Appeal from the Circuit Court of the 12th Judicial Circuit, Will County, Illinois. No. 92-CH-8525. Honorable Thomas Ewert, Judge Presiding.
Rehearing Denied March 14, 1995. Released for Publication March 14, 1995.
Present - Honorable Allan L. Stouder, Presiding Justice, Honorable Peg Breslin, Justice, Honorable Michael P. MC Cuskey, Justice. Presiding Justice Stouder delivered the opinion of the court: McCUSKEY and Breslin, JJ., concur.
The opinion of the court was delivered by: Stouder
PRESIDING JUSTICE STOUDER delivered the opinion of the court:
Plaintiff, Resolution Trust Corporation, filed a two count complaint in the circuit court of Will county. Count I sought a foreclosure of its mortgage against property located in Romeoville, Illinois, and a personal deficiency judgment against defendant, Albert Hardisty, based on a mortgage note. Count II sought liability against the defendant based on the Family Expense Act. The circuit court of Will county entered a judgment of foreclosure and sale in favor of the plaintiff. Defendant appeals. We reverse.
On December 30, 1977, defendant and his wife, Cheryl Hardisty, purchased a home in Romeoville, Illinois. Defendant claims his only involvement with the family finances after the purchase of this property was to give his paycheck to his wife. Consequently, Mrs. Hardisty took financial responsibility of the household. This included making mortgage payments on the property.
In 1985, Mrs. Hardisty began to fall behind on the mortgage payments. Consequently, foreclosure proceedings were initiated and the property was conveyed to the Federal National Mortgage Association in 1988 at a foreclosure sale. The mortgage was eventually assigned to the Standard Federal Savings Bank. The Federal National Mortgage Association then conveyed the property back to the Hardistys.
Mrs. Hardisty testified that, unbeknownst to the defendant, she attended this closing with an individual acting as the defendant. Apparently, the defendant had no knowledge of the family's financial predicament. Thus, Mrs. Hardisty and the person who pretended to be her husband signed the necessary papers.
The defendant testified his wife never informed him of the financial difficulties associated with the property. The first time defendant became aware of his financial situation was in 1993 when his children informed him of the problems. Consequently, defendant argued that he neither attended the closing, nor had any knowledge of the foreclosure. To support his argument, defendant called a handwriting expert to testify that the signatures on the Mortgage, the V.A. Assumption Rider, and the Mortgage Note were not the defendant's.
Nevertheless, once this closing was completed, Mrs. Hardisty began to make mortgage payments. In 1991, she once again had problems with her mortgage payments. Accordingly, Esther Joyal, an investor in rental properties, became involved. She supplied $17,000 to the Hardistys in order to reinstate the mortgage. In return, Ms. Joyal received a quitclaim deed and an occupancy agreement.
As a result of their agreement, Mrs. Hardisty would give Ms. Joyal two checks at the beginning of every month. The first, for $600, was made to cover the mortgage payments; the second check, for $300, was compensation for the loan. However, Mrs. Hardisty soon began to send Ms. Joyal only one check for $300. She told Ms. Joyal she was sending the mortgage check on her own. The truth, however, was the mortgage payments were not being made at all. Consequently, the Hardistys were once again in default and plaintiff filed its complaint to foreclose the mortgage.
After a bench trial, the circuit court made several alternative findings. Specifically, it held if the defendant was at the closing and signed the documents, then he was liable under the terms of the mortgage and mortgage note. Alternatively, if he was not physically present, he was nevertheless liable under the terms of the mortgage and mortgage note because he had granted his wife the authority to sign the documents on his behalf. Finally, if the defendant was not present at the closing and did not authorize his wife to sign the documents, then he lost his property after the 1987 foreclosure and never regained title.
However, defendant argues on appeal that he signed neither the mortgage, nor the mortgage note. Furthermore, he argues he did regain title to the property because the deed prepared for the 1988 closing, furnished by the Federal National Mortgage Association, named both defendant and his wife as grantees. Therefore, because it was properly executed and recorded defendant should have an unencumbered one-half interest in the property. We agree with the defendant's argument.
A mortgage is an interest in land, created by a written instrument, providing security for the performance of a duty or payment of a debt. ( Resolution Trust Corp. v. Holtzman (1993), 248 Ill. App. 3d 105, 618 N.E.2d 418, 187 Ill. Dec. 827.) Furthermore, a debt or mortgage obligation of some kind is an essential element in a transaction to create a relationship of mortgagor and mortgagee. ( Rago v. Cosmopolitan National Bank (1967), 89 Ill. App. 2d 12, 232 N.E.2d 88.) A mortgage foreclosure is an equitable action commenced in order to enforce the lien placed on the mortgaged property. ( Harms v. Sprague (1984), 105 Ill. 2d 215, 473 N.E.2d 930, 85 Ill. Dec. 331.) Its purpose is to enforce the payment of the ...