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04/10/87 Judith Johnson, v. Beneficial Finance Company

April 10, 1987

JUDITH JOHNSON, PLAINTIFF-APPELLANT AND COUNTERDEFENDANT-APPELLANT

v.

BENEFICIAL FINANCE COMPANY OF ILLINOIS, INC., DEFENDANT-APPELLEE AND COUNTERPLAINTIFF-APPELLEE (DAVID S. JOHNSON, DEFENDANT; DAVID S. JOHNSON



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

et al., Counterdefendants)

506 N.E.2d 1025, 154 Ill. App. 3d 672, 107 Ill. Dec. 134 1987.IL.480

Appeal from the Circuit Court of Winnebago County; the Hon. Galyn Moehring and the Hon. Robert C. Gill, Judges, presiding.

APPELLATE Judges:

JUSTICE WOODWARD delivered the opinion of the court. REINHARD and NASH, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WOODWARD

Plaintiff, Judith Johnson, appeals the decision of the trial court of Winnebago County finding that the defendant, Beneficial Finance Company of Illinois, Inc. (hereinafter BFC), held a valid mortgage lien on an undivided one-half interest in plaintiff's residence and granting judgment for BFC on its counterclaim for foreclosure.

In 1980, Judith Johnson and David S. Johnson owned a home at 2664 Pacific Parkway, Rockford, as joint tenants with right of survivorship. The ownership interest of the Johnsons was encumbered only by a first mortgage held by Rock River Savings and Loan Association of Rockford.

On May 13, 1980, a quitclaim deed purporting to be executed by both David S. Johnson and Judith R. Johnson conveying title to the Pacific Parkway premises to David S. Johnson alone was recorded in the recorder's office in Winnebago County. Later in 1980, David S. Johnson went to the Rockford office of BFC and applied for a second mortgage in the amount of $10,000. BFC approved the loan to David S. Johnson. Subsequently, the sum of $10,000 was paid to David S. Johnson by BFC, and David S. Johnson executed a note and second mortgage which was duly recorded as a lien against the Pacific Parkway premises. Shortly after David S. Johnson obtained this money, he and the plaintiff, Judith Johnson, parted, and David S. Johnson moved out of the home. From December 1980 through the date of trial, Judith Johnson has lived in the premises and has made all the principal and interest payments on the first mortgage, has paid all the real estate taxes for the years 1980 through 1985, and spent $1,000 having the house painted.

Judith Johnson and David S. Johnson separated, and in July 1981, a judgment for dissolution of the Johnsons' marriage was entered in the Circuit Court of the 17th Judicial Circuit, Winnebago County, Illinois. At the time of the dissolution of marriage, the Johnsons entered into a separation agreement and property settlement agreement which was specifically approved by the court and made a part of the judgment as though fully set forth therein.

Paragraph 17 of the parties' property settlement agreement provided as follows:

"The Husband and Wife own the marital residence located at 2664 Pacific Parkway, Rockford, Illinois as joint tenants. This real estate is subject to a first mortgage in favor of Rock River Savings and Loan Association in the approximate amount of $36,800.00; it is also subject to a second mortgage in favor of Beneficial Finance Company in the approximate amount of $10,000.00. Therefore, this real estate has an equity of approximately $23,100.00.

The Husband shall convey, transfer and quit-claim [ sic ] to the Wife all of his right, title and interest in and to said real estate."

As further part of the property settlement agreement, Judith Johnson agreed to make the first-mortgage payments to Rock River Savings and Loan Association, and David S. Johnson was ordered to make the second-mortgage payments to BFC. Judith Johnson was ordered to pay all real estate ...


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