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02/19/87 the Travelers Insurance v. Holland Farms

February 19, 1987

INDEMNITY COMPANY, PLAINTIFF-APPELLEE

v.

HOLLAND FARMS, INC., ET AL., DEFENDANTS -APPELLANTS (KEITH NICHOLS ET AL., DEFENDANTS)



APPELLATE COURT OF ILLINOIS, THIRD DISTRICT

THE TRAVELERS INSURANCE COMPANY, a/k/a The Travelers

504 N.E.2d 532, 152 Ill. App. 3d 389, 105 Ill. Dec. 432 1987.IL.184

Appeal from the Circuit Court of La Salle County; the Hon. William P. Denny, Judge, presiding.

APPELLATE Judges:

JUSTICE BARRY delivered the opinion of the court. STOUDER and WOMBACHER, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE BARRY

This is an interlocutory appeal from an order denying a motion for a stay of proceedings in a mortgage foreclosure action. Holland Farms, Inc., mortgagor, sought the stay under section 2-619(a)(3) of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2-619(a)(3)), which provides:

"(a) Defendant may, within the time for pleading, file a motion for dismissal of the action or for other appropriate relief upon any of the following grounds . . .:

(3) That there is another action pending between the same parties for the same cause."

Holland alleged that The Travelers Insurance Company, the mortgagee, had filed an action in the Iowa District Court for Linn County to sue upon the same notes and to foreclose the same mortgages as are the subject of the case at bar.

To begin at the beginning, Holland owns six separate, noncontiguous tracts of farmland in Illinois totaling nearly 2,200 acres. These parcels are located in La Salle, Livingston, and Marshall counties. In addition, Holland owns a 150-acre parcel of farmland in Linn County, Iowa. In 1975 Holland borrowed $3,200,000 from Travelers and secured the loan with a mortgage on five of the Illinois tracts and the one Iowa tract. In 1978 Holland borrowed an additional $1,500,000 from Travelers and executed a second mortgage on the six tracts that were subject to the first mortgage and a first mortgage as to an additional Illinois tract. In 1980 an additional loan of $1 million was made by Travelers to Holland and was secured by a third mortgage on six tracts and a second mortgage on one tract, all being the same tracts previously mortgaged. In 1982 a final loan of $200,000 was made by Travelers, and Holland again executed mortgages on its farm property: a fourth mortgage on six tracts and a third mortgage on one tract. Each mortgage contained the following provision:

"32. Mortgagor, for itself and all who may claim through or under it, waives any and all right to have the property and estates comprising the mortgaged property marshalled upon any foreclosure of the lien hereof and agrees that any court having jurisdiction to foreclose such lien may order the mortgaged property sold as an entirety."

On March 12, 1986, Travelers filed a complaint in the circuit court of La Salle County, Illinois, to foreclose the first, second, third, and fourth mortgages on the six Illinois tracts owned by Holland. On the same date Travelers also filed a petition in the Iowa District Court of Linn County to foreclose the mortgages on the Iowa tract owned by Holland. The Iowa petition prayed for "judgment in rem against the property involved in this action for the amount of the unpaid principal and interest" on each of the four notes.

Travelers sought appointment of a receiver in both the Iowa and the Illinois actions. A receiver was appointed in Iowa on March 21, 1986, and in Illinois on April 11, 1986, with each receiver to manage the property located in its respective State. On June 12, 1986, Holland filed its motion to stay the Illinois proceedings, alleging, inter alia, that the Iowa petition was filed first and the receiver was appointed first in the Iowa proceeding, that the Iowa action sought to collect the same notes and to foreclose the same mortgages as the Illinois action, that the Iowa petition sought a judgment in rem against the properties referred to in the four mortgages, that Travelers was limited to relief exclusively in the Iowa District ...


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