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04/09/87 Michael Noel Gaffney Et Al v. the County of Cook Et Al.

April 9, 1987

MICHAEL NOEL GAFFNEY ET AL., PLAINTIFFS-APPELLANTS

v.

THE COUNTY OF COOK ET AL., DEFENDANTS-APPELLEES



Before issuing a certificate of title or entering a memorial, the registrar makes a mandatory tax search. If the registrar's search discloses a tax sale, and the one-year period for presentment of the certificate of sale from the tax sale has not elapsed, then it is not clear who has title. Consequently, section 40 of the Torrens Act forbids the registrar from entering any memorial in the register until the unpaid tax or assessment is cancelled or redeemed or the certificate of sale is presented to the registrar for entry in the register within the one-year period. Ill. Rev. Stat. 1983, ch. 30, par. 84.

APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

507 N.E.2d 184, 154 Ill. App. 3d 910, 107 Ill. Dec. 520 1987.IL.464

Appeal from the Circuit Court of Cook County; the Hon. Charles E. Freeman, Judge, presiding.

APPELLATE Judges:

JUSTICE JOHNSON delivered the opinion of the court. JIGANTI and LINN, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE JOHNSON

Plaintiffs, Michael and Kathleen Gaffney, conveyed property that was registered under the Torrens system. Prior to the conveyance, the registrar of titles issued to plaintiffs an incorrect tax and special assessment search. Plaintiffs filed a claim against defendants, the registrar of titles of Cook County and the county itself, seeking indemnity pursuant to sections 101 and 102 of "An Act concerning land titles" (the Torrens Act) (Ill. Rev. Stat. 1983, ch. 30, pars. 138, 139). Plaintiffs alleged that they incurred various costs due to the incorrect tax search.

Following a hearing, the registrar denied plaintiffs' claim. On administrative review, the circuit court of Cook County upheld the dismissal. Plaintiffs appeal, contending that (1) they, as grantors of property registered under the Torrens system, are eligible to bring a claim for damages against the registrar, and (2) the registrar is liable for damages caused by the issuance of an incorrect tax and special assessment search.

We reverse.

The record shows that on October 13, 1983, plaintiffs had contracted to sell their property, vacant land located on the northwest corner of 103rd Street and Kenton Avenue, in Oak Lawn, Illinois. On that date, the certificate of title for plaintiffs' property showed that the property was under the following encumbrances: (1) 1978 Cook County real estate taxes, lien for taxes bought by the Interstate Bond Company; (2) 1979 Cook County real estate taxes, lien for taxes bought by the Phoenix Bond and Indemnity Company; (3) 1980 Cook County real estate taxes, forfeited; (4) 1981 Cook County real estate taxes, second installment not paid; and (5) two unidentified Federal tax liens.

Plaintiffs ordered a tax search of their property from the Torrens office, as authorized by section 40 of the Torrens Act (Ill. Rev. Stat. 1983, ch. 30, par. 84), on October 13, 1983. The tax search revealed that only the first and second installments of the 1982 real estate taxes were unpaid. The search did not disclose that the 1979 real estate taxes were unpaid and that the Phoenix Bond and Indemnity Company bought the lien for the unpaid 1979 taxes on November 19, 1981. Phoenix Bond subsequently petitioned for a tax deed and, on November 22, 1983, sold its interest in the property to the DeBois Investment Group.

On December 20, 1983, plaintiffs conveyed their land into a trust. Michael Gaffney was one of several beneficiaries; the other beneficiaries paid plaintiffs for a two-thirds interest in the property, with Michael receiving a one-third interest.

On January 11, 1984, the trial court ordered the county clerk to issue a tax deed to the DeBois Investment Group. After learning of the tax deed, plaintiffs sought to regain the property. After negotiations, plaintiffs paid DeBois $53,000 for the property and replaced it in the trust. Plaintiffs incurred the following additional expenses: $2,458 in attorney fees for negotiating and closing the repurchase, $533 for title insurance, and $250 for an appraisal. Plaintiffs' expenses totalled $56,241.

The record further shows that on November 19, 1984, plaintiffs filed with defendants a claim for damages, based on the incorrect tax search, pursuant to section 101 of the Torrens Act (Ill. Rev. Stat. 1983, ch. 30, par. 138). They sought the $56,241 that they spent to repurchase the property. Defendants failed to grant or deny plaintiffs' claim within 60 days of the filing date. The Torrens Act, therefore, deemed their claims denied and allowed plaintiffs administrative review in the trial court. (Ill. Rev. Stat. 1983, ch. 30, par. 139.) Plaintiffs filed their complaint for administrative review in the trial court on January 30, 1985. On November 8, 1985, the ...


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