McDonald v. Culhane

24 N.E.2d 737, 303 Ill. App. 101, 1940 Ill. App. LEXIS 1174
CourtAppellate Court of Illinois
DecidedJanuary 8, 1940
DocketGen. No. 9,356
StatusPublished
Cited by8 cases

This text of 24 N.E.2d 737 (McDonald v. Culhane) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McDonald v. Culhane, 24 N.E.2d 737, 303 Ill. App. 101, 1940 Ill. App. LEXIS 1174 (Ill. Ct. App. 1940).

Opinion

Mr. Presiding Justioe Dove

delivered the opinion of the court.

From that portion of a decree of partition which ordered that the undivided one-sixth interest of John F. Walsh in the premises sought to. be partitioned was subject first to a lien in favor of Helen Krumnga by virtue of a judgment rendered in her favor and against John F. Walsh by the circuit court of Winnebago county on September 5, 1935' and second to a lien in favor of A. B. Culhane, receiver of the Bockford National Bank by virtue of certain judgments which he obtained against the said John F. Walsh on Decernber 7,. 1934 and January 28, 1936, the said receiver has appealed.

From the stipulation of the parties, it appears that on December 7,1934, A. B. Culhane, as receiver of the Rockford National Bank, Rockford, Illinois, held a note executed by John F. Walsh for $10,000 and on that day recovered a judgment by confession in the circuit court of Winnebago county, Illinois for the sum of $13,351.18 and costs of suit, upon which judgment execution was issued on December 13, 1934, which was duly returned unsatisfied. It was further stipulated that on August 16,1935 the receiver held as collateral security for the payment of said $10,000 note, upon which judgment had been taken on December 7,1934, certain other notes also executed by Walsh, the payment of which was secured by a mortgage upon certain real estate not involved in this proceeding. That default in the payment thereof had been made and the receiver foreclosed said mortgage in the circuit court of Winnebago county, Illinois. In that proceeding there was included in the amount which the court found to be due the plaintiff the said sum of $13,351.18, being the amount of the judgment rendered in favor of the plaintiff and against Walsh on December 7,1934. The usual decree of foreclosure and sale was rendered and thereafter a sale was held and the property sold for $10,721.49 less than the debt, interest and costs. On January 28, 1936 a deficiency judgment was rendered in said foreclosure proceeding in favor of the said A. B. Culhane, receiver, and against John F. Walsh for $10,721.49, being the amount of the deficiency. On February 5, 1936 an execution was issued upon this deficiency judgment and subsequently returned unsatisfied.

It was further stipulated that from time to time after the rendition of said deficiency judgment there has been applied toward its satisfaction various sums of money so that there remained due from said Walsh to said receiver at the date of the partition decree the sum of $3,801.09 and interest from January 28, 1936. It was further stipulated that on September 16, 1935 Helen Krumnga, appellee herein, recovered a judgment against Walsh in the circuit court of Winnebago county for the sum of $566.05 and costs, upon which an execution issued on September 20,1935, which was subsequently returned unsatisfied.

Upon these facts the trial court held that the first judgment obtained by the receiver against Walsh on December 7, 1934 merged in the deficiency judgment obtained by him in the foreclosure proceeding on January 28, 1936 and that therefore the said judgment of appellee rendered against Walsh on September 5, 1935 was a prior, paramount and superior lien to the said judgment of appellant, and that appellee’s judgment out of the proceeds to be realized from the sale of the interest of said Walsh in the real estate described in the decree for partition shall be satisfied prior to any payment being made to appellant upon the balance due him upon his deficiency judgment of January 28, 1936.

The author of the article on judgments in 15 E. O. L. 791, states that at common law a judgment upon a judgment, being of the same dignity, does not fall within the general rule that a cause of action is merged in the judgment and therefore the first judgment is not merged in the second and that the weight of modern authority favors the view that if a judgment creditor brings an action on his judgment and obtains a new judgment, the first judgment is not merged in the second. What mig’ht be called the minority rule, however, is to the effect, says this author, that the obtaining of a second judgment on a previous one operates as a merger and the extinguishment of the first judgment and its lien irrespective of whether the second judgment is for a less or greater sum. The only Illinois case cited is Dow v. Blake, 148 Ill. 76, 35 N. E. 761. It appeared in that case that on May 6, 1882 the circuit court of Milwaukee county, Wisconsin rendered a decree of divorce dissolving the marriage theretofore existing between the plaintiff Christine Blake and the defendant Barnum Blake and ordering him to pay the plaintiff $2,000 upon her releasing her dower in his real estate. In 1886, the plaintiff filed in the same court her petition alleging that the former provision of $2,000 made for her was inadequate and made under a mistaken estimate of the financial ability of the defendant. Upon a hearing an order was entered on December 24, 1888, to the effect that plaintiff recover the sum of $31,000 from the defendant and that the former order and judgment of May 6, 1882, except as modified and superseded by the order of December 24, 1888 remain in full force and effect. Our court held that the judgment of December 24, 1888 was something more than a modification of or supplement to the decree of 1882, that when it was rendered nothing remained of the decree of 1882 except the provisions annulling the marriage and giving the defendant the custody of the children. “All the rest of that decree,” said the court, “was merged in the judgment of 1888 which was for a definite and specific sum. ’ ’

The author of the article on judgments in 34 C. J. 697 says: “When a judgment is used as a cause of action for the recovery of another judgment the question whether the first judgment is merged in the subsequent judgment is one on which there is much conflict of opinion. One group of authorities holds that merge r is effected, except in certain cases, while another group hold that there is no merger of the first judgment, and that it is not extinguished without satisfaction of the second, especially where the judgments are recovered in different states, and they apply the same rule where the second judgment is auxiliary or collateral to the first. But whichever may be the correct rule, as applied by courts of law, judgments will not be treated as merged by a court of equity if a merger would operate inequitably.”

In this State appellant had a right to sue on the principal note which he held and likewise he had a right to foreclose his mortgage. Karnes v. Lloyd, 52 Ill. 113. He could take these steps at different times or pursue both remedies at the same time. He obtained judgment against Walsh on December 7, 1934. Thereafter he foreclosed his mortgage which he then held as security for the payment of this judgment. This foreclosure proceeding was consummated by an effective sale and the net proceeds thereof applied to discharge the indebtedness due appellant represented by this judgment. After that was done there remained due appellant $10,721.49 for which amount he procured the court to render a new, personal and unconditional judgment against Walsh and it is this new judgment upon which execution was issued and upon which payments have been made so that at the time of the hearing in this case there remained due appellant thereunder the sum of $3,801.09. By these steps appellant’s first judgment became merged in the deficiency judgment rendered on January 28, 1936.

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Bluebook (online)
24 N.E.2d 737, 303 Ill. App. 101, 1940 Ill. App. LEXIS 1174, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcdonald-v-culhane-illappct-1940.