Appeal from the Circuit Court of Cook County; the Hon. RICHARD
HAREWOOD, Judge, presiding. Affirmed.
The plaintiff was the holder of a note issued in behalf of Tyre Lodge #70, a Masonic organization. It appears to be a printed form provided by the plaintiff with blank spaces filled by ink handwriting. It was signed at the lower right "Tyre Lodge #70 by Howard Collins, W.M., President, Hilton Stewart, Sec'y, Attest (embossed seal)." At the lower left appeared the signatures of Howard Collins, W.M. and Hilton Stewart, Secretary, also four other names, in all but one case there was added the word "Trustee." Above this column of names there was typed or printed the word "individually."
Litigation over this instrument against the six individuals, but not against the lodge, culminated in a judgment in favor of the defendants, from which the plaintiff appealed.
The defendants contended that they had signed the instrument in a representative capacity as officers and trustees of the lodge, and were not individually liable. The plaintiff admits this as to the signatures at the lower right but argues that this was sufficient to bind the lodge, so that repetition of the signatures at the lower left, plus additional names, indicate that they were to be individually liable.
The law as to the effect of adding to a signature words indicating a representative capacity was in a state of confusion for many years with the various states having different rules. Then the Negotiable Instruments Law, adopted in Illinois, specified the effect of such wording under varying states of facts. When that law was repealed in Illinois by the adoption of the Uniform Commercial Code, a similar provision appeared as section 3-403 thereof in chapter 26, Ill Rev Stats. The pertinent portion thereof is:
"(3) Except as otherwise established the name of an organization preceded or followed by the name and office of an authorized individual is a signature made in a representative capacity."
From this it would appear that the defendants classified as signers in a representative capacity, since there is the name of an organization preceded or followed by the individuals' names followed by their purported titles. But the plaintiff contends this is partly negated by the same names appearing again, among others, and all are under the word "individually."
The trial judge considered there was some ambiguity and therefore admitted evidence in explanation. There is nothing in the statute about parol evidence but it was very common in many states to admit parol evidence to ascertain the capacity in which a person signed, especially if it appeared to be ambiguous.
The evidence introduced thereupon showed that at a regular meeting the lodge directed the trustees to "get heat" in their building.
Thereafter the trustees met with a Mr. Rafalson, a contractor, who proposed to install heat equipment. For this purpose he explained the required financing was to be obtained by a loan. He had previously asked who were the officers and trustees of the lodge and what was their credit standing. He was supplied with a list of the names with credit information. From this he prepared applications for credit to be signed by each trustee. He explained this was to show the bank the calibre of membership in the lodge and that the loan was duly authorized.
At the meeting with the trustees he had them sign a number of papers which he said were necessary to "get heat." Each trustee signed his credit application, also the note and a completion certificate, although the work was not even started.
It was stated at this meeting that any document affecting the property of the lodge must be executed by five to seven trustees. The elected officers who signed as president and secretary were also trustees ex officio, so there were six trustees who signed the note.
There was some dispute as to the existence of the word "individually" at the time of signing, and some assertion that the body of the note was covered by a slip of paper so they could not read it when signing. The trial judge indicated he gave no credence to these statements. However, he regarded the requirement of five to seven signatures of trustees explained the reason for the signatures at the lower left.
It is the opinion of this court that the apparent ambiguity presented a question of fact, which justified the hearing of parol ...