## Facts

- Sellers agreed in 1982 to sell a Chicago apartment building to an Illinois partnership and related individuals for $350,000, with funding tied to a specified HUD project; absent HUD funding, the contract would be void.
- A July 1982 amendment required $10,000 at the initial closing (deed delivery) and a $110,000 promissory note executed individually by two purchasers as co-makers.
- The note’s maturity was tied to “final endorsement” of the identified HUD loan and contemplated satisfaction from HUD loan proceeds.
- The sale closed, the deed was delivered, HUD ultimately endorsed and funded the loan (final endorsement occurred in April 1983), and partial payments were made.
- The seller alleged an unpaid balance remained and sued in March 1994 to recover under the sale agreement and promissory note and to enforce an equitable seller’s lien against the property.

## Issues

1. Whether the promissory note was a negotiable instrument subject to the UCC limitations period and, if so, when the cause of action accrued.
2. Whether the seller’s contract-based claims could proceed despite the elapsed time since HUD’s final endorsement and the note’s maturity.
3. Whether equity would recognize an equitable seller’s lien to secure the alleged unpaid purchase price after the monetary claim was time-barred.

## Decision

- The appellate court affirmed dismissal with prejudice of the seller’s contract/note claims.
- The court treated the note as a negotiable instrument with payment due at a definite time—HUD’s final endorsement—so the cause of action accrued in April 1983.
- Applying the UCC statute of limitations for actions on negotiable instruments, the court held the 1994 suit was untimely.
- The court also affirmed dismissal of the equitable seller’s lien claim, declining to impose a lien to avoid the limitations bar given the parties’ chosen structure (deed at closing and an express promissory note as security).

## Legal Principles

- A promissory note payable upon a specified, contractually identified event can be “payable at a definite time” and qualify as a negotiable instrument.
- An action on a negotiable instrument accrues when the instrument matures under its terms; limitations run from that maturity date.
- Recasting a time-barred claim for payment as equitable lien enforcement does not avoid the statute of limitations.
- An equitable seller’s (vendor’s) lien is discretionary and may be denied where the seller accepted other security for payment and delayed suit beyond the limitations period.

## Conclusion

The court held that the seller’s claims to collect an alleged unpaid balance were barred because the note matured upon HUD’s final endorsement in 1983 and suit was not filed until 1994, and it refused to impose an equitable seller’s lien that would effectively circumvent the limitations period.


Krajcir v. Egidi, 712 N.E.2d 917 (Ill. App. Ct. 1999)