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12/12/89 Lincoln Park Federal v. Robert A. Carrane Et Al.

December 12, 1989

LINCOLN PARK FEDERAL SAVINGS AND LOAN ASSOCIATION, PLAINTIFF-APPELLEE

v.

ROBERT A. CARRANE ET AL., DEFENDANTS-APPELLANTS



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION

548 N.E.2d 636, 192 Ill. App. 3d 188, 139 Ill. Dec. 251 1989.IL.1927

Appeal from the Circuit Court of Cook County; the Hon. Thomas P. Quinn, Judge, presiding.

APPELLATE Judges:

PRESIDING JUSTICE BILANDIC delivered the opinion of the court. SCARIANO and DiVITO, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE BILANDIC

Plaintiff, Lincoln Park Federal Savings and Loan Association (hereinafter the Bank), sued defendants, Robert A. Carrane and Joseph Bechtold, as guarantors of a promissory note made by Cosmopolitan National Bank, as trustee under a land trust agreement (the Land Trustee). The land trust was created by defendants, Carrane and Bechtold, who are also the sole beneficiaries of the trust. A default judgment was entered against Bechtold and the Land Trustee for failure to appear and answer or otherwise plead. The Bank subsequently sought and was granted summary judgment against Carrane. Carrane's post-trial motion was denied. He appeals. The other defendants are not involved in this appeal.

On March 25, 1980, at the direction of Carrane and Bechtold, the Land Trustee executed a mortgage and a note (secured by the mortgage) in connection with a loan made by the Bank. Contemporaneously with the execution of the note and mortgage by the Land Trustee, Carrane and Bechtold, the sole beneficiaries of the land trust, executed a guaranty of the note and mortgage. The loan went into default on May 1, 1980.

On May 14, 1984, the Bank filed a one-count action to enforce the guaranty against Carrane and Bechtold. Carrane answered and asserted an affirmative defense demanding that the Bank proceed against the Land Trustee as the maker of the note.

An amended complaint was filed on November 29, 1984. The Bank added the Land Trustee as a defendant and added a second count, seeking judgment against the Land Trustee under the terms of the note.

On March 27, 1985, the Bank filed a motion seeking a default judgment against Bechtold and the Land Trustee for failure to appear or plead. After a prove up hearing on April 15, 1985, a default judgment was entered against Bechtold and the Land Trustee.

The Bank filed its motion for summary judgment against Carrane on May 24, 1985. The affidavit supporting the motion stated that the loan had been in default since May 1, 1980, and that the court had entered judgment against the mortgagor on April 15, 1985.

The Bank's motion was granted on October 16, 1987. Carrane's post-trial motion was denied on May 17, 1988. Carrane appeals. I

The technical nature of a transaction involving a corporate land trustee following the direction of its beneficiaries in obtaining a loan from a financial institution, secured by the corpus of the trust, requires the use of language that makes a relatively simple transaction appear to be unduly complex.

Simply stated, in substance, this case involves an individual, defendant Carrane, who elected to hold title to real estate in a land trust rather than in his own name. To accomplish that end, he caused the land trust to be created. Then he directed the trustee to execute the note and mortgage in favor of the Bank. It was acknowledged at oral argument that the Bank would not make the loan to the land trust without the personal ...


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