Belohradsky v. Kuhn

Citations

• 69 Ill. 547

Syllabus

<p>1. Trustee—parol evidence to show that payee of note is, for another. Where the name of a person is put in a promissory note as the payee, and in a mortgage to secure its pajmient, as the mortgagee, by the express agreement of the parties in interest, for the mere purpose of convenience in the collection and payment of the same, in view of a contemplated removal from the State of the party to whom the debt was owing, this will constitute the payee a mere trustee, and parol evidence is admissible to show that fact for the purpose of enabling the maker to show fraud and failure of consideration.</p> <p>2. Promissory note—defense allowed, where plaintiff sues on note as trustee for another. Where the plaintiff in an action on a promissory note is a mere trustee for another, the maker may avail himself of any defense which he might set up against the real owner if the action had been brought in his name.</p> <p>3. Same—enjoining transfer of, by trustee of real owner. Where a promissory note was given to one as the trustee of another, secured by a chattel mortgage, and the real owner became insolvent, it was held, that the maker could, by bill in equity, restrain the payee from transferring the same before maturity, and from proceeding to foreclose, on the ground of fraud and failure of consideration, and show the real character of the transaction by parol testimony.</p> <p>4. Same—who.a bona fide assignee, to cut off defense. Where a party, by arrangement for the convenience of collection and payment, takes a promissory note, payable to another person, and the party in interest delivers the same to A in payment of a debt, and the latter transfers the same to the payee, neither A nor the payee will be regarded as a bona fide assignee, in the usual course of business, so as to deprive the maker of any defense he has as against the real owner, for whose benefit it was given.</p>