Lange v. Shapiro

• Decision Date: 08 February 1966
• Docket Number: Gen. No. 50538
• Citation: 216 N.E.2d 294,68 Ill.App.2d 433
• Parties: Irene LANGE, Plaintiff-Appellee, v. Gene H. SHAPIRO, American Bookkeeping Associates, and Edward Zolla, Jr., Defendants. Appeal of AMERICAN BOOKKEEPING ASSOCIATES and Edward Zolla, Jr., Defendants.
• Court: United States Appellate Court of Illinois

Page 294

216 N.E.2d 294

68 Ill.App.2d 433

Irene LANGE, Plaintiff-Appellee, v. Gene H. SHAPIRO, American Bookkeeping Associates, and Edward Zolla, Jr., Defendants Appeal of AMERICAN BOOKKEEPING ASSOCIATES and Edward Zolla Jr., Defendants.

Gen. No. 50538.

Appellate Court of Illinois, First District, Second Division.

Feb. 8, 1966.

Jay Erens, Chicago, for appellants.

Arnold I. Kramer, Chicago, for appellee.

LYONS, Justice.

This is an appeal from a judgment by confession entered against three defendants.

This action was commenced by plaintiff, Irene Lange, on October 2, 1964, by the filing of a complaint and confession on a promissory note against Gene H. Shapiro, American Bookeeping Associates (hereinafter also referred to as ABA) and Edward Zolla, Jr. (hereinafter referred to as Zolla). The note sued on was attached to the complaint and in substance states: 'FOR VALUE RECEIVED, I promise to pay to the order of American Bookkeeping Associates, Inc. (an Illinois corporation) the principal sum and interest at the office of American Bookkeeping Associates, Inc. in Chicago.' The note contains a standard confession of judgment clause by which 'the undersigned does hereby authorize irrevocably any attorney of any court of record to appear for the undersigned * * * and to confess judgment without process against the undersigned.' The note is signed in the place provided for the maker's signature, 'Gene H. Shapiro.' To the left of Mr. Shapiro's signature appears the following typewritten insertion:

Pay to the order of Irene Lange with full recourse and warranty.

AMERICAN BOOKKEEPING ASSOCIATES, INC.

By: E. M. Zolla, Jr.,

By: E. M. Zolla, Jr.,

Personal

Process was never served on any of the defendants. On October 5, 1964, the court, awarded judgment, based on the confession of judgment clause, against all three defendants in the amount of $3,247.92 and costs.

On October 22, 1964, two of the defendants, ABA and Zolla, filed a motion to vacate the judgment. The motion pointed out that the maker of the note was Gene H. Shapiro, that the note was payable to ABA, by Zolla as general manager, that ABA endorsed the note over to plaintiff, Irene Lange, and that Zolla also signed personally as an accommodation endorser below ABA's endorsement. The motion stated that Shapiro as maker of the note had given a warrant of attorney, to confess judgment against him, but that ABA and Zolla as endorsers thereof, had given no such warrant of attorney, and therefore prayed that the judgment be vacated as against them. Upon the filing of the motion, the court set the matter for a hearing on January 14, 1965.

At the hearing plaintiff testified over appellants' objection, to the execution of the note by Zolla for ABA, and Zolla personally, and that 'she relied on the representations of Edward Zolla, Jr. that he would be personally bound under the terms of this note along with Mr. Shapiro and American Bookkeeping Associates, Inc.' Mr. Charles Snedecker testified over appellants' objection to substantially the same effect.

The foregoing was all the evidence heard, and arguments were confined to the question of whether ABA and Zolla signed the note as co-makers or as endorsers. Plaintiff's counsel argued that all three defendants, Shapiro, ABA and Zolla, signed as co-makers and therefore joined in the warrant of attorney to confess judgment. Counsel for ABA and Zolla argued that ABA and Zolla signed as endorsers and therefore did not join in the warrant of attorney given by Shapiro as maker.

At the conclusion of the hearing, the court denied the motion to vacate the judgment by confession as to ABA and Zolla and ordered that the judgment be confirmed. On February 1, 1965, ABA and Zolla moved to vacate the latter order and this motion was likewise denied on February 18, 1965.

This appeal is taken by defendants, ABA and Zolla from, one, the original judgment by confession; two, the order of January 14, 1965, refusing to vacate it and ordering that it be confirmed; and three, the order of February 18, 1965, refusing to vacate the order of January 14, 1965.

Appellants' theory of the case is, one, that the capacity in which they signed the note was, as a matter of law, that of endorsers and not co-makers; two, that the court erred in admitting parol evidence to contradict the capacity in which they signed the note; three, that these appellants, as endorsers, gave no warrant of attorney for judgment to be confessed against them; and four, that the judgment rendered against them is void for want of jurisdiction over the person.

Plaintiff's theory of the case is, one, that the signatures of defendants, ABA and Zolla, placed upon the front of the instrument, indicates that they were co-makers of the promissory note; two, that in the alternative that the position of the signatures of the promissory note creates an ambiguity which should be construed against the perpetrators of the ambiguity; namely, ABA and Zolla, so as to place upon them the burden of proving in what capacity the promissory note was signed; and three, that even if the confession of judgment originally obtained was improper as to ABA and Zolla, their filing a motion to vacate and their participation in a hearing on the merits subjected appellants to the jurisdiction of the court and, therefore, the refusal to vacate the aforesaid judgment, or in effect, the confirmation thereof, is binding upon appellants.

We disagree with plaintiff that Zolla signed the face of the instrument in the capacity of a co-maker. The capacity of the appellants clearly appears, from the face of the note, to be that of endorsers. The negotiable instrument law requires the capacity of a person placing his signature on a note to be determined from within the four corners of the note itself. Thus, we turn to an examination of the note in question.

The body of the note recites that it is payable to the order of ABA. It is signed by Gene H. Shapiro in the place provided for the maker's signature, namely, the lower right-hand corner. Thus, apparently, Shapiro is the maker and ABA is the payee. To the left of Shapiro's signature, the following words are typed in: 'Pay to the order of Irene Lange with full recourse and warranty,' and directly underneath those words are the signatures of ABA (by Zolla) and Zolla personally. Since ABA is the payee of the note, it was essential that it endorse the note over to the plaintiff, Mrs. Lange, in order for her to acquire title to it. See Ill.Rev.Stat. (1961), Ch. 98, Par. 50. If plaintiff's argument that ABA signed as a co-maker is correct, then she is faced with the anomalous result that she never acquired title to the note. Obviously no such result was intended. The words preceding the signature of ABA are clearly words of endorsement and negotiation. The words 'full recourse and warranty' can only have reference to the obligation of ABA as payee, which by endorsement negotiated the note to Mrs. Lange, a subsequent holder, and thereby made certain warranties to all subsequent holders. See Ill.Rev.Stat. (1961) Ch. 98, Par. 86.

If there could be any doubt about the inevitability of this result,...