Court Opinion

ID: 6973852
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:07:26.432917+00
Date Added: 2024-06-11T16:08:54.147011
License: Public Domain

Mr. Chief Justice Hand delivered the opinion of the court: The contention made in this court by the appellants is, that on July i, 1897, interest was paid upon said promissory note in advance until January 5, 1898, the eEect of which, it is insisted, was to release said premises from the lien of said trust deed. The promissory note secured by said trust deed was introduced in evidence before the master, and there appeared endorsed thereon: “July 1, 1897.—Interest paid to July 5, 1897.—Interest paid to Jan’y 5, 1898,”—and such endorsement is relied upon by the appellants to establish an extension of the time of payment of said indebtedness so as to release said premises from the lien of said trust-deed. The payment of interest in advance is a good consideration for an agreement to extend the time of the payment of a promissory note. The endorsement, on a promissory note, of interest is not, however, alone sufficient to establish an extension of the time of payment of the promissory note so as to release a surety, or to release, as in this instance, the lien of a trust deed given by a third party to secure the payment of a promissory note. In order for the payment of interest in advance to work such a release, it is necessary to show that the payment of interest in advance was made without the assent of the surety or owner of the land covered by the trust deed and was received by a party authorized to agree to a valid extension, and the burden of proof is upon the party pleading the discharge to show those facts. (New York Life Ins. Co. v. Casey, 178 N. Y. 381; Shepherd v. May, 115 U. S. 505.) As the record does not show the payment of said interest was made in advance without [he assent of the appellants, or that the party to whom it was paid had authority to extend the time of the payment of said promissory note, the payment of such interest did not have the effect to discharge the lien of said trust deed, even though it was paid in advance. 1 It appears that endorsed upon the trust deed which was offered in evidence is the following agreement signed and sealed by Nimrod Lancaster: “I hereby agree that the said Charles E. Springer may have the loan mentioned within this trust deed, or any part of the said loan, renewed from time to time as he may see fit, and this trust deed will still act to secure the said loan and the principal note or notes in case of the renewal of the same or any part of it.” This agreement was coupled with an interest and was not revoked by the death of Nimrod Lancaster, (Benneson v. Savage, 130 Ill. 352,) and fully authorized the extension of the time of payment of the promissory note secured by said trust deed without affecting the lien of the trust deed. It also appears that the premises covered by said trust deed, and other lands owned by Nimrod Lancaster at the time of his death, were partitioned by a bill in chancery in the superior court of Cook county between the appellants, as devisees of Nimrod Lancaster, deceased, to which bill Eugene E. Prussing, as trustee, and the Illinois Trust and Savings Bank, were also parties, and that the superior court in that case held that the trust deed in this suit sought to be foreclosed was a first and valid lien upon the premises covered by said trust deed, and that in this case, at the instance of the appellants, the decree directed the premises covered by said trust deed to be sold according to the subdivision of said premises established by that decree. It is clear, we think,—first, that the lien of said trust deed was not released by a valid extension of the time when the indebtedness secured thereby should become due; second, that if such extension was made it was authorized by the agreement of the parties entered into at the time the trust deed was executed; and third, that the decree in the partition suit between the appellants is res judicata as to them of the question that said trust deed' was a' valid lien upon said premises. It is also contended, if it were conceded that said trust deed was .a valid lien upon the premises covered thereby, that the court erred in continuing the receivership after the approval of the master’s sale under the foreclosure decree and in directing that the rents collected by the receiver during the period of redemption be applied in payment of the deficiency decree. The premises did not sell for enough to satisfy the foreclosure decree, and there was a deficiency decree for $5598.44 in favor of appellees. In such case the practice is a proper one to apply to the satisfaction of such deficiency decree, through a receiver, the rents which may accrue upon the premises covered by the trust deed during the redemption period; and this may be done by a court of equity, although the trust deed is silent upon the subject of the application of the rents to the payment of any deficiency that may remain after the sale of the land covered by the trust deed. Haas v. Chicago Building Society, 89 Ill. 498; First Nat. Bank of Joliet v. Illinois Steel Co. 174 id. 140. The appellants rely upon other grounds for a reversal. As it clearly appears, however, from this record, that the indebtedness of the appellee the Illinois Trust and Savings Bank was a first lien' upon said premises, secured by. said trust deed, and that the decree of foreclosure was properly entered, and that the court did not err in the application of the rents received by its receiver during the period of redemption to the satisfaction of said deficiency decree, we do not deem it necessary to consider in this opinion the other points raised by appellants. The judgment of the Appellate Court will be affirmed. Judgment afhrmed.