APPEAL from the Appellate Court for the First District;
heard in that court on appeal from the Circuit Court of Cook
County; the Hon. Judges HARRY M. FISHER and HENRY L. BURMAN,
MR. JUSTICE DAILY DELIVERED THE OPINION OF THE COURT:
Rehearing denied March 28, 1960.
The plaintiff, Helen M. Holmes, brought an action in the superior court of Cook County against the defendants, Birtman Electric Company and its stock transfer agent, the First National Bank of Chicago, to recover damages of $21,756 for their refusal to effect a transfer to her of twelve certificates representing 2,697 shares of record in the names of herself and her deceased father, Charles Hansel, as joint tenants, with the right of survivorship. Plaintiff's motion for summary judgment was sustained to the extent it related to the issue of liability; defendants' motion for summary judgment was denied. The order disposing of these motions provided that plaintiff recover damages, if any, against defendants, as might be assessed against them upon a hearing limited to that issue. A trial before the court without a jury resulted in a judgment in favor of plaintiff and against defendants for $6,890.83. Defendants appealed to the Appellate Court for the First District, seeking a reversal of the order sustaining plaintiff's motion for summary judgment upon the issue of liability and denying their motion for a summary judgment and, also, of the order awarding plaintiff damages. Plaintiff prosecuted a cross appeal, contending that she was entitled to damages of $24,598.75, $21,756, or $20,975. The Appellate Court reversed the judgment and remanded the cause, with directions to enter judgment for defendants and against plaintiff. (22 Ill. App.2d 72.) We have granted the latter's petition for leave to appeal.
The decisive issue presented is whether the defendants' delay in transferring the stock was justified and reasonable with respect to the factual situation presented. Disposition of the issue requires a narration of the essential facts.
On December 11, 1953, Birtman Electric Company issued 2,697 shares of its common stock to Charles Hansel and Helen Holmes, as joint tenants, with the right of survivorship. Hansel died on April 4, 1955, survived by his wife, Rose, and their daughters, Helen M. Holmes and Marion Lenox, as his only heirs-at-law. Mrs. Hansel died in June 1955. On September 15, 1955, more than five months after Hansel's death, the First National Bank of Chicago, as transfer agent for Birtman's stock, was served with process as a defendant in an action in the superior court of Cook County, No. 55 S 13710, instituted by Marion Lenox against Helen Holmes, the latter's husband, James Holmes, and the bank. Mrs. Lenox sought a declaratory judgment that the shares of Birtman stock, held in the name of Hansel, or in the names of Hansel and his wife jointly prior to December of 1953, and transferred at that time to Charles Hansel and Helen Holmes, as joint tenants, be held in trust for the benefit of Marion Lenox and Helen Holmes, only heirs-at-law of their deceased parents. The plaintiff in that case, Mrs. Lenox, alleged further that she feared Helen Holmes would dissipate and place beyond the control of the court the stock or the proceeds from its sale and asked for the issuance of a temporary injunction to restrain her sister and the bank, as transfer agent, from selling, transferring, assigning, or in any way encumbering the stock certificates. An order was entered on September 19, referring the question of the issuance of the injunction to a master in chancery, with directions to file his report on or before October 19, 1955.
On September 23, plaintiff, by her attorney, made personal demand upon the bank to cause the shares to be transferred or reissued in the name of Helen Holmes. The demand was accompanied by adequate evidence of Hansel's death and a consent to the transfer of the stock by the Attorney General. The bank refused to honor the request, advising the attorney that the matter had been considered by its officials as well as other attorneys and that no transfer of the stock would be made until the disposition of the litigation pending in the superior court. By a letter dated September 23, 1955, Mrs. Holmes once again made the same demand upon the bank. On October 6, an assistant vice-president of the bank replied, confirming its earlier refusal by stating: "Because of the fact that we are one of the defendants in a case pending in the superior court of Cook County entitled Marion Lenox v. Helen Holmes, et al., No. 55 S 13710, in which action an injunction has been applied for, we will be unable to comply with your request that we transfer the stock into the name of your client until the litigation is disposed of." The bank's refusal was flat and final.
On November 22, the master submitted his report in Lenox v. Holmes, recommending that a temporary injunction be denied. His report read in part: "There is not a scintilla of evidence that defendants have threatened or are going to sell, transfer, dispose of, conceal, dissipate, or otherwise place in jeopardy any of said * * * stock * * * received by Helen Holmes from her parents." Objections to the master's report filed by Mrs. Lenox were overruled. Thereafter, on January 6, 1956, the court approved the master's report in Lenox v. Holmes, overruled Mrs. Lenox's motion for a temporary injunction and, on January 16, entered a decree dismissing the complaint for want of equity.
The order and decree in Lenox v. Holmes became final on February 16, 1956. Plaintiff's attorney again demanded transfer or reissuance of the 2697 shares of Birtman stock to Helen Holmes and, on February 20, the bank, as transfer agent, issued to Mrs. Holmes new certificates for the shares, conformably to her request. The certificates were delivered to her on March 1, 1956. She retained the certificates until May of 1957 when, pursuant to the merger of Birtman with Whirlpool Corporation, she received shares of stock in the latter corporation in exchange for the Birtman stock.
In the interim it appears that Birtman declared and paid dividends on its common shares of record on November 23 and December 20, 1955. Birtman issued two dividend checks, dated November 23 and December 31, 1955, aggregating $1,483.35, payable to the order of Charles Hansel (deceased April, 1955). These checks bear the purported blank endorsements of the payee and of Helen M. Holmes.
Based upon the foregoing facts, the plaintiff's second amended complaint alleged that, as the result of the bank's refusal to effect a transfer of the stock or to issue new stock to her in exchange for the certificates previously described, she was restricted from making and unable to effect a lawful sale of the stock, with the approval and authority of the bank, as transfer agent for Birtman, and that any sale of the stock by her without such approval would have been ineffective. She also alleged that she was, at all times during the grievances complained of, in possession of the certificates of Birtman stock and that, by virtue of Hansel's death, became and was the sole owner, and thereby entitled to have the stock transferred and assigned and new certificates issued to her. Additional allegations were that on September 23, 1955, the day transfer or reissuance of the stock was formally demanded, the cash market value of the stock was $24.50 per share and on February 20, 1956, the date of issuance of the shares in the name of Helen Holmes, alone, $16.50, the total cash market values on the days named being $66,076.50 and $44,500.50, respectively.
By its answer, Birtman averred that the complaint in the Lenox case seriously questioned plaintiff's rights, if any, to the 2,697 shares of Birtman stock standing in the names of the joint tenants on its stock books, and prayed that the existence and extent of such rights be determined and declared; that at no time during the progress of the proceedings in Lenox v. Holmes did plaintiff or any one else make any attempt to cause an order to be entered directing and permitting the issuance, during the pendency of the hearings on the temporary injunction, of certificates representing the shares of stock in controversy in the name of Helen Holmes and the transfer of all or any part of the shares to a purchaser, if such could be found. Accordingly, Birtman alleged that the bank properly delayed the issuance of new stock certificates until the order and decree in No. 55 S 13710 had become final.
In the affidavit supporting plaintiff's motion for summary judgment, her attorney alleged that no injunction was issued in No. 55 S 13710 or in any other proceeding restraining Helen Holmes, Birtman, or the bank, from selling, transferring or assigning any or all of the shares of stock.
The affidavit of an attorney for the bank in support of defendants' motion for summary judgment averred that the complaint in the Lenox case charged that plaintiff and her husband had, by fraud, false representation and undue influence, schemed to cause Hansel, at a time when he was mentally incompetent, to transfer the shares into the names of himself and Mrs. Holmes as joint tenants, with right of survivorship.
Following the entry of the judgment order finding the issue of liability in favor of plaintiff and against defendants, considerable evidence was heard upon the single question of the amount of damages sustained by plaintiff. Judgment was rendered assessing plaintiff's damages at $6,890.83, together with interest. Thereupon, defendants made a motion to amend the judgment order to delete all reference to interest, alleging that, during the period of their alleged wrongful failure to transfer or reissue the stock, plaintiff asserted and they, the defendants, admitted that she was the sole and absolute owner of the stock, and that, therefore, she was entitled to receive any dividends paid on the stock. Defendants alleged, further, that the amount of $1,483.35 received by plaintiff as dividends during the period should be offset against the interest on damages caused by the ...