Keenan v. Blue

Decision Date03 June 1909
Citation88 N.E. 553,240 Ill. 177
PartiesKEENAN et al. v. BLUE et al.
CourtIllinois Supreme Court


Appeal from Appellate Court, Third District, on Appeal from Circuit Court, McLean County; Colostin D. Myers, Judge.

Action by A. J. Keenan and others against William Blue and others. Judgment for plaintiffs affirmed by the Appellate Court, and defendants appeal. Affirmed.

See, also, 130 Ill. App. 312.T. C. Kerrick, Bracken, Young & Peirce, and Earl D. Riddle, for appellants.

Welty, Sterling & Whitmore, Leslie J. Owen, and Barry & Morrissey, for appellees.

On the 21st day of October, 1905, the appellees, A. J. Keenan and L. C. Keenan, doing business under the name of J. Keenan's Bank,’ caused to be entered by confession, in the circuit court of McLean county, against the appellants, William Blue and James Vance, and one D. L. Buckworth, a judgment for $4,573.44 upon a promissory note for $4,000, bearing date March 8, 1905, signed by D. L. Buckworth, William Blue, and James Vance, and payable two years after date to D. L. Buckworth or order, with interest at 7 per cent. per annum from date until paid, which note had attached thereto a warrant of attorney authorizing Owen & Owen, or any attorney at law, to confess judgment on the note in favor of the legal holder for the amount thereof and costs and $400 attorney's fees, which note bore on its back the following indorsement: ‘For value received I hereby assign all right, interest or title in the within note to I. N. Porter or bearer. March 14, 1905. D. L. Buckworth.’ After the entry of the judgment the appellants appeared and moved to vacate the judgment and to recall the execution which had been issued, which motion was overruled, and an appeal was prosecuted to the Appellate Court for the Third District, where the judgment was reversed and the cause was remanded to the circuit court. 130 Ill. App. 312. Upon the case being redocketed in the trial court, an order was entered opening the judgment, staying execution, and granting the appellants leave to plead. A demurrer was thereupon interposed to the declaration and sustained, and the appellees, by leave of court, amended their declaration and averred therein that D. L. Buckworth, on March 14, 1905, assigned the said note for a valuable consideration, by his indorsementthereon, to one I. N. Porter or bearer, the said I. N. Porter being then and there a fictitious person, and that appellees were the bearers and legal holders of said note. The appellants again demurred to the declaration, and, their demurrer being overruled, they filed seven pleas to the declaration. The first, second, and third pleas were sworn to. The first denied the assignment for value by indorsement and delivery. The second denied that the note was indorsed or delivered to appellees for value, and the third denied that I. N. Porter was a fictitious person and was known by Buckworth to be a fictitious person. The fourth, fifth, and sixth pleas averred the said note was without consideration and was signed by the appellants as accommodation paper, and that they executed said note by reason of certain false and fraudulent representations made to them as to the financial standing of said D. L. Buckworth, and to induce them to sign said note said D. L. Buckworth executed and delivered to them his note for $4,000 of even date with said judgment note; that said Buckworth had been adjudged a bankrupt; and that they had filed said collateral note against his estate, upon which they had received a dividend of $906.34, which sum they brought into court and offered to pay over to appellees if they should be adjudged to be the owners of the said judgment note. The seventh plea averred that the attorney's fees incorporated in said judgment note and warrant of attorney made the transaction between the appellants and appellees usurious. The appellees joined issue upon the first, second, third, and seventh pleas and filed two replications to the fourth, fifth, and sixth pleas, in the first of which they denied that J. Keenan had any notice of the facts averred in said pleas, and the second replication pleaded an estoppel upon the appellants growing out of the presentation of said collateral note by them against the estate of D. L. Buckworth. The court sustained a demurrer to the second replication, and upon the trial, at the close of all the evidence, instructed the jury to find the issues in favor of the appellees, and after overruling a motion for a new trial rendered judgment on the verdict, holding ‘the judgment entered herein on the 21st day of October, 1905, in favor of the plaintiffs and against the defendants, for $4,573.44, stand in full force and effect as of the time of its rendition,’ which judgment included the sum of $400 for attorney's fees, as provided in said note and warrant of attorney, and, said judgment having been affirmed on appeal to the Appellate Court for the Third District, a further appeal has been prosecuted to this court.

On the trial two witnesses, namely, Wesley M. Owen and A. J. Keenan, were called on behalf of appellees and testified upon the trial. Wesley M. Owen testified, in substance, as follows: That he was a member of the firm of Owen & Owen; that at the time of the note transaction his firm had for collection several claims against Buckworth, amounting to $700 or $800, among which was one in favor of his half-brother, Thomas Owen, for $400; that Buckworth applied to his firm, as brokers, to negotiate a sale of the note; that he went to J. Keenan's Bank and talked with the appellee A. J. Keenan, cashier, and asked him if the bank would buy the note; that Keenan said they would if the bank's note against Buckworth of $1,750 was taken out and if it could be arranged so that Buckworth would not know the bank was getting the note; that Keenan suggested making the assignment to I. N. Porter or bearer; that he told Keenan he would see what could be done about it, and went back and told Buckworth his firm could dispose of the note if Buckworth would pay them $80 commission and assign the note to I. N. Porter or bearer, and permit Owen & Owen to deduct from the proceeds the amount of the claims held by them and an additional claim of $1,750; that Buckworth said ‘Very well,’ and he (witness) wrote the assignment on the back of the note and read it to Buckworth, who asked, in substance, if Porter lived ‘near or around here,’ but that he did not answer the question; that Buckworth executed the assignment without knowing that Porter was, in fact, a fictitious person; that he took the note to Keenan, the cashier, who deducted the amount of the note for $1,750 held by the bank against Buckworth and credited the account of Owen & Owen with the balance of the $4,000; that he deducted $75 for his firm's services and the amount of the claims held by them against Buckworth, including the $400 claim of their half-brother, Thomas Owen, and paid over the balance, something like $1,500, to Buckworth. A. J. Keenan testified, in substance: That at the time of the transfer of the note, his father, Joseph Keenan, owned and was operating the J. Keenan's Bank; that the transaction was had with him alone; that he was the only person connected with the bank who talked about it; that Joseph Keenan died testate on the 19th day of September, 1905, and the note was an asset of the bank. The appellees also offered in evidence the last will and testament of Joseph Keenan, by the first clause of which all the assets of the bank were given to appellees in equal shares, to vest in them absolutely and in fee simple on the date of the testator's death, and by the last clause of which appellees were appointed executors of the will. The last codicil to the will directed that out of the other assets of the estate appellees should pay to themselves the amount of any loss or depreciation in the notes held by the bank at the testator's death. The note was also introduced in evidence.

After the appellees had closed their testimony, the appellants offered themselves as witnesses to establish the facts set up in their fourth, fifth, and sixth pleas, but upon objection they were held incompetent as witnesses, and on the cross-examination of Wesley M. Owen appellants sought to show that at the time of the transfer of the note Wesley M. Owen had knowledge of its accommodation character, and that at the time it was signed certain restrictions were placed upon its use by Buckworth, and that he knew that its execution had been obtained by false and fraudulent representations as to the financial standing of D. L. Buckworth. An objection was sustained to the cross-examination on the ground that it was not proper cross-examination.

HAND, J. (after stating the facts as above).

It is first contended that as between the appellees and D. L. Buckworth there was no consideration for said note, it being...

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