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Great Lakes Mortgage Corp. v. Collymore

JULY 27, 1973.




APPEAL from the Circuit Court of Cook County; the Hon. SAMUEL B. EPSTEIN, Judge, presiding.


Rehearing denied September 21, 1973.

Plaintiff appeals from a judgment denying its request for a common-law strict foreclosure on property owned by defendant Lillie M. Collymore and for appointment of a receiver pendente lite to collects rents and profits accruing to the property. In denying the relief the court held that strict foreclosure was no longer an available remedy to a mortgage holder in Illinois because it was inconsistent with the governing statutes (Ill. Rev. Stat. 1957, ch. 77, pars. 1 et seq.) which will be set forth in relevant part later but which in general require a judicial sale in the process of foreclosing a mortgage absent the express consent of the mortgagor.

Defendant has failed to file an appearance or brief in this court. Nevertheless, we shall address the merits of the case. Daley v. Jack's Tivoli Liquor Lounge, Inc., 118 Ill. App.2d 264, 254 N.E.2d 814.

Plaintiff's complaint to foreclosure alleged that on November 11, 1970, defendant Lillie Collymore signed a note payable to plaintiff in the sum of $17,050; that the note was secured by a mortgage on the subject property; that defendant had defaulted in the payment schedule beginning with the payment due August 1, 1971; that $16,976.06 was still due on the note; that by reason of the default plaintiff had declared the entire balance to be due presently; that the cash value of the subject property (which contained a dwelling thereon) is less than 90% of the amount still owed to plaintiff and taxes due on the property; and that the defendant is insolvent.

The defendant failed to answer or otherwise respond to the complaint, and the court entered an order declaring that she was in default and that the complaint be taken as confessed against her. Plaintiff submitted an affidavit supporting the facts alleged in the complaint and then moved for entry of a decree of strict foreclosure at common law including a three month redemption period for defendants and for the appointment of a receiver pendente lite. The court denied the motion and made the following findings: that the defendant confessed to the fact that the value of the property was less than the indebtedness to plaintiff and the costs of the action, and that defendant was insolvent; that proof of the foregoing facts was presented in conformity with (Ill. Rev. Stat. 1971, ch. 95, par. 22b;) *fn1 but that since the draft of the decree submitted along with the motion for strict for strict foreclosure did not provide "for the sale of the mortgaged premises in conformity with statutes of Illinois," the motion is denied.


Plaintiff first contends that under the circumstances it is entitled to a decree granting it a common law strict foreclosure of its mortgage.

The precise issue here is whether the addition of sections 18(c) and 18(d) in 1957 to the "Act in regard to judgments and decrees, and the manner of enforcing the same by execution, and to provide for the redemption of real estate sold under execution or decree" abolished the common law remedy of strict foreclosure. Ill. Rev. Stat. 1957, ch. 77, pars. 18(c) and 18(d).

Section 18(c) provided in relevant part: *fn2

"In any foreclosure proceeding involving any mortgage or trust deed in the nature of a mortgage executed after the effective date of this section, * * *, if the court shall find in its decree of foreclosure that the value of the mortgaged property at the time of entry of such decree, does not exceed 90 per cent of the amount of indebtedness found due in the decree plus the total delinquent taxes and assessments and other prior liens, if any, on the mortgaged property, and if the owner of the indebtedness so found due shall consent to a waiver of any and all rights to a deficiency judgment, * * *, then such waiver shall be binding upon and be an effective bar against obtaining a deficiency judgment by such owner of the indebtedness. When any sale is had under any order or decree of foreclosure upon consent to waiver of all rights to a deficiency judgment filed as aforesaid, any defendant, * * * may, within three months from said sale, redeem the real estate so sold by paying to the purchaser thereof, * * * or to the sheriff or master in chancery or the officer who sold the same, * * *, for the benefit of such purchaser, * * *, the sum of money for which the premises were sold or bid off, with interest thereon at the rate of six percentum per annum from the time of such sale, whereupon such sale and certificate shall be null and void."

Section 18(d) provided in relevant part: *fn3

"In any suit to foreclose a mortgage or trust deed in the nature of a mortgage, the court may enter a decree satisfying the mortgage indebtedness by vesting absolute title to the mortgaged property in the mortgagee or trustee, free and clear of all claims, liens, and interests of the mortgagor and of all persons claiming by, through or under the mortgagor, and, except as herein provided, free and clear of all rights to redeem if, after the institution of the suit, the owner of the mortgaged property expressly consents to the entry of such a decree; provided, that any defendant, * * *, may within three months from the date of the entry of such a decree, redeem the real estate by paying to the decree creditor, * * *, the sum of money therein found due for said mortgage debt, with interest thereon at the legal rate and costs whereupon said decree and mortgage debt shall be satisfied and fully discharged, in default of which all rights and equity of redemption in and to the mortgaged premises shall be barred and foreclosed. * * *."

Strict foreclosure of a mortgage, in part, alleviates the necessity of conducting a judicial sale of the property since the decree serves to vest title in the mortgagee upon failure of the mortgagor to clear his debt within the period of the equity of redemption set forth in the decree. See Aletto v. Kyatt, 12 Ill. App.2d ...

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