Johnson v. Zahn

• Citation: 44 N.E.2d 15,380 Ill. 320
• Decision Date: 25 September 1942
• Docket Number: No. 26606.,26606.
• Parties: JOHNSON v. ZAHN et al.
• Court: Supreme Court of Illinois

380 Ill. 320

44 N.E.2d 15

JOHNSON

v.ZAHN et al.

No. 26606.

Supreme Court of Illinois.

Sept. 25, 1942.

Action in ejectment by Harriet E. V. Johnson against Charles J. Zahn and others. From an adverse judgment, plaintiff appeals.

Judgment affirmed.Appeal from Circuit Court, Cook County; John Prystalski, judge.

Barrett, Barrett, Costello & Barrett, of Chicago (Robert E. Wright, of Chicago, of counsel), for appellant.

Robert J. Hilliard, Harold L. Reeve, and Elmer M. Leesman, all of Chicago, for appellees.

STONE, Chief Justice.

This cause is here to review a judgment of the circuit court of Cook county in an action in ejectment, finding the defendants not guilty and entering judgment nil capiat and for costs against appellant.

The facts were stipulated and are: Appellant owned a promissory note for $5,000 executed by one Miriam M. Thomas and secured by a trust deed upon the premises involved in this ejectment suit. Upon failure to perform the conditions of the note and trust deed, foreclosure proceedings were filed and on September 3, 1936, a decree for foreclosure and sale was entered. The sale was had on October 6, 1936, and the premises sold to appellant, to whom the master in chancery delivered his certificate of purchase. On October 22, 1936, a decree confirming the master's report of sale and for distribution was entered. That decree also found a deficiency in the sum of $911.81 due appellant, held the mortgagor personally liable to appellant, and entered deficiency judgment in her favor and against the mortgagor. On April 5, 1937, during the twelve months in which she was entitled to redeem, the mortgagor Thomas, by quitclaim deed, conveyed the premises to appellee Mangold. The deed was duly recorded. On April 15, 1937, Mangold redeemed the premises in the manner prescribed by statute, and the master in chancery delivered to him a certificate of redemption and the redemption money was paid to and accepted by appellant. The certificate of redemption was recorded on April 16, 1937, and appellee Mangold entered into possession. On April 15, 1937, the day Mangold redeemed, appellant caused the clerk of the circuit court to issue an execution upon her deficiency judgment and delivered the same to the sheriff. On July 16, 1937, the sheriff returned the writ unexecuted. An alias writ was issued on the last named date and on October 14, 1937, was returned ‘No property found.’ On June 20, 1939, appellant caused a pluries writ of fieri facias to issue and to be delivered to the sheriff for execution. On June 28, 1939, the sheriff, under that writ, levied execution on the real estate involved in this case, and on August 29, 1939, after due advertisement of the sale, sold it to appellant and delivered to her his certificate of sale, and on December 6, 1940, delivered to appellant a deed conveying the premises to her. That deed was recorded. Appellee Zahn was a tenant in possession under a lease from Mangold and was made party. All parties hereto claim title to the premises from and through Miriam M. Thomas as a common source of title.

The only question involved in the case is whether a deficiency judgment, entered after a foreclosure decree and sale of the premises, is a lien upon the mortgagor's equity of redemption which attaches to the property in the hands of the mortgagor's grantee purchasing during the twelve-month period of redemption available to the mortgagor.

Counsel for appellant argue that the deficiency judgment, entered by a decree approving a master's sale under foreclosure, having all the requisites of a judgment at law, is to be considered such, and as under the statute a judgment at law is a lien on all property of the judgment debtor, from the date of its entry and issuance of execution, and the equity of redemption of the mortgagor is an interest in real estate, the deficiency judgment is a lien on that interest, and when, during the twelve-month period of redemption, the mortgagor transfers his equity of redemption, the lien which has attached to the property goes with it into the hands of the mortgagor's grantee. They also say that where redemption is made by such grantee within the twelve-month period of redemption, such redemption not only renders the certificate of purchase and the decree for sale void, but also renders the property in the hands of the grantee subject to execution on the lien of the deficiency judgment, and that the redemption provisions of the statute do not prevent the attaching of the lien of the deficiency judgment, but merely suspend the right of enforcement of such lien during the period of redemption or until redemption is made by the mortgagor, or his grantee.

Appellee Mangold, on the other hand, argues that it is established in this State as a rule of property that during the statutory period of redemption no deficiency judgment lien attaches to the equity of redemption of the mortgagor, and that the doctrine of stare decisis requires adherence to that rule of property.

Section 18 of the Judgment act, Ill.Rev.Stat.1941, chap. 77, par. 18, provides for redemption by the mortgagor, his heirs, executors, administrators, assigns or any person interested in the premises through or under the mortgagor, within twelve months, and in event of redemption, the foreclosure sale and certificate of purchase become null and void. This act also provides for successive redemptions and preferences therein. It is the rule that redemption laws are to be construed liberally for the benefit of the mortgagor, but no cases of this or other courts are cited holding that the mortgagor may be placed at the mercy of the mortgagee, by granting to the latter a deficiency judgment lien on the mortgagor's equity of redemption during his period of redemption.

The appellant here, as holder of the mortgage, undoubtedly had a first lien upon the premises. By the decree for foreclosure and sale she had an opportunity to satisfy the debt due her out of the property. It was in her power to bid the fair cash value of the property and she having bid thereon, the presumption is that she did bid such value. By the sale the mortgage debt was extinguished. By bidding in the property at less than fair cash value, in the hope that the mortgagor might redeem, and so afford appellant an opportunity to levy on the property to satisfy the deficiency judgment, she followed the course of her own choosing. She is charged with knowledge of the provisions of the statute which gave to a grantee of the mortgagor the right to redeem from the sale, by which redemption the sale and certificate of purchase are rendered void and the lien of the mortgage satisfied

Appellant's deficiency judgment was not entered as a part of the decree for foreclosure but after the sale at which she had bid, and as a part of the decree confirming the sale. Though the decree for foreclosure provided that a deficiency judgment might be entered if the property did not sell for enough to pay the whole of the mortgage debt, such judgment was no...