Niblack v. Farley

• Decision Date: 20 February 1919
• Docket Number: No. 12356.,12356.
• Citation: 122 N.E. 160,286 Ill. 536
• Parties: NIBLACK v. FARLEY.
• Court: Illinois Supreme Court

286 Ill. 536

122 N.E. 160

NIBLACK

v.FARLEY.

No. 12356.

Supreme Court of Illinois.

Feb. 20, 1919.

Error to Second Branch, Appellate Court, First District, on Error to Circuit Court, Cook County; Charles M. Walker, Judge.

Action by William C. Niblack, receiver, against John W. Farley. Judgment for plaintiff was reversed on appeal to the Appellate Court, and plaintiff brings certiorari. Reversed, and judgment of circuit court affirmed.Hiram T. Gilbert and Lewis, Fox, Blumberg & Adelsdorf, all of Chicago (Joseph W. Moses and Harry Markheim, both of Chicago, of counsel), for plaintiff in error.

Jesse E. Roberts, of Chicago (Roberts & Swain, of Chicago, of counsel), for defendant in error.

FARMER, J.

William C. Niblack, as receiver of the La Salle Street Trust & Savings Bank (hereafter referred to as plaintiff), sued John W. Farley (hereafter referred to as defendant) in the circuit court of Cook county in an action of assumpsit. A trial was had without a jury, and a judgment rendered in favor of plaintiff for $13,845.44 and costs of suit. From that judgment defendant appelled to the Appellate Court for the First District. That court reversed the judgment with a purported finding of fact, and the record is brought to this court on a petition for a writ of certiorari.

The declaration consisted of the common counts and a special count on a promissory note for $11,500 given by defendant May 24, 1913, payable on demand to the La Salle Street Trust & Savings Bank. The facts, about which there is no dispute, are, that defendant was in 1911 a partner in the firm of John W. Farley & Co. That firm borrowed from the La Salle Street National Bank on October 16, 1911, $10,000, for which the partnership gave a note payable in 90 days, signed with the firm name and guaranteed by defendant. November 2, 1911, the same firm borrowed from the same bank an additional $1,500 and gave another note, which was also guaranteed by defendant. Nothing was ever paid on either of these notes. On October 21, 1912, the La Salle Street National Bank was reorganized and converted into a state bank, which reorganization and conversion are fully described in Golden v. Cervenka, 278 Ill. 409, 116 N. E. 273. The national bank turned over and assigned all its effects and assets to the La Salle Street Trust & Savings Bank, and that bank adopted a resolution that, in consideration of the assignment to it by the national bank of its cash, accounts receivable, bills receivable, bonds, stock, and all other assets and credits, the La Salle Street Trust & Savings Bank agreed to assume all the indebtedness of the national bank of whatever kind or nature. The state bank had substantially the same stockholders and was controlled by the same officers as the national bank. In December, 1911, the defendant and his partner, John A. Murphy, individually and as partners, filed their petition in bankruptcy in the District Court of the United States and were adjudged bankrupt. The two notes mentioned were scheduled and filed, and proven on December 27, 1911, and nothing has ever been paid on them. These notes were in the possession of the national bank at the time it was succeeded by the state bank, when they passed into the possession of the last-named bank. They were carried on the books of the national bank as live assets, and after they passed to the state bank were so carried on its books until its failure, June 12, 1914. On May 24, 1913, defendant executed and delivered to the La Salle Street Trust & Savings Bank a demand promissory note for $11,500, which is the note specially declared on in the declaration. The defendant pleaded the general issue, want of consideration, and discharge in bankruptcy. To the plea of a discharge in bankruptcy plaintiff replied, averring a new promise made by defendant May 24, 1913, which was subsequent to the bankruptcy proceeding.

Plaintiff contended (1) that the note for $11,500, dated May 24, 1913, was given by reason of defendant's moral obligation to pay the two old notes...