Echols v. Olsen , 63 Ill. 2d 270 ( 1976 )

MR. CHIEF JUSTICE WARD

delivered the opinion of the court:

What the facts are in this case is not in dispute. Vernal Echols, the petitioner, and her husband Valentine were joint owners of a lot in Chicago that was registered under “An Act concerning land titles” (Ill. Rev. Stat. 1973, ch. 30, pars. 45-148) (hereafter cited as the Torrens Act). On September 29, 1966, the circuit court of Cook County entered a decree of divorce in a suit that had been brought by the petitioner. Under the terms of the decree, the petitioner was required to pay her former husband $2,000 and he, in turn, was required to execute a quitclaim deed in her favor surrendering his interest in the lot. The petitioner’s attorney recorded the quitclaim deed in the office of the Cook County Recorder of Deeds on October 18, 1966, but he failed at that time to register the deed with the Cook County Registrar of Titles (Registrar).

The Independence Bank of Chicago (the Bank) obtained in 1969 an ex parte judgment in the amount of $1,058.67, against Valentine Echols. On January 21, 1971, the Bank had the judgment memorialized on the duplicate Torrens certificate that is maintained in the Registrar’s office. As the petitioner had not registered the quit-claim deed, the duplicate certificate had shown Valentine and Vernal Echols as joint owners of the lot. On February 24, 1971, Vernal Echols filed a petition in the circuit court requesting the court to direct the Registrar to remove the Bank’s memorial and to issue a new certificate showing title to be in the petitioner alone. Both the Bank and the Registrar were named as respondents. Ill. Rev. Stat. 1973, ch. 30, par. 131.

The Bank moved to dismiss the petition contending that under the Torrens Act a judgment creditor who memorializes his judgment after the judgment debtor has conveyed his interest in property acquires an interest superior to that of a prior transferee who failed to register his deed. On August 4, 1971, the court ordered the Registrar to issue a new certificate of title showing title to be in the petitioner alone but showing that her interest was subject to the Bank’s registered judgment.

The petitioner filed a notice of appeal to the appellate court on September 17, 1971, but she served a copy of it only upon the Bank. The petitioner and the Bank briefed and orally argued the case and the court reversed the trial court, holding that the Bank did not acquire an interest in the property since Valentine Echols had conveyed his interest to the petitioner before the judgment was memorialized. 10 Ill. App. 3d 752, 755.

On learning of the decision, the Registrar moved the appellate court to dismiss the appeal for failing to provide him with notice of the appeal, or, in the alternative, to have the court withdraw its opinion and to permit him to file a brief and to argue his position, which was the same as the Bank’s. The court did not withdraw its opinion but it did allow the Registrar to file a brief. After oral argument on June 4, 1975, by the petitioner and the Registrar, the appellate court on June 9, 1975, announced this order:

“On our own motion we allowed a rehearing. We have again allowed oral argument and considered the briefs that were filed. We find no merit in the request we dismiss the appeal. After thoroughly reviewing the case again, we are of the opinion our original decision was correct and we so hold. It is hereby ordered the rehearing is dismissed.”

We granted the Registrar’s petition for leave to appeal under our Rule 315. Ill. Rev. Stat. 1973, ch. 110A, par. 315; 58 Ill.2d R. 315.

The Registrar makes two contentions here. He argues that under our Rule 303(d) (Ill. Rev. Stat. 1973, ch. 110A, par. 303(d); 58 Ill.2d R. 303(d)) if one party fails to serve a copy of its notice of appeal on an opposing party, the appeal must be dismissed. He also makes the same contention the Bank did that a memorialized interest of a judgment creditor is superior to the interest of the holder of a prior unregistered deed.

Rule 303(d) provides:

“No later than 7 days after the notice of appeal or an amendment as of right is filed in the circuit court, the party filing it shall serve, in a manner provided by Rule 11, a copy of the notice of appeal and notice of the date of filing upon every other party and upon any other person or officer entitled by law to notice of the appeal. Proof of service must be filed within 7 days after service is made, and no action shall be taken until it is filed.”

However, a failure to serve a copy of a notice of appeal upon an opposing party does not deprive the court of appeal of jurisdiction. (See 6 C. Nichols, Illinois Civil Practice, secs. 6131, 6143-47 (1975); see generally, Francke v. Eadie, 373 Ill. 500; National Bank of the Republic v. Kaspar American State Bank, 369 Ill. 34.) As our Rule 301 explicitly provides, the only jurisdictional step in appealing a final judgment of a circuit court in a civil case is the filing of the notice of appeal. Ill. Rev. Stat. 1973, ch. 110A, par. 301; 58 Ill.2d R. 301 People ex rel. Pickerill v. New York Central R.R. Co., 391 Ill. 377; People ex rel. Sandberg v. Grabs, 373 Ill. 423.

We would note that there was no evidence of prejudice to the Registrar because of the failure to serve him. Prior to its original decision the appellate court had the benefit of the briefs and arguments of the Bank, which took a position that was similar to that of the Registrar. Further, the court granted a rehearing and allowed the Registrar to file briefs and to argue orally.

We must now consider whether under the Torrens Act, as the Registrar contends, a judgment creditor who has registered his judgment after the judgment debtor has conveyed his interest in the property acquires an interest superior to that of a prior grantee from the debtor who did not register his deed. The principal objective of the Torrens Act is “to provide an independent system of registration, whereby an intending purchaser of land can determine from the register the condition of the title.” (People v. Mortenson, 404 Ill. 107, 111; Miller v. Frederick’s Brewing Co., 405 Ill. 591, 594;Hacken v. Isenberg, 288 Ill. 589, 599-600.) While generally it has been held that to achieve this all matters affecting title to registered property should be either registered or memorialized so that the Registrar’s duplicate certificate will indicate to all interested parties the status of the title (Miller v. Frederick’s Brewing Co., 405 Ill. 591, 594; People v. Mortenson, 404 Ill. 107, 113; Hartsman v. Kaindl, 400 Ill. 243; Evans v. Chicago Title and Trust Co., 317 Ill. 11), we have held that the provisions of the Act must be construed in light of the established law of property and that the register of title will not always be considered conclusive. Chicago and Riverdale Lumber Co. v. Vellenga, 305 Ill. 415, 417-18; In re Bickel, 301 Ill. 484, 492.

The language of the Torrens Act does not provide any direct answer to the Registrar’s contention; nor has the contention been considered in any reported decision in Illinois. The Registrar urges that in order to serve the objective of the Act, that is, to enable an intending purchaser to determine the condition of title from the register we should read into the Act a provision similar to section 30 of “An Act concerning conveyances” (Ill. Rev. Stat. 1973, ch. 30, par. 29) (hereafter the Conveyance Act). Section 30 provides that a judgment creditor, as well as a bona fide purchaser, who records his judgment in accordance with the provisions of the Conveyance Act (Ill. Rev. Stat. 1973, ch. 30, pars. l-37(a)) acquires rights superior to those of the holder of a prior unrecorded interest. It is only because of this statute that a judgment creditor will prevail over the holder of a prior but unrecorded interest. Hooper v. Haas, 332 Ill. 561, 568; East St. Louis Lumber Co. v. Schnipper, 310 Ill. 150, 156; 3 E. Grigsby, Illinois Real Property, secs. 1194, 1208 (1948).

The plea of the Registrar that we read into the Torrens Act what section 30 of the Conveyance Act provides cannot be allowed. To do so would be an egregious intrusion upon the legislative authority. The Torrens Act was designed by the legislature to protect intending purchasers (People v. Mortenson, 404 Ill. 107; Balzer v. Pyles, 350 Ill. 344; In re Bickel, 301 Ill. 484; Hacken v. Isenberg, 288 Ill. 589), and has never been considered to extend the preference to judgment creditors. Judgment creditors under section 30 are preferred to holders of prior but unrecorded interests only because of that statute. Section 30 existed prior to the Torrens Act and it is not unreasonable to say that had the legislature intended that judgment creditors receive under the Torrens Act the priority and preference they are given under section 30 it would have inserted a provision in the Torrens Act similar to section 30.

The Torrens Act provides that in disputes under it, courts should be guided by the provisions of the Act, of course, and by general principles of equity. (Ill. Rev. Stat. 1973, ch. 30, pars. 59, 70, 130, 131; Klouda v. Pechousek, 414 Ill. 75; Balzer v. Pyles, 350 Ill. 344; Amundson v. Glos, 271 Ill. 209.) The holder of an unregistered interest has strong claims to equitable consideration, especially when, as here, the holder of an interest claiming preference (here, the Bank) did not rely upon the absence of a registration. We said in Kostelny v. Peterson, 19 Ill.2d 480, 484, that:

“Whereas at common law a deed took effect upon delivery without regard to recordation, (Williamson v. Williamson, 306 Ill. 533; Delfosse v. Delfosse, 287 Ill. 251;Doe v. Miles, 2 Scam. 315,) under the Torrens Act it is the registration itself which completes the conveyance of legal title. (People v. Mortenson, 404 Ill. 107.) This does not mean, however, that under the registration statute [Ill. Rev. Stat. 1973, ch. 30, par. 98] an unfiled deed must be considered as a mere executory contract. Rather, as was pointed out in Klouda v. Pechousek, 414 Ill. 75, and Naiburg v. Hendriksen, 370 Ill. 502, a deed to Torrens property may take effect in equity upon delivery to the grantee so as to immediately pass the equitable title.”

Too, it has been held that a judgment creditor’s lien extends under section 30 only to the actual interest of the judgment debtor in the property (East St. Louis Lumber Co. v. Schnipper, 310 Ill. 150; Yarnell v. Brown, 170 Ill. 362), and that this interest will not be extended to allow him to claim property of another in satisfaction of his lien in the absence of a statute specifically giving him this right (East St. Louis Lumber Co. v. Schnipper, 310 Ill. 150, 156; see also Sturdyvin v. Ward, 336 Ill. 593, 602-03; Hooper v. Haas, 332 Ill. 561, 568; 3 E. Grigsby, Illinois Real Property, secs. 1194, 1208). It was said in East St. Louis Lumber Co. v. Schnipper, 310 Ill. 150, 156, that a judgment creditor cannot attach his judgment to a “mere naked legal estate when the entire equitable estate is vested in some third person.”

When Valentine Echols quitclaimed his interest to the petitioner in September of 1966, he relinquished all equitable rights in the property. The Bank could not attach its judgment to the legal interest which remained in his name only because the petitioner had not registered the quitclaim deed. The trial court erred in not ordering the Registrar to remove the Bank’s memorial.

We do not accept the Registrar’s additional argument that since it was the petitioner’s neglect that led the Bank to memorialize its judgment, the judgment creditor should prevail as a matter of equity. The force that this argument would have in the case of a bona fide purchaser for value who without notice purchased property relying on the state of the registered title of the property or the case of a mortgagee who made a loan because of a similar reliance does not extend to a judgment creditor who has not acted to his prejudice in reliance on the registered state of title. What this court observed in East St. Louis Co. v. Schnipper, 310 Ill. 150, 159-60, has relevance here:

“A judgment creditor does not deal with the land, which is the specific thing that would be the subject of a purchase, nor does he part with any consideration nor buy from one having the apparent legal title. He is protected by section 30 of the Conveyance act, not because he is a purchaser without notice but because creditors are named as one of the classes who are given priority by that section. *** They do not purchase anything or purport to do so. *** [Therefore,] the lien of a judgment or execution is limited to the actual title or interest which the judgment debtor has in property ***.”

For the reasons given the judgment of the appellate court is affirmed.

Judgment affirmed.