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05/04/88 First National Bank of v. Marian R. Jones

May 4, 1988

FIRST NATIONAL BANK OF WHEATON, PLAINTIFF-APPELLEE

v.

MARIAN R. JONES, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, THIRD DISTRICT

523 N.E.2d 377, 169 Ill. App. 3d 277, 119 Ill. Dec. 769 1988.IL.673

Appeal from the Circuit Court of Bureau County; the Hon. James J. Wimbiscus, Judge, presiding.

APPELLATE Judges:

JUSTICE SPITZ delivered the opinion of the court. McCULLOUGH and KNECHT, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SPITZ

The underlying action in this appeal was commenced in the circuit court of Bureau County when plaintiff, First National Bank of Wheaton, a banking corporation, filed a complaint to foreclose a second mortgage against defendant, Marian R. Jones. The mortgaged property, owned by defendant, was used to secure a promissory note in the amount of $31,000. The note and the mortgage were executed by defendant and her son, Edwin B. Jones III, who is not a party to this action.

Defendant answered plaintiff's complaint by way of a general denial and later amended her answer to add a counterclaim in two counts. Count I of the counterclaim alleged that the plaintiff was contractually obligated to extend or renew the mortgage at the current interest rates when the second mortgage, which was the subject of the plaintiff's complaint, matured. Count II alleged that the mortgage is void by reason of a material alteration made by plaintiff after it was executed and recorded. In count II the defendant prayed that the court dismiss the foreclosure action and direct that the plaintiff issue a new mortgage and note at current interest rates. After a bench trial the court entered its decree of foreclosure in favor of plaintiff and denied defendant's counterclaims.

During the trial, the following relevant facts were adduced. The second mortgage in question was dated February 1, 1984, and was recorded in the recorder's office of Bureau County, Princeton, Illinois, on February 3, 1984. In the mortgage, the following clause was included:

"Borrower does hereby mortgage, grant, and convey to Lender the following described property . . .."

The mortgaged property at 313 Elm Place, Princeton, Illinois, was owned solely by defendant. Edwin, her son, had no interest in the premises. Under the promissory note, also dated February 1, 1984, defendant and her son promised to pay $367.32 per month principal and interest beginning March 5, 1984, with the balance due on January 2, 1986.

According to the testimony of Edwin B. Jones III, it was he and Mr. Harold Ticktin, then president of plaintiff bank, who negotiated the loan. Jones brought the note and mortgage to his mother's house for her to sign. After defendant and he executed these documents, he caused the mortgage to be recorded at the Bureau County courthouse, and the recorder of deed's office returned it by mail to plaintiff. Harold Ticktin was produced by neither party as a witness.

During Jones' testimony and after several objections by plaintiff's counsel, all sustained by the court, defense made an offer of proof to the effect that Ticktin had advised Jones the early maturity date of the note was utilized because of extreme fluctuations in interest rates, and when the note matured, the bank would adjust the rate and renew the loan at the then current mortgage rate for similar loans. Defendant did not know Ticktin and did not participate in any of the loan negotiations.

It is clear from the documents and testimony that the mortgage sued upon by plaintiff was altered after execution by defendant and her son and after the mortgage was recorded, to wit: the word "hypothicate" [ sic ] was interlineated as follows:

"Borrower does hereby mortgage,/hypothicate [ sic ] grant and convey to Lender the following ...


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