Kingman & Co. v. Reinemer

Mr. Justice Green delivered the opinion oe the Court. The means by which the makers of the judgment notes were induced to execute them, is the vital, controlling question involved, touching which there is a conflict of evidence. We are of the opinion the court was warranted in finding, by a preponderance of the evidence, that Roberts was an agent of Kingman & Co., and was apprised on the 31st of June, 1893, by Knebel, of the organizing of the corporation as mentioned in the preceding statement. That on the evening of that day he informed Kingman & Co. of that fact, and was instructed to go back to Grantfork and get money, security or judgment notes from Reinemer & Co. for the amount of their indebtedness, and in accordance with this instruction did go back on June 22d to the store of Reinemer & Co., and found there the committee appointed by said corporation, and both members of said firm busily engaged in invoicing the goods. That a part only of the firm debt to Kingman & Co., about $4,950, was then due; a small part of the balance was due July 1, 1893, and the residue September 1, 1893. That Roberts importuned Reinemer to settle this indebtedness by notes, maturing July 1st and September 1st, for the reason his firm wished to close up this' account before the corporation took hold, and would not push the collection of the notes but would give two or three weeks extension if not paid at maturity. That Reinemer finally consented, and said he would, get some blank notes of the kind the firm had usually given Kingman & Co., fix the matter up and give security; but Eoberts replied that would not be necessary, as he had some of the same kind of blank notes, and did not want any security; and Eoberts then went into the private office, fixed up a settlement sheet with the bookkeeper, filled up the judgment notes, and Eeinemer and Knebel were called in and signed the same without examination, relying upon the honesty of Eoberts and the truthfulness of his representations as to the character and contents of the notes, each believing them to be ordinary promissory notes, such as they had been in the habit of giving King-man & Co., due July 1st and September 1st, respectively, and not knowing they were judgment notes, and not intending to execute notes of that character. The evidence justified the conclusion that the making of said notes was obtained by the fraud of Eoberts, with the purpose of obtaining a judgment and immediate execution, seizing the entire stock, selling the same thereunder, and applying the proceeds to the payment of the debt of Kingman & Co., to the exclusion of other creditors. It is said, however, on behalf of appellants, that Eeinemer and Knebel did not exercise proper precaution and examine the notes before signing, and hence, can not be heard to dispute their validity. This was a question of fact for the court acting in place of a jury. Taylor v. Atchison, 54 Ill. 196; Leach v. Nichols, 55 Ill. 273; Munson v. Nichols, 62 Ill. 111. The evidence shows that intimate business relations had existed for years between said firm of Eeinemer & Co. and Kingman & Co. That they had never been asked by the latter firm to give a judgment note, and both parties were busy and in a hurry, and Eoberts claimed he was anxious to get away at the time the notes were executed, and there was nothing in his manner, or statements to them, that would awaken distrust, but everything justified them in relying upon his honesty, and the integrity of the firm who sent him, to protect them from imposition or fraud in a business transaction, and the court could properly find the makers of the notes were not guilty of negligence in view of all th e surrounding circumstances. It is also claimed that no demand was made of the sheriff by Fritz for the goods before commencing the replevin suit. Under the pleadings and evidence no demand was necessary. Butters v. Haughwout, 42 Ill. 18; Hardy v. Keeler, 56 Ill. 152; Farwell v. Hanchett, 120 Ill. 513. There was no error in refusing to declare the law to be as requested in the refused propositions, and in modifying those which were modified, and those which the court held to be the law were quite as favorable to appellants as they had the right to demand. The motion to vacate the judgment was filed at the next ensuing term of court after judgment was confessed, and was filed in apt time. The conclusion reached by us is that the execution, of the judgment notes having been obtained by the fraud of the agent of the payee, they were void, and no recovery could be had therefor, as against the makers, by the payee. Hence, the judgment entered in vacation was illegal and was properly vacated and set aside on the motion of appellees. The execution, issued to satisfy a judgment obtained by fraud, is also tainted with the original fraud and can not be availed of by Kingman & Go. and used as a means to effectuate the fraudulent purpose. Hence, said writ did not justify the taking of the stock of goods by the sheriff, and the issues in the replevin suit were properly found in favor of the plaintiff, and the order and judgment of the court on the finding was right. By this finding and judgment, and the order vacating and setting aside the judgment confessed, justice to all the parties is secured. The debt of Kingman & Co. is filed as a claim against the insolvent estate, the net proceeds of which will be used for the payment of that claim and the other indebtedness of the insolvent firm, without preference or undue advantage being given to any creditor. The order and judgment on the said motion and judgment in the replevin suit are affirmed.