Court Opinion

ID: 9714640
Source: CourtListenerOpinion
Date Created: 2023-08-26 05:42:01.922498+00
Date Added: 2024-06-11T18:23:27.379936
License: Public Domain

Mr. JUSTICE STOUDER dissenting: I disagree with the result reached by the majority of the Court. I cannot subscribe to the view that the operation of par. 63, ch. 95, Ill. Rev. Stat. 1963, may depend on whether the senior mortgagee decides to be courteous. It requires no citation of authority to support the general proposition that the law does not favor mortgage foreclosures. Equitable principles have generally been applied to mortgage foreclosures in an effort to protect the rights of all parties concerned. Concededly, par. 63, ch. 95, Ill. Rev. Stat. 1963, is designed to avoid the necessity of mortgage foreclosure. Such par. is a legislative recognition that to permit a junior mortgagee to cure delinquencies of principal and interest due on a senior mortgage protects both the junior mortgagee and mortgagor without detriment to the security interest of the senior mortgagee. If a junior mortgagee has a right to cure delinquencies, such right by necessary implication and by the plain purpose of the statute, includes the right to ascertain whether a delinquency exists and if so the amount thereof. Indeed the plaintiff does not dispute the right of the junior mortgagee to inquire but rather argues that it has no duty to respond. This is to me a fallacious argument and finds no support either in the statute or reason. Emphasizing the fallacy of such argument is plaintiff’s further contention that the defendant junior mortgagee could and should have proceeded to cure the delinquencies under par. 57, ch. 95, Ill. Rev. Stat. 1963. This section provides in substance that for a limited time after foreclosure proceedings are instituted, the mortgagor or his successor in interest may cure delinquencies by payment thereof together with costs and attorney’s fees. Sec. 57 and 63 supra, establish a legislative policy which recognizes that temporary defaults may be remedied without injustice to the security holder. If the delinquencies are cured under par. 63 no question of payment of attorney’s fees or costs arises. Consequently it is of substantial benefit for the junior mortgagee to be able to cure the delinquencies under par. 63 prior to the institution of foreclosure proceedings. According to the pleadings of the defendant Bloomington Loan, the plaintiff refused to respond to a personal inquiry and neglected to respond to a certified mail request seeking information concerning the amount of any delinquency. Plaintiff’s negative response was unconditional and was in fact and legal effect a refusal by the plaintiff to recognize the right of the defendant to cure such delinquencies as may have existed. The statute does not vest such mortgagee with discretion to recognize the right of a junior mortgagee to cure a delinquency and as a result which approves of such mortgagee’s arbitrary discretion is not in accord with the statute. In my view a senior mortgagee may not by his conduct prevent a junior mortgagee from remedying or curing a default in the senior obligation where, as in the case at bar, a senior mortgagee refuses without justification to indicate the amount of any delinquency. The right of a junior mortgagee to cure any delinquency is not terminated but merely suspended or delayed until such information is provided. Accordingly I believe that the facts set forth in the affirmative defense and motion for accounting did constitute a defense to the mortgage foreclosure and consequently the pleadings should not have been stricken. The suggestions of the majority concerning what a junior mortgagee should do are curious and to me demonstrate the unsoundness of the result reached. First the majority suggests that a junior mortgagee should send the senior mortgagee a generous amount of money with the request that whatever was not needed to bring the loan up to date should be returned to the junior mortgagee. This is a curious application of the principles of tender and at best may be described as a unique procedure without statutory basis. More importantly such a suggestion is inconsistent with the main holding of the majority namely that the section imposes no duties on a senior mortgagee. Also the majority suggests that after foreclosure proceedings are filed the junior mortgagee can and therefore is compelled to resort to discovery procedures to ascertain the amount of delinquencies. The issue involved in this case is the sufficiency of defendant’s pleadings and I am aware of no rule which authorizes the determination of such sufficiency on the basis of what could or should have been ascertained by discovery procedures. Usually the reverse is true. Discovery is only appropriate if based on pleadings. In summarizing this aspect of the case it appears to me that rewarding a senior mortgagee for its wrongful conduct is contrary to equitable principles. On the basis of the pleadings of defendant which were stricken, the court ought to have required that the senior mortgagee be required to accept an amount equal to the delinquent payments of principle and interest. On the basis of the pleadings and statute the amount of such delinquency should have been determined and the defendant afforded a reasonable time to make such payment. If payment was not made within such time by the junior mortgagee then foreclosure would be appropriate. Lastly I believe that the rents received by the plaintiff under the assignment in the mortgage should have been applied to the indebtedness as and when received. (Hitchcock v. Fortier, 65 Ill. 239, Branch v. Barnes, 19 Ill.App.2d 472, 154 N.E.2d 337.) The plaintiff did not receive such rents as a receiver and I am not aware of any equitable principle that requires or authorizes the mortgagee to be treated like the receiver. Plaintiff apparently received amicable possession of the real estate and its request for the appointment of a receiver was never acted on. Plaintiff’s receipts of rents was independent of the foreclosure proceeding. Consequently in my view it was obligated to apply such rents to the underlying obligation.