{
  "id": 5435957,
  "name": "WILLIAM F. McGREW, Plaintiff-Appellee and Cross-Appellant, v. LARRY MIX et al., Defendants-Appellants.-(Grace Mix, Defendant-Cross-Appellee.)",
  "name_abbreviation": "McGrew v. Mix",
  "decision_date": "1983-01-04",
  "docket_number": "No. 82-145",
  "first_page": "14",
  "last_page": "19",
  "citations": [
    {
      "type": "official",
      "cite": "112 Ill. App. 3d 14"
    }
  ],
  "court": {
    "name_abbreviation": "Ill. App. Ct.",
    "id": 8837,
    "name": "Illinois Appellate Court"
  },
  "jurisdiction": {
    "id": 29,
    "name_long": "Illinois",
    "name": "Ill."
  },
  "cites_to": [],
  "analysis": {
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    "char_count": 11535,
    "ocr_confidence": 0.778,
    "pagerank": {
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    "simhash": "1:0db284b5e001b85d",
    "word_count": 1928
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  "last_updated": "2023-07-14T18:23:40.944956+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [],
    "parties": [
      "WILLIAM F. McGREW, Plaintiff-Appellee and Cross-Appellant, v. LARRY MIX et al., Defendants-Appellants.\u2014(Grace Mix, Defendant-Cross-Appellee.)"
    ],
    "opinions": [
      {
        "text": "JUSTICE KARNS\ndelivered the opinion of the court:\nPlaintiff, William E McGrew, commenced this action in the circuit court of Clay County to recover $20,545.18 plus 7% interest on a promissory note executed by defendants, Larry Mix, Sandra Mix and Grace Mix. The trial court, sitting without a jury, entered judgment for plaintiff and against Larry and Sandra Mix in the amount of $27,598.11, and entered judgment in favor of Grace Mix and against plaintiff. Defendants\u2019 post-trial motion to vacate judgment or, in the alternative, to modify the judgment was denied, and defendants, Larry Mix and Sandra Mix, now appeal. Plaintiff\u2019s cross-appeal against defendant, Grace Mix, has been abandoned.\nThe material facts of this case are uncontroverted. On March 28, 1973, Larry and Sandra Mix, husband and wife, executed a promissory note payable to the First National Bank of Flora, Illinois. The note was in the amount of $26,200 and was payable in installments of $651.84 per month. Interest on the note was set at 8%. The note was payable on demand, or if not demanded, it was to be paid on March 29,1977.\nGrace Mix, mother of Larry Mix, signed as an accommodation party at his request because the collateral offered as security was insufficient. Subsequent to the execution of the note, plaintiff married Grace Mix on November 11, 1973. After the marriage, Grace Mix informed plaintiff that she had co-signed the note.\nIn March 1975, defendant, Grace Mix, then Grace McGrew, received a letter from Roger Wells, president of the First National Bank, which advised her that payments on the note were in arrears. The letter suggested that she come in with the other co-makers to discuss the arrearage. From March 18, 1975, the arrearage increased from $5,220.40 to $6,775. Sometime during this period, plaintiff saw the letter sent by Mr. Wells to his wife.\nPlaintiff discussed the note with Larry Mix, his stepson, but did not tell him or the other defendants that he intended to pay the note. On June 9, 1975, plaintiff went to the bank and paid $20,313.68 in principal and $213.22 in interest. Roger Wells, president of the bank, marked the note \u201cpaid, June 9, 1975, R.W.,\u201d and gave the note to plaintiff. Plaintiff took the note home and placed it in a dresser drawer.\nOn June 26, 1975, defendant, Larry Mix, stated to plaintiff that he learned at the bank that plaintiff had paid the note, and inquired about what arrangements would be made for his payment of the note. Defendant wrote out a check to plaintiff for $300 as a payment on the note. Sometime thereafter, the note was delivered by either plaintiff or his wife to Larry and Sandra Mix. Plaintiff testified that this was done so that they would have the note for bookkeeping purposes.\nDefendants, Larry and Sandra Mix, made payments on the note on October 30, 1975 \u2014 $281.57; December 17, 1975 \u2014 $513.33; January 27, 1976 \u2014 $513.33, and February 9, 1976 \u2014 $1,000. Plaintiff and defendant, Grace Mix, were separated on December 29, 1976, and were divorced on April 23, 1979. After plaintiff and Grace Mix were separated in December 1976, defendant Larry Mix stopped making payments on the note. Plaintiff asked defendant, Larry Mix, for payment of the note and when none was forthcoming, brought this suit.\nOn appeal, defendants, Larry and Sandra Mix, challenge plaintiff\u2019s right to recover on the note under the several theories set forth in the complaint. The primary issue for review, we believe, is whether the plaintiff\u2019s payment and receipt of the promissory note entitled him to recover on the note from defendants under the Uniform Commercial Code. This case appears to be one of first impression in this State.\nAt the outset, we note that the trial court\u2019s decision implicitly rests upon the finding that plaintiff\u2019s payment of the note did not constitute a gift. This conclusion is well-founded upon the record which discloses that plaintiff and defendant, Larry Mix, discussed the note and that defendant testified that he knew that plaintiff expected him to pay on it. Plaintiff\u2019s adjustment of the interest on the note from 8% to 7%, and defendants\u2019 several payments on the note lend additional support to the court\u2019s finding of fact.\nThe evidence further establishes that on June 9, 1975, plaintiff went to the First National Bank and paid the promissory note which defendants had executed. After receiving this payment, Roger Wells, the bank president, stamped the note \u201cpaid,\u201d put his initials and the date on it and handed it to plaintiff. On the basis of these facts, plaintiff contends that he acquired the bank\u2019s rights in the note including the right to demand payment.\nIn support of his position, plaintiff cites section 3 \u2014 603(2) of the Uniform Commercial Code (Ill. Rev. Stat. 1981, ch. 26, par. 3 \u2014 603(2)) which provides:\n\u201cPayment or satisfaction may be made with the consent of the holder by any person including a stranger to the instrument. Surrender of the instrument to such a person gives him the rights of a transferee. (Section 3 \u2014 201.)\u201d\nThe rights of a transferee are discussed in section 3 \u2014 201 of the Uniform Commercial Code (Ill. Rev. Stat. 1981, ch. 26, par. 3 \u2014 201):\n\u201cTransfer of an instrument vests in the transferee such rights as the transferor has therein ***.\u201d\nSection 3 \u2014 603(2) of the Uniform Commercial Code represents a marked departure in the law as it previously had been under the Negotiable Instrument Law. The official comments to that section state that the original sections 171 through 177 of the Negotiable Instrument Law (Ill. Rev. Stat. 1961, ch. 98, pars. 192 through 198) provided for payment of a draft \u201cfor honor\u201d after protest. (Ill. Ann. Stat., ch. 26, par. 3 \u2014 603(2), Uniform Commercial Code Comment, at 398 (Smith-Hurd 1976).) It provided a method by which a third party might intervene to protect the credit of the drawer and at the same time protect his own rights. Under the prior law, a payment for honor in order to operate as such and not as a mere voluntary payment was required to be attested by a notarial act of honor. The drafters of the Restatement of Restitution recognized this rule stating in section 117(2):\n\u201c(2) A person who pays a negotiable bill of exchange which has been protested for nonpayment, declaring that he does so for the honor of a party thereto whom he names and having this attested by a notarial act of honor, is entitled to restitution from the person for whose honor he made payment.\u201d Restatement of Restitution sec. 117(2) (1937).\nWith the elimination of \u201cpayment for honor,\u201d section 3 \u2014 603(2) provides that any person may pay with the consent of the holder. In addition, subsection 2 states that the surrender of the instrument to such person gives him the rights of a transferee. Plaintiff contends that the promissory note was surrendered to him when the bank handed the note to him. Defendants challenge this contention and maintain that surrender did not occur because the note was not endorsed by the bank.\n\u201cSurrender\u201d as used in section 3 \u2014 603(2) is not defined in the Code nor in Illinois case law. In the absence of such definition, defendant concludes that the most logical approach is to assign \u201csurrender\u201d the same meaning as \u201ctransfer,\u201d a term which is discussed in section 3 \u2014 201. Section 3 \u2014 201(3) provides:\n\u201cUnless otherwise agreed any transfer for value of an instrument not then payable to bearer gives the transferee the specifically enforceable right to have the unqualified indorsement of the transferor. Negotiation takes effect only when the indorsement is made and until that time there is no presumption that the transferee is the owner.\u201d (Ill. Rev. Stat. 1981, ch. 26, par. 3-201(3).)\nDefendants contend that plaintiff cannot be presumed to be the owner of the note because it lacked the indorsement of the bank as required by section 3 \u2014 201(3). Furthermore, defendants contend that plaintiff\u2019s failure to secure the bank\u2019s indorsement is evidence that he lacked the authority to do so. We find both propositions to be without merit.\nWe believe the word \u201csurrender\u201d should be read in the context of section 3 \u2014 603. This section permits any person with the consent of the holder to make payment of a negotiable instrument. Upon payment and surrender of the paper, the payor succeeds to the rights of the holder, subject to the limitation found in section 3 \u2014 201 that one who has himself been a party to any fraud or illegality affecting the instrument or who as a prior holder had notice of a defense or claim against it cannot improve his position by taking from a later holder in due course. (Ill. Ann. Stat., ch. 26, par. 3 \u2014 603, Uniform Commercial Code Comment, at 399 (Smith-Hurd 1976).) Defendants have not set forth any persuasive authority which suggests that the word \u201csurrender\u201d be given a technical meaning which would place an additional limitation upon section 3 \u2014 603. Consequently, we find that plaintiff acquired the rights of a transferee including the right to demand payment on the note from its makers.\nDefendants further argue that plaintiff should not be allowed to recover on the promissory note because the note was cancelled and the makers discharged under 3 \u2014 605. Section 3 \u2014 605 which governs discharge states in pertinent part:\n\u201cThe holder of an instrument may even without consideration discharge any party\n(a) in any manner apparent on the face of the instrument or indorsement ***.\u201d (Ill. Rev. Stat. 1981, ch. 26, par. 3 \u2014 605.)\nDefendants maintain that the fact that the bank president wrote \u201cpaid\u201d on the face of the note and placed his initials, \u201cR.W.,\u201d together with the date of payment is evidence that the promissory note was cancelled.\nWe believe that the bank president\u2019s act of marking the note \u201cpaid\u201d merely acknowledged receipt of payment from plaintiff and did not extinguish the underlying obligation. Section 3 \u2014 603(2) would be rendered meaningless if the original payee were permitted to unilaterally discharge the maker upon payment by a third party. The party paying on the note essentially would become a transferee without one of the principal rights of a transferee, that is, the authority to enforce the note according to its original tenor. Accordingly, we find that defendants were not discharged by the bank, and defendants, as makers, remain obligated on the note.\nThe remaining issues presented on review concern availability of traditional restitutionary principles as grounds for recovery. In count I of the complaint, plaintiff sought recovery under the theory of subrogation maintaining that he paid the note in order to protect his marriage and his wife\u2019s health. Although defendants persuasively argue that the doctrine of subrogation is not available to one who voluntarily pays the debt of another, we need not address this issue because of the operation of section 3 \u2014 603(2) of the Uniform Commercial Code discussed above. Similarly, we need not reach the issue of whether defendants ratified plaintiff\u2019s payment of the note and are liable by virtue of a subsequent promise to pay as plaintiff alleged in count III of his complaint.\nFor the foregoing reasons, the judgment of the trial court is affirmed.\nAffirmed.\nJONES and WELCH, JJ., concur.",
        "type": "majority",
        "author": "JUSTICE KARNS"
      }
    ],
    "attorneys": [
      "Ralph D. Glenn, of Glenn & Logue, of Mattoon, for appellants.",
      "John R. Meyer, of Meyer & Meyer, of Flora, for appellee."
    ],
    "corrections": "",
    "head_matter": "WILLIAM F. McGREW, Plaintiff-Appellee and Cross-Appellant, v. LARRY MIX et al., Defendants-Appellants.\u2014(Grace Mix, Defendant-Cross-Appellee.)\nFifth District\nNo. 82\u2014145\nOpinion filed January 4, 1983.\nRalph D. Glenn, of Glenn & Logue, of Mattoon, for appellants.\nJohn R. Meyer, of Meyer & Meyer, of Flora, for appellee."
  },
  "file_name": "0014-01",
  "first_page_order": 36,
  "last_page_order": 41
}