Appeal from the Appellate Court for the Fourth District; heard
in that court on appeal from the Circuit Court of Greene County,
the Hon. L.K. Hubbard, Judge, presiding.
JUSTICE MORAN DELIVERED THE OPINION OF THE COURT.
Rehearing denied February 1, 1985.
Plaintiff, William H. Harms, filed a complaint to quiet title and for declaratory judgment in the circuit court of Greene County. Plaintiff had taken title to certain real estate with his brother John R. Harms, as a joint tenant, with full right of survivorship. The plaintiff named, as a defendant, Charles D. Sprague, the executor of the estate of John Harms and the devisee of all the real and personal property of John Harms. Also named as defendants were Carl T. and Mary E. Simmons, alleged mortgagees of the property in question. Defendant Sprague filed a counterclaim against plaintiff, challenging plaintiff's claim of ownership of the entire tract of property and asking the court to recognize his (Sprague's) interest as a tenant in common, subject to a mortgage lien. At issue was the effect the granting of a mortgage by John Harms had on the joint tenancy. Also at issue was whether the mortgage survived the death of John Harms as a lien against the property.
The trial court held that the mortgage given by John Harms to defendants Carl and Mary Simmons severed the joint tenancy. Further, the court found that the mortgage survived the death of John Harms as a lien against the undivided one-half interest in the property which passed to Sprague by and through the will of the deceased. The appellate court reversed, finding that the mortgage given by one joint tenant of his interest in the property does not sever the joint tenancy. Accordingly, the appellate court held that plaintiff, as the surviving joint tenant, owned the property in its entirety, unencumbered by the mortgage lien. (119 Ill. App.3d 503.) Defendant Sprague filed a petition for leave to appeal in this court. (87 Ill.2d R. 315.) Subsequently, defendants Carl and Mary Simmons petitioned this court to supplement Sprague's petition for leave to appeal. That motion was granted and the petition for leave to appeal was allowed.
Two issues are raised on appeal: (1) Is a joint tenancy severed when less than all of the joint tenants mortgage their interest in the property? and (2) Does such a mortgage survive the death of the mortgagor as a lien on the property?
A review of the stipulation of facts reveals the following. Plaintiff, William Harms, and his brother John Harms, took title to real estate located in Roodhouse, on June 26, 1973, as joint tenants. The warranty deed memorializing this transaction was recorded on June 29, 1973, in the office of the Greene County recorder of deeds.
Carl and Mary Simmons owned a lot and home in Roodhouse. Charles Sprague entered into an agreement with the Simmonses whereby Sprague was to purchase their property for $25,000. Sprague tendered $18,000 in cash and signed a promissory note for the balance of $7,000. Because Sprague had no security for the $7,000, he asked his friend, John Harms, to co-sign the note and give a mortgage on his interest in the joint tenancy property. Harms agreed, and on June 12, 1981, John Harms and Charles Sprague, jointly and severally, executed a promissory note for $7,000 payable to Carl and Mary Simmons. The note states that the principal sum of $7,000 was to be paid from the proceeds of the sale of John Harms' interest in the joint tenancy property, but in any event no later than six months from the date the note was signed. The note reflects that five monthly interest payments had been made, with the last payment recorded November 6, 1981. In addition, John Harms executed a mortgage, in favor of the Simmonses, on his undivided one-half interest in the joint tenancy property, to secure payment of the note. William Harms was unaware of the mortgage given by his brother.
John Harms moved from his joint tenancy property to the Simmons property which had been purchased by Charles Sprague. On December 10, 1981, John Harms died. By the terms of John Harms' will, Charles Sprague was the devisee of his entire estate. The mortgage given by John Harms to the Simmonses was recorded on December 29, 1981.
Prior to the appellate court decision in the instant case (119 Ill. App.3d 503) no court of this State had directly addressed the principal question we are confronted with herein the effect of a mortgage, executed by less than all of the joint tenants, on the joint tenancy. Nevertheless, there are numerous cases which have considered the severance issue in relation to other circumstances surrounding a joint tenancy. All have necessarily focused on the four unities which are fundamental to both the creation and the perpetuation of the joint tenancy. These are the unities of interest, title, time, and possession. (Jackson v. O'Connell (1961), 23 Ill.2d 52, 55; Tindall v. Yeats (1946), 392 Ill. 502, 507.) The voluntary or involuntary destruction of any of the unities by one of the joint tenants will sever the joint tenancy. Van Antwerp v. Horan (1945), 390 Ill. 449, 451.
In a series of cases, this court has considered the effect that judgment liens upon the interest of one joint tenant have on the stability of the joint tenancy. In Peoples Trust & Savings Bank v. Haas (1927), 328 Ill. 468, the court found that a judgment lien secured against one joint tenant did not serve to extinguish the joint tenancy. As such, the surviving joint tenant "succeeded to the title in fee to the whole of the land by operation of law." 328 Ill. 468, 471.
Citing to Haas for this general proposition, the court in Van Antwerp v. Horan (1945), 390 Ill. 449, extended the holding in Haas to the situation where a levy is made under execution upon the interest of the debtor joint tenant. The court found that the levy was "not such an act as can be said to have the effect of a divestiture of title * * * [so as to destroy the] identity of interest or of any other unity which must occur before * * * the estate of joint tenancy has been severed and destroyed." 390 Ill. 449, 455.
In yet another case involving the attachment of a judgment lien upon the interest of a joint tenant, Jackson v. Lacey (1951), 408 Ill. 530, the court held that the estate of joint tenancy had not been destroyed. As in Van Antwerp, the judgment creditor had levied on the interest of the joint tenant debtor. In addition, that interest was sold by the bailiff of the municipal court to the other joint tenant, who died intestate before the time of redemption expired. While the court recognized that a conveyance, even if involuntary, destroys the unity of title and severs the joint tenancy, it held that there would be no conveyance until the redemption period had expired without a redemption. As such, title was not as yet divested and the estate in joint tenancy was unaltered.
Clearly, this court adheres to the rule that a lien on a joint tenant's interest in property will not effectuate a severance of the joint tenancy, absent the conveyance by a deed following the expiration of a redemption period. (See Johnson v. Muntz (1936), 364 Ill. 482.) It follows, therefore, that if Illinois perceives a mortgage as merely a lien on the mortgagor's interest in property rather than a conveyance of title from mortgagor to mortgagee, the execution of a ...