First Division 

June 26, 2006 

No. 1-05-1829 

U.S. BANK N.A., as Trustee for New Century Home 

Equity Loan Trust, Series 2002-A Asset Backed 

Pass through Certificates Series 2002-A, 

Plaintiff-Appellee, 

v. 

ANTHONY B. PHILLIPS, 

Defendant-Appellant. 

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Appeal from 

the Circuit Court 

of Cook County 

02 CH 14953 

Honorable 

Paul A. Karkula, 

Judge Presiding 

JUSTICE McBRIDE delivered the opinion of the court: 

Defendant Anthony Phillips appeals, pro se, from the denial of his APetition to 

Vacate a Void Judgment and Collateral Attack Under Authority of Illinois Statute.@ For 

the reasons that follow, we affirm. 

On December 31, 2001, defendant obtained a mortgage for $255,000 from New 

Century Mortgage Corporation (New Century) to purchase a parcel of property 

commonly known as 2024 East 171st Court in South Holland, Illinois. The mortgage 

and corresponding note were owned by plaintiff, U.S. Bank N.A., as trustee for New 

Century, and serviced by Ocwen Federal Bank, FSB (Ocwen). 

On August 14, 2002, plaintiff filed a complaint to foreclose defendant's mortgage, 

alleging that defendant had failed to pay the monthly installments on the mortgage since 

June 1, 2002. Defendant was personally served on September 9, 2002, but did not 

appear or otherwise answer the complaint. On October 28, 2002, the circuit court 

entered an AOrder of Default@ against defendant, as well as a AJudgment for Foreclosure 
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and Sale@ (Judgment) ordering the subject real estate to be sold at a judicial sale. 

On February 5, 2005, defendant sent a letter to Ocwen, purporting to tender 

payment for the entire balance of the mortgage by an enclosed ABonded Bill of 

Exchange@ (Bill). The Bill stated that A[t]he obligation of the *** Secretary of Treasury *** 

arises out of the want of consideration for the pledge and by the redemption of the 

pledge under HJR-192, Public Law 73-10 and 59 S.Ct. 847.@ Attached to the Bill were 

instructions on how to process it with the United States Treasury Department. The 

instructions stated that defendant had established a APersonal Treasury UCC Contract 

Trust Account@ through the Treasury Department, and that the Bill was a negotiable 

instrument that should be mailed to the Secretary of the Treasury (Secretary) for 

redemption. 

On February 8, 2005, defendant was sent a ANotice of Sale,@ stating that, 

pursuant to the Judgment entered on October 28, 2002, the subject property would be 

sold at a judicial sale on March 8, 2005. On March 1, 2005, defendant filed a pro se

AMotion to Vacate Sale with Prejudice,@ claiming that the Bill had been dishonored 

Athrough failure to process such tender in total satisfaction of the proclaimed liability.@ 

Defendant, citing section 3-603 of the Uniform Commercial Code (Code) (810 ILCS 5/3-

603 (West 2004)), argued that although the Bill had been dishonored, his obligation on 

the mortgage was discharged because he had tendered payment. The record contains 

no indication as to the disposition of defendant's motion. 
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Plaintiff purchased the subject real estate at a judicial sale on March 8, 2005. On 

March 21, 2005, the circuit court entered an order approving the judicial sale and 

directing the sheriff of Cook County to evict defendant from the subject property. 

On April 13, 2005, defendant filed a pro se APetition to Vacate a Void Judgment 

and Collateral Attack Under Authority of Illinois Statute.@ In that petition, defendant 

claimed that the judgment against him was void because he had tendered payment and 

was therefore discharged of his obligation to pay the mortgage. The circuit court denied 

the petition, and defendant filed this appeal. 

On appeal, defendant contends that the circuit court erred in denying his petition. 

 He specifically claims that the Bill was a valid negotiable instrument and, therefore, 

argues that the court lacked jurisdiction to enter the order approving the judicial sale 

because he had tendered payment through that Bill and was therefore discharged of his 

obligation under the mortgage. 

Although we have found no Illinois cases dealing with the issue presented in this 

appeal, we do find the California Appellate Court's recent decision in McElroy v. Chase 

Manhattan Mortgage Corp., 134 Cal. App. 4th 388, ___ P.3d ___, 36 Cal. Rptr. 3d 176 

(2005), instructive. In McElroy, plaintiff defaulted on a loan secured by a deed to his 

property and attempted to redeem the loan by tendering to defendant a ABonded Bill of 

Exchange Order@ (Bill) that is virtually identical to the Bill at issue in this appeal. 

McElroy, 134 Cal. App. 4th at 390, ___ P.3d at ___, 36 Ca. Rptr. 3d at 177. Attached to 

the Bill were instructions stating that the Bill was a negotiable instrument that could be 
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processed by mailing it to the United States Treasury Department and that plaintiff had 

established a APersonal UCC Contract Trust Account@ with the Treasury Department. 

McElroy, 134 Cal. App. 4th at 390, ___ P.3d at ___, 36 Cal. Rptr. 3d at 177. The Bill 

expressly stated that the Secretary's obligation to honor the Bill arose Aout of the want of 

consideration for the pledge and by the redemption of the pledge under Public 

Resolution HJR-192, Public Law 73-10 and Guaranty Trust Co. of N.Y. v. Henwood, 

307 U.S. 247, 59 S. Ct. 847, 83 L. Ed. 1266 (1939).@ McElroy, 134 Cal. App. 4th at 392, 

___P.3d at ___, 36 Cal. Rptr. 3d at 178-79. Defendant refused to process the Bill and 

subsequently sold plaintiff's property at a foreclosure sale. McElroy, 134 Cal. App. 4th 

at 390, ___ P.3d at ___, 36 Cal. Rptr. 3d at 178. 

On review, the court found that the Bill was not a negotiable instrument because 

it was not made Apayable to order or to bearer@ as required by the California Uniform 

Commercial Code and that it was not a check because it was not drawn on a bank. 

McElroy, 134 Cal. App. 4th at 392, ___ P.3d at ___, 36 Cal. Rptr. 3d at 179. The court 

further found that, although the Bill purported to identify the source of the Secretary's 

obligation to honor the Bill, the cited sources did not establish any such obligation. 

McElroy, 134 Cal. App. 4th at 392-93, ___ P. 3d at ___, 36 Cal. Rptr. 3d at 179. 

Therefore, the court concluded that the Bill was a Aworthless piece of paper@ that 

amounted to no tender at all and found that the foreclosure was proper. McElroy, 134 

Cal. App. 4th at 393-94, ___ P. 3d at ___, 36 Cal. Rptr. 3d at 179-81. 

In this case, the Bill tendered by defendant is not a negotiable instrument 
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because it is not made Apayable to bearer or to order,@ as required by section 3-104 of 

the Uniform Commercial Code. 810 ILCS 5/3-104(a)(1) (West 2004); see also Krajcir v. 

Egidi, 305 Ill. App. 3d 613, 621 (1999). Additionally, although a check may be a 

negotiable instrument even when not made payable to bearer or to order (810 ILCS 5/3-

104(c) (West 2004)), the Bill is not a check because it is not drawn on a bank (810 ILCS 

5/3-104(f) (West 2004)). 

We have also reviewed the sources identified in the Bill as giving rise to the 

Secretary's obligation to honor the Bill, and find that they create no such obligation. Nor 

do they discuss a APersonal Treasury UCC Contract Trust Account@ or the Aredemption 

of a pledge.@ The Bill is nothing more than words strung together on a piece of paper 

which lack any cohesive meaning and convey nothing. Under these circumstances, we 

find no error in the trial court's refusal to acknowledge defendant's Bill as a valid 

negotiable instrument. 

In reaching this conclusion, we reject defendant's reliance on section 3-603 of the 

Code (810 ILCS 5/3-603 (West 2004)) to argue that the court lacked jurisdiction to 

approve the sale because he had tendered payment to plaintiff and was thus relieved of 

his obligations under the mortgage. As discussed above, defendant did not tender 

Apayment@ but, rather, a piece of paper that was entirely lacking in value. Therefore, the 

Bill did not discharge defendant's obligation to pay the mortgage, and the circuit court 

did not error in approving the judicial sale of the property. 

Accordingly, the judgment of the circuit court of Cook County is affirmed. 
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Affirmed. 

CAHILL, P.J. and GORDON, J., concur.