Federal Deposit Ins. Corp. v. Wainer

• Court: Appellate Court of Illinois
• Writing for the Court: FRIEND; BURKE, P. J., and NIEMEYER
• Citation: Federal Deposit Ins. Corp. v. Wainer, 124 N.E.2d 29, 4 Ill.App.2d 233 (Ill. App. 1955)
• Decision Date: 31 January 1955
• Docket Number: Gen. No. 46416
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION, Appellee, v. Heinnie WAINER, Appellant.

Page 29

124 N.E.2d 29

4 Ill.App.2d 233

FEDERAL DEPOSIT INSURANCE CORPORATION, Appellee, v. Heinnie WAINER, Appellant.

Gen. No. 46416.

Appellate Court of Illinois, First District, First Division.

Jan. 31, 1955.

Maurice J. Walsh, Chicago, for appellant.

John H. Bishop, Chicago, Royal L. Coburn, Washington, D. C., Robert A. Dixon, Chicago, John L. Cecil, Washington, D. C., Ray W. Fick, Jr., Chicago, for appellee.

FRIEND, Justice.

Defendant appeals from an order of the Superior Court denying his motion to open a judgment and for leave to defend. The judgment, in the aggregate sum of $24,688.74, which included $1,255 as fees for plaintiff's attorney, and costs, was based on a note held by the Federal Deposit Insurance Corporation (hereinafter referred to as FDIC) and acquired by it through endorsement of the First State Bank of Elmwood Park, Illinois. FDIC purchased the note from the First State Bank of Elmwood Park pursuant to the provisions of the Federal Deposit Insurance Act (64 Stat. 873, title 12, U.S.C.A. § 1823(e)) in order to facilitate the assumption of its deposit liabilities by another insured bank. The First State Bank of Elmwood Park was closed by the auditor of public accounts of the State of Illinois on April 11, 1953 for examination and adjustment, and thereafter was not allowed to re-open and resume the banking business. Application was made by it to FDIC for financial assistance pursuant to the terms of the Federal Deposit Insurance Act. Assistance was granted, and a contract was entered into with FDIC on May 26, 1953 under the terms of which certain of its assets, including the note in question, were sold to FDIC. Subsequently First State Bank of Elmwood Park ceased to do any further banking business, and as part of the over-all transaction the bank's deposit liabilities were assumed in toto by a newly organized bank, Bank of Elmwood Park, and FDIC is in the course of liquidating the assets it purchased from First State Bank of Elmwood Park. The transaction by which the note was acquired was an integral part of the performance by FDIC of a statutory duty, as directed by an act of congress (title 12 U.S.C.A. § 1811 et seq.)

Defendant's motion to open the judgment and for leave to defend alleged that the note was acquired by plaintiff after maturity and with notice of defects and defenses thereto, and that it was acquired by means of fraud. In support of these allegations the factual situation underlying the transaction was set forth at length and may be summarized as follows. Henry J. Beutel, who was president of both the Belmont National Bank of Chicago and the First State Bank of Elmwood Park, solicited and requested defendant to make a $25,000 deposit of cash in the Belmont National Bank. This money was delivered to Beutel who issued a receipt therefor in the name of the Belmont National Bank on December 28, 1951. Defendant, on frequent occasions thereafter, sought to withdraw the funds but was requested and persuaded by Beutel to continue the deposit. Defendant ultimately insisted on obtaining his money, and on Beutel's request and representation that the affairs of the bank would be embarrassed, he was, on January 29, 1953, persuaded to execute a note payable in fifteen days to the First State Bank of Elmwood Park, in the amount of $25,000, which amount was paid to defendant. At the time of the execution of the note Beutel said that it would be satisfied before maturity by funds due defendant from Belmont National Bank. This agreement was not carried out by Beutel, and after the note matured defendant was induced and persuaded to execute a new note in the amount of $20,500, payable to the First State Bank of Elmwood Park, due in thirty days. This was the instrument upon which the judgment in controversy was entered. The reduction was accomplished by the use of $2,560 furnished by Beutel, $2,500 of which was applied on principal and $60 on estimated interest. Beutel again at this time assured and promised defendant that this note would be satisfied with the funds of defendant on deposit in Belmont National Bank.

Defendant's affidavit in support of the motion substantially recited the foregoing matters, and attached thereto was the original note to the First State Bank of Elmwood Park in the sum of $25,000 which was marked paid, the receipt of the Belmont National Bank of Chicago signed by Beutel as president, and the handwritten memorandum of Beutel which accompanied the $2,560 given by him to defendant for use...