Northridge Bank v. Lakeshore Commercial Finance Corp.
Illinois Appellate Court
365 N.E.2d 382 (1977)
- Written by Rich Walter, JD
Facts
On September 16, 1974, Howard Bloom mortgaged property to Lakeshore Commercial Finance Corporation (Lakeshore) (defendant). This mortgage stated that it secured Lakeshore’s $30,000 loan to Bloom. However, the mortgage went on to state that it also secured any future amounts Bloom might borrow from Lakeshore. Lakeshore did not immediately record the mortgage. On October 4, 1974, Bloom mortgaged the same property to Northridge Bank (Northridge) (plaintiff). Northridge later claimed to have had neither actual nor constructive notice of Lakeshore’s mortgage. Northridge’s mortgage provided no information as to what debt it secured. Northridge recorded its mortgage on the morning of October 25, 1974. That afternoon, Lakeshore finally recorded its own mortgage. When it became clear that the value of Bloom’s property was insufficient to satisfy both encumbrances, Lakeshore and Northridge forced a foreclosure sale. Northridge sued for a declaratory judgment prioritizing Northridge’s claim to the sale proceeds. The trial court entered judgment for Northridge. Lakeshore appealed to the Illinois Appellate Court.
Rule of Law
Issue
Holding and Reasoning (Downing, J.)
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