{
  "id": 5575738,
  "name": "ROCHELLE STATE BANK, n/k/a Rochelle Bank and Trust Company, Plaintiff-Appellant, v. HARLAN GAVIC, Defendant-Appellee",
  "name_abbreviation": "Rochelle State Bank v. Gavic",
  "decision_date": "1979-03-28",
  "docket_number": "No. 78-217",
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  "last_updated": "2023-07-14T21:04:20.751997+00:00",
  "provenance": {
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  "casebody": {
    "judges": [],
    "parties": [
      "ROCHELLE STATE BANK, n/k/a Rochelle Bank and Trust Company, Plaintiff-Appellant, v. HARLAN GAVIC, Defendant-Appellee."
    ],
    "opinions": [
      {
        "text": "Mr. JUSTICE NASH\ndelivered the opinion of the court:\nPlaintiff, Rochelle State Bank, appeals from orders of the trial court which opened a judgment by confession it had obtained against defendant, Harlan Gavie, granted judgment in favor of defendant and released the lien of plaintiff\u2019s judgment against defendant\u2019s real estate.\nOn February 14, 1974, defendant borrowed *20,000 from plaintiff secured by his promissory note. He became delinquent in payments on the note and on May 20,1974, plaintiff caused a judgment by confession to be entered against him in Ogle County for principal, interest and attorney\u2019s fees in the sum of *21,805.56. On May 24, 1974, a memorandum of the judgment was duly filed by plaintiff in Winnebago County with the recorder of deeds for the purpose of creating a lien against defendant\u2019s residence located in that county (Ill. Rev. Stat. 1973, ch. 77, par. 1).\nOn July 1,1974, defendant filed a voluntary petition in bankruptcy in the United States District Court for the Northern District of Illinois, Western Division, and it listed plaintiff as an unsecured creditor for the unpaid *20,000 loan. Plaintiff filed a claim in the bankruptcy proceeding on July 22,1974, which stated defendant owed it *20,000 plus interest on the note and that the debt was secured by a \u201cJudgment Rendered \u2014 Court order attached.\u201d In his petition for bankruptcy, defendant did not list the judgment held by plaintiff nor did he seek in that action to cause the lien of the judgment against his real estate in Winnebago County to be released. He was duly discharged in bankruptcy on September 25, 1974, and his residential real estate in Winnebago County was apparently determined to be exempt and set apart to defendant.\nOn April 11, 1977, defendant filed a motion to open the judgment by confession against him, pursuant to the provisions of Supreme Court Rule 276 (Ill Rev. Stat. 1975, ch. 110A, par. 276), on the grounds a defense to the action on the note existed in that the debt had been discharged in bankruptcy. The trial court opened the judgment and, after a bench trial held on stipulated facts, entered judgment in favor of defendant finding the debt had been discharged in bankruptcy. The court also entered an order releasing the hen of the judgment by confession against defendant\u2019s real estate (Ill. Rev. Stat. 1975, ch. 77, par. 68a.). Plaintiff appeals.\nThe basic issue presented is whether the lien of plaintiff\u2019s judgment against defendant\u2019s real estate was properly released by reason of the discharge of defendant\u2019s debt in bankruptcy.\nThe general rule is that \u201c[a] discharge in bankruptcy, being personal to the bankrupt, does not act as a release of liens or security interests in property owned by him.\u201d Avco Finance Co. v. Erickson (1971), 132 Ill. App. 2d 868, 870, 270 N.E.2d 111, 112; 9 Am. Jur. 2d Bankruptcy \u00a7\u00a7759, 760 (1963).\n\u201cA discharge, being personal in character, releases the bankrupt\u2019s personal liab\u00fcity only. It follows, therefore, that a valid lien on property of the bankrupt existing at the time of the adjudication in bankruptcy, which is not avoided by the Bankruptcy Act, may be enforced notwithstanding the discharge of the bankrupt. So also a judgment evidencing a hen is not affected by a discharge except as to the personal liabffity it imposes upon the bankrupt.\u201d 1A Collier on Bankruptcy par. 17.29 (14th ed. 1978) (footnotes omitted).\n\u201cStrictly speaking, a discharge in bankruptcy is not a satisfaction of a judgment against the bankrupt. Discharge goes only to bar civil remedies for the coUection of the judgment as a personal obligation of the debtor \u201d \u00b0 *. It does not preclude the enforcement of alien under the judgment which is recognized as valid under state law and is not invalidated by the bankruptcy proceeding.\u201d 9 Am. Jur. 2d Bankruptcy \u00a7753 (1963).\nPlaintiff contends these principles are controlling under the facts before us and that its lien was erroneously released by the trial court. Plaintiff does not dispute defendant\u2019s contention that the debt upon which the lien is based was properly discharged in bankruptcy but argues that the discharge of the debt, alone, had no effect on the existing judgment lien which was not invalidated by the bankruptcy proceedings. We agree and reverse.\nDefendant\u2019s contention that because the debt was discharged there is no longer any basis for the continuation of the lien is clearly contrary to the prevailing view to which we have referred and defendant cites no authority to the contrary. Since defendant did not seek to avoid the lien of the judgment in the bankruptcy proceeding as one obtained within four months of the filing of a petition in bankruptcy under section 67(a)(1) of the Bankruptcy Act (11 U.S.C. \u00a7107 (1976); James Talcott, Inc. v. Roto American Corp. (1973), 123 N.J. Super. 183, 197-99, 302 A.2d 147, 154-55), we need not here consider that issue.\nFor the reasons discussed the judgment of the trial court is reversed and the cause is remanded with directions that plaintiff\u2019s lien be reinstated.\nReversed and remanded with directions.\nRECHENMACHER and WOODWARD, JJ., concur.",
        "type": "majority",
        "author": "Mr. JUSTICE NASH"
      }
    ],
    "attorneys": [
      "Christ T. Troupis, of Chicago, and Donald A. Manzullo, of Manzullo & Moore, of Oregon, for appellant.",
      "Robert G. Coplan, of Connolly, Oliver, Goddard, Copian & Close, of Rockford, for appellee."
    ],
    "corrections": "",
    "head_matter": "ROCHELLE STATE BANK, n/k/a Rochelle Bank and Trust Company, Plaintiff-Appellant, v. HARLAN GAVIC, Defendant-Appellee.\nSecond District\nNo. 78-217\nOpinion filed March 28, 1979.\nChrist T. Troupis, of Chicago, and Donald A. Manzullo, of Manzullo & Moore, of Oregon, for appellant.\nRobert G. Coplan, of Connolly, Oliver, Goddard, Copian & Close, of Rockford, for appellee."
  },
  "file_name": "0042-01",
  "first_page_order": 64,
  "last_page_order": 66
}