Court Opinion

ID: 9525736
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:07:10.080115+00
Date Added: 2024-06-11T13:16:50.713812
License: Public Domain

JUSTICE TULLY, dissenting: I must respectfully dissent from the majority’s opinion as I believe the assignment of rents involved in this case is enforceable under article 9 of the Uniform Commercial Code (UCC) (Ill. Rev. Stat. 1989, ch. 26, par. 9—101 et seq.; Ind. Code Ann. §26—1—9—101 et seq. (West 1980)). Accordingly, I would reverse the trial court’s order of February 8,1991, granting summary judgment in favor of Holland Farms. As the majority points out, Two Bar B failed to present to the trial court the issue of the applicability of article 9 of the UCC to this case; nevertheless, this court has the power to consider this argument and is not limited by the proceedings at the trial court level. (Hux v. Raben (1967), 38 Ill. 2d 223, 230 N.E.2d 831; In re Application of the County Treasurer (1975), 25 Ill. App. 3d 717, 323 N.E.2d 803.) I believe in order to effectuate an equitable and just resolution of this case we must examine this argument. Section 9—102 of the UCC makes the UCC applicable to any business transaction which is intended to create a security interest in personal property, including crops. (Ill. Rev. Stat. 1989, ch. 26, par. 9—102; Ind. Code Ann. §26—1—9—102 (West 1980).) An assignment of rents is not excluded under section 9—104 of the UCC and, thus, an assignment of rents is covered by provisions of article 9. (Ill. Rev. Stat. 1989, ch. 26, par. 9—104; Ind. Code Ann. §26—1—9—104 (West 1980).) Therefore, in the present case, the assignment of rents would clearly fall within the ambit of article 9. Section 9—503 of the UCC (Ill. Rev. Stat. 1989, ch. 26, par. 9—503; Ind. Code Ann. §26—1—9—503 (West 1980)) states that unless there is an exclusionary clause within a security agreement, a secured party, upon default, can take possession of the collateral, i.e., in this case, the monies received from the sale of the crops to Cargill, Inc., without judicial process. The majority believes that the case of Anna National Bank v. Prater, 154 Ill. App. 3d 6, 506 N.E.2d 769, is dispositive of this issue. However, I believe Anna is distinguishable from the case sub judice and, in fact, suggests a resolution inapposite of that contained in the majority’s opinion. Anna dealt only with a “rents and profits” clause under a mortgage document, not a transaction involving a separate chattel mortgage as in the case here. The quote given by the majority in footnote 2 of its opinion unfortunately truncates the following from the Anna opinion: “There is no question that growing crops may be the subject of an article 9 security interest before they have been severed from the land. Indeed, ANB, the mortgagee here, could have chosen to secure its loan to the [mortgagors] with an article 9 security interest on crops ‘growing or to be grown’ on the mortgaged property in addition to a mortgage on the real estate itself. Since ANB had no such security interest, ANB could claim the crops on the mortgaged premises only by foreclosing on its real estate mortgages and taking possession of the property before the crops were severed from the real estate. Thus, ANB’s interest in the crops was not an article 9 security interest and should not be so considered.” (Emphasis added.) Anna, 154 Ill. App. 3d at 18. Thus, Anna quite correctly concludes that a mortgagee can choose to secure its loan with a collateral article 9 security interest on crops growing or to be grown on the mortgaged property, in addition to a mortgage instrument on the land itself. It is my belief that the majority’s decision creates an additional burden upon secured creditors to file a lawsuit in the event of a relatively minor default, rather than simply executing on the assignment of rents: a ridiculous concept to behold. This holding creates yet another legal hurdle for individuals to surmount in a society already overburdened by litigation. Consequently, the judgment of the circuit court of Cook County should be reversed.