{ "id": 5235479, "name": "Mary Bogdan, Plaintiff-Appellant, v. Henry B. Ausema and George Kooinga, d/b/a Chesterfield Awning Co., Defendants-Appellees", "name_abbreviation": "Bogdan v. Ausema", "decision_date": "1962-01-08", "docket_number": "Gen. No. 48,373", "first_page": "294", "last_page": "301", "citations": [ { "type": "official", "cite": "33 Ill. App. 2d 294" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "19 NE2d 363", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "370 Ill 523", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2562168 ], "pin_cites": [ { "page": "527" } ], "opinion_index": 0, "case_paths": [ "/ill/370/0523-01" ] }, { "cite": "14 Ill App 577", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 4875871 ], "opinion_index": 0, "case_paths": [ "/ill-app/14/0577-01" ] }, { "cite": "211 Ill App 596", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3020443 ], "pin_cites": [ { "page": "601" } ], "opinion_index": 0, "case_paths": [ "/ill-app/211/0596-01" ] }, { "cite": "63 Fed 413", "category": "reporters:federal", "reporter": "F.", "case_ids": [ 3790430 ], "pin_cites": [ { "page": "414" } ], "opinion_index": 0, "case_paths": [ "/f/63/0413-01" ] }, { "cite": "9 NE2d 61", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "290 Ill App 546", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3154098 ], "opinion_index": 0, "case_paths": [ "/ill-app/290/0546-01" ] }, { "cite": "252 Ill App 68", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3227705 ], "opinion_index": 0, "case_paths": [ "/ill-app/252/0068-01" ] }, { "cite": "234 Ill App 325", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3099801 ], "opinion_index": 0, "case_paths": [ "/ill-app/234/0325-01" ] }, { "cite": "256 Ill App 29", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3224150 ], "opinion_index": 0, "case_paths": [ "/ill-app/256/0029-01" ] }, { "cite": "68 Ill 604", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2628516 ], "opinion_index": 0, "case_paths": [ "/ill/68/0604-01" ] }, { "cite": "280 Ill App 73", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5617835 ], "pin_cites": [ { "page": "77" } ], "opinion_index": 0, "case_paths": [ "/ill-app/280/0073-01" ] }, { "cite": "159 Ill App 363", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5318681 ], "opinion_index": 0, "case_paths": [ "/ill-app/159/0363-01" ] }, { "cite": "4 Ill 71", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2471374 ], "opinion_index": 0, "case_paths": [ "/ill/4/0071-01" ] } ], "analysis": { "cardinality": 562, "char_count": 9621, "ocr_confidence": 0.561, "pagerank": { "raw": 2.1373970960085342e-07, "percentile": 0.7666981742951037 }, "sha256": "651ac3358187a239fe22dbb3fadf9de165a1261d6d48ee2ce6cfedfadb7e4176", "simhash": "1:3d9b4ecf9302dac6", "word_count": 1626 }, "last_updated": "2023-07-14T20:59:54.756245+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "MURPHY, P. J. and ENGLISH, J., concur." ], "parties": [ "Mary Bogdan, Plaintiff-Appellant, v. Henry B. Ausema and George Kooinga, d/b/a Chesterfield Awning Co., Defendants-Appellees." ], "opinions": [ { "text": "MR. JUSTICE BURMAN\ndelivered the opinion of the court.\nPlaintiff filed suit in the Municipal Court to recover on a promissory note executed by defendants. When plaintiff\u2019s motion for summary judgment was denied she elected to stand on her motion and refused to proceed with the case. The trial court dismissed the suit at plaintiff\u2019s cost and this appeal followed.\nIt appears from the pleadings and affidavits filed by the parties that plaintiff\u2019s late husband, Joseph Bogdan, sold the business he conducted under the name of Chesterfield Awning Company to defendants, Henry B. Ausema and George Kooinga, for $3,500. The purchase and sale contract entered into between the parties on October 3, 1958, provided in part that defendants pay $1,500 in cash at the time of closing and execute a note to Bogdan in the amount of $2,-000 for the balance, payable one year after date without interest. Among the undertakings of the seller recited in the Agreement were the following:\n6. It is understood and agreed that if said business is subject to Illinois sales tax, then a portion of the purchase price shall he held in escrow until a release is secured from the Department of Revenue of the State of Illinois.\n8. As a part of the consideration herein, and, for delivery to him of promissory note herein-before mentioned, party of the first part agrees that he will work for said second parties and teach and train them in the operation of said business for a period of one year from October 1, 1958, without further remuneration to him.\nIn a \u201cRider to Agreement Dated October 3, 1958,\u201d appeared the following provisions:\nIt is further agreed that first party will let second parties in possession of the premises at 368 East 69th Street, Chicago, Illinois, until May 1, 1959, rent free.\nIt is further agreed that if there shall he a sales tax assessment charge against first party, hut which is required to he paid by second party, then said amount so paid shall he deducted from the balance of Two Thousand ($2,000) Dollars, as herein provided.\nThe note, no part of which has been paid, was executed and delivered to plaintiff and her husband as joint tenants with right of survivorship and not as tenants in common. Plaintiff, as the sole owner and holder of the note by reason of her husband\u2019s death, sought a judgment in the amount of $2,000, together with interest from and after maturity at the statutory rate.\nIn their answer and affidavit in opposition to plaintiff\u2019s request for summary judgment defendants averred the following grounds for partial failure of consideration or setoff: (1) the provision for one year\u2019s training and services was unfulfilled because of Joseph Bogdan\u2019s death; (2) the rent-free occupancy clause was breached by plaintiff\u2019s demand that defendants vacate the premises; and (3) there is currently a sales tax assessment against the company in the amount of $1,000. Attached to the affidavit was a copy of a letter from the Department of Revenue claiming a lien against the goods, -wares and merchandise purchased from Joseph Bogdan in the amount of $793.64.\nPlaintiff contends that the affirmative matters alleged by defendants do not constitute a valid defense on the note. Plaintiff argues that the consideration for the note was the transfer of her late husband\u2019s awning business, and not his promises to perform future acts as recited in the Agreement and Rider; and secondly, that even if the promises constituted the consideration for the note, failure to perform them did not cause a failure of consideration on the note.\nWe think that plaintiff\u2019s first contention is untenable. It is quite clear from the record that the note, agreement and rider were executed contemporaneously by the parties to the agreement as a part of the same transaction, and that the note represented deferred payment of a portion of the purchase price stipulated in the contract. Under these circumstances the documents must be construed together as forming but one contract. (Bailey v. Cromwell, 4 Ill 71; Kraft v. Hora, 159 Ill App 363.) \u201cWhen there is a contemporaneous written contract affecting the terms of a note, it is to be construed together with the note in so far as each may be given effect, and there is no repugnancy between them. Any lawful condition annexed to a note by a collateral written agreement may be recognized and enforced as between the original parties.\u201d (Old Second Nat\u2019l Bank of Aurora v. Wright, 280 Ill App 73, 77.) Any defenses, therefore, which defendants could assert in an action upon the contract itself are equally available in an action solely upon the note.\nPlaintiff\u2019s second contention, in essence, is that the promises themselves constituted the consideration for the note and not the performance of those promises. This proposition is supported by a line of cases beginning with Gage v. Lewis, 68 Ill 604. In that case it was held that plaintiff\u2019s agreement to retire and forever refrain from competing with defendant\u2019s business was a promise to perform a future act and the failure to perform did not cause a failure of consideration on the bond executed in return for the promise. In Smysor v. Glasscock, 256 Ill App 29, in connection with the leasing of pasture lands, plaintiff-lessor agreed to repair and rebuild fences surrounding the land, in return for which defendant gave plaintiff the note in question. The court held that plaintiff\u2019s failure to rebuild and repair the fences did not constitute a failure of consideration on the note. Upon the authority of the Gage decision the court concluded, at page 32:\nWhere the consideration of a promissory note is the promise of the payee to perform a certain act in the future, the consideration does not fail because it is the promise to perform and not the performance which constitutes the real consideration. Stellwagen v. Schmidt, 234 Ill App 325, and cases cited; Woodlawn Security Finance Corp. v. Doyle, 252 Ill App 68.\nIn accord with this view is the decision in Conour v. Zimmerly, 290 Ill App 546, 9 NE2d 61.\nThe cases above cited are not determinative of the question before us. Those cases involved defenses comprised entirely of promises to perform future acts. The case at bar does not. The provision in the rider which allowed a deduction from the amount due on the note for sales taxes required to be paid by defendants supplied the basis for one of the defenses asserted on tbe note. It is apparent that this defense is in the nature of recoupment. \u201cIn recoupment, both the cause of action in the plaintiff and tbe right to recoup in the defendant grow out of the same subject-matter and are correlative.\u201d (Dietrich v. Ely, 63 Fed 413, 414.) \u201cRecoupment is in tbe nature of a cross-action, where defendant alleges that be has been injured by a breach by plaintiff of another part of tbe contract on which tbe action is founded, and unliquidated damages may be so recouped.\u201d (Luther v. Mathis, 211 Ill App 596, 601.) As a right to reduce or defeat plaintiff\u2019s claim arising out of tbe same transaction, recoupment is a defense which can be raised in an action on a promissory note. Kingman v. Draper, 14 Ill App 577.\nDefendants\u2019 averment concerning a tax lien thus raised a defense which could validly be asserted on tbe note. Bogdan agreed to bold in escrow a portion of tbe purchase price if tbe business was subject to an Illinois Sales Tax. Tbis was never done, perhaps, because of bis death within a week after tbe business was sold. Tbe parties considered tbe possibility of a sales tax lien in their agreement and intended that Bogdan should deduct from tbe amount due on tbe note tbe amount of such a lien. Plaintiff, having acquired tbe note as surviving joint tenant, is in no better position than was her deceased bus-band.\nSince defendants averred certain matters which raise a valid defense on tbe note, their other defenses of partial failure of consideration \u2014 which might not otherwise be asserted because they involve promises to perform future acts \u2014 may also be raised against tbe note. Tbe Gage and subsequent decisions do not deny that the breach of the promises to perform future acts would give rise to a separate action for damages. Those cases merely sought to preserve the validity of notes where no other defenses were raised. In the case at bar, since the note is subjected to a defense in the nature of recoupment, the reason to protect it from defenses concerning the performance of future acts has disappeared.\nIt is our conclusion, therefore, that defendants\u2019 allegations concerning the tax lien, the loss of Bogdan\u2019s training and services, and rent-free possession of the premises raised defenses which, if proved, would prevent full recovery on the note. There were questions to be determined by the trier of fact. \u201cWhere a defense raising an issue of fact as to plaintiff\u2019s right to recover is set up, a summary judgment must he denied.\u201d (Diversey Liquidating Corp. v. Neunkirchen, 370 Ill 523, 527, 19 NE2d 363.) The action of the trial court was therefore proper.\nPlaintiff, by her action in the trial court, caused a final judgment to he entered for defendants. For the reasons stated herein, that judgment is affirmed.\nAffirmed.\nMURPHY, P. J. and ENGLISH, J., concur.\nJoseph. Bogdan died on October 10, 1958.", "type": "majority", "author": "MR. JUSTICE BURMAN" } ], "attorneys": [ "Korshak and Rothman, of Chicago (John P. Loughnane and Thomas J. Finnegan, of counsel), for appellant.", "Ben G. Ottenhoff, of Chicago, for appellees." ], "corrections": "", "head_matter": "Mary Bogdan, Plaintiff-Appellant, v. Henry B. Ausema and George Kooinga, d/b/a Chesterfield Awning Co., Defendants-Appellees.\nGen. No. 48,373.\nFirst District, First Division.\nJanuary 8, 1962.\nKorshak and Rothman, of Chicago (John P. Loughnane and Thomas J. Finnegan, of counsel), for appellant.\nBen G. Ottenhoff, of Chicago, for appellees." }, "file_name": "0294-01", "first_page_order": 322, "last_page_order": 329 }