Joseph v. Carter

• Decision Date: 16 March 1943
• Docket Number: No. 26871.,26871.
• Citation: 382 Ill. 461,47 N.E.2d 471
• Parties: JOSEPH v. CARTER.
• Court: Illinois Supreme Court

382 Ill. 461

47 N.E.2d 471

JOSEPH

v.CARTER.

No. 26871.

Supreme Court of Illinois.

March 16, 1943.

Appeal from Appellate Court, First District, Third Division, on Appeal from Municipal Court of Chicago; Frank M. Padden. Judge.

Action on a note by George Crowley, as receiver of Hyde Park-Kenwood National Bank of Chicago, against Edward Carter. Upon resignation of George Crowley as receiver, Harry Joseph as receiver was substituted as plaintiff. From a judgment of the Appellate Court, 314 Ill.App. 630, 42 N.E.2d 321, reversing and remanding with directions an order vacating and setting aside the judgment as to defendant Edward Carter, defendant appeals on leave to appeal granted.

Judgment of Appellate Court reversed and judgment of municipal court affirmed.Frank P. Mies and Ode L. Rankin, both of Chicago, for appellant.

Perlman, Goodman, Hecht & Chesler, of Chicago (Theodore E. Rein, Morton C. Chesler, and Maurice Fedotin, all of Chicago, of counsel), for appellee.

STONE, Chief Justice.

A judgment by confession, in the sum of $2,191.82, was, on November 28, 1940, entered in the municipal court of Chicago, against appellant, Edward Carter, and Eva Ruby Raulston Carter, his wife, on a judgment note given to the Kenwood National Bank in the sum of $1,250, dated December 14, 1928, and due in thirty days. Appellant, Edward Carter, on December 24, 1940, filed a petition to vacate the judgment as to him, which petition was allowed, and the cause was heard by the court without a jury. The issues were found for defendant Edward Carter and the judgment vacated as to him. His wife appears not to have sought vacation of the judgment. On appeal to the Appellate Court the judgment of the municipal court was reversed, and the cause remanded with directions to enter judgment against appellant as originally entered, for the sum of $2191.82. The cause is here on leave to appeal granted.

The note provided that thirty days after date ‘we jointly and severally, promise to pay to the order of Knewood National Bank of Chicago, Twelve Hundred Fifty #___ Dollars' etc. The note also provided: ‘In case of the insolvency of the undersigned, any indebtedness due from the legal holder hereof to the undersigned may be appropriated and applied hereon at any time as well before as after the maturity hereof.’ The note also stated that the undersigned had deposited with the bank, as collateral security for the note and any other liability, ‘the following property, viz: $1250.00 1st Mtg. With the right on the part of the said Bank or the legal holder hereof from time to time to call for additional security of such kind and value as will be satisfactory to said Bank or the legal holder hereof.’ The note also provided that in case of failure to respond with additional security or in case of depreciation in value of collateral, the whole of the note should be deemed payable at the election of the legal holder thereof, ‘with full power in said Bank or the legal holder hereof on maturity thereof, either by its terms or by election as aforesaid, or on the non-payment of any of the other liabilities above mentioned, to at any time and from time to time sell, assign and deliver the whole of said property and all additions thereto and substitutes therefor, or any part of said property, additions and substituted, at any public or private sale, at the option of the bank or legal holder thereof, and without advertising the same, and without notice to the undersigned. * * * Said bank or legal holder hereof is hereby authorized and empowered at any time to apply the payment of any liability or liabilities, whether the same be due or not, of the undersigned, to said bank, or to the legal holder thereof, (including any liability or liabilities of any partnership created while the undersigned may have been or be a member thereof,) whether the same be due or not, all property, real and personal, of every kind and description, including balances, credits, collections, moneys, drafts, checks, notes, bills or accounts, (whether on hand or in transit,) of the undersigned.’ There followed a power of attorney to confess judgment. It is conceded no payments were made on the note by appellant but the evidence shows that on January 26, 1931, the note then being past due, the sum of $238.10 in the private account of Eva Ruby Raulston Carter was applied by the bank and credited on the note.

The defense was the ten-year statute of limitations. The only question in the case is whether the application by the bank of Mrs. Carter's private account tolled the running of the statute. It is conceded that if it did not, the judgment of the municipal court was right.

The Kenwood National Bank (later the Hyde Park-Kenwood National Bank), went into receivership, and the judgment in this case was secured by the receiver of that bank. It is claimed by the appellee, receiver, that the application of the deposit of Carter's wife to the payment of the note, tolled the running of the Statute of Limitations, and therefore judgment was secured before the statute had run. The answer to the petition to vacate the judgment and open up the proceeding, stated that the application of the account of Carter's wife to the note was made with the knowledge and authority of Carter. Inspection of the note shows clearly that the authority to apply credits or deposits of the makers was conditioned upon the insolvency of the makers. There is no evidence of such insolvency and no reliance is made upon that provision of the note.

Appellee contends that the provision contained in that part of the note having to do with collateral and securities, granted authority to the bank to apply the deposits or credits of either or both makers, as the agent for each maker in so doing. As to this contention two observations must be made. Mrs. Carter's account was...