Wolfram v. Halloway

• Decision Date: 11 March 1977
• Docket Number: No. 76--809,76--809
• Parties: , 5 Ill.Dec. 264, 21 UCC Rep.Serv. 591 Duane WOLFRAM, Plaintiff-Appellant, v. Dr. Mahmoud A. HALLOWAY, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 587

361 N.E.2d 587

46 Ill.App.3d 1045, 5 Ill.Dec. 264,

21 UCC Rep.Serv. 591

Duane WOLFRAM, Plaintiff-Appellant, v. Dr. Mahmoud A. HALLOWAY, Defendant-Appellee.

No. 76--809.

Appellate Court of Illinois, First District Fifth Division.

March 11, 1977.

[5 Ill.Dec. 265] Frank R. Wiemerslage, Park Ridge, for plaintiff-appellant

Goldstein & Du Bois, Ltd., Chicago, for defendant-appellee; A. Marcy Newman, Harold Rosen, Chicago, of counsel.

LORENZ, Justice.

Plaintiff appeals from the entry of a summary judgment in defendant's favor contending that summary judgment was improper because there existed a genuine issue of material fact as to whether he was personally liable on the note as an accommodation indorser upon defendant's default.

Plaintiff's amended verified complaint alleged that he was a manager of a branch office of the Home Life Insurance Company (Home); that defendant purchased an insurance contract through Gregory Amantu, Home's field underwriter, for an annual permium of $2,551. He further alleged that defendant executed and delivered a note for $2,551 payable to Madison Bank & Trust Company (Bank), and that he signed the note as an accommodation party and as defendant's surety. The note, which was attached to the complaint as an exhibit, was signed in the lower right hand corner by defendant and in the lower left hand corner by plaintiff as follows:

'Endorsed without recourse

by Duane S. Wolfram

(Manager)'

Plaintiff also alleged that when defendant defaulted on the note at due date, he paid $2,551 in satisfaction of defendant's obligation and that defendant refused to repay any sum to him despite his demands.

Defendant did not answer or otherwise reply to plaintiff's amended verified complaint. Instead, he filed a motion for summary judgment on the grounds that he was entitled to judgment as a matter of law alleging the plaintiff lacked the capacity to sue and that the complaint failed to state proper causes of action.

The trial court granted defendant's motion, but allowed plaintiff 28 days to file a second amended complaint before the judgment would take effect. Plaintiff chose not to replead and this appeal followed.

OPINION

Plaintiff contends a summary judgment was improper because there exists a genuine issue of material fact as to whether he was personally liable on the note as an accommodation indorser upon defendant's default. Defendant, having chosen neither to answer plaintiff's complaint nor to support its motion for summary judgment with affidavits, argues that, as a matter of law, plaintiff had no personal liability to pay the note upon defendant's default because he signed the note as the agent of Home. Plaintiff argues that he was the manager of his own insurance office which sold Home policies, and that his signature as '(Manager)' was in his capacity as a sole proprietor making him individually liable as defendant's accommodation indorser.

Section 3--403 of the Uniform Commercial Code--Commercial Paper provides in pertinent part:

'(2) An authorized representative who signs his own name to an instrument

(a) is personally obligated if the instrument neither names the person represented nor shows that the representative signed in a representative capacity;

(b) except as otherwise established between the immediate parties, is personally obligated if the instrument names the person represented but does not show that the representative signed in a representative capacity, or if the instrument does not name the person represented but does show that the representative signed in a representative capacity.' Ill.Rev.Stat.1975, ch. 26, par. 3--403(2)(a), (b).

Subsection 2(b) makes it clear that parole...