Court Opinion

ID: 9742325
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:10:53.133088+00
Date Added: 2024-06-11T07:24:31.119386
License: Public Domain

Mr. PRESIDING JUSTICE SCOTT, specially concurring: My concurrence is mandated in light of our supreme court’s decision in Baker v. Loves Park Savings & Loan Association (1975), 61 Ill. 2d 119, 333 N.E.2d 1. It should be noted with interest, however, that in Baker, while the court held a “due on sale” provision to be a permissible restraint on the alienation of property, the real issue to be determined in Baker was whether a provision in a note providing for an increase in interest of 1 percent above the original rate was permissible. The original interest rate in Baker was 6 percent per annum. Baker was decided prior to the present inflationary era of our economy. The imposition of results which were just and not prohibitory in pre-inflation times might well not be so easily reached and imposed in the atmosphere of our present economy. The citation in the majority opinion of the case of Sleven Container Corp. v. Provident Federal Savings & Loan Association (1981), 98 Ill. App. 3d 646, adds little if anything to the majority opinion as to the validity of a “due on sale” clause, since such question was not an issue in the case. In the instant case, Provident acknowledges that one of the purposes in enforcing the “due bn sale” clause is to seek an increase in its interest rate. Illinois as yet has not addressed the issue of whether a bank can validly accelerate a mortgage debt pursuant to a due-on-sale clause solely for the purpose of increasing the interest rates in its mortgage portfolio. When a mortgagee’s security is not jeopardized, then in my opinion a due-on-sale clause should be inoperative when the reason for enforcing the clause is to obtain for the mortgagee higher interest rates which are currently in effect. See “Due on Sale Clauses in Illinois,” authored by David L. Higgs, Southern Illinois University Law School, published in volume 5, page 35, The Illinois Fund Concept (Attorneys Title Guaranty Fund Inc. 1981). A solution of the problems and in my opinion the alleviation of the injustices which in many instances result by enforcement of due-on-sale clauses in our present economy will hopefully be considered by our supreme court or receive the attention of our General Assembly.