Lindberg v. Mut. Nat. Bank of Chicago
| Decision Date | 05 April 1943 |
| Docket Number | Gen. No. 42265. |
| Citation | 318 Ill.App. 195,47 N.E.2d 551 |
| Parties | LINDBERG v. MUTUAL NAT. BANK OF CHICAGO. |
| Court | United States Appellate Court of Illinois |
OPINION TEXT STARTS HERE
Appeal from Superior Court, Cook County; Peter H. Schwaba, Judge.
Action by Freda Lindberg, as conservatrix of the estate of Harry Lindberg, also known as Harry C. Lindberg, insane, against the Mutual National Bank of Chicago, a banking association, duly organized and existing under and by virtue of the laws of the United States, to have two collateral notes executed by Harry Lindberg declared void and the collateral given to secure payment of the notes returned to plaintiff. From a judgment for plaintiff, the defendant appeals.
Reversed and remanded with directions. Rathje, Hinckley, Barnard & Kulp, of Chicago (Francis E. Hinckley and William E. Fisher, both of Chicago, of counsel), for appellant.
Oke L. Pearson, of Chicago, for appellee.
September 10, 1941, Freda Lindberg, as conservatrix of the estate of Harry Lindberg, insane, filed her verified complaint in equity against defendant, the Mutual National Bank of Chicago, praying that two collateral notes executed by Harry Lindberg May 17 and May 27, 1941, be declared null and void and the collateral, given to secure the payment of the notes, returned to plaintiff. Defendant filed a verified answer and afterward plaintiff moved for a summary judgment supported by an affidavit. Defendant filed an affidavit in opposition to plaintiff's motion. The court disposed of the case on the pleading and entered an order and decree in plaintiff's favor. Defendant appeals.
The substance of the allegations of the complaint is that July 9, 1934, Harry Lindberg was found to be insane by the County court of Cook county and so remained to the present time. That May 17 and 27, 1941, he executed his two promissory, collateral notes, both due August 15, 1941, one for $1,787 and the other for $100, and to secure the payment of them deposited with defendant as collateral, 105 shares Common Stock, Berghoff Brewing Corporation; 10 shares Compania Swift Internationale; 10 shares Preferred Stock, Continental Baking Company; 60 shares Common Stock, General Cigar Company and 10 shares Common Stock, National Distillers Products Company. That August 30, 1941, defendant served notice on plaintiff that it would, on September 12, at a certain hour and place, sell the stock, or so much of it as would be necessary, to pay the amount due on the notes. And it is averred that the stock had an actual value of approximately $3,000; that plaintiff had demanded a return of the collateral and a surrender of the notes, which was refused. “Therefore plaintiff charges that it would be unconscionable to permit the defendant to retain possession of said collateral and said notes.”
Defendant filed its answer in which it admits that July 9, 1934, an inquest was held in the County court of Cook county, concerning the mental condition of Harry Lindberg, and in the petition there filed by plaintiff, Freda Lindberg, his wife, it was alleged that Harry Lindberg had no property. That July 26, 1934, an order was entered in that proceeding, by which Harry Lindberg was committed to the State Hospital at Kankakee, Illinois, and there remained until May 19, 1935, when he was released on parole, and on August 19, 1935, discharged from the institution. Defendant denies that after Lindberg's discharge he lacked capacity to enter into a contract. The answer further sets up that after Lindberg's discharge, he commenced a course of business dealings with a number of business firms and corporations; entered into leases for premises occupied by him and his wife, for which he paid rent; borrowed money from the Metropolitan Life Insurance Company upon his life insurance policy; engaged in stock brokerage transactions with stock brokers in Chicago; bought and sold shares of stock, repaid his loan to the Metropolitan Life Insurance Company; had numerous transactions with the defendant bank; that since his discharge from the institution at Kankakee he purchased an automobile which he drove and had it registered in his name; that on or about December 5, 1936, he bought 50 shares of Berghoff Brewing Corporation Common Stock and a certificate was issued to him; that about January 12, 1937, he bought 10 shares of the Common Stock of the General Cigar Company, and a stock certificate was issued to him; that January 7, 1938, he bought 25 shares of the Berghoff Brewing Corporation Common Stock and a certificate was issued to him; that May 19, 1939, he bought 10 shares of the Continental Baking Company Preferred Stock and the certificate was issued to him; that July 11, 1939, he bought 10 shares of National Distillers Products Corporation Common Stock and the certificate was issued to him; that May 23, 1939, he bought 10 shares of General Cigar Company Common Stock and the certificate was issued to him; that December 19, 1939, he bought 40 shares of General Cigar Company Common Stock and the certificate was issued to him; that July 26, 1940, he acquired a deposit certificate of the Compania Swift Internationale for 10 shares of stock and the certificate was issued to him. January 15, 1941, he bought 30 shares of Berghoff Brewing Corporation Common Stock and the certificate was issued to him.
It is further set up in the answer that about October 3, 1936, Lindberg opened a savings account with defendant bank and made deposits and withdrawals; that in August, 1940, he had a loan account of $1,800, with the Terminal National Bank of Chicago, which at the request of Lindberg, defendant bank afterward paid to the Terminal Bank and at the time, the securities put up with defendant as collateral were turned over to defendant bank. That defendant in good faith dealt with Lindberg as a sane man and without any knowledge that he had ever been adjudged insane.
It was further alleged that plaintiff, Freda Lindberg, wife of Harry Lindberg, at all times since Harry's release from the State Hospital at Kankakee in 1935, knew of the business transactions of her husband, consented to and approved of them and gave no notice to any person with whom Harry dealt that he had been adjudged insane, and it was averred that she colluded and conspired with her husband to avoid obligations on the notes involved in suit and caused him to be readmitted to the hospital for the insane June 5, 1941. Defendant denied that the notes were void.
The affidavit filed in support of plaintiff's motion for a summary judgment set up substantially the facts alleged in the complaint and defendant's affidavit set up substantially the same facts as those alleged in its answer.
The court held that since Lindberg had been adjudged insane by the County court of Cook county July 9, 1934, and since there had been no readjudication of the matter by the same court, and since under the provisions of § 12, ch. 85, Ill.Rev.Stats.1937, every note or other contract made by a person adjudged insane was void, no recovery could be had.
Sec. 22, ch. 85, Ill.Rev.Stats.1937 provides that where a person has been adjudged insane and committed to a state institution, as the State Hospital at Kankakee, such person may be paroled or discharged. That section provides:
Section 25, of the same chapter provides: “Whenever notice shall have been given to the judge of any county court that any patient committed to any hospital or asylum in this state, under the order of said court, has been discharged cured, upon receipt of such notice signed by the superintendent the judge shall enter an order adjudging the patient to be sane and restoring the patient in question to all his rights as a citizen.” No contention is made that the parole and discharge of Lindberg from the State Hospital at Kankakee were not in every particular valid and in compliance with the law.
We think the court erred in holding that since Lindberg was adjudged insane by the County court of Cook county July 9, 1934, this was a judicial determination and conclusive of his insanity until that court should, by a like decision, declare him sane. Lilly v. Waggoner, 27 Ill. 395;Titcomb v. Vantyle, 84 Ill. 371.
In the Lilly case Waggoner in 1851 conveyed real estate to Lilly. In 1858 Waggoner was adjudged insane by the County court of Moultrie county and...
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