240 Ill. 177 | Ill. | 1909
Lead Opinion
delivered the opinion of the court:
It is first contended that as between the appellees and D. L. Buclcworth there was no consideration for said note, it being accommodation paper, and that its execution was obtained by false representations as to the financial standing-of D. L. Buclcworth, and that as the father of appellees only paid $4000 for the note, conceding he purchased the note in good faith but for the face of the note, the recovery in favor of appellees should have been limited to the face of the note and interest, and that the judgment is excessive as to the attorney’s fees included in the judgment. The note was accommodation paper, and there are no restrictions as to its use written on the note and no proof of notice of any restrictions as to its use or any proof of fraudulent representations made to appellants at the time the note was signed. In Naef v. Potter, 226 Ill. 628, it was said that accommodation paper is always necessarily issued without consideration, and no recovery can ever be had thereon by the original payee against the accommodation maker; that while the accommodation maker can impose any restrictions upon the use of such paper that he may see fit at the time it is issued, still, unless such restrictions are written upon the paper or otherwise brought to the knowledge of the transferee for value before he has purchased the paper, such restrictions constitute no defense to the paper, and the same rule with reference to fraudulent representations which do not go to the execution of the paper but apply only to the reasons which prompted the maker to lend his credit must apply to accommodation paper which applies to other commercial paper, and unless knowledge of such fraudulent representations is brought home to the transferee before he purchases the paper he will take it as an innocent purchaser, free from the defense of fraud. In Woodworth v. Huntoon, 40 Ill. 131, this court, on page 137, said: “A note tainted with fraud or other infirmity, passing into the hands of an innocent purchaser not chargeable with notice and for a valuable consideration, he acquires it purged of the defense.” In Wightman v. Hart, 37 Ill. 123, it was held when a promissory note has been assigned the presumption will be indulged that it was for value and bona tide. Persons questioning the fairness of the transaction, to defeat the assignment must prove that it was not for value or that it was made for fraudulent purposes.
In this case the evidence shows the father of the appellees, from whom they obtained the note, purchased this note in the due course of business and for its full face value. Clearly, therefore, appellees, as legatees under their father’s will, have the right to recover the full face value of the note, and as the note was not paid and a judgment was rightfully confessed thereon in accordance with the warrant of attorney attached thereto, the attorney’s fee specified in the note and warrant of attorney was rightfully included in the judgment. In Weigley v. Matson, 125 Ill. 64, it was held a stipulation in a warrant of attorney for the confession of a judgment by which a debtor agrees to pay the fees of his creditor’s attorney in case the creditor is compelled to resort to legal proceedings to collect his debt is an agreement which is not only eminently just but which rests upon a good and valuable consideration. In Dorsey v. Wolff, 142 Ill. 589, it was held a provision in a note whereby the maker promises to pay an attorney’s fee of ten per cent in case suit is brought thereon, either in such suit or by a separate action, passes by the assignment of the note as an incident to the main debt, and the assignee may recover such fee in an action on the note or in a separate action brought after suit on the note. The agreement to pay the attorney’s fees in case judgment should be confessed upon the note in question gave the note currency as well as security, and rendered the note more valuable than though a provision for the payment of attorney’s fees had not been incorporated in the note and power of attorney. Such agreement was supported by a good consideration, and by the transfer of the note passed to its legal holder.
The contention that the attorney’s fees provided for in the note and warrant of attorney were unlawfully included in the judgment cannot be sustained.
It is next contended that the endorsement on the note was not sufficient, in law, to transfer the title of the note to the appellees. In Kistner v. Peters, 223 Ill. 607,- a note was made payable to the order of Rosa M. Rinehart, who wrote on the back of the note, “I hereby acknowledge myself a principal maker of this note with E. N. Rinehart and my liability as such principal jointly with him.—Rosa M. Rinehart,” and delivered the same to Hettie J. Peters, who subsequently brought suit on the note. At the hearing, by leave of the court, she wrote the words, “Eor value received I assign the within note to. Plettie J. Peters,” immediately preceding the words hereinbefore quoted, and it was held that the legal title to the note, by virtue of the original endorsement, passed to Hettie J. Peters, and that it was not error to permit her to write on the back of the note the words which she did, preceding the original endorsement thereon. On page 611 of the opinion in that case this court said: “The name of the payee upon the back of.a negotiable instrument will transfer the legal title to the same, and it makes no difference that there is written above it language enlarging the liability of the endorser, such as a guaranty of the payment of the note.—Heaton v. Hulbert, 3 Scam. 489; Herring v. Woodhull, 29 Ill. 92; Judson v. Goodzvin, 37 id. 268.” We are of the opinion the name of D. L. Buclcworth upon the back of the note was sufficient to transfer the title to said note.
■ It is further contended that the note was transferred to I. N. Porter or bearer and that the legal title to the note did not pass to the legal holder of the note as bearer. The evidence shows that the name I. N. Porter was that of a fictitious person, and the law seems to be, where there is no statute on the subject, that the transfer of a negotiable instrument to a fictitious person or bearer will be treated as payable to bearer, and that the holder of such paper may bring a suit thereon in his own name. (Randolph on Commercial Paper, par. 161; 2 Parsons on Notes and Bills, p. 591, and note.) In Grant v. Vaughan, 3 Burr. 1516, it was held a bill payable to á fictitious name or bearer, as, e. g./to “Ship Fortune or bearer,” is payable to bearer. See, also, Piets v. Johnson, 3 Hill, 112.
It is said, however, that this rule does not apply where the maker of the instrument does not know that the note is payable to a fictitious person. If the rule is subject to the claimed exception this note was made payable to D. L. Buclcworth and by him endorsed to a fictitious person or bearer. The endorsement to the fictitious person was an endorsement to no person at all, and we think that part of the endorsement may be stricken out and the endorsement would then stand to “bearer,” which would pennit the appellees to maintain this suit. The case at bar in that particular differs from an endorseihent to a fictitious person or to a fictitious person or order, which seem to be the kind of cases relied upon by appellants to sustain their contention. We do not think, therefore, the cases in this State which hold that when a negotiable instrument is payable to a particular person or bearer the same must be endorsed by the particular person named as payee in order to pass title to the note apply here, as no specific person is named in this endorsement, I. N. Porter being a fictitious person.
It is also claimed it was error to refuse appellants the right to cross-examine Wesley M. Owen as to his knowledge of the facts surrounding the execution of said note. In the first place, the interrogatories propounded to Wesley M. Owen were not proper cross-examination; and secondly, there was no evidence tending to show that Wesley M. Owen was the agent of J. Keenan at the time Keenan purchased the note. At that time Wesley M. Owen was representing D. L. Buclcworth and received from Buck-worth $75 for his services.
It is finally contended that the court erred in declining to permit the appellants to testify to the facts,,surrounding the execution of the note and warrant of attorney. There was no evidence that J. Keenan had any knowledge of the facts surrounding the execution of the note at the time he purchased said note, and the appellees were suing as legatees, and the court properly declined to permit appellants to testify against them. McAyeal v. Gullett, 202 Ill. 214.
Finding no reversible error in this record the judgment of the Appellate Court will be affirmed.
Judgment affirmed.
Dissenting Opinion
dissenting:
The appellees’ title to the note and their right to maintain the suit are derived through the endorsement to I. N. Porter or bearer. Because I. N. Porter "was not a real person the opinion of the majority holds this endorsement equivalent to ah endorsement to bearer, and that the title therefore passed by delivery to appellees. From this I dissent. In this State the words “or order” and “or bearer,” in an instrument payable to a person named or order, or to a person named or bearer, are surplusage. The legal effect of the instrument, whether payable to a person named or order, or to a person named or bearer, or to a person named, only, is the same, and in either case the instrument is payable only to the person named or to his order. (Hilborn v. Artus, 3 Scam. 344; Sappington v. Pulliam, id. 385; Roosa v. Crist, 17 Ill. 450; Turner v. Peoria and Springfield Railroad Co. 95 id. 134.) The doctrine that treats negotiable paper made payable to a fictitious person as if made payable to bearer, and so negotiable without endorsement, applies only to paper put in circulation by the maker with knowledge that the name of the payee does not represent a real person. (Shipman v. Bank, 126 N. Y. 318; Armstrong v. National Bank, 46 Ohio St. 512; Chism, Churchill & Co. v. Bank, 96 Tenn. 641.) Since Buck-worth, in making the endorsement, did not know that I. N. Porter was a fictitious person that doctrine cannot be applied in this case, and there was no evidence that appellees were the legal owners of the note.
