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Ill. Hous. Dev. Auth. v. La Salle Nat'l Bk

OPINION FILED DECEMBER 31, 1985.

ILLINOIS HOUSING DEVELOPMENT AUTHORITY, PLAINTIFF-APPELLEE,

v.

LA SALLE NATIONAL BANK ET AL., DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Du Page County; the Hon. Anthony M. Peccarelli, Judge, presiding.

JUSTICE SCHNAKE DELIVERED THE OPINION OF THE COURT:

On August 3, 1984, the circuit court of Du Page County entered a judgment of foreclosure against defendants, La Salle National Bank, as trustee under trust No. 44132, and Lisle Development Associates. The judgment included a finding that defendants had waived their right of redemption. Defendants appeal the judgment of foreclosure as to the finding of waiver of right of redemption.

Plaintiff, the Illinois Housing and Development Authority (IHDA), is a body politic and corporate with power "to make loans for the acquisition, construction and rehabilitation of housing, community facilities and housing related commercial facilities" for low and moderate income families. (Ill. Rev. Stat., 1984 Supp., ch. 67 1/2, par. 303.) On October 25, 1982, IHDA filed a suit against defendants to foreclose its mortgage on certain real property known as Shadowood Apartments, a 300-unit apartment complex located in Du Page County.

On August 3, 1984, the circuit court entered a judgment of foreclosure against defendants and granted IHDA immediate possession of the real estate after finding that defendant La Salle National Bank, as trustee, was required to waive its right of redemption under paragraph 19 of the trust agreement. Paragraph 19 stated:

"The Trustee is authorized and empowered and shall, if requested by Authority, waive any and all rights of redemption from sale under any order or decree of foreclosure of the mortgage on its own behalf and on behalf of each and every person except decree of judgment creditors of the Trustee in its representative capacity acquiring any interest in or title to the premises subsequent to the date of the mortgage."

The court also expressly found "that there [was] no just reason for delaying the enforcement of this decree or an appeal therefrom."

On August 31, 1984, defendants filed this appeal, but failed to obtain a stay of the judgment. Subsequently, a sheriff's sale was held on September 13, 1984, and the subject real property was sold to American National Bank & Trust Company, as trustee under trust No. 62199. The sheriff's sale was approved by the circuit court on September 19, 1984.

• 1 The first issue raised is whether this appeal has become moot due to the later sale of the subject real estate. It is well established that in the absence of a stay, an appeal is moot if possession or ownership of the specific property which is involved in the relief being sought on appeal has been conveyed to third parties. (87 Ill.2d R. 305(i); Jones v. Matthis (1980), 89 Ill. App.3d 929; Horvath v. Loesch (1980), 87 Ill. App.3d 615; Schwind v. Mattson (1974), 17 Ill. App.3d 182.) The record must unequivocally disclose, however, that the third-party purchaser was not a party or a nominee of a party to the litigation. Arnold v. Leahy Home Building Co. (1981), 95 Ill. App.3d 501; Avondale Savings & Loan Association v. Amalgamated Trust & Savings Bank (1979), 78 Ill. App.3d 244; Glen Ellyn Savings & Loan Association v. State Bank (1978), 65 Ill. App.3d 916.

On the issue of mootness, plaintiff submitted the affidavit of James A. Regas which stated: (1) that he was the general partner of Shadowood Partners, the sole beneficiary under trust No. 62199; (2) that Shadowood Partners was not a party or a nominee of any party to this litigation, nor was it a beneficiary or a nominee of any beneficiary under the prior trust No. 44132; (3) that American National Bank & Trust Company, as trustee under trust No. 62199, was not a party nor a nominee of any party to this litigation; and (4) that Shadowood Partners had received a mortgage loan commitment from IHDA. Defendants contend that this affidavit is insufficient to show unequivocally that this appeal is moot because the loan documents between IHDA and Shadowood Partners might possibly reveal that IHDA has an ownership interest in the property or an interest in Shadowood Partners as a partner or a joint venturer.

The affidavit of James Regas states that American National Bank & Trust Company, as trustee under trust No. 62199, now holds the fee simple title to the subject real estate and that the sole beneficiary under this trust is Shadowood Partners. Therefore, the only way IHDA could have any ownership interest in the property would be if it was a partner in Shadowood Partners. Defendants correctly point out that Regas' affidavit does not state who the other partners are, nor does it affirmatively state that IHDA is not a partner.

Defendant's argument raises the issue of whether a partnership would be considered a nominee of a party under Supreme Court Rule 305(i) if one of its partners was a party to the foreclosure action. IHDA admitted at oral argument that, in its opinion, a partnership would be a nominee for its partners. We agree.

• 2 In First National Bank v. Road District No. 8 (1945), 389 Ill. 156, our supreme court, in discussing a predecessor to Rule 305(i), stated:

"These provisions of the Civil Practice Act and of the Judgments Act are expressly for the protection of persons not parties to the suit. No such protection is afforded the parties to the action, and it has never been the rule that their rights are the same as those of strangers tot he litigation. * * * A party to a suit is presumed to know of all the errors in the record, and such party cannot acquire any rights or interests based on such erroneous decree that will not be abrogated by a subsequent reversal thereof." 389 Ill. 156, 161-62.)

Further, section 12 of the Illinois Uniform Partnership Act (Ill. Rev. Stat. 1983, ch. 106 1/2, par. ...


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