Wolf v. McNulta

• Decision Date: 17 February 1899
• Citation: 178 Ill. 85,52 N.E. 896
• Parties: WOLF v. McNULTA et al.
• Court: Illinois Supreme Court

178 Ill. 85

52 N.E. 896

WOLF

v.McNULTA et al.

Supreme Court of Illinois.

Feb. 17, 1899.

Appeal from appellate court, First district.

Action by Harris Wolf against John McNulta, receiver of the National Bank of Illinois, and another. From a judgment of the appellate court (77 Ill. App. 325) reversing a judgment for plaintiff, plaintiff appeals. Reversed.Moses, Resenthal & Kennedy, for appellant.

George M. Eckels, for appellees.

The National Bank of Illinois, at Chicago, sold to Harris Wolf certain bonds known as bonds of the Chicago Auditorium Association, and, at the time of the several sales, entered into the following agreements and undertakings with appellant: ‘Chicago, June 22, 1896. H. Wolf, Esq., City-Dear Sir: We have this day sold to you $11,000 of the five per cent. bonds of the Chicago Auditorium Association, at par, and interest. Should you desire to resell to us during the month of January, 1897, we will buy them back from you at same price. Yours truly, Wm. A. Hammond, Second Vice Prest.’ On July 9, 1896, in connection with the sale of others of the bonds: ‘Should you wish to sell these bonds back to us in the month of January, 1897, we will buy them back at par, and interest. W. A. Hammond, Second Vice Prest.’ On July 14, 1896, referring to the sale of others of the bonds: ‘Should you wish to sell us these bonds back during the month of January, 1897, we will repurchase them at par, and interest. W. A. Hammond.’ And on July 15, 1896, referring to another of the sales: ‘If you wish to sell these bonds back to us at par, and interest, during the month of January, 1897, we will repurchase them from you at the above price. W. A. Hammond, Second Vice Prest.’ The bank failed on the 21st day of December, 1896, and on that day John C. McKeon was appointed receiver. On January 16, 1897, appellant gave the following notice to the receiver: ‘Chicago, Ill., Jan. 16, 1897. Hon. John C. McKeon, Receiver Nat. Bank of Illinois-Dear Sir: I hereby tender you thirty-five bonds of the Chicago Auditorium Association, of $1,000 each, making a total of $35,000, and I hereby offer to sell said bonds to you, as said receiver, at their face value, with accrued interest. This tender and this offer to sell are made in pursuance of certain receipts and guaranties given me by said National Bank of Illinois at the time I purchased said bonds from said bank. Copies of said receipts and said guaranties are attached hereto, and made a part hereof, and your attention is specifically called thereto. You are further notified that, if said bonds are not repurchased by you in pursuance of above demand, I shall at once place them upon the open market, offering them for sale, and shall hold said bank, and you, as receiver thereof, liable for any loss incurred by me growing out of said sale, or I shall have said bonds appraised, and their present market value fixed, and hold you, as receiver of said bank, and said bank, liable for any difference between the face value and said appraised value. H. Wolf.’ The receiver refused to accept the bonds or to recognize any obligation by reason of the agreements to repurchase. This suit was brought to recover damages for breach of these several agreements by the bank to repurchase the bonds at the option of the appellant. A jury was waived, and the cause submitted to the trial court upon an agreed statement of facts. Among other items in the agreed statement is the following: ‘(8) That in all of said purchases said plaintiff informed the said bank, acting through said W. A. Hammond, its second vice president, that he would not make said purchases unless said bank would contract in writing to repurchase said bonds, as is in said several contracts more fully stated.’ It was further stipulated that all of said transactions were made between said parties in good faith, and that said plaintiff fully believed that said bank, acting through said Hammond, had full power and authority to enter into such contracts, and that said W. A. Hammond, acting as such second vice president of said bank, fully believed that said bank had the power and authority to enter into such contract; that said W. A. Hammond, in his capacity as second vice president of said bank, exercised all the powers vested in the president and first vice president of said bank as a matter of fact, but, in the making of said contracts, the board of directors did not pass any resolution authorizing the execution and delivery of said contracts; that all of the said contracts recited herein shall be considered by the court as if they had been signed, ‘The National Bank of Illinois, by W. A. Hammond, Its Second Vice President;’ that said bank had an authorized capital of $1,000,000, and always did a very large commercial banking business; that said auditorium bonds were not speculative bonds, but were and are, in the banking community of Chicago, recognized as good and valid staple securities, either for a loan of money or for the purchase and sale thereof; that such bonds mentioned in said contracts formed a part of a purchase of $50,000 by said bank, the remainder of which were in the possession of the bank as a part of its assets at the time when the receiver took possession thereof under the orders of the comptroller of the currency. Item 14 of the stipulation was as follows: ‘(14) It is agreed that, in the making of this stipulation by the parties hereto, the power of the National Bank of Illinois, and that of William A. Hammond, its second vice president, to enter into said contracts in its behalf, is affirmed on the part of the plaintiff herein, and is disputed on the part of the defendants herein, and the judgment of the court is requested on the stipulated facts.’ The circuit court found the issues in favor of the plaintiff, and entered judgment against the National Bank of Illinois for the sum of $35,257.61, but refused to enter judgment against the receiver, but entered an order ‘that John C. McKeon, receiver, certify this claim in judgment to the comptroller of the currency of the United States of America, to be paid by him in the due course of administration of the assets of said National Bank of Illinois at Chicago.’ To reverse the judgment, the defendants sued out a writ of error to the appellate court, where the judgment was reversed, and the plaintiff appealed to this court. McKeon, the former receiver of the bank, has since been succeeded in the receivership by John McNulta, the present appellee.

CRAIG, J. ...