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Farmer City St. Bk v. Champaign Nat'l Bk

OPINION FILED NOVEMBER 19, 1985.

FARMER CITY STATE BANK, PLAINTIFF-APPELLEE,

v.

THE CHAMPAIGN NATIONAL BANK, TRUSTEE, ET AL., DEFENDANTS (JOHN T. HENRY ET AL., DEFENDANTS-APPELLANTS).



Appeal from the Circuit Court of De Witt County; the Hon. William C. Calvin, Judge, presiding.

JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:

The defendants appeal a deficiency decree entered in favor of the plaintiff, Farmer City State Bank, resulting from the foreclosure and sale of defendants' property. On appeal, the defendants argue that the trial court erred in entering the deficiency judgment against them because (1) the allegations of the complaint for foreclosure do not sustain the entry of the deficiency decrees; (2) the defendants are guarantors; and (3) defendant John Henry failed to receive actual notice of the foreclosure sale. Alternatively, the defendants argue that the trial court erred in determining the amount due under the mortgage indebtedness. We affirm.

The Farmer City State Bank (bank) loaned John T. Henry and Evelyn Henry the sum of $60,000 on July 24, 1980. The Henrys executed a promissory note in favor of the bank. The Champaign National Bank, as trustee (trustee), under a land trust held for the benefit of the Henrys, executed a mortgage to secure the payment of the indebtedness. On this same date, the trustee executed a second mortgage to the bank to secure the payment of a prior loan to the Henrys in the amount of $345,000. This indebtedness is also evidenced by a promissory note executed by the Henrys. Both mortgages provided that the trustee was not liable for the mortgage indebtedness.

On March 9, 1982, after the Henrys had defaulted, the bank obtained a judgment by confession against the Henrys on the $60,000 note. In an effort to collect the judgment, the bank levied upon certain personal property of the Henrys. Those proceedings are the subject of a separate appeal. Farmer City State Bank v. Henry (1985), 138 Ill. App.3d 854 (Henry I).

The bank then filed a two-count complaint seeking foreclosure of both mortgages. Although the body of either complaint failed to allege the parties who would be personally liable for a deficiency, both counts included a prayer for a personal deficiency decree against the Henrys. On March 9, 1983, a judgment of foreclosure was entered against Evelyn Henry and the trustee. The decree conditionally provided for the entry of a deficiency judgment against Evelyn Henry. On June 13, 1983, a judgment of foreclosure was entered against John Henry. The order provided that if the proceeds from the sale were insufficient, a deficiency judgment would be taken against John Henry.

The bank purchased the property at the foreclosure sale as high bidder for $170,000. The Henrys moved to set aside the sale for failure of John Henry to receive notice of the sale. On December 16, 1983, the court, finding that the sale was in total compliance with the statute, confirmed the sale and entered deficiency judgments against Evelyn in the amount of $86,998.37 and against John Henry in the amount of $95,464.14. The Henrys appeal from the order denying their motion to vacate the judgment.

On appeal the Henrys first argue that the bank's failure to plead the Henrys' personal liability bars the deficiency judgment. Presented with this appeal is the bank's motion to amend its complaint by adding an allegation that the Henrys are the persons claimed to be personally liable for a deficiency. Because we find that the entry of the deficiency decrees against the Henrys was proper, we deny the bank's motion to amend the complaint as unnecessary. 87 Ill.2d R. 362(b).

• 1 Section 6 of "An Act relating to mortgages of property of public utilities" provides in pertinent part:

"[I]n all actions directing foreclosure of mortgages, a judgment may be rendered for any balance of money that may be found due to the plaintiff, over and above the proceeds of the sale or sales and execution may issue for the collection of such balance, the same as when the judgment is solely for the payment of money. Such judgment may be rendered conditionally, at the time of ordering the foreclosure, or it may be rendered after the sale and the ascertainment of the balance due. Such execution shall issue only in cases where personal service has been had upon the defendant or defendants personally liable for the mortgage debt, unless they have entered their appearance in such suits." (Ill. Rev. Stat. 1981, ch. 95, par. 56.)

Thus, a court has express statutory authority to render a personal judgment for a deficiency against any defendant over whom it has personal jurisdiction, or any defendant who has appeared in the foreclosure action. Conerty v. Richtsteig (1942), 379 Ill. 360, 41 N.E.2d 476; Skolnik v. Petella (1941), 376 Ill. 500, 34 N.E.2d 825; St. Ange v. Chambliss (1979), 71 Ill. App.3d 658, 390 N.E.2d 484.

The defendants' argument implies, however, that the provisions of the Illinois Mortgage and Foreclosure Act (Ill. Rev. Stat. 1981, ch. 95, par. 23 et seq.) (IMFA) preclude the entry of a deficiency decree against a defendant who is not named in the complaint as being personally liable. We disagree.

Section 7(m) of the IMFA, which sets forth the form for a shortened foreclosure complaint, provides for inclusion of the following information:

"Name or names of persons claimed to be personally liable for a deficiency, if a deficiency judgment is prayed for: * * *."

Section 23.6 of the IMFA, providing for a short form of pleading in a foreclosure action is "a purely procedural amendment and does not change the law in existence at the time the amendment was adopted." City of Chicago v. Chatham ...


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