source: Caselaw Access Project

author: PRESIDING JUSTICE CERDA

license: Public Domain

text:
      In re APPLICATION OF THE COOK COUNTY COLLECTOR FOR JUDGMENT AND SALE AGAINST LANDS AND LOTS RETURNED DELINQUENT FOR NONPAYMENT OF GENERAL TAXES FOR THE YEAR 1985 AND PETITION FOR TAX DEED OF LESLIE C. BARNARD, d/b/a Elsie Bee (Standard Bank and Trust Company, as Trustee Under Trust No. 5812, Petitioner-Appellee, v. Leslie C. Barnard, d/b/a Elsie Bee, Respondent-Appellant (Joseph Berke et al., Intervenors)).
    First District (3rd Division)
    Nos. 1—89—2647, 1—89—2648 cons.
    Opinion filed August 28, 1991.
    Rehearing denied May 8, 1992.

      Benitta Berke, of Chicago, for appellant Joseph Berke.
    Herbert Lesser, of Chicago, for appellee.
   PRESIDING JUSTICE CERDA

delivered the opinion of the court:

Respondent, Leslie C. Barnard, doing business as Elsie Bee, and intervenors, Joseph Berke and American National Bank and Trust Company, as trustee under trust number 108-084-00, appeal from an order that vacated a tax deed in favor of the original owner of land trust property that had been sold for the nonpayment of real estate taxes.

On December 30, 1986, the property, which was located in Cook County and identified with the permanent index number 27-08-300-002-0000, was sold for $774.80 by the Cook County treasurer and ex officio county collector to respondent pursuant to an order of judgment and sale finding a failure to pay 1985 taxes. A “take notice” dated April 8, 1987, was given to Midwest Bank in Elmwood Park notifying it of the tax sale of the property to respondent. On August 30, 1988, respondent filed an extension of the time of redemption to February 15,1989.

On September 28, 1988, respondent filed a petition for a tax deed. Two take notices filed September 28, 1988, were sent by certified mail to Heritage Standard Bank & Trust Company of Evergreen Park on September 29, 1988, by the clerk of the circuit court of Cook County. The notices stated that the property had been sold for delinquent taxes and that redemption could be made at any time on or before February 15, 1989. The bank received the notices on October 1, 1988. In addition, the bank was served with two notices on October 4, 1988.

On February 21, 1989, respondent applied for an order directing the county clerk to issue a tax deed. Respondent’s supporting affidavit swore that: (1) affiant viewed the property between three and five months prior to the expiration of the time of redemption and found that the property was vacant and that no one occupied the property;

(2) prior to the expiration of the time of redemption, affiant or another agent made a search of the appropriate records to determine parties interested in the property and found that those parties were Stanley T. Kusper, Heritage Standard Bank & Trust Company, and Heritage Standard Bank & Trust Company trust number 5812; (3) written notice was served upon all the interested persons by personal service followed by certified mailing of the notice; (4) a notice of the purchase at the tax sale was published on November 3, 4, and 7, 1988; and (5) notices were mailed within five months after the sale to the party in whose name the taxes were last assessed.

On February 27, 1989, respondent testified at a hearing that he inspected the property several times during the notice serving period. There were about 38 acres of vacant land which had improvements consisting mainly of a water main. There were no driveways, and “it appealed] as if there was some farming on the property.” He testified that to the best of his knowledge there were no occupants. In addition, respondent testified to the following:

“THE COURT: Any indication that someone was evidencing some interest in the property by usage, by structure, by whatever?
A. It appeared to me that there was someone doing some farming on the property but no one visible by way of any signs or any houses or buildings on the property.
THE COURT: Were you able to ascertain who that party may have been if indeed there was some farming?
A. No, I was not.”

Respondent also testified, in answer to a question about what steps he took to determine who had an interest in the property, that he examined public records and that he ordered several documents. He also testified that the record owner of the property was Heritage Standard Bank, as trustee under trust number 5812, and that Midwest Bank was the last assessee.

Respondent’s attorney stated at the hearing that: (1) pursuant to sections 263 and 266 of the Revenue Act (Ill. Rev. Stat. 1989, ch. 120, pars. 744, 747), take notices were served upon all the parties in interest; (2) notice was served on October 4, 1988, on the record owner, Heritage Standard Bank, and “those” were all the parties in interest; (3) the subsequent taxes due for the years 1986 and 1987 had been paid; and (4) the first installment of 1988 taxes had not been paid. Submitted into evidence were proofs from the county clerk’s office of these subsequent tax payments. The proofs were dated February 27, 1989, and indicated that Gallagher & Henry (G&H) had paid the taxes. The tax bill for the first installment of 1988 taxes was addressed to G&H at a Countryside, Illinois, address.

The trial court at the February 27, 1989, hearing found that there had been due diligence in inquiring of the whereabouts of the parties entitled to notice under sections 241a, 263, and 266 of the Revenue Act (Ill. Rev. Stat. 1989, ch. 120, pars. 722a, 744, 747). On February 28, 1989, an order was entered directing issuance of a tax deed to respondent. The trial court found that: (1) it had jurisdiction; (2) the tax sale notices were served in the manner and time required; (3) all persons entitled to notice had received due notice of the filing and the time of hearing of the petition; (4) the property had not been redeemed; and (5) the time for redemption expired on February 15, 1989.

On May 2, 1989, Heritage Standard Bank filed a petition pursuant to section 2 — 1401(f) of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1401(f)) for a declaration that the order directing the issuance of a tax deed was void. Copies of the petition were mailed to respondent in care of its attorney and to the attorney.

Upon leave of court, a second petition to vacate was filed by new attorneys for Heritage Standard Bank and Trust Company on May 11.1989, but no proof of service appears in the record.

Robert E. Gallagher swore in a supporting affidavit that he was the managing partner of Orchard Hill Building Company, which was the beneficiary of the land trust that owned the property. All notices would have come to him, and he first learned of the tax deed on April 18.1989.

Respondent filed a special and limited appearance and a motion to strike the section 2 — 1401 petition for insufficiency of service of process. Respondent argued that his attorney received a notice of motion but was not authorized to accept process or notice on his behalf, that he was not properly served with notice of the petition, and that the trial court lacked personal jurisdiction over him. The motion to strike was denied.

A temporary restraining order was entered that enjoined respondent from transferring or dealing with the property. Respondent moved to dissolve the temporary restraining order, but the order was reconfirmed and continued.

A third section 2 — 1401 petition was filed by Standard Bank & Trust Company, f/k/a Heritage Standard Bank and Trust (the bank), on May 23, 1989. Among its allegations were that: (1) the entire property was being extensively farmed; (2) the fact that the property was assessed as farmland was readily discoverable in the public records; (3) the tax buyer had the duty to exercise due diligence in discovering all pertinent facts; (4) the hearing was held only two years and two months from the date of the tax sale; (5) the trial court was not advised on February 27, 1989, that the redemption period was three years, that the property was assessed as farmland, and that the entire property was being extensively farmed; (6) the beneficiary of the land trust did not receive notice of the tax deed proceeding and therefore did not appear at the February 27, 1989, hearing; (7) even if the beneficiary had received notice, the notices were erroneous and void because they failed to properly set forth the correct redemption period; (8) an April 14, 1989, deed from respondent conveyed the property to American National Bank & Trust Company of Chicago as trustee under trust number 10805406; (9) an April 17, 1989, deed conveyed the property to the same bank into trust number 108-084-00; and (10) the order issuing a tax deed was void ah initio because the statute provided for a three-year period of redemption and because the redemption period would not have expired until December 30,1989.

The third petition was supported by another affidavit of Robert E. Gallagher, who swore that: (1) he was the managing partner of Orchard Hill Building Company (Orchard Hill); (2) Orchard Hill was the beneficiary of land trust number 5812; and (3) he did not receive notice of the tax sale or of any expiration of a period of redemption.

On May 30, 1989, Joseph D. Berke, the sole beneficiary of American National Bank and Trust Company of Chicago land trust number 108-084-00, filed a petition to intervene. He alleged that on April 18, 1989, he paid $1.2 million in consideration for the property, that the property had been conveyed into the land trust by respondent, and that he was a bona fide purchaser for value within the meaning of section 2 — 1401(e) of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1401(e)).

On May 30, 1989, respondent filed a motion to strike and dismiss the section 2 — 1401 petition. Respondent swore in a supporting affidavit that: (1) he inspected the property and informed the court of his inspection and the fact that the property “had evidence of farming on it”; (2) he was not aware that farmland had a three-year period of redemption; (3) at the time of the February 27, 1989, hearing, he had not previously determined how the property was assessed or the assessed valuation, but believed that the property was in a residential zone; (4) after the tax deed was issued, he conveyed the property into a land trust with himself as sole beneficiary; (5) on or about April 18, 1989, he sold the property to Berke using a “like kind exchange”; and (6) Berke was not a party to the tax deed proceeding.

The interveners also moved to dismiss the petition. Berke’s supporting affidavit swore that he was “unaware of any of the circumstances surrounding [respondent’s] acquisition of the property, other than he had obtained a tax deed” and “no facts *** caused [him] to question any aspect of [either his] purchase” or respondent’s acquisition of the property. Berke attached the documents that he swore were all those related to his purchase of the property: real estate sales contract, trust agreements, trustee’s deed in trust, installment note, trust deed securing the installment note, and county and State real estate transfer declarations. No copy of the title commitment was attached.

The motions to dismiss the petition were denied, and a preliminary injunction was entered against respondent and Berke enjoining them from dealing with the property.

Respondent filed an answer in which it stated that it had “no knowledge sufficient to form a belief as to the identity” of the trust’s beneficiary.

At the trial, Thomas J. McGovern testified on behalf of the bank that he was the supervisor of the land division of the Cook County assessor’s office and that he made an examination of the status of the property in the records of the assessor’s office. According to an annual questionnaire completed by Robert E. Gallagher on March 15, 1988, for McGovern’s office, the property was farmed by a tenant. McGovern had sworn in an affidavit that the questionnaire had been filed on or about March 24, 1988, and that the classification number on the assessor’s property record information system indicated land under agricultural use. In the 1985, 1986, and 1987, questionnaires, George M. Eck was the applicant, but in the 1986 and 1988 questionnaires and in another 1987 questionnaire, G&H was the applicant. According to a copy of the office’s microfiche for tax year 1985, the property was classified as agricultural.

Donald E Yunker testified at the trial on behalf of the bank that he farmed approximately 200 acres of property located on Wolf Road from 145th to 153rd, and he grew com, soy beans, and hay. He farmed all his life the property on the east side of Wolf Road from approximately 147th Street to about 150th Street, including 1985 through 1989, and he was well known in the area as the farmer of the property. George Eck owned this property prior to G&H.

Robert E. Gallagher testified at the trial on behalf of the bank that he was- the managing partner of Orchard Hill, a wholly owned subsidiary of G&H. Orchard Hill owned 100% of the beneficial interest in Standard Bank land trust number 5812. The property was purchased on November 1, 1985. The company intended to farm the property for the next 10 years, but eventually planned to build houses on it. The company paid the general real estate taxes on the property for the years 1986 and 1987 and the first installment of 1988 taxes.

Gallagher further testified that a letter dated October 3, 1988, from the bank to Orchard Hill enclosed a copy of the take notice and asked the company to take the appropriate action to protect its interest. But he denied receiving the October 3, 1988, notice that the property had been sold for delinquent taxes. Gallagher scanned all mail to Orchard Hill and he would pass it on to the appropriate person. It was possible, but not probable, that a letter addressed to Orchard Hill could have gone to other persons at the company besides Gallagher. Another letter, dated August 16, 1988, enclosed a notice of other property that had been sold for delinquent taxes.

Respondent testified at the trial on his own behalf that he started buying at tax sales in approximately 1973 for two years and then began again in 1982. He understood in 1988 that the period of redemption was two years. He served a take notice on the last known assessee of the property, the Midwest Bank, which was the only name available to him at the time. In a record search for owners and interested parties, he ordered a “Chicago Title and Trust computer run,” he did “some tracking *** in the judgment books,” and he ordered documents. The computer run showed that on January 30, 1979, Rita Larson placed a deed in trust in the Heritage Standard Bank and Trust Company trust number 5812, which was shown to be the record owner of the property. (This court’s examination of the document revealed that G&H’s name appeared at the top.)

Respondent further testified that he viewed the property by himself. The large property was being farmed but was “vacant.” There were also a couple of groves of trees but he saw no buildings. He looked for a farmer but he saw no one. There were buildings close to the property but he did not go there to try to find someone who knew the farmer. His only attempt to determine who was in possession of the property was to see if anyone was there when he visited.

Respondent further testified that two notices were sent to the bank as a courtesy because he assumed that there might be a loan against the property. He did not put a three-year redemption period in the notices because he did not know about it. According to the sheriff’s returns, the bank was served with both notices on October 4, 1988.

Respondent further testified that he put nothing false in the application for an order directing the issuance of a tax deed and that he told the judge the truth at the February 27, 1989, hearing. He denied that there was any fraud committed in the trial court. At the time of the hearing, he did not know about a three-year period of redemption and he checked whether subsequent taxes had been paid. Duplicate certificates of payment of taxes dated February 27, 1989, stated that the taxes for the years 1986 and 1987 were paid by G&H. He paid the first installment of the 1988 taxes. The “warrant book” and the “judgment book” showed that the assessee was G&H. Six or seven weeks after he obtained the tax deed, he sold the property to Berke in a tax-free like kind exchange so that he would not pay taxes until he sold the exchanged property.

Berke testified at the trial on his own behalf that he was a real estate broker and tax buyer. Berke relied upon the title commitment in purchasing the property. The purpose of the like kind exchange was to save respondent Federal income taxes and did not benefit him.

After trial, the trial court made the following findings: (1) respondent negligently investigated the use of the property and inaccurately presented the evidence to the court issuing the tax deed order; (2) it was misled about the use of the property because the property was fully cultivated according to the farmer; (3) full disclosure of the use of the property at the hearing would have resulted in a denial of the tax deed; (4) respondent’s failure to present the complete evidence of the use of the property and the failure to comply with the law requiring a three-year redemption period for farmland was tantamount to fraud on the court; and (5) the tax deed was void.

Respondent first argues on appeal that the trial court erred in not striking the notice of motion because the section 2 — 1401 petition was improperly served on respondent’s attorney instead of on the party as required by Supreme Court Rules 105 and 106 (134 Ill. 2d Rules 105, 106).

Respondent did file a special appearance, but any error in ruling against an objection to personal jurisdiction is waived by the specially appearing defendant’s taking part in further proceedings in the case. (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 301(c).) After respondent’s motion to strike was denied, he took part in further proceedings so that his objection to the service of process was waived. See Slade v. Bowman (1977), 49 Ill. App. 3d 242, 246, 364 N.E.2d 922 (defects of service of petition to vacate were waived when defendant generally-appeared to argue the motion).

Respondent also argues that the petition did not allege due diligence as required because: (1) the bank did not refute that it was served with notice of the tax sale; (2) the petition did not show that the failure to present any defense was not the bank’s fault; and (3) the bank received notice approximately five months prior to the hearing.

Section 253 of the Revenue Act (the Act) (Ill. Rev. Stat. 1989, ch. 120, par. 734) provides that real property sold for delinquent taxes may be redeemed within two years of the date of sale, except that farmland sold in the period from November 15, 1985, to December 31, 1988, could be redeemed within three years. A purchaser must give, between three and five months prior to the expiration of the period of redemption, notice of the sale and the date of expiration of the period of redemption to the owners, occupants, and parties interested in the premises. (Ill. Rev. Stat. 1989, ch. 120, par. 744.) The notice, a form of which is given in the statute, is to be served by the sheriff upon owners who reside on any part of the property. (Ill. Rev. Stat. 1989, ch. 120, par. 744.) If they can be found in the county upon diligent inquiry, other owners and parties interested in the property are to be served by personal service, or by leaving a copy at the usual place of abode of the person and mailing a copy by registered or certified mail. (Ill. Rev. Stat. 1989, ch. 120, par. 744.) But where a party interested in the property is a trustee, “notice served upon the trustee shall be deemed to have been served upon any beneficiary.” Ill. Rev. Stat. 1989, ch. 120, par. 744.

The tax sale purchaser may file a petition within five months of the expiration of the time of redemption that prays for an order directing the county clerk to issue a tax deed in case the property is not redeemed. (Ill. Rev. Stat. 1989, ch. 120, par. 744.) Section 266 of the Act further provides that notice of the filing of this petition, and the date on which the petitioner intends to make application for an order on the petition, is to be given to occupants, owners, and persons interested in the real estate in the same manner similarly as provided in section 263. (Ill. Rev. Stat. 1989, ch. 120, par. 744.) But the purchaser may, in the alternative, insert in the notice, required by section 263, the fact of filing the petition for a tax deed and the date of the hearing. Ill. Rev. Stat. 1989, ch. 120, par. 747.

Tax deeds are incontestable except by appeal and by a section 2 — 1401 petition, and section 266 of the Act is to be liberally construed so that tax deeds shall convey merchantable title. Ill. Rev. Stat. 1989, ch. 120, par. 747.

Section 2 — 1401 of the Illinois Code of Civil Procedure provides relief from final orders and judgments after 30 days from their entry. (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1401.) Due diligence must be demonstrated in presenting the defense or claim in the original action and in filing the petition. (Lazzara v. Dreyer Medical Clinic (1983), 120 Ill. App. 3d 721, 724, 458 N.E.2d 958.) A section 2-1401 petition must be dismissed if the petitioner does not show that, through no fault or negligence of his own, the error of fact or the existence of a valid defense was not made to appear to the trial court. In re Application of County Treasurer (1982), 92 Ill. 2d 400, 409, 442 N.E.2d 216.

The first petition was withdrawn by the bank, and neither of the two subsequent petitions explained why no defense was presented in the tax deed proceedings by the bank. But the record contains the facts revealed at trial that the bank.sent a letter to the beneficiary. As the land trust beneficiary has the right to manage the property and the trustee only owns the bare legal title (In re Application of County Treasurer (1973), 16 Ill. App. 3d 385, 390, 306 N.E.2d 743), the bank was diligent in responding to the notice of the tax deed proceedings because it notified the beneficiary, who had the responsibilities to pay the property taxes and either to redeem the property or to contest the tax sale. The refusal to dismiss the petition will not be reversed on the basis of the petitioner’s failure to allege the bank’s diligence in the tax deed proceedings because ultimately facts were revealed that the bank acted diligently. The first section 2 — 1401 petition was filed by the bank on May 2, 1989, soon after discovery of the tax deed so that the bank also acted diligently in filing the petition to vacate.

The petition alleged that the beneficiary did not receive notice and that the managing partner of the beneficiary first learned of the tax deed on April 18, 1989, about six weeks after the issuance of the tax deed. Although a beneficiary is deemed to have received notice under the Act when notice was served upon the trustee (Ill. Rev. Stat. 1989, ch. 120, par. 744), and a beneficiary is not entitled to notice (In re Application of County Treasurer (1973), 16 Ill. App. 3d 385, 390, 306 N.E.2d 743), nonreceipt of the notice made excusable Orchard Hill’s failure to appear in the tax proceedings.

Respondent also argues that the tax deed order was not void even if, arguendo, it provided an incorrect redemption period because: (1) a tax deed order is void only where the trial court did not have jurisdiction and not where fraud was subsequently committed; and (2) jurisdiction in tax deed proceedings is in rem and is obtained when the county collector applies for judgment and order of sale. Vulcan Materials Co. v. Bee Construction (1983), 96 Ill. 2d 159, 165, 449 N.E.2d 812.

A void order can be attacked at any time. (City of Chicago v. Fair Employment Practices Comm’n (1976), 65 Ill. 2d 108, 112, 357 N.E.2d 1154.) A void judgment is from its inception a complete nullity and without legal effect. (In re Marriage of Allcock (1982), 107 Ill. App. 3d 150, 153, 437 N.E.2d 392.) An order is not void merely because of an error or impropriety, but is void because the court lacked jurisdiction (Vulcan, 96 Ill. 2d at 161), because the court exceeded its authority (Dils v. City of Chicago (1978), 62 Ill. App. 3d 474, 480, 378 N.E.2d 1130), or because the court lacked the inherent power to enter the order (People v. Holum (1988), 166 Ill. App. 3d 658, 660-61, 520 N.E.2d 419). Only in the case of a clear usurpation of power by the court will a judgment be rendered void for want of jurisdiction. In re Marriage of Allcock, 107 Ill. App. 3d at 153.

There is no question that the trial court here had subject matter jurisdiction over tax deed cases. In addition, the trial court obtained personal in rem jurisdiction over the property by the collector’s filing of the application for a tax sale. (Urban v. Lois, Inc. (1963), 29 Ill. 2d 542, 546, 194 N.E.2d 294.) A court lacks jurisdiction over property if the taxes had been paid or if the property was exempt from taxation (In re Application of Dickey (1978), 72 Ill. 2d 317, 325, 381 N.E.2d 260 (order for sale of mineral interest was void because the interest was exempt from separate taxation); In re Application of County Collector (1977), 48 Ill. App. 3d 572, 584, 362 N.E.2d 1325), but these were not the circumstances here. Although the farmer and the land trust beneficiary did not receive notice, the failure to give notice of the tax deed proceedings did not deprive the court of jurisdiction (Smith v. D.R.G., Inc. (1976), 63 Ill. 2d 31, 35-36, 344 N.E.2d 468).

If the trial court had personal and subject matter jurisdiction, the tax deed order was void only if the trial court lacked the inherent power to enter it. Few cases have found orders void because of a lack of authority. E.g., In re Marriage of Fox (1989), 191 Ill. App. 3d 514, 520-21, 548 N.E .2d 71 (an order modifying a prior child custody order was held void because only a petition for contempt in connection with visitation had been filed and because the petition did not invoke jurisdiction to make a child custody determination); Mortgage Syndicate, Inc. v. Do & Go Equipment, Inc. (1972), 7 Ill. App. 3d 106, 110, 286 N.E.2d 520 (the court was held to have transcended its statutory jurisdiction because a decree of foreclosure did not provide the date of service on the owner of the equity of redemption); Oak Park National Bank v. Peoples Gas Light & Coke Co. (1964), 46 Ill. App. 2d 385, 394-96, 197 N.E.2d 73 (a court was held to have exceeded its jurisdiction because it entered a judgment on the pleadings as a sanction contrary to a supreme court rule).

Even though the court exceeded its authority by erroneously entering a default judgment against a defendant who had answered the complaint, the judgment was held not void in Dils v. City of Chicago (1978), 62 Ill. App. 3d 474, 480-81, 378 N.E.2d 1130. Where it was not beyond dispute that an order was in violation of the applicable statutory provisions, the order was held not void in People v. Holum (1988), 166 Ill. App. 3d 658, 660-61, 520 N.E.2d 419. Although a tax deed order had not been entered by a court clerk as required, it was held not void in Landis v. Miles Homes, Inc. (1971), 1 Ill. App. 3d 331, 335, 273 N.E.2d 153. An incorrect property description did not render a judgment for the issuance of a tax deed void in Elliott v. Johnson (1987), 156 Ill. App. 3d 70, 74, 508 N.E.2d 1229.

We hold that the tax deed order here was not void because the trial court had the power in general to order the issuance of tax deeds, because a tax deed was sought by the petitioner, and because the order was only erroneous in that it was entered prior to the period of redemption’s expiration.

Relief from a tax deed order that is not void can only be obtained under a petition to vacate if the deed was procured by fraud. (Smith v. D.R.G., Inc. (1976), 63 Ill. 2d 31, 36, 344 N.E.2d 468.) But a tax deed procured by fraud is a voidable order which can be vacated pursuant to a section 2 — 1401 petition. (Vulcan Materials Co. v. Bee Construction (1983), 96 Ill. 2d 159, 165, 449 N.E.2d 812.) A section 2 — 1401 petition cannot put in issue questions that were decided by the trial court in a tax deed proceeding unless there was fraud. (See Dahlke v. Hawthorne, Lane & Co. (1966), 36 Ill. 2d 241, 244, 222 N.E.2d 465 (petition under predecessor section 72).) Fraud in this context is a “wrongful intent — an act calculated to deceive.” Dahlke, 36 Ill. 2d at 245.

Respondent also argues that the bank failed to allege fraud in the section 2 — 1401 petition. But whether or not the petition sufficiently alleged fraud, the trial court correctly refused to dismiss the petition because it sufficiently alleged that the tax deed order was void, which is a ground for section 2 — 1401 relief because a void order can be attacked at any time (City of Chicago v. Fair Employment Practices Comm’n (1976), 65 Ill. 2d 108, 112, 357 N.E.2d 1154).

Respondent and the interveners also argue that the trial court erred in finding fraud because: (1) respondent did not know about the three-year redemption period for farmland; (2) the farmer did not testify to the extent of the farming on the property; and (3) respondent testified that there was a grove of trees on the property so that the property was not fully cultivated.

The farmer did not clearly testify whether the entire property was farmed, and there is no evidence that respondent intended to deceive the trial court about the extent of farming on the property. Respondent advised the trial court that there was some farming, and the farmer did not testify that the entire property was farmed.

But the record does raise the issue of fraud in connection with: (1) respondent’s advising the trial court that he was not able to ascertain the identity of the farmer; and (2) respondent’s failure to advise the trial court about G&H, which was named in the proofs of real estate tax payments obtained by respondent to determine whether subsequent tax bills had been paid.

Respondent’s negative answer to the trial court’s question at the hearing whether he was able to ascertain the identity of the farmer was fraudulently misleading because the answer implied that respondent attempted to ascertain the identity. Respondent testified at trial that his only attempt to determine who was in possession of the property was to see if anyone was there when he visited. Respondent did not seriously attempt to find the farmer but merely noted the absence of anyone upon his visit.

In addition, the false representation that the bank was the only interested party was fraudulent. Despite the fact that the name of G&H appeared on the proofs of real estate tax payments, respondent, through his attorney, represented to the trial court that the only interested party was the bank and that all the parties in interest had been served with notice. Although the land trust beneficiary was not entitled to notice, it cannot be said with certainty that, if the trial court had known of the existence of G&H, the parent company of the land trust beneficiary, it would have nevertheless ordered the issuance of a tax deed to respondent. Rather, the trial court might have required respondent to determine the whereabouts of G&H and to serve notice upon it because the beneficiary is an interested party and is permitted to redeem (In re Application of County Treasurer (1973), 16 Ill. App. 3d 385, 390, 306 N.E.2d 743).

The granting of section 2 — 1401 relief was proper on the basis of respondent’s fraud in misleading the court that he attempted to ascertain the identity of the farmer and in representing that there were no interested parties other than the bank although the proofs of tax payments stated that G&H paid subsequent taxes. See In re Application of County Treasurer (1978), 67 Ill. App. 3d 122, 131-32, 384 N.E.2d 729 (tax deed purchaser withheld enough information from the court to evidence a wrongful intent, and where a deed contains information to ascertain the truth concerning persons to be notified and the tax deed purchaser fails to notice it, there is sufficient evidence of bad faith to warrant concluding the deed was procured by fraud).

But, if Berke was a bona fide purchaser for value within the meaning of section 2 — 1401(e) (Ill. Rev. Stat. 1989, ch. 110, par. 2— 1401(e)), the trial court was without the power to vacate the tax deed order. Section 2 — 1401(e) provides:

“Unless lack of jurisdiction affirmatively appears from the record proper, the vacation or modification of an order or judgment pursuant to the provisions of this Section does not affect the right, title or interest in or to any real or personal property of any person, not a party to the original action, acquired for value after the entry of the order or judgment but before the filing of the petition, nor affect any right of any person not a party to the original action under any certificate of sale issued before the filing of the petition, pursuant to a sale based on the order or judgment.” Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1401.

Section 2 — 1401(e) has been interpreted as intending to protect bona fide purchasers for value although the section only refers to purchasers for value. (In re Application of County Treasurer (1975), 30 Ill. App. 3d 235, 239, 332 N.E.2d 557.) The Joint Committee Comments of 1955 stated that the subsection was intended to protect a bona fide purchaser of property from the effects of an order setting aside a decree affecting the title if the purchaser was not a party to the original proceeding when lack of jurisdiction does not affirmatively appear from the record. Ill. Ann. Stat., ch. 110, par. 2 — 1401, Joint Committee Comments, at 603-04 (Smith-Hurd 1983).

A purchaser is not a bona fide purchaser if he had constructive notice of an outstanding title or right in another person. (County Treasurer, 30 Ill. App. 3d at 240.) In addition, a purchaser having notice of facts that would put a prudent man on inquiry is chargeable with knowledge of other facts he might have discovered by diligent inquiry. (County Treasurer, 30 Ill. App. 3d at 240; City of Chicago v. Cosmopolitan National Bank (1983), 120 Ill. App. 3d 364, 368, 458 N.E.2d 11 (buyer of foreclosed property was not bona fide purchaser where, inter alia, the owner was in visible possession of the property).) If tax deed grantees had notice of the owners’ claim to the property, then they stand in no better position than the tax purchaser and are subject to relief against them. County Treasurer, 30 Ill. App. 3d at 241.

Section 2 — 1401(e) (Ill. Rev. Stat. 1989, ch. 110, par. 2— 1401(e)) does not state whether the petitioner or the alleged bona fide purchaser has the burden of proof. In general, the burden of proof is on the petitioner to prove facts sufficient to justify relief (Brunswick v. Mandel (1974), 59 Ill. 2d 502, 504-05, 322 N.E.2d 25), and section 2 — 1401(e) (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1401(e)) provides that relief cannot affect a purchaser for value. But if the burden of proving that the alleged purchaser was not bona fide were on the petitioner, he would have to prove a negative fact. In at least one other jurisdiction, it has been held that the burden of proof is on the alleged bona fide purchaser. (State v. Garcia (1967), 77 N.M. 703, 711, 427 P.2d 230, 236 (in suit by State to set aside tax deeds, purchasers of tax deed from tax deed petitioner had the burden of proving that they were bona fide purchasers).) We hold that an alleged bona fide purchaser who attempts to prevent the granting of section 2 — 1401 relief must prove that he was a bona fide purchaser.

At trial, Berke testified about the purchase price and the like kind exchange. He claimed that at the time the property was placed in trust for him, he did not know about the three-year redemption period for farmland. In purchasing the property, he relied upon the title commitment (which was not filed with Berke’s motion to dismiss that claimed to have attached all documents relating to the purchase). But Berke did not testify about his understanding of the ownership of the property, i.e., whether he viewed the property and saw evidence of farming or whether he saw G&H’s name on the title commitment or on the proofs of tax payments. The only reference in the record to Berke’s knowledge of the tax deed proceedings was in his affidavit that supported the motion to dismiss, and the affidavit merely stated Berke’s conclusion that nothing caused him to question any aspect of respondent’s purchase of the land and that he was unaware of any of the circumstances surrounding respondent’s purchase other than he had obtained a tax deed.

Berke did not establish that he had no actual or constructive notice of the interests of the farmer or of the owner, and the extent of his knowledge and notice was not proven. Therefore, Berke did not prove that he was a purchaser for value within the meaning of section 2 — 1401(e) (Ill. Rev. Stat. 1989, ch. 110, par. 2-1401(e)). The trial court properly vacated the tax deed.

Respondent also argues that the trial court erred in basing relief on equitable principles when the tax system is statutory. But it is the judgment, and not the reasoning, of the trial court that is to be reviewed. Material Service Corp. v. Department of Revenue (1983), 98 Ill. 2d 382, 387, 457 N.E.2d 9.

Respondent also argues that the trial court erred in construing section 253 of the Act (Ill. Rev. Stat. 1989, ch. 120, par. 734) as applying to the property at issue because a land developer who permits farming on vacant land in order to reduce real estate taxes is not entitled to a three-year redemption period. But the statute provided for a three-year redemption period for farmland and did not limit its application to farmland farmed personally by the owner. Therefore, the trial court did not err in applying a three-year redemption period.

Respondent also argues that the trial court erred in providing injunctive relief in the form of a temporary restraining order and a preliminary injunction.

The granting of injunctive relief including a temporary restraining order is an interlocutory order that is appealable as of right. (134 Ill. 2d Rules 307(a)(1), (d)(1).) The appeal must be perfected within 30 days of the interlocutory order. (134 Ill. 2d R. 307(a).) An order denying a motion to dissolve a temporary restraining order, when not appealed from, becomes a final order and becomes the law of the case. (Stocker Hinge Manufacturing Co. v. Darnel Industries, Inc. (1983), 94 Ill. 2d 535, 544, 447 N.E.2d 288.) A judgment is res judicata where an appeal has not been perfected, and an order from which an appeal might have been taken may not be reviewed on appeal from a subsequent order entered in the same case. (Baird & Warner, Inc. v. Gary-Wheaton Bank (1984), 122 Ill. App. 3d 136, 138-39, 460 N.E.2d 840 (appeal pursuant to Supreme Court Rule 307(a)(4) (134 Ill. 2d R. 307(a)(4))).) In general, the failure to timely appeal an order appealable under Supreme Court Rule 307(a) renders the judgment res judicata. (Wolfe v. Illini Federal Savings & Loan Association (1987), 158 Ill. App. 3d 321, 324, 511 N.E.2d 828 (appeal under Supreme Court Rule 307(a)(2) from order appointing receiver).) Therefore, the entering of injunctive relief concerning the property in this case cannot be reviewed on appeal.

Respondent finally argues that the trial court erred in vacating the tax deed order without providing payment to it for all the taxes and other costs incurred. Petitioner does not argue that respondent is not entitled to reimbursement. Section 270 of the Act does provide that any order of court setting aside any tax deed procured under the Act shall provide that the claimant shall pay to the party holding the tax deed: all taxes and legal costs with 18% annual interest, subsequent taxes and assessments incurred, the filing fee, the service fees, the amount paid to the county clerk for issuing the tax deed, $3 for each property for the service of notices served on occupants, owners or parties interested in the real estate, recording fee, and publication fees. (Ill. Rev. Stat. 1989, ch. 120, par. 751.) The trial court is directed on remand to order payment to respondent pursuant to section 270.

The judgment of the trial court is affirmed, and the cause is remanded with directions.

Affirmed and remanded with directions.

RIZZI and WHITE, JJ., concur.

      Justice White concurred with this opinion prior to his retirement.


author: PRESIDING JUSTICE LORENZ

text:
    THE CITY OF ROLLING MEADOWS, Plaintiff-Appellee, v. NATIONAL ADVERTISING COMPANY et al., Defendants-Appellants.
    First District (5th Division)
    No. 1—89—3080
    Opinion filed November 27, 1991.
    Rehearing denied June 4, 1992.

      Robert C. Kenny, of Schain, Firsel & Burney, Ltd., of Chicago, for appellants Universal Outdoor, Inc., and Citizens Bank & Trust Company.
    Gordon & Glickson, P.C., of Chicago (Sanford M. Stein, Jean Marie R. Pechette, and Sarah K. Nadelhoffer, of counsel), for appellants National Advertising Company, P.K. Neuses, Inc., and First National Bank of Arlington Heights.
    Rose & Ross, Ltd., of Rolling Meadows (Donald M. Rose and Kathleen Ross, of counsel), for appellee.
   PRESIDING JUSTICE LORENZ

delivered the opinion of the court:

Following a bench trial, judgment was entered in favor of plaintiff, the City of Rolling Meadows (city), enforcing a restrictive covenant which prohibited off-premise billboards in an industrial park. Defendants now appeal and raise the following issues: (1) whether a previous Federal court action involving the city’s zoning ordinance barred the present action as res judicata; (2) whether the issuance of permits to construct the billboards amounted to a vested property right; (3) whether the doctrine of laches prevented the city from enforcing the restrictive covenant; (4) whether the city’s enforcement of the covenant had a proper public purpose; (5) whether it was against the manifest weight of the evidence to find that the city did not abandon its right to enforce the covenant; (6) whether it was against the manifest weight of the evidence to find that the character of the property had not changed; and (7) whether enforcement of the restrictive covenant would violate the right to freedom of speech. For the following reasons, we affirm.

This action concerns the city’s complaint for declaratory and injunctive relief to enforce a restrictive covenant which applied to property it owned in an industrial park in Rolling Meadows. Defendants, RK. Neuses, Inc., First National Bank of Arlington Heights, and Citizens Bank & Trust Company, also owned property in the park subject to the covenant and leased portions of their property to defendants, National Advertising Company (National) and Universal Outdoor, Inc. (Universal), to erect and maintain billboards.

The restrictive covenant was recorded in 1957 against most of the lots in the industrial park and allowed any owner to bring legal action to enforce them. The covenant provides:

“Improvements erected on property subject to this declaration *** shall not exceed forty-five (45) feet in height; [provided, however, [t]hat water towers or tanks *** may exceed this height with the written approval of the [Northwest Industrial Park, Inc.]
* * *
No billboards or advertising signs, except those identifying the name, business and products of the person or firm occupying the premises shall be permitted.”

The covenant also gave Northwest Industrial Park the authority to generally supervise and enforce the covenant. That corporation was dissolved in 1966.

The city acquired property in the industrial park in 1960 and built a water tower on the property in 1961.

In 1962, the center line of Route 53 was recorded showing it would run through the industrial park, and in 1963, 20.64 acres of the 201 acres in the park were condemned for its construction. Route 53 opened for traffic in 1966 and was, at the time of this action, a six-lane highway.

In 1983, National applied for two building permits from the city to erect advertising billboards on the property it leased in the industrial park. The city denied the permits because National’s proposed billboards violated the city’s zoning ordinance which limited the size and height of billboards and allowed only on-premise billboards. On-premise billboards advertise a business or product of a person or firm occupying the premises.

When its permits were denied, National filed a civil rights action against the city in Federal court. It alleged that the zoning ordinance violated the right to freedom of speech because it only allowed on-premise billboards and that the size and height restrictions of the ordinance were preempted by the Highway Advertising Control Act of 1971 (Ill. Rev. Stat. 1985, ch. 121, par. 501 et seq.). On the city’s motion, the Federal district court dismissed National’s complaint. On appeal, the reviewing court reversed that decision agreeing with National’s argument that the zoning ordinance was preempted by State law. (National Advertising Co. v. City of Rolling Meadows (7th Cir. 1986), 789 F.2d 571.) As a result of its decision, the court did not consider the freedom of speech issue. The case was remanded to the district court to “give National effective relief from the existing ordinance.” (National, 789 F.2d at 577.) The action of the district court, on remand, is not apparent from the record in this case.

After the Federal litigation was resolved, the city amended its zoning ordinance to comply with the Highway Advertising Control Act of 1971. National again applied for permits to erect two billboards on the property it leased in the industrial park. The city issued the permits on October 29, 1986, and National began construction of the billboards.

Universal also applied for and was granted a permit to construct a billboard on the property it leased in the park. Universal also began construction of the billboard.

In November of 1986, the city learned of the restrictive covenant, applicable to most of the property in the industrial park, which prohibited improvements over 45 feet high and allowed only on-premise billboards. On December 12, 1986, the city filed the present action, a complaint for declaratory and injunctive relief, against defendants alleging that National’s and Universal’s billboards violated the restrictive covenant because they would be more than 45 feet high and they would display off-premise advertising. Off-premise billboards advertised businesses, products, or services which were available or conducted at a location other than where the billboard was located.

The city requested a temporary restraining order to halt construction of the billboards. The trial judge denied the request and allowed National and Universal to complete construction of the billboards. Subsequently, the parties agreed that National and Universal could lease the billboards for off-premise advertising but the agreement would not prejudice the city’s attempt to enforce the restrictive covenant in the present action.

Defendants moved to dismiss the complaint arguing that the covenant should not be enforced on the grounds of res judicata, laches, estoppel, public policy, changed character of the property, and the right to freedom of speech. The motion was denied.

Defendants answered the complaint and asserted the following as affirmative defenses: (1) the restrictive covenant violated the right to freedom of speech; (2) the city’s enforcement of the covenant did not serve a public purpose for which public funds should be spent; (3) the character of the property had changed since the covenant was recorded; and (4) the city had abandoned the right to enforce the covenant.

Defendants also filed a motion for summary judgment on their affirmative defenses which was denied. The city, however, was granted summary judgment on the affirmative defenses of freedom of speech and public purpose.

Prior to trial, the parties stipulated to the following facts. The water tower on the city’s property in the park was 80 feet high, but there was no documentation that the water tower was approved by the Northwest Industrial Park as required in the covenant. Pursuant to the permits issued by the city, National built two billboards on property it leased in the park which were 55 feet and 11 inches high and 56 feet and 5 inches high. Also pursuant to a permit, Universal built one billboard which was 49 feet and 8 inches high. National and Universal offered their billboards for lease to “all comers” to display commercial and noncommercial messages.

In a bench trial on the remaining issues of changed conditions and abandonment, the following evidence was presented.

Rolf Campbell, the city’s land use and planning expert, testified that when the city planned the area as an industrial park, it anticipated that there would be access from a highway such as Route 53. Further, Route 53 did not change the character of the industrial park and the development of the park was consistent with the covenant. The billboards in question were incompatible with the park because they were excluded by the covenant, architecturally incompatible with the present buildings, and provided two separate uses for one parcel which was intended to have only one use. If the covenant was enforced, there would be no hardship to the present owners because the property was being used for industrial purposes which was consistent with the intent of the covenant.

Allen Kracower, defendants’ land use and planning expert, testified that Route 53 was a significant change on the property because of its size, traffic, and noise. Route 53 carried 100,000 to 150,000 cars per day through the park. He also testified that prohibiting billboards in the park was no longer relevant and that billboards were a reasonable use of the land in the park.

William McCann, defendants’ real estate appraiser, testified that allowing the billboards would increase the value of the property without a detrimental impact to the other property in the park.

The trial judge found that the character of the property did not change since the time the covenant was recorded and that the city did not tolerate violations of the covenant which would have indicated an abandonment. The judge enforced the covenant and ordered National and Universal to remove the billboards. National, Universal, and their respective lessors now appeal.

Opinion

I

National first argues that the Federal litigation operates as res judicata to the city’s attempt to enforce the restrictive covenant in this action.

Under the doctrine of res judicata, the final judgment of a court of competent jurisdiction is conclusive of the rights of the parties and their privies and absolutely bars subsequent actions involving the same claims or demands by the same parties or their privies. (Catlett v. Novak (1987), 116 Ill. 2d 63, 506 N.E.2d 586.) The bar not only extends to the issues that were actually decided in the former proceeding but also to any other issues properly involved by the subject matter which might have been raised or decided. Best Coin-Op, Inc. v. Paul F. Ilg Supply Co. (1989), 189 Ill. App. 3d 638, 545 N.E.2d 481.

Although the action of the Federal district court on remand is not apparent from the record in this case, the city does not challenge the finality of that decision. The parties primarily dispute whether the Federal court action and the present case involve the same claim or demand.

Illinois courts have used either the “ ‘same evidence’ ” test or the “ ‘transactional’ ” test to determine whether there is an identity of the causes of actions; however, the supreme court has not expressly adopted either test. Best Coin-Op, 189 Ill. App. 3d at 652-54, 545 N.E.2d at 490-91.

Under the same evidence test, res judicata will apply if the evidence needed to sustain the second cause of action would have sustained the first cause of action. (Best Coin-Op, 189 Ill. App. 3d 638, 545 N.E.2d 481.) Here, the city’s action to enforce the restrictive covenant necessarily requires different evidence than the evidence that was required in the Federal court action involving the zoning ordinance. Although both actions involved the restriction of billboards, the Federal action was based on the city-wide zoning ordinance and this action was based on the restrictive covenant recorded in 1957 against most of the property in the industrial park. This action could have been sustained without reference to the zoning ordinance.

Under the “transactional” test, different theories of relief constitute a single cause of action if a single group of operative facts give rise to the assertion of relief. (Best Coin-Op, 189 Ill. App. 3d 638, 545 N.E.2d 481.) In this case, the Federal action was brought by National after it was denied permits in 1983. The present action was brought by the city after it granted National permits in 1986. Although both actions involve National’s attempt to erect billboards in the park, they stemmed from different conduct at different times.

National relies on Exchange National Bank v. City of Des Plaines (1975), 32 Ill. App. 3d 722, 336 N.E.2d 8, where plaintiff challenged the application of defendant’s zoning ordinance to its property. As an affirmative defense, defendant raised the issue of a restrictive covenant also applicable to the property. In this case, National contends that based on Exchange, the city could have and should have raised the issue of the restrictive covenant in the Federal court action. However, Exchange does not assist in resolving the issue presented here because it did not consider the issue of res judicata.

National also relies on Furgatch v. Butler (1988), 188 Ill. App. 3d 1060, 545 N.E.2d 140, to support its argument that res judicata applies in this case. In Furgatch the court found that a constitutional challenge to a zoning ordinance was barred under res judicata because it could have been raised in a prior proceeding which challenged the denial of a permit based on the zoning ordinance. In Furgatch, distinguished from the present case, both actions involved the application of the zoning ordinance.

The present action stems from different facts and requires different evidence than the Federal court litigation and, as a result, it was not barred under res judicata.

II

National also argues that it had a vested right in the Federal court judgment and the permits issued by the city.

National relies on Arnold & Murdock Co. v. Industrial Comm’n (1924), 314 Ill. 251, 145 N.E. 342, which stated that a judgment is a vested property right which cannot be destroyed by giving a subsequently enacted statute retroactive effect. Arnold does not resolve the issue in the present case which does not involve the retroactive effect of a statute on a judgment.

In Leisuretime Recreation Center VI, Inc. v. Byrne (1981), 93 Ill. App. 3d 489, 417 N.E .2d 658, which National also relies on, the court stated that when a party has made a substantial change in position, by incurring expenditures and obligations in reliance on a building permit, the permit may ripen to a vested right depending on the totality of the circumstances.

National contends that in reliance on the permits, it incurred $40,000 to construct each billboard. However, from the time National leased the property in the park, it had constructive notice of the restrictive covenant, which was recorded in 1957, prohibiting billboards. Further, when the city filed the present action six weeks after it issued the permits, National had not yet completed construction of the billboards. National was only allowed to complete the billboards because the city’s request for a temporary restraining order was denied. Under these circumstances, National did not acquire a vested right in the permits.

III

Universal argues that laches bars the city from enforcing the restrictive covenant.

Under the doctrine of laches, a party may be precluded from asserting a claim when he unreasonably delays raising that claim which prejudices the opposing party. (Tully v. State (1991), 143 Ill. 2d 425, 574 N.E.2d 659.) It is within the trial court’s discretion to apply the doctrine of laches. City of Rochelle v. Suski (1990), 206 Ill. App. 3d 497, 564 N.E.2d 933.

Universal relies on City of Rochelle to support its argument. In that case, defendant owned a trailer park in which mobile homes were installed. In 1987, the city gave defendant notice that three of the mobile homes encroached on its property. Those homes were installed between 1969 and 1974 pursuant to permits issued by the city in 1968 or 1969. Removal of the homes would have cost defendant $25,000 and the city did not establish a need for the property. The appellate court found that laches may have prevented the city from asserting that the homes encroached on its property and remanded the case to the trial court for a determination of that issue.

Unlike City of Rochelle, the city in this case did not delay an unreasonable length of time after it issued the permit in asserting the restrictive covenant. The city filed this action to assert its rights under the restrictive covenant within six weeks after the permit was issued to Universal. Although Universal also relies on the city’s actions toward National to support its argument, those actions could not have prejudiced Universal. As a result, in this case the trial judge did not abuse his discretion in denying Universal’s claim of laches.

IV

Both National and Universal argue that the city cannot enforce the restrictive covenant because it does not serve a proper public purpose.

Under the State constitution, public funds and property can only be used for public purposes. (Ill. Const. 1970, art. VIII, §1(a).) Public funds cannot be devoted to a purely private purpose. (O’Fallon Development Co. v. City of O’Fallon (1976), 43 Ill. App. 3d 348, 356 N.E.2d 1293.) Whether acting in its proprietary or governmental capacity, the test is whether the attempted private use of municipal property subserves the public interest and benefits a private individual or corporation only incidentally. (O’Fallon Development Co. v. City of O’Fallon (1976), 43 Ill. App. 3d 348, 356 N.E.2d 1293.) In O’Fallon, which Universal relies on, the court held that the city could not allow a private corporation to advertise on the city’s water tower.

Unlike O’Fallon, the present case does not involve the use of public money or property for private purposes. The city is acting in its own interest to enforce the covenant applicable to its property in the industrial park. Aesthetics and traffic safety are valid policy reasons for government regulation of billboards. (National Advertising Co. v. Village of Downers Grove (1990), 204 Ill. App. 3d 499, 561 N.E.2d 1300.) Similarly, the city has a valid public purpose to achieve the same objectives through enforcement of the restrictive covenant in this case.

V

National and Universal also argue that the trial judge erred when he found, after a bench trial, that the city did not abandon its right to enforce the covenant.

Restrictive covenants will not be enforced when property owners have acquiesced in prior violations of the covenants. (Rogers v. City of Jerseyville (1990), 196 Ill. App. 3d 136, 552 N.E.2d 1314.) However, minor violations of a restriction do not prohibit subsequent enforcement of the covenant. (Amoco Realty Co. v. Montalbano (1985), 133 Ill. App. 3d 327, 478 N.E.2d 860.) The trial judge’s decision after a bench trial will not be disturbed on review unless it was against the manifest weight of the evidence. Commercial Mortgage & Finance Co. v. Life Savings (1989), 129 Ill. 2d 42, 541 N.E.2d 661.

National and Universal contend that the evidence at trial established that the city acquiesced in a prior violation of the covenant when it constructed the water tower. The tower was 80 feet high. Although the covenant allowed construction of a water tower in excess of 45 feet with written approval of the Northwest Industrial Park, the city did not produce evidence at trial that it received such approval. The trial judge found that the city’s failure to produce written approval did not establish that the tower was constructed without such approval. It cannot be said that this determination was against the manifest weight of the evidence. Further, even if there was no approval for the water tower, a minor violation of a covenant does not establish that the city abandoned the covenant.

National and Universal also contend that the city acquiesced in a violation of the covenant when it issued permits to construct the billboards in question. The evidence at trial established that the city learned of the restrictive covenants one month after it issued the permits. It immediately filed the present action to enforce them. The billboards were only completed because the trial judge denied the city’s request for a temporary restraining order. As a result, the city’s act of issuing the permits did not automatically establish that it abandoned the covenants.

The trial judge’s decision that the city did not abandon the right to enforce the covenant was not against the manifest weight of the evidence.

VI

National and Universal also argue that the trial judge erred when he found that enforcement of the restrictive covenant was equitable because the character of the industrial park did not change.

A restrictive covenant should not be enforced if the character and environment of the property have changed to the extent that the objective of the restriction cannot be accomplished by its enforcement or if it would be unreasonable or oppressive to enforce it. (Rogers, 196 Ill. App. 3d 136, 552 N.E.2d 1314.) The decision of the judge after a bench trial will not be disturbed on appeal unless it was against the manifest weight of the evidence. Commercial, 129 Ill. 2d 42, 541 N.E.2d 661.

National and Universal contend that the evidence at trial showed Route 53 changed the character of the industrial park to such an extent that enforcement of the covenant was unreasonable. However, the testimony of the parties’ experts, Campbell and Kracower, conflicted on this point. Campbell testified that when the area was planned as an industrial park, it was expected that there would be access to the area from a highway such as Route 53. Campbell also testified that the character of the park had not changed because it was being used as an industrial park consistent with the intent of the covenant. On the other hand, Kracower testified that Route 53 was a significant change to the industrial park because of its size, the amount of traffic it carried, and the noise it caused. Further, he testified that billboards were a reasonable use of the land near Route 53.

The trial judge, as the trier of fact, was required to resolve the conflicting testimony and his decision that the character of the property had not changed was supported by the evidence. Most notably, Route 53 was consistent with the plan for the industrial park and, even if the covenant was enforced, the owners of the property in the park could continue to use their property for industrial purposes. Accordingly, enforcement of the covenant was not unreasonable and the decision of the judge was not against the manifest weight of the evidence.

VII

Lastly, National and Universal argue that the restrictive covenant cannot be enforced because it violates their right to freedom of speech. They contend that the paragraph of the covenant which only allows on-premise billboards restricts their right to display noncommercial messages.

National and Universal rely on Shelley v. Kraemer (1948), 334 U.S. 1, 92 L. Ed. 1161, 68 S. Ct. 836, where the Supreme Court held it would not enforce a restrictive covenant that would violate constitutional rights. They argue that the restrictive covenant prohibiting off-premise billboards violates their right to free speech relying on Metromedia, Inc. v. City of San Diego (1981), 453 U.S. 490, 69 L. Ed. 2d 800, 101 S. Ct. 2882. In Metromedia, the Supreme Court held that an ordinance permitting on-premise commercial advertising but prohibiting other commercial advertising and noncommercial advertising violated the right to freedom of speech. The court found that the ordinance could value commercial messages relating to on-premise business over commercial messages relating to off-premise business. However, the ordinance could not protect commercial speech more than noncommercial speech. “Insofar as the city tolerates billboards at all, it cannot choose to limit their content to commercial messages; the city may not conclude that the communication of commercial information concerning goods and services connected with a particular site is of greater value than the communication of noncommercial messages.” Metromedia, 453 U.S. at 513, 69 L. Ed. 2d at 818, 101 S. Ct. at 2895.

National and Universal argue that under Metromedia the restrictive covenant unconstitutionally prohibits the display of noncommercial messages because it allows only the display of on-premise commercial messages. They urge this court to hold that enforcement of the restrictive covenant violates freedom of speech.

National and Universal ignore, however, the fact that their proposed billboards violate the height restrictions of the covenant. The covenant prohibits improvements over 45 feet high. The three billboards which National and Universal constructed were between 49 feet and 56 feet high, exceeding the limitation. Regardless of the message that their billboards may carry, whether it is commercial or noncommercial, there is no question that the billboards violate the height restriction of the covenant. As a result, whether enforcement of the covenant would violate freedom of speech is not at issue. Even if this court were to find that the restrictive covenant violated the freedom of speech, the height restriction of the covenant would still bar National’s and Universal’s billboards.

For the foregoing reasons, the decision of the trial judge is affirmed.

Affirmed.

GORDON and McNULTY, JJ., concur.


author: JUSTICE McNAMARA

text:
    FIRST CHICAGO TRUST COMPANY OF ILLINOIS, as Trustee, et al., Plaintiffs-Appellants, v. OLD WILLOW FALLS CONDOMINIUM ASSOCIATION, Defendant-Appellee.
    First District (6th Division)
    No. 1—91—1810
    Opinion filed February 28, 1992.
    Rehearing denied April 20, 1992.
    Ellis B. Levin, of Lamet, Kanwit & Davis, of Chicago, for appellants.
    Marshall N. Dickler and Shelley R.Z. Barnett, both of Marshall N. Dickler, Ltd., of Arlington Heights, for appellee.
   JUSTICE McNAMARA

delivered the opinion of the court:

Plaintiffs, First Chicago Trust Company of Illinois, as trustee, and Saul Azar, Alex Pinsky, and Zal Horn, as beneficiaries under trust No. RY — 011121 (hereinafter plaintiff), sought a mandatory injunction against defendant, Old Willow Falls Condominium Association, ordering it to accept plaintiff’s voting proxies and to permit Azar to become a candidate for the board of managers of defendant association. The trial court granted defendant’s motion to dismiss, holding that plaintiff was a developer and not a unit owner with voting rights.

As set forth in the companion case of Azar v. Old Willow Falls Condominium Association, (1992), 228 Ill. App. 3d 753, Azar, Pinsky and Horn are beneficial owners of 48 units in Old Willow Falls Condominium Association. On December 18, 1990, an annual meeting was held to elect members to defendant board for the upcoming year. Plaintiffs attorneys presented voting proxies and attempted to nominate Azar to the board of managers. A dispute arose between the parties regarding plaintiffs voting rights. Defendant’s attorney directed that a vote be conducted with double tallying. In the vote excluding plaintiff’s votes, three incumbent members of the board and two challengers were elected. In the second tally, which included plaintiff’s votes, Azar would have been elected to the board.

The sole issue presented for review is whether plaintiff is entitled to vote as a unit owner and run for election to the board of managers. Plaintiff contends that its previous status as developer does not preclude its right to exercise the powers of a unit owner.

The Condominium Property Act provides that the bylaws shall include provisions for:

“The election from among the unit owners of a board of managers, the number of persons constituting such board, and that the terms of at least one-third of the members of the board shall expire annually and that all members of the board shall be elected at large.” Ill. Rev. Stat. 1989, ch. 30, par. 318(a)(1).

Article II, section I, of defendant’s bylaws provides that defendant shall have one class of members, and that each unit owner shall be a member of the association. The bylaws further provide that each member shall be entitled to the number of votes equal to his percentage ownership interest in the common elements at the time any matter is submitted to a vote of the members. If a unit is owned by more than one person, the voting rights shall not be divided, but shall be exercised as if the unit owner consisted of one person in accordance with the proxy.

While there are no Illinois cases directly addressing the issue of whether a developer is considered a unit owner, we find cases from other jurisdictions instructive for purposes of our review. In Brooks v. Palm Bay Towers Condominium Association, Inc. (Fla. App. 1979), 375 So. 2d 348, the Florida court determined that a condominium developer is a unit owner and as such is liable for assessments that come due while title is held by the developer, regardless of how title is acquired. Belatedly, in Richard Gill Co. v. Jackson’s Landing Owners’ Association (Tex. App. 1988), 758 S.W.2d 921, the Texas court held that a partnership which managed and performed duties of an owners’ association during the development period was an “apartment owner” as to units within the condominium that it still owned during the development period and was subject to assessments. Like the developers in both Brooks v. Palm Bay Towers and Richard Gill Co. v. Jackson’s Landing, plaintiff in this case was responsible for paying assessments on the 48 units held in trust.

The Condominium Property Act and the declaration of defendant association define a unit owner as: “the person or persons whose estates or interests individually or collectively, aggregate fee simple absolute ownership of a unit.” (Ill. Rev. Stat. 1989, ch. 30, par. 302(g).) In an Illinois land trust, the interests of the trustee and the beneficiary together aggregate fee simple ownership. (La Salle National Bank v. Triumvera Homeowners Association (1985), 133 Ill. App. 3d 303, 478 N.E.2d 1033; Robinson v. Chicago National Bank (1961), 32 Ill. App. 2d 55, 176 N.E.2d 659.) There are no express provisions in the Condominium Property Act or defendant’s bylaws or declaration indicating that a developer cannot be a unit owner.

Applying these rules to the present case, it becomes apparent that the interests of the trustee, together with those of the three beneficiaries, aggregate fee simple ownership of the 48 units in Old Willow Falls Condominium. Thus, plaintiff meets the definition of a unit owner found in both the Act and defendant’s declaration and, therefore, becomes a member of the condominium association. In accordance with defendant’s bylaws, plaintiff is entitled to the number of votes equal to his percentage ownership interest in the common elements at the time any matter is submitted to a vote of the unit members.

Article IV, section 2, of defendant’s bylaws provides in relevant part:

“Only a member of the Association may be a member of the Board. In the event that a member of the Association is a corporation, partnership, trust or other legal entity other than a natural person or persons, then any shareholder, officer or director of such corporation, partner of such partnership, beneficiary or individual trustee of such trust, or manager of such other legal entity, may be eligible to serve as a member of the Board.”

In view of our finding that plaintiff is a unit owner and therefore becomes a member of the Association, we find that Azar, as beneficiary of the trust, is eligible to run for election to defendant’s board of managers.

For the foregoing reasons, the judgment of the circuit court of Cook County is reversed. We remand the cause with directions to enter an order consistent with this opinion.

Judgment reversed and cause remanded with directions.

EGAN, P.J., and RAKOWSKI, J., concur.


text:
    SAUL AZAR, Plaintiff-Appellant, v. OLD WILLOW FALLS CONDOMINIUM ASSOCIATION, Defendant-Appellee.
    First District (6th Division)
    No. 1—91—0271
    Opinion filed February 28, 1992.
    Rehearing denied April 20, 1992.

      Ellis B. Levin, of Lamet, Kanwit & Davis, of Chicago, for appellant.
    Marshall N. Dickler and Shelley R.Z. Barnett, both of Marshall N. Dickler, Ltd., of Arlington Heights, for appellee.
   JUSTICE McNAMARA

delivered the opinion of the court:

Plaintiff, Saul Azar, beneficial owner of 48 units in the Old Willow Falls Condominium, filed suit to enjoin defendant, Old Willow Falls Condominium Association, from levying a special assessment of $223,000 without obtaining approval from two-thirds of the condominium unit owners. Defendant filed a motion to dismiss plaintiff’s claim for failure to state a cause of action, which the trial court granted. After plaintiff’s motion for reconsideration was denied, he filed this appeal.

We adduce the following background from the affidavits, pleadings and documents filed. Plaintiff, together with Zal Horn and Alex Pinsky, is the beneficial owner of 48 condominium units in Old Willow Falls Condominium located in Prospect Heights, Illinois. First Illinois Bank and Trust Co. of Evanston (First Illinois Bank) acted as trustee of the land trust. On August 24, 1990, defendant mailed to all unit owners, including plaintiff, the proposed budget for 1990-1991 due to be implemented on January 1, 1991. In the notice, defendant advised that the regular assessment would increase approximately 9.98%, and that each unit owner would incur an additional assessment for roof repairs and legal fees of $105.59 per unit each month.

On September 25, 1990, plaintiff requested at the meeting of defendant board that the proposed increase in the special assessment be voted upon by the unit owners. Defendant refused plaintiff’s request and adopted the additional assessment.

On November 27, 1990, plaintiff filed suit seeking declaratory and injunctive relief to bar implementation of the special assessment. The trial court granted plaintiff’s motion for an expedited ruling or preliminary injunction to bar enforcement of the special assessment. Azar also sought leave to file an amended complaint to join as plaintiffs First Hlinois Bank, as trustee, and Horn and Pinsky, the other two beneficiaries of the land trust.

On December 19, 1990, the trial court granted defendant’s motion ' to dismiss with prejudice pursuant to section 2 — 619 of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 619), or alternatively, for judgment on the pleadings. The court also denied plaintiff’s motion for leave to file an amended complaint. Specifically, the trial court held that plaintiff lacked standing and capacity to bring this cause of action because he has never been a unit owner at Old Willow Falls Condominium. The trial judge concluded that legal title to the subject property resides in the trustee, who was the proper and necessary party to the action.

In support of plaintiff’s motion for reconsideration, Charles N. Goodnow, senior vice-president and trust officer of First Hlinois Bank, submitted an affidavit stating that plaintiff has a 50% beneficial interest and that Pinsky and Horn each possess a 25% beneficial interest in the subject property. Goodnow stated that it has never been the policy of the bank to execute proxies to vote in condominium elections. The trust agreement governing the land trust provides that a beneficiary has the right to the management and control of the property, and that the land trustee has no such right. It was Goodnow’s position that the execution of the proxies is a right personal to the beneficiaries of the trust, as it relates to the management and control of the property.

On appeal, plaintiff maintains that the trial court erroneously held that plaintiff lacked standing to bring this action; that the land trustee and other beneficiaries should have been permitted to join the action as additional party plaintiffs; that the proposed increase should have been separately assessed; and that the size of the increase in the special assessment requires approval by two-thirds of the unit owners. (Belatedly, on this date we also filed our opinion in First Chicago Trust Co. v. Old Willow Falls Condominium Association (1992), 228 Ill. App. 3d 750, holding that plaintiff is considered a unit owner with voting rights, and that Azar may run as a candidate for the board of managers of defendant association).

We turn first to plaintiff’s contention that the trial court erred in holding that, as a beneficial owner, plaintiff lacked standing to bring the present action.

We find a brief review of the relevant legal principles surrounding land trusts instructive for the resolution of this issue. In a land trust, the legal and equitable title lies with the trustee, and the beneficiary retains what is referred to as a personal property interest. (People v. Chicago Title & Trust Co. (1979), 75 Ill. 2d 479, 389 N.E.2d 540, citing Chicago Federal Savings & Loan Association v. Cacciatore (1962), 25 Ill. 2d 535, 185 N.E.2d 670.) In spite of its classification as a personal property interest, most of the usual attributes of real property ownership are retained by the beneficiary under the trust agreement. The only attribute of ownership ascribed to the trustee is that relating to title, upon which third parties may rely in transactions where title to the real estate is of primary importance. (People v. Chicago Title & Trust Co., 75 Ill. 2d 479, 389 N.E.2d 540.) Moreover, title to property does not necessarily involve ownership of the property; rather, title refers only to a legal relationship to the land, while ownership is comparable to control and denotes an interest in the real estate other than that of holding title thereto. (Restatement (Second) of Trusts §2, Comment d, §10, Comment a (1959).) Thus, it is readily apparent that true ownership in a land trust lies with the beneficiaries, although title lies with the trustee.

Applying these principles in this case, we find that the trial court erred in concluding that plaintiff, as beneficiary of a land trust, lacked standing to file the present lawsuit. This court has held that the beneficiary of a land trust is a proper party to litigation involving his rights and liabilities with respect to management and control, use, or possession of the property pursuant to the trust agreement. (Department of Conservation v. Franzen (1976), 43 Ill. App. 3d 374, 356 N.E.2d 1245.) One of the tests for determining the necessity or propriety of involvement of beneficiaries in litigation relating to land trust property is whether the trustee can protect the beneficiaries’ interests. (Department of Conservation, 43 Ill. App. 3d 374, 356 N.E.2d 1245; Chicago Title & Trust v. Exchange National Bank (1974), 19 Ill. App. 3d 565, 312 N.E.2d 11.) In this case, the trustee cannot adequately protect the interests of the beneficiary. The trust agreement expressly provides that the beneficiary has the right to the management and control of the property, and that the land trustee has no such right. In Goodnow’s affidavit, he stated that it has never been the policy of the bank to become involved in the execution of proxies in condominium elections. It is therefore incumbent upon plaintiff, as beneficiary, to challenge the imposition of the special assessments as part of the management and control of the land trust, and to protect his interests. Plaintiff has standing to bring this cause of action.

Plaintiff next asserts that the land trustee, First Illinois Bank, and the other beneficiaries, Horn and Pinsky, should have been allowed to join the action as additional party plaintiffs. The trial judge refused to allow the plaintiff to file an amended complaint because it was not signed or verified by the land trustee.

We find that the trial judge’s refusal to allow Azar to amend his complaint to add party plaintiffs was an abuse of discretion. However, in view of our holding that Azar has standing to bring this action, no further discussion of this issue is warranted.

Plaintiff further contends that the trial court erred when it dismissed plaintiff's complaint for failure to state a cause of action under section 9(d) of the Condominium Property Act. (Ill. Rev. Stat. 1989, ch. 30, par. 309(d).) That section provides in pertinent part:

“Any non-recurring common expense, any common expense not set forth in the budget as adopted, and any increase in assessment over the amount adopted shall be separately assessed against all unit owners. Any such separate assessments shall be subject to approval by the affirmative vote of at least two-thirds of the unit owners duly called for the purpose of approving the assessment if it involves proposed expenditures resulting in a total payment assessed to a unit equal to the greater of 5 times the unit’s most recent common expense assessment calculated on a monthly basis or $300.”

The trial judge found that the legal fees, engineering and roof repairs were nonrecurring common expenses; however, they had been adopted by the board as part of its annual budget. The judge held that because plaintiff met only one of the conditions set forth in the first sentence of the Act, there was no need for a special assessment for the proposed expenditures.

We find rather that a plain reading of the first sentence in this section indicates that it is intended to be read disjunctively, and that meeting any one of the conditions is adequate to require the amount to be separately assessed. Legal fees and engineering and roofing costs should be characterized as nonrecurring expenses and require separate assessment. (See Washington Courts Condominium, Association—Four v. Cosmopolitan National Bank (1988), 169 Ill. App. 3d 1059, 1061, 523 N.E.2d 1245 (maintenance of litigation is type of “nonrecurring common expense” which is proper subject matter of special assessment under the Condominium Property Act).) Thus, having met the criteria of nonrecurring expense, plaintiff established that the board of managers must separately assess these expenditures.

Finally, we turn to the question of whether prior approval by two-thirds of the unit owners is required for the proposed separate assessment. In the previous year’s budget, the total amount paid for regular and special assessments was $380,000. In the proposed budget, the regular and special assessments totaled $552,950, representing an increase of $172,950.

According to section 9(d), a vote by two-thirds of the unit owners is required if the total payment assessed to a unit is equal to the greater of five times the unit’s most recent common expense assessment calculated on a monthly basis, or $300. Application of this formula yields the following computations: previous year’s expenditures ($380,000) divided by 12 months ($31,667) and multiplied by five equals $158,333, which is the amount of permissible increase over the previous year’s assessment. The proposed increase of $172,950 exceeds the threshold cap of $158,333. Therefore, the board of managers must secure approval by two-thirds of the unit owners prior to the implementation of the special assessment.

For the foregoing reasons, the judgment of the circuit court of Cook County is reversed.

Judgment reversed.

EGAN, P.J., and RAKOWSKI, J., concur.