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Lewis v. Palmer

JULY 3, 1974.

TERRY D. LEWIS, PLAINTIFF-APPELLEE,

v.

WILLIAM PALMER, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Piatt County; the Hon. JOHN P. SHONKWILER, Judge, presiding.

MR. JUSTICE CRAVEN DELIVERED THE OPINION OF THE COURT:

This is an appeal from an order denying defendant's motion to open a judgment by confession on a promissory note.

On May 19, 1971, defendant executed a promissory note in favor of plaintiff. The first installment of $1000 became due on September 20, 1972. On December 19, 1972, plaintiff obtained a judgment by confession against defendant as a result of an alleged failure to pay the first installment.

On December 26, 1972, defendant filed a motion to open the judgment by confession. In support of the motion, defendant's amended affidavit and an affidavit of Diane McMahan were filed along with defendant's proposed answer. Plaintiff filed a counteraffidavit. After a hearing on the motion, the trial court denied the motion.

Defendant's affidavit states he was notified prior to September 20, 1972, that plaintiff's interest in the promissory note had been transferred to Duane Lewis, a minor, pursuant to a written agreement between plaintiff and Diane McMahan, parents of the minor. Defendant claims he made several efforts to locate plaintiff and arrange payment of the installment before its due date. He also states he was told by plaintiff that his intentions were not to honor the agreement between himself and Diane McMahan, but instead to appropriate the proceeds for his own use. Plaintiff then refused to accompany defendant to the depository named in the agreement for the purpose of creating the account for the minor child. Defendant alleges that he was, and is, prepared, willing and able to make his payment in accordance with the agreement between the plaintiff and Diane McMahan, but was prevented from doing so by plaintiff.

The agreement between plaintiff and Diane McMahan stated in relevant part:

"That the Four Thousand Dollar ($4000.00) obligation of WILLIAM PALMER to TERRY D. LEWIS * * * shall be, the property of DUANE LEWIS and upon its repayment, deposited in a savings account * * * in the name of DUANE LEWIS, a minor, for his use and benefit * * * [but the minor's parents] shall * * * have the privilege of withdrawing said funds on their joint signatures."

The agreement was signed by Terry Lewis and Diane McMahan.

Diane McMahan's affidavit acknowledged the making of an agreement between herself and plaintiff regarding defendant's promissory note. She stated that prior to September 21, 1972, defendant had requested instructions regarding payment of the note after telling her plaintiff had advised him that he intended to keep the proceeds of the note as his own property. Diane McMahan acknowledged that defendant had deposited a check with her for $1200 made payable to Diane McMahan and Terry D. Lewis. The check was never negotiated. Finally, Diane McMahan's affidavit stated that plaintiff came to her home in October 1972 and told her defendant had sought him out concerning repayment of the note and establishment of the account for the minor child as called for in the agreement. Plaintiff told the affiant that he did not wish to make such arrangement, and that he wanted the money paid to himself because it was his money.

Plaintiff filed a counteraffidavit denying proper tender by defendant and denying that he, plaintiff, ever had any intention to appropriate any of the proceeds of the note in question to his own use. He stated he intended to comply with the agreement executed between himself and his former wife. Finally, he denied knowledge of a deposit with Diane McMahan of a check for $1200, drawn by defendant and made payable to Terry Lewis and Diane McMahan.

The procedure for opening a judgment by confession is set forth in Supreme Court Rule 276 (Ill. Rev. Stat. 1973, ch. 110A, ¶ 276). That Rule provides in part as follows:

"If the motion and affidavit disclose a prima facie defense on the merits to the whole or a part of the plaintiff's demand, the court shall set the motion for hearing. * * * If, at the hearing upon the motion, it appears that the defendant has a defense on the merits to the whole or a part of the plaintiff's demand and that he has been diligent in presenting his motion to open the judgment, the court shall sustain the motion either as to the whole of the judgment or as to any part thereof as to which a good defense has been shown, and the case shall thereafter proceed to trial upon the complaint, answer, and any further pleadings which are required or permitted."

• 1, 2 On a motion to open a judgment by confession, the court may not make an inquiry into the facts of the cause. All allegations of defendant are to be accepted as true. (Scheinfeld v. Muntz TV, Inc., 67 Ill. App.2d 8, 214 N.E.2d 506.) The motions and affidavits must be examined carefully to see if a prima facie defense is pleaded. They must also be scrutinized to determine whether purported facts set forth in them would be admissible as evidence at a trial on the merits. National Boulevard Bank v. Corydon Travel Bureau, Inc., 95 Ill. App.2d 281, 238 N.E.2d 81.

• 3 No issue as to defendant's diligence is present in this case. Therefore, we must carefully examine defendant's motion and the accompanying affidavits to determine if he has pleaded a prima facie meritorious defense. According to the dictates of Supreme Court Rule 276, when a prima facie meritorious defense is raised with diligence by defendant's affidavits, the court has no discretionary ...


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