## Facts

- In October 1996, Brian P. McIntyre, through his company Total Home, gave homeowner Sandra Bennett a price quote to repair her roof.
- McIntyre told Bennett she needed to provide $2,000 up front for the repair, and Bennett wrote a $2,000 check payable to Total Home.
- McIntyre then gave Bennett a $2,000 check that he postdated October 28, 1996, telling her she could cash it if the roof work was not completed by that date.
- McIntyre deposited Bennett’s $2,000 check into his business account at Twin Oaks Savings Bank.
- The roof repair was not completed by October 28, 1996.
- Bennett presented McIntyre’s postdated $2,000 check for payment.
- Before the check was paid, McIntyre directed the Bank to stop payment on the check to Bennett, and the Bank accepted the stop-payment order.
- The Bank mistakenly disregarded the stop-payment order and paid the check to Bennett, resulting in a $2,000 debit to McIntyre’s account.
- McIntyre complained to Robert E. Harris, the Bank’s executive vice president, that the debit would overdraw his account.
- McIntyre executed a written agreement (memorialized by a note) under which the Bank would leave the $2,000 in his account and McIntyre would pay the Bank $2,000 plus interest by July 1.
- McIntyre did not fully repay the Bank.
- McIntyre sued the Bank and Harris, alleging he was improperly coerced into signing the repayment agreement after the Bank paid the check despite his valid stop-payment order.
- The Bank counterclaimed to recover the $2,000 (and interest).

## Issues

1. Whether Sandra Bennett was a holder in due course of McIntyre’s $2,000 check, and whether the Bank—after paying the check over a valid stop-payment order—was subrogated to Bennett’s rights and could recover the amount from McIntyre.
2. Whether the trial court denied McIntyre a fair trial by allowing impeachment with evidence of a prior felony conviction that McIntyre claimed had later been dismissed under a first-offender statute.
3. Whether the trial court committed reversible error by admitting a document McIntyre claimed had been altered.

## Decision

- The Illinois Appellate Court, Third District, affirmed the judgment for Twin Oaks Savings Bank and Robert E. Harris.
- The court upheld the trial court’s determination that Bennett qualified as a holder in due course and that the Bank, having paid the check despite a stop-payment order, was subrogated to Bennett’s rights and could recover from McIntyre.
- The court rejected McIntyre’s challenge to the impeachment evidence, holding the specific objection was not properly preserved and any error was harmless in a bench trial on this record.
- The court also rejected the altered-document claim because it was not preserved by a timely objection and, in any event, the record supported the trial court’s evidentiary ruling.

## Legal Principles

- A payee may qualify as a holder in due course if the payee takes the instrument for value, in good faith, and without notice of defenses or claims.
- When a bank pays an item over its customer’s valid stop-payment order, the bank may seek subrogation to prevent the customer from receiving a windfall where the payment satisfied the customer’s obligation to the payee.
- If the payee is a holder in due course, subrogation allows the bank to assert the payee’s rights on the instrument, limiting the customer’s ability to avoid repayment based on personal defenses.
- A party must make timely and specific objections at trial to preserve claims of evidentiary error for appeal; unpreserved claims are forfeited, and reversal also requires a showing of prejudice.

## Conclusion

The appellate court affirmed judgment for the Bank and Harris, concluding that Bennett took McIntyre’s check as a holder in due course and that, after mistakenly honoring the check despite a stop-payment order, the Bank could recover from McIntyre by subrogation to Bennett’s rights; McIntyre’s evidentiary and fair-trial arguments failed because they were not properly preserved and did not show harmful error.


McIntyre v. Harris, 709 N.E.2d 982 (1999)