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State Farm Life Ins. v. Town & Country Assoc.





APPEAL from the Circuit Court of Sangamon County; the Hon. SIMON L. FRIEDMAN, Judge, presiding.


Rehearing denied July 23, 1980.

This case concerns application of section 7 of "An Act relating to mortgages of property of public utilities" (Ill. Rev. Stat. 1977, ch. 95, par. 57). The parties do not dispute that it applies to mortgages and trust deeds made by other debtors as well. Section 7 provides a method whereby defaults in periodic payments on obligations secured by such instruments may be cured, even after due date of payments has been accelerated and foreclosure started, by tender of payment of periodic payments due prior to acceleration plus costs and mortgagee's attorney's fees as determined by the court. A question raised is whether use of the remedy of section 7 was available here after a prior suit to foreclose the mortgages involved here had been dismissed in 1975. Section 7 provides that reuse of the procedure is prohibited for a period of five years "from the date of dismissal of such proceeding" where previously used.

Plaintiff, State Farm Life Insurance Company, filed suit in the circuit court of Sangamon County on December 11, 1978, seeking to foreclose three mortgages on two adjoining tracts owned by defendants, National Bank of Albany Park in Chicago, as trustee of a land trust, and Miller Associates as beneficiary thereof. The complaint alleged as to each mortgage (1) failure to make monthly payments due in September, October, and November of 1978, (2) commission of waste by permitting buildings and parking lots thereon to deteriorate, and (3) acceleration of the due date of full principal amount of the secured indebtedness. Defendants responded with a motion alleging their tender of the amount of installments due without acceleration together with interest and requesting that the court fix reasonable attorney's fees, costs and expenses to be paid by them to plaintiff. The motion also stated that all non-monetary defaults by them were being rectified. Plaintiff responded asserting partially that defendants had previously exercised the section 7 remedy in regard to the same mortgages in a foreclosure suit dismissed on September 29, 1975, which was within five years.

The trial court heard evidence on the issues raised and on June 18, 1979, entered an order finding (1) defendants were in monetary default, (2) dismissal of the 1975 foreclosure suit prevented defendants' use of section 7, and (3) defendants were not committing waste. A decree of foreclosure was entered August 29, 1979. Defendants appeal contending that the court erred in prohibiting their use of section 7. Plaintiffs cross-appeal the finding in regard to waste. We affirm in all respects.

The following evidence in regard to the 1975 case was before the court in this case. Suit was filed on August 20, 1975, and involved default in the same mortgages. The parties agreed that:

"It is stipulated that by payment of principal and interest payments in the total amount of $64,131.31, being payments in arrears as of September 1, 1975, and costs of suit of $429.92, and legal fees of $1,890.00, the mortgage loans set forth in the suit are now current and the suit may be dismissed."

The trial court then entered an order on September 29, 1975, which stated:

"This matter coming on to be heard on the stipulation of the parties and it appearing to the court that the mortgage loans described in the complaint are now current, IT IS ORDERED that the suit be and it is hereby dismissed."

Attached to a pleading filed by defendants was an affidavit of the sole general partner of Miller Associates stating that in 1975 when the mortgages were made current and plaintiff's attorney's fees and costs paid, "[n]o mention was ever made by anyone of Associates' use of a legal right to bring the mortgages current." No counteraffidavit was filed to this assertion nor was any countervailing evidence ever presented. Defendants also place reliance on a letter by an officer of plaintiff to its trial counsel dated September 19, 1975, but that document was never admitted into evidence.

The specific language of section 7 limiting its reuse is:

"The relief granted by this Section shall not be exhausted by a single use thereof, but shall not be again available under the same trust deed or mortgage for a period of 5 years from the date of the dismissal of such proceedings." (Ill. Rev. Stat. 1977, ch. 95, par. 57.)

Defendants maintain that they should not be held to have made "use" of the remedy in 1975 because (1) plaintiff's dismissal of that case was voluntary, (2) section 7 is remedial legislation which should be construed favorably to mortgagors whom it was designed to help, and (3) other portions of the legislation have been construed favorably to mortgagors. They contend that the 1975 proceeding would have given rise to a "use" only if they had made a motion to dismiss the proceedings because of their rights under section 7 or if the parties' stipulation had shown that it was being agreed to because of the existence of that ...

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