Johnson v. Campanella

• Decision Date: 15 April 1942
• Docket Number: No. 14.,14.
• Citation: 314 Ill.App. 7,40 N.E.2d 905
• Parties: JOHNSON v. CAMPANELLA.
• Court: United States Appellate Court of Illinois

314 Ill.App. 7

40 N.E.2d 905

JOHNSON

v.CAMPANELLA.

No. 14.

Appellate Court of Illinois, Fourth District.

March 2, 1942.

Rehearing Denied April 15, 1942.

Appeal from Circuit Court, Marion County; Josiah T. Bullington, Judge.

Action by Joe Blalack against Ben Campanella on a demand note. After judgment was entered by confession, the court permitted the case to be reopened and tried on its merits. After institution of suit and reopening of case, G. W. Johnson was substituted as plaintiff. From an adverse judgment, defendant appeals.

Affirmed. Harold N. Harrison, of Benton, and Hugh V. Murray, Jr., and Lester R. Carlson, both of Centralia, for appellant.

Ward P. Holt and John B. Kramer, both of Salem, for appellee.

STONE, Presiding Justice.

The original suit herein was filed in the Circuit Court of Marion County, as a narr and cognovit action, by Joe Blalack, asking for a judgment in the sum of $6,946.50, against Ben Campanella, appellant (hereinafter designated as defendant), on a demand note, dated June 29, 1939, for $6,000, executed by Ben Campanella to A. F. Grone, as payee, which note was endorsed by said Grohe and delivered to G. W. Johnson, appellee (hereinafter designated as plaintiff). After judgment was entered by confession, on motion of the defendant, the Court permitted the case to be re-opened and tried on its merits. After the institution of the suit and the re-opening of the case, G. W. Johnson, having reacquired the note was substituted as plaintiff.

The case was tried before a jury which returned a verdict of $6,570. Judgment was entered thereon and this appeal followed.

Plaintiff's theory of this case, as evidenced by the testimony of G. W. Johnson, was that plaintiff acting as the attorney in fact for R. E. Davis, acquired a lease upon a piece of ground known as the Chitwood strip for approximately $20,000 and thereafter assigned a three-eighths interest in the lease to A. F. Grohe in exchange for which Grohe agreed to pay him $15,000, and agreed to drill an oil well on the leasehold. Thereafter Grohe assigned an undivided one-eighth interest in the lease to Ben Campanella, for which Campanella paid Grohe $6,000 in cash and made and executed a demand note in the sum of $6,000 and delivered same to Grohe.

Johnson and Grohe had purchased some leases near Keensburg, Illinois, upon which Grohe was indebted to Johnson in the sum of $10,000. Several notes were made by A. F. Grohe to Johnson and renewed, but never paid. Upon Johnson pressing Grohe for payment of this $10,000 indebtedness, Grohe asked him for additional time and gave Johnson the $6,000 demand note as additional security for the payment of his indebtedness of $10,000. This note was transferred to plaintiff, the last few days in January, 1940, and was dated June 29, 1939.

Defendant's theory was that at the time Campanella executed the note involved in this suit, Grohe signed and gave to Campanella a letter acknowledging that there was to be no liability on the note until Grohe had completed a well on the Chitwood strip. No well was completed there and it is claimed that when, after the lapse of some six months Grohe endorsed the note and delivered it to plaintiff, that Johnson had full knowledge of the circumstances under which the note was delivered, and did not become a holder in due course thereof, and hence was not entitled to recover on the note.

It is the contention of counsel for defendant that plaintiff could not be held to be a holder in due course for the reason that the note was a demand note and was negotiated an unreasonable length of time after its issue; that as a matter of law, from the facts and circumstances Grohe and Johnson were partners and all knowledge that Grohe had in relation to the note including the defenses to which the note was subject, must be imputed to Johnson.

Section 53 of the Negotiable Instruments Law (Ill.Rev.Stats. 1939, ch. 98, par. 73, Jones Ill.Stats.Ann. 89.073) provides; “Where an instrument payable on demand is negotiated an unreasonable length of time after its issue, the holder is not deemed a holder in due course” Section 192 (Ill.Rev.Stats.1939, ch. 98, par. 215; Jones Ill.Stats.Ann. 89.215 of the same act provides: “In determining what is a ‘reasonable time’ or an ‘unreasonable time’ regard is to be had to the nature of the instrument, the usage of trade or business (if any), with respect to such instruments, and the facts of the particular case.” Counsel for defendant contend that it should be the judgment of the Court that as a matter of law, in the absence of special circumstances, the negotiation of an instrument payable on demand more than six months from the date of its issue be regarded as a negotiation an unreasonable length of time after its issue, so that the taker of the instrument cannot be regarded as a holder in due course. Counsel for plaintiff insist that it is a question of fact for the jury.

It is a well established principle of law in this state that what is a reasonable length of time is a question of fact for the jury. Nagle v. J....