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Ericson v. Slomer.

February 9, 1938

ERICSON
v.
SLOMER.



Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; Charles E. Woodward, Judge.

Author: Major

Before EVANS and MAJOR, Circuit Judges and LINDLEY, District Judge.

MAJOR, Circuit Judge.

An action at law was instituted in the District Court by appellant to recover the statutory liability attached to 176 shares of the capital stock of the Waukegan National Bank as assessed by the Comptroller of the Currency.

Joseph Warren Slomer, the record holder of the shares of stock in question, and Joseph Slomer, his father and appellee, the real or actual owner of said shares, were made parties defendants. The shares of stock were originally held by Margaret Slomer, mother of the first named defendant and wife of the latter until her death, and shortly thereafter, on December 24, 1930, were duly transferred on the records of the bank to Joseph Warren Slomer.

The cause was tried by the court without a jury, and by a stipulation of the parties the District Court entered an order that the cause proceed under the Civil Practice Act of the State of Illinois, Smith-Hurd Ill. Stats. c. 110, § 125, et seq.

What is referred to as the amended complaint was filed September 8, 1936, and consisted of two counts. In the first count, Joseph Warren Slomer was alleged to be the owner of record of the shares of stock in controversy and in the second count, a similar allegation is made, but in addition thereto, it is alleged that Joseph Warren Slomer holds the said stock as the agent or in trust for Joseph Slomer, as executor of the estate of Margaret Slomer, deceased. In the first count, judgment is prayed against Joseph Warren Slomer, and in the second count against Joseph Slomer, individually, or as executor of the estate of Margaret Slomer, deceased. Appropriate answer was filed to this complaint and a trial had on the issues thus made. On May 19, 1937, a second amended complaint was filed consisting of two counts; the first count, as in the previous complaint alleging Joseph Warren Slomer to be the record owner of the stock and the second count alleging Joseph Slomer to be the actual owner, although the stock appeared on the records of the bank in the name of Joseph Warren Slomer. It is not alleged in this count that the latter owned this stock as executor, and judgment is prayed against him individually. On the same day this amended complaint was filed the District Court found the issues agaisnt the defendant, Joseph Warren Slomer and in favor of Joseph Slomer, entering judgment accordingly as to each defendant.

On June 15, 1937, motion to dismiss the second amended complaint was filed. In support of said motion was filed an affidavit of counsel in which is set forth the unsatisfied judgment of May 19, 1937, against Joseph Warren Slomer from which no appeal had been taken and also the judgment on the same date in favor of Joseph Slomer as a bar to any further proceedings against Joseph Slomer.

The court sustained the motion to dismiss the cause of action stated in the second amended complaint as to Joseph Slomer, holding the judgment theetofore rendered against Joseph Warren Slomer a bar to further proceedings. The appeal was taken from this order of dismissal. Appellee takes the position that the judgments of May 19th were final, and not having been appealed from, the second amended compalint filed thereafter stating substantially the same cause of action as to Joseph Slomer was properly dismissed as a matter of course. The error in this position is found in the premise upon which it is based. While the record is somewhat confusing, a study of the same convinces us that the second amended complaint was filed prior to the entry of the judgments. True it is, the second amended complaint and the judgment were entered on the same day. There was, however, an order of court, also entered the same day, which recited, among other things: First, leave was given the plaintiff to file instanter his second amended complaint; second, motions for a new trial made by both parties were overruled; and, third, exceptions were ntoed by the respective attorneys and each entered motions in arrest of judgment which were overruled by the court.

The record further discloses that afterwards, but on the same day, the judgments heretofore referred to were entered. While the record does not disclose, it seems apparent that the trial court had previously announced its decision as to how the issues were to be decided and that on the day mentioned and before either the entry of judgment or the argument on the motion for a new trial, the second amended complaint was filed with the sanction of the court.

By virtue of section 46 of the Civil Practice Act of Illinois, Smith-Hurd Ill. Stats. c. 110, § 170, there seems to be no question but what the court was possessed of the authority to permit the filing of the second amended complaint at any time before judgment was entered; in fact, paragraph (3) of said section, Smith-Hurd Ill. Stats. c. 110, § 170, par (3), seems to indicate that such an amended complaint might have been filed even after judgment. The question which promptly presents itself is whether the cause of action, as stated in the second amended complaint, was the one upon which judgment was entered regardless of the fact that the trial had been had upon an issue raised by other pleadings in which the cause of action, especially as to Joseph Slomer, was somewhat different than that stated in the latest complaint. We think it must be held that the second amended compalint entirely superseded all previous pleadings and rendered them of no effect whatever. This conclusion finds support in Wright v. Risser, 290 Ill.App. 576, 8 N.E.2d 966, where a rather similar situation was presented arising under the Illinois Civil Practice Act. There the court 290 Ill.App. 576, on page 581, 8 N.E.2d 966, 968, said:

"The third amended complaint was complete in itself and does not refer to or adopt any portion of either the original complaint or the first or second amended complaints. 'An amendment which is complete in itself and does not refer to, or adopt, the prior pleading, supersedes it and the original pleading ceases to be a part of the record, being in effect abandoned, or withdrawn, and become functus officio, with the result that the subsequent proceedings in the case are to be regarded as based upon the amended pleading, which will not be aided by anything in the prior pleading, and any ruling of the court with relation to the sufficiency of the original pleading is not properly in the record.' 49 C.J. 558, § 773."

We, therefore, have a situation where judgments were entered upon this second amended complaint with no answer or other pleadings filed by the defendants. Later, the motion to dismiss was filed as heretofore related and the complaint dismissed as to Joseph Slomer. The motion to dismiss was denied as to Joseph Warren Slomer and no appeal having been taken, the same is, no doubt, final and res adjudicata as to him. It seems, however, when the second amended complaint was dismissed as to Joseph Slomer that this was the equivalent of a vacation of the judgment which had theretofore been entered in his favor. As a matter of fact, it seems to us the court should have, of its own motion, vacated the judgment when the party in whose favor it was entered, came subsequently in an attack on the sufficiency of the complaint upon which the judgment was rendered. In any event, appellee is in no position to rely upon the finality of such a judgment.

We are of the opinion that the order of June 15, 1937, dismissing the cause of action as to Joseph Slomer was properly appealed from and squarely presents the following question: After the entry of a judgment against the registered owner of shares of stock in an insolvent national bank upon the statutory liability, may the ...


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