Court Opinion

ID: 8866107
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:06:29.907055+00
Date Added: 2024-06-11T17:06:00.234916
License: Public Domain

Mr. Justice O’Connor dissenting' in part: The note which is the basis of the suit is dated June 10, 1932, and is for $4,000, payable two months after date to the order of plaintiff bank. A number of payments are indorsed on the note, so that, according to plaintiff’s computation as set forth in its complaint, there was $2,858.12 of principal due on the note and $1,227.45 interest. The instant suit was brought June 11, 1938, and judgment by confession for $4,372.34 was entered 2 days later, June 13, for principal, interest and attorneys’ fees. The suit was brought and judgment entered against Oul Homestead Association, a corporation, Albert Hornick, James L. Preisler and James Bican. Defendants, pursuant to notice given counsel for plaintiff on July 13, filed their petition to vacate the judgment. July 15th an order was entered reciting that on motion of counsel for defendants to vacate the judgment it was ordered “by agreement of counsel for plaintiff and defendants, that the judgment against Albert Hornick, James L. Preisler and James Bican is hereby vacated and set aside and declared null and void. ’ ’ And it was further ordered that the motion of the other defendant, Oul Homestead Association, a corporation, be set for hearing at a later date and leave given plaintiff to file counter-affidavits within 15 days. July 20th counsel for plaintiff served notice on defendants ’ counsel that they would move to vacate the order of July 15th by which the judgment against the three named individual defendants had been vacated and set aside, and that plaintiff’s counsel would further move “to file a counter-affidavit against the entire petition filed herein by attorney for defendants.” July 21st an order was entered vacating the order of July 15th and giving plaintiff leave to file a counter-affidavit and the matter was continued to the contested motion calendar. July 26th plaintiff’s counter-affidavit was filed in which it is set up that the note upon which judgment was confessed “is not the obligation of the Oul Homestead Association solely, but also the obligation of Albert Hornik, James L. Preisler and James Bican.” The counter-affidavit further set up that plaintiff was never notified that the Oul Homestead Association “had filed a resolution for liquidation with the Auditor of Public Accounts of the State of Illinois, and denied that plaintiff had any knowledge that Hornik, Preisler and Bican were appointed a liquidating committee on the 17th of January, 1936, as alleged in defendants’ petition to vacate the judgment.” There are further averments and references to this liquidation proceeding which I think unnecessary to refer to here. Defendants in their verified petition (to vacate the judgment, which was filed July 15, 1938, as above stated) averred among other things that the note in suit was the obligation of the Oul Homestead Association, a corporation, and was executed by the three individual defendants as officers of the corporation and not as individuals. What is now known as the Uniform Negotiable Instruments Law went into effect July 1, 1907. (Ch. 98, III. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 89.040].) Section 20 of the act provides: “Where the instrument contains, or a person adds to his signature, words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized; but the mere addition of words describing him as an agent or as filling a representative character without disclosing his principal, does not exempt him from personal liability. ’ ’ Under the provisions of this section I think it is clear that none of the defendants, Albert Hornik, James L. Preisler or James Bican is personally liable. The note is signed: “Oul Homestead Association, Albert Hornik, Pres., James L. Preisler, Sec’y> James Bican, treas.” In my opinion it is clear that the note is the obligation solely of the corporation and was signed by the three individual defendants as president, secretary and treasurer of the corporation. The note comes specifically within the provisions of section 20, and indicates that the three individuals signed “for or on behalf of the principal ... in a representative capacity” and therefore they are “not liable on the instrument,” if they were authorized to execute the note. In the instant case there is no contention but that they were so authorized. And this conclusion is not altered by the fact that the body of the note says, “the undersigned jointly and severally promise to pay” because the entire note must be considered. We have examined the original note and it is a printed form prepared and used by plaintiff bank. In Tampa Investment & Securities Co. v. Taylor, 272 Ill. App. 541, in considering the question whether individuals who signed “as trustees” were personally liable, we said (p. 549): “Section 20 [above quoted] changed the previous rule that a name followed by a designation as to some relationship to another would be considered only descriptio personae and the maker therefore personally liable. Professor Brannan says (Brannan’s Negotiable Instruments Law, 4th ed., p. 164): “ ‘The plain language of this section indicates that it was the intention of the draftsman and the commissioners to clear up the unnecessary and unpardonable confusion caused by the failure of some of the courts to exercise a little common sense and to recognize mercantile usage. Much of the difficulty found in this subject is purely manufactured and would not trouble a business man for a moment. ’ ” It was there held the individuals who signed the notes as trustees were not personally liable. As sustaining the position I have reached in the instant case, compare Mathis v. Liberty Straw Spreader Co., 238 Ill. App. 467; Decowski v. Grabarski, 181 Ill. App. 279; Reed v. Fleming, 209 Ill. 390; Cannon v. Miller Rubber Products Co., 128 Ohio St. 72; Jump v. Sparling, 218 Mass. 324; Consumers’ Twine & Machinery Co. v. Mt. Pleasant Thermo Tank Co., 196 Iowa 64; Myers v. Chesley, 190 Mo. App. 371; Second Nat. Bank of Akron, Ohio v. Midland Steel Co., 155 Ind. 581; Daniels on Negotiable Instruments, sec. 461, p. 533, vol. 1, 7th ed.