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Waldorf v. Marlas

OPINION FILED DECEMBER 23, 1977.

VERN WALDORF, PLAINTIFF-APPELLEE,

v.

JAMES MARLAS, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. RICHARD L. SAMUELS, Judge, presiding.

MR. JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT:

Defendant appeals from an order confirming a judgment by confession on a promissory note executed by him in favor of plaintiff. He contends that the note is usurious in contravention of section 4 of the Interest Act. Ill. Rev. Stat. 1973, ch. 74, par. 4.

Plaintiff brought this action to enforce a $4,500 promissory note executed by defendant on December 15, 1974, and due on June 15, 1975. The note carried an interest rate of "10 percent per annum after maturity until paid." Judgment on the note was confessed on behalf of defendant on June 25, 1975, and the court entered judgment on June 30, 1975.

Thereafter, defendant sought to open the judgment. In his amended answer, defendant admitted he signed the note, but set forth two counterclaims, neither of which are pertinent to this appeal. In addition, he alleged that the note was usurious because it carried an interest rate in excess of the eight percent per annum allowed by section 4 of the Interest Act. (Ill. Rev. Stat. 1973, ch. 74, par. 4.) According to defendant's amended answer, the note was a "renewal note of a prior loan." Defendant asserted that plaintiff had agreed to loan him $10,000 "so that defendant would, in turn, loan that sum to Food Specialties." In an affidavit accompanying his amended answer he stated that plaintiff was a consultant for Fontana Foods, which he owned. He further stated that in loaning Food Specialties this money "it was the hope of both parties that Food Specialties, Inc. would develop the product lines that would aid Fontana Foods Co. and himself * * *."

In accordance with section 6 of the Interest Act (Ill. Rev. Stat. 1973, ch. 74, par. 6) he asked that plaintiff's claim be reduced by the $1,450 in interest already paid plus a penalty of twice the total interest paid or $2,900. Based on these allegations the court opened the judgment and granted defendant a trial at which the following pertinent facts were adduced.

For plaintiff

Vernon Waldorf, on his own behalf

He is the payee on the note. Although defendant sent him a check for $450 in January, 1975 representing interest due on the note, defendant has not paid him anything on the principal.

At this point plaintiff rested his case and both parties moved for a directed verdict. The court denied both motions.

For defendant

Roman Edwards

He is the secretary-treasurer of Food Specialties, Inc., which did business with Fontana Foods. In 1973, defendant gave him an interest-free loan. Although he never discussed a loan to Food Specialties, Inc., with plaintiff, he admitted on cross-examination that defendant told him that the money for the loan came from plaintiff.

Hugh Wilkerson

He is the president of Food Specialties, Inc. Defendant loaned Food Specialties money. Defendant drew the check on his personal account and made it payable to Food Specialties. He never had any discussion with plaintiff regarding this loan. Although Food Specialties did business with Fontana Foods, which ...


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