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01/26/95 APPLICATION FOR TAX DEED (STEPHEN BAILEY

January 26, 1995

IN RE APPLICATION FOR TAX DEED (STEPHEN BAILEY AND BONNIE BAILEY, PETITIONERS-APPELLEES,
v.
MID AMERICA BANK & TRUST, AN ILLINOIS BANKING CORPORATION, NOT INDIVIDUALLY BUT AS TRUSTEE OF LAND TRUST 932-51-3; AND RICHARD HALL, RESPONDENTS-APPELLANTS, AND HOME FEDERAL SAVINGS AND LOAN ASSOCIATION; MAGNA BANK; UNKNOWN OWNERS; AND NONRECORD CLAIMANTS, RESPONDENTS).



Appeal from the Circuit Court of Jackson County. No. 93-TX-37. Honorable E. Dan Kimmel, Judge, presiding.

As Corrected February 7, 1995.

The Honorable Justice Hopkins delivered the opinion of the court: Maag, P.j., and Chapman, J., concur.

The opinion of the court was delivered by: Hopkins

JUSTICE HOPKINS delivered the opinion of the court:

Respondent, Richard Hall (Hall), appeals from an order in favor of petitioners, Stephen and Bonnie Bailey (Bailey), alleging that the tax-fraud statute prohibits the purchase of a tax-sale certificate by petitioners due to an interest in the property sold at tax sale to Pier Company. Respondent also claims that attorney fees and costs should not be allowed to petitioners. The circuit court found that the petitioners had standing for the purchase and were entitled to reasonable attorney fees and costs. We affirm.

FACTS

On January 1, 1990, Hall was the 100% owner of a parcel of land. Title was held in a land trust by Mid America Bank and Trust as trustee. That property was later subdivided into four lots called the "Grass Roots Subdivision. On April 3, 1990, Hall sold Lot 4 of the Grass Roots Subdivision to Bailey. Hall received property tax bills due in 1990 and payable in 1991 on all four lots. The tax roll did not reflect the subdivision or the sale of Lot 4 until January 1, 1991. Thus, Bailey was not shown as holding any interest in Lot 4 until that date.

At the time of the April 3, 1990, sale, both Hall and Bailey agreed that Lot 4 constituted 38% of the total tax bill. Prorated credit of $423.94 was given to Bailey at the time of closing for the previous tax period of 1990. Hall was to pay the 1990 taxes due and payable in 1991, and Bailey was to reimburse Hall for 38% of the entire 1990 tax bill.

Hall received the tax bill but failed to pay the taxes. At a delinquent-tax sale on October 28, 1991, the Grass Roots Subdivision was sold, and a tax-sale certificate was issued to Pier Company. The record shows that neither Hall nor Bailey realized that Lot 4 had been included in the tax bill with the other three lots until either the sale itself or the publication listing delinquent-tax-sale property.

Bailey, on numerous occasions, had asked Hall to redeem on the property, and although he did not come with cash in hand, he offered to reimburse by check the amount of $1905.27. Hall testified that he had not paid the taxes or redeemed the property from the burden of the tax sale, due to the lack of funds. On April 22, 1993, 18 months after the tax sale, fearing his loss of Lot 4, Bailey purchased the tax-sale certificate from Pier Company. Subsequently, Bailey notified Hall that he had purchased the tax-sale certificate and would file a petition for a tax deed on Lots 1, 2, and 3 if not redeemed by July 26, 1993. Hall did not redeem, and Bailey filed a petition for tax deed on July 27, 1993. Hall later filed an objection to the petition for tax deed, and to show good faith, according to his testimony, he deposited $5,731.31 with the circuit clerk. The court granted a request to extend the date of redemption from October 28, 1993, to November 10, 1993. On October 29, 1993, Hall redeemed the property.

At the tax-deed-petition hearing on November 3, 1993, the trial court, after hearing all the evidence, ruled in favor of petitioners and specifically found:

"B. That Petitioners are holders of the tax sale certificate of purchase for the sale of lots 1, 2, 3, and 4 in Grass Roots Subdivision pursuant to the Order filed October 10, 1991;

C. That Petitioners do not have an "ownership interest" in the property for purposes of [section 235d of the Revenue Act of 1939 (35 ILCS 205/235d (West 1992))];

D. That pursuant to [section 27a of the Revenue Act of 1939 (35 ILCS 205/27a (West 1992))], Respondents as legal title holder[s] and/or the owner[s] of 100% of the beneficial interest in the property on January ...


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