                           ILLINOIS OFFICIAL REPORTS
                                         Appellate Court




               US Bank National Ass’n v. Villasenor, 2012 IL App (1st) 120061




Appellate Court            US BANK NATIONAL ASSOCIATION, as Trustee for WFALT 2005-
Caption                    02, Plaintiff and Cross-Defendant-Appellant, v. BENJAMIN
                           VILLASENOR, JR., a/k/a Benjamin S. Villasenor, Jr., UNKNOWN
                           OWNERS and NONRECORD CLAIMANTS, Defendants and Cross-
                           Defendants (Ruthie Lee Ellis, Intervenor and Cross-Plaintiff-Appellee;
                           Property Tax Counselors, Inc., a Dissolved Illinois Corporation, and
                           Unknown Shareholders of Property Tax Counselors, Inc., Cross-
                           Defendants).



District & No.             First District, Sixth Division
                           Docket No. 1-12-0061


Filed                      October 5, 2012


Held                       Plaintiff bank was properly denied summary judgment in its foreclosure
(Note: This syllabus       action on the ground that it was not a bona fide mortgagee without notice
constitutes no part of     of intervenor’s interest in the property, especially in view of plaintiff’s
the opinion of the court   involvement in the transactions that resulted in defendant mortgagor
but has been prepared      acquiring title to the property as part of intervenor’s attempt to obtain
by the Reporter of         funds to pay delinquent real estate taxes and plaintiff’s failure to discover
Decisions for the          that intervenor’s relatives lived there.
convenience of the
reader.)


Decision Under             Appeal from the Circuit Court of Cook County, No. 07-CH-22660; the
Review                     Hon. Pamela Gillespie and Jesse Reyes, Judges, presiding.


Judgment                   Affirmed.
Counsel on                    Ronald A. Damashek and Melissa J. Lettiere, both of Stahl Cowen
Appeal                        Crowley Addis LLC, of Chicago, for appellant.

                              Jeffrey S. Blumenthal and Rodney C. Slutzky, both of Law Offices of
                              Slutzky & Blumenthal, of Chicago, for appellee.


Panel                         PRESIDING JUSTICE GORDON delivered the judgment of the court,
                              with opinion.
                              Justices Hall and Garcia concurred in the judgment and opinion.



                                                OPINION

¶1                                         BACKGROUND
¶2                   I. Complaint to Foreclose Benjamin Villasenor’s Mortgage
¶3          Defendant, Benjamin Villasenor, purchased a home located at 11724 South Bishop Street
        (the subject property) from First Suburban National Bank (First Suburban) on June 7, 2005.
        On June 23, Villasenor obtained a $99,000 loan from Wells Fargo Bank1 secured by a
        mortgage, recorded August 3, 2005. Villasenor defaulted on his mortgage on May 1, 2007,
        and Wells Fargo filed a complaint to foreclose on August 21, 2007. On November 7, 2007,
        Wells Fargo filed a motion for an order of default and for judgment for foreclosure and sale
        for Villasenor’s failure to file an appearance and answer or otherwise plead.
¶4          An order of default and judgment for foreclosure and sale was entered on December 10,
        2007. The notice of sale was mailed to two separate addresses, one of which was the subject
        property. At the time the notice was mailed to the subject property, Michael Ellis was the
        occupant of the home. At the judicial sale, the property was sold to Wells Fargo. On April
        24, 2008, Wells Fargo filed a motion to approve the report of sale and for the entry of an
        order of possession, which was granted the same day.

¶5                 II. Ruthie Lee Ellis’s Intervention and Complaint to Quiet Title
¶6          Ruthie Lee Ellis, the intervenor, age 73, alleges in her intervenor’s complaint, affirmative
        defense, and complaint to quiet title that she had owned the home since 1972 and lived in the
        home with her son, Andre Ellis, until 1985. Ellis then moved out and Andre, or other
        relatives, continued to reside in the home until 2003. Later, Andre moved out and Michael
        Ellis, a grandson, moved in and resided in the home until 2009. From 2009 through the
        commencement of the instant action, Martez Knox, another of Ellis’s grandsons, has lived

               1
                   Wells Fargo assigned its interest in the mortgage to US Bank, as trustee for WFALT 2005-
        02.

                                                    -2-
       in the home.
¶7          In 2004, Ellis became aware that her 2000 Cook County real estate taxes had been sold
       in a tax sale. To avoid losing the property, Ellis sought a loan to pay off the overdue taxes.
       She began searching for loan providers and was contacted by Property Tax Counselors, Inc.
       (PTC). On September 23, 2004, Ellis signed a written agreement drafted by PTC (the PTC
       agreement) and, pursuant to the agreement, executed a warranty deed in trust on the same
       day, conveying title to the home to First Suburban as trustee of trust number 9892-01, a land
       trust. The terms of the PTC agreement are noted below. After recording the warranty deed
       on October 4, 2004, the trustee transferred the property to trust No. 9896-01 via trustee’s
       deed on December 8, 2004.2 However, the deed indicates that the transfer between trusts was
       exempt from transfer taxes.
¶8          Ellis alleges in her motion for summary judgment, addressed in a later section, that
       Villasenor purchased the subject property on June 7, 2005. However, Ellis’s account of the
       chain of title hereafter differs from that of US Bank because she alleges that Villasenor
       purchased the property, not from First Suburban as trustee, but rather from a company called
       CRG Investments, LLC (CRG). In her motion she attempts to introduce into evidence a real
       estate contract indicating Frank Lopez, an associate of CRG, as the seller, and Villasenor,
       also an associate of CRG, as the buyer; however, this contract was not admissible for want
       of authentication. In the contract, both Lopez and Villasenor list the same addresses next to
       their names: 1475 W. Irving Park Rd. Chicago, IL 60613. Ellis alleges that this address
       matches the addresses of both PTC and CRG. She relies on an “LLC-5.5 form” entitled
       “Illinois Limited Liability Company Act, Articles of Organization” that was filed with the
       Secretary of State on August 4, 2004 as evidence to link the Irving Park address to CRG.
       However, a “Cyber Drive LLC” member search from April of 2010, also admitted as
       evidence, does not indicate a matching address for CRG, yet does list Lopez and Villasenor
       as members. Regardless, a trustee’s deed was recorded on August 3, 2005 indicating a sale
       from First Suburban to Benjamin Villasenor; Villasenor does list the allegedly matching
       PTC/CRG address on this deed. However, it is unclear if Villasenor accepted title as an
       individual or as a representative of CRG.
¶9          Once Villasenor had title, Ellis alleges in her motion to intervene, he conveyed title to
       a third bank: Lasalle Bank National Association as trustee for trust number 134185. Ellis
       admits the quitclaim deed in trust as proof of this conveyance recorded July 20, 2005. Lasalle
       Bank has never been a party to this action, its possession of title is not disputed, and its
       quitclaim deed is not addressed again. Thereafter, Villasenor mortgages the very same
       property and conveys title to Wells Fargo in a mortgage recorded August 3, 2005.
       Nonetheless, after Ellis executed a warranty deed pursuant to her agreement, the subsequent
       transfers occurred under authority of the deed and terms of the agreement.
¶ 10        The PTC agreement outlined the terms of a $10,210.63 loan in which Ellis alleges, in her
       affirmative defense and complaints, that her property served as security for the loan.
       Paragraph 4 of the PTC agreement, entitled “Promise to Pay,” reads in part: “If the Grantor


              2
                  The beneficiary of either trust is not identified in the record of this case.

                                                      -3-
       [Ellis] shall fail to pay any monthly payment at the times, place and in the manner above
       provided *** the PTC by reason thereof shall be authorized to declare the Term ended, an
       acceleration clause will apply and the right to repurchase will be forfeited ***.”
¶ 11        Paragraph 6, entitled “Collateral,” reads: “The Grantor acknowledges that the PTC is
       securing the property in order to resell it to the Grantor or sell it to a third party purchaser,
       if and in the event the grantor defaults on any terms of this agreement.” The agreement
       required that a warranty deed in trust be conveyed to PTC, but stated that Ellis held the right
       to repurchase her property and explained how Ellis could exercise such a right.
¶ 12        Paragraph 10, entitled “Transfer of Title,” reads in part: “If Grantor complies with all the
       requirements for the exercise of the Right to Repurchase, PTC shall convey (or shall cause
       to be conveyed) to Grantor merchantable title to the Premises by special warranty deed, free
       and clear of all liens and encumbrances ***.”
¶ 13        Paragraph 13 reads: “This agreement contains all the terms and provisions of the
       understanding between the parties. There are no other promises or agreements other than
       those contained herein.”
¶ 14        Paragraph 14 reads: “This agreement shall be construed in accordance with the laws of
       the State of Illinois.” Paragraph 15 provides: “Grantor shall not record or file this agreement
       (or any memorandum hereof) in the public records of any county or state.”
¶ 15        Paragraph 18, entitled “Express Acknowledgment,” reads:
            “Grantor expressly acknowledges hereby that PTC has the right at any time during the
            term of this [a]greement to encumber title and/or convey ownership of PTC’s interest in
            the Agreement premises notwithstanding Grantor’s *** Right to Repurchase ***. It is
            expressly agreed hereby that any such conveyance by PTC shall not be deemed an
            anticipatory breach and/or default of PTC’s obligations under this said Agreement, and
            notwithstanding any such conveyance, Grantor shall continue to be obligated to perform
            any and all undertakings, promises, covenants, and agreements as provided in this said
            Agreement, said performances, and each of them to continue to be rendered to PTC
            hereunder or to PTC’s successor as directed by written notice forwarded by PTC to
            Grantor. PTC expressly undertakes hereby to reacquire title to the subject premises such
            that PTC will be in a position to perform as provided in paragraph 10 above.”
¶ 16        On April 1, 2007, Ellis secured a second loan from PTC for $3,764.19, alleging in her
       deposition that she needed the money to pay off water bills and property taxes. An identical
       agreement was executed for that loan. Ellis alleges in her complaints, affirmative defense,
       and motions that she made all payments due under both PTC loans until October of 2007
       when her mailed payments were returned by the United States post office showing that PTC
       was not located at the address and had left no forwarding address. All efforts to locate PTC
       were unsuccessful.
¶ 17        Ellis alleges in her motion for leave to intervene that she learned of a cloud on her title
       on April 28, 2008 after receiving notice that her property had been foreclosed and that an
       eviction action had commenced. In response she filed, on May 21, 2008, a motion for leave
       to intervene in the Villasenor foreclosure and a motion to vacate the judgment for foreclosure
       and the order confirming the sale. On August 7, 2008, the court permitted Ellis to intervene

                                                 -4-
       and granted her request to vacate the April 24 order approving the report of sale and
       possession order, and the December 10 judgment of foreclosure and order confirming the
       sale. The court granted Ellis leave to file an answer, affirmative defense, and complaint to
       quiet title.
¶ 18       Ellis alleges in her affirmative defense and complaint that the warranty deed was
       represented to her and in the PTC agreement as only security for her loan. Ellis claimed that
       the agreement and warranty deed she executed created an equitable mortgage.
¶ 19       Ellis further alleges in her motion to intervene and affirmative defense that since she
       remained in title, all transfers after the deed was recorded in trust No. 9892-01 were void for
       lacking consideration. Ellis also alleges that PTC would be required to foreclose on her
       mortgage in accordance with Illinois Mortgage Foreclosure Law (735 ILCS 5/15-1101 et seq.
       (West 2004)) before title could pass to a third party.
¶ 20       Lastly, Ellis alleges in her motion and affirmative defense that all payments due under
       the agreement were delivered to PTC as required until October 2007. In her complaint to
       quiet title, she alleges that these payments total $13,345.40, which is more than the sum
       required to satisfy the indebtedness due. In October of 2007 she attempted to exercise her
       right to repurchase and made efforts to find PTC to no avail. Ellis alleges that she should
       have reacquired merchantable title.

¶ 21                                      III. Depositions
¶ 22       The following are excerpts from Ruthie Lee Ellis’s deposition regarding the agreement
       she signed with PTC, which was admitted in evidence.
               “PLAINTIFF’S COUNSEL: Let’s turn to the second page. Do you recognize the
           second page of this document? [Warranty Deed]
               ELLIS: Yes. I signed it.
               PLAINTIFF’S COUNSEL: Did you read this document before you signed it?
               ELLIS: No, I did not.
               PLAINTIFF’S COUNSEL: Was it explained to you?
               ELLIS: Yes, they explained it. They went through it. Yes, they did.
               PLAINTIFF’S COUNSEL: What did you understand about this document?
               ELLIS: I thought you had to sign all of these forms in order to get the loan. That is
           the only thing. I signed these forms in order to get the loan.
               PLAINTIFF’S COUNSEL: But what did you understand that these documents said?
               ELLIS: I didn’t know it said he was taking my property. I did not know that.
               ***
               PLAINTIFF’S COUNSEL: Do you see about three quarters of the way down the page
           [of the PTC Agreement] by paragraph three where it says, ‘Warranty Deed in Trust’ in
           bold?
               ELLIS: Yeah.


                                                 -5-
               PLAINTIFF’S COUNSEL: Do you remember reading that provision before you
           signed this document?
               ELLIS: No.
               PLAINTIFF’S COUNSEL: Do you remember this provision being explained to you?
               ELLIS: I don’t think it were.
               PLAINTIFF’S COUNSEL: If you read that paragraph now, what does that paragraph
           say? What do [you] understand that paragraph to mean?
               ELLIS: Right now it says you giving the other people the warranty and deed of your
           property. But up above that it says where I was getting the $10,000 to pay the taxes on
           the property.
               PLAINTIFF’S COUNSEL: Did you understand that you had to give a deed to the
           Bishop property in order to get the loan?
               ELLIS: No, I did not.
               PLAINTIFF’S COUNSEL: You didn’t understand that?
               ELLIS: No, I did not. Nobody explained that to me.
               ***
               PLAINTIFF’S COUNSEL: Forgive me if I asked this question already, but when they
           would give you the documents and you said they explained them to you, did you read the
           documents?
               ELLIS: No, I didn’t have them in my hand like you have this paper in front of me.
           No, they went just down and they read it all and I was sitting there.
               ***
               PLAINTIFF’S COUNSEL: Was there ever anything discussed about you
           repurchasing the Bishop property?
               ELLIS: No.
               PLAINTIFF’S COUNSEL: Was there anything ever discussed about a land trust? Do
           you ever remember anything being discussed about a trust?
               ELLIS: No.
               PLAINTIFF’S COUNSEL: Did you ever have any concerns about the property credit
           agreement that you entered into?
               ELLIS: No, I didn’t because as long as I was paying, I thought everything was okay.
           I didn’t know I was paying them and they were taking my property.”
¶ 23       After addressing Ellis’s understanding of the documents, Ellis was asked about the
       eviction notices that were posted, which led to her first notice that the property had been
       sold. She testified that, “When somebody come around and put all kind of papers around the
       house, move out, move out. *** But that’s how we found out that the house had been sold.
       Nobody ever talked to us about nothing.”
¶ 24       Both of Ellis’s grandsons, Michael and Martez, were deposed. Michael testified to a time
       when men took pictures of the home.


                                               -6-
         “PLAINTIFF’S COUNSEL: Do you remember if other than this time in March or
    April of 2007, was there any other time when anyone came to the home to take pictures
    of the property?
         MICHAEL: I recall the people that came. They came a second time.
         ***
         PLAINTIFF’S COUNSEL: Was your grandmother there when they came the second
    time?
         MICHAEL: No. I was there.
         PLAINTIFF’S COUNSEL: Did you let them into the house?
         MICHAEL: Yes.
         PLAINTIFF’S COUNSEL: And they took more pictures?
         MICHAEL: Yes.
         ***
         PLAINTIFF’S COUNSEL: While they were there, did you talk to them? This is the
    second time. Did you talk to them at all?
         MICHAEL: No. They just took pictures, and they left.
         PLAINTIFF’S COUNSEL: Do you remember any conversations that took place the
    first time they came to visit, either conversations you had with them, or conversations
    they had with your grandmother?
         MICHAEL: No.
         PLAINTIFF’S COUNSEL: Do you remember about how many people there were
    that came?
         MICHAEL: There was three guys.
         PLAINTIFF’S COUNSEL: Do you remember any of their names?
         MICHAEL: No.
         ***
         PLAINTIFF’S COUNSEL: Mike, have you ever seen this document [Uniform
    Residential Appraisal Report prepared by Cynthia Tengler-Hansen] before?
         MICHAEL: No.”
The following exchange comes from Martez’s deposition and is relevant because Martez
acted as witness when Ellis first signed the PTC agreement. Martez reviewed the agreement
along with Ellis during the meeting with PTC representatives. Although allegedly appearing
on behalf of PTC, both Benjamin Villasenor and Ignacio Villasenor are listed as members
of CRG Investments, LLC. A “Cyber Drive LLC” member search completed in April of 2010
was admitted as evidence and supports this fact. Martez was also present for the appraisal.
         “PLAINTIFF’S COUNSEL: You said that Ignacio was one of the gentlem[e]n. There
    was another gentleman there?
         MARTEZ: Yes.
         PLAINTIFF’S COUNSEL: Do you remember his name?

                                        -7-
              ***
              MARTEZ: I think it was Benjamin Villasenor.
              PLAINTIFF’S COUNSEL: Do you remember a gentleman named Rick?
              MARTEZ: I think that’s what she [Ellis] called him.
              PLAINTIFF’S COUNSEL: What she called Ben or Ignacio?
              MARTEZ: I think that’s what she called Ignacio[.] ***
              PLAINTIFF’S COUNSEL: Do you remember if they worked for a company?
              MARTEZ: I thought it was their company.
              PLAINTIFF’S COUNSEL: Do you remember the name of it?
              MARTEZ: Property Tax Counselors.
              ***
              PLAINTIFF’S COUNSEL: You said there was an appraisal too. *** Were you there
          for the appraisal?
              MARTEZ: Yeah, I’m certain I was–I believe I was there. I mean, they just came in
          and did like a–I mean, like a walk through, basically. They didn’t look at anything.
              PLAINTIFF’S COUNSEL: Who is ‘they’? Ignacio and the other gentleman?
              MARTEZ: I know Ignacio was one of them. I’m almost certain of that. I can’t
          remember if Benjamin was the other guy with him though.
              ***
              PLAINTIFF’S COUNSEL: Was your grandmother there?
              MARTEZ: I don’t think she was there, no.
              ***
              PLAINTIFF’S COUNSEL: Do you remember if you had a conversation with them
          during that time about anything?
              MARTEZ: Nothing in particular, no.
              ***
              PLAINTIFF’S COUNSEL: Okay. Did you believe that your grandmother understood
          the terms of this [PTC] agreement when she signed it?
              ***
              MARTEZ: I mean, I think that she, probably she and I, probably took their
          explanation of it a little bit more than we should have. So, yes, the answer would be yes.”

¶ 25                         IV. Motions for Summary Judgment
¶ 26                     A. US Bank’s Motion for Summary Judgment
¶ 27       US Bank filed a motion for summary judgment on March 3, 2010. 735 ILCS 5/2-1005
       (West 2008). In this motion, the bank included Villasenor’s mortgage, the assignment of
       mortgage from Wells Fargo to US Bank, deposition testimony of Ellis, Michael, and Martez,
       the PTC agreements of 2004 and 2007, the warranty deed in trust showing the conveyance

                                                -8-
       from Ellis to First National, the trustee’s deed showing the conveyance between the First
       National trusts, and the trustee’s deed showing a conveyance between First National and
       Villasenor. US Bank claims that, as a matter of law, Ellis’s equitable mortgage claim could
       not defeat the bank’s mortgage because the bank was first to record its interest in the property
       and had no notice of Ellis’s equitable claim.
¶ 28       US Bank alleges in its summary judgment motion that it had no actual or constructive
       notice of any other interest in the property that would have prevented a valid sale and
       subsequent mortgage. US Bank alleges that in searching the chain of title it was not alerted
       to any other interests because Ellis’s claimed equitable mortgage was never recorded. US
       Bank alleges that Ellis’s failure to record led the world to believe that title to the property
       was held in the land trust and that the land trust had the authority to convey the property. It
       further alleges that if Michael lived in the home, that did not constitute notice, nor did it
       require the bank to inquire further.
¶ 29       US Bank alleges that no evidence in the appraisal suggests that Michael Ellis was living
       in the house. US Bank alleges that the property owner would have had to be the occupant to
       place it on notice, and, since Michael is only the grandson of Ellis, that did not operate as
       notice.
¶ 30       US Bank further alleges that the matching PTC/CRG addresses listed by Lopez and
       Villasenor would not have required a “deeper” inquiry. US Bank also alleges that a
       discrepancy in the actual versus the reported sale price was insufficient to place it on notice.
       US Bank attempts to rely on the appraisal as evidence in which the appraiser wrote: “The
       current sellers/owners [allegedly CRG] were contacted and/or, the tax transfer records were
       searched. It appears from the research that the subject property transferred ownership 10/04
       for $86,000. The past sale was verbally verified through the seller. The assessor reported the
       sale occurring 10/04 as $10,500 which the seller stated was incorrect.” Ellis attempted to
       admit into evidence the real estate contract between Lopez and Villasenor, and the appraisal
       to no avail because the real estate contract and the appraisal were not authenticated and no
       foundation was laid.
¶ 31       Lastly, US Bank alleges that Ellis was bound by her actions in signing an agreement she
       did not understand. US Bank concedes that had Ellis properly exercised her right to
       repurchase, PTC would be obligated to reacquire title and reconvey the property. If Ellis did
       in fact comply with the terms of her agreement, and repay PTC in full, PTC could be held
       in breach of contract for failing to reconvey the title. However, even in that case, US Bank
       alleges that the breach would not affect Ellis’s original assent to the terms of the agreement.
       US Bank alleges that these terms and Ellis’s assent enabled all successive sales. In the case
       at bar, US Bank alleges that although PTC had acted fraudulently, Ellis should be the party
       held responsible because she initially authorized PTC to act within the terms of the
       agreement.

¶ 32              B. Ellis’s Response and Cross-Motion for Summary Judgment
¶ 33      On May 3, 2010, Ellis filed a response to US Bank’s motion for summary judgment, as
       well as a cross-motion for summary judgment. In this motion, Ellis included “certificates”

                                                 -9-
       on behalf of herself, Michael Ellis, and Martez Knox. These certificates are unnotarized
       statements admitted as evidence under the Code of Civil Procedure, section 1-109, entitled
       “Verification by certification.” 735 ILCS 5/1-109 (West 2008). Ellis, Michael, and Martez
       each signed a statement that says, “Under penalties of perjury as provided by Section 1-109
       of the Illinois Code of Civil Procedure, I, [name], hereby certify that the foregoing statements
       in this Certificate are true.” The motion also included the amortization schedule for the 2004
       loan, an invoice showing receipt of payments for the 2007 loan, a trustee’s deed showing
       conveyance between the First National trusts, a trustee’s deed showing conveyance between
       First National and Villasenor, and a quitclaim deed in trust showing conveyance between
       Villasenor and Lasalle Bank National Association. This quitclaim deed is mentioned very
       briefly in Ellis’s motion as an inconsistency in the chain of title; it is never addressed again
       throughout the record or in any proceedings. Although not considered, Ellis attached
       Villasenor’s real estate contract, loan application, and appraisal to her motion.
¶ 34        In her motion, Ellis alleges that US Bank was notified of her interest in the property and
       that since the bank was on notice of her interest in the property, it was not a bona fide
       mortgagee, and thus, never had a valid mortgage. Ellis alleges that US bank had constructive
       notice of her interest in the property because Michael was living in the home at the time of
       the sale to Villasenor, and the discrepancy between the appraisal value and tax stamps on
       Ellis’s warranty deed required a greater inquiry. Ellis also alleges that the appraisers sent by
       US Bank met Michael and had notice of a tenant living in the house. Ellis alleges that had
       US Bank spoken to Michael Ellis, his answers would have led the bank to Ellis and her
       interest in the property.
¶ 35        Ellis alleges further that US Bank was on notice of her interest based solely on the tax
       stamps on the warranty deed between Ellis and First Suburban. The tax stamps indicated that
       the property was sold for $10,500. Thus, when US Bank had the property appraised at
       $115,000, it was placed on notice of the drastic difference in consideration in the value of
       the property. Ellis alleges that this notice imputes a duty of further inquiry.
¶ 36        Ellis, in her summary judgment motion, also questioned the legality of the property sale
       between Trust 9896-01 and Villasenor. Ellis raised this claim because it was not clear that
       the sale was solely between trust No. 9896-01 and Villasenor. Although Ellis did not
       formally raise claims of fraud against PTC, she relied on the unauthenticated real estate
       contract and suggested that fraud was at play because Villasenor’s name appeared as a
       partner of the company listed as the seller, CRG; Villasenor was also listed individually as
       the buyer. The addresses of the buyer, Villasenor, and seller, CRG, were also the same yet
       did not match the address of the subject property.
¶ 37        Ellis also alleges that PTC defrauded her in their representations of the agreement. When
       Ellis executed the PTC agreement, Martez acted as a witness and reviewed the document.
       At the time of signing, Ellis had a high-school education and Knox was in pursuit of a
       business management degree from Robert Morris College. Ellis believed that the agreement
       vested her property interest as security with PTC; she alleges she did not realize that the
       agreement had actually conveyed her interest to the land trust. In an unnotarized “certificate”
       submitted by Ellis, she stated:


                                                -10-
            “I did not read all of it [PTC Agreement] before signing it, but [PTC employee]
            explained it was necessary for the loan and that I could not lose the house as long as I
            paid the loan back as agreed. I never had any intention of selling *** the house nor would
            I ever have done so ***. In every conversation I had with [PTC employee, he] told me
            he was giving me a loan and that when I finished paying the loan, I would still own the
            property. Based on his explanations, I believed I was getting a loan and as agreed, I paid
            the loan back so I would not lose my house.”
       In a similar “certificate,” Martez Knox stated:
            “I understood that [PTC] was providing my grandmother a loan to pay some taxes. ***
            [PTC employee] further explained that as long as she paid the money back, she could not
            lose the house. At no time did [PTC employee] say anything that she was selling him the
            property. I do know that at no time did anyone ever ask for the keys or was there ever any
            request that Michael [Ellis] move out of the house as a result of the loan.”
       Although Ellis does not allege a formal fraud claim, she asks that these facts should be
       considered in classifying her agreement with PTC and her conveyance of the warranty deed
       to First Suburban as an equitable mortgage. Ellis alleges that when PTC required her to
       execute a warranty deed and then later sold the property to Villasenor, it committed fraud in
       the inducement. However, Ellis alleges that US Bank is also at fault for ignoring facts that
       would have led a diligent lender to conclude that Villasenor did not have merchantable title.
       Thus, Ellis alleges that US Bank was never a bona fide mortgagee because it had constructive
       notice of Ellis’s adverse interest and therefore her interest should be considered an equitable
       mortgage.
¶ 38        In support of her argument for an equitable mortgage, both in the trial court and before
       us, Ellis relies on section 5 of the Mortgage Act (765 ILCS 905/5 (West 2004)). The
       Mortgage Act reads, “Every deed conveying real estate, which shall appear to have been
       intended only as a security in the nature of a mortgage, though it be an absolute conveyance
       in terms, shall be considered as a mortgage.” 765 ILCS 905/5 (West 2004). Ellis alleges that
       the Illinois Mortgage Foreclosure Law section 15-1207(c) also addresses a deed intended as
       security for a loan but executed as an absolute conveyances on its face. Ellis alleges that
       these statutes should apply to her mortgage. US Bank requests that we consider the
       Conveyances Act, section 30 to bind Ellis in her conveyance. 765 ILCS 5/30 (West 2004).
       The statute pertinently reads, “creditors and subsequent purchasers, without notice; and all
       such deeds and title papers shall be adjudged void as to all such creditors and subsequent
       purchasers, without notice, until the same shall be filed for record.” 765 ILCS 5/30 (West
       2004). Ellis alleges that the Illinois Mortgage Foreclosure Law and the Mortgage Act should
       apply to her deed because those statutes are written more broadly. She alleges that if we rely
       on the Conveyances Act and call her deed a conveyance, the courts would render the Illinois
       Mortgage Foreclosure Law and the Mortgage Act inapplicable in the exact situation the
       legislature intended them to apply. Thus, she urges that the deed be called an equitable
       mortgage.




                                                -11-
¶ 39                V. Trial Court’s Written Memorandum on August 30, 2010
¶ 40        After a hearing on the motions for summary judgment, the court issued a written
       memorandum opinion and order on August 30, 2010. First, the trial court stated that it would
       not consider the real estate contract or loan application submitted by Ellis because they were
       not authenticated. Next, the court found that Ellis’s 2004 and 2007 loans from PTC would
       operate as equitable mortgages, but only against PTC. In reaching this conclusion, the court
       relied on the four factors set out in Silas v. Robinson to determine whether the deed was a
       conveyance or a mortgage: “Relevant factors to determine whether the deed absolute in form
       was intended to be a mortgage include [(1)] the relation of the parties, [(2)] the circumstances
       surrounding the transaction, [(3)] the adequacy of consideration, and [(4)] the situation of the
       parties after the transaction.” Silas v. Robinson, 131 Ill. App. 3d 1058, 1062 (1985). Despite
       Ellis’s argument that the Illinois Mortgage Foreclosure Law “trumped” the Conveyances Act,
       the court found no legal basis for this claim. The court found that since there is a third party
       involved, the Conveyances Act must be applied. For this reason the court found the PTC
       agreement to be an equitable mortgage between Ellis and PTC, and a conveyance as to the
       rest of the world. Subsequent purchasers and mortgagees must be able to rely on the record.
¶ 41        The court also found that US Bank did not have actual notice of Ellis’s interest. In
       determining if constructive notice was present, the court considered both record notice and
       inquiry notice. The court found that there was no record notice because all documents
       indicated that Ellis conveyed her interest to the land trust. Because Ellis never properly
       recorded her agreement with PTC, there was no record of her property interest in the chain
       of title. The court also found that the presence of Michael Ellis did not require US Bank to
       inquire further. The court explained that the sale between trust No. 9896-01 and Villasenor
       was not inconsistent with a tenant’s presence on the property. Thus, the presence of Michael,
       as a tenant, did not place US Bank on notice, nor did it require that the bank inquire further
       into the landlord-tenant relationship.
¶ 42        Finally, the court decided that issues of fact regarding US Bank’s status as a bona fide
       mortgagee remained. For this reason, the court denied both US Bank’s and Ellis’s motions
       for summary judgment.

¶ 43                         VI. US Bank’s Motion to Reconsider and
                                 Trial Court’s Written Memorandum
¶ 44       On September 29, 2010, US Bank filed a motion to reconsider and asked the court to
       vacate its opinion of August 30, find the bank to be a bona fide mortgagee, and grant the
       motion for summary judgment in its favor. US Bank alleges that because the tenancy
       relationship between Ellis and her grandson was not inconsistent with the public record, this
       relationship did not place the bank on notice of Ellis’s interest as a matter of law. US Bank
       denies Ellis’s claim that it had a duty to inquire further to satisfy inquiry notice. US Bank
       also alleges that, had it inquired further, there was nonetheless no certainty that it would be
       led to Ellis’s purported interest.
¶ 45       On January 19, 2011, Ellis filed a response to US Bank’s motion to reconsider and a
       second motion for summary judgment, alleging that because there was no material issue of

                                                -12-
       fact relating to the bank’s status as a bona fide mortgagee, the court should grant her request
       to quiet title.3 She also alleges that US Bank’s discovery responses authenticated the
       appraisal, loan agreement, and real estate contract, making them admissible evidence to
       prove the bank had constructive notice.
¶ 46       On April 15, 2011, the court issued a new written memorandum opinion and order
       concerning US Bank’s motion to reconsider. The trial court again denied Ellis’s attempt to
       admit the excluded documents into evidence. The court explained that it was too late in the
       proceedings to admit the documents from the loan application file in the way that Ellis
       presented them to the court.
¶ 47       The court reviewed its prior decision that a material issue of fact remained to be decided
       regarding US Bank’s status as a bona fide mortgagee. The court noted that the facts
       demonstrated that the seller was not in possession of the home, which placed a duty upon US
       Bank to inquire further as to the possessor’s interest in the home. The trial court found that
       had Michael been questioned, he would have led US Bank to Ellis.
¶ 48       The court also found that since the public record revealed that the most recent deed was
       exempt from transfer taxes, indicating the transfer between the two First Suburban trusts,
       there was no evidence of a sale between the trusts managed by First Suburban. The court
       noted that this should have led US Bank to review the next deed in the chain of title, which
       would have revealed Ellis’s alleged sale to the land trust at a value significantly less than the
       market value. This examination of the chain of title was also imputed to US Bank and, if
       discovered through due diligence, would have resulted in a question of consistency: Why was
       Ellis acting as landlord for a property that she had apparently sold years earlier? The court
       concluded that the only logical inference was that Ellis believed she still owned the property,
       and US Bank was on constructive notice to make an inquiry of this interest. Since US Bank
       was on constructive notice of Ellis’s interest, the bank was never a bona fide mortgagee.
       Consequently, the court reconsidered its order denying the cross-motions for summary
       judgment and then denied US Bank’s motion for summary judgment and granted Ellis’s.
¶ 49       On May 13, 2011, US Bank filed a second motion to reconsider, which was denied on
       December 9, 2011. US Bank filed a notice of appeal on January 6, 2012, and this appeal
       followed.

¶ 50                                       ANALYSIS
¶ 51       On appeal, US Bank raises a challenge to the summary judgment below that denied it the
       protections of a bona fide mortgagee. US Bank asks us to determine whether knowledge of
       Michael’s possession in the property, and the inadequate consideration exchanged for Ellis’s
       warranty deed, placed the bank on inquiry notice of Ellis’s interest in the property. It further
       asks us to consider whether the trial court erred in not considering the appraisal of the
       property as evidence. US Bank ultimately asks us to find that the summary judgment was
       improperly decided and should be reversed in its favor.


               3
                   The court denied Ellis’s request for leave to file the second motion for summary judgment.

                                                     -13-
¶ 52        As an initial note, the arguments regarding the appraisal, the real estate contract between
       Villasenor and CRG, and the loan application will not be considered on appeal because the
       documents were not considered by the trial court and they will not change our decision on
       review. US Bank encouraged the trial court to avoid considering the appraisal, yet now
       requests us to consider it. Ellis attempted to admit the documents into evidence and US Bank
       initially opposed this attempt in “U.S. Bank’s Response and Objections to Ruthie Lee Ellis’s
       Request to Admit Facts.” US Bank admits that it produced the documents per Ellis’s request,
       but then objects that they “are genuine, true and correct copies of the documents.” US Bank
       denies receiving a transfer of the documents when Wells Fargo assigned the mortgage and
       loan files to US Bank. US Bank also denied that the documents were kept in a loan file as
       part of its ordinary course of business. US Bank raised several other objections about the
       form of the questions, the compound use of terms, and the ambiguity of terms. Furthermore,
       in the document “Plaintiff’s Response to Ruthie Lee Ellis’s Supplement to Her Cross-Motion
       for Summary Judgment and Response to Plaintiff’s Motion for Summary Judgment,” US
       Bank encouraged the court not to admit the documents into evidence. “Ruthie Lee has not
       laid the proper foundation to establish that these documents constitute business records ***
       or otherwise constitute evidence that would be admissible at trial.”
¶ 53        In light of these facts in the record, we are puzzled when US Bank accuses the trial court
       of “erroneously” finding that the “appraisal was not properly authenticated, and therefore,
       did not consider the appraisal as admissible evidence.” US Bank alleges on appeal that it “did
       not challenge the admissibility of the appraisal.” But we are not persuaded. The record
       presents us with US Bank’s clear objection to admitting these documents into evidence.
       Now, US Bank alleges that the appraisal should be included and accuses Ellis of violating
       the tenet set out in “Gillespie v. Chrysler Motors Corp., 135 Ill. 2d 363, 374 (1990) (holding
       that where a party introduces evidence, he cannot later complain of its admissibility).”
       Conversely, US Bank cannot steadfastly oppose the admission of documents into evidence,
       then follow that the document should be admitted.
¶ 54        US Bank alleges that it would rely on the appraisal to prove that Ellis’s alleged
       inadequate consideration for conveyance of her title to First Suburban was actually adequate.
       As noted above, US Bank alleges that the evidence to support this lies in the appraisers
       admission that they contacted the seller (allegedly CRG) to confirm that the consideration
       in Ellis’s conveyance was not $10,500 but $86,000. US Bank further alleges that the
       appraisal would prove that no evidence existed of Michael’s occupancy. Were the appraisal
       properly admitted as evidence, both arguments would fail. The consideration argument
       would be inadmissable hearsay and the appraisal clearly shows that a tenant resided on the
       property and paid rent of “$850.00 [which] is slightly below the typical market range for the
       rental of single family homes in the area.”

¶ 55                                 I. Standard of Review
¶ 56       “Summary judgment is proper where, when viewed in the light most favorable to the
       nonmoving party, the pleadings, depositions, admissions, and affidavits on file reveal that
       there is no genuine issue as to any material fact and that the moving party is entitled to


                                                -14-
       judgment as a matter of law. General Casualty Insurance Co. v. Lacey, 199 Ill. 2d 281, 284
       (2002); 735 ILCS 5/2-1005(c) (West 2004).” Buenz v. Frontline Transportation Co., 368 Ill.
       App. 3d 10, 14 (2006). Whether or not the trial court erred in granting summary judgment
       is a question of law and subject to a de novo standard of review. Williams v. Manchester, 228
       Ill. 2d 404, 417 (2008); Amalgamated Transit Union v. Chicago Transit Authority, 342 Ill.
       App. 3d 176, 179 (2003); General Casualty Insurance Co., 199 Ill. 2d at 284 (2002). De
       novo consideration means we perform the same analysis that a trial judge would perform.
       Khan v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578 (2011). It may be stated generally
       that, if what is contained in the pleadings and affidavits would have constituted all of the
       evidence before the court and upon such evidence there would be nothing to be decided by
       the trier of fact, the court would be required to grant summary judgment. See Fooden v.
       Board of Governors of State Colleges & Universities, 48 Ill. 2d 580, 587 (1971); People ex
       rel. Sharp v. City of Chicago, 13 Ill. 2d 157 (1958); Shirley v. Ellis Drier Co., 379 Ill. 105
       (1942).

¶ 57                      II. US Bank’s Notice of Ellis’s Equitable Interest
¶ 58       The primary issue we are to consider is whether US Bank had notice of Ellis’s interest
       prior to granting the Villasenor mortgage. The law measures bona fide purchasers and
       mortgagees under the same standards. US Bank must qualify as a bona fide mortgagee to
       retain an interest in the property. In order to successfully foreclose on the property, US Bank
       must establish that it acquired an “interest in [the] property for valuable consideration
       without actual or constructive notice of another’s adverse interest in the property.” In re
       Ehrlich, 59 B.R. 646, 650 (Bankr. N.D. Ill. 1986) (citing Life Savings & Loan Ass’n of
       America v. Bryant, 125 Ill. App. 3d 1012, 1019 (1984)). If US Bank meets these
       requirements it would obtain the role of a bona fide mortgagee. In the case at bar, US Bank
       denies that it had actual or constructive notice of Ellis’s interest.
¶ 59       Actual notice is that knowledge the purchaser had at the time of the conveyance. Bryant,
       125 Ill. App. 3d at 1019. The parties agree that US Bank did not have actual notice. Thus,
       the next inquiry is whether the bank had constructive notice. Constructive notice is
       knowledge that the law imputes to a purchaser, whether or not he had actual knowledge at
       the time of the conveyance. See generally In re Application of Cook County Collector for
       Judgment & Sale Against Lands & Lots Returned Delinquent for Nonpayment of General
       Taxes for the Year 1985, 228 Ill. App. 3d 719, 734-35 (1991); City of Chicago v.
       Cosmopolitan National Bank, 120 Ill. App. 3d 364, 368 (1983); In re Application of County
       Treasurer, 30 Ill. App. 3d 235, 240 (1975); Landis v. Miles Homes Inc., 1 Ill. App. 3d 331
       (1971). There are two kinds of constructive notice: record notice and inquiry notice. LaSalle
       Bank v. Ferone, 384 Ill. App. 3d 239, 245 (2008) (citing In re Ehrlich, 59 B.R. 646, 650
       (Bankr. N.D. Ill. 1986)). Both parties agree that US Bank did not have record notice because
       Ellis’s interest in the property was not recorded because the PTC agreement prevented
       recordation. Thus the chain of title does not impute record notice on US Bank. The bank
       relies on section 30 of the Conveyances Act (765 ILCS 5/30 (West 2004)) to explain in
       relevant part that all mortgages:


                                                -15-
     “which are authorized to be recorded, shall take effect and be in force from and after the
     time of filing the same for record, and not before, as to all creditors and subsequent
     purchasers, without notice; and all such deeds and title papers shall be adjudged void as
     to all such creditors and subsequent purchasers, without notice, until the same shall be
     filed for record.” 765 ILCS 5/30 (West 2004).
US Bank argues that, “the first mortgage recorded has priority. Firstmark [Standard Life
Insurance Co. v. Superior Bank FSB], 271 Ill. App. 3d [435,] 439 [(1995)]. An unrecorded
interest in land is not effective to a bona fide purchaser without notice. Schaumburg State
Bank v. Bank of Wheaton, 197 Ill. App. 3d 713, 720 (1990).” Federal National Mortgage
Ass’n v. Kuipers, 314 Ill. App. 3d 631, 635 (2000). US Bank points to the chain of title to
prove that it recorded an interest before Ellis. However, Ellis argues that US Bank is on
inquiry notice, yet failed to uphold its duty to inquire. In effect, she argues that, “where a
party has constructive notice of a prior interest in real estate, the failure to record is not
necessarily fatal to the rights of the prior interest holder. See Dana Point Condominium Ass’n
v. Keystone Service Co., 141 Ill. App. 3d 916, 922 (1986).” Kuipers, 314 Ill. App. 3d at 635.
         “The title of a purchaser whose deed has been recorded will not be postponed to a
     prior unrecorded conveyance except upon clear proof of actual notice of the earlier deed
     or of circumstances which should have induced an honest and prudent purchaser to make
     inquiry which would have disclosed the truth. Mere suspicion will not establish an
     inference of fraudulent intent. The proof must be so clear that the inference of bad faith
     is a necessary conclusion.” Cessna v. Hulce, 322 Ill. 589, 597 (1926), cited in Reed v.
     Eastin, 379 Ill. 586, 592 (1942).
See also Blake v. Blake, 260 Ill. 70 (1913); In re Cutty’s-Gurnee, Inc., 133 B.R. 934, 949
(Bankr. N.D. Ill. 1991). Ellis argues that US Bank acted in bad faith by ignoring clear proof
of her equitable interests. She relies most heavily on Michael Ellis’s presence as an occupant
of the home, and the inadequate consideration recorded in her initial conveyance evidenced
in the chain of title, as proof of her interests. She argues that had US Bank inquired of
Michael Ellis, inquiry would have led to Ellis’s interests since Michael was her grandson.
Regardless of the bank’s actions, Ellis argues that the law imputes US Bank with this duty
to inquire. She relies on Cessna, once again stating that, “[i]t is true that one having notice
of such facts as would put a prudent man on inquiry is chargeable with the knowledge of
other facts which he might have discovered by diligent inquiry. Whatever is notice enough
to excite attention, put the party on his guard and call for inquiry is notice of everything to
which such inquiry might have led.” Cessna, 322 Ill. at 595. See also Reed v. Eastin, 379 Ill.
at 592. It is important to note that the law does not concern itself with whether an inquiry is
actually carried out; rather, “notice is imputed to the subsequent purchaser, on account of his
negligence in not prosecuting his inquiries in the direction indicated.” Anthony v. Wheeler,
130 Ill. 128, 135 (1889). See also Smolek v. K.W. Landscaping, 266 Ill. App. 3d 226, 229
(1994); Bryant v. Lakeside Galleries, Inc., 402 Ill. 466, 477 (1949); Reed v. Eastin, 379 Ill.
586, 592 (1942) (citing Cessna v. Hulce, 322 Ill. 589, 597 (1926)); Doll v. Walter, 305 Ill.
App. 188, 192 (1940). See generally Aurora National Loan Ass’n v. Spencer, 81 Ill. App.
622, 622-25 (1898); Robertson v. Wheeler, 162 Ill. 566, 580 (1896); Grundies v. Reid, 107
Ill. 304 (1883); Slattery v. Rafferty, 93 Ill. 277 (1879).

                                         -16-
¶ 60       Both parties rely on Ehrlich to explain the tenets of inquiry notice. In re Ehrlich, 59 B.R.
       646, 649-50 (Bankr. N.D. Ill. 1986). Ehrlich, in turn relies on Illinois Supreme Court and
       Appellate Court cases Miller v. Bullington, 381 Ill. 238 (1942), and Burnex Oil Co. v. Floyd,
       106 Ill. App. 2d 16 (1969), respectively. We will first consider the precedent set forth in
       Miller by reviewing the relevant case history that spans over 50 years.
¶ 61       We begin our review with Miller v. Bullington, but first must lay Miller’s foundational
       precedent in Whitaker v. Miller, 83 Ill. 381 (1876), and Mallett v. Kaehler, 141 Ill. 70, 73-74
       (1892). In Whitaker, our supreme court found that a complainant’s right of possession was
       evidenced by her tenants. “Her possession was notice to all the world of her rights in the
       premises, and inquiry of her would have disclosed a knowledge of the truth. Without inquiry,
       no one can claim to be an innocent purchaser of lands in actual possession of another, as
       against such party.” Whitaker v. Miller, 83 Ill. 381, 386 (1876). This tenet was reinforced
       when the Illinois Supreme Court found, yet again, that:
           “[W]hen one purchases land in the possession of a third party, he is bound to take notice
           of whatever facts an inquiry as to the right of such possession would lead to. We said in
           Whitaker v. Miller, 83 Ill. 381 [(1876)], (and in substance in many other cases,) that ‘the
           possession of land by a party, through his tenants, is notice to all the world of his rights
           in the premises, and without inquiry of him, no one can claim to be an innocent
           purchaser, as against him.’ ” Mallett v. Kaehler, 141 Ill. 70, 74 (1892).
       These two 19th-century cases lay the foundation upon which the 20th-century Miller v.
       Bullington decision stands. The court in Miller found:
           “Again, possession of premises by a landlord through his tenant is notice of the
           landlord’s rights. (Mallett v. Kaehler, 141 Ill. 70 [(1892)]). One having notice of facts
           which would put a prudent man on inquiry is chargeable with knowledge of other facts
           which he might have discovered by diligent inquiry. Whatever is notice enough to excite
           attention and put the party on his guard is notice of everything to which such inquiry
           might have led and every unusual circumstance is a ground of suspicion and demands
           investigation. Reed v. Eastin, [379 Ill. 586 (1942)]; Struve v. Tatge, 285 Ill. 103 [(1918)];
           Blake v. Blake, 260 [Ill.] 70 [(1913)].” Miller v. Bullington, 381 Ill. 238, 243 (1942).
       See also LaSalle Bank v. Ferone, 384 Ill. App. 3d 239, 246 (2008).
¶ 62       US Bank ignores the importance of these three holdings in protecting the rights of
       landlords through their tenants. Ellis repeatedly asserts that Michael, as occupant and tenant,
       represents her equitable interests in the property. “Such occupancy has been repeatedly held
       to charge a purchaser or incumbrancer with notice, and all that it would lead to, if pursued.”
       Crawford v. Chicago, Burlington & Quincy R.R. Co., 112 Ill. 314, 321 (1884). See Doll v.
       Walter, 305 Ill. App. 188, 192 (1940).
¶ 63       US Bank supports its position by noting that Michael’s tenancy is not inconsistent with
       the record owner. The bank persistently argues that when Villasenor applied for a loan and
       mortgage, First National remained the record owner in a land trust. US Bank argues that
       Michael’s tenancy is not inconsistent with this relationship and thus it is not on notice of
       Ellis’s interests. However, US Bank reaches this conclusion only after misinterpreting
       Burnex Oil Co. v. Floyd and thus we do not find its argument persuasive. Burnex was

                                                 -17-
       decided after the trio of supreme court cases discussed above and clearly supports their
       conclusions:
           “Where real estate is in the possession of someone other than the record owner, such
           possession is generally regarded as notice to the world of the interest represented thereby
           and is legally equivalent to the recording of such interest. Carnes v. Whitfield, 352 Ill.
           384 *** [(1933), cited in Beals v. Cryer, 99 Ill. App. 3d 842, 845 (1981); Bryant v.
           Lakeside Galleries, Inc., 402 Ill. 466, 477 (1949); Chicago Title & Trust Co. v. Darley,
           363 Ill. 197, 204 (1936)], and Slinger v. Sterrett, 283 Ill 82 *** [(1918)]. A purchaser is
           bound to inquire of the person in possession by what tenure he holds and what interest
           he claims in the premises.” Burnex Oil Co. v. Floyd, 106 Ill. App. 2d 16, 21-22 (1969).
       Even if First Suburban was the record owner at the time Villasenor’s mortgage was recorded,
       the home was still in Ellis’s possession via Michael. Thus, this situation matches the criteria
       described in Burnex. Following the logic of Burnex, Ellis’s equitable mortgage has all the
       effects of recordation because the land was in possession by someone other than the record
       owner. Not only does the equitable mortgage have the effects of recordation, but this also
       requires that US Bank foreclose on Michael’s interests as occupant and tenant of the house.
       We note that while Burnex is instructive, it continues the long precedent our supreme court
       set forth in Miller v. Bullington, Carnes, Slinger, Mallett, and Whitaker.
¶ 64       Therefore, US Bank was imputed with inquiry notice of Ellis’s interest based on Michael
       Ellis’s possession of the home. Had the bank, or their appraisers, dutifully inquired of
       Michael, he surely would have responded that he rented the property from his grandmother,
       Ruthie Lee Ellis, who was the owner of the home. Then US Bank would have searched the
       chain of title further to find the recorded conveyance with inadequate consideration. These
       facts in tandem would have led US Bank to learn of Ellis’s interest and PTC’s
       misrepresentation and fraud. These facts are imputed to US Bank regardless of their decision
       to actually question Michael Ellis. The ruling in Burnex is certainly not an anomaly based
       on ancient case law; rather, the same precedent from Miller v. Bullington is evidenced in the
       21st century as well:
           “[S]ee also Atwood v. Chicago, Milwaukee & St. Paul Ry. Co., 313 Ill. 59, 62 (1924) (as
           long as possession is not occasional or temporary, it amounts to constructive notice,
           viable against the world, of any rights person in that possession may have). This may
           include improvements on the property, signs posted thereon, or possession by a tenant
           of the person claiming possession. See Carnes, 352 Ill. at 390 (possession of tenant is
           constructive notice of rights of landlord in property, even if legal title to property
           indicates another) ***.” Banco Popular v. Beneficial Systems, Inc., 335 Ill. App. 3d 196,
           211 (2002).
¶ 65       In Banco Popular, George and Helena Kaltezas owned property which contained a
       building that had fallen into disrepair. Banco Popular, 335 Ill. App. 3d at 199. The City of
       Chicago instituted a building code violation case against the Kaltezases, which resulted in
       the filing of a lis pendens notice with the recorder’s office in 1995. Banco Popular, 335 Ill.
       App. 3d at 199. The Kaltezases hired Morris Reynolds to do work on the property, but he
       eventually filed a claim for breach of contract against the Kaltezases and sought a lien on the


                                                -18-
       property. Banco Popular, 335 Ill. App. 3d at 199. Reynolds was awarded judgment against
       the Kaltezases, and the judgment was recorded in the Cook County recorder of deeds office
       on May 3, 1996. Banco Popular, 335 Ill. App. 3d at 199.
¶ 66        Before the judgment was entered, the Kaltezases executed a quitclaim deed conveying
       all interest in the property to Marsha Azar, through her nominee Saul Azar. Banco Popular,
       335 Ill. App. 3d at 199. The deed was delivered on March 13, 1995, and stated that Marsha
       Azar had the right of equitable ownership in the property and the building, “ ‘even if it [was]
       not recorded by way of deed conveying and vesting such legal ownership.’ ” Banco Popular,
       335 Ill. App. 3d at 199. The Azars paid taxes on the property, paid the water bill and brokers’
       commissions, placed a sign in the building’s window stating that their company was
       managing the property, changed the name of the tax addressee to their company, dealt with
       the local police department and alderman’s office in rehabilitating the property, and leased
       the property to new tenants. Banco Popular, 335 Ill. App. 3d at 199. Saul Azar told
       Reynolds’ attorney that he and Marsha had purchased the property. Banco Popular, 335 Ill.
       App. 3d at 199. Saul Azar also appeared in open court to defend the building code case
       instituted by the City of Chicago, and the case was eventually dismissed when the Azars
       completed all necessary repairs on the property. Banco Popular, 335 Ill. App. 3d at 200.
       However, the Azars did not record the quitclaim deed. Banco Popular, 335 Ill. App. 3d at
       200.
¶ 67        After the judgment in favor of Reynolds was rendered, he assigned the judgment to
       Benefit Systems, Inc. Banco Popular, 335 Ill. App. 3d at 200. Benefit Systems’ president
       searched the records and found the lis pendens notice, but did not review the court file or
       inspect the property. Banco Popular, 335 Ill. App. 3d at 200. On August 6, 1996, Marsha
       Azar recorded the deed she received from the Kaltezases and recorded a deed in trust on the
       property and a mortgage. Banco Popular, 335 Ill. App. 3d at 200.
¶ 68        Benefit Systems delivered the judgment to the Cook County sheriff for levy and sale on
       August 16, 1996. Banco Popular, 335 Ill. App. 3d at 200. Benefit Systems successfully
       purchased the property at the sheriff’s sale, and Benefit Systems notified Marsha Azar of the
       sale. Banco Popular, 335 Ill. App. 3d at 200. Marsha Azar, and Banco Popular as trustee,
       brought suit against Benefit Systems to set aside the sheriff’s deed. Banco Popular, 335 Ill.
       App. 3d at 200. Benefit Systems filed a counterclaim to quiet title and establish its priority
       in the mortgage. Banco Popular, 335 Ill. App. 3d at 200. The trial court granted summary
       judgment to Marsha Azar and Banco Popular. Banco Popular, 335 Ill. App. 3d at 201.
¶ 69        On appeal, we found that Beals and Miller found that possession of a property can “be
       equivalent to the recording of a deed as to a judgment creditor who claims an interest in the
       property of which another has possession when the creditor secured the judgment.” Banco
       Popular, 335 Ill. App. 3d at 210 (citing Beals v. Cryer, 99 Ill. App. 3d 842, 844 (1981), and
       Miller, 381 Ill. at 243). Possession must provide some measure of notice to the outside world
       of the possessor’s interest. Banco Popular, 335 Ill. App. 3d at 211 (citing Beals, 99 Ill. App.
       3d at 844). Evidence of possession includes making improvements on the property, posting
       signs on the property, and possession of the property by a tenant of the person claiming
       possession. Banco Popular, 335 Ill. App. 3d at 211.


                                                -19-
¶ 70        What constitutes possession in this respect will depend on the facts of the case and is thus
       a question of fact. Banco Popular, 335 Ill. App. 3d at 211. Therefore, the Azars’ actions
       created questions of fact about whether or not they “possessed” the property and whether or
       not their actions put Reynolds and Benefit Systems on constructive notice of Marsha Azar’s
       interest in the property. Banco Popular, 335 Ill. App. 3d at 211-12. Therefore, we reversed
       the grant of summary judgment and remanded for further proceedings. Banco Popular, 335
       Ill. App. 3d at 214.
¶ 71        In summation, US Bank had before it a series of facts that should have led it to inquire
       further before issuing its loan and mortgage. This is a duty imputed by the law. US Bank
       relies on Connor v. Wahl in alleging that Illinois precedent requires that “[w]here one of two
       innocent persons must suffer by reason of fraud or wrong conduct of another the burden must
       fall upon him who put it in the power of the wrongdoer to commit the fraud or do the
       wrong.” Connor v. Wahl, 330 Ill. 136, 146 (1928). US Bank urges us to find that Ellis should
       be held responsible for placing the power in PTC to commit fraud. However, we find that US
       Bank is not without fault for the reasons noted. Thus US Bank is not a bona fide mortgagee
       without notice. We come to this conclusion without considering Villasenor’s role in any
       fraud that may have been committed upon Ellis.

¶ 72                                       III. Conclusion
¶ 73      For the reasons noted above, US Bank is not a bona fide mortgagee without notice.
       Therefore we affirm the trial court in denying US Bank’s motion to reconsider and affirm the
       grant of summary judgment in favor of Ruthie Lee Ellis.

¶ 74       Affirmed.




                                                 -20-
