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Mendelson v. Flaxman

SEPTEMBER 24, 1975.




APPEAL from the Circuit Court of Cook County; the Hon. JOHN C. FITZGERALD, Judge, presiding.


Plaintiffs filed a claim in the circuit court of Cook County, probate division, against the estate of Sidney Flaxman for the principal of a promissory note in the amount of $47,500. After the claim was paid, plaintiffs filed a complaint and confession on judgment note, claiming interest on the aforementioned note from the date of its execution. A judgment by confession was entered in favor of plaintiffs, and thereafter defendants filed a petition to vacate the judgment. After a hearing on the petition, the judgment against the defendants was vacated.

Thereupon, plaintiffs filed this appeal. Several issues are presented for review, but we deem it necessary to discuss only the following question: whether the trial court's finding that the promissory note in question is not an interest-bearing instrument was against the manifest weight of the evidence.

Jeanette Mendelson and Evelyn Jackson were payees on a promissory note dated October 20, 1964, in the amount of $47,500. Sidney Flaxman, Arthur Flaxman, and Mildred Flaxman appeared on the note as makers. It is uncontroverted that the note was given in consideration for moneys advanced by the payees to Sidney Flaxman, who died on March 6, 1967.

According to the testimony of Miss Mendelson at the hearing on the petition to vacate the judgment, the note was executed in the following manner. After receiving the note, Miss Mendelson inserted in her own handwriting the names of the plaintiffs as payees and a handwritten statement of the amount of the note. She then transmitted the note to Sidney Flaxman and the defendants, and the note was returned to her in a form she regarded as "completed." Miss Mendelson testified that she could not recall whether she inserted the numeral "6" in the space provided for the interest rate at the same time the other portions of the note were filled in or after it was completed by the parties. Although Miss Mendelson insisted that all her entries were in blue ink, the trial court found that the numeral "6" is written in black ink whereas the remaining entries are made in blue ink.

Plaintiffs filed a claim in the circuit court against the estate of Sidney Flaxman on July 18, 1967, for a total of $81,750. This sum included the principal of $47,500 on the October 20, 1964, promissory note and five personal checks payable to the plaintiffs in the sum of $34,250. Plaintiffs did not claim interest on the promissory note at that time. The claim was signed by both plaintiffs and prepared by Abraham Kosdon, the attorney for the estate. It states in pertinent part:

"Claimants Jeanette Mendelson and Evelyn Jackson have a claim for $81,750 against this estate which is just and unpaid after allowing all just credits, deductions and setoffs. The nature of the claim is for monies advanced by Jeanette Mendelson and Evelyn Jackson to the decedent in his lifetime as set forth on the day specified and evidenced by check and notes and memoranda hereto attached, evidencing the indebtedness."

Mr. Kosdon, testifying at the hearing on the petition to vacate the confession of judgment on the note, stated that he specifically inquired of plaintiffs while preparing the claim whether any interest was due on the note and was informed by Miss Mendelson that they had nothing coming other than what was set forth. However, Miss Mendelson testified that the claim did not include interest because Mr. Kosdon assured her that Arthur Flaxman would pay the interest, "that the estate was one claim, and the interest would be paid by other parties."

After the claim was allowed, the circuit court granted leave for Miss Mendelson to keep the original note and substitute a photostatic copy therefor. However, the note entrusted to Miss Mendelson disappeared prior to final payment of the claim. Despite her testimony that she kept the original note in a suitcase, Miss Mendelson averred in an affidavit in lieu of bond that the note was stolen from her on August 8, 1967, during a strong-armed robbery about 6:30 or 7 p.m., at or near 1341 West Roosevelt Road in Chicago, Illinois. The affidavit further stated that the purpose of its execution was to induce the executor of the estate of Sidney Flaxman to pay plaintiffs' claim without submitting the original note, and that plaintiffs would hold the executor harmless from any and all claims by virtue of their failure to produce the original note upon which the claim was based.

Plaintiffs were paid a total of $81,750 by the estate in six installments. On May 1, 1968, a receipt was signed by the plaintiffs which states:

"This is to acknowledge full and complete payment received by us in our claim against the above estate dated the 18th day of July, 1967 and filed and approved by the Probate Court of Cook County, Illinois in the amount of $81,750.00 and that the same is in full and complete settlement of any claim that we may have against the said Estate."

Miss Mendelson negotiated the final three checks paid to her by the estate by writing the following endorsement on the back of the checks:

"In full payment of claim approved by court on July 18, 1967 and releases the estate of Sidney Flaxman and Arthur Flaxman as Executor."

According to Miss Mendelson, the original note was recovered near the end of 1968. She testified that a "working man" found it and turned it over to her. She did not report its recovery to the police or to the defendants because, "I ...

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