Reconstruction Finance Corporation v. Maley

• Decision Date: 07 January 1942
• Docket Number: No. 7723.,7723.
• Parties: RECONSTRUCTION FINANCE CORPORATION v. MALEY et al.
• Court: U.S. Court of Appeals — Seventh Circuit

125 F.2d 131 (1942)

RECONSTRUCTION FINANCE CORPORATION v. MALEY et al.

No. 7723.

Circuit Court of Appeals, Seventh Circuit.

January 7, 1942.

Lee Walker, M. O. Hoel, and John M. Crimmins, all of Chicago, Ill., for appellant.

Burrel Barash, of Galesburg, Ill., for appellees.

Before SPARKS, MAJOR, and MINTON, Circuit Judges.

MAJOR, Circuit Judge.

This is an appeal from an order, entered May 27, 1941, dismissing plaintiff's suit for declaratory judgment. The complaint alleged that a judgment was obtained in the United States District Court for the Northern District of Illinois on May 1, 1937; that a duly certified copy of the same was filed October 14, 1937, in the office of the Clerk of the Circuit Court of Knox County, Illinois, a court of record; that an execution was issued on said judgment, April 19, 1938, by the United States Clerk for the Northern District of Illinois directed to the United States Marshal for the Southern District of Illinois; that the same was served on the judgment debtor July 7, 1938, and returned to, and filed in, the office of the District Clerk for the Northern District of Illinois, July 21, 1938, endorsed no property found and unsatisfied; and that the judgment debtor was the owner of certain real estate in Knox County, Illinois, from a date prior to May 1, 1937, to March 26, 1940.

Premised on these allegations, plaintiff prayed for an adjudication that its judgment entered May 1, 1937, in the United States District Court, be declared a lien upon the real estate of the judgment debtor located in Knox County. (Subsequent to March 26, 1940, the real estate was conveyed by William H. Maley, the judgment debtor, to certain persons named as co-defendants in this suit. The circumstances of such conveyance are not material to the instant case.)

The court below concluded that the filing of a certified copy of the decree (judgment) in the Circuit Clerk's office of Knox County, Illinois, was not in compliance with Par. 1, Chap. 77, Illinois Revised Statutes (quoted hereinafter) providing for the filing of a transcript of judgment. In other words, the court held that the certified copy of judgment was not a transcript of judgment. In conformity with this holding, the court allowed defendant's motion to dismiss the complaint. The court's conclusion in this respect presents one of the issues argued on this appeal. Unfortunately, the question has not been decided by any Illinois Court, so far as we are advised. We are convinced the court's action in dismissing the complaint was proper, even though the certified copy of judgment met the Illinois requirement as to a transcript of judgment. It therefore appears unnecessary to decide this question. For the purpose of our decision we assume, without deciding, that the certified copy of judgment filed in the Clerk's office of Knox County, October 14, 1937, was a transcript of the judgment and it will be referred to hereafter as such.

Admittedly, plaintiff, by the filing of such transcript, acquired a lien upon the debtor's real estate located in Knox County. No execution was issued upon such transcript, but execution was issued, April 19, 1938, upon the Federal Court judgment, directed to the United States Marshal for the Southern District of Illinois, which was served upon the judgment debtor and returned, no property found, to the office from whence it issued. Plaintiff contends (1) that this execution extended the lien on the Knox County real estate, acquired by reason of the transcript filed in that county, and (2) that if the execution did not serve such purpose, the Illinois law discriminates against a Federal Court judgment in that it makes no provision for the issuance of an execution upon a transcript of judgment from a Federal Court, while such provision is made with reference to a State Court judgment. It is further contended that as a result of this discrimination, the Illinois Statute is not controlling, and that under Federal law its judgment became a lien on defendant's property in any county in the State of Illinois.

A reading of the legislative enactments, both by the Congress of the United States and the General Assembly of Illinois, leaves no room for doubt but that it was the purpose of each to place a Federal Court judgment and the lien created thereby upon a par with a State Court judgment. Inasmuch as the question under consideration involves numerous statutory provisions, it will be necessary to quote rather extensively.

Section 812, 28 U.S.C.A., provides in part: "Judgments and decrees rendered in a district court of the United States within any State, shall be liens on property throughout such State in the same manner and to the same extent and under the same conditions only as if such judgments and decrees had been rendered by a court of general jurisdiction of such State. * *"

Section 814, of the same title, provides: "Judgments and decrees rendered in a district court, within any State, shall cease to be liens on real estate or chattels real, in the same manner and at like periods as judgments and decrees of the courts of such State cease, by law, to be liens thereon."

Paragraph 1 of Chap. 77, Illinois Revised Statutes, 1939, provides: "* * * a judgment of a court of record shall be a lien on the real estate of the person against whom it is obtained, situated within the county for which the court is held, from the time the same is rendered or revived, for the period of seven years, and no longer: Provided, that there shall be no priority of the lien of one judgment over that of another rendered during the same calendar month and upon the filing in the office of the clerk of any court of record in any county in this State, of a transcript of a judgment or decree rendered in any other county of this State, such judgment shall have the like force and effect and shall be a lien upon the real estate of the party against whom the same is obtained in said county where filed, and execution may issue thereon in said county, in like manner as in the county where originally obtained. When execution is not issued on a judgment within one year from the time the same becomes a lien, it shall thereafter cease to be a lien, but execution may issue upon such judgment at any time within said seven years, and shall become a lien on such real estate from the time it shall be delivered to the sheriff or other proper officer to be executed. * * *"

So there may be no uncertainty as to the construction sought by plaintiff of Par. 1, we quote the following statement from plaintiff's brief: "In order, therefore, to make a State court judgment a lien on real estate located in a foreign county in Illinois it is necessary to do two things, (1) to file transcript of the judgment in the foreign county within a year from the date the judgment is entered whereupon it becomes a lien on the real estate of the judgment debtor in that county, and (2) to issue an execution on the judgment within one year from the time it becomes a lien. Plaintiff obtained its judgment on May 1, 1937. It filed its transcript in Knox County, Illinois on October 14, 1937. It obtained the issuance of an execution from the United States District Court for the Northern District of Illinois on its judgment on April 19, 1938. That execution was duly served on the judgment debtor. Plaintiff has, therefore, complied with the Illinois statutes, and its lien on the real estate located in Knox County will continue until seven years from May 1, 1937."

In support of this statement, plaintiff relies upon the first phrase of the last sentence of Par. 1 (above quoted): "When execution is not issued on a judgment within one year from the time the same becomes a lien, it shall thereafter cease to be a lien." It then argues "the statute does not say from where the execution must issue. The steps taken by plaintiff are within the language of the statutory requirement." The literal words of the phrase relied upon, independent of the remainder of the paragraph, may support plaintiff's contention, but that phrase must be read in the light of the entire paragraph, and when so read, there is no room for the construction sought. Immediately preceding this phrase is the provision for the filing of a transcript in any county of the state and "execution may issue thereon in said county, in like manner as in the county where originally obtained." The paragraph plainly provides, so we think, that the execution may be issued upon the transcript judgment in one situation and the original judgment in the other. It would be just as reasonable for plaintiff to contend that its judgment lien was preserved without filing a transcript in Knox County because the phrase immediately following that relied upon, provides: "But execution may issue upon such judgment at any time within said seven years, and shall become a lien on such real estate from the time it shall be delivered to the sheriff." By ignoring the remainder of the paragraph and accepting the literal meaning of this phrase, it was only necessary for plaintiff to have execution upon its original judgment in order to preserve its lien for seven years.

So far as we are aware, Par. 4 of Chap. 77, Illinois Revised Statutes, 1939, contains the only authority for the issuance of an execution directed to a county other than that in which the judgment has been obtained. The mere service of such an execution, however, furnishes no assistance to a judgment lien — in fact, an execution lien is created only by service of the execution, a levy upon the real estate, and a certificate of such levy filed in the Recorder's office of the county in which the real estate is located, as is provided by Par. 37, Chap. 77 of the Illinois Act.

It appears, as stated by the plaintiff, that no Illinois court has held that the execution contemplated by Par. 1 must be issued on the transcript of the judgment rather than on the original judgment in order to preserve...