Harris v. Adame , 2015 IL App (1st) 123306 ( 2016 )

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Harris v. Adame, 2015 IL App (1st) 123306
Appellate Court ROBERT F. HARRIS, Public Guardian of Cook County, and Plenary
Caption Guardian of the Estate and Person of Arthur Lynch,
Petitioner-Appellee, v. JOSE A. ADAME, Respondent-Appellant
(Professional National Title Network, Inc., an Illinois Corporation,
James Brya, T&H Mortgage, Inc., Respondents).–NICHOLAS G.
GRAPSAS, Administrator of the Estate of Arnold Lynch, Deceased,
Petitioner-Appellee, v. JOSE A. ADAME, Respondent-Appellant
(Professional National Title Network, Inc., an Illinois Corporation,
James Brya, T&H Mortgage, Inc., Respondents).
District & No. First District, Second Division
Docket Nos. 1-12-3306, 1-12-3307 cons.
Filed September 30, 2015
Rehearing denied October 27, 2015
Modified opinion filed November 3, 2015
Decision Under Appeal from the Circuit Court of Cook County, Nos. 08-P-4696,
Review 09-P-3544; the Hon. Lynne Kawamoto, Judge, presiding.
Judgment Affirmed in part and reversed in part; cause remanded.
Counsel on Masuda, Funai, Eifert & Mitchell, Ltd., of Chicago (Timothy J.
Appeal Hammersmith and Gerald L. Morel, of counsel), for appellant.
Robert F. Harris, Public Guardian, of Chicago (Charles P. Golbert,
Kass A. Plain, and Janet L. Barnes, of counsel), for appellee Robert F.
Harris.
Arnstein & Lehr LLP, of Chicago (Michael A. Abramson, Colleen A.
Chinlund, and Julie A. Meyer, of counsel), for appellee Estate of
Lynch.
Panel PRESIDING JUSTICE PIERCE delivered the judgment of the court,
with opinion.
Justices Harris and Liu concurred in the judgment and opinion.
OPINION
¶1 This action arose from the filing of two citation to recover assets petitions in the probate
division of the circuit court of Cook County. One petition was filed by the guardian for a
disabled person, Arthur Lynch. The other petition was filed by the administrator of the
decedent estate of a disabled person, Arnold Lynch. The petitions alleged that prior to Arnold’s
death he was an adjudicated disabled person who, along with his brother Arthur, conveyed
their home to a third party without approval from the probate court. The circuit court entered
summary judgment on those petitions in favor of Arthur’s and Arnold’s estates, finding that the
warranty deed (and thus the conveyance) is void in its entirety. The court ordered title to the
home restored to the estates of Arthur and Arnold. The circuit court allowed the third party
buyer, Jose Adame, to appeal.
¶2 BACKGROUND
¶3 Arnold and Arthur were brothers who owned a home as joint tenants, each owning an
undivided one-half interest. The home was encumbered by a mortgage. The brothers lived in
the home until 2002, when, as a result of an auto accident, Arnold fell into a coma. On Arthur’s
petition, Arnold was adjudicated a disabled person and a guardian was appointed. Later that
year, the probate court adjudicated Arnold incompetent and James Brya was appointed plenary
guardian of Arnold’s estate and person. Arnold eventually recovered but Brya remained his
guardian.
¶4 Three years later, in 2005, Brya helped facilitate the sale of Arnold and Arthur’s home to a
third party, Jose Adame. Brya intended to sell his own home to Adame, however, he suggested
to Adame that he also look at the Lynch property as an alternative. Brya then facilitated a
viewing of the Lynch home. Adame and the Lynches’ real estate agent negotiated the sale
price. At the closing, Arthur and Arnold were represented by attorney Elizabeth Mann. Adame
had his own attorney at the closing.
¶5 Professional National Title Network, Inc. (PNTN) prepared the title commitment policy
issued to Adame. Elizabeth Mann, Arthur and Arnold’s attorney, prepared and sent the title
commitment packet to PNTN. The title commitment packet included a “Property Insight” form
which showed Arnold’s open guardianship case in probate court with an entry of “GDN OF
THE EST & PERSON.” This term is not explained by the parties, however, for the purpose of
our decision we consider this sufficient to indicate the existence of a guardian of the estate and
person of Arnold. The title commitment policy issued by PNTN made no reference to Arnold’s
probate estate.
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¶6 In June 2005, Arthur and Arnold conveyed the home to Adame by way of a warranty deed.
Adame obtained a mortgage from respondent, T&H Mortgage, Inc., using the property as
security for the loan. Brya, Arnold’s guardian, was present at the closing but did not sign the
closing documents. The property sold for $145,000. The sale proceeds were used to pay off the
brothers’ mortgage. Pursuant to a letter of direction, signed by Arnold and Arthur, PNTN
disbursed $34,750 to Brya and the remaining proceeds of $43,957.48 to Arnold and Arthur.
Petitioners contend that Brya immediately took the $43,957.48 from Arnold and Arthur. The
probate court was not informed of and did not approve the sale or the disbursement of the sale
proceeds.
¶7 Ten months later, in April 2006, Arnold died intestate. Arthur is the sole surviving heir of
Arnold’s estate.
¶8 In July 2008, the Cook County public guardian petitioned for the appointment of a
guardian for Arthur. In April 2009, Arthur was declared a disabled person and the public
guardian was appointed plenary guardian over Arthur’s estate and person.
¶9 In late 2009, the public guardian, as plenary guardian for Arthur, and the public
administrator of Arnold’s estate, filed separate citations to recover assets against Adame, Brya
and PNTN. Relevant to this appeal, the petitions alleged that Brya took advantage of his
position as Arnold’s guardian and converted the proceeds of the real estate sale for his own
use. The petitions sought an order declaring the entire 2005 conveyance void ab initio;
restoring title to the estates of Arthur and Arnold; setting aside Adame’s mortgage against the
property; and entering judgment against Brya for the misappropriated funds.
¶ 10 Adame responded to the petition and argued that: he was a bona fide purchaser who paid
valuable consideration for the property; he has continuously resided at the property since the
closing; and if the sale is deemed void, he should be restored to his original position and repaid
his purchase price plus all taxes, water bills and maintenance costs he has paid since the
closing.
¶ 11 Petitioners jointly moved for summary judgment against Adame arguing that the warranty
deed and conveyance are void on the sole basis that Arnold, a disabled person without the legal
capacity to contract, personally executed the deed without previous court approval or
guardianship involvement. Petitioners argued that Arthur’s signature and conveyance
appeared in the same warranty deed and, therefore, Arthur’s conveyance to Adame is also
void. Petitioners also argued that, based on the “property insight” form provided by Mann to
PNTN (Adame’s title insurer), Adame should be charged with notice of the public record that
Arnold was adjudicated an incompetent person.
¶ 12 In the alternative, petitioners also sought judgment against PNTN for violating the Probate
Act of 1975 (Act) (755 ILCS 5/1-1 et seq. (West 2008)) in “allowing the sale of the property to
proceed” when PNTN was on notice of Arnold’s disability and for disbursing the sale proceeds
pursuant to a “Letter of Direction” signed by Arnold and Arthur.
¶ 13 The petitioners requested alternative relief from the circuit court, either: (1) enter judgment
against PNTN for the funds misappropriated by Brya or (2) restore title in the home to the
estates of Arnold and Arthur and divest Adame of his title in the property and remove Adame’s
mortgage lien against the property.
¶ 14 Adame responded to the motion for summary judgment arguing: he had no notice of
Arnold’s disability prior to the 2005 closing; he was a bona fide purchaser who paid fair
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market value for the property; and petitioners have made no offer to restore him to his original
position. Attached to his response was an affidavit wherein he averred that he was not aware of
Arnold’s probate case until this citation action; he acted in good faith when purchasing the
property; based on Arthur’s and Arnold’s conduct at the closing, he had no reason to believe
that either of the Lynch brothers were disabled persons; he hired an attorney to represent him in
purchasing the property; Arnold and Arthur were represented by their own counsel during the
sale; and he paid a fair purchase price for the property.
¶ 15 PNTN responded to the petitioners’ motion by filing its own cross motion for summary
judgment arguing that petitioners’ damages were not proximately caused by PNTN.
¶ 16 On October 1, 2012, the circuit court held a hearing on the motions for summary judgment.
At the hearing, the petitioners and Adame disputed whether Adame had either actual or
constructive notice of Arnold’s disability. The circuit court informed the parties that, because
the determination of whether the conveyance was void did not depend on a finding of whether
Adame was an innocent purchaser, the court would make that determination in separate
proceedings, after the disposition of any appeal of its ruling on the validity of the conveyance.
¶ 17 On October 4, 2012, the circuit court granted petitioners’ joint motion for summary
judgment against Adame. The circuit court found that Arnold had no authority to execute the
warranty deed and, because Arnold executed the same warranty deed as Arthur, the warranty
deed as to both brothers is void in its entirety. The circuit court ordered title to the home
restored to the estates of Arthur and Arnold. Rather than ruling on the issue of whether Adame
was a bona fide purchaser or whether he is entitled to monetary relief, the circuit court left this
issue unresolved and entered and continued the case generally.
¶ 18 As to the requested alternative relief, the circuit court granted petitioners’ joint motion for
summary judgment against PNTN, finding the judgment would not be entered “unless and
until Respondent Jose Adame successfully appeals the judgment” against him. The court
continued generally the remaining claims and issued a Rule 304(a) (Ill. S. Ct. R. 304(a) (eff.
Feb. 26, 2010)) finding only as to the entry of summary judgment against Adame. Adame
timely filed this appeal. Accordingly, as a final order disposing of fewer than all of the parties’
claims with other claims that remain undecided, we have jurisdiction pursuant to Rule 304(a)
to review the judgment against Adame. Revolution Portfolio, LLC v. Beale, 332 Ill. App. 3d
595, 598 (2002).
¶ 19 ANALYSIS
¶ 20 On appeal, Adame does not contest that Arnold’s conveyance is void. Rather, he argues the
circuit court erred in finding the entirety of the sale of property held in joint tenancy void
ab initio and ordering the property be returned to the estates of Arthur and Arnold without
compensation to Adame. After considering the parties’ arguments and reviewing the record,
we reverse the circuit court’s judgment declaring the sale void in its entirety and find: (1) the
sale as to Arnold’s joint tenancy interest is void; (2) the sale of Arthur’s joint tenancy interest is
valid; and (3) Adame is a tenant in common with Arnold’s estate. We remand this matter to the
circuit court for proceedings to determine whether Adame is a bona fide purchaser entitled to a
return of one-half of the purchase price attributed to the purchase of Arnold’s interest in the
property and, further, to determine whether Adame is entitled to monetary relief for the monies
he paid for real estate taxes and other expenses to maintain the property attributed to Arnold’s
half interest in the property, including the share held by Arnold’s estate, since 2005.
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¶ 21 Summary judgment is appropriate when “the pleadings, depositions, and admissions on
file, together with the affidavits, if any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a matter of law.” 735 ILCS
5/2-1005(c) (West 2008). We review the circuit court’s entry of summary judgment de novo
and construe the record in the light most favorable to the nonmoving party. Home Insurance
Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307, 315 (2004).
¶ 22 Courts have a duty to protect the interests of a disabled person who is party to the judicial
proceeding before it. Perry v. Estate of Carpenter, 396 Ill. App. 3d 77, 85 (2009). In protecting
the interests of a disabled party, courts are vested with the power to order the return of property
wrongfully removed from the estate. Id. The objective of a citation proceeding to recover
assets in an estate matter is to recover property either in the possession of others or being
concealed by others. In re Estate of Joutsen, 100 Ill. App. 3d 376, 380 (1981).
¶ 23 I. Arnold’s Conveyance
¶ 24 Section 11a-22 of the Act provides that “[e]very note, bill, bond or other contract by any
person for whom a plenary guardian has been appointed or who is adjudged to be unable to so
contract is void as against that person and his estate.” 755 ILCS 5/11a-22 (West 2008). Absent
a court order directing a guardian to dispose of a ward’s real property, an adjudicated
incompetent person and his guardian have no power to convey any real property interest held
by a disabled person’s estate. In re Guardianship of Mabry, 281 Ill. App. 3d 76, 83 (1996); In
re Estate of Scheribel, 340 Ill. App. 238 (1950). The record reveals that Arnold was
adjudicated incompetent by the circuit court on May 8, 2002 and a plenary guardian was
appointed to manage his estate and financial affairs. Three years later, Arnold, not his plenary
guardian, personally executed the warranty deed for the sale of Arnold’s one-half joint tenancy
interest in the Lynch property to Adame, without prior approval by the probate court.
Therefore, pursuant to the Act, the conveyance of Arnold’s interest in the property to Adame is
void as a matter of law.
¶ 25 II. Arthur’s Conveyance
¶ 26 Next, we address the question of whether the circuit court erred in ruling that Arthur’s
conveyance to Adame is void. At the time of the real estate closing, Arthur had not yet been
adjudicated a disabled person. Although contracts executed by a person later adjudicated
disabled by the probate court may be voidable, upon proving mental incapacity to contract at
the time of the transaction (Burnham v. Kidwell, 113 Ill. 425, 428-29 (1885); White v. White,
28 Ill. App. 2d 19, 27-28 (1960)), the petitioners pled that Arthur lacked capacity to convey to
Adame, however, petitioners did not move to invalidate the sale on this basis when they moved
for summary judgment. Consequently, this argument for invalidating Arthur’s conveyance has
been waived and we consider the petitioners’ argument, adopted by the circuit court, that the
entire transaction is void because Arthur and Arnold executed the same deed and conveyance
documents. See Cholipski v. Bovis Lend Lease, Inc., 2014 IL App (1st) 132842, ¶ 58 (it is well
settled that issues “not raised in the trial court are considered waived on appeal” and will not be
considered (internal quotation marks omitted)). On appeal, Adame contends that even though
Arnold’s conveyance is void, the entire transaction is not void and Arthur’s conveyance of his
undivided one-half joint tenancy interest to Adame is valid. We agree with Adame.
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¶ 27 The parties do not cite any authority that holds that a void conveyance by one joint tenant
renders the entire conveyance void as to the remaining joint tenant who contemporaneously
executed the same conveyance document. However, petitioners assert that the ruling in Ure v.
Ure, 223 Ill. 454 (1906) instructs that where a conveyance by one grantor is void, the entire
sale of the property must be undone. In Ure, Robert Ure and his brother John inherited certain
lots of land after the death of their mother. Id. at 458. In 1892, the circuit court entered a decree
dividing the property between the brothers. Id. In 1897, Robert’s wife petitioned the probate
court of Cook County to appoint a conservator over Robert. Id. at 459-60. Three months later,
the probate court declared Robert a drunkard and spendthrift and appointed a conservator over
his person. Id. at 460. In 1898, Robert sold his interest in 15 lots to Eugene W. Yeomans. Id.
Due to separate pending litigation over the division of the property, Yeomans brought an
action to confirm the circuit court’s 1892 division of property in an effort to enforce the sale
contract with Robert. Id. at 460-61. The trial court found that Yeomans was an innocent
purchaser and did not set aside Robert’s conveyance. The supreme court reversed finding that,
because the conveyance to Yeomans occurred after Robert’s conservator had been appointed,
the conveyance was void and must be set aside. Id. at 466. What is unclear from the Ure
opinion is whether the conveyance was merely between Robert and Yeomans or whether the
deed was also executed by Robert’s wife. For example, the Ure court explained that “Yeomans
exchanged three practically worthless equities in Chicago real estate with Robert for his
interest” (emphasis added) (id. at 460), however, the court later described that same
conveyance as “[t]he conveyance of Robert Ure and his wife to Eugene W. Yeomans.” Id. at
465. Therefore, because it is unclear whether Robert’s wife also executed the deed conveying
the 15 lots to Yeomans we do not find Ure helpful in our disposition of this appeal. One aspect
of Ure, however, is noteworthy: the disabled party sought to avoid performance under an
agreement based on the disability where the opposing party sought enforcement of the
agreement. Here, petitioners moved for summary arguing that Arthur’s conveyance to Adame
was void solely because Arnold executed the same conveyance documents. Notably, although
petitioners pled Arthur’s lack of capacity to convey, they did not move for judgment on the
basis that Arthur’s sale was otherwise invalid due to his own incapacity and, therefore, as
previously stated, that issue was waived in the trial court.
¶ 28 Petitioners also cite Jordan v. Kirkpatrick, 251 Ill. 116 (1911) where our supreme court
affirmed a judgment cancelling a mortgage executed by both a husband and wife where the
trial court found the wife was “insane” at the time the mortgage was executed. In Jordan,
George Jordan, the conservator of Minnie Arnold, filed an action to cancel a $1,000 note and
mortgage executed by Minnie and her husband. Id. at 118-19. The conservator alleged that
Minnie was a “distracted person and incapable of executing the note and mortgage.” Id. at 118.
Minnie’s husband acted as her agent in procuring the loan and she received no consideration
for the note and mortgage. Id. According to Jordan, Minnie’s husband took the $1,000,
“deserted her and left her destitute” immediately after obtaining the funds. Id. The trial court
found that the mortgagee, Kirkpatrick, had no knowledge of Minnie’s mental condition at the
time the mortgage was executed. Id. at 119. The trial court further found that Minnie was
“insane at the time the note and mortgage were signed” and received no benefit from the
transaction because of her husband’s actions. Id. at 120. The appellate court and the supreme
court affirmed the trial court’s decision to set aside the transaction. Id. Essentially in Jordan,
Minnie was able to avoid the mortgage due to her incapacity. Here, Adame on appeal
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essentially accepts the circuit court’s finding that Arnold’s sale is void and does not seek to
enforce Arnold’s sale to Adame. Rather, Adame argues that Arthur’s sale is not void solely
because Arnold signed the same conveyance documents. Considering the transaction as it
relates to Arthur and Adame, there is no evidence and there was no factual determination made
that supports declaring the sale of Arthur’s interest to Adame void.
¶ 29 Neither the Act, nor recent case law address the situation at hand. Petitioners argue that this
case is similar to Dineff v. Wernecke, 27 Ill. 2d 476 (1963) and Hosty v. Kroupa, 117 Ill. App.
2d 419 (1969), that support the conclusion that where one joint tenant (Arnold) does not
execute an agreement to convey fee simple to a third party, the sale fails as to all joint tenants
(Arthur). In Dineff, a prospective purchaser offered in writing to buy fee simple title of a home
owned by a brother and sister. Dineff, 27 Ill. 2d at 479. Only the sister executed a letter
accepting Dineff’s offer. Id. The brother and sister later sold the property to a third party. Id. at
481. Dineff sued for specific performance to enforce the sale against both the brother and
sister. Id. Dineff did not allege that he offered a separate price for each sibling’s interest or
request relief against the sister only. Id. at 482. The supreme court held that because both
siblings did not sign the letter accepting Dineff’s offer to purchase the sibling’s interests as a
unit, the alleged real estate sale contract was never formed because Dineff’s intention was to
buy the interests of both owners of the home. Id. at 481-82. Here, in the trial court, Arthur
sought to avoid the sale by claiming defects applicable to Arnold, not himself. Because we find
Arthur waived any argument that he lacked capacity, nothing in the record refutes that Arthur
intended to convey his joint tenant interest to Adame and there is no evidence that supports
invalidating that conveyance.
¶ 30 Similarly, in Hosty, we found that where the sale of property held in joint tenancy was
conditioned on the purchase of all interest in the property “without the signature of both
owners [on the real estate contract], there can be no contract.” Hosty, 117 Ill. App. 2d at 424.
The important point in Hosty is that the purchaser cannot obtain specific performance of the
sale of property where only one of two owners signs the sale agreement. Adame acquired
Arthur’s interest and Arthur has offered no evidence that supports a finding that the
conveyance between Arthur and Adame was invalid.
¶ 31 There are several distinctions we draw from these cases in comparison to the case on
appeal. First, in Ure, the purchaser sought specific performance to enforce a disabled person’s
agreement to convey his interest in property. Here, Adame does not appeal from or argue that
the circuit court erred in finding that Arnold’s conveyance was void. However, Adame
contends Arthur’s conveyance of his own interest is not void merely because Arnold executed
the same warranty deed that Arthur executed to convey his interest. Second, Adame is not
seeking to enforce the warranty deed against both brothers. Unlike Yeomans in Ure, Adame
did not file an action to enforce a conveyance of the entire property. For that same reason,
Dineff and Hosty are distinguishable from the case before this court. Additionally, we note that
this court has enforced a mortgage executed by only one joint tenant because the action was not
brought against the entire property, but only against the mortgagor’s undivided one-half
interest. See Cadle Co. II, Inc. v. Stauffenberg, 221 Ill. App. 3d 267, 270-71 (1991). In
distinguishing its holding from Dineff, the Cadle court observed that “[i]n Dineff, the plaintiff
was attempting to enforce an agreement to convey the entire interest in the jointly held
property without the signatures of both cotenants.” Id. at 270.
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¶ 32 In the instant case, unlike the underlying actions in Ure, Dineff, and Hosty, Adame is not
seeking an enforcement of the warranty deed against all interests in the property, or against a
party who did not execute the warranty deed. Rather, Adame correctly contends that he should
not be divested of Arthur’s interest because Arthur’s conveyance was valid and Arthur did not
present any evidence, other than Arnold’s incapacity to convey Arnold’s interest, to invalidate
his conveyance to Adame.
¶ 33 Furthermore, the petitioners do not contest the validity of Arthur’s conveyance based on
his legal incapacity determined several years after the sale. Rather, the sole basis argued by the
petitioners, and accepted by the circuit court, for invalidation of the entire sale was that the sale
by Arthur was void because Arthur conveyed his interest in the same warranty deed as Arnold.
This conclusion is in error. Therefore, we find that Arnold’s legal incapacity to convey his
interest did not restrict or impede Arthur’s right to convey his interest in the property to
Adame. The parties have not provided us with any case law, nor have we found any, that
concludes that the conveyance by a joint tenant of his interest in real property (Arthur) is void
merely because it occurred through a warranty deed in which a remaining joint tenant intended
to convey his interest, but failed due to legal incapacity (Arnold).
¶ 34 “An indisputable right of each joint tenant is the power to convey his or her separate estate
without the knowledge or consent of the other joint tenant and to thereby sever the joint
tenancy, transforming it into a tenancy in common and extinguishing the right of
survivorship.” Sathoff v. Sutterer, 373 Ill. App. 3d 795, 797 (2007). Where part of a real estate
sales contract can be performed, that part will be enforced even where another part of the
contract is unenforceable or where part of the conveyance agreement fails. Ennis v. Johnson, 3
Ill. 2d 383 (1954); Laegeler v. Bartlett, 10 Ill. 2d 478 (1957); Kuhn v. Sohns, 324 Ill. 48, 54
(1926) (courts will enforce a part of a contract, which is capable of being performed even
where “the contract as a whole is incapable of performance”).
¶ 35 Here, Arthur executed the warranty deed and related conveyance documents prepared by
his attorney who was also present at the closing. At that time, no guardian had been appointed
over Arthur or his estate. Arthur’s entire case hinged on the argument that Arnold’s incapacity
made the sale void ab initio with no meaningful argument made concerning Arthur’s capacity
to contract with Adame. There being no evidence to the contrary, Arthur’s execution of a
warranty deed in favor of Adame was an enforceable conveyance of his undivided joint
tenancy interest in the home. Adame paid the agreed upon consideration and, in return,
Arthur’s (and Arnold’s) mortgage lien was released and the net proceeds were paid out at
Arthur’s direction. Therefore, we find Adame purchased Arthur’s interest for value. Although
Arthur’s estate claims that Brya converted sale proceeds and Arthur did not receive any
payment from the sale of his interest, there remains no existing dispute between Arthur’s estate
and Adame regarding the validity of Arthur’s conveyance. Any dispute concerning the
disbursement of sale proceeds relate to other parties, not Adame, and those issues remain
pending in the circuit court pursuant to its October 4, 2014 interlocutory order.
¶ 36 III. After Acquired Title Doctrine
¶ 37 Next, Adame argues that, in the event Arnold’s conveyance is found to be void, he is the
equitable holder of fee simple title because when Arnold died in 2006, Arthur inherited
Arnold’s interest in the property by right of survivorship. Adame asserts that when Arthur
conveyed his one-half interest in 2005 and later inherited Arnold’s one-half interest as
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Arnold’s surviving heir in 2006, this resulted in Adame acquiring equitable title in fee simple
under the after-acquired title doctrine (765 ILCS 5/7 (West 2008)). Arthur’s guardian asserts
that Adame has waived review of this issue because it was not raised in the circuit court.
However, Adame raised this issue in response to the joint motion for summary judgment and at
the October 1, 2012 hearing. Therefore, we will address the merits of Adame’s argument.
¶ 38 The after-acquired title doctrine provides:
“If any person shall sell and convey to another, by deed or conveyance, purporting to
convey an estate in fee simple absolute, in any tract of land or real estate, lying and
being in this state, not then being possessed of the legal estate or interest therein at the
time of the sale and conveyance, but after such sale and conveyance the vendor shall
become possessed of and confirmed in the legal estate to the land or real estate so sold
and conveyed, it shall be taken and held to be in trust and for the use of the grantee or
vendee; and the conveyance aforesaid shall be held and taken, and shall be as valid as if
the grantor or vendor had the legal estate or interest, at the time of said sale or
conveyance.” Id.
¶ 39 The after-acquired title doctrine applies where a grantor purports to convey good title to
another party, for which the grantor had no title or imperfect title. Tompkins State Bank v.
Niles, 127 Ill. 2d 209, 217 (1989). Here, the warranty deed provided that “Arthur, individually,
and Arnold, individually *** for and in consideration of TEN & 00/100 DOLLARS, and other
good and valuable consideration in hand paid, CONVEY(S) and Warrant(s) to Jose Adame,
Individual *** all interest in the following described Real Estate.” By signing the warranty
deed, conveying “all interest,” Arthur conveyed his then-existing legal or equitable interest to
Adame. Goodwine State Bank v. Mullins, 253 Ill. App. 3d 980, 1009 (1993). In 2005, Arthur
owned a one-half interest in joint tenancy in the Lynch property. There is no evidence in the
record to suggest that Arthur either intended to or attempted to convey any interest other than
his own one-half joint tenancy interest in the property to Adame. Nothing in the record
supports a finding that Arthur intended to convey fee simple title, Arnold’s joint tenancy
interest or Arthur’s future interest received at Arthur’s death under right of survivorship.
Therefore, Adame’s argument that the after-acquired title doctrine applies fails because there
is no evidence that Arthur attempted or intended to convey more than what he then owned.
¶ 40 IV. Status of Ownership
¶ 41 Having determined that (1) Arnold did not have the legal capacity to convey his interest in
the property to Adame, (2) that Arthur conveyed his one-half joint tenancy interest to Adame,
and (3) that Arnold’s death did not trigger the doctrine of after-acquired title to vest fee simple
title in Adame, we next consider the status of ownership of the property as framed by our
decision.
¶ 42 Prior to the 2005 closing, Arnold and Arthur held the property as joint tenants. A joint
tenancy can be severed by the acts of one tenant without the knowledge or consent of the other.
Sathoff v. Sutterer, 373 Ill. App. 3d 795 (2007). It is the indisputable right of each joint tenant
to have the power to “convey his or her separate estate without the knowledge or consent of the
other joint tenant and to thereby sever the joint tenancy.” Id. at 797. A joint tenancy is severed
“when only one joint tenant assigns his or her entire interest in the property.” In re Estate of
Martinek, 140 Ill. App. 3d 621, 630 (1986). Once a joint tenant’s interest is conveyed to a third
party, the unities of title and interest which are fundamental to a joint tenancy are destroyed
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and the remaining tenant holds the property as a tenant in common with the third party. Sathoff,
373 Ill. App. 3d at 797.
¶ 43 Adame asserts that when Arthur conveyed his interest to Adame, Arthur severed the
brothers’ joint tenancy, creating a tenancy in common between Arnold’s estate and Adame.
Adame cites Ennis v. Johnson, 3 Ill. 2d 383 (1954), for the proposition that a joint tenancy is
severed where one joint tenant executed a real estate sales contract to convey his interest with
the mistaken belief that the second joint tenant would also convey their interest, but ultimately
failed to do so.
¶ 44 In Ennis, our supreme court held that where only one joint tenant contracts to convey his
interest by warranty deed as part of a sale of a fee simple interest, mistakenly believing the
second joint tenant will also agree to convey her interest, the contract is enforceable against the
first joint tenant, the joint tenancy is severed and tenancy in common is created between the
second joint tenant and the buyer. In Ennis, a third party leased real property held in joint
tenancy by a husband and wife. Id. at 383. The lease included a rider granting the lessee an
option to purchase the property. Id. at 384. After the lessee took possession, a second rider was
executed extending the lessee’s option to purchase which set forth the terms of the purchase.
Id. The lessee delivered to the husband a notice of election to exercise the option. Id. at 385.
The husband acknowledged receipt of the election in a letter to the lessee. Id. The wife refused
to participate in the conveyance and the lessee filed for specific performance to require the
husband and the wife to convey their separate interests. Id. The trial court found the agreement
enforceable against the husband’s interest but not the wife’s. Id. The supreme court affirmed
finding that even though the husband was mistaken in believing that his wife would join in the
conveyance, this did not excuse his failure to perform under the option contract. Id. at 387. The
supreme court concluded that the husband exhibited an intent to sever the joint tenancy when
he accepted the option election thereby obligating the husband to convey his interest by
warranty deed. Id. By granting specific performance, the joint tenancy would be severed when
the husband conveys his interest to the third party lessee. Id. The court noted that “[s]pecific
performance of a contract to convey real estate may be granted as to whatever title the vendor
may have in the property, with a proportionate abatement of the purchase price commensurate
with the interest of the vendor in the whole.” Id. at 388.
¶ 45 Here, similar to Ennis, the record supports the reasonable inference that when Arthur
executed the warranty deed he intended to convey his interest in the property. Ordinarily the
same inference would be made regarding Arnold’s intention, however, Arnold did not have
legal capacity to transfer his interest. Another inference is that Adame did not have notice that
Arnold lacked legal capacity because no direct evidence adverse to Adame was offered on this
score and the attempt to defeat Adame’s interest in the property was limited to voiding the
entire transaction because of Arnold’s incapacity. Arnold and Arthur possessed separate joint
tenancy interests in the property at the time of sale. Also, similar to Ennis, when Arthur
conveyed his interest to Adame, Arthur severed the brothers’ joint tenancy, leaving Arnold’s
estate and Adame as tenants in common in the property. In sum, we find that because Arthur’s
conveyance to Adame is valid, Arthur severed the brothers’ joint tenancy at the time of
Arthur’s conveyance to Adame, creating a tenancy in common between the estate of Arnold
and Adame.
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¶ 46 V. Adame’s Requested Relief
¶ 47 Adame also argues that the circuit court erred in divesting him of title without considering
whether he is entitled to reimbursement of the money he paid for the home and for other
expenditures, including real estate taxes and maintenance costs, he has paid since the closing.
¶ 48 The parties disagree on the circuit court’s holding on this issue. Petitioners argue that the
circuit court correctly declined to return any money to Adame. Adame argues the opposite: the
circuit court cannot divest him of title without considering whether Arnold’s estate should
return its one-half share of the purchase money Adame paid, and Adame should be reimbursed
for expenditures on maintenance and real estate taxes since the closing which are attributed to
Arnold’s interest.
¶ 49 The record reveals the circuit court did not make a finding as to whether Adame was
entitled to the return of any funds. At the summary judgment hearing, Adame’s counsel argued
that it was inequitable to return the property to the petitioners without considering Adame’s
affirmative defenses and without a determination of whether he is entitled to reimbursement.
The circuit court disagreed stating, “[i]f [the sale] is void, it’s void, and the contract is over.
Bad faith I don’t think [is an] issue. If it’s void because he’s (Arnold) a ward of the Court then
Adame’s bad faith would go perhaps to the remedy, but not as to the finding as to the summary
judgment.” The circuit court then asked petitioners’ counsel whether they wanted a separate
hearing regarding setoff for the mortgage and other payments made by Adame, but ultimately
concluded that it would grant petitioners’ requested remedy and permit Adame to file
“subsequent motions for other relief” at a later date. The circuit court noted in its written
summary judgment order that Adame’s claim for reimbursement against Arnold’s estate
remained pending.
¶ 50 In restoring title to the estate of a disabled person from a void conveyance Illinois courts
have concurrently considered claims by the buyer that he is a bona fide purchaser and entitled
to repayment of the monies expended in exchange for lands. Scanlan v. Cobb, 85 Ill. 296
(1877); Ure v. Ure, 223 Ill. 454, 466 (1906); Jordan v. Kirkpatrick, 251 Ill. 116 (1911); Walton
v. Malcom, 264 Ill. 389 (1914). Return of consideration paid to a disabled person for a void real
estate conveyance is determined by whether the buyer was a bona fide purchaser or whether
the buyer defrauded the disabled seller. See Ure, 223 Ill. at 466; Jordan, 251 Ill. at 122;
Walton, 264 Ill. 389. “A bona fide purchaser is one who takes without notice of a prior claim or
encumbrance.” Life Savings & Loan Ass’n of America v. Bryant, 125 Ill. App. 3d 1012, 1019
(1984). Notice may be actual or constructive and “contemplates the existence of circumstances
or facts either known to a prospective purchaser or of which he is chargeable with knowledge
which imposes upon such purchaser the duty of inquiry.” (Internal quotation marks omitted.)
Schaffner v. 514 West Grant Place Condominium Ass’n, 324 Ill. App. 3d 1033, 1046 (2001).
Generally, whether a party has acted in good faith is a question of fact. Department of
Transportation ex rel. People v. 151 Interstate Road Corp., 209 Ill. 2d 471, 488 (2004);
Schaffner, 324 Ill. App. 3d at 1046.
¶ 51 Here, the record establishes that the circuit court entered summary judgment on
petitioners’ claims and granted their requested remedy based on the erroneous ruling that the
entire conveyance was void due to Arnold’s incapacity. The court severed Adame’s
affirmative defenses alleging that he was a bona fide purchaser entitled to restitution. Because
no finding was made on Adame’s affirmative defenses, we remand this matter to the circuit
court for proceedings to determine whether Adame is entitled to an abatement of any portion of
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the purchase price from Arnold’s estate as alleged and for the monies Adame paid attributed to
Arnold’s one-half interest in the property for maintenance, real estate taxes, mortgage payoff
and other expenses paid at and subsequent to the 2005 closing. In short, the trial court should
determine whether Adame, having paid full price for fee simple title, is entitled to a return of
one-half the purchase price because he now owns one-half interest in the property and, if so,
which party is obligated to make the repayment. Further, the court should also determine
whether Adame is entitled to reimbursement for the share of real estate taxes and other
expenses he paid since closing that would have been the obligation of Arnold’s estate as a
tenant in common with Adame.
¶ 52 Lastly, Adame argues that petitioners failed to name necessary parties to the litigation, the
two mortgagees of the property and, therefore, the circuit court erred in granting summary
judgment. However, because Adame failed to raise this argument in the circuit court he has
waived consideration of this argument on appeal. Palen v. Daewoo Motor Co., 358 Ill. App. 3d
649, 658 (2005) (an argument not raised in the trial court and presented for the first time on
appeal is considered waived).
¶ 53 CONCLUSION
¶ 54 We reverse that part of the circuit court’s summary judgment order declaring the 2005
warranty deed void in its entirety. Pursuant to our authority under Illinois Supreme Court Rule
366(a)(5) (eff. Feb. 1, 1994), we find that Arnold’s purported sale of his one-half joint tenancy
interest to Adame is void because Arnold, acting on his own behalf, lacked the legal capacity to
convey his interest. Further, we find that Arthur conveyed his one-half joint tenancy interest in
the property to Adame for value at the 2005 closing, severing the Lynch brothers’ joint tenancy
and creating a tenancy in common with Adame and the estate of Arnold Lynch. As previously
stated, we remand for further proceedings, including the determination of whether Adame is
entitled to monetary relief as alleged in his pleadings. Based on our ruling and because the
remainder of the October 4, 2012 order is interlocutory, nothing in this order should be
interpreted to indicate that all or any portion of the October 4, 2012 order cannot be vacated,
modified or amended. Combs v. Schmidt, 2012 IL App (2d) 110517, ¶ 40 (a trial court has the
power to modify or vacate an interlocutory order granting summary judgment anytime prior to
final judgment).
¶ 55 Affirmed in part and reversed in part; cause remanded.
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