text:
    Leo Awotin, Defendant in Error, v. Atlas Exchange National Bank of Chicago, Plaintiff in Error.
    Gen. No. 37,307.

      Opinion filed June 15, 1934.
    Elbridge W. Eioe, for plaintiff in error.
    Lloyd C. Whitman, for defendant in error.
   Mr. Justice Gridley

delivered the opinion of the court.

On December 28, 1933, the defendant, Atlas Exchange National Bank of Chicago, sued out the present writ of error to reverse a judgment order of the circuit court, entered April 15, 1932, in substance as follows:

This cause coming on to be heard upon plaintiff’s motion to strike defendant’s affidavit of merits for insufficiency “upon the remandment of the cause upon the reversal thereof by the appellate court for the first district in accordance with the opinion rendered by it,” and “for a judgment as of default on the affidavit of claim,” and it appearing that “the affidavit of merits does not state any defense to plaintiff’s cause of action” and that the court is therefore entitled to strike said affidavit of merits, it is “Therefore Ordered that said affidavit of merits ... is hereby stricken from the files in this cause.”

And it further appearing from .plaintiff’s affidavit of claim, dated September 4, 1930, that there was due to plaintiff at said date the sum of $37,085.41, and that plaintiff is entitled to interest at 5 per cent on said sum from the date of the affidavit of claim to this day, which has been computed to be the sum of $2,756.25; and that the total damages sustained by plaintiff, and herein assessed against defendant, amount to the sum of $39,841.66; and that plaintiff is entitled to recover said total sum from defendant.

“Whereupon it is consider ejd by the court that plaintiff have and recover of defendant his damages in the sum of $39,841.66”; and that the clerk of this court issue an execution in favor of plaintiff and against defendant “on the judgment herein now entered as aforesaid.”

This is the second time the cause has been before us. From our former opinion (Awotin v. Atlas Exchange Nat. Bank, 265 Ill. App. 238), it appears that plaintiff’s action against defendant (commenced August 19, 1930) is in assumpsit; that during March, 1931, on the issues made by the pleadings, the cause came on for trial before a jury; that at the conclusion of plaintiff’s evidence the court, on defendant’s motion, directed the jury to return a verdict in defendant’s favor, which they did; that on May 23, 1931, judgment was entered upon the verdict against plaintiff for costs and he appealed to this court; and that on February 23, 1932, for reasons stated in the opinion, we reversed the judgment and remanded the cause, generally and without specific directions. In the opinion we outlined the pleadings, including the accompanying affidavits, as follows (pp. 239-41):

“Plaintiff’s declaration consisted of a special count and the common counts. In the special count he alleged that on November 1,1929, at Chicago, defendant offered to sell to him ‘$35,000 Dollars First National Company Collateral Trust, Series O, First Mortgage Real Estate 5%% Gold Bonds in denomination of $1,000 each, and then and there promised that, if plaintiff purchased the bonds and paid therefor the sum of $35,000, together with accrued interest thereon, it (defendant) would repurchase the bonds at maturity, paying therefor the par value of the bonds and accrued interest’; that plaintiff, in consideration thereof, on November 1, 1929, paid to defendant said sum and purchased the bonds from it; that to evidence the agreement defendant reduced the same to writing and, as an inducement to plaintiff to purchase the bonds, then and there delivered to plaintiff the following writing:

Nov. 1, 1929.

“ ‘Mr. Leo Awotin,

1920 8. Halsted Street, Chicago.

Dear Sir:

“ ‘This is to acknowledge that we have this day sold you $35,000 par value First National Company, Collateral Trust, Series O, First Mortgage Real Estate 5%% gold bonds, in denomination of $1,000 each, numbered as follows: #4584-4585 and 4612 to 4644, inclusive,

‘Should you desire to resell these bonds to us, we hereby agree to repurchase same at maturity at par, or $35,000 and accrued interest.

Yours very truly,
B. M. Blankenheim,
Cashier. ’

“That the bonds matured on July 15, 1930; that on that day plaintiff presented them to defendant and demanded that it repurchase them and pay to plaintiff the sum of $35,000 and accrued interest; that defendant refused so to do; and that although plaintiff has made repeated demands on defendant since July 15, 1930, to the same effect it has not repurchased the bonds or paid to him the $35,000 and accrued interest or any part thereof, but still refuses. To plaintiff’s damage, etc.

“In plaintiff’s affidavit of amount due, attached to the declaration, and dated September 4, 1930, it is stated that his demand ‘is for the sum of $37,085.41, due and owing to plaintiff from defendant under its written agreement, dated November 1, 1929, and that there is due from defendant after allowing to it all just credits, deductions and set-offs $37,085.41.’

“Defendant entered its appearance by attorney, demanded a jury trial, and filed a plea of the general issue. In the accompanying affidavit of merits of Daniel M. Healy he alleged that he is the president of defendant, that there is not owing to plaintiff any sum of money, and that ‘defendant did not enter into any agreement with plaintiff and never authorized or' empowered anyone else to enter into the agreement alleged in the declaration or in the affidavit- thereto attached. ’ On the eve of the trial defendant by leave of court, filed an additional plea alleging that it is a national bank, organized under the banking laws of the United States, that ‘neither its charter nor the general law gives to defendant any power or authority whatever to guarantee payment of the indebtedness of any other person, firm or corporation nor to repurchase bonds at maturity,’ and that the supposed guarantee or repurchase agreement of said Blankenheim, cashier, as set forth in the declaration, ‘is ultra vires and void.’ To this additional plea plaintiff filed a replication.”

It also appears from the present record that there accompanied said additional plea an affidavit of merits, signed and sworn to by said Healy, stating:

“That there is not owing to plaintiff from defendant the sum of $37,085.41, or any other sum whatsoever; that the supposed agreement set forth in said declaration is not the agreement of defendant; that defendant never authorized or empowered anyone to execute the same; and that said supposed agreement is ultra vires and void.”

And the bill of exceptions discloses that on April 9, 1932, after the mandate of this court had been filed, an attorney for plaintiff appeared in the circuit court, after notice to defendant, and moved the court “to strike defendant’s affidavit of merits from the files because of its failure to state a meritorious defense, and that judgment be entered against defendant, as in case of default, on the affidavit of claim attached to plaintiff’s declaration”; and that on April 15, 1932, after arguments of respective counsel, the court granted the motion and entered the judgment now in question ■ against defendant as first above mentioned.

In our former opinion, we quoted a portion of subsection 7 (as amended February 25, 1927) of section 5136 of the U. S. Revised Statutes, relating to the powers, etc. of National Banks, as follows:

“To exercise by its board of directors, or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits, by buying and selling exchange, coin and bullion, by loaning money on personal security; and by obtaining, issuing and circulating notes according to the provisions of this title: Provided, That the business of buying and selling investment securities shall hereafter be limited to buying and selling without recourse marketable obligations evidencing indebtedness of any person, co-partnership, association, or corporation, in the form of bonds, notes and/or debentures, commonly known as investment securities, under such further definition of the term ‘investment securities’ as may by regulation be prescribed by the Comptroller of the Currency,

We then stated the contentions of respective counsel as follows: (p. 243):

“Counsel for the bank contended in the trial court and contends here that under the above statute no recovery can be had by plaintiff in the present action, because the agreement of November 1,1929, sued upon, is ultra vires the bank and wholly void. Counsel for plaintiff contend in substance that the court erred in entering the judgment (following the directed verdict) because:

“ (1) The sale of the bonds by the bank to plaintiff, coupled with its written agreement to repurchase them at maturity at par and accrued interest amounts to a conditional sale, which is valid as such and the statute has no application; and

“(2) Even if it be considered that the bank in making the repurchase agreement acted ultra vires, plaintiff, having tendered the bonds, is entitled to recover back what he paid therefor plus accrued interest on an implied assumpsit, — the bank having retained the moneys it received in the transaction.”

And we expressed the opinion (p. 244), after considering the written agreement of November 1, 1929', the arguments of respective counsel and numerous adjudicated cases, that the trial court had erred in instructing the jury as it did and in entering the judgment against plaintiff. We then -discussed said two contentions of plaintiff’s counsel and expressed the opinion that there was substantial merit in each. As to the first contention we cited and quoted from the cases of Wolf v. National Bank of Illinois, 178 Ill. 85, 93-5, and Freedman v. Madison & Kedsi'e State Bank, 259 Ill. App. 519, 523-4. As to the second contention we cited and quoted from several cases decided by the Supreme Court of the United States. And we also discussed, and decided adversely to it, defendant’s further contention that there could be no recovery by plaintiff in the case upon an implied promise or agreement.

After considering the pleadings and plaintiff’s evidence and the stipulation introduced upon the first trial (as outlined on pages 241-2 of our former opinion), we think that it may reasonably be inferred that the trial court, in directing the jury to return a verdict in defendant’s favor and in entering the judgment, was of the opinion that no recovery could be had by plaintiff on the repurchase agreement sued upon because such agreement was ultra vires the bank and void upon grounds of public policy. And we also think that it may reasonably be inferred that the court, in taking the action it did on the second hearing, after remandment of the cause, and in entering the judgment of April 15, 1932, now in question, was moved to do so because of the decision and holdings in our former opinion.

On December 22, 1933 (six days before the present writ of error was sued out to reverse the judgment now in question) our Supreme Court decided the case of Knass v. Madison & Kedde State Bank, 354 Ill. 554. In that case the first division of this Appellate Court, on March 6, 1933, had affirmed a decree, with certain modifications, of the superior court of Cook county (269 Ill. App. 588, 611), and the case reached the Supreme Court on appeal and certificate of importance granted. The Supreme Court reversed the judgment of the Appellate Court and the decree of the superior court, and remanded the cause to the superior court “with directions to dismiss complainant’s bill for want of equity” (p. 572). In that case certain bonds were sold to complainants under certain “repurchase agreements” by the bank, which are similar to the repurchase agreement in the present case, in that it is stated in one repurchase agreement: “These bonds may be cashed at any time after one year at 99 and accrued interest or in three and one-half years at par”; and in the other: ‘ ‘Will purchase these bonds at any time after one year at 99, and after three and one-half years at par if desired.” The bank was one organized under the laws of this State, as distinguished from one organized under the laws of the United States, as is the defendant in the present ease. In the opinion of the Supreme Court in the Knass case, after outlining the pleadings and stating certain facts, etc., it is said (p. 561): “Of first importance on this record is the question whether the repurchase agreements, assuming them to have been such and to have been made by the bank, are ultra vires the powers of the bank and contrary to the declared public policy of the State, and so unenforceable. This question has never been passed upon by this court.”

Theii follows in the opinion an exhaustive ■ discussion of the question, accompanied with the citation of numerous adjudicated cases in this State and in other jurisdictions bearing upon it. In conclusion the court determined the question in the affirmative. And the court said (p. 567): “As often stated by this court, one dealing with a banking or other corporation having limited and delegated powers is chargeable with notice of those powers and their limitation.” (Citing cases.) And in discussing the question whether the repurchase agreements were to be considered as being void as against public policy, the court said in part (pp. 567-8, italics ours):

“Are such contracts as here relied upon void as against public policy or violative of statutory ■ enactment? Contracts against public policy are generally unenforceable by any remedy. (Re-statement of the Law of Contracts, Am. Law Ins., sec. 369.) Public policy is a principle of law which holds that no one may lawfully do that which has a tendency to injure the public or to be against the public good. Banks are quasi-public institutions. Their well-being concerns not only the stockholders but the depositors and public at large. Contracts are against public policy when they tend to injure the public. Agreements such as are here iiwolved fall within that category. Recent experience, so general as to afford the basis of judicial notice, has shown that contracts not within the powers conferred on banks and which so jeopardize the safety of bank deposits as to result in their loss, tend to produce widespread injury to the public, and may properly be held void though there be found no specific statutory prohibition against them. It is an academic rule of law that from the constitution and statutory enactments may be gleaned the public policy of the State. The General Assembly of this State in 1879 passed an act entitled ‘An Act for the protection of bank depositors,’ approved June 4, 1879. (Smith’s Stat. 1931, Chap. 38, par. 64.) Section 4 of this act is as follows:

“ ‘It shall not be lawful for any savings bank, individual or individuals doing banking business, banking company, or incorporated bank receiving savings deposit, or deposits of trust funds, to assume the payment of, or to become liable for, or to guarantee to pay the principal of, or interest on, any bonds, notes or other evidence of indebtedness of, for, or on account of any person or persons, company or incorporation; and in any assumption, liability or guarantee, whereby such deposits or trust funds could be jeopardized or impaired shall be null and void.’

“This section has not heretofore been construed by this court. It seems clear, however, that payment or assumption of or guaranteeing to pay bonds of the character here involved is of the gist of the prohibition of this act applicable in any case where by any such contracted liability the deposits or the trust funds of the bank could become jeopardized or impaired. The act for the protection of bank depositors evidences an intention on the part of the legislature to declare contracts of the character before us void as against the public policy of the State. That act, section 4 of which is herein quoted, was enacted, as the title indicates, for the protection of bank depositors. Its enactment was for the. public generally and should be construed to carry out that purpose. (People v. Tallmadge, 328 Ill. 210.)”

And the court, after disagreeing with an argument made that the quoted statute was not applicable to the particular facts, further said in part (pp. 568-9):

“The bonds are evidences of indebtedness of the corporations which owned the real estate and executed the bonds, and by these agreements the bank’s undertaking is to guarantee the bonds of those corporations. The fact that the bank may have received a commission for selling them in nowise renders the mortgage bonds obligations of the bank. It follows that agreements to repurchase them at their face value, or with a deduction of one per cent for handling, as complainants construe these agreements, are agreements to assume or guarantee the payment of the evidences of indebtedness of another corporation, contrary to the express provisions of the act for protection of bank depositors. As it cannot be doubted that such an agreement could jeopardize or impair the deposits or trust funds of the bank, such contract, because of its inherent danger to deposits and trust funds and because it is contrary to the public policy of the State, as evidenced by the legislative expression in section 4 of the statute quoted, is null and void.”

And the court, after stating a contention of the complainants (viz., that the old bank, having received the purchase price of the bonds in question, “is estopped from setting up the defense of ultra vires”) decided against the contention, saying in part (pp. 569-70, italics ours):

“Under the established law of this State the defense of ultra vires is available to the old bank when sued on a void agreement. It is said, however, that the complainants performed and executed their part of the agreement, and that it would not be good faith to permit the hank now to refuse. The same question was raised in Steele v. Fraternal Tribunes, supra (215 Ill. 190), where this court'said (pp. 193-4):

“ ‘A contract of a corporation which is ultra vires in the proper sense of that term — that is to say, outside the object of its creation, as defined by the laws of its organization, and therefore beyond the powers conferred upon it by the legislature, — is not only voidable, but wholly void aA%d of no legal effect. The objection to the contract here is not merely that the corporation ought not to have made it but that it could not lawfully make it. The contract could not be ratified by either party because it could not have been authorized by either. No performance by the parties could give the unlawful contract validity or become the foundation of any right of action upon it. . . . But when the contract is beyond the powers conferred upon it by existing laws, neither the corporation nor the other party to the contract can be estopped, by assenting to it or by acting upon it, to show that it was prohibited by those laws. The powers delegated by the State to corporations are matters of public law, of which no one can plead ignorance. A party dealing with a corporation having limited and delegated powers is chargeable with notice of those powers and their limitations and cannot plead his ignorance of their existence.’ (Citing cases.)

“A contract void because it.is prohibited by law can in no manner be enforced. The law does not prohibit and also enforce a contract. (Citing cases.) Complainants are chargeable with notice that the old bank was utterly without power to make these repurchase agreements. t The defense of ultra vires is properly urged here.”

And the court discussed, and decided adversely to them, complainants’ contention that the agreements involved should not be considered as “repurchase

agreements” but as “conditional sales contracts.” In support of the contention complainants had cited two cases, — one of which was Wolf v. National Bank of Illinois, 178 Ill. 85 (which this Appellate Court had referred to and relied upon in its said former opinion in the present case). But our Supreme Court, in its opinion in the Knass case, said in part (pp. 570-2, italics ours):

“In the Wolf case the contention was that contracts similar in terms to those before us were options and gambling contracts. The court held, however, that the record showed that it was the intention of the parties that the purchaser was to be allowed a certain time in which to elect whether he was to keep or return them, and so the transaction was a conditional sale. Such are not the facts here, but it is evident that complainants and the bank considered that the sale was completed and by a separate agreement the bank agreed to repurchase the bonds. Such does not constitute a conditional sale. . . . The statute for the protection of bank depositors was not called to the attention of the court. Stewart v. Dodson, 282 Ill. 192 (the other case cited by complainants in the Knass case), involved a contract for repurchase between individuals and no question of limitation of powers arose. . . . These cases are not controlling here. It seems clear here that both the evidence of the transaction itself and the theory on .which the bill is brought preclude a construction of these agreements as conditional sales contracts. Complainants’ evidence shows that they bought the bonds outright and that in the sale of these bonds to them the title passed. . . . Complainants also received interest on the bonds sold them, which they did not offer to return when tender was made of the bonds. The purchase price was paid in full, and what the purchasers did with the bonds lay entirely with them. They were under no obligations to return them and no condition remained to be discharged in order to pass title. They could hypothecate them, sell them elsewhere, and were in nowise required to account to the bank. These were not conditional sales.”

On February 5, 1934 (before oral argument of the present cause was had in this court) the Supreme Court of the United States decided the case of Texas & Pacific Ry. Co. v. Pottorff. The opinion is published in the Supreme Court Reporter, Vol. 54, No. 7, at pages 416-20, and it there appears in substance that the Railway Co. filed a bill against Pottorff as receiver of a national bank at El Paso, Texas; that Pottorff filed a cross-bill; that after evidence heard the United States District Court entered a decree on his cross-bill and dismissed the bill of the Railway Company; that the decree was affirmed by the United States Circuit Court of Appeals (63 F. [2d] 1); and that on certiorari the Supreme Court also affirmed the decree. It is stated in the opinion that “the main question for decision is whether a national bank has power to pledge a part of its assets to secure a private deposit”; that the bank failed in September, 1931, at which time the Railway Company was and long prior thereto had been a depositor; that to secure it as such the bank, in January, 1931, had pledged $50,000 Liberty Bonds and held them for the Railway Company in the bank’s trust department; that when the bank failed the Railway Company’s balance in its regular checking account was $54,646, of which sum it made proof of claim as a secured creditor; that the receiver approved the amount of the claim but denied the validity of the pledge, and he tendered a dividend check only for the amount to which the Railway Company would have been entitled as an unsecured creditor; that thereupon the Railway Company filed its bill against the receiver “praying, in the alternative, that the bonds be delivered to it, or that they be sold for its benefit, or that the claim be paid in full with interest”; that the receiver in his cross-bill prayed that the bank’s title to the bonds be quieted; and that the District Court in its decree held that ‘ ‘ the pledge was void and that the Liberty Bonds constituted assets to be administered for the benefit of the general creditors of the bank, ’ ’ which decree was affirmed by the Circuit Court of Appeals. It is further stated in the opinion that the Railway Company contended (1) “that the bank had power to make the pledge; (2) that even if the bank did not have such power, the receiver is not in a position to question the validity of the pledge; and (3) that even if he is not estopped from doing so, he may not disaffirm it without returning the consideration therefor received by the bank.” And the Supreme Court expressed the opinion that “none of these contentions is sound.” And after setting forth certain additional facts as found by the District Court, the Supreme Court made numerous holdings, which are epitomized in the syllabi of the case as reported, in substance as follows: (1) That national banks lack power to pledge their assets to secure private deposits; (2) that the measure of powers of such banks is statutory grant, and powers not conferred by Congress are denied; (3) that the court takes judicial notice of facts indicating that among national banks the practice of pledging assets must have been deemed contrary to good banking practice; (4) that a receiver for an insolvent national bank is not estopped to deny the validity of a pledge of assets to secure a private deposit; (5) that no rights arise on an ultra vires contract, even though the contract has been fully performed; (6) that it is the duty of the receiver of an insolvent corporation to take steps to set aside transactions which fraudulently or illegally reduce the assets available for the general creditors, even though the corporation itself was not in a position to do so; and (7) that the receiver of an insolvent national bank may assert the invalidity of a pledge of assets to secure a private deposit without making restitution by paying the pledgee’s claim in full. And the court, as to the above propositions, Nos. 4 and 5, said (p. 420, italics ours):

“The receiver is not estopped to deny the validity of the pledge. The railway’s argument is that the bank could not set up the defense of ultra vires since it had the benefit of the transaction; and that the receiver, as its representative, can have no greater right. Neither branch of the argument is well founded. The bank itself could have set aside this transaction. It is the settled doctrine of this court that no rights arise on an ultra vires contract, even though the contract has been performed; and that this conclusion cannot be circumvented by erecting an estoppel which would prevent challenging the legality of a power exercised.” (Citing cases.)

Counsel for the Atlas Bank, as grounds for a reversal of the present judgment, contends that the decisions and holdings in the Knass and Pottorff cases, supra, are decisive and controlling as to the issues here involved; that no recovery can be had by plaintiff (Awotin) by virtue of the written agreement of November 1, 1929, sued upon, and as set forth in the special count of plaintiff’s declaration hereinabove mentioned; and that it should be held that the making of such an agreement was ultra vires the bank and against public policy and that, hence, the agreement is void and unenforceable. And counsel argues in substance that, notwithstanding the fact that in the Knass case the defendant was an Illinois banking corporation while in the present case defendant is a national bank, the respective statutes (above set forth) as to their powers, and as to the limitations on their powers, are similar,. and that the decision and holdings in the Knass case can here properly be applied. It will be noticed that in subsection 7 (as amended in 1927) of the National Bank Act, the proviso reads in part: “Provided, that the business of buying and selling investment securities shall hereafter be limited to buying and selling without recourse marketable obligations ... in the form of bonds, notes and/or debentures, commonly known as ‘investment securities,’ ...” The terms “without recourse” or “no recourse” have well settled meanings. In Anderson’s Dictionary of Law, 1893, p. 865, it is said that by the use of the former stated words “the holder of negotiable paper may transfer title without incurring the responsibility of an indorser.” In Webster’s New International Dictionary, 1933, p. 1785, it is said that the words, “when added to the indorsement of a negotiable instrument, protect the indorser from liability to the indorsee and subsequent holders.” And in Lyons v. Fitzpatrick, 52 La. Ann. 697, 699, it is said: “Words are to be understood in their ordinary significance. ‘No recourse’ means no access to, no return, no coming back upon, no assumption of any liability whatsoever, no looking to the party using the term for any reimbursement in case of loss, or damage, or failure of consideration in. that which was the cause, the motive, the object, of the undertaking or contract.”

After again considering the pleadings in the present case and the written agreement of November 1, 1929, sued upon, and in view of the decisions and holdings in said Knass and Pottorff cases, we are of the opinion that the present judgment of April 15, 1932, cannot stand because it is contrary to the law. And we are now of the belief that, when on February 23, 1932, on the former appeal, we entered our former judgment (reversing the former judgment of the circuit court in favor of defendant and remanding the cause generally), we acted erroneously.

One of the contentions here made by counsel for plaintiff is that our holdings and decisions on said former appeal are “binding” upon us in the present writ of error cause. In other words the contention is in substance that, under the rule or doctrine of the “Law of the Case,” we should affirm the present judgment. We cannot agree with the contention. In 2 R. C. L., p. 226, sec. 188, in discussing the limitations of the general rule, the writer says: “The better rule, and that more in accord with justice, however, is that though ordinarily a question considered and determined on the first appeal is deemed to be settled and not open to re-examination on a second appeal, it is not an inflexible rule, and if the prior decision is palpably erroneous it is competent for the court to correct it on the second appeal. This may be said to be the view which has for its support the trend of modern authority, ...” In Zerulla v. Supreme Lodge, 223 Ill. 518, it was decided that a proposition of law laid down by an Appellate Court of Illinois, upon reversing a judgment generally and remanding the cause, is not binding upon that court upon a second Appeal, where the Supreme Court has since the first appeal decided the point involved contrary to the proposition laid down. And the court said (pp. 519-20, italics ours):

“Plaintiff in error contends that the law of the case was settled and announced by the Appellate Court the first time the case was before that tribunal and before the decision of this court in the Seitzinger case (204 Ill. 58) was filed, and that the law as announced by the Appellate Court at that time must govern the future progress and determination of this case. . . . The judgment and order of the Appellate Court” (on the first appeal to it, 99 Ill. App. 630, 637), “reversing and remanding the case was general in its terms and contained no directions to the trial court. It was neither final nor conclusive between the parties, no appeal could have been prosecuted from it, and it was, therefore, not res adjudicaba. (Citing cases.) Where the Appellate Court or this court, on the first appeal to it, announces a particular view of the law governing the case and reverses and remands the case for further proceedings in accordance with the views announced, if the case is again brought before such court for review the former decision is binding’ on the court making it, and the questions decided and determined by it on the first appeal are not open for reconsideration on the second appeal. But while the determination of a question of law by the Appellate Court on the first appeal may, as a general rule, be binding upon it on the second appeal, it certainly cannot be binding on this court. Nor would the Appellate Court on the second appeal, we apprehend, he obliged to adhere to a proposition of law laid down on the first appeal, when this court had, since the first appeal, decided the precise question contrary to the rule announced by the Appellate Court. To so hold would lead to most illogical results.”

Reference may also be made to other adjudicated cases bearing upon the question: Messinger v. Anderson, 225 U. S. 436, 444; Johnson v. Cadillac Motor Car Co., 261 Fed. (C. C. A.) 878, 886; City of Hastings v. Foxworthy, 45 Neb. 676, 699; Missouri, K. & T. Ry. Co. v. Merrill, 65 Kan. 436, 451. In the Messinger case it is said (p. 444, italics ours): “In the absence of statute the phrase, law of the case, as applied to the effect of previous orders on the later action of the court rendering them in the same case, merely expresses the practice of courts generally to refuse to reopen what has been decided, not a limit to their power.” In the Johnson case (p. 886) it is said: “We recognize the full force and effect of the doctrine of stare decisis and the general rule that on a second appeal matters disposed of on the first appeal ordinarily will not again he considered. . . . But the rule is not an inexorable one, and should not be adhered to in a case in which the court has committed an error which results in injustice, and at the same time lays down a principle of law for future guidance which is unsound and contrary to the interests of society.”

Another contention of plaintiff’s counsel is in substance that the circuit court on the second hearing properly struck for insufficiency defendant’s affidavit of merits (which accompanied its additional plea to plaintiff’s declaration), and properly entered the judgment of April 15, 1932, now in question, for the reason that the affidavit stated “mere conclusions and not the essential facts.” In our opinion the contention is lacking in merit. The affidavit is set forth in a foregoing paragraph of this opinion. It alleges inter alia that “there is not owing to plaintiff from defendant the sum of $37,085.41, or any other sum whatsoever, ’ and that the agreement, set forth in plaintiff’s declaration is ultra vires and void.” No question was raised as to the sufficiency of the affidavit at or prior to the time of the first trial. And on the second hearing, as appears from the present judgment order, first herein mentioned, plaintiff’s motion to strike said affidavit for insufficiency was apparently based “upon the remandment of the cause upon the reversal thereof by the Appellate Court for the first district in accordance with the opinion rendered by it.” Furthermore, we think that the affidavit was sufficient to give notice to plaintiff that one of the defenses to plaintiff’s action was that the repurchase agreement sued upon was ultra vires the bank to make, and void in law and, hence, unenforceable. There was sufficient notice of the nature of the defense. (See Firestone Tire & Rubber Co. v. Ginsburg, 285 Ill. 132, 136; Thayer v. Bolender, 250 Ill. App. 16, 22; Runyan v. Moon, 267 Ill. App. 312, 314.)

Plaintiff’s counsel also contends that “even if it be considered that the bank in making the repurchase agreement acted ultra vires, plaintiffs, having tendered the bonds, is entitled to recover back what he paid therefor, plus accrued interest, on an implied assumpsit.” It is our opinion that this contention is also without merit. Plaintiff’s affidavit of claim accompanying his declaration does not disclose that he is seeking a recovery on the theory of an implied assumpsit after having tendered back the bonds, but rather by virtue of said repurchase agreement of November 1, 1929. Furthermore, as stated in the opinion in the Pottorff case, supra, it is the settled doctrine of the Supreme Court of the United States that “no rights arise on an ultra vires contract even though the contract has been performed.” This is also the settled law of this State as appears from the opinion in the Knass case, supra (pp. 569-70). And we think that under said decisions and holdings plaintiff’s counsel’s further contention, that defendant cannot avoid the contract on the ground that it is ultra vires “without tendering to plaintiff the money defendant received from plaintiff” is equally without merit.

After this cause had been orally argued by respective counsel, we allowed plaintiff’s counsel to file certain typewritten suggestions on points mentioned and arising on said oral argument and thereafter certain counter suggestions were filed by defendant’s counsel. We have reviewed these suggestions but are of the opinion that a discussion of them is here unnecessary in view of the record before us and the decisions and holdings in said Pottorff and Knass cases, supra.

Our conclusions are that the circuit court erred in entering against defendant the judgment of April 15, 1932, in question; that said judgment should be reversed; and that as the law will not allow any recovery to be had by plaintiff against defendant on the repurchase agreement of November 1, 1929, sued upon and as set forth in plaintiff’s declaration, the case will not be remanded. Accordingly, the judgment is reversed.

Reversed.

Sullivan, P. J., and Scanlan, J., concur.


source: Caselaw Access Project

author: Mr. Justice Scanlan

license: Public Domain

text:
    Elizabeth Lamburne Hoebel, Appellee, v. The Travelers Insurance Company, Appellant.
    Gen. No. 37,063.
    Opinion filed June 15, 1934.
    Kirkland, Fleming, Green & Martin, for appellant; David Jaoker and William H. Symmes, of counsel.
    Hume & Kennedy, for appellee.
   Mr. Justice Scanlan

delivered the opinion of the court.

An action in contract in the municipal court of Chicago. At the conclusion of the evidence the trial court directed a verdict for plaintiff in the sum of $5,000 and this appeal followed a judgment entered upon the verdict.

Plaintiff’s statement of claim alleges that her “claim is based upon a Group Policy of insurance issued by said defendant on the life of Fred Carl Hoebel, husband of this plaintiff in and by which policy this plaintiff was made beneficiary”; that the said policy “is in words and figures as follows:

“The Travelers Insurance Company
Hartford, Connecticut
“Group Policy No. G2095 Certificate No. 59.

“This Is To Certify that under and subject to the terms and conditions of a Group Policy of insurance No. G2095, issued and delivered by The Travelers Insurance Company, Hartford, Connecticut, the life of Fred Carl Hoebel, an Employee of

(Hereinafter called the Employee)
Central Manufacturing District IBank
(Hereinafter called the Employer)
is insured initially

for the sum of Fifteen Hundred (1500) Dollars, payable to Elizabeth Lamburne Hoebel — Wife, as beneficiary if death shall occur while an Employee of the Employer during the continuance of said policy. Such payment at the election of the Employer shall be paid either in one amount or in a fixed number of payments at intervals of not less than one month and covering a period of not exceeding one year. u

“The insurance provided for by said policy terminates with the termination of employment with the said Employer unless the Employee shall elect to continue the insurance in accordance with the following Conversion Privilege

Central Manufacturing District Bank
Chicago
Conversion Privilege
(Taken from Group Policy)

“Any Employee of the Employer covered under, this group policy shall, in case of the termination of employment for any reason whatsoever, be entitled to have issued to him by the Company without evidence of insurability upon application to the Company made within thirty-one days after such termination and upon the payment of the premium applicable to the class of risks to which he belongs and to the form and amount of the policy at his then attained age, a policy of life insurance in any one of the forms customarily issued by the Company, except term insurance, in an amount equal to the amount of his protection under such group insurance at the time of such termination. ...” The statement of claim avers:

“That said Hoebel was employed continuously for more than nine years from May 13, 1921, by the Central Manufacturing District Bank; that said . . . Hoebel died on August 23, 1932 . . . ; that plaintiff has repeatedly requested the payment of said insurance due her as beneficiary by defendant, but that it has refused to make payment as in and by said policy provided to be paid to this plaintiff; . . . avers that all of the premiums due and payable under said policy were duly paid to defendant prior to the death of Fred Carl Hoebel.”

A motion to strike the statement of claim was overruled, but the trial court entered a rule on plaintiff to file an additional statement of claim. Plaintiff then filed the following:

“Additional Statement of Claim.

“Plaintiff further avers and states that on, to-wit, August 23, 1932, the date of the death of said insured, the said Fred Carl Hoebel was first assistant Vice President of the Central Manufacturing District Bank; that he had not resigned and was not discharged as such officer of said bank up to and including the date of his death; . . . that on August 15, 1932, the said Hoebel sent his application to defendant ... to change said group insurance to a straight life insurance ; that said application was received by defendant and retained by it, and that thereafter the defendant ordered and directed the said Hoebel to forward to it the said group insurance certificate so that a new policy could be issued to said Hoebel; that before said group insurance certificate could be returned to defendant the said Hoebel died; that at the time of the death of said Hoebel all premiums under such policy of insurance hereinbefore set forth was duly paid to said defendant up to and including the date of the death of said decedent.”

The material part of defendant’s affidavit of merits is as follows:

“That under the group Policy of Insurance, . . . Hoebel was not entitled to convert the Certificate to other insurance, unless the Group Policy of Insurance . . . was in force and . . . Hoebel had terminated his employment; that said Group Policy of Insurance ... was cancelled on June 24,1932, and said Certificate . . . after said date gave no right to the beneficiary thereunder, as after said date said Group Policy was discontinued.

“That the employment of . . . Hoebel with Central Manufacturing District Bank terminated on July 1, 1932, and that the application of the said . . . Hoebel, under the terms of Group Policy of Insurance, . . . for conversion of the Group Life Insurance under said Group Policy to individual insurance had to be filed within thirty-one days of said date, July 1, 1932, and within thirty-one days of the termination of his employment with said Bank, and that the incomplete application which . . . Hoebel sent to defendant, dated August 15, 1932, or August 18, 1932, and correctly dated August 18, 1932, was filed too late to give him any right under said Group Life Policy, as said application was not made to defendant within thirty-one days after the termination of his employment with said Bank.

“That if the termination of employment of . . . Hoebel with Central Manufacturing District Bank did not occur until July 15, 1932, the application for conversion of Group Life Insurance to individual insurance submitted to defendant on August 18, 1932, was submitted too late under said Group Policy of Insurance ... to entitle . . . Hoebel to convert said Group Life Insurance to individual insurance ;

“That in said application . . . Hoebel agreed in words and figures, as follows:

“ ‘19. I agree for myself and for any person who may have or claim an interest in any contract which may be issued upon this application, as follows: A. That every statement hereinabove contained is true; and that the contract issued hereupon shall not take effect unless the first premium shall be actually paid to the company during my lifetime upon or before delivery of the contract.’

and that the said . . . Hoebel did not pay the first premium to the company, this defendant, during his lifetime upon or before delivery of the contract, or at any time, and that there was no premium paid with the said application and there was no individual insurance policy issued during the lifetime of ... Hoebel, and there was no premium paid during the insured’s lifetime, and that there was no policy of insurance delivered or in force or effect on the life of the said . . . Hoebel. ...”

Fred Carl Hoebel had been in the employ of the Central Manufacturing District Bank (hereinafter called the Bank) for 12 or 14 years, and on June 24, 1932, was an assistant vice president of it. In 1921 the defendant issued a “group policy” which covered the Central Manufacturing District and certain allied companies, and a rider was issued which covered the Bank, an allied company, and an individual certificate of insurance was issued to Hoebel on May 13, 1921. The group policy provides, inter alia:

‘ ‘ Termination of Insurance: — The insurance of each employee covered hereunder shall end when he shall leave the service of the Employer or be dismissed therefrom, but without prejudice to his right to conversion to individual policy form. . . .

‘‘ Certificates of Insurance — Conversion:—The Company will issue to the Employer for delivery to each employee whose life is insured under this policy, an individual certificate setting forth a statement as to the insurance protection to which he is entitled and to whom ‘payable. Any employee of the Employer covered under this group policy shall, in case of the termination of employment for any reason whatsoever, be entitled to have issued to him by the Company without evidence of insurability upon application to the Company made within thirty-one days after such termination and upon the payment of the premium applicable to the class of risks to which he belongs and to the form and amount of-the policy at his then attained age, a policy of life insurance in any one of the forms customarily issued by the Company, except term insurance, in an amount equal to the amount of his protection under such group insurance policy at the time of such termination.”

The Bank paid the entire premium due on its employees’ certificates to the Central Manufacturing District and the latter paid defendant. While the employees did not directly contribute to the payment of the premiums, there is evidence to the effect that the Bank paid the premiums as part of the compensation due employees.

On June 24, 1932, the board of directors of the Bank, at a special meeting, passed the “following preambles and resolutions:”

“Whereas, during the period of five months there has been a steady continual decrease of the deposits covered in the commercial and savings deposits of this bank to the extent that the commercial deposits of this bank have shrunk approximately five and a half million dollars on January 1, 1932, to approximately three million dollars, and the savings deposits have shrunk from approximately one and one-half million dollars on January 1, 1932, to approximately nine hundred thousand dollars, and

“Whereas, such withdrawals have necessarily required the liquidation of a pro-rata part of the bank’s assets in order that it might at all times maintain itself in liquidating condition, and

“Whereas, because of the present unprecedented condition, it is the opinion of the Board that such condition will in all probability continue, and

“Whereas, notwithstanding the fact'that the bank is now amply solvent and its capital unemployed, it is the opinion of this Board that in order to conserve the assets of the bank and to protect the interests of the depositors and stockholders, and to insure the orderly liquidation, it is advisable that the bank forthwith discontinue business and the Auditor of Public Accounts be requested to assume immediate charge of its affairs.

“Now, therefore, be it resolved, that the officers of this bank be, and they are hereby authorized, empowered and directed to forthwith close the doors of this bank and discontinue the transactions of its business, and be it further

“Resolved that pursuant to the provisions of the general banking act of Illinois, this bank by its board of directors does request Oscar Nelson, auditor of public accounts to forthwith take charge of this bank, and of all its assets to the end that such assets may be conserved and liquidated in an orderly mrnmer for the benefit of the depositors, and stockholders of this bank.” (Italics ours.)

On the same date, pursuant to this request, the state auditor took charge of the Bank, which then “ceased operations in dealing with the public.” On August 6, 1932, there was presented to a chancellor of the circuit court by the state auditor a verified bill of complaint (not set forth in the record), and thereupon, upon motion of the attorney general, an order was entered which found that on June 24,1932, an examination of the Bank by the auditor disclosed that its capital stock had become impaired and that its condition was such that the impairment could not be made good; that the Bank was' being conducted in an unsafe manner and it was dangerous for it to continue to receive deposits and to further conduct a banking business; “that said Auditor . . . thereupon took control of the property, assets and effects of said bank and prohibited the carrying on by it of any banking business, and that said bank has since said date ceased to do the business for which it was incorporated, and is not now doing business.” The order appointed W. F. Leimert receiver of the Bank and gave him very broad powers.

On August 1, 1932, the Central Manufacturing District wrote defendant as follows:

“We have been asked to cancel the insurance coverage on all Central Manufacturing District Bank employees, as of June 24th, 1932. Yellow record cards are attached, also a complete list of same.

“Would also suggest that you have your representative call on Mr. Geary V. Stibgen, 1110 W. 35th Street, to ascertain the number, if any, who would care to continue the insurance individually.”

On August 15,1932, defendant wrote the said receiver:

“We enclose rider in duplicate which cancels the Group Insurance coverage of the employees of the Central Manufacturing District Bank under the Group Life Policy G-2095, issued to the Central Manufacturing District, as of June 24, 1932, the date on which the bank closed.

“Will you kindly sign both copies of this rider, retain the original and return the duplicate to us for the completion of our file?

“Final premium adjustment will be made shortly.” On August 15, 1932, Hoebel wrote defendant:

“Enclosed please find my personal application with the conversion of my group insurance with the Central Manufacturing District Bank, to that of a straight life policy for like amount. I have failed to enclose a check for premiums as I am not aware of the amount that, will be necessary, and whether or not your company will accept this application. But to again remind you that this is a little bit late for your thirty days clause through no fault of my own, as I was in connection with your office approximately two weeks after the bank closed.

“Trusting that this application will be accepted by your company, I remain ...”

On August 17, 1932, defendant wrote Hoebel:

“We are obliged to return herewith the application you recently sent us in connection with the conversion of your Central Manufacturing District Bank Group Certificate, inasmuch as you did not have the witness complete the reverse side of the application in the place provided. When that has been attended to, please return the application to us.

“We would also appreciate it if you will send us your Group Certificate and advise us the date on which you terminated your employment with the bank.”

On August 18, 1932, Hoebel wrote defendant:

“I am enclosing herewith, application in connection with the conversion of my Central Manufacturing District Bank Croup Certificate, same having been completed by witness.

• “May I inform you at this time, that my Croup Certificate is in Evanston, and will forward same under separate cover.”

When Hoebel died, on August 23, 1932, no policy had been issued to him by defendant under the conversion clause of his certificate, no premium had been paid by him upon account of such a policy, and his application had not been accepted by defendant. On August 23, 1932, defendant wrote the receiver as follows:

“Be: Croup Life Policy C-2095
Central Manufacturing District Bank

“In view of the cancelation of coverage of employees of Central Manufacturing District Bank under the above contract as of June 24, 1932, the date on which the bank closed, we enclose final statements, showing a credit to the policyholder of $1,690.68.

“Becord cards of the employees are also enclosed.

“Check for this credit will be forwarded shortly.”

On August 26, 1932, defendant wrote Central Manufacturing District:

“Be: Croup Life Policy C-2095

“Final statements relating to the cancelation of coverage of employees of the Central Manufacturing District Bank, effective June 24,1932, have been passed along to Mr. Leimert, Beceiver. These statements showed a refund credit due by reason of this cancelation of $1690.68.

“We are enclosing our check 838367 in the amount of $1690.68 covering this refund, and shall appreciate your placing it in the proper account. We have advised Mr. Leimert that this refund cheek is being sent you.”

On November 7, 1932, Central Manufacturing District sent the following letter to defendant:

“Be: Group Policy G-2095.

“We hold your company’s check # 838367, in the amount of $1,690.68, covering the refund credit by reason of cancellation of coverage of employees of the Central Manufacturing District Bank from- the date of June 24th, 1932.

“A representative of your company has delivered to us duplicate copies of Eider form, to be executed and attached to Group Life Policy No. G-2095.

“We cannot execute the Eider, or endorse for payment the refund check, until assurance is given to us that either or both of these proceedings will in no way prejudice the claim made against you by Mrs. Hoebel, widow of Fred Carl Hoebel, deceased, one of the employees of the Central Manufacturing District Bank, whose application for conversion was in your hands at the time of his death.”

On November 21, 1932, defendant replied to the same as follows:

“Be: Group Life Policy G-2095.

“I referred your letter of November 7 to our home office, and have today been advised by them that the execution of the rider and the endorsement of the check for refund under your Group Life Policy will not affect or prejudice the case in question.

“I shall, therefore, appreciate it if you will sign the rider and return it to us for the completion of our file.”

Plaintiff’s statement of claim alleges that the claim is based upon the group policy, and the trial court, in directing a verdict for plaintiff, stated that he did so “on the theory that the corporation still has a corporate existence; that he (Hoebel) was at the time the bank went into receivership an assistant vice president of the bank and he never resigned his office as assistant vice president up to the day he- died, August 23d; that the rider in question cancelling the policy of June 24th was not mailed to the Central Manufacturing District by the insurance company until sometime in November, and was not executed by the Central Manufacturing District until that time, and that the draft represented the unearned premium from June 24th, 1932 to May 1933, was not sent until November, and that an interest vested in the plaintiff in this case, and that the attempted cancellation was in pursuance of an interest that had already vested, I will have to direct a verdict for the plaintiff in the case. And on the theory also that there is no dispute in the evidence of these facts that Mr. Hoebel was still an officer of the corporation up to the time he died; that "he never resigned and that he never rendered any services to the banlc from the date of its closing up to the day of his death, though he did render services for the Auditor of Public Accounts for one week, approximately, after the day of closing, and that there are no facts in dispute for the jury to- pass upon. The question of employment is a question of law as raised by the evidence.” It thus appears that the trial court adopted the theory of plaintiff’s statement of claim that the group policy was still in force at the time of the death of Hoebel and that the latter was an employee of the Bank at that time.

Defendant contends that the group policy, under which plaintiff sued to recover, “was cancelled by the Central Manufacturing District effective as of June 24, 1932 (the day the bank was turned over to -the State Auditor), prior to the death of Fred Carl Hoebel, with a request for the return of the unearned premium.” In the view that we have taken of this appeal we do not deem it necessary to determine the question of fact as to whether or not the group policy was cancelled as of June 24, 1932. Nor do we deem it necessary, under the pleadings and the facts, to determine this question: Assuming that, as between the Bank and the defendant, the group policy was can-celled as of June 24, 1932, what effect, if any, would such a retroactive cancellation have upon the rights of Hoebel in the matter of a conversion policy? That he had certain rights under the group policy which the Bahk and defendant could not arbitrarily take away is certain. In fact, defendant admits in its brief that “there was no interest that could vest in the plaintiff or in Mr. Hoebel, unless within 31 days after the termination of his employment Mr. Hoebel had converted his certificate to individual insurance.” In quoting this admission we do hot wish to be understood as holding or intimating that Hoebel’s rights to a conversion policy would fail if he did not secure a conversion policy within 31 days. In view of the pleadings and the reasons given by the trial court for directing a verdict for plaintiff, we are not called upon to determine what rights, if any, Hoebel had to a conversion policy at the time of his death.

Defendant contends that Hoebel was not an employee of the Bank after June 24, 1932, and that, therefore, under the terms and conditions of the certificate of insurance issued by defendant under the group policy, plaintiff has no right to recover under that policy ; that under the pleadings and the evidence the trial court was not warranted in directing a verdict for plaintiff. The contention of defendant that Hoebel was not an employee of the Bank after June 24 is undoubtedly sustained by the overwhelming weight of the evidence. That plaintiff would have no right to sue defendant under the group policy if Hoebel’s employment with the Bank had terminated when the receiver took charge of the Bank is not even disputed by plaintiff, and the trial court’s decision was based, in part, upon the assumption that Hoebel was still an employee of the Bank at the time of his death although he had rendered no services to it from the date of its close to his death, for the sole reason that the Bank still had a corporate existence and the evidence failed to show that Hoebel had resigned his office as an assistant vice president of the Bank. “An employee is one who works for an employer; a person working for a salary or wage.” (Helliwell v. Sweitzer, 278 Ill. 248, 253.) The evidence shows that after the Bank was closed, on June 24, it ceased to function as a going concern, and that all of its employees, including its officers, who were retained by the state auditor, were subject to the orders of the latter and were paid by him. Hoebel was employed by the auditor until July 1, 1932, and on July 5, 1932, he signed a receipt for his pay for the period in question, which shows on its face that he was paid by the auditor for his work. After July 1 he performed no services for the auditor, the receiver nor the Bank. In his application to defendant for group conversion insurance, dated August 15, Hoebel stated that his then occupation was “Real Estate, Servicing Mortgages,” and that the name and address of his then employer was “Hoebel and Gordon Realty Co., 809 W. 35th St., Chicago, HI.” The group policy provides that “the insurance of each employee covered hereunder shall end when he shall leave the service of the Employer or be dismissed therefrom, but without prejudice to his right to conversion to individual policy form,” and that “any employee of the Employer covered under this group policy shall, in case of the termination of employment for any reason whatsoever, be entitled to have issued to him by the Company . . . a policy of life insurance. ...” That Hoebel considered himself no longer an employee of the Bank at the time that he applied to defendant for “the conversion of my group insurance ... to that of a straight life policy for like amount ...” is obvious. Indeed, he would have no right to apply for a conversion policy until his employment with the Bank had terminated. Under the provisions of section 11 of the General Banking Act, Cahill’s Ill. Rev. St. 1931, ch. 16a, H11, pp. 170, 171, and under the powers given the receiver in the instant case by the chancellor, it is evident that that official was ordered to handle the entire affairs of the Bank. It must also be remembered that the directors of the Bank resolved that the Bank discontinue business and that the auditor be requested to take charge of its affairs; that its doors be closed, and that the auditor take charge of the Bank and of all of its assets “to the end that they may be conserved for the benefit of the depositors and stockholders.” While plaintiff, in the trial, endeavored to prove that Hoebel might have performed services for the corporation as an assistant vice president even after the appointment of the receiver, she has not argued in this court that Hoebel was an employee after the receiver was appointed. However, if we assume that she made out a prima facie showing in that regard, it is certain that the trial court erred in holding, as a matter of law, that Hoebel was an employee of the Bank at the time of his death. If we take the view of the evidence most favorable to plaintiff, we must, nevertheless, hold that the question of the alleged employment should have been submitted to the jury.

The judgment of the municipal court of Chicago is reversed and the cause is remanded.

Reversed and remanded.

Sullivait, P. J., and Gridley, J., concur.


text:
    Anthony Kovell, by his Next Friend and Father, Anthony Kovell, Sr., Appellee, v. North Roseland Motor Sales Inc., et al., Defendants. Frank Kucinskis et al., Appellants.
    Gen. No. 37,131.

      Opinion filed June 15, 1934.
    J. P. Waitches, for appellants; David Gr. Stone, of counsel.
    . Earl J. Walker, for appellee.
   Mr. Justice Scanlan

delivered the opinion of the court.

Plaintiff sued North Roseland Motor Sales Inc., Frank Kucinskis, Sr., Joseph Kingma and Frank Kucinskis, Jr., in case. Kingma was not served and the suit was dismissed as to him. A jury returned a verdict finding defendants Frank Kucinskis, Sr., and Frank Kucinskis, Jr., guilty and assessing plaintiff’s damages in the sum of $4,200. There was a directed verdict in favor of North Roseland Motor Sales Inc. The Kucinskises, hereinafter also called senior defendant and junior defendant, have appealed from a judgment entered upon the verdict.

No point is raised on the pleadings. Plaintiff sued to recover damages for injuries sustained as the result of his having been struck by an automobile driven by junior defendant. The accident happened in the street in front of plaintiff’s home, 10610 Edbrooke avenue. That avenue is a residence street, upon which boys living in the neighborhood are accustomed to play various games. At the time of the accident 15 to 20 boys “were playing touch tackle, just passing the ball around.” The evidence for plaintiff showed that just before and at the time the automobile struck him it was travelling at a very fast rate and that after the collision the car dragged him along the street for a distance of between 20 and 30 feet, that then the brakes were applied and he was thrown upward about five feet and away from the car. As defendants have not here argued that the jury were not warranted in finding junior defendant guilty, it is unnecessary for us to discuss further the evidence bearing upon the accident. The accident occurred on October 30, 1931. Junior defendant was then 16 years of age, and defendants’ evidence shows that he had been allowed, by his parents, to drive an automobile for three and a half years prior to the accident.

Appellants contend that the evidence did not sustain the verdict and that the trial court erred in refusing to direct a verdict for senior defendant.

North Boseland Motor Sales Inc. was engaged in the sale and service of automobiles and maintained a garage' and salesroom at 10558-60 South Michigan avenue,, Chicago. It is a reasonable conclusion from the evidence that the business was, in fact, owned by senior defendant. From his testimony we learn that he was its president and manager and that he had charge of the sales, the collections, “and everything.” To use his own language: “I was the whole cheese”; “I am the whole cheese.” The following excerpts áre taken from his direct testimony: “Q. And you are in the automobile business? A. Yes, sir. Q. What is the name of your company? A. The North Roseland Motor Sales, Incorporated. Q. Located at what street address? A. 10558-60 South Michigan Avenue. Q. You have been in business ever since what time? A. Since 1910.” For three years prior to the accident, junior defendant had been working in the garage daily from three o’clock p. m. until six o’clock p. m. His duties, according to senior defendant, were to repair tires, dust off automobiles and assist the mechanics. The corporation owned and maintained an Oldsmobile DeLuxe sedan which senior defendant stated was used as a demonstrator in the business of the corporation. The son was driving this car at the time of the accident. The father testified that he, as manager of the corporation, and for corporate purposes solely, had the exclusive use of this car, but he later admitted that the mechanics sometimes used it. Junior defendant testified that his father sometimes used the car for personal matters. Plaintiff’s evidence tended to show that junior defendant had been in the habit of using it. The latter testified that the father had forbidden him to use the Oldsmobile DeLuxe sedan and that he had never used it until the day of the accident; that he had been in the habit of using his sister’s car and also his brother’s car. His mother testified that he had a car of his own, which was kept at the garage. The father testified that he had forbidden his son to use the Oldsmobile DeLuxe sedan and that he did not know that the latter was using that automobile on the day of the accident. Paul Kovell, plaintiff’s brother, testified that after the accident Anthony Kovell was taken to the Rose-land Community hospital and that senior defendant and junior defendant came there and senior defendant had a talk with plaintiff’s father. The trial court then put to the witness the following question: “The Court: No, — what did he (referring to senior defendant) say? Be specific. Let us have the exact language as near as you can recall it. A. Well, .he said he don’t see how the boy can have an accident, he said he sent his son to get his aunt or some member of his family. ■ — • I don’t know which now, and the brakes is demonstrated good, and he asks does he blow the horn, and that is about it.” The witness further stated that he and his father went home in an auto with the two Kucinskis es and that during the ride there was a conversation between the latter. The witness was then asked to state what senior defendant said, to which question the witness made the following answer: “Mr. Frank Kucinskis, Senior, he say that he don’t see how, he don’t know, — he don’t understand how there can be an accident, — how the boy can get in an accident; he demonstrated the brakes, — they were in perfect order, and he question him whether he blew his horn, and his son said he did.” The witness stated that he had detailed, in substance, all that was said by senior defendant that evening. There was no cross-examination of this witness. Senior defendant and junior defendant admitted being at the hospital on the occasion in question and that they left it with the Kovells, and that the “father had considerable talk about how the accident happened and with reference to the brakes of the car.” Senior defendant testified that he had a conversation with the father of Anthony Kovell at the hospital but that he did not make the statement that he “had sent Frank Kucinskis, Jr., for an aunt or for his mother.” Junior defendant testified that he did not hear his father say to Mr. Kovell that he had sent the witness for his mother or aunt. The witness was asked the following questions: “Q. There was some talk at the hospital between Mr. Kovell and Paul? A. Yes, sir. . . . Q. Then you and your father had considerable talk about how the accident happened? A. Yes, sir. Q. And you and your father had considerable conversation on the way home with reference to the brakes of the car and whether you could stop the car or not? A. Yes, sir. Q. He asked you quite a bit regarding that on the way home? A. Yes, sir.” It is significant, as plaintiff argues, that while the Kucinskises admitted that there was considerable conversation as to the manner of the accident and the condition of the automobile, that neither the father nor the son testified that the former made any statement to the effect that the son was using the automobile on the occasion in question without the authority or knowledge of the father.

Defendants contend that “the plaintiff called the senior defendant as a witness in his own behalf. He then testified in behalf of the plaintiff, that he had no knowledge prior to the accident of the car having been taken out and used by the junior defendant; that it had been taken out without his knowledge. The plaintiff was and is bound by this evidence. ’ ’ The exact testimony upon which defendants rely is as follows: “Q. This particular car involved here prior to this time or on this particular day, did your son drive it during this particular day? A. Well, I didn’t know that. See? Q. You don’t understand me. I mean, during the day the Kovell boy was hurt, did your boy drive your car at that time? A. No, sir, not that I knew about.” Defendants argue that as plaintiff called the senior defendant he is bound by this evidence. The direct question was, “Did your boy drive your car at that time,” and, as senior defendant contended, in the trial, that the corporation, and not he, owned the car involved, his answer would hardly have the probative effect claimed by defendants. But assuming that it did, plaintiff was not bound by the evidence. In Highley v. American Exch. Nat. Bank, 185 Ill. 565, 570, the court held:

“A party is not conclusively bound by the statements made by a witness whom he has called to give testimony. He may call another witness to disprove such statements. {Rindskoph Co. v. Kuder, 145 Ill. 607.) The general rule a party may not impeach the character of a witness he has voluntarily introduced is not infringed by the introduction of other testimony disproving the statements of such witness as to facts and circumstances involved in the hearing. ’ ’ In Chicago City Ry. Co. v. Gregory, 221 Ill. 591, 597-8, the court held:

“The law is well settled that a party to a suit cannot impeach a witness voluntarily called by him, except as that result may be incidentally accomplished by proving a state of facts differing from that sworn to by the witness in question. Greenleaf on Evidence, sec. 442; Rockwood v. Poundstone, 38 Ill. 199; Griffin v. City of Chicago, 57 id. 317; American Hoist and Derrick Co. v. Hall, 208 id. 597; 10 Ency. of Pl. & Pr. 316.”

In Chance v. Kinsella, 310 Ill. 515, 523, the court stated:

“The appellee called the appellant as her own witness. She was not for that reason bound by his testimony but might show the truth by any competent evidence, even in direct contradiction of what the appellant testified, but she could not call in question the appellant’s credibility.”

In connection with the instant contention defendants argue that because of the injurious effect upon plaintiff’s case of this testimony of senior defendant, plaintiff, in a desperate effort to counteract the effect of that testimony, caused Paul Kovell to testify to the conversation between senior defendant and plaintiff’s father at the hospital after the accident. In making this argument counsel for defendants forget that Paul Kovell testified to the said conversations before senior defendant was called as a witness in the case.

Defendants contend that the evidence shows that the automobile involved in the accident was owned by the defendant corporation and that it was used exclusively in its business, and they argue that these alleged facts are of controlling influence in the determination of the case. We think the jury would have been warranted, under the evidence, in finding that the corporation was merely a cloak under which senior defendant operated his business and that he, in fact, owned the automobile. However, if it be assumed that the corporation owned the automobile, that fact would not relieve senior defendant from responsibility if the jury adopted plaintiff’s theory of fact. In Stegman v. Sturtevant & Haley Beef & Supply Co., 243 Mass. 269, 273-4, it was said:

“When the. collision occurred Dole was carrying out the order of Perkins as an individual, and was not operating the motor car in the performance of his duties as an agent of the corporation. If Dole were in the general employment of the corporation and the automobile were owned by Perkins, who requested him to take it to Cambridge and bring Scannell to Perkins ’ house for the accommodation of Perkins, the jury could find that at this time, and while so engaged, Dole was the servant of Perkins. In Chute v. Morey, 234 Mass. 387, the driver of the car was in the employ of the Vulcan Garage Company. The defendant was the president of the company. He brought his car to the garage and told the driver ‘to fix it,’ to ‘take it out and try it.’ The accident happened while the driver was operating the car for the purpose of trying it out. It was held that the finding for the plaintiff was justified on the ground that the driver became temporarily the servant of the defendant. See Higgins v. Bickford, 227 Mass. 52. Although, in the present actions, the automobile was not owned by Perkins, the jury could find on the evidence that he was not authorized to use it in his private business or to instruct Dole to perform such work as he was then engaged in. If Perkins directed the operator to use it for such purpose, they could find that he assumed control and ownership of the automobile during the progress of the business, and stood, for the time being, as the owner to the same extent as if he himself had taken the car from the garage for his personal business. They could find that, by appropriating the automobile, without right, for the purpose of carrying Scannell to Melrose, he had converted it to his own use. If these facts were found, he would be liable to the same extent as if he owned the car. The jury could also find that Dole consented to become the servant of Perkins temporarily, in the performance of the particular business, and that Dole was his servant at the time in question.”

“The borrower of a motor vehicle is liable for the negligence of one who at the time of the injury is driving the car as his agent or servant.” (42 C. J. 1125, sec. 891.)

“A borrower is liable for the negligence of his chauffeur in the operation of the borrowed car, although he is not riding in it.” (Berry Automobiles (6th ed.) Vol. 2, p. 1205, sec. 1445.)

As bearing upon the instant contention that the corporation owned the car, it is not without significance that junior defendant, a mere boy, in his testimony was always careful to call the automobile he used “the corporation car. ’ ’

Defendants contend that “the plaintiff has utterly failed to prove . . . that the driver of the car was his (senior defendant’s) servant and was driving it in his business and by his authority, and, therefore, the judgment of the trial court ag'ainst the senior defendant must be reversed without remanding.” We have studied with great care the evidence that bears upon the question as to whether or not the senior defendant sent his son to get his mother and we are satisfied that we would not be justified in holding that the finding of the jury that he did so was against the manifest weight of the evidence. The evidence of Paul Kovell, if believed by the jury, would be practically conclusive upon the subject. We find a number of circumstances that tend to support plaintiff’s theory of fact in that regard. To refer to a few: It is conceded that junior defendant went to his brother’s home with the automobile for the purpose of taking his mother home. The senior defendant had allowed junior defendant to drive automobiles from the time the latter was 12% or 13 years of age and it might well seem strange to the jury that the junior defendant was permitted to use other cars in the garage but not the particular one involved in the accident. The senior defendant admitted that the mechanics used that car at times and that part of the duties of junior defendant was to assist the mechanics. While senior defendant denied that the son had ever used the demonstrating car before the day in question, plaintiff introduced evidence to the effect that junior defendant had for a long time past used an Oldsmobile car with a dealer’s license on it. The theory of defendants is that junior defendant “sneaked” the auto out of the garage, but the latter testified that when he left the garage he drove through the front entrance of the garage, where his father was attending to business, although he might have used the back entrance. He was certain, however, that when he took “the corporation car” out of the garage his father did not see him. After the father had been informed about the accident and how it occurred, he said nothing, in the conversations heretofore referred to, that would indicate that the automobile had been taken by junior defendant without his knowledge or consent. His sole concern at the time of the conversations was the condition of the machine and the manner of the accident. From many circumstances the jury might well believe that the instant defense was an afterthought. In Huddy Encyclopedia of Automobile Law (9th ed.) 7-8, the author states (p. 337):

“But owing to the intimate relations between members of a family, less evidence may be required to show the agency of the driver than is required in cases of paid employees.” (See also Kolensky v. DeFrancesco, 102 Conn. 660, 662.)

Defendants contend that “even if the junior defendant had been sent by the senior defendant to call for and bring his mother home, . . . the relation of master and servant would have ceased as soon as he, junior defendant, disobeyed his mother’s instructions to wait for her and went on a pleasure ride of his own.” The argument in support of the instant contention is based upon the testimony of junior defendant, called as a witness “in his own behalf.” He testified as follows in relation to the alleged deviation: “Q. Where did you go with this car? A. With the corporation’s car that evening? Q. Yes. A. I drove over to my brother’s house. Q. Where did he live at that time? A. 9917 Yale. And I drove over there and parked, that is all, and after a while my mother came out and I asked her if she wanted to go home and she said, ‘Ho, I will stay in the house,’ wait for me out here, and she goes back in and I think I will listen to the radio in the car a while, and while I was waiting there I decided to go for a ride. Q. Where did you go? A. I went down 99th street, down to State and south to 107th, and at 107th I turn down the hill to Edbrook, and as I approached Edbrook at 107th, I was going east, and a car was coming west up the hill, and so I stopped my car to let him go by, and then I start up all over again and continue down Edbrook, going north then, and I had probably gone, oh, about a quarter of a block or half a block and I notice a group of small children playing there.” The witness then described the manner of the accident. On cross-examination the following occurred: “Q. You arrived over at your brother’s house about what time ? A. I would say approximately 6:30. Q. And you were over there about how long a time? A. Oh, three or four minutes. Q. You talked to your mother there? A. She came out to me. Q. And you found that she wasn’t ready to go home yet? A. Yes, sir. Q. What did she tell you? — to wait there? A. Yes, she told me to wait there. Q. Did she say how long she would be in there? A. No, sir. Q. You had been gone how long from the time you left your mother there, before this accident occurred? A. You mean after she came outside and told me to wait, how long from that? Q. How long after? A. I would say 15 or 25 minutes, somewhere around there. Q. To get back to your mother you had to drive north? A. Yes, sir. Q. And that is the way you were going at the time of the accident? A. Yes, sir.” In the conversations that took place upon the evening of the accident nothing was stated by the junior or senior defendant as to any alleged deviation.

There is a mass of decisions dealing with the subject of deviation by a servant from route or instructions. A great many of the leading cases are collated in Berry Automobiles (6th ed.) Vol. 2, sections 1386-1390, pp. 1149-1161. It would be quite impossible without unduly lengthening this opinion to refer to all of the cases cited therein that apply to the instant question. We may call attention, however, to certain general principles stated by that author:

“If the servant steps aside from his master’s business, for however short a time, to do an act not connected with such business, the relation of master and servant is for the time suspended, and an act of the servant during such interval is not to be attributed to the master. However, a mere deviation by the servant from the direct route, or from the strict course of his duty, will not relieve the master from responsibility.

“It is held that if the servant makes a slight deviation from his master’s business, for a purpose of his own, th,e master remains responsible for his acts. Such instances generally occur when the act of the servant is so closely connected with the affairs of the master that, though the servant may derive some benefit from it, it may, nevertheless, fairly be regarded as within the course of his employment. An illustration of this kind is where a chauffeur, after transacting business for his employer, deviates from his course slightly for a purpose of his own, and after accomplishing his purpose, is returning to his employer’s place of business when he collides with someone.

“A driver who deviated from his route one or two blocks to go by his father’s home for some money he had left there, was held not to have so completely abandoned his employer’s business as to defeat the latter’s liability for his negligence.

“To relieve the employer from liability, the deviation must be so substantial as to amount to a departure from the service, and must be for purposes entirely personal to the employee.

“The question is sometimes one of fact for the jury, and sometimes one of law for the court. ‘In cases where the deviation is slight, and not unusual, the court may, and often will, as matter of law, determine that the servant was still executing his master’s business. So, too, where the deviation is very marked and unusual, the court in like manner may determine that the servant was not on the master’s business at all, but on his own. Cases falling between these extremes will be regarded as involving merely a question of fact, to be left to the jury.’ ” (Sec. 1386, pp. 1149-51.)

“If a chauffeur, after deviating from the line of his employment, is at the time an accident occurs pursuing Ms regular course to reach the place it was his duty to drive to, the employer may be held liable for his conduct.

“It is held that, when the servant, having completed the purpose for which he turned aside, is returning to resume his duties, he is, while so returmng, engaged in the business of his master.” (Sec. 1390, p. 1161.) One of the cases most frequently cited is Ritchie v. Waller, 63 Conn. 155. There a driver, after obtaining a load, instead of returning by the direct route, drove four blocks in the opposite direction on a personal mission and an accident occurred before he returned to his usual route. The court, after stating that it has always been a matter of extreme difficulty to apply the law to the ever varying facts and circumstances which present themselves, said (p. 165):

“If the rule of law were that any deviation by the servant ‘to carry some business of his own into effect,’ was of itself such a departure, the above question would be one of law. But this, as we have seen, is not the rule of law. To decide the question in a case like the present, the trier must take into account, not only the mere fact of deviation, but its extent and nature relatively to time and place and circumstances, and all the other detailed facts which form a part of and truly characterize the deviation, including often the real intent and purpose of the servant in making it.” In the able opinion in that case certain principles are announced which seem to be very generally followed by other courts. They are: Where the deviation is marked and unusual, the court may determine that the servant was not on the master’s business, but on his own; that where the deviation is slight and not unusual the court may, and often will, as a matter of law, determine that the servant was still executing his master’s business; that where the question of the master’s responsibility turns principally upon the mere extent of the deviation by the servant from the strict course of his employment or duty, it has been generally held to be one of fact and not of law, and that cases falling between the extremes will be regarded as involving merely a question of fact, to be left to the jury or other trier of such questions. The Supreme Court of Connecticut held that the case before it clearly fell within the class of cases where the question was strictly one of fact to be decided by the trier, the trial court. The trial court found, upon the facts, that the master was answerable for the act of the servant, and in connection with that finding the Supreme Court said: “We have no hesitation in saying that the court below reached the correct conclusion on the facts found.” It seems clear to us that the alleged deviation in the instant case was not so substantial that the trial court would have been authorized to hold as a matter of law that the deviation amounted to a departure from the service of the master and was for purposes entirely personal to the servant. The question of deviation, taken in the most favorable light for defendants, was one of fact for the jury to decide, and they have found against defendants’ contention and we find ourselves in accord with that finding. Defendants cite such cases as Nelson v. Stutz Chicago Factory Branch, 341 Ill. 387, and Lohr v. Barkmann Cartage Co., 335 Ill. 335, in support of their instant contention. The Nelson case has no bearing, under the facts, upon the instant one. There the court held that the possession of the car by the alleged servant was without the owner’s permission and was the unlawful possession of a wrongdoer, and that the owner of the automobile was therefore not liable for damages caused by its negligent operation by an employee. In the Lohr case the defendant’s servant had been directed to take a truck to defendant’s garage, but instead of obeying the order he went upon a mission of his own and was more than four miles away and traveling in an opposite direction from the garage when the accident happened. He had been drinking and “was on a frolic of his own” at the time of the accident, and going to meet some girls. Defendants call attention to the evidence that the junior defendant knew Anthony Kovell and other boys on Edbrooke avenue and they argue that “he went there, very likely, because his friends lived in the block.” It is a sufficient answer to this argument to say that junior defendant’s testimony does not support any such theory. Senior defendant had the right to inquire of him as to his purpose in going upon the street in question but he did not see fit to interrogate him upon that subject. The jury were fully warranted in finding from junior defendant’s testimony that he was on his way to get his mother when the accident occurred.

Defendants state that “each and every count in the declaration credits the ownership, possession and control of the automobile which caused the plaintiff’s injury to the defendants, North Roseland Motor Sales, Inc., Frank Kucinskis, Sr., and Joseph Kingma,” and they argue that plaintiff has failed to prove ownership, possession and control of the automobile in the three defendants.

“It is not necessary in actions ex delicto to prove all the allegations of the declaration. If plaintiff makes out a cause of action by proving the material allegations he is entitled to recover even though there be other averments of the declaration which are not proved. (Postal Telegraph-Cable Co. v. Likes, 225 Ill. 249; Dunham v. Black Diamond Coal Co., 239 id. 457.) ” (Reivits v. Chicago Rapid Transit Co., 327 Ill. 207, 209. See also Weber Wagon Co. v. Kehl, 139 Ill. 644, 658; Devine v. Delano, 272 Ill. 166; Wood v. Illinois Cent. R. Co., 185 Ill. App. 180, 184; Flis v. City of Chicago, 247 Ill. App. 128.)

There is no merit in the instant contention.

Defendants further contend that plaintiff failed to prove the allegation in the declaration that senior defendant was the owner of the automobile in question. We have heretofore referred to the evidence bearing upon the question of ownership of the automobile and stated our conclusion in reference to the same. The declaration alleges “ownership, possession and control of the automobile” in senior defendant, and it would suffice if plaintiff proved possession and control in him. We have heretofore referred to the evidence bearing upon his possession and control and the law applicable to the same. (See Stegman v. Sturtevant & Haley Beef & Supply Co., supra; 42 C. J., supra, and Berry Automobiles, supra.)

The final contention of defendants is that the verdict is against the manifest weight of the evidence. We cannot agree with this contention.

The trial court seems to have conducted the trial ably and impartially and many of the errors that are ordinarily assigned in cases of this character are not raised upon this appeal.

The judgment of the superior court of Cook county is a just one and it should be and it is affirmed.

Affirmed.

Sullivan, P. J., and Gridley, J., concur.