{
  "id": 5625792,
  "name": "FIRST GALESBURG NATIONAL BANK AND TRUST COMPANY, Plaintiff-Appellant, v. ALLEN D. MARTIN et al., Defendants-Appellees",
  "name_abbreviation": "First Galesburg National Bank & Trust Co. v. Martin",
  "decision_date": "1978-03-17",
  "docket_number": "No. 77-409",
  "first_page": "113",
  "last_page": "116",
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    "name_abbreviation": "Ill. App. Ct.",
    "id": 8837,
    "name": "Illinois Appellate Court"
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  "last_updated": "2023-07-14T18:22:59.686785+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
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  "casebody": {
    "judges": [],
    "parties": [
      "FIRST GALESBURG NATIONAL BANK AND TRUST COMPANY, Plaintiff-Appellant, v. ALLEN D. MARTIN et al., Defendants-Appellees."
    ],
    "opinions": [
      {
        "text": "Mr. JUSTICE STENGEL\ndelivered the opinion of the court:\nOn July 25, 1975, First Galesburg National Bank and Trust Company (plaintiff) loaned *850 to Allen and Patricia Martin (defendants) in return for defendants\u2019 note in the amount of *1,033.92 secured by a 1970 Mercury Montego. After obtaining title to the automobile, defendants failed to have the plaintiff\u2019s lien shown upon the certificate of title as required by the security agreement. Defendant Allen Martin subsequently filed bankruptcy proceedings and was granted a discharge in bankruptcy as of February 7, 1977. Plaintiff was scheduled as a creditor of Martin in the bankruptcy case.\nOn June 3,1976, plaintiff made the appropriate bookkeeping entries to write off the balance of defendants\u2019 debt (*840) as a bad debt, and through a clerical error, the note was marked paid and returned to defendants. Defendants were later notified of the plaintiff\u2019s error, but they did not return the note or make any further payments as requested.\nPlaintiff then filed this replevin action on May 12, 1977, alleging, inter alia, that plaintiff is entitled to possession of a 1970 Mercury Montego and that the car is wrongfully detained by defendants. In their verified answer, defendants denied that plaintiff was entitled to possession of the vehicle, asserted that Allen Martin is owner of the vehicle as evidenced by the attached certificate of title and that Martin had received a discharge in bankruptcy. The only evidence presented at the hearing was the testimony of plaintiff\u2019s loan officer who described the transaction between the parties, the bank\u2019s error in marking the note paid, and who also stated that as far as he knew, defendants still have possession of the vehicle in question. Defendants presented no evidence. The trial court entered judgment on behalf of defendants based on four findings of fact: (1) that plaintiff failed to endorse its lien on the certificate of title; (2) that plaintiff returned the note to defendants, stamped paid, by mistake; (3) that plaintiff treated the obligation as paid by writing off the account as a bad debt; (4) that plaintiff failed to establish that the car was still in defendant\u2019s possession. Plaintiff appeals from that judgment, contending that the findings of the trial court do not support a judgment in favor of defendant.\nFirst, the trial court found that plaintiff failed to endorse the lien on the certificate of title. However, the security agreement between the parties required defendants to have the lien entered on the certificate, not plaintiff. Furthermore, the failure to perfect the hen as to third parties does not invalidate a lender\u2019s security interest as against the original borrowers. (See Ill. Rev. Stat. 1975, par. 9\u2014203(1).) Therefore plaintiff\u2019s security interest was enforceable against defendants, and defendants concede that point in their brief filed in this court.\nPlaintiff next challenges the relevance of the court\u2019s second and third findings and asserts that defendants\u2019 underlying obligation to plaintiff was not extinguished when the note was stamped paid by mistake. Section 3\u2014605(1) (a) of the Uniform Commercial Code (Ill. Rev. Stat. 1975, ch. 26, par. 3\u2014605(1) (a)) provides that the holder of an instrument can discharge the debtor by intentionally cancelling the instrument. Similarly writing off defendants\u2019 account as a bad debt is said to be a matter of internal accounting procedure and does not discharge the debtor.\nDefendants respond that the evidence was sufficient to permit the trial court to conclude that plaintiff had treated the debt as paid. We do not agree. When the court found that the note was stamped paid by mistake, the only conclusion permissible under the law of Illinois is that the debt was not discharged. When the court found that plaintiff wrote off defendants\u2019 liability as a bad debt that could never be collected, it would be illogical to infer that the bank intended to treat the debt as discharged. Consequently the court\u2019s second and third findings did not support the judgment.\nFinally, plaintiff contends that defendants\u2019 possession was proven when defendants admitted ownership in their answer and when plaintiff\u2019s witness testified without contradiction that the vehicle was still in defendants\u2019 possession to the best of his knowledge. Defendants insist that the trier of fact was not required to accept this testimony as establishing defendants\u2019 possession. E.g., Biggerstaff v. Estate of Nevin (3d Dist. 1954), 2 Ill. App. 2d 462, 119 N.E.2d 826.\nPlaintiff\u2019s burden of proof was succinctly stated in Hanaman v. Davis (2d Dist. 1959), 20 Ill. App. 2d 111, 116, 155 N.E.2d 344, as follows:\n\u201cIt is necessary in a replevin action that the plaintiff allege in his complaint and prove that he is lawfully entitled to the possession of the property sought to be replevined; that the defendant wrongfully detains said property and refuses to deliver possession thereof to the plaintiff.\u201d\nHere plaintiff alleged defendants\u2019 wrongful detention of the car, and defendants denied that allegation, asserting instead that they owned the automobile free of any liens and that any debt owed plaintiff was discharged by order of the bankruptcy court. Defendants, however, presented no evidence in support of their allegations, so the only question on review is whether plaintiff established a prima facie case. Under the pleadings in this case, defendants\u2019 assertion of ownership of the automobile would logically mean that they do not disclaim possession but rather claim that their detention of the vehicle is lawful, not wrongful. In such a situation, it would be pointless to require plaintiff to produce proof that defendants have possession of the automobile. Hence, we conclude that plaintiff is entitled to a writ of replevin.\nWe note that plaintiff neither alleged nor proved a demand and refusal to deliver possession as required by law. However, defendants have waived that issue by failing to raise it either in the trial court or before this court.\nFor the reasons stated, we reverse the judgment of the trial court, and remand to the Circuit Court of Knox County for further proceedings consistent with this opinion.\nReversed and remanded.\nSTOUDER, P. J., and SCOTT, J., concur.",
        "type": "majority",
        "author": "Mr. JUSTICE STENGEL"
      }
    ],
    "attorneys": [
      "Lucas, Brown & McDonald, of Galesburg, for appellant.",
      "Dale A. DeLoriea, of Galesburg, for appellees."
    ],
    "corrections": "",
    "head_matter": "FIRST GALESBURG NATIONAL BANK AND TRUST COMPANY, Plaintiff-Appellant, v. ALLEN D. MARTIN et al., Defendants-Appellees.\nThird District\nNo. 77-409\nOpinion filed March 17, 1978.\nLucas, Brown & McDonald, of Galesburg, for appellant.\nDale A. DeLoriea, of Galesburg, for appellees."
  },
  "file_name": "0113-01",
  "first_page_order": 135,
  "last_page_order": 138
}