{ "id": 2432465, "name": "THE ROCK ISLAND BANK, Plaintiff-Appellee, v. TIMOTHY O. ANDERSON et al., Defendants (First Federal Savings and Loan Association of Davenport, Defendant-Appellant)", "name_abbreviation": "Rock Island Bank v. Anderson", "decision_date": "1989-02-03", "docket_number": "No. 3-88-0184", "first_page": "1068", "last_page": "1073", "citations": [ { "type": "official", "cite": "178 Ill. App. 3d 1068" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "431 A.2d 862", "category": "reporters:state_regional", "reporter": "A.2d", "opinion_index": 2 }, { "cite": "179 N.J. Super. 307", "category": "reporters:state", "reporter": "N.J. Super.", "case_ids": [ 916972 ], "opinion_index": 2, "case_paths": [ "/nj-super/179/0307-01" ] }, { "cite": "56 N.E.2d 649", "category": "reporters:state_regional", "reporter": "N.E.2d", "pin_cites": [ { "page": "652" } ], "opinion_index": 2 }, { "cite": "323 Ill. App. 594", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 4968254 ], "opinion_index": 2, "case_paths": [ "/ill-app/323/0594-01" ] }, { "cite": "374 N.E.2d 1028", "category": "reporters:state_regional", "reporter": "N.E.2d", "pin_cites": [ { "page": "1030" } ], "opinion_index": 2 }, { "cite": "58 Ill. App. 3d 811", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5626421 ], "opinion_index": 2, "case_paths": [ "/ill-app-3d/58/0811-01" ] } ], "analysis": { "cardinality": 636, "char_count": 11694, "ocr_confidence": 0.792, "pagerank": { "raw": 8.746149901732063e-08, "percentile": 0.4947668763700123 }, "sha256": "b7c5f60b879672ea3102a3c870ed5d0a45cb8657761b208af601c3316d2e612c", "simhash": "1:f6080cf73b045f74", "word_count": 1985 }, "last_updated": "2023-07-14T17:15:09.210343+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "THE ROCK ISLAND BANK, Plaintiff-Appellee, v. TIMOTHY O. ANDERSON et al., Defendants (First Federal Savings and Loan Association of Davenport, Defendant-Appellant)." ], "opinions": [ { "text": "JUSTICE HEIPLE\ndelivered the opinion of the court:\nThis case presents a controversy between two financial institutions, each of whom claim a preferred security interest in a mobile home. For purposes of clarity, we do not discuss extraneous and immaterial details appended to the dispute. The simple scenario is that the Andersons purchased a mobile home from the defendant, First Federal Savings and Loan Association of Davenport, Iowa (First Federal), on October 28, 1982. Pursuant to statute, First Federal perfected its security interest in the mobile home by filing same with the Illinois Secretary of State and obtaining a notation on the title document to that effect. Ill. Rev. Stat. 1987, ch. 951/2, par. 3 \u2014 202(b).\nSome three months later, the Andersons placed the mobile home on leased ground in Mercer County, Illinois. They next proceeded to place it on a cinder block foundation, add a room to it and build an attached garage.\nAlmost three years later, in August of 1985, the Andersons borrowed money from the Rock Island Bank (Bank). For its security, the Bank took a trust deed along with an assignment of the leasehold interest where the mobile home was situated. What next occurred was that the Andersons defaulted on their loan with the Bank and the Bank filed a complaint to foreclose their trust deed.\nAt a hearing on that foreclosure suit, the trial court found a priority lien in favor of the Bank and against First Federal, assigning as a reason that First Federal was required to make a second filing of its security claim once the mobile home became attached to the real estate. (Ill. Rev. Stat. 1987, ch. 26, par. 9 \u2014 313(7).) We disagree.\nThe trial judge also ruled that the Bank could not pursue its foreclosure because the Bank possessed only a leasehold interest and not the fee interest in the real estate. Again, we disagree.\nAn analysis of the statutory language relied on by the trial judge causes us to conclude that those statutory directives pertain only to persons who seek to obtain a security interest in a chattel which has not as yet been perfected. In the case at hand, however, the security interest of First Federal had been perfected some three years earlier. The statute relied on by First Federal provided that its security interest could be perfected by proceeding as it did. The statute uses the word \u201cperfected.\u201d Black\u2019s Law Dictionary defines \u201cper-feet\u201d as \u201ccomplete, finished, executed, enforceable, without defect, merchantable and marketable.\u201d (Black\u2019s Law Dictionary 1351 (3d ed. 1933).) It goes on to define a \u201cperfect instrument\u201d as \u201cone that is good as to all the world.\u201d (Black\u2019s Law Dictionary 1351 (3d ed. 1933).) In short, having perfected its security interest according to statute, there was nothing further that First Federal need do. Its security interest was perfect as defined in Black\u2019s Law Dictionary. That is to say, it was complete, finished and enforceable. It was good as to all the world.\nKnowing that a mobile home already on the premises was to serve as security for a loan, the Bank could have protected itself by asking to see the title document and by checking with the Illinois Secretary of State. Had it done so, the prior lien of First Federal would have been discovered. First Federal, on the other hand, or any financial institution for that matter, is not in a position to continuously monitor and track the peregrinations of a mobile home. Nor are they required to do so.\nFinally, we know of no reason why the Bank could not foreclose its trust deed whether or not it possessed the fee interest in the real estate. Of course, its interest would be no greater than the mortgagor could convey and that interest was, as we have indicated, inferior to the lien of First Federal.\nFor the reasons stated, the judgment of the circuit court of Mercer County is reversed and the cause is remanded for further proceedings consistent with the views herein expressed.\nReversed and remanded.", "type": "majority", "author": "JUSTICE HEIPLE" }, { "text": "WOMBACHER, J.,\nconcurs.", "type": "concurrence", "author": "WOMBACHER, J.," }, { "text": "JUSTICE BARRY,\ndissenting:\nThe issue we are asked to determine is whether a prior perfected security interest in a mobile home is entitled to priority over a later recorded lien on real estate to which the mobile home became affixed. The issue we are not asked to review is the extent of the Bank\u2019s present foreclosure rights in the subject property. As I see it, the majority has chosen to second-guess a purely advisory opinion gratuitously decided by the trial court on the former issue. The majority then proceeds to express its disagreement with the trial court\u2019s determination of the latter issue from which neither party has appealed. Under the circumstances, and for the further reason that I disagree with my colleagues on the merits, I respectfully dissent.\nAlthough neither party has chosen to discuss appellate jurisdiction and the majority rejects the question of jurisdiction as extraneous and immaterial, a review of the procedural posture of this case readily reveals that the parties to this appeal have no right to appellate review.\nIt appears to me that the majority raises the question of the extent of the Bank\u2019s foreclosure rights sua sponte and finds error as a predicate for reaching the \u201cmerits.\u201d In my opinion, the circuit court correctly determined from the documents of record that the Bank\u2019s present interest, in the leased property is merely possessory. In Illinois the law is well settled that a mortgagee\u2019s right to actual possession and control of the mortgaged property upon default is not \u201cautomatic,\u201d but must be invoked by a motion by the mortgagee in the foreclosure action. (Marcon v. First Federal Savings & Loan Association (1978), 58 Ill. App. 3d 811, 374 N.E.2d 1028, 1030, citing Ill. Rev. Stat. 1975, ch. 95, par. 22b.53 (now Ill. Rev. Stat. 1985, ch. 110, par. 15 \u2014 303).) As noted by the Marcon court, \u201cafter a default and until [the mortgagee exercises its right to actual] possession, a mortgagee may discard the mortgage entirely.\u201d\nIn the case before us, the Bank has not moved for an order entitling it to exercise its possessory right. By the terms of the lease, the Bank may acquire an option to purchase the subject real estate for $15,000 (credit given for all prior rent payments) after January 1, 1989. On the other hand, the Bank may choose never to acquire a greater interest in the real estate. Unless and until the Bank exercises its rights based on its present interest or acquires a title interest in the property the Bank is not entitled to an order of foreclosure, judicial sale and other relief as sought in its complaint, and there is no actual conflict between the interests of the Bank and First Federal. Without a present, actual controversy between the parties, the issue we are asked to review is premature, or \u201cmoot\u201d (In re Matter of Creager (1944), 323 Ill. App. 594, 56 N.E.2d 649, 652), and further discussion is merely advisory.\nNevertheless, in view of the positions assumed by the majority I am constrained to express my views on the \u201cmerits\u201d of this appeal as well. The circuit court ruled that First Federal lost its priority by failing to make a fixture filing in the county office of the recorder of deeds pursuant to section 9 \u2014 313 of the Uniform Commercial Code-Secured Transactions (Code) (Ill. Rev. Stat. 1987, ch. 26, par. 9 \u2014 313). Citing only to the authority of Black\u2019s Law Dictionary (3d ed. 1933) and in direct defiance of section 9 \u2014 313 of the Code, the majority has determined that First Federal\u2019s 1982 perfection of its security interest in the mobile home as a motor vehicle gave it priority over all subsequent interests for all time.\nThe Code does not define \u201cperfection\u201d as such, but does require fixture filing for goods which are to become a fixture if a secured party is to maintain priority over conflicting interests of an encumbrancer or owner of real estate. (Ill. Rev. Stat. 1987, ch. 26, pars. 9\u2014 302(l)(d), 9 \u2014 313(4), (7).) The Code clearly contemplates changes in collateral and provides a simple solution for perfecting a security interest in a mobile home that the secured party contemplates will become affixed to land. The wary lender is advised to prefile its financing statement or mortgage in the county where the home is to become affixed, and this \u201cfixture filing\u201d will protect the secured party\u2019s priority status as against subsequent encumbrancers of the real estate. Ill. Rev. Stat. 1987, ch. 26, pars. 9 \u2014 313, 9 \u2014 402.\nNotwithstanding the foregoing statutory authority, I might agree that the Bank was precluded from denying First Federal\u2019s priority lien if, in fact, (a) First Federal could not have contemplated that the mobile home would become affixed to realty; and (b) the Bank had knowledge that the residence on the subject property in 1985 had been a 1974 \u201cdouble-wide\u201d Fuqua mobile home prior to its attachment in 1983. (See Township of Commercial v. Block 136, Lot 2, Now Lot 13 (1981), 179 N.J. Super. 307, 431 A.2d 862 (citing New Jersey equivalent of Ill. Rev. Stat. 1987, ch. 26, par. 9 \u2014 401).) But such facts are inapposite to this case.\nAccording to defendant Tim Anderson, he apprised First Federal\u2019s loan officer of his plans to affix the \u201cdouble-wide\u201d mobile home during negotiations for its sale in 1982. There is no evidence of record to the contrary. Yet the majority declares an iron-clad rule absolving First Federal of any duty to inspect its collateral or to give reasonable notice of its interest after the mobile home became affixed to the land.\nThe record establishes that when the Andersons moved the home to the subject real estate around January of 1983, they placed it on a cinder block foundation. They removed the tongue, re-sided it, re-roofed it, attached a garage and added a room. These improvements were completed in 1984 and were financed primarily by a \u201cmaster loan\u201d made by Rock Island Bank to the Andersons\u2019 business operation known as Progressive Farms, Inc. There is no issue in this case as to when the home became a fixture. The parties agree that it was affixed to the land well before 1985 when the Andersons applied for the $22,500 loan which gave rise to this suit. Further, there is no indication of record that the home bore any resemblance whatsoever to a mobile home when the Andersons applied for the $22,500 loan. Nor is there any support of record for the majority\u2019s conclusion that the Bank knew that its security had ever been on wheels. Yet the majority assumes that the Bank knew that a \u201cmobile\u201d home was on the subject real estate when it approved the loan in 1985 and places upon the Bank a duty to search the records of the Secretary of State.\nIn my opinion, a mobile home such as the one here at issue \u2014 that gives every appearance that it will become affixed to realty, and that the purchasers tell the financing officer they intend to affix to realty, and that in fact is thereafter affixed and never again \u201cmobilized\u201d \u2014 is precisely the type of \u201cgoods which are to become fixtures\u201d for which a fixture filing is required for proper perfection under section 9 \u2014 313 of the Code. Lacking any legal, factual or equitable support for the majority\u2019s result, I would agree with the circuit court that, pursuant to section 9 \u2014 313(7), First Federal\u2019s chattel interest in the home in this case is subordinate to the Bank\u2019s interest.", "type": "dissent", "author": "JUSTICE BARRY," } ], "attorneys": [ "Conway & Shoemaker, of Aledo (Dwight L. Shoemaker, of counsel), for appellant.", "Michael J. Galvin, of Rock Island, for appellee." ], "corrections": "", "head_matter": "THE ROCK ISLAND BANK, Plaintiff-Appellee, v. TIMOTHY O. ANDERSON et al., Defendants (First Federal Savings and Loan Association of Davenport, Defendant-Appellant).\nThird District\nNo. 3-88-0184\nOpinion filed February 3, 1989.\nBARRY, J., dissenting.\nConway & Shoemaker, of Aledo (Dwight L. Shoemaker, of counsel), for appellant.\nMichael J. Galvin, of Rock Island, for appellee." }, "file_name": "1068-01", "first_page_order": 1090, "last_page_order": 1095 }