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07/11/95 CHAMPAIGN NATIONAL BANK v. DICK BABCOCK

July 11, 1995

THE CHAMPAIGN NATIONAL BANK, A NATIONAL BANKING ASSOCIATION, PLAINTIFF-APPELLEE,
v.
DICK BABCOCK AND CHARLES A. BAKER, DEFENDANTS, AND WILLIAM R. GASTON, WILLIAM M. GOLDSTEIN, AND T.V. JOHNSON, DEFENDANTS-APPELLANTS.



Appeal from Circuit Court of Champaign County. No. 86L619. Honorable Art Powers, Jr., Judge Presiding.

As Corrected July 31, 1995.

Honorable Carl A. Lund, J., Honorable James A. Knecht, P.j., Honorable Robert W. Cook, J., Concurring

The opinion of the court was delivered by: Lund

JUSTICE LUND delivered the opinion of the court:

Defendants William Gaston, William Goldstein, and T.V. Johnson appeal from a summary judgment entered by the circuit court of Champaign County finding defendants liable for the balance owing plaintiff Champaign National Bank (Bank) on a judgment entered against The Great Little Soap Company Corporation (Corporation). A default judgment was entered against defendant Dick Babcock. Charles Baker has not joined in this appeal.

On July 29, 1974, all defendants signed a guaranty of loans made to the Corporation by the Bank. The guaranty was security for loans to the Corporation not exceeding a principal amount of $21,000. The guaranty also included accrued interest and collection costs. The guaranty provided in relevant part:

"No renewal or extension of time of payment of the Indebtedness, no release or surrender of any security for the Indebtedness or this guaranty, no release of any person primarily or secondarily liable on the Indebtedness (including any maker, indorser or guarantor), no delay in enforcement of payment of the Indebtedness or this guaranty and no delay or omission in exercising any right or power with respect to the Indebtedness or this guaranty shall affect the liability of any of the undersigned hereunder.

Each of the undersigned waives presentment, protest, demand, notice of dishonor or default, notice of acceptance of this guaranty, notice of any loans made, extensions granted, or other action taken in reliance hereon and all demands and notices of any kind in connection with this guaranty or the Indebtedness.

This guaranty shall remain in full force and binding upon the undersigned until written notice of its discontinuance shall be received by the Bank, notwithstanding the death of one or more of the undersigned and until any and all Indebtedness accepted before receiving notice of revocation shall have been fully paid.

If this is signed by more than one person it shall be the joint and several obligation of said persons."

Only one promissory note executed by the Corporation is involved in this action, and judgment on that note was entered against the Corporation in 1977 for $22,646.96. After judgment in 1977, the Corporation made payments on the note until (and including) November 1984. The present action against those signing the guaranty was filed in 1986. Babcock was defaulted and, subsequently, plaintiff filed a motion for summary judgment.

Defendants filed affirmative defenses, all of which were dismissed by the trial court when summary judgment was granted. We initially note defendants' objection to the trial court's reconsideration of its earlier decision to deny plaintiff's motion to strike defendants' affirmative defenses. We find the order denying dismissal of affirmative defenses to be interlocutory in nature and it may be modified or vacated at any time before final judgment. (See Burton v. County of Jackson (1993), 246 Ill. App. 3d 677, 681-82, 616 N.E.2d 662, 666, 186 Ill. Dec. 472; Kemner v. Monsanto Co. (1986), 112 Ill. 2d 223, 240, 492 N.E.2d 1327, 1335, 97 Ill. Dec. 454.) On appeal, defendants also argue that four of the affirmative defenses should not have been dismissed. The trial judge did not articulate the reasons for the dismissals. The following four affirmative defenses are now to be considered.

Affirmative defense No. 1 alleges the original note was in the court file and plaintiff's copy (a photocopy) was marked paid; thus, plaintiff no longer had a cause of action. Defendants' affirmative defense did not allege that the judgment (or debt) had in fact been paid.

Affirmative defense No. 2 alleges the judgment against the Corporation, the copy of the note was marked paid on or about March 17, 1978, and there was a novation, all thereby ...


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