Skolnik v. Petella

I concur in the conclusion reached in the court's opinion, but not in parts of the reasoning upon which it is based. Beatrice Petella, the appellee, by the assumption of an agreement to pay the mortgage debt which she and her husband, now deceased, entered into, became liable to pay the sum secured by the mortgage. The Petellas were made parties defendant in the foreclosure proceeding, wherein the complaint of the trustee, acting for all bondholders, set up the assumption agreement. The Petellas were duly served with summons. Ciro Petella, appellee's husband, died pending the suit, and it was continued against appellee. When foreclosure proceedings were filed the Petellas were owners of the property subject to the mortgagee's rights. (Rohrer v. Deatherage, 336 Ill. 450.) They were by the pleadings setting up the assumption agreement alleged to be liable for the payment of the debt. Appellant's abstract does not disclose what, if any, action was sought or rights saved against appellee in the foreclosure proceeding. The complaint and decree are not abstracted. Appellant argues, however, and it is not denied, that the equity of the Petellas in the premises was foreclosed by the decree.

Section 16 of the statute on mortgages (Ill. Rev. Stat. 1939, chap. 95, par. 17, p. 2109) authorizes a judgment or decree and an execution for the recovery of any sum found due over and above the proceeds of the foreclosure sale, against those defendants personally liable for the debt, where personal service is had upon such defendants or they have entered their appearance. Appellee was personally served, and it is apparent, as a matter of law, that under the circumstances set out in the complaint she was a defendant personally liable for the debt. The deficiency decree was entered against the makers of the bonds only, and as I understand the law, the cause of action against appellee was by that means merged in the decree or judgment, and she and all others against whom no deficiency decree or judgment was taken were released. (State Bank of St. Charles v. Burr, 375 Ill. 379;Travelers' Ins. Co. v. Mayo, 170 id. 498.) This is not, however, as I understand the rule, on the doctrine of res judicata or estoppel by verdict, as the court's opinion holds, but on the ground that the plaintiff, having voluntarily taken a personal judgment against one of a number of defendants, severally liable, without in any way preserving his rights against others equally liable, is presumed to be content with the judgment. If he desires to prevent this result he must take some action to rebut that presumption. If he does not, he cannot complain, since he is deemed to have obtained all relief to which equity and justice entitle him, and other defendants liable for the debt are discharged therefrom. (Travelers' Ins. Co. v. Mayo, supra; Lawrence v.Beecher, 116 Ind. 312, 19 N.E. 143.) So far as the record shows the trustee took no steps to preserve his right against the appellee to later secure relief against her. The Petellas, by their assumption agreement, were liable for the debt, not as sureties but primarily, though, as pointed out in the Mayo case, the question whether the appellee was primarily liable or liable as surety can make no difference in the application of the rule.

Appellant argues that this rule cannot apply to him as a bondholder for the reason that he had nothing to do with the management of the proceeding wherein the deficiency decree was entered. That proceeding, as pointed out in the court's opinion, was brought by the trustee for the benefit of all the bondholders. His management of the suit was binding on the bondholders.

I am of the opinion that the cause of action against appellee was merged in the deficiency decree entered and that she was thereby released from liability.

GUNN, C.J., and FARTHING and WILSON, JJ., dissenting.