Silberman v. Becklenberg

279 Ill. App. 250, 1935 Ill. App. LEXIS 98
CourtAppellate Court of Illinois
DecidedFebruary 25, 1935
DocketGen. No. 37,830
StatusPublished
Cited by4 cases

This text of 279 Ill. App. 250 (Silberman v. Becklenberg) 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
Silberman v. Becklenberg, 279 Ill. App. 250, 1935 Ill. App. LEXIS 98 (Ill. Ct. App. 1935).

Opinion

Mr. Justice Matchett

delivered the opinion of the court.

This suit was an action begun December 19, 1933, upon bond No. 11 of the Austin Boulevard Apartments, made by defendants December 16, 1927, for the sum of $1,000, with interest at 6% per cent, payable to bearer and maturing December 16, 1933. Attached were coupons representing interest falling due on the bond on June 16 and December 16, 1933. On May 21, 1934, the court, having stricken an amended affidavit of ‘merits, entered judgment by default in favor of plaintiff and against defendants for $1,084. Defendants appealed, filing a bond which was approved June 13,1934. The record was filed in this court August 31, 1934.

The bond sued on was one of a series of bonds aggregating $48,000 made by defendants and secured by a trust deed of even date conveying certain real estate in Cook county, Illinois, to Milton S. Yondorf, as trustee. Defendants undertook to interpose the defense that by reason of certain provisions printed on the face of the bond and others contained in the trust deed to which the bond referred, the owner could not maintain a suit at law thereon. In opposition to this defense plaintiff relied on Oswianza v. Wengler & Mandell, 273 Ill, App. 239, 241, which was then pending on certiorari in the Supreme Court. Defendants urged that the decision was wrong and relied upon a reversal of it by the Supreme Court. However, since the appeal in this case was perfected that case has been affirmed by the Supreme Court, 358 Ill. 302, and defendants do not argue error with respect to the judgment entered by the trial court.

Pending the appeal, on July 17, 1934, defendants entered a motion for leave to file a petition in the nature of a writ of audita querela, setting up certain facts on account of which it was prayed the judgment should be in part satisfied. This motion was denied by the court August 29, 1934, and defendants, appealing from that order also, filed a supplemental record in this court and now argue at length error by reason of the entry of it. • •

The petition was duly verified and set up the execution of the trust deed to Yondorf to secure payment of the bonds. It averred that after the execution of the bond, namely, on January 26, 1928, defendants conveyed the real estate by warranty deed to Norman J. McLeod, who received the conveyance subject to the trust deed; that September 10, 1929, Norman J. McLeod and wife conveyed the premises to Charles Drechsler and Gertrude Drechsler by a like deed, they also assuming and agreeing to pay the indebtedness represented by the outstanding bonds,* further, that on February 5, 1934, Yondorf as trustee filed an action in the circuit court of Cook county, Illinois, cause No. 34C 1485, against defendants and Charles and Gertrude Drechsler to foreclose the trust deed; that a decree of foreclosure and sale was entered in that proceeding on June 5, 1934, and that the master in chancery advertised the property for sale; that the proceedings were for the equal use and benefit of plaintiff, together with all other holders of bonds secured by the trust deed, and that plaintiff had an equal interest in the proceeds derived from the foreclosure sale; that the trust deed provided that Tondorf as trustee should have full power and authority to represent plaintiff and all other bondholders with respect to their bonds, and specifically provided that each legal holder held the same upon condition that in case of foreclosure “the Trustee, if he deems it for the best interests of all of the holders of said bonds so to do, and in order that no advantage in the sale of said premises upon foreclosure may be taken by or accrue to any holders of said bonds over any other holders of said bonds, may, at the sale, if said premises shall not be bid in by some other person, persons or corporation for the full amount of the debt, bid in, in his own name as trustee, said premises for the equal benefit of all of the holders of said bonds, included in said foreclosure, either for the full amount of the debt or for a less amount, leaving such deficiency as he may deem proper.”

The petition also averred that by reason of this provision and the decision of the Appellate Court of Illinois in Straus v. Chicago Title & Trust Co., 273 Ill. App. 63, it was the duty of the trustee to bid in the property for the equal and pro rata benefit of all the bondholders, including plaintiff, and that the indebtedness claimed by plaintiff was subject and subordinate to the right of the trustee to satisfy it by such a purchase; that on June 29, 1934, pursuant to the terms of the trust deed, the trustee, as agent for and trustee of all the owners, bid for the whole property at the foreclosure sale $41,000; that the trust deed provided that in case the trustee should become the purchaser he should be entitled to receipt to the officer making the sale for the full amount of his bid as agent and trustee of the holders of the bonds, ratably for each and all of them, after allowing in cash for the costs and expenses of the foreclosure sale; that for that purpose the trustee was constituted irrevocably the attorney for each and all of the bondholders; that the bondholders agreed to contribute and pay to the trustee upon demand their proportionate share of the cash payment on demand; that the trustee was authorized to sue for and recover the same, and if the same should not be otherwise paid the trustee should have a lien therefor upon the interest of any holder of the bonds who failed to pay the same, and that he might retain the amount realized from the premises, from the net rents of the premises, or from such sale thereof, or otherwise.

It was also averred that the decree of foreclosure provided that the trustee might receipt for the amount to the master on behalf of all the bondholders, the same as if his bid were in cash; that the proceeds of the sale were $41,000, which was paid by the master to the trustee and was receipted by him as of June 29, 1934; that under the decree of foreclosure the total indebtedness found due including all expenses of foreclosure was $47,009.60; that the master pursuant to the decree rendered his report of sale and distribution; that on July 12, 1934, an order was entered approving same and finding there remained due and unpaid to the trustee, as agent for and trustee of all the bondholders, $6,009.60, for which defendants and Charles and Gertrude Drechsler were personally liable ; that the order directed that execution issue forthwith and that the deficiency decree should be a first lien against the rents, issues and profits of the property theretofore and thereafter collected by the receiver during the period of the equity of redemption.

The petition also alleged that defendants had theretofore been unable to present these matters, for the reason that they occurred subsequently to the entry of the judgment; that defendants were entitled to have the judgment satisfied to the extent and proportion that the purchase price paid at the foreclosure sale bore to the total indebtedness, as found due by the decree of foreclosure and sale, and that such sum amounted to $945.42.

A copy of the order approving the master’s report of sale and distribution was attached to the petition and made a part thereof. As already stated, the court entered an order denying leave to file the petition. In support of their argument that the court erred in denying leave to file the petition, defendants urge several propositions of law, concerning which there can be no controversy.

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Bluebook (online)
279 Ill. App. 250, 1935 Ill. App. LEXIS 98, Counsel Stack Legal Research, https://law.counselstack.com/opinion/silberman-v-becklenberg-illappct-1935.