APPEAL from the Circuit Court of Cook County; the Hon. IRWIN
COHEN, Judge, presiding.
MR. JUSTICE MEJDA DELIVERED THE OPINION OF THE COURT:
Corpus Christi Bank & Trust Company (Corpus Christi) originally brought this action to register a Texas judgment against defendants P.I. Corporation and Eugene Pullano (Eugene) in Illinois. The judgment was registered in Illinois in the amount of $75,264.67, and this order was upheld on direct appeal. (Corpus Christi Bank & Trust Co. v. Pullano (1979), 69 Ill. App.3d 604, 388 N.E.2d 180.) Corpus Christi brought supplementary proceedings against P.I. Corporation and Eugene, including the filing of an affidavit for garnishment against Banco di Roma (the Bank), alleging that the garnishee held certain property belonging to Eugene. Pursuant to court order, the Bank answered that among other things, it had an assignment of 95,287 shares of Old Heritage Corporation stock in Eugene's name which it held as collateral for a small business loan of $210,000 made to Pullano & Sons, Inc. Since the stock held as security for the loan and its sale is the subject of this appeal, a detailed analysis of the loan and security agreements is necessary.
The record reflects that Eugene and Mary Louise Pullano, Louis Pullano and Marietta Pullano (the Pullanos) pledged the following shares of Old Heritage Corporation stock as collateral for the loan made by the Bank:
(1) Eugene Pullano 95,287 shares
(2) Eugene Pullano and Mary Louise Pullano 7437 shares
(3) Eugene Pullano and Louis Pullano 1000 shares
(4) Louis Pullano and Marietta Pullano 1000 shares.
Eugene and Louis Pullano signed a note to secure the loan. Eugene and each of the other Pullanos signed identical "General Pledged Agreements" when they gave the stock as collateral. Included in the agreement were the following pertinent provisions:
"GENERAL PLEDGE AGREEMENT
As collateral security for the payment of any note and of all indebtedness, obligations or liabilities of the undersigned or any of them to Banco di Roma * * * of every kind or character, now or hereafter existing, absolute or contingent, joint or several, or joint and several, secured or unsecured, due or not due, direct or indirect, expressed or implied in law, contractual or tortious, liquidated or unliquidated, at law, or in equity, or otherwise, and whether heretofore or hereafter incurred or given by the undersigned or any of them as principal, surety, endorser, guarantor or otherwise, and whether created directly or acquired by Bank by assignment or otherwise, (all of which are herein collectively called `liabilities'), the undersigned hereby pledges and delivers and/or gives to Bank a general lien upon and/or right of set-off as to the following: all the securities, hereinabove set forth and described * * * to secure any liability so acquired by Bank as aforesaid, * * *.
Every liability of the undersigned and any one or more of them to Bank shall, without notice to any of the undersigned, become due and payable forthwith, unless Bank otherwise elects, if (1) any amount payable on such liability to Bank is not paid when due; (2) * * *.
When any liability of any of the undersigned to Bank becomes due and payable, by its terms or pursuant hereto Bank may (1) appropriate and apply toward the payment and discharge of any such liability, moneys on deposit or otherwise held by Bank for the account of, to the credit of, or belonging to any of the undersigned, (2) sell or cause to be sold any collateral security, * * *. Any sale of collateral may be made without demand of performance and any requirement of the Code for reasonable notice to the undersigned shall be met if such notice is mailed, postage prepaid, to any one of the undersigned at his address as it appears herein or as last shown on the records of Bank at least ten business days before the time of sale, disposition or other event giving rise to the notice. * * *. The proceeds of any sale, or sales, or collateral security shall be applied by Bank in the following order: (1) To expenses, including expense for any legal services, arising from the enforcement of any of the provisions hereof, or of any of the liabilities, or of any actual or attempted sale; (2) to the payment or the reduction of any liability of any of the undersigned to Bank with the right of Bank to distribute or allocate such proceeds as Bank shall elect, and its determination with respect to such allocation shall be conclusive, however making proper rebate of interest or discount in case of allocation to any item not due; (3) to the payment of any surplus remaining after payment of the amounts mentioned, to the undersigned or to whomsoever may be lawfully entitled thereto.
Rights and powers of Bank under this Agreement shall inure to the benefit of its successors and assigns and any assignee of any liability secured hereby. * * *."
Corpus Christi assigned all its interest in the Texas judgment to Angelo Marcheschi on June 28, 1978. The assignment also appointed Marcheschi as attorney for Corpus Christi to collect the money due under the judgment. Marcheschi brought a petition pursuant to sections 14 and 18 of the garnishment act (Ill. Rev. Stat. 1977, ch. 62, pars. 46(b) and 50) in which he offered to tender the balance of approximately $162,891.62 due on the loan and sought that the Bank be ordered to assign the loan and to turn over all collateral held thereunder to him. He further intended to sell the collateral ...