{ "id": 3554255, "name": "THE FIRST STATE BANK OF MAPLE PARK, Plaintiff-Appellant, v. THE De KALB BANK, as Trustee, et al., Defendants-Appellees", "name_abbreviation": "First State Bank v. De Kalb Bank", "decision_date": "1988-10-26", "docket_number": "Nos. 2-88-0165, 2-88-0178 cons.", "first_page": "812", "last_page": "818", "citations": [ { "type": "official", "cite": "175 Ill. App. 3d 812" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "44 N.E. 411", "category": "reporters:state_regional", "reporter": "N.E.", "year": 1896, "opinion_index": 0 }, { "cite": "162 Ill. 158", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5511943 ], "year": 1896, "pin_cites": [ { "page": "161" } ], "opinion_index": 0, "case_paths": [ "/ill/162/0158-01" ] }, { "cite": "48 N.E. 159", "category": "reporters:state_regional", "reporter": "N.E.", "opinion_index": 0 }, { "cite": "168 Ill. 444", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3187924 ], "opinion_index": 0, "case_paths": [ "/ill/168/0444-01" ] }, { "cite": "46 Ill. 288", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5297120 ], "weight": 2, "pin_cites": [ { "page": "291" } ], "opinion_index": 0, "case_paths": [ "/ill/46/0288-01" ] }, { "cite": "41 Ill. 215", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5217836 ], "weight": 3, "pin_cites": [ { "page": "219" }, { "page": "220" } ], "opinion_index": 0, "case_paths": [ "/ill/41/0215-01" ] }, { "cite": "525 N.E.2d 151", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "170 Ill. App. 3d 720", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3584621 ], "pin_cites": [ { "page": "724" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/170/0720-01" ] }, { "cite": "514 N.E.2d 216", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "161 Ill. App. 3d 201", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3467189 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/161/0201-01" ] }, { "cite": "350 N.E.2d 356", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "opinion_index": 0 }, { "cite": "39 Ill. App. 3d 379", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5383189 ], "weight": 3, "pin_cites": [ { "page": "385" }, { "page": "385" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/39/0379-01" ] }, { "cite": "45 N.E. 414", "category": "reporters:state_regional", "reporter": "N.E.", "weight": 2, "year": 1976, "opinion_index": 0 }, { "cite": "163 Ill. 646", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5509709 ], "weight": 2, "year": 1976, "pin_cites": [ { "page": "650" }, { "page": "650" } ], "opinion_index": 0, "case_paths": [ "/ill/163/0646-01" ] }, { "cite": "76 Ill. 261", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5314822 ], "opinion_index": 0, "case_paths": [ "/ill/76/0261-01" ] }, { "cite": "159 Ill. 311", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3130889 ], "year": 1875, "pin_cites": [ { "page": "317" } ], "opinion_index": 0, "case_paths": [ "/ill/159/0311-01" ] }, { "cite": "89 U.S. 381", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3408446 ], "weight": 4, "year": 1874, "opinion_index": 0, "case_paths": [ "/us/89/0381-01" ] }, { "cite": "37 Ill. App. 58", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 859935 ], "year": 1875, "opinion_index": 0, "case_paths": [ "/ill-app/37/0058-01" ] }, { "cite": "112 Ill. 247", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2860114 ], "weight": 2, "year": 1890, "pin_cites": [ { "page": "251" }, { "page": "252" } ], "opinion_index": 0, "case_paths": [ "/ill/112/0247-01" ] }, { "cite": "454 N.E.2d 357", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "pin_cites": [ { "page": "360" } ], "opinion_index": 0 }, { "cite": "117 Ill. App. 3d 1001", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3481151 ], "weight": 3, "pin_cites": [ { "page": "1005" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/117/1001-01" ] } ], "analysis": { "cardinality": 648, "char_count": 13920, "ocr_confidence": 0.757, "pagerank": { "raw": 1.3171724843194224e-07, "percentile": 0.6257770240658819 }, "sha256": "c8547e94b8bcc5c4cfe2e99230d24273b74e48d37a5d3391c1e0bd958bdce93a", "simhash": "1:b6c59436eaae31ce", "word_count": 2353 }, "last_updated": "2023-07-14T17:24:13.630237+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "THE FIRST STATE BANK OF MAPLE PARK, Plaintiff-Appellant, v. THE De KALB BANK, as Trustee, et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE REINHARD\ndelivered the opinion of the court:\nPlaintiff, the First State Bank of Maple Park, filed a complaint for replevin against the De Kalb Bank, as trustee, George Stratton, Mary Rita, Inc., and Mary R. Nelson. Plaintiff alleged that the De Kalb Bank, as trustee, and George Stratton (hereinafter defendants) had seized certain personal property under a landlord\u2019s distress warrant and that the seized property was plaintiff\u2019s collateral for a loan to Mary Rita, Inc., and Mary R. Nelson which was in default. Both plaintiff and defendants moved for summary judgment, seeking a declaration of priority over proceeds from the seized property which had been sold by agreement of the parties, yielding $18,684.13. The trial court granted defendants\u2019 motion for summary judgment and denied plaintiff\u2019s motion. Mary Rita, Inc., and Mary R. Nelson were defaulted and are not parties to plaintiff\u2019s appeal.\nThe following issues are raised on appeal: (1) whether there is any distinction between a landlord\u2019s lien on growing crops and his lien under a distress warrant on personal property other than crops for purposes of determining priority as against a security interest under article 9 of the Uniform Commercial Code (UCC) (Ill. Rev. Stat. 1985, ch. 26, par. 9\u2014101 et seq.); (2) whether the priority rules of article 9 apply to a conflict between a landlord\u2019s lien under a distress warrant and an article 9 security interest; and (3) whether, under the appropriate priority rule, a landlord\u2019s lien under a distress warrant is superior to an article 9 security interest which is perfected before the distress warrant is levied upon.\nLeave was granted to the Community Bankers Association of Illinois to file an amicus brief in support of plaintiff.\nPlaintiff\u2019s complaint for replevin alleged that plaintiff made a loan to Mary Rita, Inc., and Mary R. Nelson to enable them to purchase equipment and inventory for a health club. On October 23, 1986, Mary Rita, Inc., and Mary R. Nelson executed a promissory note in the amount of $40,000. On that same date, these two parties executed a security agreement, assigning as collateral for the loan, among other things, machinery, equipment and inventory, then owned or after-acquired, situated at the Olympic Health Club in Sycamore, Illinois. On November 5, 1986, plaintiff filed a financing statement containing the same description of collateral as contained in the security agreement.\nOn March 4, 1987, Mary R. Nelson executed a further promissory note for $2,000 payable to plaintiff. Both notes were defaulted upon, with a balance of $28,048.96 owing on the October 23 note and a balance of $2,000 owing on the March 4 note as of May 12, 1987. On June 15, 1987, defendants executed a distress warrant and seized property of Mary Rita, Inc., listed in the distress warrant and claimed by plaintiff as collateral.\nPlaintiff moved for summary judgment, and defendants thereafter moved for summary judgment. The trial court denied plaintiff\u2019s motion for summary judgment and granted defendants\u2019 motion holding that defendants were entitled to priority under their distress warrant over plaintiff\u2019s perfected article 9 security interest in spite of the fact that the perfection of plaintiff\u2019s security interest occurred prior to the creation, filing or service of, or any levy under the distress warrant by the defendants. The trial court held that in determining priorities between a landlord\u2019s lien under a distress warrant and a prior security interest, there is no distinction between a landlord\u2019s lien on crops and a landlord\u2019s lien on personal property other than crops. The trial court then concluded that this case was governed by Dwyer v. Cooksville Grain Co. (1983), 117 Ill. App. 3d 1001, 454 N.E.2d 357, where a landlord\u2019s lien on crops was held superior to an article 9 security interest.\nPlaintiff contends on appeal that the trial court erred in finding no distinction between a landlord\u2019s lien on crops and a landlord\u2019s lien on personal property other than crops for purposes of determining priority as against a security interest under article 9 of the UCC. Plaintiff further argues that, recognizing that a landlord\u2019s general lien on personal property under a distress warrant does not carry the same priority as a crop lien, defendants\u2019 lien is inferior to plaintiff\u2019s security interest under either the priority rules of article 9 of the UCC or under common law principles.\nIn support of the contention that a distinction must be drawn between a landlord\u2019s lien on crops and his remedy under a distress warrant, plaintiff notes that the two remedies are established under separate statutory provisions. The landlord\u2019s distress remedy arises under section 9\u2014301 of the Code of Civil Procedure, which provides:\n\u201cIn all cases of distress for rent, the landlord, by himself or herself, his or her agent or attorney, may seize for rent any personal property of his or her tenant that may be found in the county where such tenant resides, and in no case shall the property of any other person, although the same may be found on the premises, be liable to seizure for rent due from such tenant.\u201d (Ill. Rev. Stat. 1985, ch. 110, par. 9\u2014301.)\nThe landlord\u2019s remedy against crops specifically is set out in section 9\u2014316 of the Code of Civil Procedure and states, in pertinent part:\n\u201cEvery landlord shall have a lien upon the crops grown or growing upon the demised premises for the rent thereof *** and also for the faithful performance of the lease.\u201d Ill. Rev. Stat. 1985, ch. 110, par. 9-316.\nEarly cases underscore the fact that the landlord\u2019s lien on crops is separate from his lien on other personal property and that the statute creating a lien on crops does not extend to other personal property. (Herron v. Gill (1884), 112 Ill. 247, 251; Felton v. Strong (1890), 37 Ill. App. 58; see also Morgan v. Campbell (1875), 89 U.S. 381, 22 L. Ed. 796.) With regard to a landlord\u2019s liens for rent, it was the intention of the legislature to make a distinction between agricultural products raised on the farm and the general personal property of the tenant in the county. Morgan v. Campbell (1874), 89 U.S. 381, 22 L. Ed. 796.\nPlaintiff correctly notes that different rules apply with respect to the creation and priority of the two types of liens. The crop lien is a paramount lien which arises by operation of statute and does not depend upon the judgment of any court or the employment of any means for its enforcement. (Lillard v. Noble (1896), 159 Ill. 311, 317.) The landlord\u2019s lien in crops attaches from the time of the commencement of their growth. Watt v. Scofield (1875), 76 Ill. 261.\nIn contrast, the landlord\u2019s lien on personal property other than crops does not arise automatically, but requires the landlord to file a distress warrant with the circuit court. (Ill. Rev. Stat. 1985, ch. 110, par. 9\u2014302.) It is well established that the landlord\u2019s lien on personal property other than crops does not arise until the property is actually seized. According to Powell v. Daily (1896), 163 Ill. 646, 650, 45 N.E. 414: \u201c[A landlord\u2019s] lien, other than his statutory lien upon crops grown or growing upon the premises devised, does not attach until after the goods have been levied upon under the distress warrant.\u201d See also Peterson v. Ziegler (1976), 39 Ill. App. 3d 379, 350 N.E.2d 356.\nDefendants argue that in determining the priority between a landlord\u2019s lien and an article 9 security interest, no distinction should be made between a landlord\u2019s crop lien and a landlord\u2019s lien on dis-trained property. Defendants rely on the language of section 9\u2014104 of the UCC (Ill. Rev. Stat. 1985, ch. 26, par. 9\u2014104(b)), which states that article 9 \u201cdoes not apply *** to a landlord\u2019s lien.\u201d Defendants note that because this provision does not distinguish between the two types of liens, there is no distinction between the two types of landlord\u2019s liens for purposes of resolving priority disputes against article 9 security interests. We disagree. Section 9\u2014104 merely governs the applicability of the UCC to landlord\u2019s liens. It does not by its language suggest that under whatever priority rule is applied in a dispute between a landlord\u2019s lien and an article 9 security interest, distinctions between types of landlord\u2019s liens are to be ignored, and defendants cite no other authority for any such proposition.\nHaving determined that the UCC does not eliminate distinctions between a landlord\u2019s crop lien and a lien under a distress warrant, we now turn to the question of whether, in view of section 9\u2014104, conflicts between landlord\u2019s liens and article 9 security interests are governed by the priority rules of article 9. There is a split of authority in Illinois on this question. In Peterson v. Ziegler (1976), 39 Ill. App. 3d 379, 385, 350 N.E.2d 356, the Appellate Court for the Fifth District stated:\n\u201cThe purpose of section 9\u2014104(b), however, is only to indicate that article 9 does not govern the creation of a landlord's lien or the priorities between competing landlords\u2019 liens. In order for article 9 to be the comprehensive statute that it was meant to be on the subject of consensual security interests, article 9 must always supply a rule for determining the priorities between a consensual security interest and any other kind of lien.\u201d\nHowever, in Dwyer v. Cooksville Grain Co. (1983), 117 Ill. App. 3d 1001, 454 N.E.2d 357, the Appellate Court for the Fourth District specifically rejected the holding in Peterson, stating that \u201c[t]he language of 9\u2014104(b) and 9\u2014102(2) is crystal clear\u2014no part of article 9, including the priority rules, apply to a landlord\u2019s statutory lien.\u201d (117 Ill. App. 3d at 1005, 454 N.E.2d at 360.) The holding in Dwyer has been adopted by the Appellate Court for the Third District in Farmers Grain & Supply Co. v. Skinner (1987), 161 Ill. App. 3d 201, 514 N.E.2d 216.\nWe adopt the view of the Appellate Court for the Third and Fourth Districts that the UCC is inapplicable to priority conflicts between article 9 security interests and landlord\u2019s liens. The plain language of section 9\u2014104(b) states that article 9 does not apply to landlord\u2019s liens. The UCC contemplates resort to principles of law outside the code in situations to which provisions of the code are not applicable. (See Ill. Rev. Stat. 1985, ch. 26, par. 1\u2014103.) As the UCC, by its plain language, excludes from its coverage questions involving landlord\u2019s liens, non-UCC law should be applied.\nApplying non-UCC principles, generally a lien which is first in time has priority (Home Federal Savings & Loan Association v. Cook (1988), 170 Ill. App. 3d 720, 724, 525 N.E.2d 151) and is entitled to prior satisfaction out of the property it binds. (51 Am. Jur. 2d Liens \u00a752 (1970).) The rationale underlying the principle of \u201cfirst in time, first in right\u201d is that a lienor obtains rights in the charged property which reflect the state of title at the time the lien is created, and that, generally, a lienholder cannot acquire greater rights in the charged property than the lienee held. This is reflected in Tinney v. Wolston (1866), 41 Ill. 215, wherein it is stated that \u201c[t]here is no rule of law better recognized than that a person who gives to another a valid lien, or against whom the law has created a lien, is unable by any act of his short of discharging it, to impair or affect it. Nor can he, in conjunction with others, accomplish such a result.\u201d (41 Ill. at 219.) The Tinney court then stated that \u201cjudgment creditors had a right to enforce their lien precisely in the condition they obtained it, and to sell the property as the judgment debtors held it at the time the lien was created.\u201d 41 Ill. at 220.\nA landlord\u2019s lien under a distress warrant is not subject to any special priority in derogation of the general principle of \u201cfirst in time, first in right.\u201d In O\u2019Hara v. Jones (1867), 46 Ill. 288, it was stated that a landlord\u2019s statutory lien \u201cmay be enforced against all but prior liens and bona fide purchasers, without notice.\u201d (Emphasis added.) (46 Ill. at 291.) Furthermore, in Rand, McNally & Co. v. Francis (1897), 168 Ill. 444, 48 N.E. 159, it was held that where an assignee for the benefit of creditors takes possession before the levy of any distress warrant, the assignee\u2019s rights are superior to the landlord\u2019s. Further, where an execution is levied before any levy of the distress warrant, the latter is subject to the prior lien. Herron v. Gill (1884), 112 Ill. 247, 252.\nApplying the principle \u201cfirst in time, first in right\u201d to the instant case, defendants had no lien until June 1987, when they seized the property pursuant to a distress warrant. (See A. N. Kellogg Newspaper Co. v. Peterson (1896), 162 Ill. 158, 161, 44 N.E. 411; Powell v. Daily (1896), 163 Ill. 646, 650, 45 N.E. 414; Peterson v. Ziegler (1976), 39 Ill. App. 3d 379, 385, 350 N.E.2d 356.) Plaintiffs security interest, securing payment of the October 23 note, had attached and was perfected by November 6, 1986, the date on which a financing statement was filed as required by sections 9\u2014302 and 9\u2014303 of the UCC. (Ill. Rev. Stat. 1985, ch. 26, pars. 9\u2014302, 9\u2014303.) Therefore, plaintiff\u2019s security interest is entitled to satisfaction prior to defendants\u2019 lien.\nThe judgment of the circuit court is reversed, and summary judgment is entered in favor of plaintiff.\nReversed.\nNASH and WOODWARD, JJ., concur.", "type": "majority", "author": "JUSTICE REINHARD" } ], "attorneys": [ "Wiley W. Edmondson and Charles F. Haverty III, both of Brady, McQueen, Martin, Collins & Jensen, of Elgin, and Krupp & Krupp, of De Kalb, for appellant.", "Robert P. Carlson, of De Kalb, for appellees.", "Joseph M. Ambrose, of Saint & Ambrose, P.C. of Bloomington, for amicus curiae Community Bankers Association of Illinois." ], "corrections": "", "head_matter": "THE FIRST STATE BANK OF MAPLE PARK, Plaintiff-Appellant, v. THE De KALB BANK, as Trustee, et al., Defendants-Appellees.\nSecond District\nNos. 2\u201488\u20140165, 2\u201488\u20140178 cons.\nOpinion filed October 26, 1988.\nWiley W. Edmondson and Charles F. Haverty III, both of Brady, McQueen, Martin, Collins & Jensen, of Elgin, and Krupp & Krupp, of De Kalb, for appellant.\nRobert P. Carlson, of De Kalb, for appellees.\nJoseph M. Ambrose, of Saint & Ambrose, P.C. of Bloomington, for amicus curiae Community Bankers Association of Illinois." }, "file_name": "0812-01", "first_page_order": 834, "last_page_order": 840 }