First Galesburg Nat'l Bank v. Joannides

This appeal involves a conflict within the appellate court on the question of whether the failure of a secured creditor to give notice to the debtor or guarantor (see Commercial Discount Corp. v. Bayer (1978), 57 Ill. App.3d 295) of the sale of collateral bars the creditor from recovering a deficiency from the debtor or guarantor. The circuit court of Knox County held that the plaintiff, First Galesburg National Bank (the bank), could not recover from Louis and Jennie Joannides, the defendants, guarantors on a loan made by the bank. The appellate court affirmed. (116 Ill. App.3d 810.) The appellate court's decision was on the ground that the bank failed to give the guarantors notice of the sale of the collateral as required by section 9-504(3) of the Uniform Commercial Code (Ill. Rev. Stat. 1981, ch. 26, par. 9-504(3)). We granted the bank's petition for leave to appeal under Rule 315 (87 Ill.2d R. 315). Tim Joannides, the defendants' son, was the owner of an automobile dealership incorporated as Town and Country Dodge. The bank financed the dealer's new-car inventory through a floor plan agreement. Under the arrangement, Town and Country was given a credit line at the bank to purchase new cars, and it agreed to remit the proceeds to the bank as each car was sold.