Harms v. Sprague

Supreme Court of Illinois · 1984 · Property

Propertyjoint tenancyseverancemortgageright of survivorshipjoint tenancymortgagelien theory

Facts

William Harms and his brother John Harms acquired real estate as joint tenants with right of survivorship in 1973. In 1981, John Harms co-signed a $7,000 note for Charles Sprague and executed a mortgage to Carl and Mary Simmons on John's undivided one-half interest in the joint tenancy property; William did not know about the mortgage. John later died, and his will devised his entire estate to Sprague. The mortgage was not recorded until after John's death, and the dispute was whether that mortgage severed the joint tenancy and whether it remained enforceable after John's death.

Issue

Does a mortgage executed by one joint tenant on his own interest sever the joint tenancy? If not, does that mortgage survive the mortgagor joint tenant's death as a lien against the property in the hands of the surviving joint tenant?

Rule

A joint tenancy is severed only when one of the four unities is destroyed, and in Illinois a mortgage is treated as a lien rather than a conveyance of title. Therefore, a mortgage executed by one joint tenant on his interest does not sever the joint tenancy, and when that mortgagor joint tenant dies before severance, his interest is extinguished and the mortgage lien is extinguished with it because the surviving joint tenant takes the whole by virtue of the original joint tenancy conveyance, not through the decedent.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Peoria, Illinois, Nora Kim and Ethan Cole own a duplex as joint tenants with right of survivorship. Without telling Nora, Ethan signs a mortgage to Prairie Lantern Credit, granting a security interest in Ethan's undivided interest to secure a loan he used to help his cousin start a restaurant.

Under Illinois law as stated by the majority opinion, what is the best analysis of the mortgage's effect on the joint tenancy at the moment Ethan signs it?

Explanation. The majority held that in Illinois a mortgage is treated as a lien rather than a conveyance of title. Because severance requires destruction of one of the four unities, and a mere lien does not destroy unity of title, one joint tenant's mortgage on that tenant's interest does not sever the joint tenancy.