Illinois Appellate Court Reports

MULHOLLAND v. LANDISE, 284 Ill. App. 237 (1936) 1 N.E.2d
255 Robert T. Mulholland et al., Appellees, v. Thomas H.
Landise and Unknown Owners, Appellants. Gen. No. 38,598.
Appellate Court of Illinois, First District. Opinion filed
March 23, 1936.

1. FORECLOSURE OF MORTGAGES — remedy against lienor
not made party to original foreclosure proceedings.
Successors in title of mortgagee under trust deed who had
purchased mortgaged premises at foreclosure sale held
entitled to bring foreclosure proceedings under same trust
deed against lienors who had not been made parties to prior
foreclosure proceedings, as against the contention that a
bill to compel lienor to redeem from the former sale was
the sole remedy, because the trust deed, notes, etc., were
merged in the first decree. Page 238

2. MORTGAGES — bill to foreclose mortgage and bill
to compel exercise of right of redemption distinguishable.
There is a clear distinction between a bill to foreclose a
mortgage and a bill to obtain or compel exercise of the
right of redemption.

Appeal by defendants from the Circuit Court of Cook
county; the Hon. JOHN PRYSTALSKI, Judge, presiding. Heard
in the first division of this court for the first district
at the December term, 1935. Affirmed. Opinion filed March
23, 1936.

THOMAS H. LANDISE and ODE RANKIN, both of Chicago, for
appellants; ODE RANKIN, of counsel.

BRENNER & McBRIDE, of Chicago, for appellees; THOMAS G.
McBRIDE, of counsel.

MR. JUSTICE MATCHETT delivered the opinion of the court.

Plaintiffs filed a bill to foreclose a trust deed and made
defendants thereto Thomas H. Landise (a judgment creditor
of the grantors named in the trust deed who had perfected
the lien of his judgment against the premises) and unknown
owners. Landise answered, admitting the material averments
of the bill as to the execution of the notes, trust deed,
etc., but setting up by way of defense that Thomas
Mulholland, deceased, plaintiffs’ predecessor in title, had
filed a prior bill to foreclose the same trust deed and in
that proceeding obtained jurisdiction of the parties; that
a decree of foreclosure and sale was entered, and that the
master sold the premises to Thomas Mulholland for
$11,488.30; that the sale was approved by the court on May
3, 1933; that the premises were not redeemed, and a deed
thereto was duly issued to the purchaser; that defendant
was not made a party to the proceeding, notwithstanding his
lien against the premises, and that by reason of this prior
proceeding, the notes, trust deed, etc., were merged in the
decree entered in that case and Page 239 lost their legal
existence; that plaintiffs could not maintain a second
foreclosure against the same property for the same
indebtedness; that plaintiffs, upon the expiration of the
period of redemption, became vested with the fee simple
title and could not in this suit foreclose against

Plaintiffs filed a motion in the nature of a demurrer to
strike the answer as substantially insufficient in law in
certain specified respects: because the right of plaintiffs
to foreclose the trust deed was not affected by a former
suit, to which defendant Landise was not a party and which
was as to him a nullity; the right of defendant was only to
redeem from the mortgage the principal debt, interest,
taxes paid, and the costs of the suit at bar; defendant was
bound by the mortgage but not by the decree of sale, and
Thomas Mulholland lost no equity as against Landise in the
former suit; plaintiffs were entitled to the mortgage and
its incidents by descent from Thomas Mulholland and became
the equitable assignees of the mortgage, but the right of
Landise to redeem was not thereby affected; plaintiffs,
whose rights of lien and equity under the mortgage were
prior to the right of redemption of Landise, had a right to
foreclose the mortgage by the usual and ordinary process as
against him until the debt was paid in full.

March 28, 1935, the court sustained the motion to strike
the answer, and on May 18th, for failure of Landise to file
an amended answer, entered his default. A decree finding
that the sum of $17,085.30 was due on the mortgage was
thereafter entered, and upon default in payment the master
to whom the cause had been referred sold the premises to
plaintiffs. The report of sale of the master showed a
deficiency of $2,488.96, for which plaintiffs were given a
lien on the rents pending the period of redemption. Page

Defendant Landise appeals, contending that plaintiffs’
remedy was not by a bill to foreclose but by way of a bill
to compel defendant to redeem from the sale under the first
foreclosure; that the right of an omitted lienor to redeem
and the right of a purchaser at the sale to compel
redemption are reciprocal rights recognized in equity which
may be waived or completed, and that property cannot be
twice subjected to the same debt. Defendant cites a number
of cases in which under the circumstances existing in each
of them, a party was granted leave to redeem by a court of
equity. These cases are all clearly distinguishable from
the instant case, in that in every one of them the person
entitled to redeem appeared and obtained a decree upon his
own initiative, allowing him to make redemption by paying
the debt, interest and costs within the time fixed, in
default of which his bill was dismissed and he forever
barred from his equity of redemption. As plaintiffs point
out none of these cases was a bill to compel redemption,
nor in any one of them was the decree prayed by a
complainant who was in the position in which these
plaintiffs appear to be. Indeed, plaintiffs assert that a
bill to compel redemption is not known to equity practice,
and they say that no such case can be found in the books.
Defendant replies that a bill to foreclose a mortgage is in
the nature of a bill to compel redemption. There is,
however, a clear distinction between a bill to foreclose a
mortgage, or any other lien, and a bill to obtain or compel
the exercise of the right of redemption, and this
distinction is recognized in the cases cited by defendant,
namely, Harper v. Ely, 70 Ill. 581; Decker v. Patton, 120
Ill. 464; Bremer v. Calumet & Chicago Canal & Dock Co.,
127 Ill. 464; Chicago & Calumet Rolling Mill Co. v.
Scully, 141 Ill. 408.

In Decker v. Patton, Decker, who had a subordinate
interest in the premises, had not been made a party to
Page 241 the suit to foreclose. The property was sold, and
complainant Patton purchased it. Decker then filed a bill
to redeem. The decree found that Decker should be allowed
to redeem upon paying a certain amount found due; that in
default of such payment within the time specified, the bill
would be dismissed and he barred from all equity of
redemption. Decker sued out his writ and argued error in
that the decree did not direct a sale of the premises. The
Supreme Court said that the time allowed was quite liberal,
and that unless the law imperatively demanded a resale in
case of default, no good reason existed for the insertion
of such a provision in the decree. The opinion says:

“But it is said in the argument, that the property was
worth more than the mortgage debt, and if there were
judgment creditors, it was erroneous to decree a strict
foreclosure. Had this been a bill to foreclose a mortgage,
and had a decree been rendered cutting off the rights of
parties in interest, without a sale of the mortgaged
premises, and denying the redemption provided by the
statute, there might be force in the argument. But such was
not the case. . . . The decree which was rendered in this
case may, and probably does, cut off all equities and
rights of Decker in case he fails to redeem within the time
prescribed by the decree, but that does not render it a
strict foreclosure decree, as contended by counsel for
plaintiff in error. On the other hand, it is an ordinary
decree on bill to redeem.”

In support of his contention that plaintiffs could
maintain a bill in this suit to compel redemption,
defendant cites Rose v. Walk, 149 Ill. 60. In that case a
bill was filed to foreclose a junior mortgage against
purchasers at a foreclosure sale under a senior mortgage.
Complainants did not offer to redeem; they averred that
they had not been made defendants to the foreclosure of the
senior mortgage. They claimed the Page 242 right to
foreclose their mortgage subject to the lien of the senior
mortgage because they were not bound by that decree, not
being parties to the proceedings, but the court drew a
distinction between the foreclosure of a second mortgage
before and after the foreclosure of the first, holding that
after the foreclosure and sale under the first mortgage,
“the interest theretofore existing under the senior
mortgage and the equity of redemption are merged, and the
grantee in such conveyance takes the fee subject only to an
equitable right of redemption in junior incumbrancers who
were not parties to the decree of foreclosure.” The court
added: “Nothing remained in such junior mortgagees except a
right in equity to redeem, and, upon redemption, to subject
the land to the lien of their mortgage.”

Defendant reasons that as by such proceeding there the
junior incumbrancers lost their right to foreclose against
those whose rights had been merged with those of the
purchaser at the senior lien sale, the purchaser here lost
his right to foreclose against the junior lienor’s right of
redemption. The situations are not analogous, in that in
the first case as against the junior lienor, nothing was
left in the owner of the equity of redemption which could
be made the subject of levy or appropriation; while here,
as against the person taking title through the senior
mortgage sale, there is outstanding a statutory right of
redemption which must be foreclosed in some appropriate way
in order to vest a clear title in the owner.

There are a number of cases where the nature of the right
of the inferior lienor as against the purchaser has been
considered. In Bradley v. Snyder, 14 Ill. 263, the court
held the secondary lienor in the exercise of his right to
redeem was bound by the mortgage and not by the sale, and
in Walker v. Warner, 179 Ill. 16, the court held that a
purchaser from a mortgagor, Page 243 which purchaser had
not been made a party to the foreclosure of the mortgage,
merely succeeded to the rights of the mortgagor, and that
the failure to make him a party did not affect the validity
of the decree but left his right of redemption unimpaired;
and that this right was an equitable one which it was
necessary to assert in a court of equity.

In Rodman v. Quick, 211 Ill. 546, Quick, holder of the
first mortgage, foreclosed, failing to make the trustee of
a second and inferior mortgage a party. There was a decree
of sale, and the holder of the second mortgage filed a bill
to redeem from the Quick mortgage. The court said:

“Where the foreclosure proceedings are irregular for the
want of proper parties and the mortgagee purchases at the
sale, it amounts to no more, so far as relates to the
rights of persons not made parties, than an entry for
condition broken, and if a stranger to the proceedings and
mortgage becomes a purchaser, he will, as to those not made
parties and having an equity of redemption, take an
equitable assignment of the mortgage. Jackson v. Bowen, 7
Cow. 13; Robinson v. Ryan, 25 N.Y. 320; Ten Eyck v. Casad,
15 Iowa, 524.”

In Odell v. Levy, 224 Ill. App. 345, one Russell became
the purchaser at the foreclosure sale held June 25, 1917.
April 22, 1918, by supplemental bill certain minors who had
been omitted (inadvertently) as defendants were brought in,
and July 26, 1918, complainants procured a supplemental
decree, making the original decree binding upon the omitted
defendants with the exception that they were given until
October 31, 1918, to redeem from the sale, the decree
providing that upon failure to redeem within that time they
should be barred and the bill dismissed. This decree was
reversed in Odell v. Levy, 307 Ill. 277. The Supreme Court
said in substance that it was a rule of chancery practice
that by filing an amended or supplemental bill Page 244
all previous decretal orders were vacated and defendants had
a right to answer; that such a bill made a new case, and
defendants had a right to answer both the original and the
supplemental bill. The court added:

“The relief sought by the supplemental bill was to make
the decree of foreclosure already rendered, and the sale
already made, binding on the plaintiffs in error
(defendants). This could not be done. The decree included
costs and a solicitor’s fee of $1,200, and these charges
were included in the amount which plaintiffs in error would
have been required to pay to prevent a sale. The plaintiffs
in error had a right to redeem from the mortgage even after
the decree and after the sale, which were both void as to
them, without paying any of the costs incurred in the
foreclosure proceeding; and this would be so if they had
come into court as complainants, asking to be allowed to
redeem in equity. (Rodman v. Quick, supra.) Clearly the
plaintiffs in error were entitled to redeem the premises,
without regard to the void decree, by payment of the notes,
with the interest, and so prevent a foreclosure or sale.
Their liability could not be increased by a proceeding to
foreclose the mortgage to which they were not parties.
(Moore v. Kirby, 76 Wis. 273.) The court had no
jurisdiction of the plaintiffs in error in the original
suit, and the purchase price at the sale under the original
decree could not be the measure of the amount required to
redeem. (Bradley v. Snyder, 14 Ill. 263.) The plaintiffs in
error are bound by the mortgage but not by the decree or
sale. The statute secures to the mortgagor the right to
redeem from a decree of foreclosure within 12 months after
a sale under the decree, but the decree under review cuts
off the right to redeem without any decree of foreclosure.
The defendants in error had a right to foreclose their
mortgage against the plaintiffs in error, but they could
not make the plaintiffs in error parties to a decree of
foreclosure Page 245 rendered in their absence and without
an opportunity for a hearing. Their supplemental bill, if
properly amended, may be sustained as a bill seeking
original relief by the foreclosure of their mortgage, but
as against the plaintiffs in error the original decree can
be given no effect whatever.”

In Culver v. Lincoln Sav. & Bldg. Ass’n, 271 Ill. App. 91,
the Appellate Court for the Third District had before it a
case in which complainant (purchaser at a foreclosure sale)
filed a bill against the holder of a subordinate lien
against the premises who had inadvertently been omitted as
a party to the foreclosure proceeding. The bill prayed the
entry of a decree providing that if there was no redemption
by the mortgagor or his assigns within 12 months from the
foreclosure sale, the junior creditor should be allowed to
redeem by paying either the amount of the mortgage
indebtedness or the amount bid at the foreclosure sale
within the limited time, and that in default of such
redemption he should be foreclosed of all interest in the
realty. The decree was entered as prayed. Upon appeal
defendant contended that the sale under the foreclosure
discharged the lien of the first mortgage; that complainant
had no interest under which she could maintain her suit.
The Appellate Court reviewed all the authorities, and while
holding that complainant could maintain her suit, further
held that defendant lienor could not be bound by the former
decree in the foreclosure case. The court said:

“The decree in this cause, entered December 23, 1931,
bound appellant by the results of the sale in the former
case and found it was a beneficial sale in the interest of
appellant. This was error.

“The decree further found that appellant should have the
right to redeem within three months after May 27, 1932.
This was error. Appellant should be decreed its full
statutory time to redeem following a Page 246 sale in
this cause of action, and appellant should not be held to
pay any of the costs of the former suit and proceeding.”

The above cases set forth the law as it exists in Illinois
and are, we think, controlling. However, in Parker v.
Child, 25 N.J. Eq. 41, a case decided in 1874, the Court of
Errors and Appeals of New Jersey held that the purchaser
under foreclosure of a first mortgage could file a bill to
compel a second mortgagee, who had been omitted as a
defendant to redeem from the sale or be foreclosed. The
question there seems to have been considered without regard
to any statutory right of redemption such as now exists in
Illinois, and the question as to whether the remedy of
complainant by such a bill was exclusive does not seem to
have been considered.

Whatever the rule may be in any other State, we hold that
plaintiff in such case is not, in Illinois, compelled to
rely upon such remedy exclusively. The Illinois decisions
above reviewed show that so far as defendant was concerned,
the mortgage notes, etc., were not merged in the original
foreclosure decree or destroyed by it. As to defendant,
that decree was null and void. His lien by reason of his
judgment was a property right of which under our statute he
could not be deprived without a proceeding which would
preserve to him his right to have the mortgage and
indebtedness proved by competent testimony and assure to
him his right of redemption. The usual method of
determining these matters is by a bill to foreclose the
mortgage. This defendant had not been foreclosed by the
former proceeding because as to him it was a nullity. The
method adopted by plaintiffs seems to preserve every
possible right of defendant and to place upon him no unjust
burden. Defendant cannot be permitted to assume
inconsistent positions. He cannot be heard to say that the
former decree of foreclosure is void and Page 247 at the
same time assert that the mortgage and indebtedness were
merged in it. We do not doubt that defendant Landise, prior
to the beginning of plaintiffs’ suit, might have filed a
bill to redeem, or possibly in this suit he might have
filed a counterclaim asking such relief. Ill. State Bar
Stats. 1935, ch. 110, sec. 38, § 166. He did not
avail himself of his right in this respect. His position
seems to be that plaintiffs’ only and exclusive remedy was
to file a bill against him to compel him to do that which
on his own volition he was entitled but failed to do. In
view of the position defendant assumed, plaintiffs are in
equity deemed to be, so far as defendant is concerned,
equitable assignees of the first mortgage. It follows that
plaintiffs could, as such owners and assignees, foreclose
that mortgage as against any person holding a valid
subordinate lien which had not been foreclosed. The method
adopted protects every equitable and legal right of

The decree is affirmed.


McSURELY, P. J., and O’CONNOR, J., concur.