Appeal from the Circuit Court of Cook County. Honorable Lester Foreman, Judge Presiding.
The Honorable Justice Cahill delivered the opinion of the court: Hoffman, P.j., And S.m. O'brien, J., concur.
The opinion of the court was delivered by: Cahill
JUSTICE CAHILL delivered the opinion of the court:
The parties to this appeal created a security interest in the form of a pledge in a deposit bank account, but required each other to endorse checks written from that account. The issue we address is whether the two signature requirement defeats an otherwise valid pledge under article 9 of the Uniform Commercial Code (810 ILCS 5/9-101 et seq. (West 1992)).
The Edibles Corporation obtained a judgment against Baja Beach Company in the amount of $35,898.23 on November 8, 1993. Edibles then filed a motion in the circuit court on November 22, 1993, to order North Bank of Streeterville to turn over a deposit account at the bank under the name of Baja Beach Company. Mary Faucher and Frank Siepker filed an appearance and objected to Edibles' motion, alleging that they held a valid security interest in the account. After a hearing, the trial court ordered North Bank to turn over the account to Edibles, finding that Faucher and Siepker did not have a perfected security interest in the account. Faucher and Siepker appeal this order and argue that the court erred as a matter of law. We agree and reverse.
Faucher and Siepker presented evidence at the hearing that they and Baja entered into a security agreement on May 20, 1993. The agreement read in part:
"SECURITY AGREEMENT made this 20th day of May, 1993, between Baja Beach Company, Inc., a corporation (Hereinafter referred to as "Pledgor") and Mary F. Faucher, individually, Mary F. Faucher, Co-Trustee and Frank F. Siepker, Co-Trustee, (hereinafter referred to as "Secured Party").
WHEREAS, for and in consideration of the execution of this Security Agreement by Pledgor, Secured Party is Lessor under a certain Lease for the premises at 223 West Ontario Street, Chicago, Illinois (the "Lease"); and
WHEREAS, Secured Party desires to obtain, and Pledgor desires to grant, a security interest in certain property of Pledgor, now owned or hereafter acquired, and the proceeds thereof, to secure payment of [mechanic lien claims against the Ontario property totalling $44,691.29];
As security for the payment of the obligations ***, Pledgor hereby pledges, assigns and grants to Secured Party a security interest in and to the following (the "Collateral"): That certain Checking Account bearing number 602435500, dated 5/20/93, issued by North Bank of Streeterville for the account of Pledgor, in the amount of $44,691.29, *** (the "Account")."
The agreement also stated:
"Upon the happening of any Event of Default ***, at the option of Secured Party, any and all Obligation secured hereby shall become immediately due and payable without presentment or demand or any notice to Pledgor ***, and Secured Party shall have and may exercise any or all of the rights and remedies of a secured ...