First Nat. Bank of Chicago v. Marks

• Decision Date: 08 April 1940
• Docket Number: Gen. No. 40977.
• Citation: 26 N.E.2d 731,304 Ill.App. 438
• Parties: FIRST NAT. BANK OF CHICAGO v. MARKS ET AL.
• Court: United States Appellate Court of Illinois

304 Ill.App. 438

26 N.E.2d 731

FIRST NAT. BANK OF CHICAGO

v.MARKS ET AL.

Gen. No. 40977.

Appellate Court of Illinois, First District, First Division.

April 8, 1940.

Appeal from Superior Court, Cook County; Paul McWilliams, Judge.

Action by the First National Bank of Chicago against Louis L. Marks and another, on contract of guaranty. From a judgment for plaintiff, defendants appeal.

Affirmed. Rosenberg, Stein & Rosenberg, of Chicago, for appellants.

D'Ancona, Pflaum & Kohlsaat, of Chicago, for appellee.

O'CONNOR, Justice.

Plaintiff brought an action against defendants on a written contract by the terms of which they guaranteed the payment of a promissory note for $12,000 dated July 8, 1927, due three years after date. The note was made by Louis L. Simon, who executed a trust deed on certain real estate in Chicago to secure the payment of the note The trust deed was foreclosed, the property sold and there was a deficiency of $12,543.04, for which the maker of the note was held to be personally liable. It is to recover this deficiency that plaintiff brings suit. The case was tried before the court without a jury; there was a finding and judgment in plaintiff's favor for the amount claimed and defendants appeal.

The record discloses that July 8, 1927, Louis L. Simon executed his three principal promissory notes, one for $1,500 due in one year; one for the same amount due in two years, and the third for $12,000 due in three years. To secure the payment of the $15,000, Simon executed his trust deed conveying certain Chicago property to the Foreman Trust & Savings Bank, trustee. The first and second notes and some interest were paid. At the time the $12,000 note was executed, it bore the following endorsement: “For Value Received ______ hereby guarantee the payment of this note and all expenses of collecting the same, including attorneys' fees, and waive protest and notice of nonpayment and diligence in collecting the same, and consent that security may be taken or the time of payment be extended without impairing this guarantee.”Then follow the signatures of defendants, Louis L. Marks and Meyer S. Marks.

Afterward the trustee filed its bill to foreclose the lien of the trust deed for the nonpayment of the $12,000 note. No mention was made in the bill of the contract of guarantee. The bill contained the usual allegations and in one paragraph a number of persons are mentioned, including Louis and Meyer Marks, and it is alleged that these persons “have or claim to have some right, title, interest or lien in and to the real estate * * * but * * * that the right, title, interest and lien of such persons, * * * if any they have * * * is subject, inferior and subordinate to the lien” of complainant. The prayer was the usual one in such cases; and that “the Court may in and by its decree determine or find the person or persons personally liable for said indebtedness.” The Marks, as defendants to the foreclosure suit, filed their answer in which they demanded strict proof of the allegations of the bill. A decree of foreclosure was entered which approved the master's report (to which no objections were filed), and finds the amount due to be $17,922.08, for which Louis L. Simon, the maker of the note, was decreed to be personally liable to plaintiff, the First National Bank of Chicago, with which the Foreman Bank, as trustee, had merged.

Afterward the property was sold by the master for $6,000, leaving a deficiency of $12,543.04. The master's report of sale and distribution was approved by the Chancellor. Nowhere in the foreclosure proceeding is any reference made to the contract of guarantee which is the basis of the instant suit.

Defendants contend the plaintiff's failure to take a deficiency decree in the foreclosure suit against Louis and Meyer Marks released them from liability on their guarantee; that the...