Zyks v. Bowen

• Decision Date: 10 November 1953
• Docket Number: Gen. No. 46028
• Citation: 351 Ill.App. 491,115 N.E.2d 577
• Parties: ZYKS v. BOWEN et al. Appeal of BOWEN et al.
• Court: United States Appellate Court of Illinois

Page 577

115 N.E.2d 577

351 Ill.App. 491

ZYKS v. BOWEN et al.

Appeal of BOWEN et al.

Gen. No. 46028.

Appellate Court of Illinois, First District, Second Division.

Nov. 10, 1953.

Irving B. Campbell, Harold C. Osburn and Harold V. Snyder, Chicago, for appellants.

Fred B. Hanson, Chicago, Thomas E. Crowley and William E. Corrigan, Chicago, of counsel, for appellee.

TUOHY, Justice.

Plaintiff filed his bill to foreclose a trust deed in the nature of a mortgage given to secure a principal note in the amount of $4,000. The defense urged was that although the debt remained existent, the lien of the trust deed expired by limitation under the provisions of section 11b of the Illinois Limitations Act because the note and trust deed were more than 20 years past due at the time suit was filed and no extension agreement or affidavit had been filed in the interim as required by the act. The cause was referred to a master in chancery who found that the principal indebtedness had been reduced to $3,500 and that this sum, together with interest, solicitor's fees and other costs, making a total of $4,510.93, was due. From a decree approving the master's report and awarding plaintiff master's fees and court reporter's fees, making the total amount of the judgment $4,955.11, and ordering the property sold to satisfy the indebtedness, defendants appeal.

The evidence before the master shows that on May 5, 1923 Mabel B. Hoopes, now deceased, and Ed. Hoopes, her husband, one of the defendants, being indebted in the sum of $4,000, executed a note payable five years after date bearing interest at the rate of 6% per annum, payable semi-annually, evidenced by 10 interest notes; and to secure said indebtedness executed the trust deed of even date with said note. The trust deed was recorded in the office of the Recorder of Cook County, Illinois, on May 8, 1923. The interest notes were paid as they became due and were cancelled. Subsequent written extension agreements and extension interest coupons were executed, none of which were recorded, the last extending payment of the indebtedness (which in the meantime had been reduced by a $500 payment) until May 5, 1951. The default in the principal payment occurred on May 5, 1951. The title to the property through the years was in Mabel Hoopes, and after her death was in her heirs. Foreclosure proceedings were instituted on June 22, 1951, approximately two months after the default.

The question for our determination is whether, because of failure to file for record extension agreements within the 20 year period provided for in section 11b of the Limitations Act (chap. 83, Ill.Rev.Stat.1953), the lien expired, notwithstanding the fact that the indebtedness has been kept alive by payments.

After careful examination of the Illinois authorities we are of the opinion that, as between the parties here, the lien of the mortgage was preserved by the written extension agreements even though unrecorded.

Our conclusion rests in part upon our analysis of Kraft v. Holzmann, 206 Ill. 548, 69 N.E. 574, and several later cases. While the litigants in the Kraft case were the holder of a mortgage and a subsequent lienholder, and in that particular the case differs from the instant one where the original parties are involved, the general statements of substantive law in the Kraft case are relevant. There the time for the payment of the note had been extended and an agreement extending the lien of the trust deed had been executed but not recorded. It was contended that the failure to record the trust instrument caused its expiration under the terms of the existing limitation statute. The court said, 206 Ill. at pages 549-551, 69 N.E. at page 574:

'The first contention of the appellants is that, when the bill was filed to foreclose the deed of trust, the suit was barred by the eleventh section of the act in regard to limitations, which section is as follows: 'No person shall commence an action or make a sale to foreclose any mortgage or deed of trust in the nature of a mortgage, unless within ten years after the right of action or right to make such sale accrues.' Hurd's Stat.1901, p. 1163, c. 83.

'We have repeatedly held in such cases that the debt is the principal thing, and the mortgage or trust deed but an incident thereto; that section 11 of the Limitation act must be construed in connection with section 16, applicable to promissory notes, and that the mortgage will not be barred until the debt is barred. * * *

'* * * It was not necessary that subsequent incumbrancers or purchasers should have notice of any such extension. The recording of the deed of trust gave all the notice necessary to be given.'

Thereafter, in 1941, section 11 was amended by the addition of section 11b, which now provides:

'The lien of every mortgage, trust deed in the nature of a mortgage, and vendor's lien, the due date of which is stated upon the face * * * shall cease by limitation after the expiration of twenty years from the time the last payment on such mortgage, trust deed in the nature of a mortgage, or vendor's lien became or becomes due upon its face and according...