Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Field v. Oberwortmann

JUNE 28, 1957.

MEYER FIELD, PLAINTIFF-APPELLANT,

v.

NUGENT R. OBERWORTMANN, FRANK J. TIERK, CLARENCE D. OBERWORTMANN AND ANDREW B. BARBER, DEFENDANTS-APPELLEES.



Appeal from the Superior Court of Cook county; the Hon. JOHN J. LUPE, Judge, presiding. Reversed and remanded.

PRESIDING JUSTICE KILEY DELIVERED THE OPINION OF THE COURT.

Rehearing denied September 20, 1957.

This is an action to rescind a sale of bank stock. The suit was dismissed for want of equity on defendants' motion to strike the amended complaint. Plaintiff elected to stand by his pleading and has appealed.

[1-5] Defendants' motion to strike admits the facts well pleaded, and although the amended complaint is construed most strongly against plaintiff, he is entitled to the reasonable intendments of the language used in the amended complaint. (Chapman v. Northern Trust Co., 13 Ill. App.2d 386.) A plaintiff is entitled to favorable inferences after decree (Lasko v. Meier, 394 Ill. 71), but not before. The court in Wedell v. American Telephone & Telegraph Co., 8 Ill. App.2d 510, 513, made a contrary statement, but the court there seems to have mistaken a demurrer to a pleading for a demurrer to the evidence and the case cited to the statement does not support it. A pleader who sets forth facts need not set forth the legal effect of or conclusion from the facts. (Leitch v. Sanitary Dist. of Chicago, 369 Ill. 469, 473.) A plaintiff need not allege with precision facts which "to a much greater degree of exactitude" are within the knowledge of defendants rather than of plaintiff. (Opal v. Material Service Corp., 9 Ill. App.2d 433, 441.) Under these rules we shall consider whether the amended complaint states a cause of action.

In June, 1941, plaintiff and one Carl Kuehnle acquired majority ownership of two classes of stock issued by the North Shore National Bank of Chicago. A third class of stock, representing a majority of the voting shares of the bank, was owned entirely by the Reconstruction Finance Corporation. Plaintiff and Kuehnle therefore controlled only a minority of the directorate of the bank.

At that time, the bank was located in a building leased from a corporation controlled by the "majority group" on the Board of Directors. Plaintiff deemed the rent excessive, and negotiations were undertaken to reduce the rent. Consideration was given also to a proposal to move the bank to a new location where the rental would be less than half that being paid at the existing location. Plaintiff and Kuehnle went to the Chicago Manager of the RFC, one Frank Murchison, to seek advice on the matter. Murchison referred them to defendant Oberwortmann, who at that time was Chief National Bank Examiner for the Seventh Federal Reserve District with jurisdiction over the bank.

Oberwortmann refused to approve the relocation of the bank despite the saving in rent and the fact that no expense would be incurred in moving. Instead he demanded that the bank raise $250,000 additional capital and stated to "plaintiff and others" several times that liquidation of the bank might be "necessary" and "a good idea." Oberwortmann also dissuaded an acceptable and agreeable candidate for the bank presidency from taking the position by repeating the demand for additional capital and the statement about liquidation. At this same time, a bank examiner working under Oberwortmann insisted on "writing off" $6,000 in recently defaulted mortgage bonds which plaintiff then evaluated at 75 cents on the dollar and which within a year were redeemed at full value plus interest.

During this time Kuehnle was president of another, larger bank in Chicago. The larger bank was his primary interest and Kuehnle feared that any dispute with Oberwortmann at the North Shore Bank would jeopardize this interest. Murchison was waiting for an opportunity to purchase Kuehnle's North Shore Bank stock and was being advised by Oberwortmann to persist in offers of purchase. At the same time, Oberwortmann was coercing Kuehnle's superiors at the other bank to induce Kuehnle to sell his North Shore Bank stock in order to relieve the other bank from official pressure.

Though he had originally intended to sell to plaintiff, Kuehnle in the fall of 1943 sold his stock to Murchison. The effect of this sale was to divide the combined minority strength of plaintiff and Kuehnle and "relegate" plaintiff to an "isolated" minority status. In December of 1943 plaintiff, under the official pressure of Oberwortmann and Murchison, sold 90 per cent of his own stock to the latter. He did not know then, although Murchison and Oberwortmann had knowledge, that improved earnings of the bank had increased the value of the stock. A month after his sale, having learned the facts, plaintiff sought rescission and repurchase at a price which would have netted Murchison a profit of $75,000. He and Murchison discussed rescission during many years after the sale and Murchison made plaintiff many promises to resell.

With the sales of stock to Murchison the official pressures upon the bank ceased. Meanwhile, plaintiff and his wife remained owners of "six to eleven" per cent of the bank stock and were the second or third largest investors, the bank having purchased its stock held by the RFC. Plaintiff remained a director of and attorney for the bank until the instant suit was filed.

In August, 1949, Oberwortmann resigned his Federal position and was employed as president of the bank to fill the vacancy which had been created at Murchison's request. From this time on, Oberwortmann's attitude toward plaintiff changed. He became friendly, sympathetic, and a donor of gifts, and he encouraged plaintiff in his efforts to reacquire the bank stock from Murchison. He consulted plaintiff about bank affairs, referred law business to him and spoke to plaintiff of growing differences with Murchison. Oberwortmann and plaintiff confided in each other with respect to their future hopes and agreed to devote their efforts to realize these hopes. After two years this new attitude won plaintiff's confidence and trust and Oberwortmann became plaintiff's family financial adviser and plaintiff paid Oberwortmann a $2,500 fee for the services rendered.

The first question is whether the foregoing allegations show a fiduciary relationship between plaintiff and Oberwortmann. The allegation of Oberwortmann's cultivating and winning plaintiff's friendship and confidence after becoming bank president, with its resultant superiority, and the allegation of plaintiff's payment to Oberwortmann of a fee as financial adviser are enough to show a fiduciary relationship. (McCartney v. McCartney, 8 Ill.2d 494; Fischer v. Slayton & Co., Inc., 10 Ill. App.2d 167.)

The allegation that Oberwortmann was plaintiff's paid agent distinguishes Cranwell v. Oglesby, 12 N.E.2d (Mass.) 81, and Vargas v. Esquire, 166 F.2d 651. (Note the dissent of Judge Major.) The complaint alleges that plaintiff learned before his sale of stock to defendants of the alleged faithless conduct of Oberwortmann, but we think that if the allegation of fiduciary relationship and faithlessness are taken as true, the sale must be considered as having been made under the influence of the breach of faith. This renders Perry v. Pearson, 135 Ill. 218, inapplicable. We think also that we should not decide that because plaintiff was a bank director, bank attorney and a successful business man he would not, as a matter of law, place trust and confidence in ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.