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Strilky v. Levy

NOVEMBER 27, 1961.




Appeal from the Circuit Court of Cook County; the Hon. DANIEL A. ROBERTS, Judge, presiding. Affirmed.


Rehearing denied January 11, 1962.

This is a chancery action seeking to establish an oral express trust between plaintiff's deceased mother, Miriam Strilky, and her brother, Isador H. Levy, with plaintiff, Arthur Strilky, as the beneficiary. As relief, plaintiff prayed that the court set aside the transfer of certain shares of stock, or in the alternative, that he be awarded the market value of said shares, and that defendant be forced to account for all dividends paid thereon. The Master in Chancery found that plaintiff failed to establish his cause of action by a preponderance of the evidence and recommended that the suit be dismissed for want of equity. Plaintiff has appealed from the decree approving the Master's Report, overruling the exceptions filed thereto, and dismissing the complaint.

The undisputed facts leading up to the controversy in question are as follows:

Defendant Isador H. Levy *fn1 was one of the organizers of Central States Finance Corporation, which was engaged in financing automobiles, and was president and general manager of that company. Louis Strilky, father of the plaintiff and brother-in-law to Levy, became associated with Levy in that company in 1926, and later served as its secretary and assistant general manager. In 1931 Levy organized the Liberty Loan Corporation, which engaged in the business of making small loans and automobile loans, and became president and general manager with Louis Strilky as its vice president and assistant general manager.

Miriam Strilky, Levy's sister and mother of the plaintiff, was the owner of record of a certificate for 350 shares of the Liberty Loan class "B" stock. In 1947 a new certificate for 50 shares was issued in Miriam's name, and a certificate for 300 shares was issued in the name of Levy's daughter, Harriet. Miriam's 50 share certificate was placed in a strong box in her husband's office. The disposition of the remaining 300 shares is the subject of much conflicting testimony. Plaintiff contends that Levy accepted the original 350 share certificate of Liberty "B" stock, endorsed in blank by plaintiff's mother, upon the express oral agreement that Levy would hold 300 of those shares in trust for plaintiff's benefit, but that despite his promise Levy transferred the stock to his daughter, Harriet.

The Master found contrary to this claim of an oral trust, and plaintiff asserts that the Master's conclusions and recommendations, approved by the Chancellor, are against the manifest weight of the evidence.

At the outset, plaintiff argues that this court is not bound by the rule that the Master's findings must be accepted so long as they are not against the manifest weight of the evidence. On the contrary, says plaintiff, while the Master's report is considered to be prima facie correct, it does not carry the weight of a jury verdict, but rather is advisory in nature, and all the facts are open for consideration, in the first instance, by the Chancellor, and on appeal, by the court of review. It is the established law that when exceptions to a Master's Report are sustained by the Chancellor the "manifest weight" rule does not apply, and all the facts are open for consideration on review. The reason is that the Chancellor did not see and hear the witnesses, and therefore was in no better position than is the court of review to determine the credibility of the witnesses. (Uksas v. Zelensky, 21 Ill.2d 303, 172 N.E.2d 359; Stasch v. Stasch, 355 Ill. 581, 189 N.E. 891; Kosakowski v. Bagdon, 369 Ill. 252, 16 N.E.2d 745; Thatcher v. Kramer, 347 Ill. 601, 180 N.E. 434.) In the Uksas decision the Supreme Court, in reversing the Chancellor and approving the findings of the Master, noted that "while the rule is that the Master's findings on controverted facts do not carry the weight of a jury verdict in a suit where trial by jury is a matter of right, yet such findings are advisory [citation], and thus are entitled to much consideration. . . . [I]t is our duty to make our own independent determination of the facts, giving due consideration to the findings of the Master, who heard and saw the witnesses, since the factual conclusions here depend upon an appraisal of the credibility of conflicting testimony." It is quite a different situation where, as in the instant case, the Chancellor approves the Master's findings. Under such circumstances the matter on appeal is viewed in a light comparable to the situation where the Chancellor himself heard and saw the witnesses and made findings of fact. We will not disturb the Master's findings where approved by the Chancellor unless they are manifestly against the weight of the evidence. (People v. La Salle St. Trust & Sav. Bank, 5 Ill. App.2d 261, 125 N.E.2d 654; Schmalzer v. Jamnik, 407 Ill. 236, 95 N.E.2d 347; Finley v. Felter, 403 Ill. 372, 86 N.E.2d 188.) With this rule in mind we have examined the voluminous record in some detail.

Louis Strilky testified that in September of 1946 Levy remarked that his wife, Virginia, was coming down to the office shortly and he warned Louis, "you better go out because she is going to raise a lot of hell again." Strilky left his office and on his return found a note from Virginia demanding that Miriam's stock be taken out of her name. He testified that he showed Levy the note and the latter advised him to forget about it. He said Virginia called him that night to inquire whether he discovered the note, and when he replied in the affirmative she threatened, "you better get that stock down here and transfer it out of Miriam's name. I don't want her as a stockholder in Liberty Loan Corporation or I will have you beaten up." He testified that in many previous conversations between them she had told him she didn't want Miriam as a stockholder and he had replied that it was none of her business. Strilky further testified that in the latter part of December of 1946, or January, 1947, pursuant to a phone call from his wife, he removed from his strong box the certificate for 350 shares of "B" stock, which was assigned in blank by Miriam, and upon giving it to Levy the ensuing conversation took place:

Strilky: "Miriam called me this morning and wants me to give you the certificate of 350 shares of B stock. . . . What is all this about?"

Levy: "I talked to Miriam last night and Miriam wanted to put 300 shares of B stock in trust with some bank for Buddy [the plaintiff, Arthur Strilky]. I said, `why go to all that trouble and expense? Let me hold the stock and if something happens to you I will see that Buddy gets it and any time you want the stock returned you may have it.'"

Strilky testified that shortly after leaving this certificate assigned in blank with Levy he found a new certificate for 50 shares of "B" stock in Miriam's name on his desk, and he followed the usual procedure of having Miriam assign it in blank and placing the certificate in his strong box.

Plaintiff, Arthur Strilky, who was employed by Liberty as supervisor of several of its branches in Chicago, testified that when Levy was at the Strilky home during the holidays of December, 1946, plaintiff's mother told Levy that she was going to place 300 shares of "B" stock with a bank in trust for Arthur, and Levy suggested, "why go to all that time and trouble and expense? . . . I will hold the stock for Bud [plaintiff]. Any time you want it back, you can have it. In the event that anything happens, I will make sure that he gets it." Plaintiff testified that his mother replied something like "oh, that is a good idea, I will think it over, I.H." Plaintiff stated that a short time later his mother told him that she had given the certificate in question to Levy to be held in trust for him [Arthur].

Arthur Strilky also testified that there were no other conversations with his mother while she was living, or with Levy, about the stock. He stated that shortly after his mother passed away in October of 1951, he, for the first time, told Levy that he wanted the "B" stock returned. He testified that on a number of occasions during the years 1952, 1953 and 1954, he made similar demands of Levy, who advised him to wait because there was a pending deal to sell all of the "B" stock held by the Levy and Strilky families which would benefit plaintiff. Arthur said he agreed to wait. He testified further that in July, 1954, and on several occasions in 1955, he asked Levy to return the stock since the company had been sold, and Levy explained that a law suit was pending that might upset the deal and that he should wait, which plaintiff agreed to do. No other persons were present during any of these conversations. Plaintiff stated that in the fall of 1955 he and his uncle, Dr. Strilky, met with Levy in a ...

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