{ "id": 2654829, "name": "FIRST NATIONAL BANK OF DEERFIELD, Plaintiff-Appellant, v. CORT I. LEWIS, Defendant-Appellee", "name_abbreviation": "First National Bank v. Lewis", "decision_date": "1989-06-30", "docket_number": "No. 1\u201487\u20143764", "first_page": "16", "last_page": "21", "citations": [ { "type": "official", "cite": "186 Ill. App. 3d 16" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "246 N.E.2d 96", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "107 Ill. App. 2d 204", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 1596829 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/107/0204-01" ] }, { "cite": "65 Ill. App. 484", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5181988 ], "opinion_index": 0, "case_paths": [ "/ill-app/65/0484-01" ] }, { "cite": "140 N.E.2d 125", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "10 Ill. 2d 328", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2723894 ], "opinion_index": 0, "case_paths": [ "/ill-2d/10/0328-01" ] }, { "cite": "136 N.E. 454", "category": "reporters:state_regional", "reporter": "N.E.", "opinion_index": 0 }, { "cite": "304 Ill. 170", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 4997208 ], "opinion_index": 0, "case_paths": [ "/ill/304/0170-01" ] }, { "cite": "105 Ill. 470", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2790173 ], "year": 1922, "opinion_index": 0, "case_paths": [ "/ill/105/0470-01" ] }, { "cite": "436 N.E.2d 15", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "106 Ill. App. 3d 360", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3030134 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/106/0360-01" ] }, { "cite": "51 N.E.2d 126", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1982, "opinion_index": 0 }, { "cite": "384 Ill. 180", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2491185 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/ill/384/0180-01" ] }, { "cite": "402 N.E.2d 885", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "82 Ill. App. 3d 569", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3225542 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ill-app-3d/82/0569-01" ] }, { "cite": "476 N.E.2d 1259", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "132 Ill. App. 3d 300", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3443959 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/132/0300-01" ] }, { "cite": "312 N.E .2d 605", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "537 N.E.2d 738", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "127 Ill. 2d 350", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5563926 ], "opinion_index": 0, "case_paths": [ "/ill-2d/127/0350-01" ] }, { "cite": "312 N.E.2d 605", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "57 Ill. 2d 398", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5406059 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ill-2d/57/0398-01" ] }, { "cite": "516 N.E.2d 552", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "163 Ill. App. 3d 160", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3548117 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/163/0160-01" ] }, { "cite": "9 N.E. 885", "category": "reporters:state_regional", "reporter": "N.E.", "weight": 4, "pin_cites": [ { "page": "886" } ], "opinion_index": 0 }, { "cite": "119 Ill. 407", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2903296 ], "weight": 4, "pin_cites": [ { "page": "410" } ], "opinion_index": 0, "case_paths": [ "/ill/119/0407-01" ] } ], "analysis": { "cardinality": 540, "char_count": 11058, "ocr_confidence": 0.756, "pagerank": { "raw": 1.0366131571105607e-07, "percentile": 0.5495689130910721 }, "sha256": "d8010bf4f6c781473fec683d0fd4c4a52d5e358c91443fc5b2614fc9ce8e921c", "simhash": "1:3b90d5c66ad09bce", "word_count": 1809 }, "last_updated": "2023-07-14T21:56:50.889546+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "FIRST NATIONAL BANK OF DEERFIELD, Plaintiff-Appellant, v. CORT I. LEWIS, Defendant-Appellee." ], "opinions": [ { "text": "JUSTICE LORENZ\ndelivered the opinion of the court:\nPlaintiff, First National Bank of Deerfield, appeals from the entry of summary judgment on count I of its declaratory judgment complaint in favor of defendant, Cort I. Lewis. We affirm.\nCount I of plaintiff\u2019s complaint alleged the following facts. Defendant and his father, Gerson E. Lewis (Gerson), formed a partnership under the name Gerson E. Lewis & Son (partnership) for the purpose of making investments.\nPlaintiff alleged that beginning in January of 1980 until July of 1982, it \u201cmade a series of loans *** to Gerson which were used for the partnership\u2019s investments.\u201d Because the loans were not repaid, plaintiff instituted an action against him for the unpaid balance of the loans. Plaintiff obtained a judgment against Gerson for $196,430.33 plus attorney fees, which was also not paid.\nPlaintiff also alleged that the partnership held a checking account with plaintiff, and in August of 1982, it was overdrawn in the amount of $8,180.98.\nDefendant, in his own name, had a money market account and a certificate of deposit with plaintiff. On July 20, 1985, plaintiff transferred funds from defendant\u2019s money market account into the partnership checking account to cover the overdraft. On July 23, 1985, plaintiff notified defendant that it would also set off the remaining balance of his money market account and his certificate of deposit for the judgment that plaintiff obtained against Gerson.\nPlaintiff also alleged \u201con information and belief\u201d that Gerson attempted to make himself \u201cjudgment proof\u201d by transferring funds and other property from the partnership to defendant in his name but \u201csecretly held\u201d for the partnership.\nPlaintiff asked the court to declare that Gerson E. Lewis & Son was a partnership at the time in question; that the overdraft and the judgment against Gerson were partnership debts for which defendant was responsible; that defendant\u2019s money market account and certificate of deposit were subject to plaintiff\u2019s right of setoff; and that the setoff was proper.\nDefendant answered the complaint and denied that he entered into a partnership with Gerson, denied knowledge of the loans made to Gerson, denied knowledge of the overdraft but admitted that plaintiff transferred $8,180.98 from his money market account in July of 1985. Defendant also denied that the judgment against Gerson was a partnership debt.\nDefendant moved for summary judgment arguing that plaintiff did not have factual support for the allegations in its complaint, relying on the deposition testimony of Alan Meyer, who was president of plaintiff at the time in question. Defendant also argued that even if there was factual support for the allegations, as a matter of law, plaintiff could not set off a partnership debt against the individual account of a partner, relying on International Bank v. Jones (1887), 119 Ill. 407, 9 N.E. 885.\nIn response to the motion, plaintiff argued that although Mayer \u201clacked personal knowledge of some of the ultimate facts stated in the [cjomplaint, *** [ojther bank officers and employees will testify as to their personal knowledge\u201d and documents would be introduced at trial to prove the allegations. Plaintiff, however, did not attach any affidavits, deposition testimony, or other evidence to support its argument that it could prove the allegations of the complaint. Plaintiff also argued that International Bank was no longer \u201cgood law\u201d and was inapplicable to the present case.\nThe trial court agreed with defendant and granted his motion for summary judgment on count I of the complaint, excluding paragraphs 14 and 15, which related to a different promissory note and are not relevant on appeal. Plaintiff appealed from that order but the appeal was dismissed for lack of jurisdiction in First National Bank v. Lewis (1987), 163 Ill. App. 3d 160, 516 N.E.2d 552. On December 10, 1987, the trial court entered an order finding that there was no just reason to delay enforcement or appeal of the previous order and thereafter, plaintiff filed a timely notice of appeal.\nOpinion\nA motion for summary judgment almost necessarily assumes that plaintiff\u2019s complaint states a cause of action and its purpose is to determine whether a genuine issue of material fact exists. (Janes v. First Federal Savings & Loan Association (1974), 57 Ill. 2d 398, 312 N.E.2d 605.) A motion to dismiss, on the other hand, challenges the legal sufficiency of a party\u2019s pleading, such as whether a complaint states a cause of action. (Ill. Rev. Stat. 1985, ch. 110, par. 2 \u2014 615.) The Illinois Supreme Court has expressly disapproved of the use of \u201chybrid\u201d motions which combine aspects of both a motion to dismiss and a motion for summary judgment. See Dunn v. Baltimore & Ohio R.R. Co. (1989), 127 Ill. 2d 350, 537 N.E.2d 738; Janes, 57 Ill. 2d 398, 312 N.E .2d 605.\nIn the present case, defendant\u2019s motion, although titled as one for summary judgment, was actually a hybrid motion which included an argument that should have been brought as a motion to dismiss. Defendant argued that the allegations of plaintiff\u2019s complaint did not give it a remedy under International Bank. This argument should have been raised as a motion to dismiss because it tests the legal sufficiency of the pleading and necessarily accepts the allegations of plaintiff\u2019s complaint as true. Although the trial court entered summary judgment on the ground that International Bank barred plaintiff\u2019s claim, the court should have dismissed plaintiff\u2019s complaint with prejudice for failure to state a cause of action. Accordingly, we will review defendant\u2019s motion as one to dismiss plaintiff\u2019s complaint. See Kellerman v. Mar-Rue Realty & Builders, Inc. (1985), 132 Ill. App. 3d 300, 476 N.E.2d 1259.\nA declaratory judgment complaint must set forth sufficient facts to state a cause of action and it should be dismissed if plaintiff is not entitled to relief under the facts as alleged. (Denkewalter v. Wolberg (1980), 82 Ill. App. 3d 569, 402 N.E.2d 885.) In considering whether the complaint should have been dismissed, we must accept the allegations as true and determine whether it states a cause of action upon which relief can be granted. Denkewalter, 82 Ill. App. 3d 569, 402 N.E.2d 885.\nPlaintiff alleged facts to support that defendant and Gerson formed a partnership. The partnership held a checking account with plaintiff which was overdrawn. Plaintiff loaned money to Gerson which was used to fund the partnership. When the loans were not repaid, plaintiff obtained a judgment against Gerson. Plaintiff set off defendant\u2019s money market account and certificate of deposit to satisfy the judgment and the overdraft.\nThe general rule in Illinois is that a bank may apply its depositor\u2019s account for a debt he owes to the bank. (Kerner v. Kinsey (1943), 384 Ill. 180, 51 N.E.2d 126; International Bank, 119 Ill. 407, 9 N.E. 885; First National Bank v. Estate of Philp (1982), 106 Ill. App. 3d 360, 436 N.E.2d 15.) The application of the deposit, which is called a setoff, is only proper when the debts are mutual between the parties. (International Bank, 119 Ill. 407, 9 N.E. 885; Coates v. Preston (1882), 105 Ill. 470; Stuart v. Lott (1922), 304 Ill. 170, 136 N.E. 454.) As the supreme court stated:\n\u201c[A] bank has a right to set-off, as against a deposit, only when the individual who is both depositor and debtor, stands, in both these characters alike, in precisely the same relation, and on precisely the same footing, towards the bank, and hence an individual deposit cannot be set off against a partnership debt.\u201d International Bank, 119 Ill. at 410, 9 N.E. at 886.\nDespite the above-quoted language from the supreme court, plaintiff contends International Bank is not applicable to the present case because at the time that case was decided, partnership obligations were joint. Plaintiff argues that partnership debts are joint and several in equity (see Sternberg Dredging Co. v. Estate of Sternberg (1957), 10 Ill. 2d 328, 140 N.E.2d 125) and that under section 2 \u2014 410 of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2\u2014 410) all partnership obligations are deemed joint and several.\nRelying on the appellate court case of Merchants National Bank v. Maple (1896), 65 Ill. App. 484, which held that a bank may set off a joint and several debt against the deposit of one of the joint and several obligors, plaintiff contends it had the right to set off defendant\u2019s deposit for the partnership debt because it was a joint and several obligation. In Merchants National Bank, the bank set off an individual deposit for the amount due on a promissory note signed by the individual and a third person. The court noted that the setoff was proper because the bank could have brought an action against either of the joint and several obligors and recovered the amount due on the note.\nThe decision in Merchants National Bank based the bank\u2019s right of setoff on the liability of the parties to the note. In International Bank and Coates, however, the supreme court focused its decision on the relationship between the bank and its depositor. In both cases the supreme court stated the requirement of mutuality must be present before a bank can exercise its right of setoff.\nIn Coates the court considered whether a bank\u2019s right of set-off would be different if partnership obligations were joint and several. Referring to a statute that stated \u201c[a]ll joint obligations *** shall be taken and held to be joint and several obligations\u201d (Ill. Rev. Stat. 1874, ch. 76, par. 3), the court noted that although the statute was not applicable to partnerships, if it were applicable and as a result, partnership obligations were joint and several, a bank still could not set off an individual partner\u2019s deposit against a partnership debt because the requirement of mutuality would not be present. Accordingly, even if a partnership debt imposed joint and several liability, the requirement of mutuality would not be satisfied. See also Faber, Coe & Gregg, Inc. v. First National Bank (1969), 107 Ill. App. 2d 204, 246 N.E.2d 96 (a bank\u2019s right of setoff is not \u201cco-extensive\u201d with its right to recover).\nWe are bound to follow the supreme court\u2019s decisions in International Bank and Coates. Under that authority we find that a bank is not entitled to exercise its right of setoff against an individual partner\u2019s deposit for a partnership debt. Therefore, plaintiff\u2019s complaint fails to state a cause of action upon which relief can be granted.\nAffirmed.\nMURRAY, P.J., and COCCIA, J., concur.", "type": "majority", "author": "JUSTICE LORENZ" } ], "attorneys": [ "Mathewson, Hamblet & Casey and Jenner & Block, both of Chicago (Michael J. Hamblet, Bruce T. Hopple, Laura H. Morill, Arthur M. Martin, Donald R. Cassling, and Jay S. Geller, of counsel), for appellant.", "John Thomas Moran, of Law Offices of John Thomas Moran, and Hal Kessler, of Kessler & Ex, both of Chicago, for appellee." ], "corrections": "", "head_matter": "FIRST NATIONAL BANK OF DEERFIELD, Plaintiff-Appellant, v. CORT I. LEWIS, Defendant-Appellee.\nFirst District (5th Division)\nNo. 1\u201487\u20143764\nOpinion filed June 30, 1989.\nMathewson, Hamblet & Casey and Jenner & Block, both of Chicago (Michael J. Hamblet, Bruce T. Hopple, Laura H. Morill, Arthur M. Martin, Donald R. Cassling, and Jay S. Geller, of counsel), for appellant.\nJohn Thomas Moran, of Law Offices of John Thomas Moran, and Hal Kessler, of Kessler & Ex, both of Chicago, for appellee." }, "file_name": "0016-01", "first_page_order": 38, "last_page_order": 43 }