Searching over 5,500,000 cases.

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.

Gossett v. Levy

JANUARY 18, 1963.




Appeal from the Circuit Court of Cook County; the Hon. JACOB M. BRAUDE, Judge, presiding. Affirmed.


Rehearing denied April 4, 1963.

This is a chancery action by Gretchen Levy Gossett and her four children, Judith Levy Russell, William Isaac Levy, Albert Ladd Levy and Morris Alexander Levy, seeking to establish an oral express trust between the children's deceased father, Melvin A. Levy, and Melvin's older brother, Isador H. Levy. *fn1 The trust was alleged to have been established in 1940, when Melvin transferred to Isador a certificate, endorsed in blank, evidencing ownership of 334 shares of Class "B" stock in defendant Liberty Loan Corporation. Liberty had been organized by Isador in 1932 and a substantial majority of the Class "B" stock was owned by the Levy family until 1954, when the stock was sold to another finance company. Isador was President of Liberty from its inception until 1954. At the time of his death, in May, 1942, Melvin was an employee of Liberty.

Reference was made to a Master in Chancery, who, after a hearing on the issues raised, found that plaintiffs had failed to establish the alleged trust by a preponderance of the evidence and recommended the suit be dismissed for want of equity. Exceptions to the report were overruled by the Chancellor and the case was dismissed. Plaintiffs now appeal.

Plaintiffs' assertion that a trust had been established was supported by the testimony of two witnesses at the hearing before the Master: Gretchen Levy Gossett and Louis Strilky, a brother-in-law of Isador.

Strilky's testimony was that in December of 1939, Melvin brought to the Liberty office certificate number 24, which was for 334 shares of Liberty Class "B" stock. He asked Strilky, who was then an officer of Liberty, about transferring ownership of the stock to Gretchen and the four children. Strilky said he told Melvin to see Isador, and a short time later, Strilky said Melvin told him that Isador was going to hold the shares in trust for the benefit of Gretchen and the children in the event anything should happen to him (Melvin). This was the extent of Strilky's testimony concerning the alleged trust. On cross-examination, Strilky admitted he was a witness in another lawsuit (then still in litigation) between his son and Isador, wherein his son had sued Isador in an effort to establish an oral trust concerning Liberty stock. (See Strilky v. Levy, 33 Ill. App.2d 91, 178 N.E.2d 694.) Strilky testified he first met Gretchen at Melvin's funeral. He said he next saw Gretchen in the Liberty office in 1949, but no conversation took place between them. He further testified that Gretchen telephoned him in 1958, "to find out how I was feeling and how Isador was." He said he told her he had not talked to Isador for quite a while and that, "we had a little trouble with Isador, my son did." He then informed her of the litigation between his son and Isador. By his own testimony, Strilky never talked to Gretchen about the alleged trust and had not talked to Isador since 1955.

Gretchen's testimony was as follows:

She met Melvin in the later 1920's when they both worked at the Joliet office of Central States Finance Corporation (the predecessor of Liberty). In the fall of 1929, Melvin returned to Chicago and a short time later, was joined by Gretchen. They lived together at various places in Chicago until 1936, when they moved to a farm in Monticello, Indiana. The other four plaintiffs were born between 1932 and 1940. Melvin and Gretchen rented the farm until 1939, when Melvin purchased it on contract for $8,000. From 1936, until his death in 1942, Melvin divided his time between Chicago and Monticello; the weekdays were spent in Chicago and the weekends in Monticello with Gretchen and the children. Gretchen testified that Melvin kept the certificate for 334 shares of Liberty in a metal box at the farm until some time before his death, when he took the certificate to Chicago. Melvin died suddenly, of a heart attack, May 31, 1942. At this time his children ranged in age from two to eight years. A week after Melvin's death, Isador, accompanied by another brother, Harry, went to the farm in Monticello to pick up a company car Melvin had taken to the farm. While they were at the farm, Isador had a conversation with Gretchen, and in the course of that conversation, Gretchen said she inquired about the stock. She said Isador told her that they were not to get the stock until the youngest child reached twenty-one. Gretchen insisted that Melvin told her that, "he turned the certificate over to [Isador] to hold in trust for her and the children and that in the event something happened to him, [Isador] was to turn the certificate over to her and the children." Gretchen then expressed concern as to how she and the children would manage. Isador told her he would make arrangements to help Gretchen maintain her family and home. Nothing further was said about the alleged trust.

Gretchen said she next spoke to Isador about the trust in 1949, when she said she went to Chicago to see Isador about borrowing $1,000. She said she told Isador she wanted to use the stock as collateral for the loan but that Isador told her Liberty did not make loans on stock. Arrangements were then made to allow Gretchen to borrow $1,000 on her automobile. Gretchen said she next contacted Isador about the trust in 1954, when she learned, from her sister, that Liberty had been sold to another firm. She asked Isador, "what about the money for the stock," and she stated, Isador told her that only the Class "B" stock was being sold, but that no money would be available for at least two years because the sale was the subject of litigation. Finally, in 1959, she said she learned of the litigation between Strilky's son and Isador and after contacting Strilky's attorney, this suit was instituted.

Defendants' explanation of the transfer of stock consisted primarily of Isador's testimony. However, his testimony was substantiated by the testimony of Tessie Levy (Melvin's wife), Harry Levy (Melvin's and Isador's brother), Samuel C. Simons (an ex-employee of Liberty) and Norman D. Curtis (the auditor of Liberty's books).

Isador's testimony was as follows:

He refuted only one part of Gretchen's testimony as to what transpired prior to 1939. Isador said that Melvin, after he left the Joliet office of Central States, briefly worked for another loan company, and while employed there, was threatened with prosecution for failure to account for company funds. Isador said he made a personal loan to Melvin to make up the shortage and the threatened prosecution was avoided.

In July of 1939, when Melvin decided to purchase the farm in Monticello, he asked Isador for a loan of $1,500 to use for a down payment. It was agreed that Melvin would get a $1,500 loan from Liberty in return for Melvin's collateral note for that amount with Melvin's stock in Liberty to be the collateral. This was done, the collateral being delivered in January of 1940. (In 1939, Central States was being liquidated; Central stock being replaced with Liberty stock. Melvin owned 1,000 shares of Central stock for which he received the 334 shares of Liberty. The liquidation proceedings were the cause of the delay in delivering the collateral.) At the time of Melvin's death in 1942, there was a balance due of over $800 on this note.

In February of 1942, Melvin asked Isador for a loan of $1,000 to use for the purchase of cattle for the farm. This loan was also made by Liberty, Melvin executing a promissory note for the amount. This loan was unpaid at Melvin's death and Liberty's records show it was written off as uncollectable in 1943. In addition to the above loans, Isador testified that he had, over the ...

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.