Katz v. Berkos

45 N.E.2d 566, 316 Ill. App. 569, 1942 Ill. App. LEXIS 787
CourtAppellate Court of Illinois
DecidedDecember 9, 1942
DocketGen. No. 42,206
StatusPublished
Cited by7 cases

This text of 45 N.E.2d 566 (Katz v. Berkos) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Katz v. Berkos, 45 N.E.2d 566, 316 Ill. App. 569, 1942 Ill. App. LEXIS 787 (Ill. Ct. App. 1942).

Opinion

Mr. Presiding Justice Burke

delivered the opinion of the court.

William Berkos was the owner of certain real estate located in Chicago. On March 23, 1927, he made, executed and delivered eight principal promissory notes, numbered from one to eight inclusive, one for $21,600, one for $2,600 and six for $5,400 each, all payable on or about two years after date, with interest at 6 per cent per annum, payable semiannually, and interest at 7 per cent per annum after maturity. To secure the payment of the notes, William Berkos and Pauline Berkos, his wife, executed and delivered a trust deed to the Chicago Title & Trust Company, as trustee. On May 25, 1939 Jessie Katz, executrix of the estate of George F. Harding, deceased, filed a complaint in the superior court of Cook county to foreclose the lien of the trust deed. She alleged that George F. Harding, during his lifetime, owned principal note No. 1; that note No. 3 was paid; that notes Nos. 2, 4, 5, 6, 7 and 8 were owned one each by Agnes McCoy, Luella McCoy, Margaret Smith Hayden, Thomas Smith, Henry Smith and James Smith; that payments to George F. Harding on account of note No. 1 reduced the principal amount due under the note to $6,600; that two of the remaining six notes were reduced by principal payments to the sums of $1,982 and $1,338, and the remaining four notes to the sums of $1,755 each; that interest was paid to March 23, 1933; that the balance of $6,600 on note No. 1, with interest at 7 per cent to March 23, 1933, was unpaid; that there was due on the last six described notes the sum of $10,340, with interest at 7 per cent from March 23, 1933, or a total of $17,000, together with interest from March 23,1933, amounting to $7,503.62 on May 1,1939, or an aggregate sum of $24,503.62; and that as principal payments were made certain lots were released from the lien of the trust deed. She brought the complaint for the benefit of the holders of all the notes. She further alleged that on April 11, 1927, Bedrich Mager, the then owner of the premises, executed a second trust deed, which was subordinate to the trust deed she sought to foreclose. She averred that the Lawndale National Bank of Chicago, as trustee under the provisions of a trust agreement dated June 20, 1927, held title to a certain lot and that the beneficial interest therein was vested in Charles R. Smith and others. On July 28, 1939, pursuant to léave of court, plaintiff filed an amendment to her complaint showing that since the filing of the original complaint she ascertained that one of the defendants, Agnes McCoy, the holder of one of the notes sought to be foreclosed, had died, and that Warren D. Emerson, Jr., was the executor of her last will and testament. Accordingly, Emerson was named as a defendant in place of Agnes ■ McCoy. The complaint was also amended by adding a paragraph showing that title of the property sought to be foreclosed vested in Charles R. Smith as to an undivided 34/100th interest, Helen Maloney as to an undivided 20/100th interest, Frank Kaiser as to an undivided 43/100th interest, and in the heirs-at-law of Julius Mager, deceased, as to an undivided 12/100tti interest. On August 2, 1939 Charles R. Smith and William Berkos filed separate answers alleging that payments of $14,161.96 were made on the notes in excess of those credited in the complaint. These answers alleged that no interest was due and pleaded usury, citing sec. 6, ch. 74, Ill. Rev. Stat. 1941 [Jones Ill. Stats. Ann. 67.06]. The answers asserted that because of the plea of usury and the payments made, there was a balance due on all the principal notes of $2,789.54. Defendants also claimed the release of additional lots because of prepayments.

On July 25, 1939, Charles R. Smith, one of the defendants in the foreclosure suit, filed his separate complaint in the superior court of Cook county for partition of the same property. The parties to the foreclosure suit were named as defendants. In this complaint Smith, referring to the notes sought to be foreclosed, alleged that “this plaintiff further shows that most of the notes secured by this trust deed, if not all of the said notes, have been paid, and most, if not all of the real estate secured by the said trust deed, and still remaining not released from said trust deed should be released, if such happening has not taken place at this time.” All of the noteholders were made defendants in the partition case. The owners and holders of the notes, in an answer filed in the partition suit, denied that most of the notes were paid, denied that any of the real estate secured by the trust deed should be released, and alleged that a large amount remained unpaid upon each and all of the notes, except note No. 3, which had been paid. The answer stated that Jessie Katz, as executrix of the estate of George F. Harding, deceased, was the owner of note No. 1 and that there was a balance due and unpaid on that note of $6,600; that Margaret Smith Hayden was the owner of note No. 6, and that there was a balance due and unpaid on that note in the sum of $1,755; that Thomas Smith was the owner of note No. 7, and that there was a balance due and unpaid of $1,755; that Henry Smith was the owner of note No. 4, and that there was a balance due and unpaid of $1,755; that Huella McCoy was the owner of note No. 2, on which there was a balance due and unpaid of $1,338; and that Warren D. Emerson, Jr. was the owner of note No. 8, on which there was a balance due and unpaid of $1,982, and that there was also interest due on each of said notes at the rate of 7 per cent per annum from March 23,1933. The noteholders in their answer also stated that any right of partition by the plaintiff was subordinated to the lien of the notes, and that until the notes were fully paid and discharged, any partition would be meaningless. The answer also alleged the filing of the complaint to foreclose by Jessie Katz, as executrix of the estate of George F. Harding, deceased, on behalf of herself and all the other note-holders on May 25, 1939, and averred that there was an unpaid balance due on all of the notes in the sum of $17,000, together with interest at 7 per cent per annum from March 23, 1933, amounting to $7,503.62, or a total balance due on the unpaid promissory notes at the time of the filing of the answer in the partition suit of $24,503.62. On April 15, 1940 a decree of partition was entered. This decree was drafted and presented to the court by the plaintiff therein, Charles R. Smith. Paragraph 8 of the partition decree finds that “the sum of $14,320 was due and unpaid on the said notes so secured by the said trust deed 9675004 on March 1, 1940, and interest at the rate of five percent per annum upon the said sum of $14,320 from March 1, 1940, until payment thereof.” This decree appointed commissioners to make partition of the premises. The commissioners reported that the premises could not be divided without manifest prejudice to the "parties in interest. On May 10,1940 a decree of sale was entered in the partition suit directing that the real estate be sold at public auction, subject to the trust deed sought to be foreclosed securing payment of the eight promissory notes dated March 23, 1927. This decree found that “there was due on March 1, 1940 on account of said trust deed 9675004 and notes secured thereby the sum of $14,320, with interest at the rate of five percent per annum after [that] date, until the payment thereof.”

On February 4,1941’, plaintiff in the foreclosure suit filed her “second amendment” to her complaint, and set out that on July 25, 1939 Charles R.

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Bluebook (online)
45 N.E.2d 566, 316 Ill. App. 569, 1942 Ill. App. LEXIS 787, Counsel Stack Legal Research, https://law.counselstack.com/opinion/katz-v-berkos-illappct-1942.