56 N.E.2d 405 | Ill. | 1944
The construction of an ineptly drawn promissory note is here involved, the same having arisen through the filing of a claim thereon against the estate of the deceased maker. *570 A hearing before the county court of Whiteside county resulted in the disallowance of the claim, which action was approved by the circuit court, and its judgment was affirmed by the Appellate Court. The case is now before this court by virtue of the granting of a petition for leave to appeal. In addition to the facts stated by the Appellate Court, we deem it necessary to consider certain other matters disclosed by the record for a proper understanding of the issues and how the same arose.
Under date of March 1, 1931, Minnie E. Feldman executed and delivered her promissory note for $3000 payable to her son, James C. Feldman. We have examined the original note certified with the record and find it to be upon an ordinary printed form which is reproduced herewith, the part in standard type being the printed words of the note while the italics represent the filled-in portions written with ink:
---------------------------------------------------------------- | | | Morrison, Ill. March 1st 1931 No. ____ On or Before | | after date we jointly and severally promise to pay James C. | | Feldman or order, the sum of $3,000.00 Three Thousand || 00/000 DOLLARS, with interest at the rate 5 per cent, per | | annum from Date until paid, payable annually. Value | | received. Both principal and interest payable at the SMITH | | TRUST SAVINGS BANK, Morrison, Illinois. [Other provisions | | follow with regular power of attorney to confess judgment.] | | | | MINNIE E. FELDMAN | | | | Due Mar. 1, 1939 _______________________ | | | ----------------------------------------------------------------
The payee, James C. Feldman, continued to hold this note until May 11, 1932, on which day he pledged it to Leon Van Zele as collateral security for a $1500 note executed by himself and one Charles E. Ward to said Van Zele as part payment for certain premises known as the "Red Mill" in Geneseo, Illinois. This transaction was fully covered by a written contract of the same date and in accordance *571 therewith the following endorsement was made on the back of the $3,000 note:
On the following day, January 7, 1933, a new contract relative to the same mill property was executed by Van Zele and Hazel Feldman, wife of James C. Feldman. The total purchase price was the same, part of which was again represented by a $1500 note, this time signed by Hazel Feldman and due January 2, 1934. Under this contract the $1500 note was again collaterally secured by the $3000 note in question and Van Zele continued to hold possession of it under the following endorsement which the parties stipulated was made on said 7th day of January, 1933:
"I hereby assign the within note to Hazel Feldman subject, however, to the interest and right therein of Leon Van Zele, who now holds the said note as collateral security for a debt due him from Hazel Feldman. The within note is now in the possession of said Leon Van Zele, who has permitted me to make this endorsement. When Hazel Feldman has paid her note to said Leon Van Zele he is to surrender the within note to her.
James C. Feldman."
No other endorsement appears on the note.
In August, 1933, James C. Feldman and a brother were adjudged bankrupts, individually and as copartners doing business as Feldman Brothers. Their schedules showed large amounts due Minne E. Feldman for rents and other items, but the $3000 note was not listed as an asset. Nevertheless, in adjusting accounts between James C. Feldman and Minne E. Feldman, the referee charged her with the *572 amount of this note and credited a like sum on the claim ultimately allowed her against the bankrupt. The parties hereto stipulated that Van Zele was ordered to appear before the referee on October 3, 1933, and bring with him the $3000 note in question as well as the contracts and release concerning the mill property; that he there testified about said documents and left them with the referee for further examination as exhibits. What Van Zele testified to is not shown but he died on December 26, 1933, and the above-mentioned findings of the referee were not announced until June 13, 1934. However, the referee returned the note and other exhibits, intact, to Van Zele.
Minnie E. Feldman died February 20, 1941, and on June 25, 1941, claim was made against her estate by the executrix of Leon Van Zele, deceased, for the $3000 principal of said note plus interest of $1362.75. The executor of Minnie E. Feldman's estate filed objections to the claim, asserting in substance: (1) That the action did not accrue within 10 years of the day the claim was filed because the note became due on the date it bears, March 1, 1931; (2) that the note is not a negotiable instrument and the alleged due date of March 1, 1939, appearing thereon is not a part of it; (3) that the note was discharged in the bankruptcy proceedings of James C. Feldman of which Van Zele was aware; and (4) that the claimant was guilty of laches in attempting to collect upon this note. These contentions were adopted by the county and circuit courts and likewise approved by the Appellate Court as stated above. There being no disputed questions of fact in the record, the problems for solution are purely questions of law.
The crux of this case is aptly summarized by the Appellate Court as, "What is the real due date of this note?" If it became payable March 1, 1931, or thereafter upon demand, Van Zele was not a holder in due course because the negotiation by James C. Feldman on January 7, 1933, *573 or even May 11, 1932, was an unreasonable length of time after issuance. See section 53, Negotiable Instrument Law. (Ill. Rev. Stat. 1943, chap. 98, par. 73.) And if Van Zele was not a holder in due course then the present claim is barred under sections 11 and 58 of the Negotiable Instrument Law by the same defense which would be available between the original parties, i.e., the Feldman bankruptcy setoff. On the other hand, if the note did not mature until March 1, 1939, Van Zele became a holder in due course to the extent of his lien as further provided by section 27 of the same statute. The exact question here involved is new to this court and the facts unique.
It will first be observed from the note that it is dated March 1, 1931, and then provides, "On or Before after date we jointly and severally promise to pay," etc. If this was all that appeared with reference to maturity it would become a demand note under section 7 of the Negotiable Instrument Law. (Ill. Rev. Stat. 1943, chap. 98, par. 27.) The difficulty arises, of course, when we observe in the lower left-hand corner the words and figures, "Due Mar. 1, 1939." The record is barren of any evidence as to when this due-date blank was filled in and, accordingly, we must proceed upon the well-known presumption that it was done contemporaneously with the execution of the instrument. (VanZandt v. Hopkins,
From a reading of the cases cited by the court below and in briefs of counsel, together with those found upon our own research we appear to be faced with irreconcilable *574
decisions and principles of law. For example, as a corollary, if not a part, of the above-stated presumption we have the accepted rule that the effect of a promissory note is to be gathered from everything appearing thereon with the consent of the parties. (7 Am. Jur., Bills and Notes, secs. 49-60; Van Zandt v. Hopkins,
Opposed to the foregoing principles is the statement found in numerous cases that "where the body of the note and a marginal memorandum differ as to date of maturity the provision in the body of the instrument is controlling." (Union State Bank ofMinneapolis v. Benson,
The above-cited case of Economy Fuse and Mfg. Co. v. StandardElectric Mfg. Co.
Yet we do not conceive those decisions to be in conflict with the above-cited cases of Langdale v. People,
As to the case of Fisk v. McNeal,
Applying the foregoing principles to the facts of this case, we must first observe that it would be a most extraordinary thing if a person should undertake to repay money before he had, in fact, borrowed it or signed an obligation to repay it. Yet, that would be the effect of construing this note to become payable on March 1, 1931. The strained effect of such a construction is even more apparent when *578 we consider that the parties struck from the printed portion of the note the word "after," because it would have been much more simple to leave the word unaltered and simply prefix the phrase "On or" had the parties intended to make the note collectible at any time after the date of issuance. In other words, if the parties had intended to make the note payable on demand or at any time after the date of execution, simple words to that effect could readily have been inserted in the blank provided therefor in the note. To avoid such a strained and abnormal meaning we naturally look elsewhere in the note and find what appears to be a clear explanation of the intention of the parties. That is, referring to the left-hand corner of the note we find the due date to be "Mar. 1, 1939." Reading this with the "On or Before" provision makes the note quite intelligible and eliminates the unnatural result which would follow from making it payable even before it was executed. We recognize that the words "On or Before" could possibly have referred to the date of March 1, 1931. However, we repeat that such a reference would result in a paradox which we cannot believe the parties intended.
Standing alone, the payment provision in the body of the note is not only a poor sentence grammatically, but it is ambiguous and lacking in certainty. Reference to the date of "Mar. 1, 1939," however, clarifies the apparent intention of the parties to permit payment of the note, without penalty, before the date on which they considered that it finally matured. Furthermore, the date is filled in on a blank of the printed form which appears to be as much a part of the note as any other of its provisions. The line on which that date was inserted is even with the second signature line and is entirely within the black borderline encompassing all component parts of the note. Such being the case, it seems to us to be giving appellee the benefit of every doubt even to consider it a marginal memorandum. At any event, the due date of March 1, 1939, is present in *579
the note, and we see no more license for excluding consideration of it than if it said "This note is given to secure 5000 shares of Regina stock" as was the case in Scholbe v. Schuchardt,
The foregoing rule of construction appears to us to be the best and the one supported by a greater weight of opinion, including ours in the somewhat analogous cases of Corgan v. Frew,
Having found that the note, in fact, matured on March 1, 1939, we, of course, have no problem of laches or Statute of Limitations because the claim in question was filed well within 10 years after such maturity. *580
From what we have stated in this opinion, it follows that Van Zele was a holder in due course, and the orders in the Feldman bankruptcy can have no adverse effect on him, as he was not a party thereto. While it is true that he knew of the bankruptcy, yet that did not occur until August, 1933, whereas he became a holder in due course not later than January 7, 1933. The reason for the referee in bankruptcy holding this note to be an asset of James C. Feldman is obscure but with the family relationship of the maker, payee, and endorsee of this note, there are any number of explanations which would rationalize the situation. The note was not scheduled as an asset and since Van Zele appeared only as a witness he is not bound by such a collateral proceeding. (In reEstate of Rackliffe,
Therefore, the judgment in this case is reversed and the cause remanded for further proceedings consistent with the opinion herein.
Reversed and remanded, with directions.
SMITH, C.J., and MURPHY, J., dissenting. *581