Union National Bank v. Hines , 177 Ill. 417 ( 1898 )

Mr. Justice Wilkin

delivered the opinion of the court:

We concur in the view of the Appellate Court that it is immaterial when the bank acquired possession of the $15,000 note and the stock certificates, there being no dispute as to the fact that Hines had no notice of the transfer of possession from Barker to the bank until long after he claims to have made the contract of guaranty to McElwee & Carney, and after he had acquired the notes given by Barker to them. The note, with the statement on the face, “This note is non-negotiable,” was a non-negotiable instrument, and while it could, notwithstanding that fact, be transferred to a third party so as to vest him with the legal title, he could only take it subject to the then existing rights of the maker, and such other rights as might accrue prior to his receiving notice of the transfer.

While it is doubtless true, as said in the opinion of the Appellate Court, as a proposition of law, that Hines could set up the Barker notes in defense of an action upon his note if he received them before notice that the bank had acquired the ownership of his note, no matter whether he received the Barker notes because of his being a guarantor for Barker to McElwee & Carney or not, yet we are unable to concur in the view that upon this bill it is immaterial whether he obtained them by reason of such guaranty or not. The bill bases the right to offset these notes upon the allegation that the guaranty was made, and that in pursuance thereof the notes were taken up. If it is true, as alleged in the answers of Barker and the bank, that the pretended guaranty was wholly fictitious and fraudulent, gotten up with a design to manufacture that defense to the notes, a court of equity would not lend its aid to carry out that scheme, notwithstanding it might be truly said he had a meritorious defense simply as the holder of the notes. Hines’ title to the notes therefore is, under his allegations, made to depend upon the guaranty, and in our view of the case the controlling question here must be, was such a guaranty made? In view of the fact that the chancellor who heard the cause and the judges of the Appellate Court have reached different conclusions upon this question, which is purely one of fact, we have endeavored to give the fullest and most careful consideration to all the testimony bearing upon it. Giving due weight to the fact that the chancellor heard the oral testimony in open court, we cannot escape the conviction that the clear preponderance of the proof is against his finding and in favor of that of the Appellate Court.

The contention that no guaranty was in fact given, and that the claim based upon it as a defense to the §15, - 000 note is a fabrication, rests largely, if not altogether, upon the testimony of S. B. Barker, who cannot be said to stand fair before the court. He admits that he was a willing' party to the wicked and fraudulent scheme which he swears Hines concocted to defeat a recovery upon his note, and his testimony, on the hearing as to the alleged fraud, is wholly inconsistent with and contradicted by statements shown to have been made by him prior thereto. His evidence, under all the facts shown, is of very little value. On the other hand, Hines swears positively that the guaranty was given as alleg'ed in his bill, and denies the charge of fraud in manufacturing a defense to the note in every particular.

Counsel for the appellant bank attach great importance to the fact that the copy of the guaranty letter by Hines to McElwee & Carney appears in the letter-press book crowded on a page upon which another letter of the same date had been copied, and that the paper upon which the copy was impressed was discolored; also to the fact that letters copied into the same book, preceding and following this copy, show that the tyjpewriter in use by Hines March 22, 1893, wrote the letter “o,” whenever it followed the letter “n,” above and out of alignment with the “n” and other letters, it being earnestly insisted that these facts appearing from his own letter-press book show that the guaranty letter was gotten up by Hines, as testified to by Barker, long after the time it purports to have been written. The fact that other letters written about that time by Hines or for the Hines Lumber Company, with which he had his office, showed that a machine was used which was out of order, as indicated, is in no way inconsistent with the claim that the letter in question was written and copied as of the date shown, unless it can be said that there is evidence tending to show that Hines claimed to have had the letter written upon the machine so out of repair, or that it was the only one then in use by him or the lumber company, neither of which is shown or attempted to be shown. In fact, the evidence tends to prove that two typewriters were in use at that time, both of the same make. As said by the Appellate Court, the discoloration on the letter-press copy might have occurred from a variety of causes; and besides, the discoloration does not appear to be confined to that sheet or page alone, when the whole book is examined. The position of the copy on the page of the book is somewhat irregular, as compared with the general manner of using' the book, but we do not think it can be fairly said that this fact necessarily proves that it was placed there long after it purports to have been written. The most that can be said is, that enough is shown by the letter-press book to raise a suspicion in favor of the testimony of Barker and against that of Hines.

But the fact that the guaranty was given bona fide and at the time alleged does not depend upon the testimony of Hines alone. Mr. Carney, of McElwee & Carney, swears to the fact that it was made as shown by the letters of March 22, 1893, and he fully corroborates Hines in the material parts of his evidence on that subject. There is nothing in the record, so far as we have been able to discover, tending to discredit Mr. Carney’s testimony. He is not shown to have any interest in the result of the suit. His testimony is reasonable, and requiring the guaranty, as he and Hines both say was done, was consistent with business experience and common prudence. Even as between Barker and Hines the testimony of the latter seems to us by far the more reasonable. He appears to be a man of experience in business and of financial ability. It is not easy to conceive why such a man should have taken the trouble to' concoct a pretended scheme of getting possession of the Barker notes under a guaranty which he could only hope to carry out by willful and corrupt perjury.

We are satisfied there is no error in the judgment of the Appellate Court in reversing the decree below, the allegations of the bill being substantially proven upon the hearing. This view settles all contentions raised in both cases, and the action of the Appellate Court will accordingly be affirmed as to both appeals.

Judgment affirmed.