of the real estate in question or the plaintiffs' interest therein and that from hs inspection of the property and an examination of the records through his attorney, he was put on notice of no such interest. In a further affidavit accompanying Burton's motion for summary judgment, Ashlie Hocking stated that at the time of execution of the contract for deed, he too had been unaware of any dispute regarding ownership of the property and, believing himself to be the sole owner of the property, had so represented himself to Burton. These assertions were disputed by plaintiff Burl Hocking in an affidavit objecting to Burton Hocking's motion for summary judgment, in which he stated that Ashlie Hocking had had knowledge of the plaintiffs' interest in the real estate involved as shown by letters from Ashlie to his brothers and sister in January 1960 and November 1968 and by a letter to Ashlie Hocking in December 1974 from the plaintiffs' attorney stating that the plaintiffs wished to institute legal action to compel Ashlie to divide the property with them. Burl Hocking further stated that he had exercised possessory rights to the real estate both before and after the resulting trust action was filed in November 1976 and that Burton Hocking had had actual notice thereof.
In their motion for summary judgment, the plaintiffs stated that at the time their lis pendens notice and resulting trust action were filed in November 1976, Burton Hocking had had no interest of record in the subject property and was not in possession of the property. The plaintiffs asserted, therefore, that pursuant to the statute regarding lis pendens notice (Ill. Rev. Stat. 1975, ch. 110, par. 405), Burton would be deemed a subsequent purchaser and would be bound by the proceedings of the resulting trust action as though he had been a party thereto.
Finally, in an amended motion for summary judgment, Burton Hocking stated that he had not been made a party to the resulting trust action even though "some or all of the parties [had] had actual notice of his claimed interest in the property" and that, therefore, he was not bound by any ruling entered in that cause. Burton asserted further that since there had been no findings in the resulting trust action limiting the trustee's power to deal with the trust property or setting aside any prior actions by the trustee, the beneficiaries of the trust were entitled only to the interest held by the trustee in November 1976 and thus must be bound by the contract for deed. Burton concluded by stating that he had entered into the contract for deed as a bona fide purchaser for value and, as such, was not affected by Ashlie Hocking's status as either sole owner or trustee of the property in question.
The trial court entered judgment on July 31, 1984, granting defendant-counterplaintiff Burton Hocking's motion for summary judgment on his counterclaim for specific performance of the contract for deed. In an extensive memorandum of judgment, the court observed that the lis pendens notice of November 12, 1976, constituted actual notice to Burton Hocking that a proceeding was being conducted involving the real estate in question and that his rights might be affected. The court noted that while a judgment was entered in that cause finding that a resulting trust existed as a result of acts of Dennis Hocking and Ashlie Hocking, "[at] no place in the pleadings [or] in the decision [of the resulting trust action] was there any request or ruling that the acts of the trustee [Ashlie Hocking] should be set aside, defined or limited." After setting forth the relevant dates of the execution and recording of the contract for deed and the filing and decision of the resulting trust action, the court continued:
"7. The Court finds from the uncontradicted facts set forth in [the] affidavits that the dealings between BURTON HOCKING and ASHLIE HOCKING were open and without fraud as far as the two parties were concerned and that the purchase price was the fair market value at the time of the contract.
8. The Court further finds that the issues raised as to whether BURTON HOCKING was a bona fide purchaser are moot in the determination of this case, except [as] they might apply to the dealings between BURTON HOCKING and ASHLIE HOCKING, previously determined and set out above.
9. The Court finds that prior to the suit seeking a resulting trust, the trustee, ASHLIE HOCKING, acted with great latitude when it came to the handling of this real estate, which included maintenance, management ...