Court Opinion

ID: 7004016
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:47:12.289295+00
Date Added: 2024-06-11T16:10:00.938207
License: Public Domain

Mr. Presiding Justice Waterman dissenting. Whether Charlotte Louis purchased the first mortgage and note before or after it became due is immaterial. There is no claim that more than $400 had been paid thereon before the assignment to her. Such payment she admits and sets up in her bill to foreclose. A payment in full of this note is claimed by appellants to have been made two years after her purchase and taking actual possession of this note and the mortgage securing the same. The final full payment claimed to have been made by Mr. and Mrs. Hass was not by money paid to Schintz, but by a note and mortgage for $900 to him made by them, which it was agreed by him should be in satisfaction of the $600 and interest unpaid upon the first note and mortgage, they receiving from him in cash the difference between such amount and $900. Payment made by a mortgagor to a mortgagee without notice of an assignment of the mortgage is in this state, as to the mortgage, binding upon the assignee thereof. Schintz had, after receiving the new note and mortgage, no claim under either, save for the money and services he advanced and rendered to Mr. and Mrs. Hass; these items amounted to $258. When he sold this second mortgage to Annie Johnson, while she took the negotiable note free from any defense thereto, the mortgage was good in her hands as against the makers, only to the extent and for the sum it was good when held by Schintz. Schintz then knew that there was of the first mortgage $600 and interest thereon unpaid. Annie Johnson and Schintz had record notice of the first mortgage then owned by and in the custody of Charlotte Louis. Annie Johnson thus took the second mortgage subject to the equitable rights of Charlotte Louis under the first. If the second mortgage were now owned by Schintz, it is clear that appellee would be entitled to foreclose her first mortgage, and that neither Schintz nor Mr. nor Mrs. Hass would have any defense thereto; while the latter could compel Schintz to credit $642 on the second mortgage and note. The consideration for the second mortgage was $258 given by Schintz, and the agreement by him to satisfy the first mortgage and note, upon which there was then outstanding $642. This agreement was not performed; consequently, as between him and Mr. and Mrs. Hass, the consideration for the second note and mortgage failed to that extent. Annie Johnson did not acquire as to the second mortgage, any greater equity than Schintz had therein, it not being a negotiable instrument. The defense thereto which the makers had when it was owned by Schintz was not lost by its transfer to another party. Olds v. Cummings, 31 Ill. 188; Towner v. McClelland, 110 Id. 550; Shippen v. Whittier, 117 Id. 282; McAuliffe v. Reuter, 166 Id. 496; Buehler v. McCormick, 169 Id. 269; Schultz v. Sroelowitz, 191 Id. 249; Carey v. Kutten, 98 Ill. App. 197. Nor did the transfer of the second mortgage to Annie Johnson give to her, as against Charlotte Louis, any greater equity than Schintz had before had. Annie Johnson had, when she took the second mortgage, notice by the record that the'first mortgage was on record and unreleased. The question before us is not what are the obligations of Mr. and Mrs. Hass upon their note for $900, held by Annie Johnson, nor what is their obligation to appellee upon the note held by Charlotte Louis; but in these proceedings to foreclose, what liens exist upon the mortgaged property under the respective mortgages in favor of appellee and Annie Johnson, and to what extent, if any, has one priority over the other. The situation is ’not what it would be, had Mr. and Mrs. Hass paid Schintz $642 in money, in satisfaction of the first mortgage. The giving to Schintz of a note in which was included that sum was neither a discharge of the mortgage then held by Charlotte Louis, nor was it a payment of the note then held by her. A party paying a note should insist on the presentation of the paper by the party demanding payment, in order to make sure that it is at the time in his possession and not outstanding in another. And, if at the time he makes payment it is outstanding, and held by another, he may be compelled to pay it again. Towner v. McClelland, 110 Ill. 542; Daniel on negotiable Instruments, Sec. 1227, 1230-1233; Wheeler v. Guild, 20 Pickering, 545; Davis v. Miller, 14 Gratt. 1; Baxter v. Little, 6 Metcalf, 7. If whether the first mortgage was.assigned to Charlotte Louis before it became due is in any way material, it may be observed that however invalid the agreement for an extension of the first mortgage may have been because not signed by Theodore Schintz, it was not only signed by Challes and Magdalena Hass, but delivered to and acted upon by Schintz, he receiving interest notes from Mr. and Mrs. Hass for the extension, and also receiving from them, from time to time, payment upon four of such interest notes for $21 each. Such extension is set up in the bill filed by Charlotte Louis as a valid and binding agreement. The answer of Charles and Magdalena Hass also sets up such extension as a valid agreement. The payment made by Charles and Magdalena Hass to Theodore Schintz of the balance unpaid upon the mortgage then held by Charlotte Louis was made, as they understood, upon notes and mortgage not due; such mortgage and notes having been, as they understood, extended for the term of three years.