Union National Bank of Chicago v. Chapman

While Mrs. Chapman signed her name in Alabama, she promised to pay in Illinois. If there is doubt as to the state where the contract was made, there is none as to the state where it was to be performed. Although in fact a surety for her husband's firm, there is nothing on *Page 546 the face of the note to show it, for she contracted as a maker and her promise is absolute in form. Uniting with that firm and others as joint makers, she promised to pay the sum in question to the order of E.P. Reynolds, Jr., at the "Union National Bank, Chicago, Ill." The payee was a member of her husband's firm and she knew it when she signed the note. She also knew that it was an accommodation note, made to raise money for the use of the firm and that until negotiated it was without binding force upon any one. After signing it she intrusted it to the payee, knowing that, in behalf of the firm, he intended to negotiate it somewhere and that he was at liberty to negotiate it anywhere. When the payee thus received the note signed by her she had made no contract, for the paper had no inception as yet. The contract of a surety rests upon the contract of the principal, and until the latter becomes operative the former is not binding. The promise of the surety has nothing to act upon until the promise of the principal is in force as an effective contract. When the firm negotiated the paper in Illinois, as they had a right to, by selling it to a bona fide purchaser for value, that which theretofore had been merely a note in form first became a note in fact. It then became a contract and for the first time acquired the quality of commercial paper. Until then the law did not recognize Mrs. Chapman as a surety. She had made no enforceable contract, but merely an inchoate promise, which was without legal life, until what was done in Alabama with implied authority to complete it elsewhere, ripened into a lawful obligation by what was done in Illinois. All that was done in Alabama did not make a contract, and, therefore, the contract was not made in that state. It was made in Illinois, because there was no contract, either of principal or surety, until the paper was used in that state. That use of the note was necessarily within the contemplation of Mrs. Chapman when she signed it and gave it to Mr. Reynolds, the payee, with her implied consent that he or his firm, might negotiate it anywhere, and hence within a state where the law permits a wife to become surety for *Page 547 her husband. As the law presumes a lawful and not an unlawful intent, when possible, the presumption arises, in the absence of evidence upon the subject, that she intended the note should be used in a state where she could become such a surety. Hence she is presumed to have contracted, not with reference to the laws of Alabama, where her action would not be binding, but with reference to the laws of any jurisdiction where her promise would be lawful, provided the paper should subsequently be used within such a jurisdiction. Otherwise she must have intended to aid in imposing upon some one, which will not be presumed, but must be proved. As the note was made payable in Illinois, was delivered by Mrs. Chapman with leave to negotiate it anywhere and it was actually negotiated and had its first inception in that state, the mere fact that it was written in another state where she had a temporary residence only and where she knew it could not be enforced and hence could not be honestly used, did not make it a contract of that state nor prevent it from becoming a contract of the state within which she promised to pay it. I think it was an Illinois contract and should be governed by the laws of that state. For these reasons I dissent from the conclusion reached by the majority of the court and record my vote in favor of affirming the judgment appealed from.

PARKER, Ch. J., GRAY, O'BRIEN and MARTIN, JJ., concur with HAIGHT, J.; BARTLETT, J., concurs with VANN, J.

Judgment reversed, etc.