text:
    M. F. Stevenson, Exr. of the Estate of B. F. Stevenson, deceased, Plaintiff-Appellee, v. Harry J. Baker, Jr., Defendant-Appellant.
    (No. 12107;
    Fourth District
    April 4, 1974.
    Francis J. Davis, of Auler Law Offices, of Champaign, for appellant.
    Raymond R. Kimpel, of Summers, Watson & Kimpel, of Champaign, for appellee.
   Mr. JUSTICE SIMKINS

delivered the opinion of the court:

This is an appeal by the defendant from a judgment against him in the amount of $16,165 entered at the conclusion of plaintiff’s action on two notes in the face of defendant’s plea of discharge in bankruptcy as a defense.

The facts of the case are uncomplicated except for the rather long period of time their chronology encompasses. On May 26, 1964, the plaintiff filed suit against the defendant in Champaign County for money due on promissory notes of $10,000 and $2000 executed in 1961 in the State of Florida. The $10,000 note was payable at the rate of $2000 per year beginning January 1, 1963, and the $2000 note was payable in full on January 1, 1962. On June 25, 1964, the defendant filed an answer, generally denying the allegations of the complaint and pleading a novation of the debt to a third party whom defendant alleged had assumed the debt as well as the lease to the drug store for which the loans were made to equip and stock. On December 21, 1966, the suit was dismissed for want of prosecution. On January 12, 1967, the plaintiff made a motion to vacate the dismissal and to reinstate the cause of action, which motion was granted on the same date. On May 19, 1967, the defendant filed a voluntary petition in bankruptcy in the District Court of Nevada in which he listed plaintiffs claim as a scheduled debt. On June 5, 1967, the plaintiff moved for leave to file an amended Count II to his complaint in the Circuit Court of Champaign County, and the motion was granted following a hearing on June 8, 1967. The amended Count II to the complaint was filed alleging the unauthorized removal with the intent to defraud of fixtures and equipment which were the subject of the chattel mortgage executed simultaneously with the $10,000 note to secure that debt; and fraud in tendering several stock certificates which plaintiff alleged were worthless and known by the defendant to be worthless, as security for the $2000 note. On June 14, 1967, the defendant filed a petition in the District Court of Nevada alleging that the plaintiff was alleging fraud in an attempt to circumvent the debt listed in the defendant’s petition for bankruptcy pending in the Federal court, and stating that the plaintiff should be, as was the defendant, “willing to litigate the matter before this honorable court.” Also in his petition the defendant asked the district court to stay the Champaign Circuit Court action, “until the final adjudication of his application for a discharge, unless the same be prosecuted in these pending proceedings in bankruptcy.” The stay was issued by the District Court of Nevada along with an order for the plaintiff to show cause why the stay should not be entered by July 28, 1967. On July 27, 1967, the plaintiff filed a special and limited appearance to contest the jurisdiction of the District Court of Nevada to issue the order or to consider the dischargeability of the debt, contending that where a suit is pending against a bankrupt in a State court, the bankruptcy court should not restrain the prosecution of that State action. The date set for the plaintiffs appearance and for the plaintiff to show cause was continued, and the matter finally came on for hearing on April 17, 1968, with plaintiff failing to appear either in person or by counsel. On October 9, 1968, defendant filed in the Illinois Circuit Court in Champaign County an amendment to his answer asserting the defense of discharge in bankruptcy. On October 17, 1968, the defendant filed an answer to Count II of plaintiffs complaint denying the allegations of fraud asserted therein and denying that the stock pledged as security for the $2000 note was worthless. On October 30, 1968, the District Court of Nevada issued an order denying the petition set forth in plaintiff’s special appearance, finding that it had jurisdiction over the plaintiff’s claim, and finding that the discharge order of April 17, 1968, included the claim and obligation owed the plaintiff.

After plaintiff”s death in October 1969, his executor was substituted as plaintiff, both parties argued for summary judgment, and both were denied. Defendant’s motion included a certified copy of the proceedings in the District Court of Nevada in an attempt to show that the issue of fraud was heard and decided in favor of the defendant in the bankruptcy court. Following several more continuances, on March 23, 1972, the cause was heard at a bench trial in Champaign County concluding with a judgment in favor of the plaintiff on tibe $10,000 note with interest. The circuit court held that the $2000 loan was not made in reliance of the stock covered by the chattel mortgage given to secure it since that loan was made prior to and independent of the voluntary tender of the stock as security and the execution of the mortgage. However, as to the $10,000 note, the court found that obligation was not discharged in bankruptcy for two reasons; first, finding that the defendant had wrongfully removed fixtures and inventory from the drug store, referring to such action as a wrongful conversion which constituted a willful and malicious injury to property of the creditor within the meaning of section 17 of the Bankruptcy Act; and in addition finding that the plaintiff had relied on the defendant’s representation that the $10,000 would be used to equip and stock the drug store, but that it was not, and that the defendant did not intend to so use it, so the $10,000 loan was obtained by false pretenses and representation, which also precludes dischargeability under section 17 of the Bankruptcy Act.

The primary issue is whether the defendant’s discharge in bankruptcy by the District Court of Nevada pursuant to the defendant’s voluntary petition in bankruptcy filed while the plaintiff’s suit on the notes was pending, but before the count was added alleging circumstances which would exempt the obligation from discharge in bankruptcy, which discharge was found by the district court to include the plaintiff’s debt, was res judicata as to the matter in the Illinois circuit court. If it was, then plaintiff’s proper remedy would be an appeal within the Federal system and the issues concerning the findings and judgment of the Illinois circuit court raised by the defendant need not be considered.

Section 17(a)(2) of the Bankruptcy Act pertaining to debts not affected by discharge provides that a discharge in bankruptcy releases a bankrupt from all his provable debts, whether allowable in full or in part, except such as “* * * are liabilities for obtaining money or property by false pretenses or false representations, * * * or for willful and malicious conversion of the property of another.” (11 U.S.C.A., sec. 35(a)(2).) By way of comment and for its possible value in analyzing policy considerations and in determining the previous intent of the Bankruptcy Act, it should be noted that since 1970, section 17(c)(2) of the Bankruptcy Act specifically requires a creditor who contends that his debt is not discharged because obtained by false pretenses or false representations, or because it is a liability for a willful and malicious conversion of his property to file a timely application for a determination of dischargeability in the Bankruptcy Court or else the debt will be discharged. (11 U.S.C.A., sec. 35(c)(2).) Section 14(f) of the Bankruptcy Act providing that creditors asserting non-dischargeability of debts allegedly incurred as a result of loans based upon false financial statements are no longer permitted to bring suit in State courts after discharge has been granted, implies that, prior to 1970, such claims could be brought in State courts after a discharge in bankruptcy. The difficulty in the instant case is in determining whether that course was still open to the plaintiff after his allegations of fraudulent inducement and willful and malicious injury to property were brought before the bankruptcy court by the defendant in his petition to stay the State court, the subsequent decision of the bankruptcy court that it had jurisdiction over the plaintiffs claim and the order including plaintiff’s debt in the discharge, where the merits of the plaintiffs assertions of non-dischargeability were apparently never argued or passed upon.

One school of thought holds that the effectiveness of section 17(a)(2) in saving liabilities within its term from discharge is not dependent upon interposition of objections to discharge, and the creditor to whom the liability runs need not participate in any manner in the bankruptcy proceedings in order to safeguard his rights as against discharge of the bankrupt if one is granted. (Household Finance Corp. v. Hamer, 248 Md. 567, 238 A.2d 112.) Illinois seems to have taken the same position on the issue, it having been stated that the granting of a discharge in bankruptcy is a function of the bankruptcy court alone, but the effect of the discharge can be determined by any court where it is properly raised. (Avco Finance Co. v. Erickson, 132 Ill.App.2d 868, 270 N.E.2d Ill.) Under this theory it has even been held that where the bankrupt obtained a loan by virtue of a materially false statement, the creditor could object to the discharge or permit the discharge and sue at law on the theory that discharge did not wipe out the debt. (Friendly Finance Co. v. Stover, 109 Ga.App.21, 134 S.E.2d 837, citing Watts v. Ellithorpe (1st Cir. 1943), 135 F.2d 1.) Watts reached the same result, saying that the bankruptcy court has discretion to decide dischargeability of particular debts, but need not do so, and that generally the effect of a discharge in bankruptcy is for debtors to raise by pleading it as a bar when a creditor attempts to enforce his claim. Watts explained that policy by saying that bankruptcy courts are interested primarily in the speedy settlement of the bankrupt’s estate and should not be required to stop and hear testimony on whether various creditors have debts which are dischargeable.

Section 11(a) of the Bankruptcy Act concerning suits by and against bankrupts provides that a suit which is founded upon a claim from which a discharge would be a release and which is pending against a person at the time of the filing of a petition in bankruptcy shall be stayed until adjudication or the dismissal of the petition. (11 U.S.C.A., sec. 29(a).) The plaintiffs action in the instant case was pending at the time the defendant filed for bankruptcy, but was then simply an action on the notes which were due and unpaid with the amended Count II alleging the malicious injury to property and fraudulent inducement coming after the petition in bankruptcy was filed. In re Urquhart (1970), 427 F.2d 492, holding “* * * it is well settled that the bankruptcy court may decide the effect of the discharge, and at the same time stay the state court proceeding * * * Local Loan Co. v. Hunt, 292 U.S. 234, 54 S.Ct. 695, 78 L.Ed. 1230” would seem to support defendant’s contention that the discharge of April 1968 which was stated in October 1968 to specifically include plaintiffs debt, is res judicata to the State court. In the instant case the defendant’s petition to the bankruptcy court raised the allegations made by the plaintiff’s amended petition in the circuit court which would avoid dischargeability and asked that the bankruptcy court stay the State court proceedings pending final determination of the issue or adjudication of it in the bankruptcy court. The bankruptcy court did stay the State court proceedings, and the plaintiff made a limited appearance for the purpose of contesting the jurisdiction of the bankruptcy court, which petition was denied. The bankruptcy court found that it had jurisdiction over the parties and the subject matter and found (after a hearing according to the defendant, although it is not in the district court’s record included with the record from Champaign County) that the claim of the plaintiff was discharged.

. Strictly speaking, an unsuccessful opposition to the granting of a discharge to the bankrupt is not res judicata as to the right of the objecting creditor thereafter to assert that his claim is excepted from discharge by reasons based upon facts asserted in the specifications of objections. (Friend v. Talcott, 228 U.S. 27, 57 L.Ed. 718, 33 S.Ct. 505.) That case went on to say that a finding in the bankruptcy proceeding against the creditor on his allegations made for the purpose of defeating the discharge would be res judicata, but not as to a fact to which there was no finding in the proceedings for discharge. An attack upon a defense of discharge in bankruptcy on the ground that the debt is excepted from discharge does not constitute a coUateral attack for the discharge since it does not controvert the validity and general effectiveness of the discharge. Sutherland v. Lasher, 41 Misc. 249, 84 N.Y.S. 56.

The plaintiff argues that both parties elected to submit the issue of dischargeability to the State court, and they should have exhausted the remedies there rather than subsequently attempting to submit the issue to the Federal bankruptcy court; and further that the bankruptcy court abused its discretion in enjoining the State court because the bankruptcy court should not interfere with State courts unless “unusual circumstances” exist, and that Federal intervention should not be substituted for the appellate process in the State courts. Conversely the defendant argues that since he scheduled the debt owed plaintiff on his petition for bankruptcy, and included the allegation of fraud and willful and malicious injury raised by the plaintiff in his later Count II in the circuit court in his motion to the bankruptcy court to stay plaintiff’s suit in the State court, which was granted along with the order to plaintiff to show cause following which the bankruptcy court found it had jurisdiction and ultimately that the plaintiff’s debt was discharged, pursuance of the matter in the State court constitutes an improper collateral attack on the Federal court’s judgment.

Defendant further contends that even if plaintiff is correct that before the 1970 amendment a creditor could, at his option, allow a debtor to get a discharge in bankruptcy and then sue in the State court on the grounds that his debt was not discharged because of an exception in the Bankruptcy Act, it would not apply here where the issue of dischargeability was heard by the bankruptcy court and a specific finding was made that the plaintiff’s debt was included in the discharge. In this context the issue becomes whether the bankruptcy court really “heard” and “decided” the matter of dischargeability where it is only clear that the bankruptcy court decided the question of jurisdiction, stayed the State court proceedings, and specifically included plaintiff’s debt in the discharge. If the defendant’s contention is correct, then the plaintiff’s only recourse would be to the appellate process in the Federal system rather than a collateral attack in the State of Illinois. Although until the 1970 amendment to the Bankruptcy Act, there was no specific requirement that the creditor raise in the bankruptcy court itself the matters of fraud in the inducement, or willful and malicious injury to property to prevent a discharge of his debt, in general terms the law seems to be on the side of the defendant—bankruptcy is a Federal matter, and the Bankruptcy Act is to be supreme over State laws on the matter. Kesler v. Department of Public Safety, 369 U.S. 153, 7 L.Ed.2d 641, 82 S.Ct. 807; Perez v. Campbell, 402 U.S. 637, 29 L.Ed.2d 233, 91 S.Ct. 1704.

The plaintiff relies on two recent Illinois cases (Appliance Buyers Credit Corp. v. Zdeb, 3 Ill.App.3d 1055, 280 N.E.2d 7; First National Bank of Lansing v. Padjen, 61 Ill.App.2d 310, 210 N.E.2d 332) which were cited by the trial court where creditors recovered debts which were scheduled by debtors who had received a general discharge in bankruptcy. However, in the instant case, in addition to plaintiff’s debt being scheduled by the debtor in his petition for bankruptcy which would, as a matter of course, include it in the general discharge, the plaintiff’s contention as to non-dischargeability of his particular debt and his lawsuit thereon was raised before the bankruptcy court, giving plaintiff an opportunity to fully present his theories of non-dischargeability, with that court staying the Illinois proceedings, finding it had jurisdiction over the parties and the debt, and ultimately finding that the debt was discharged.

Also this case is distinguishable from the cases cited by the plaintiff, in which the creditors moved as quickly as possible to protect themselves. Here the plaintiff first instituted his suit to the circuit court in 1964. The plaintiff failed to diligently pursue the matter and, only after the defendant filed for bankruptcy some years later, was the count added alleging grounds which would preclude the debt’s discharge in bankruptcy. This dilatory behavior of the plaintiff further conflicts with the purpose of the bankruptcy law to expediently determine the -financial status of the bankrupt and give the honest debtor a new start.

Here in light of this general policy of the Bankruptcy Act and the specific power of the bankruptcy court to stay State court proceedings, there were unusual circumstances to warrant the bankruptcy court’s deciding the dischargeability of this particular debt. (In re Urquhart) That is, the plaintiff filed a suit on the note, the defendant filed for bankruptcy scheduling the plaintiff’s debt and received a general discharge, plaintiff added a count in the State court alleging grounds which would avoid the discharge of his debt, the defendant brought this allegation to the attention of the bankruptcy court, asking for a stay of the State court proceedings pending determination of the matter, the bankruptcy court stayed the State court, found it had jurisdiction of the parties in the debt, and after the plaintiff failed to appear and show cause, the bankruptcy court declared that plaintiff’s debt was discharged by the general discharge. Then after another delay of several years, the plaintiff pursued his action in the State court. If this procedure is permitted most creditors could, by similar reasoning and hindsight, argue that every debtor intended to misuse the borrowed funds or convert the security given and thus avoid in the State court the effect of a general discharge in bankruptcy. The whole purpose and rationale of bankruptcy would be thwarted by this type of action, and is distinguishable from the case cited by the plaintiff where the creditor, immediately after discovering the debtor’s conversion of the mortgaged television sets, instituted a suit and was awarded the remaining sets, and then diligently pursued the matter by suing for the remaining debt in the State courts following the plaintiff’s discharge in bankruptcy on the grounds his debt was exempted because it was a liability for conversion. This case is further distinguishable because there was more than the general discharge; the matter of dischargeability being raised before the bankruptcy court with the creditor clearly having an opportunity to pursue the matter and failing to do so, and the order of the bankruptcy court is res judicata on the parties in the circuit court.

As noted above, there are cases holding that a creditor may raise the issue of dischargeability of his debt in the bankruptcy court, or remain silent and sue in State courts. However, here the plaintiff failed to fully respond to an order of the bankruptcy court to show cause, and then in the fact of the specific inclusion of his debt in the discharge, pursued his suit in State courts. In a case involving patent infringements in discussing whether the same issues (the validity of a patent) had been decided in earlier lawsuits, and if so, whether there was complete mutuality of the parties so as to preclude a re-litigation, the United States Supreme Court noted that the achievement of substantial justice rather than symmetry is the measure of the fairness of the rules of res judicata. Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 28 L.Ed.2d 788, 91 S.Ct. 1434.

Any argument that the Federal court abused its discretion in either granting the discharge in bankruptcy, staying the State court proceedings, or in specifically finding that defendant’s obligation to the plaintiff was included in the discharge, should be appealed within the Federal system and not in the State courts of Illinois.

Reversed.

SMITH, P. J., and TRAPP, J., concur.


source: Caselaw Access Project

author: Mr. PRESIDING JUSTICE SMITH

license: Public Domain

text:
    Frances Delores Harding, Plaintiff-Appellant, v. James Henry Harding, Defendant-Appellee.
    (No. 12177;
    Fourth District
    April 10, 1974.
    Wright, Young and Wright, of Danville, and Greaves and Erwin, of Champaign (M. Eugene Wright and Burt Greaves, of counsel), for appellant.
    Gunn, Hickman, Kesler, Jenkins & Vogel, Ltd., of Danville (John B. Jenkins, of counsel), for appellee.
   Mr. PRESIDING JUSTICE SMITH

delivered the Opinion of the court:

The circuit court of Vermilion County granted the plaintiff-wife a divorce on the grounds of extreme and repeated mental cruelty and made a disposition of property including periodic alimony payments. In this court the only issues relate to the property. The plaintiff contends (1) that the trial court erred in failing to find special circumstances warranting a transfer of the property in the defendant’s name to the plaintiff, (2) that the alimony award and disposition of property both as to structure and amount are inadequate and unprotected, and (3) that the court erred in changing the custodian and transferring to a bank in Danville as trustee property designated for the benefit of the children under the Illinois Uniform Gift to Minors Act. Ill. Rev. Stat. 1971, ch. 3, par. 531 et seq.

The parties were married in 1950 and five children were born of this marriage: A son, 20; a daughter, 18; a son, 14; a daughter, 12; and a son, 10. The oldest son attends school away from home and the other four children live and reside with their mother in the marital residence in Danville. The wife is unemployed; the husband is a doctor practicing in Danville. Following the schooling of the husband, they returned to Danville to establish the defendant’s medical practice and at that time had accumulated only a small amount of household goods and an old car. At the time of the divorce, the marital residence was held in joint tenancy and consisted of a five-bedroom, two-story house, having five baths or half-baths, a kitchen, recreation room, dining room, living room, finished basement, a swimming pool, and surrounding grounds fully landscaped. In addition, the doctor was drawing a salary of $48,000 and had additional income as well as quite a lot of additional property.

The judgment of the trial court allowed the wife the sum of $1,200 per month alimony and $200 per month for each of the minor children for their support, allowed the defendant to take the income tax deductions for such minor children, and gave to the wife the marital residence, and the household goods, valued in the neighborhood of $40,000 to $45,000, except certain personal belongings of the husband. The court also gave to each his or her own life insurance policies, and provided that life insurance on the defendant’s life should be continued in full force and effect at his own expense with the minor children of the parties designated as primary beneficiaries and that such policies should not be encumbered without a further order of the court, that the defendant should pay all medical and dental expenses reasonably incurred for the benefit of the minor children with some supervision on his part, required the defendant to pay $8,750 for the plaintiff’s attorney fees, and costs of some $358.75, gave to the wife the marital residence valued at $90,000 then held in joint tenancy subject to present lien of $74,000, gave to the defendant the Medical Arts Building valued at $50,000 then held in joint tenancy subject to liens and indebtedness of $31,000, and excused each party from any and all debts or liabilities and directed that all funds, property and contract rights held by either party for the benefit of the five children under the Illinois Uniform Gift to Minors Act (Ill. Rev. Stat. 1971, ch. 3, par. 533) be transferred to the First National Bank of Danville as trustee or custodian and to be used for the college or vocational education of the children of the parties.

In Debrey v. Debrey, 132 Ill.App.2d 1072, 270 N.E.2d 43, this court had occasion to discuss the circumstances under which a court may transfer property from one party to another, and we discussed the circumstances under which one party may seek a conveyance of property titled in the other where special circumstances and equities exist. In that case we observed that there was no evidence indicating or suggesting that the plaintiff made any contributions to the acquisition of er the improvement of the marital home, other than the services normally rendered by a wife. The facts in the case at bar are totally different and poles away from the special circumstances set forth in Ylonen v. Ylonen, 2 Ill.2d 111, 117 N.E.2d 98, or to the circumstances related in Klebba v. Klebba, 108 Ill.App.2d 32, 246 N.E.2d 681, where the appellate court held that there was no abuse of discretion in not awarding property or money in gross in lieu of alimony. In the instant case, it is clear from the record and the plaintiff’s testimony that she contributed no money earnings or effort toward the acquisition or development of any of thé real estate properties owned by either of the parties or any other assets titled in the defendant’s name. This record falls far short of establishing any special equities in either the real estate or the other property titled in defendant’s name. The trial court found that the equities in the Medical Arts Building and in the home were substantially the same. These were the two properties held in joint tenancy. His decree provided and his findings noted that these equities pretty well balanced each other off and that he was ordering these conveyances on the theory of a gift between husband and wife. The trial court’s opinion indicated that considerable heat and animosity had been engendered between the husband and wife and we do not think that the best interests of the parties would warrant a decree which would permit that heat to continue to flare in a joint ownership of any property. We see nothing in this record creating or establishing special equities of the wife in the property solely owned by the husband. In like manner, we see nothing in this record which warrants this court in conveying property to the wife in lieu of alimony. Indeed the plaintiff concedes that the usual and proper, procedure is to award alimony in periodic payments so that the needs of the wife and family may be weighed in connection with the abilities of the husband to pay. Awarding periodic alimony remains within the control of the court and it should be only where the record shows that periodic payments are not feasible or practicable that the court should depart from the rule of need coupled with the ability to pay. Honey v. Honey, 120 Ill.App.2d 102, 256 N.E.2d 121, and cases cited therein.

In Hoffmann v. Hoffmann, 40 Ill.2d 344, 239 N.E.2d 792, the supreme court noted that the awarding of alimony is a matter reposing within the sound discretion of the trial court and in Illinois a trial judge can award either permanent periodic alimony or alimony in gross, and that the trial judge’s discretion will not be disturbed in that regard unless if amounts to an abuse of discretion or is contrary to the manifest weight of the evidence. The plaintiff’s primary attack to the allowance of periodic alimony is that the defendant’s ability or desire to continue with that method of payment is unpredictable and gives no assurance to the plaintiff that he will continue to make such payments. To protect against that contingency so far as a court can, the trial court impressed a lien upon the property of the defendant to ensure his performance, so far as it is within the power of the court to do so. Most, if not all, of defendant’s property is pledged to secure indebtedness. To transfer that property to the plaintiff subject to such indebtedness is of questionable wisdom on this record. The evidence establishes that the plaintiff had no experience in the investment and management of any large sums of money or property. When her testimony disclosed a total lack of knowledge of the custodial account of her children, the assets that were in it or what was being done with it, alimony in gross becomes suspect. The trial court expressed his concern in these words: “The court was disturbed by the events that went on after the separation as to the financial stability of the plaintiff for awarding a lump sum alimony. She testified that she would require $48,000 per year in order to maintain herself and the children in the manner to which she was accustomed. Yet the entire family, including the husband, spent approximately $28,000 per year in 1970, including fixed charges such as mortgage payments, taxes, life insurance, etc. She likewise contends that he has available in excess of $56,000 to $60,000 annually which he has consistently reported in his income tax return. The provisions of the decree presently will require an outlay by the defendant of approximately $25,000 a year, exclusive of medical costs for the children or premiums on his life insurance program. Thus, the plaintiff and her children will receive well in excess of one-half of the defendant’s income after taxes.

The plaintiff likewise contends that the trial court had no jurisdiction to limit the expenditures of the custodian of the money provided under the Illinois Uniform Gift to Minors Act to education alone. That issue is not before this court. The plaintiff in her complaint asked that the defendant be removed as a custodian and all the custodial assets and funds be transferred to her as successor custodian. The issue of the custodian was therefore squarely before the court inasmuch as the defendant likewise asks that she be removed and the administration of the custodial funds be awarded to him. The court granted neither, but designated a bank as trustee, and its proper administration awaits another day and hopefuUy without another courtroom. The argument that the bank desig- ■ nated was one used by the defendant and thus the bank will acquiesce in the defendant’s request as to the expenditure of the funds reflects no credit upon the trust department of that bank and indicates the extent to which the heat and animosity between the parties has warped an objective view of the property interests.

Courts are not endowed with a wisdom of Solomon or the prophetic vision of a seer. Everyday events suggest that the needs of the wife and the children and the ability of the husband to pay through economic changes or other uncontrollable events are common occurrences in the life or lives of mankind and change from time to time. The interests of all parties would be best served by doing as the trial court did—provide for periodic alimony with the power to adjust tomorrow’s needs to the ability to pay as the changing circumstances may warrant.

Accordingly, the judgment of the trial court is affirmed.

Affirmed.

SIMKINS and KASSERMAN, JJ., concur.


author: Mr. JUSTICE SIMKINS

text:
    Guy C. Irvin, Plaintiff-Appellee, v. Thomas Poe, Defendant-Appellant.
    (No. 12452;
    Fourth District
    April 10, 1974.
    Jack C. Vieley, of Peoria, for appellant.
    No appearance for appellee.
   Mr. JUSTICE SIMKINS

delivered the opinion of the court:

On June 1, 1973, plaintiff filed a small claims complaint against defendant, Thomas Poe, in the Macon County circuit court. On June 27, 1973, defendant filed a special and limited appearance pursuant to section 20 of the Civil Practice Act (Ill. Rev. Stat. 1971, ch. 110, sec. 20), for the purpose of objecting to the court’s jurisdiction over defendant’s person, alleging that defendant has never been a resident of Macon County but has always been a resident of Tazewell County and that defendant has never had any business dealings with plaintiff in Macon County. On August 17, 1973, the trial court overruled defendant’s motion. It is from that denial that this appeal is taken. We dismiss for want of a final and appealable order.

In order for this court to have jurisdiction the order of the circuit court from which an appeal is taken must be a final order. (Ill. Rev. Stat. 1971, ch. 110A, par. 301.) Accordingly, a final order must terminate tiie litigation between parties on the merits or dispose of the rights of the parties upon the entire controversy or some definite part thereof. (Brauer Machine and Supply Co. v. Parkhill Truck Co., 383 Ill. 569, 50 N.E.2d 836; Sebree v. Sebree, 293 Ill. 228, 127 N.E. 392.) The order in this case neither terminates the litigation between the parties on the merits nor does it settle the rights of the parties in any respect. It also does not fall within any of the exceptions to the final judgment rule contained in Supreme Court Rules 306, 307, and 308 (Ill. Rev. Stat. 1971, ch. 110A, pars. 306-308). Furthermore, the Fifth District has specifically stated that the denial of a motion made under section 20 of the Civil Practice Act for the purpose of objecting to the personal jurisdiction of the court over the defendant is not a final order or judgment and is not appealable. People ex rel. Department of Public Health v. Brown, 96 Ill. App.2d 355, 239 N.E.2d 144.

For the reasons above stated the appeal is dismissed for want of a final order.

Appeal dismissed.

SMITH, P. J., and CRAVEN, J., concur.


author: Mr. JUSTICE TRAPP

text:
      In re Estate of Lilah J. Krotzsch, Deceased—(Stella M. Parsell, Ex’r, Petitioner-Counterdefendant-Appellee, v. Ruth Parsell Sibert et al., Respondents-Counterplaintiffs-Appellants.)
    (No. 11930;
    Fourth District
    April 18, 1974.

      Rehearing denied May 7, 1974.

      George R. Schwarz, of Schwarz & Self, of Jerseyville, and Jack E. Horsley and Richard Record, Jr., of Craig and Craig, of Mattoon, for appellants.
    Earl R. Bice and Daniel J. Greer, of Springfield, for appellee.
   Mr. JUSTICE TRAPP

delivered the opinion of the court:

Lilah Krotzsch executed her will on August 11, 1964, devising 240 acres to her sister, Stella Parsell, for life, with remainder in nephews and a niece who are respondents here. On April 7, 1966, testator entered into a contract to sell such land to parties here designated Kramer. The testator died on December 25, 1968, and the will was admitted to probate in January, 1969.

The trial court held that the final payment on the contract should be made to the petitioner and executor, Stella Parsell, and thereafter be distributed through the probate court to Stella Parsell, individually. The trial court granted authority to the executor to execute a deed to the purchasers and determined that the respondent remaindermen were not entitled to the proceeds of the contract for sale. He also denied respondent’s counterclaim for construction of the will.

Other than the provision at issue, the will bequeathed all personal estate to Stella Parsell, and in a residuary clause devise and bequeathed all personal and real estate to her. The inventory discloses that the testator owned a residence.

The contract for sale to Kramer provided for payment in annual installments with the final payment to be made in the fifth year, but that if the testator should die before the fifth year, Kramer could accelerate payment of any balance due. The contract provided that Kramer should have possession and receive the income, pay taxes and keep the improvements in repair and insured. The contract was stated to be binding upon the heirs, executors, administrators and assigns, and provided that if the testator died before final payment, such final payment should be made to petitioner, Stella Parsell, or if she shall not be living, to the estate of the testator.

In a letter opinion, the trial court determined that the con-tract was as effective in defeating the devise at issue as if she had conveyed the real estate and had received the full purchase price during her lifetime.

Section 48a of the Probate Act (Ill. Rev. Stat. 1967, ch. 3, par. 46a) was not in effect either at the time of the execution of the will or the making of the contract. Such statute provides that if a testator after executing a will specifically devising the real estate makes a contract which remains executory at his death, the contractual disposition of the property shall not revoke the devise, but that the property shall pass to the devisee subject to the contract. The statute is not applicable to these facts for constitutional reasons.

The effect of the contract provision in this case is to work an ademption of the devise in the will. The court, in Brady v. Paine, 391 Ill. 596, 600-601, 63 N.E.2d 721, defined ademption as follows:

“Ademption of a specific legacy or devise is the extinction, alienation, withdrawal or satisfaction of the legacy or devise by some act of the testator by which an intention to revoke is indicated; the doing of some act with regard to the subject matter of the devise which interferes with the operation of the will. It signifies an alteration in the subject matter of the legacy or de- « » vise.

The recent opinion in In re Estate of Bloomer, 5 Ill.App.3d 533, 283 N.E.2d 523, under substantially similar circumstances, held that the unpaid proceeds should go to the devisees following the rule stated in Adams v. Peabody Coal Co., 230 Ill. 469, 82 N.E. 645. The opinion cites eminent texts, including 2 James, Illinois Probate Law And Practice, ch. 41, par. 43.90, p. 176:

“Where the vendor dies testate devising the land, the devisee is entitled to the purchase money in the absence of a contrary intent, and is entitled to the realty on failure of the vendee to pay the purchase price.”

The texts cite as authority Covey v. Dinsmoor, 226 Ill. 438, 80 N.E. 998; Adams v. Peabody Coal Co., 230 Ill. 469, 82 N.E, 645; Heirs of Wright v. Minshall, 72 Ill. 584, and First Trust & Savings Bank v. Olson 353 Ill. 206, 187 N.E. 282. In Covey and Minshall, the contract for sale had been executed prior to the time the will was made and the devise was “subject to the contract”. The court concluded that in such instances there was no question but that it was intended that the devisee take the proceeds. Also in Olson, the contract for sale was outstanding when the will was executed, and the court said that there was an intent that when :paid the purchase money should go to the devisee. To the same effect is Beemer v. Beemer, 252 Ill. 452, 96 N.E. 1058.

In Adams v. Peabody Coal Co., a will was executed devising real estate. The testator subsequently gave an option for mineral rights and the option was exercised after testators death. The issue raised was whether the option proceeds should go to the devisees or pass to the personal representative. We note that the devise remained operative for all purposes except the mineral rights. That court, citing Covey and Minshall, determined that the testator considered the mineral rights as real estate and that the doctrine of equitable conversion should not defeat his intention.

In In re Estate of McDonough, 113 Ill.App.2d 437, 251 N.E.2d 405, the court held that the proceeds from an executory contract for the sale of real estate passed as personal property to the residuary legatee. The contract had been made and a warranty deed placed in escrow prior to the execution of the will. The devise was of all land received from testator’s husband “and owned by me at the time of my death”. Other real estate, as well as that under contract, passed by such devise. The opinion examined both the doctrine of equitable conversion and the intention of the testator as expressed in her will, and the court concluded that if there was an equitable conversion it was as of the date of the contract made prior to the execution of the will. In examining the testator’s intent, the court noted that tire incidents of ownership were transferred as of the date of the contract, that the devise was of land owned at her death and that the devise would function as to other lands under contract. The court could find no intent in the will that the proceeds of the executory contracts should pass to the devisees.

In Brady v. Paine, 391 Ill. 596, 63 N.E.2d 721, it is said:

“The rule is well settled that if the testator, in his lifetime, disposes of property specifically devised by him, this will operate as a revocation of the devise.”

In this case, the testator entered into a contract for sale of real estate which transferred substantial incidents of ownership as of tire date of sale, including the right to income. The contract was specifically enforceable and by its terms was binding as to heirs, executors and administrators. The effect of the contract was the extinction or withdrawal of all of the interests devised in the land. (2 James, Illinois Probate Law And Practice, ch. 40, par. 43.88, p. 170.) The testator realized such effect in that she provided that if she did not survive the final payment should be made to Stella Parsell, and if the latter did not survive the date of payment, it should be made to testator’s estate.

Upon such facts the contract for sale was such a disposition of the devised property as to withdraw the devise from the will, and the proceeds when paid are properly treated as personalty in administering the will.

The respondents urged that the contract of sale does not meet the statutory requirements for revocation of a will. The conveyance of the subject matter of a specific devise is not truly a revocation of a will, but merely the withdrawal from the operation of the will of that which was theretofore devised. Gartin v. Gartin, 371 Ill. 418, 21 N.E.2d 289.

The judgment of the circuit court is affirmed.

Affirmed.

SMITH, P. J., and CRAVEN, J., concur.


author: Mr. JUSTICE SEIDENFELD

text:
    Leathel N. Ingram, Plaintiff-Appellee, v. MFA Insurance Company, Defendant-Appellant.
    (No. 72-379;
    Second District
    April 10, 1974.

      Knight & Knight, of Rockford, for appellant.
    Reese, Schlueter & Ecklund, of Rockford, for appellee.
   Mr. JUSTICE SEIDENFELD

delivered the opinion of the court:

The plaintiff, Leathel N. Ingram, sued to recover from defendant, MFA Insurance Company, the amount necessary to satisfy a judgment which had been obtained against Ingram as a result of a personal injury action. A default judgment was entered in favor of the plaintiff in the amount of $6,000 and costs, from which defendant appeals.

The complaint was filed on May 11, 1970. On May 12, 1970, summons was served on George M. Campbell as the purported agent for MFA Insurance Company with a return date of June 12, 1970. On July 21, 1970, plaintiff filed a motion for a default judgment for failure of defendant to enter an appearance or answer. On September 4, 1970, the court found defendant in default and entered judgment. On January 22, 1971, the defendant filed a "special appearance”, and a motion to quash summons. It also moved to vacate the judgment and to vacate a previous order in which plaintiff had been permitted to withdraw his jury demand without giving defendant notice. On February 4, 1971, the court denied defendant’s pleadings with leave to file a subsequent petition. Defendant filed a motion for vacation of the default judgment order supported by affidavits on February 8,1971. After several continuances and hearings on motions and amendments an order was entered on April 24, 1972, denying defendant’s motion for entry of an order quashing the summons, writ and return. Subsequently on August 5,1972, the court denied defendant’s motion to vacate the judgment. Defendant appeals from the denial of both the April 24, 1972, and the August 5, 1972, orders; and further asks that the judgment of September 4, 1970, be reversed outright or reversed and remanded.

To support its claim that the summons should be quashed, defendant called George M. Campbell who testified that he maintained an office at 1101 Broadway in Rockford in 1970 as an insurance agent “For the MFA Insurance Companies”. He stated he had contracts to act as agent for the MFA Mutual Insurance Company, the Countryside Casualty Company, the MFA Security Finance Company, and the MFA Life Insurance Company. He was the only agent doing business out of the Broadway office accepting premiums for MFA insurance sold and sending them to then- respective companies for delivery of the appropriate policies. Although separate forms, labels and title were available for use for each company, Campbell admitted having forms with the MFA Insurance Company designation. Campbell further stated that MFA Insurance Company was the designation under which the insurance companies did business. He first stated and then later denied that the telephone listing was in the name of MFA Insurance Company. An MFA insignia or decal was visible on tire window on the ground floor premises which Campbell occupied with otiier noninsurance tenants. At one point he testified that there was also an MFA insigna on his office door but later denied such marking.

Campbell denied knowing plaintiff in 1967 and further stated that he was not served a summons and complaint in the case on May 12, 1970, in person or by mail. At first, he denied speaking to plaintiffs attorney on May 12, 1970; but later said he did not remember acknowledging receipt of service or telling plaintiffs attorney that he sent the summons to Springfield. He similarly denied speaking to the process server; but later said he did not remember telling the process server that he would not accept service. He did explain, however, that had he been served he believes that he would have remembered it.

Richard A. Moran, an attorney employed by MFA Mutual Insurance Company, corroborated Campbell’s testimony that MFA Insurance Company was merely a trade name under which the MFA group of companies did business. He said that MFA was admitted to do business in Illinois under the Insurance Code and that the state office of the MFA Mutual Insurance Company was in Springfield. He testified that Campbell was an agent for all four companies of the MFA group. The witness stated that a copy of the summons was first received by him in January of 1971 and that Campbell had never telephoned or sent a summons and complaint. He further testified that no service was made upon the director of insurance.

The process server, Edwin White, testified that when he arrived at the office building on Broadway the receptionist said that the representative of MFA was not there but that he would return shortly; that she pointed him out as he walked to the front of the building and said, “That is his name on the door, George Campbell,” which the witness wrote down before he walked outside. White did not have the name George M. Campbell before going to make service; did not know Campbell personally in 1970; nor did he know the- girl at the front of the office. He testified that service was made on a public sidewalk on the man pointed out by the secretary before the person entered the building; and that the person served said nothing other than that he was not going to take any summons. Following this, White called plaintiffs attorney to tell him that the person served was hostile.

Defendant’s first contention, that the summons should be quashed because the return of service has been impeached, is not persuasive. Generally, a sheriffs return is prima facie evidence of service which cannot be set aside merely upon the uncorroborated testimony of the person served, but only by clear and satisfactory evidence. (Marnik v. Cusack (1925), 317 Ill. 362, 364.) When a corporation is sued, however, an officer’s return as to the fact of the agency of the person served is not conclusive since it involves a matter which is not presumptively within the personal knowledge of the officer and may thus be placed in issue by a denial of the fact. Mineral Point R.R. Co. v. Keep (1859), 22 Ill. 9, 16-17; Harris v. American Legion Post No. 838 (1973), 12 Ill.App.3d 235, 239-241.

In the affidavit filed by defendant with its motion to quash the summons and return, George M. Campbell stated that he had never been served with process and a copy of the complaint and had never been an agent of “a non-existent entity”, MFA Insurance Company. The affidavit would have been a proper basis to quash the summons and purported, return if uncontradicted. (See Harris v. American Legion Post No. 838 (1973), 12 Ill.App.3d 235, 241-242.) Here, evidence was taken which in effect contradicted the affidavit that Campbell was not defendant’s agent. Campbell in explaining a previous answer wherein he denied that he was an agent in 1970 for “some entity known as the MFA Insurance Company” but that a number of companies were represented “under the umbrella, the MFA Insurance Companies”, responded to the inquiry:

“Q. You testified earlier as to something about an umbrella. What did that refer to?
A. Well, that would be the heading of the MFA Insurance Companies, controHing or governing—if that is the proper wording, I don’t know—the Countryside Casualty Company, the MFA Mutual Insurance Company, and the MFA Life Insurance Company.”

Further, Richard A. Moran, an attorney for the MFA Mutual Insurance Company, testified that in 1970 Campbell was an agent for the four companies doing business under the trade name of “MFA Insurance Company”. Testimony also established that defendant received and cashed checks made payable to “MFA Insurance Company”. On this evidence the court properly concluded that Campbell was, in fact, an agent for the defendant as stated in the return of service.

The statement on the return of service that Campbell was the person served stands on a somewhat different footing. Unlike the conclusion of agency, this is considered a fact within the knowledge of the process server and the return is prima facie evidence of service upon Campbell which cannot be set aside upon the uncorroborated affidavit or testimony of the person purportedly served. (Marnik v. Cusack (1925), 317 Ill. 362, 364.) Further, the testimony of Campbell in this regard was not the clear and satisfactory evidence required to set aside the service. The witness did not “remember” the conversation with the process server, which was considerably less positive than the denial of any service stated in the affidavit. Similarly, Campbell did not deny having a telephone conversation with plaintiff’s attorney in 1970 concerning the service of summons, but stated he did not remember the conversation. In weighing the credibility of Campbell’s testimony, the court could well have considered various inconsistencies as to the designation of the MFA insurance insignia and the telephone listing for the MFA Insurance Company.

Sheriff White’s testimony by contrast was positive as to the manner in which he identified and served George M. Campbell. White also confirmed the fact of seivice and the agent’s hostility by a telephone call to the secretary for plaintiff’s counsel about an hour and a half after service was made. Contrary to defendant’s contention, the trial court’s finding that sendee of process was made upon an agent of the defendant corporation as provided in section 13.3 of the Civil Practice Act (Ill. Rev. Stat. 1969, ch. 110, par. 13.3) is amply supported by the record.

Defendant also contended that no service of process was made upon the director of insurance as provided by section 511 of the Insurance Code of (Ill. Rev. Stat. 1969, ch. 73, par. 1065.58) as amended. However, the provision sets forth a requirement for applicant non-resident corporations, partnerships, or associations which seek to do business in Illinois. It does not preclude service upon a foreign insurance corporation through its agents in the state, but merely establishes the director as an alternative attorney upon whom process may be served. Since we have decided that service was properly made under section 13.3 of the Civil Practice Act (Ill. Rev. Stat. 1969, ch. 110, par. 13.3), failure to serve the director is of no consequence.

Defendant also argues that the judgment should be vacated because Countryside Casualty Company was a necessary party but not made such in the pleadings in accordance with section 21(3) of the Civil Practice Act (Ill. Rev. Stat. 1969, ch. 110, par. 21(3)); and because no notice of waiver of jury demand was given prior to entry of default pursuant to section 64(1) of the Civil Practice Act (Ill. Rev. Stat. 1969, ch. 110, par. 64(1)). It also argues that MFA Insurance Company is a non-existent entity so that the judgment against it is void and can have no effect on the Countryside Casualty Company which plaintiff claims insures him but which has denied coverage.

Defendant’s argument that MFA Insurance Company is a non-entity and that the judgment against it is void is without merit. Where summons is served upon a party and the circumstances are such as to indicate that he is the person intended to be sued, he is subject to the judgment even though the process and judgment do not refer to him by his correct name. Janove v. Bacon (1955), 6 Ill.2d 245, 250; Livestock Mortgage Credit Corp. v. Keller (1949), 336 Ill.App. 282, 286. See also Ill. Rev. Stat. 1969, ch. 110, pars. 21(3), 26.

In this connection plaintiff has moved in this court to amend the name of the party defendant to Countryside Casualty Company, a Missouri Corporation, d/b/a MFA Insurance Company. We have taken the motion and defendant’s objections to the motion with the case. We note, however, that plaintiff’s motion fails to meet the requirements of Rule 362(b) in that the supporting affidavit is deficient. Nonetheless, in view of the admissions of record which indicate a telephone listing and the doing of business under the name of MFA Insurance Company, we find that plaintiff’s reliance on the name in designating the defendant was reasonable. Further, the amendment required is not a substantive matter but a formal one and in conformity with the record. (See Ill. Rev. Stat. 1971, ch. 7, par. 2; People v. Sirinsky (1970), 47 Ill.2d 183, 187-8; People v. Rosario (1972), 4 Ill.App.3d 642, 647.) We note also that counsel for defendant has appeared on behalf of “MFA Insurance Company” throughout, has filed an affidavit stating he is the attorney for the defendant, MFA Insurance Company. Richard A. Moran, who testified that he was the attorney for the MFA Mutual Insurance Company, has filed an answer to the request for admission of fact: “MFA Insurance Company, defendant, by Richard A. Moran”; and policies are issued under the heading of MFA Insurance Companies. (See Hoagland v. Brown (1966), 71 Ill.App.2d 240, 243.) Accordingly, we have decided to correct the misnomer by an exercise of our appellate authority under Supreme Court Rule 362(f) (Ill. Rev. Stat. 1971, ch. 110A, par. 362(f)). Simonson v. Simonson (1970), 128 Ill.App.2d 39, 48; City of Palos Heights v. Pakel (1970), 121 Ill.App.2d 63, 75.

Defendant next contends that the court improperly denied its motion to vacate the judgment under the provisions of section 72 of the Civil Practice Act (Ill. Rev. Stat. 1969, ch. 110, par. 72). We have disposed of that portion of defendant’s argument based upon its attack on the service of process.

We next consider defendant’s claim that we should afford section 72 relief for the following reasons: it was not notified of the entry of the default judgment of September 4, 1970, pursuant to Ill. Rev. Stat. 1971, ch. 110, par. 50.1; no proofs were presented at the time of default; it did not know of the judgment until it was advised by a letter of January II, 1971, that plaintiff would serve a citation to discover assets; it was not given notice of the plaintiff’s intention to waive the jury prior to default; it has a meritorious defense, and the judgment should be vacated in the interest of substantial justice.

Plaintiff s waiver of jury before default in the absence of defendant’s appearing or answering after service upon it does not void the judgment. See Acosta v. Burris (1964), 47 Ill.App.2d 201, 205.

The failure to notify defendant of the entry of the default judgment also does not make the judgment void. (See Watts v. Medusa Portland Cement Co. (1971), 132 Ill.App.2d 227, 230.) It is a factor which may in particular circumstances make a default judgment more vulnerable to a section 72 petition (Elfman v. Evanston Bus Co. (1963), 27 Ill.2d 609, 614); but it does not excuse a defendant from the burden of showing the exercise of due diligence. Johnson-Olson Floor Coverings, Inc. v. Branthaver (1968), 94 Ill.App.2d 394, 400; Houston v. Churchill (1968), 100 Ill.App.2d 56, 59.

Nor is the judgment voided by the failure of the court to hear proofs on the default. (See Schwartz v. Moats (1971), 3 Ill.App.3d 596, 599; Johnson-Olson Floor Coverings, Inc. v. Branthaver (1968), 94 Ill. App.2d 394, 402.) Cases cited by the defendant such as Hall v. Mc-Millian (1972), 8 Ill.App.3d 448, and Elfman v. Evanston Bus Co. (1963), 27 Ill.2d 609, which involve proof of unliquidated damages in a default hearing without notice, are distinguishable on their facts. Here the complaint sets forth the amount which had been previously reduced to judgment against plaintiff and the judgment below is for the same amount.

In the case before us the motion for a default judgment was not filed until July 22, 1970, some 40 days after the return date. The default judgment was not taken until September 4, 1970, and defendant did not file its first pleading until January 22, 1971. In addition, there was testimony that defendant’s agent Campbell had a telephone conference with plaintiff’s attorney in 1970 concerning the service of summons and also some indication on the record that counsel for plaintiff had been in continuing contact with adjusters and attorneys for the insured, Leathel Ingram.

The trial court held that on the whole record defendant had not sustained its burden of proving that the judgment entered September 4, 1970, should be vacated. The discretionary ruling of the trial court on a section 72 petition will not be overturned unless there is abuse of discretion. (Harder v. Advance Transportation Co., Inc. (1960), 26 Ill.App.2d 439, 446-449, 452; Megan v. L. B. Foster Co. (1971), 1 Ill.App.3d 1036, 1039.) We find no such abuse of discretion here.

The trial court could well have concluded that the position defendant finds itself in was the result of its own neglect based in part on its belief that it could rely on its various arguments that the judgment was void and could be disregarded, including the defense that a non-entity was being sued; and based upon its apparent erroneous belief that it could assert at any time a defense that the policy of insurance with plaintiff which was in effect prior to the accident was not in effect at the time of the accident because of non-payment of premiums, although concededly it was renewed subsequently on acceptance of premiums. However, the absence of estoppel or waiver circumstances has not been clearly established. Compare Zak v. Fidelity-Phenix Insurance Co. (1966), 34 Ill.2d 438, 443-444; Wille v. Farmers Equitable Insurance Co. (1967), 89 Ill. App.2d 377, 381.

In our view it was not unjust to allow the judgment to stand against a company which had refused either to defend one claiming to be its insured, or to determine the disputed question of coverage in a declaratory judgment action. This follows even though defendant was not bound to file a declaratory judgment action if the policy was clearly not in effect at the time of the accident. See McFadyen v. North River Insurance Co. (1965), 62 Ill.App.2d 164, 171; Wheeler v. Aetna Casualty & Surety Co. (1973), 11 Ill.App.3d 841, 844-845.

Nonetheless, tire fact remains that defendant without reasonable justification failed to establish the defense of non-coverage at a more apt time. Further, its failure to present a section 72 petition until nearly 4½ months after the judgment effectively diminishes any claim of due diligence. Thus, even assuming a meritorious defense, the trial court’s denial of the section 72 petition was not such a clear abuse of discretion as to warrant reversal. (Suarez v. Yellow Cab Co. (1969), 112 Ill.App.2d 390, 395, Cf. Davis v. Retirement Board of Policeman’s Annuity and Benefit

Fund (1972), 4 Ill.App.3d 221, 225.) See also Bennett v. Gollant (1970), 127 Ill.App.2d 224, 230-231; Johnson v. Hawkins (1972), 4 Ill.App.3d 29, 33.

Accordingly, the judgment below is affirmed.

Affirmed.

GUILD and RECHENMACHER, JJ., concur.


author:
      Mr. JUSTICE SIMKINS
      Mr. JUSTICE CRAVEN,

text:
    The City of Bloomington, Plaintiff-Appellant, v. The John Allan Company et al., Defendants-Appellees.
    (No. 12229;
    Fourth District
    April 4, 1974.

      CRAVEN, J., dissenting.
    David L. Stanczak, Corporation Counsel, of Bloomington, for appellant.
    Allan L. Blair, of Chicago, for appellees.
   Mr. JUSTICE SIMKINS

delivered the opinion of the court:

This is an appeal by the plaintiff, City of Bloomington, from an order granting defendants’ motion to strike and dismiss the plaintiff’s suit to foreclose its statutory lien for repairs made on certain real estate and to set aside a tax deed issued to the defendant, The John Allan Company, and a subsequent conveyance of the real estate to defendant, Magdalene P. Schalk; or in the alternative, to grant the city restitution for the reasonable value of the repairs it made on the property.

In October 1966, the McLean County Collector applied to the circuit court for a judgment and order of sale for the non-payment of general real estate taxes on the property in question for the year 1965. Pursuant to that judgment and order of sale, on October 24, 1966, the property was sold to Interstate Bond Company and the county clerk issued tax sale certificate No. 131. A normal redemption period of 2 years would have run to October 24, 1968; however, pursuant to section 263 of the Revenue Act, Interstate Bond Company extended the period of redemption to August 25, 1969. Ill. Rev. Stat., ch. 120, par. 744.

On grounds that the building on the land in question was unsafe, the city filed a complaint pursuant to section 11—31—1 of the Municipal Code on March 28, 1968, seeking a court order authorizing the city to repair the premises and impose a lien upon the property for the cost of repairs. (Ill. Rev. Stat., ch. 24, par. 11—31—1.) On June 7, 1968, the circuit court authorized the city to make the repairs requested and in late 1968 and early 1969 the city made repairs pursuant to the above court order in the amount of $5380.60.

On April 1, 1969, the tax purchaser, Interstate Bond Company, filed a supplemental petition within the county collector’s application for judgment and order of sale for non-payment of real estate taxes stating that the extended period of redemption would expire on August 25, 1969, and asking that a tax deed be ordered to issue if no redemption was made by that time. Shortly thereafter Interstate Bond Company served notices as prescribed by sections 263 and 266 of the Revenue Act on all parties with an interest in the property, including the City of , Bloomington, which had acquired an interest by virtue of its pending suit for the repair of the property. On August 25, 1969, the period of redemption expired with no redemption having been made. A court hearing was set for August 29, 1969, by virtue of the notice served pursuant to section 266 of the Revenue Act. On the court’s own motion the matter was continued to September 10, 1969. On August 28, 1969, section 271.1 of the Revenue Act became effective—providing that no order for the issuance of a tax deed should be entered where any city has an interest by virtue of the police power by advancement from public funds, until the city is reimbursed. On September 8, 1969, the city filed a notice of lien for improvements as authorized by the court. On September 10, 1969, the court entered an order directing issuance of a tax deed to the defendant, The John Allan Company, assignee of Interstate Bond Company, with an order finding “that all notice as required by law has been given and that petitioner, The John Allan Company, has complied with all provisions of law entitling it to a tax deed to said parcel of real estate.” The tax deed was issued to The John Allan Company on September 10, 1969. In April 1970 the defendant, Magdalene P. Schalk, purchased the real estate in dispute from the defendant, The John Allan Company.

On August 13, 1972, the city filed a suit in the circuit court seeking in Count I to foreclose its statutory lien and set aside the tax deed and subsequent conveyances, and in Count II seeking restitution for the reasonable value of the repairs made on the premises. On September 27, 1972, the defendants filed a series of motions to strike and dismiss the plaintiff’s complaint pursuant to sections 45 and 48 of the Civil Practice Act. The essence of defendant’s motions was that the circuit court had acquired jurisdiction of the property in issue by virtue of the county collector’s application for judgment and order of sale; thereafter there was a tax sale, and the tax purchaser served proper notices and fulfilled all other requirements prerequisite to the issuance of the tax deed. Finally a tax deed was issued by the court after finding all such requirements had been fulfilled, so that the city’s complaint was actually an unauthorized collateral attack on the tax deed. The defendants further point out that tire city did not directly appeal from the order to issue the tax deed, and the only other way to attack the tax deed was by section 72 of the Civil Practice Act which provides for a 2-year statute of limitations with the plaintiff’s complaint being filed almost 3 years after the tax deed was issued, and further that although not denominated as such, the plaintiff’s complaint does not set forth, a cause of action under section 72 and that the order entered on September 10, 1969, is res judicata to the issues plaintiff attempts to raise in any event. In addition the defendant, Magdalene P. Schalk, moved to strike and dismiss the complaint of the city on the grounds that she was a bona fide purchaser relying on the tax deed of September 10, 1969, having no connection with The John Allan Company, so that no order could be entered which would interfere with her title. The hearing was held on the defendant’s ' motion to strike and dismiss on November 7, 1972, and on January 12, 1973, the court entered an order sustaining that motion and dismissing the city’s complaint.

The essence of plaintiffs complaint and its appeal is that, regardless of what had gone before, on August 28, 1969, section 271.1 of the Revenue Act went into effect providing:

“No order for the issuance of a tax deed under any of the provisions of this Act shall be entered affecting the title to or interest in any land in which a city, village or town shall have an interest under the police and welfare power by advancements made from public funds until the claimant shall make reimbursement to the city, village or town of the money so advanced. However, in lieu of reimbursement, the tax purchaser or his assignee may make application for and the court shall order that the tax sale be set aside as a sale in error." (Ill. Rev. Stat. 1969, ch. 120, par. 752.1.)

Neither Interstate Bond Company, nor the defendant, The John Allan Company, or Magdalene P. Schalk, reimbursed the city for its repair expenses, which gave rise to its lien filed on September 8, 1969, so the city contends that the tax deed issued 2 days later on September 10, 1969, was improperly ordered. Plaintiff contends that the unequivocal language of the above statutory provision makes it irrelevant that the city was authorized to do the work resulting in a lien in June 1968, 20 months after the tax sale, the work completed and the final bill paid by July 1969, well before the period of redemption had run with the lien not filed until September 8, 1969, after the new Act upon which the city relies as requiring its reimbursement had gone into effect.

The plaintiffs most direct attack on the tax deed based on the above reasoning is that the tax deed is simply void for want of jurisdiction of the court to order its issuance without complying with section 271.1 of the Revenue Act. The plaintiff argues that the concept of jurisdiction includes not only the bounds as to persons, actions, and property, but also the particular thing ordered or decreed by the cotut so that even though the court here had jurisdiction over the property and the parties, the enactment of section 271.1 of the Revenue Act took away the court’s jurisdiction to thereafter award tax deeds unless the city was reimbursed for money it expended on the property. It is true while that jurisdiction is not only the power of the court to hear and determine a particular case, but also the power to render the particular judgment entered, and every act of the court beyond its jurisdiction is void. (Thayer v. Village of Downers Grove, 369 Ill. 334, 16 N.E.2d 717.) However, when a court acquires jurisdiction both of the subject matter and parties in a tax foreclosure proceeding, it retains jurisdiction to enter a supplemental decree ordering issuance of a tax deed. (Shapiro v. Hruby, 21 Ill.2d 353, 172 N.E.2d 775.) It is tire jurisdiction over the land itself, which is acquired in the original application for judgment and order of sale, that gives the court the power to act. (Cherin v. The R. & C. Co., 11 Ill.2d 447, 143 N.E.2d 235.) That jurisdiction, once acquired, continues through the entire proceedings, including the order to issue the deed. Farlow v. Oliver, 29 Ill.2d 493, 194 N.E.2d 262.

One of the grounds of defendant’s motion to strike and dismiss the city’s complaint was that, regardless of the fact that it was instituted as a suit to enforce the city’s lien, as well as to set aside the tax deed, it was really a collateral attack on the defendant’s tax deed of September 10, 1969, and therefore could only properly be brought under section 72 of the Civil Practice Act. When a tax deed is entered, section 266 of the Revenue Act provides that a new chain of merchantable title is created. (Ill. Rev. Stat., ch. 120, par. 747.) It has been said that a tax deed gives the purchaser a new and independent title, free and clear from aU previous titles and claims of every kind and character. (People v. Cottine, 20 Ill.App.2d 562, 156 N.E.2d 774.) “By its enactment of section 266 of the Revenue Act, the legislature intended to render tax titles incontestable except by direct attack, unless the circumstances are such as to warrant the application of section 72 of the CivH Practice Act, or unless the order directing the issuance of deed was utterly void. [Citations.] An order is rendered void, not by reason of mere error or impropriety, but by lack of jurisdiction by the issuing court of either the subject matter or the necessary parties [citation], and we have frequently stated that jurisdiction once acquired in a tax foreclosure action continues through the entire proceeding, including the order for deed.” Farlow v. Oliver, 29 Ill.2d 493 at 499.

Section 266 of the Revenue Act provides, “Tax deeds issued pursuant to this Section are incontestable except by appeal from the order of the court directing the county clerk to issue the tax deed. However, relief from such order may be had under Section 72 of the ‘Civil Practice Act’ * * * in the same manner, upon the same grounds and to the same extent as may be had under that Section with respect to final orders, judgments and decrees in other proceedings * * (Ill. Rev. Stat., ch. 120, par. 747.) A petition seeking relief under section 72 must be filed in the same proceeding in which the order, judgment or decree was entered, but is not a continuation thereof. (Ill. Rev. Stat., ch. 110, par. 72(2).) Of course the instant case was instituted as a suit to enforce the city’s lien and to set aside a tax deed, and in fact, the city was never a party to the proceedings culminating in the issuance of the tax deed to the plaintiff. Although the trial court specificaHy found that all required notice was given, the city did not appear at any time during the period of redemption, nor did it contest the issuance of the tax deed.

Section 72 requires that a petition seeking relief under it must be filed not later than 2 years after the entry of the order, judgment or decree challenged. (Ill. Rev. Stat., ch. 110, par. 72(3).) However, it also provides that nothing contained therein shall affect any existing right to relief from a void order, judgment or decree, or to employ any existing method to procure that relief (Ill. Rev. Stat., ch. 110, par. 72(7)), and the city contends that, therefore, even if its action should have been brought under section 72 rather than a separate action, the statute of limitations would not apply because the tax deed was void. The city also argues that its suit was not a mere collateral attack on the tax deed, but rather a foreclosure suit brought on its statutory lien created by section 11—31—1 of the Municipal Code which provides for a repair or demolition lien, and a 3-year period in which to bring a foreclosure suit. Ill. Rev. Stat., ch. 24, par. 11—31—1.

The defendant, Magdalene P. Schalk, relies on section 72(5) of the Civil Practice Act which gives added protection to certain third parties who, as bona fide purchasers, have justifiably relied upon the order or decree being attacked. (Ill. Rev. Stat., ch. 110, par. 72(5).) The city contends that this is not applicable here, alleging that the city was not given proper notice of the tax deed proceedings, and that such defect was clear on the face of the record. In Southmoor Bank & Trust Co. v. Willis, 15 Ill.2d 388, 155 N.E.2d 308, a tax deed had been issued pursuant to a court order accompanied by a finding that the petitioner had complied with all provisions entitling it to a tax deed as in the instant case. The former owner filed a suit under section 72 of the Civil Practice Act attacking the deed as void on the grounds that section 247 of the Revenue Act provided that where all prior taxes were not paid, the purchase shall become void and offered evidence that some of the taxes had not been paid on the property in issue. The supreme court said that the third-party bona fide purchaser would not be deprived of his property interest on those grounds, having relied on the tax deed previously issued.

The city of Bloomington received authority to do the repair work on the property here involved by section 11—31—1 of the Illinois Municipal Code, which also provides that:

“The cost of such demolition or repair incurred by such municipality or by a lien holder of record is recoverable from the owner or owners of such real estate and is a lien thereon, which lien is superior to all prior existing hens and encumbrances, except taxes: provided that, within sixty days after such repair or demolition, the municipality or the lien holder of record who incurred such cost and expense shall file notice of lien of such cost and expense * * *"

In a case where the city of Chicago sought to foreclose its demolition lien acquired pursuant to the above provisions, as in the instant case, even though a tax deed had issued subsequent to tire acquisition of the lien by the city, the court held that the city’s hen had been extinguished. In that case the factual change of events was similar to the instant case, but all prior to the enactment of section 271.1 of the Revenue Act upon which the city of Bloomington relies; the defendant had purchased the land at a tax sale, the city sought and received authorization to demolish and performed the work, the defendant filed for tax deed, giving the city notice as required by law, the city did not appear at the tax deed proceedings, the city filed its demolition lien, tire tax deed was issued to the defendant, and then later tire city filed a complaint to foreclose its hen. (City of Chicago v. City Realty Exchange, 127 Ill.App.2d 185, 262 N.E.2d 230.) That court said that “One of the interests a tax purchaser acquires through his certificate of purchase is the right to be paid the price of the sale, interest, costs and any other taxes paid, if there is redemption, This right is a charge on the real estate for payment of the debt represented by the taxes. A charge on property for the payment of a debit is a hen. * * * For tírese reasons we conclude that from the date of its issuance to the date of a valid tax deed, defendant’s certificate of purchase was a hen for taxes. Therefore, it was error for the trial court to enter a decree which foreclosed plaintiff’s demolition hen in derogation of defendant’s superior rights as the owner of a tax certificate of purchase which at the time of the foreclosure suit had ripened into a merchantable title.” The basis of that court’s decision for the defendant tax purchaser is the language in section 11—31—1 of the Municipal Code which provides that a city’s hen for demolition or repair shall be superior to ah pre-existing hens, except for taxes, the court finding that a tax sale purchaser has a hen for taxes. In response to the plaintiff’s argument that only the People can have a tax hen, the court said the People have a lien, but tire Revenue Act has provided a means for governmental agencies to collect that debt by a tax sale, and when the full amount of taxes is bid, such hen ends and the purchaser has the right to be paid the full amount of the sale and interest plus costs and other taxes paid if there is a redemption.

Until 1961 a city’s repair or demolition hen was to be “subordinate to ah prior and existing encumbrances” under section 23—70.2 of the Cities and Villages Act. In 1961 the Illinois Municipal Code was enacted in place of the Cities and Villages Act, and the above provision was altered to provide such hen was to be “superior to all prior existing hens and encumbrances, except taxes.” (Ill. Rev. Stat., ch. 24, par. 11—31—1.) The “except taxes” language could arguably be intended to run only in favor of the tax collecting governmental bodies, but the City of Chicago v. City Realty Exchange opinion rejected that interpretation, tracing the case law on tihe matter and finding that the whole purpose of the tax sale structure is to foster the collection of taxes, and that the purchaser’s tax lien carries with it the preferred status of the tax exception to the superiority of demolition or repair liens. The plaintiff, city of Bloomington, argues that section 271.1 of the Revenue Act, effective August 28, 1969, was intended to give the city complete superiority in such cases by requiring that its lien be paid before tax deeds are issued. The defendant contends that the tax deed was entered, so, even if erroneous, it is not subject to the collateral attack as attempted by the city of Bloomington, and also argues that section 271.1 of the Revenue Act would not be applicable to this transaction at all where the tax sale took place on October 24, 1966, the period of redemption expired on August 25, 1969, while the provision in issue only became effective on August 28, 1969. The defendants argue that all rights of the parties were fixed as of the date of the tax sale, and no legislation could subsequently be enacted which would change the substantive rights acquired by the tax purchaser on October 24, 1966. At that time section 216 of the Revenue Act provided that a purchaser at a tax sale received a lien superior to all others (Ill. Rev. Stat. 1967, ch. 120, par. 697), and by section 260 of the Revenue Act would be entitled to a tax deed granting him a fee simple merchantable title (Ill. Rev. Stat. 1967, ch. 120, par. 747) if he followed the provisions of sections 263 and 266 of tire Revenue Act relating to the filing of a petition for tax deed and serving notice and paying all subsequent taxes and redeeming all subsequent sales. Ill. Rev. Stat. 1967, ch. 120, pars. 744, 747.

It must be remembered that this is not a direct appeal of the tax deed or section 72 attack on it; rather, it is an appeal by the plaintiff from the granting of the defendant’s motion dismissing the plaintiff’s suit on its lien for repairs and to set aside the defendant’s tax deed. However, the underlying issue which determines whether or not the plaintiff had a valid cause of action is the effect of section 271.1 of the Revenue Act, it ¡being the essence of all three of the city’s fundamental arguments: that •the tax deed should be set aside and is void because the court had no jurisdiction to order its issuance after the August 28, 1969, effective date ¡of the above-mentioned provision making payment of a city’s lien a prerequisite; that the section 72 exemption to its 2-year statute of limitations in the case of an attack on void judgments or decrees applies to its suit; and that regardless of what had gone before and the rights that had accrued to the tax purchaser, section 271.1 was in effect prior to the order to issue the tax deed and therefore requires the city’s hen to be paid.

As stated above, City of Chicago v. City Realty Exchange held that from the date of issuance to the date of a valid tax deed, a real estate tax certificate of purchase was a lien for taxes to which a city’s demolition lien was subordinate. The construction of 271.1 of the Revenue Act argued by the city of Bloomington would have the effect of making its municipal lien created by section 11—31—1 of the Municipal Code recorded on September 8, 1969, superior to the lien of the tax purchaser acquired at a tax sale on October 24, 1966, even though at the time section 271.1 went into effect the defendant had the tax-sale certificate, the period of redemption had run, and all that remained was for the tax deed to be issued which was done on September 10, 1969, 2 days after the city had filed its hen for repairs.

The general rule that statutes will not be applied retroactively unless such was clearly the intent of the legislature is not usually applied to statutes which merely relate to remedy and procedure and which do not affect substantive rights. Therefore when a statute giving a special remedy is amended without a savings clause pertaining to pending actions, all actions affected must be decided according to the law as it then exists in both the trial and appellate courts regardless of whether the action accrued before or after the change. (Hogan v. Bleeker, 29 Ill.2d 181, 193 N.E.2d 844.) That court noted that even procedural or remedial statutes are not construed retroactively where to do so would deprive one of a vested property right, but in any event it is clear from decisions of the Illinois Supreme Court and the United States Supreme Court that liens, including those authorized solely by statute as well as the rights acquired by the purchasers at statutory tax sales, have been considered to be sufficiently substantial so as to fall within the concept of “property” that is protected by the provisions of both the Federal and State Constitutions prohibiting impairment of contract and the taking of property without due process. The United States Supreme Court has noted that with practically unanimity, the Federal and State courts have held that any substantial alteration by subsequent legislation of the rights of the purchaser at a tax sale accruing to him under laws in force at the time of his purchase is void as impairing the obligation of contract. Wood v. Lovett, 313 U.S. 362, 85 L.Ed. 1404, 61 S.Ct. 983.

The situation in a recent case before the First District Appellate Court was even more favorable to the city who held a lien for demolition against property involved in the petition for tax deed than the circumstances of the instant case. In the case In Re Application of County Treasurer, 14 Ill.App.3d 1062, 304 N.E.2d 9, a sale for delinquent taxes was held on March 25, 1968, the certificate of purchase issued, and the period of redemption extended to April 10, 1970. At the time of the sale, the lots were subject to a $4735 lien of the city of Chicago for demolition expenses. It was noted that the city’s lien’s relative priority was governed by section 11—31—1 of the Municipal Code as in the instant case—“The cost of such demolition or repair * * * is a lien thereon, which lien is superior to all prior existing Hens and encumbrances, except taxes * * Effective August 28, 1969, the Revenue Act was amended to provide that no tax deed should be issued until the city was reimbursed. (Ill. Rev. Stat. 1969, ch. 120, par. 752.1.) On November 12, 1969, the tax purchaser filed a petition alleging that she owned the certificate of purchase, no redemption had been made, all taxes had been paid, and that she. had given proper notice to all having an interest, including the city of Chicago. A hearing was held, the tax purchaser proved she had fulfilled all of the requirements for issuance of a tax deed, except paying the city’s demolition lien. The tax purchaser argued that when she obtained a certificate of purchase in 1968, a demolition lien was subordinate to the lien for taxes, and therefore section 271.1 of the Revenue Act of August 28, 1969, coming 1½ years after she acquired her rights, could not be retrospectively applied. At a hearing the trial court in that case entered an order in which it found that the tax purchaser was tire lawful owner of certificates of purchase and the period of redemption had expired without redemption, and even though the tax purchaser had compfied with all other requirements of the Revenue Act for issuance of a tax deed, she had not paid the city of Chicago for its demolition lien as required by section 271.1 of the Revenue Act. That Act was found to be retrospective and the trial court held it did not deprive the tax purchaser of any constitutional rights under either the Federal or Illinois Constitutions, and therefore denied the petition for issuance of a tax deed.

The appellate court carefully traced the history and purchase of the Revenue Act in deciding the sole issue of whether the 1969 amendment was intended to be a retrospective law. That court noted that when the tax purchaser acquired a certificate of purchase at the tax sale, she became the owner of a Hen for taxes, which is a vested property right entitling her to a tax deed to the lots if no redemption was made and requirements of all statutes deaHng with taxation of real estate and the sale of land for delinquent taxes were fulfilled. The court then discussed the basic rules of interpreting legislative intent as to retroactivity, noting that generally laws are to be applied only prospectively, concluding that “When a law affects vested rights, as did the statute in this case, there comes into play the public policy against retroactive legislation, a policy embedded in constitutional provisions that guarantee due process of law, prohibit ex post facto laws and forbid impairment of the obligation of contracts. [Citation.]” (14 Ill.App.3d at 1065.) The court then reversed the order dismissing the tax purchaser’s petition for issuance of a tax deed.

It should be noted that in the above case the city of Chicago held a demolition lien at the time the tax purchaser bid and acquired the tax-sale certificate of purchase, whereas in the instant case, the city of Bloomington sought permission and performed the repair work after the tax sale, and recorded its lien after the redemption time had run, and only 2 days before tire tax deed was issued. The city’s final argument in its suit was for restitution based on the grounds that the defendant would be unjustly enriched at the expense of the public if the city’s lien were not repaid. Without citing any cases, the city contends that section 271.1 of the Revenue Act and section 11—31—1 of the Municipal Code may be interpreted compatibly to aUow the tax deed to be valid and stand, but made subject to the city’s being reimbursed for the improvements made to prevent unjust enrichment of the tax purchaser. However, in this case the city did not appear at any of the tax-deed proceedings, nor did it in any way diligently pursue the matter—not recording its lien promptly, not objecting to the issuance of the tax deed, nor directly appealing from it, but rather waiting 2 years and 11 months after the issuance of the tax deed to even institute this suit to enforce its lien and set aside tire tax deed. Laches weighs strongly against any recovery for the city to prevent unjust enrichment at the expense of the municipal treasury. In fact, a party may not even avail himself of the remedies’ provided by section 72 of the Civil Practice Act unless he shows that through no fault or negligence of his own, the error or fact or the existence of a valid defense was not made to appear to the trial court. As indicated above, here tire city did not move within the 2 years provided by section 72, and was dilatory throughout the entire matter.

In addition to the matter of laches weighing against tire city, there are also contravening public policy considerations. The entire system of sales for taxes exists for the benefit of governmental units such as the plaintiff. If property does not pay its fair share to the city for police protection, streets, and other services, it may be sold with taxes due being recouped and the purchaser obligated to pay future taxes. The obvious goal was to generate as high a bid as possible, and to that end significant reliability and certainty is provided, thus the requirements of notice and filing of liens, and a time at which title becomes certain. What the city of Bloomington seeks here would clearly undermine those goals where the tax purchaser had relied on die security of the prior procedures which had been complied with, giving merchantable title. The defendant gave consideration induced by the tax-sale procedures provided for the benefit of the city’s collection of taxes in 1966, at which time the city had not even begun the proceedings resulting in its expenditures for repairs and subsequent lien, and at that time the defendant acquired the tax sale certificate. Subsequent to that the defendant paid taxes and complied with all other requirements for the tax deed including the motion for its issuance. Unless there was a redemption within the time for redemption, there was nothing more for the defendant to do to be entitled to the tax deed. There was no redemption and no contest of the issuance of the tax deed. Allowing the city to recover under its unjust enrichment theory or by the construction of section 271.1 of the Revenue Act, it urges, would clearly raise all the constitutional problems mentioned in In re Application of County Treasurer.

The policy is expressed quite clearly in section 266 of the Revenue Act providing that “Tax deeds issued pursuant to this Section are incontestable except by appeal from the order of the court directing the county clerk to issue the tax deed. However, relief from such order may be had under Section 72 * ” *. This Section shall be liberally construed so that tax deeds herein provided for shall convey merchantable title.” (Ill. Rev. Stat., ch. 120, par. 747.) The clear intent of these provisions are to make tax deeds desirable so as to induce reasonable bids at tax sales and also to further the general goal of having certainty in title to real estate.

The purpose of the sections of the Revenue Act involved in this matter providing for certificates of purchase and tax deeds is to encourage buyers at tax sales, increase the collection of taxes by governmental authorities, and to free land to re-enter the stream of commerce and bear its aliquot share of the tax burden. Cherin v. The R. & C. Co., 11 Ill.2d 447, 143 N.E.2d 235.

We need not consider the additional protection which the alleged third-party bona fide purchaser defendant Magdalene P. Schalk raised, as the trial court’s dismissal of the plaintiff’s suit to foreclose its lien and to set aside defendant’s tax deed and subsequent conveyances was proper and is affirmed.

Affirmed.

TRAPP, P. J., concurs.

Mr. JUSTICE CRAVEN,

dissenting:

The legislative mandate that our statutory provisions relevant to tax deeds shall be liberally construed so that tax deeds shall convey merchantable title need not be so implemented as to deprive the city of Bloomington of its lien to recover public funds spent upon the repair of the property involved.

The legislative policy supported by a legion of cases encouraging merchantability of tax deeds is not superior to the legislative policy that encourages cities and villages to repair or demolish buildings in the city or village. Section 11—31—1 of the Municipal Code (Ill. Rev. Stat. 1969, ch. 24, par. 11—31—1), authorizes the repair or demolition of buildings and provides for a lien to the city superior to all prior liens except taxes. In Chicago v. City Realty Exchange, Inc., 127 Ill.App.2d 185, 262 N.E.2d 230, the court effectively subordinated such lien to the interests of a purchaser at the tax sale.

Section 271.1 of the Revenue Act (Ill. Rev. Stat. 1969, ch. 120, par. 752—1), as quoted in the majority opinion, provides that there is to be no order for the issuance of a tax deed until the claimant shall make reimbursement to the city, village or town of money advanced by it for repair or demolition. While the majority opinion properly concerns itself with the retroactive application of this statute and the possible constitutional issues that would arise in the event it is given retroactive application, it would be more appropriate to emphasize that the statute was and is jurisdictional. Even if given retroactive application, we have no constitutional issue presented because the statute specifically provides that, in lieu of reimbursement, the tax purchaser or his assignee may make application to have the tax sale set aside as a sale in error. Effectively, therefore, the statutory scheme gives the tax purchaser complete protection as indeed does the whole statutory scheme relating to tax sales.

The city in this case sought to foreclose its hen and also sought to recover upon the basis of unjust enrichment or quantum meruit. The majority opinion rejects this on the basis of laches.

The allowance of recovery on the basis of quantum meruit would in no way invalidate the tax deed. The city’s right to recover may be barred by its laches but such issue should properly be determined upon the merits not upon the pleadings.

In this case, Magdalene P. Schalk asserts as a basis for her immunity from the plaintiff’s sought relief that she was a bona fide purchaser for value. The conclusion reached by the majority opinion made it unnecessary to consider that asserted status. This record does not establish that she was a bona fide purchaser for value. Indeed, the affidavit purporting to establish this fact was written not by her but by one Geraldine D. Hoffmann. It is classic hearsay and Geraldine Hoffmann's statement as to the state of mind of Magdalene P. Schalk and the resulting conclusion that Schalk was a bona fide purchaser is neither pursuasive nor competent to establish such fact.