Hoffman v. Sears Cmty. State Bank

• Citation: 191 N.E. 280,356 Ill. 598
• Decision Date: 15 June 1934
• Docket Number: No. 21909.,21909.
• Parties: HOFFMAN v. SEARS COMMUNITY STATE BANK.
• Court: Illinois Supreme Court

356 Ill. 598

191 N.E. 280

HOFFMAN

v.SEARS COMMUNITY STATE BANK.

No. 21909.

Supreme Court of Illinois.

June 15, 1934.

Error to First Branch Appellate Court, First District, on Appeal from Municipal Court of Chicago; Frank M. Padden, Judge.

Action by Sam Hoffman against the Sears Community State Bank. Judgment in favor of plaintiff was affirmed by the Appellate Court, and defendant brings certiorari.

Reversed and rendered.Lederer, Livingston, Kahn & Adler, of Chicago (Sigmund Livingston, of Chicago, of counsel), for appellant.

Abrams & Abrams, of Chicago (Abraham H. Maller and Maurice Abrams, both of Chicago, of counsel), for appellee.

HERRICK, Justice.

The appellee (hereinafter called the plaintiff) brought an action against the appellant (hereinafter called the defendant) in the municipal court of Chicago, first class, to cover for money claimed to be due the plaintiff from the defendant upon a contract to repurchase certain real estate bonds sold by the defendant to the plaintiff.

The plaintiff's cause of action is based solely upon a writing appearing at the end of an invoice which is set forth in haec verba in the statement of the claim, and which in effect is: ‘Community State Bank sold to Sam Hoffman $3,000 par value Ind. View Bldg. at 99, $2,970, accrued interest from May 1 to July 28 at six per cent, $43, total $3,013.’ At the foot of this invoice, which was delivered by the defendant to the plaintiff, there appears the following memorandum: ‘We will re-purchase these bonds at any time at 99 and pay you five per cent interest on your investment, the coupons to belong to us.-B. L. Zinder, Cashier.’ On July 2, 1931, the Community State Bank consolidated with the Sears Community State Bank. The statement of claim alleged that on August 5, 1931, and prior to bringing the suit, the plaintiff tendered the bonds, with the unpaid coupons Nos. 13 and 14, to the defendant and made formal demand upon it that it repurchase the bonds pursuant to the above-written agreement.

Several defenses were interposed by the defendant, some of which were as follows: (1) That the agreement to repurchase the bonds was ultra vires; (2) that the supposed contract was against the public policy of this state; and (3) that said agreement was, in effect, a guaranty of the bonds; that the Community State Bank and the defendant bank at all times from the beginning of business held large sums of savings deposits and deposits of trust funds, and the repurchase agreement was in violation of section 4 of an act of the Legislature entitled ‘An act for the protection of bank depositors,’ in force July 1, 1879. Trial was had before the court without the intervention of a jury. Propositions of law were submitted to the court by both sides, and the plaintiff recovered judgment for $2,976.87. The cause was taken to the Appellate Court. The judgment of the trial court was affirmed, and the record now comes here for review upon writ of certiorari.

There is practically no dispute about the facts. The plaintiff purchased the bonds from the Community State Bank. At the time he asked if the bank would guarantee them, and the cashier said the bank would, and wrote the memorandum of repurchase on the bottom of the invoice. The defendant paid for the bonds. He afterwards used the same bonds for collateral for a loan and collected all the coupons except the two tendered to the defendant. The evidence showed there was no memorandum of any kind on the records of the Community State Bank relative to this alleged liability of the bank; that the value of the bonds and the real estate mortgaged to secure the same had depreciated to a marked extent, and that both banks, from the time they severally commenced business, have had savings deposits of large amounts and deposits of trust funds.

It is urged by the plaintiff that section 4, supra (Smith-Hurd Rev. St. 1933, c. 38, § 64, p. 1008; Cahill's Rev. St. 1933, c. 38, par. 41, p. 992) has been repealed by the enactment of the general banking law of 1919 (Laws 1919, p. 224, as amended Smith-Hurd Rev. St. 1933, c. 16 1/2, § 1 et seq.). In support of that contention it is urged that section 4 is inconsistent with sections 1, 9, and 10 of the general Banking Act (sections 1, 9, 10), in that section 4 imposes a limitation upon the powers of banks. There is no inconsistency between the several sections 1, 9, and 10 and section 4, when the object and purposes of the Banking Act and of said provision of the Criminal Code are considered as a whole. Section 4 is a part of the Act of 1879, adopted for the protection of bank depositors. In the case of People v. Gould, 345 Ill. 288, 178 N. E. 133, it was urged that the Act of 1879 was inconsistent with the Banking Act of 1919, and therefore repealed by implication. It was there held that the Act of 1879 was not inconsistent with the Banking Act of 1919 and that the Act of 1879 was not repealed by the Banking Act of 1919.

The plaintiff further contends that section 4 is...