Harding v. Hawkins

Citations

• 141 Ill. 572
• 31 N.E. 307

Syllabus

<p>1. Collateral security-—accommodation paper reduced to judgment —payment of principal debt discharges the judgment. A creditor holding an accommodation note of a third person, properly indorsed to him by his debtor, as collateral security for the payment of his debt, after maturity, may reduce such collateral to judgment, and then the judgment will take the place of the collateral, and stand as security, merely, for the payment of the residue of the principal debt, and on payment of that by the principal debtor such judgment will be satisfied, and no action can thereafter be maintained upon it.</p> <p>2. Same—relation once shown—presumed to continue. Where notes are shown to have come into the hands of a party as collateral security for other notes, it will be presumed that his subsequent holding of them is in the same capacity, and on the production of the principal notes by the maker the presumption of their payment will prevail, in the absence of other evidence.</p> <p>3. Chancery — enjoining the collection of a judgment at law — when relief will be granted. A judgment at law may be enjoined when the defense is purely an equitable one, and not available in an action at law. If the matter relied on by the complainant could not have been received as a defense in the action at law, equity may relieve, notwithstanding an ineffectual attempt to defend at law.</p> <p>4. A party will also be excused from interposing a legal defense under certain circumstances, as, when he is ignorant of such defense at the time of the trial of the common law action, in which the judgment was rendered. Equity will grant relief against a judgment at law when it is shown that there was a good and valid defense to the action on the merits, of which the defendant was ignorant at the time of the trial, and which he could not have discovered, by reasonable and proper diligence, in time to set it up at law.</p> <p>5. But it is an important corollary to the above rule, or, indeed, an integral