{ "id": 5177770, "name": "Joseph S. Gerber, Director of Insurance of State of Illinois, as Liquidator of United States Mutual Insurance Company, Appellant, v. Continental Illinois National Bank and Trust Company of Chicago, a national banking association, Appellee", "name_abbreviation": "Gerber v. Continental Illinois National Bank & Trust Co.", "decision_date": "1958-01-07", "docket_number": "Gen. No. 47,089", "first_page": "379", "last_page": "384", "citations": [ { "type": "official", "cite": "16 Ill. App. 2d 379" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "223 Ill. 41", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3336686 ], "opinion_index": 0, "case_paths": [ "/ill/223/0041-01" ] }, { "cite": "282 Ill. App. 14", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3249751 ], "pin_cites": [ { "page": "27" } ], "opinion_index": 0, "case_paths": [ "/ill-app/282/0014-01" ] }, { "cite": "65 Ill. 69", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2617574 ], "opinion_index": 0, "case_paths": [ "/ill/65/0069-01" ] }, { "cite": "82 S.E.2d 172", "category": "reporters:state_regional", "reporter": "S.E.2d", "pin_cites": [ { "page": "174" } ], "opinion_index": 0 }, { "cite": "68 N.W.2d 105", "category": "reporters:state_regional", "reporter": "N.W.2d", "case_ids": [ 4685596 ], "pin_cites": [ { "page": "109" } ], "opinion_index": 0, "case_paths": [ "/sd/75/0468-01" ] }, { "cite": "228 P.2d 929", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 1240121 ], "pin_cites": [ { "page": "934" } ], "opinion_index": 0, "case_paths": [ "/kan/170/0620-01" ] }, { "cite": "301 Ill. App. 128", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3187011 ], "pin_cites": [ { "page": "152" } ], "opinion_index": 0, "case_paths": [ "/ill-app/301/0128-01" ] }, { "cite": "2 Ill.App.2d 70", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5122240 ], "weight": 2, "pin_cites": [ { "page": "77" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/2/0070-01" ] } ], "analysis": { "cardinality": 505, "char_count": 8568, "ocr_confidence": 0.533, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.15603226288482455 }, "sha256": "4f0dd9c799926387b45f642ddb8d3e87444be9198eb77adbba8c0595fb88b2d8", "simhash": "1:16320455e0466acf", "word_count": 1401 }, "last_updated": "2023-07-14T20:24:43.680417+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "LEWE and MURPHY, JJ., concur." ], "parties": [ "Joseph S. Gerber, Director of Insurance of State of Illinois, as Liquidator of United States Mutual Insurance Company, Appellant, v. Continental Illinois National Bank and Trust Company of Chicago, a national banking association, Appellee." ], "opinions": [ { "text": "PRESIDING JUSTICE KILEY\ndelivered the opinion of the court.\nThis is the second appeal in this action, which began as an accounting suit by United States Mutual Insurance Company, called company herein, against former directors and officers. The director of insurance of the state of Illinois was appointed liquidator of the company after suit was filed and was substituted as plaintiff. He filed an amended complaint against defendant Continental Bank to recover $217,500, the amount of the check drawn against the company account, which he alleges Continental negligently paid unauthorized persons. The trial court entered \u201cjudgment on the pleadings,\u201d and plaintiff appealed. We reversed the judgment and remanded the cause for further proceedings (2 Ill.App.2d 70). After remandment and hearing, the trial court dismissed plaintiff\u2019s suit and again rendered judgment for Continental, and plaintiff has again appealed.\nWe reversed the original judgment in order to enable plaintiff to file a reply to Continental\u2019s answer and special defenses. The reply was filed but was stricken on Continental\u2019s motion, and the cause dismissed. The well pleaded allegations of the amended complaint and reply are therefore admitted.\nMay 4, 1949, the company had an active account at the Northern Trust Company, and on that day and on May 9, 1949, $225,000 was transferred from that account to the company\u2019s then inactive account with Continental. The day of the transfer of this sum, Mc-Farling and Doolin presented a check for $217,500, drawn against the company account in Continental and payable to Insurance Investment Corporation. That sum was credited to the account of the payee corporation, which had that day (May 9) been opened in Continental. The company account was debited in a like amount. Thereafter two cashier\u2019s checks, totalling $200,000, were issued by Continental, one payable to Carl Barrett and the other to Evelyn Marks, at one time officers and directors of the company, and charged to the account of Insurance Investment Corporation.\nWhen Continental paid the check presented by Mc-Farling and Doolin, company resolutions and a signature card, giving authority for drawing company checks, were on file with Continental. McFarling and Doolin were not included in the authorization. They were, however, as shown in our prior opinion (2 Ill. App.2d 70, 77), later on the same day elected officers and directors to succeed Barrett and Marks, and were instructed to \u201cexecute appropriate resolutions\u201d for Continental.\nThe reply admits that about May 31, 1949, Continental sent to the company \u201cthe vouchers representing the payment of the checks,\u201d and that neither plaintiff nor the company gave Continental notice of any claimed forgery until suit was filed September 17, 1951. When tbe bank statement was sent to tbe company McFarling and Doolin were in control of the company, and able to suppress knowledge of tbe check transaction from tbe shareholders, who learned nothing of tbe transaction until tbe plaintiff was appointed in December 1950.\nPlaintiff contends tbe check paid by Continental was not a forgery, but that if it were, Continental itself bad notice of tbe forgery, and that tbe company also gave timely notice under tbe circumstances.\nWe think that our prior decision that tbe check was a forgery announced a conclusion of law and settled tbe question. Knowles Foundry & Machine Co. v. National Plate Glass Co., 301 Ill. App. 128, 152. Plaintiff asks us to reconsider that conclusion, but no reason has been shown, in tbe reply filed after remandment or otherwise, why we should do so. We are bound by tbe prior decision that tbe transaction wap a forgery.\nTbe Liability for Forged or Raised Checks Act (Ill. Rev. Stat., 1949, chap. 161/2, par. 24), provided, so far as pertinent here: \u201cNo bank . . . which has paid and charged to tbe account of a depositor . . . a forged . . . check issued in tbe name of said depositor shall be liable to said depositor . . . unless . . . (2) . . . within one year after tbe return to said depositor of tbe voucher representing such payment, said depositor shall notify tbe bank that the check so paid is forged . . . .\u201d\nTbe theory of tbe amended complaint is that tbe bank negligently paid tbe check. Tbe argument made here is that Continental bad notice of tbe forgery. Plaintiff argues that by reason of its notice through tbe resolutions and signature card on file, his action is not barred for failure of notice under tbe Act.\nTbe Supreme Court of Illinois has not construed tbe Act with respect to this precise point. Tbe Supreme Court of Kansas in Herbel v. Peoples State Bank of Ellinwood, 228 P.2d 929, 934, construed a similar Act on this point, and the Supreme Court of South Dakota in Flaherty v. Bank of Kimball, 68 N.W.2d 105, 109, also construed a similar Act with respect to the question whether \u201cnegligence\u201d or \u201cknowledge of the facts\u201d affected the bar of a depositor\u2019s cause of action. Both courts decided that neither of those factors affected \u201cthe legislative mandate.\u201d\nThere is nothing in the Illinois Act which indicates that an exception is to be made if the \u201cbank\u201d had notice or was negligent in paying the forged check. It is interesting to note that the Georgia Act absolves the bank from liability only when the payment is made in \u201cgood faith.\u201d Cesaroni v. Savannah Bank & Trust Co., 82 S.E.2d 172, 174. That qualification is absent in the Acts of Illinois, Kansas and South Dakota.\nIn Manufacturers\u2019 Nat. Bank v. Barnes, 65 Ill. 69, relied on by plaintiff, the court held that the bank had knowledge that the checks it paid were improperly drawn, and that its defense of lack of notice by the depositor was not effective. That case was decided before the Act was adopted and did not construe the Act. The court in Illinois Tuberculosis Ass\u2019n v. Springfield Marine Bank, 282 Ill. App. 14, 27, did not construe the Act either and, though decided when the Act was in effect, states the duty of depositor to \u201c. . . report to the bank within a reasonable time . . . .\u201d It is our view that the legislature intended to impose on depositors the burden of examining their bank statements and the duty of notifying the bank of any forgery, so that the bank could proceed to enforce restitution from the forger; and that the legislature intended this duty to be absolute, and purposely omitted any qualification contained in the cases, of whose existence we must presume they knew. We conclude that the plaintiff\u2019s action is barred if Continental had itself complied with the Act even though, assuming hut not deciding, Continental had notice or was negligent.\nWe see no merit in plaintiff\u2019s contention that its reply should not have been stricken because it alleged that McFarling and Doolin were in control of the company when the bank statement was received. In Shattuck v. Guardian Trust Co., 97 N. E. (N. Y. Court of Appeals) 517, 518, 519, receipt of the statement by a company officer, who knew of the forgery, was held sufficient. The same is true in Cesaroni v. Savannah Bank & Trust Co., 82 S.E.2d (Ga.) 172, 175. Plaintiff relies on Merchants\u2019 Nat. Bank v. Nichols & Shepard Co., 223 Ill. 41, which was decided on an agency principle. There, however, the court thought that there was no reason to expect that a guilty agent would send the bank passbook on to the depositor\u2019s officers. In the instant case the vouchers were received by the company through its officers. Plaintiff argues that because these officers were guilty parties, they concealed the facts from the policy holders. He does not suggest what Continental should have done with the vouchers so as to get the \u201cfacts\u201d to the policy holders. Furthermore, when McFarling and Doolin received the vouchers for the company, they had themselves already been regularly elected officers and directors with authority to draw checks.\nWe have considered all the points raised, and we affirm the judgment.\nAffirmed.\nLEWE and MURPHY, JJ., concur.", "type": "majority", "author": "PRESIDING JUSTICE KILEY" } ], "attorneys": [ "Albert E. Jenner, Jr. and Prentice EL Marshall, of Chicago, for Joseph S. Gerber.", "Mayer, Friedlich, Spiess, Tierney, Brown & Platt, of Chicago (Frank D. Mayer, Lonis A. Kohn, and Dwight W. Fawcett, of counsel) for defendant-appellee." ], "corrections": "", "head_matter": "Joseph S. Gerber, Director of Insurance of State of Illinois, as Liquidator of United States Mutual Insurance Company, Appellant, v. Continental Illinois National Bank and Trust Company of Chicago, a national banking association, Appellee.\nGen. No. 47,089.\nFirst District, Second Division.\nJanuary 7, 1958.\nReleased for publication April 2, 1958.\nAlbert E. Jenner, Jr. and Prentice EL Marshall, of Chicago, for Joseph S. Gerber.\nMayer, Friedlich, Spiess, Tierney, Brown & Platt, of Chicago (Frank D. Mayer, Lonis A. Kohn, and Dwight W. Fawcett, of counsel) for defendant-appellee." }, "file_name": "0379-01", "first_page_order": 407, "last_page_order": 412 }