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Weiland Tool & Mfg. Co. v. Whitney

OCTOBER 7, 1968.






Appeal from the Circuit Court of Cook County, County Department, Law and Chancery Divisions; the Hon. B. FAIN TUCKER and the Hon. EDWARD G. EGAN, Judges, presiding. Affirmed in part, reversed in part, and modified with directions.


The present appeal, arising from a judgment entered in the Circuit Court of Cook County on a trial of the counterclaim raised by Hexarmour Company and Emerson C. Whitney to the original complaint of Weiland Tool & Manufacturing Company, represents the culmination of a twelve-year history of litigation. Plaintiff and counterdefendant will be referred to herein as "Weiland," and defendants and counterplaintiffs will be referred to collectively as "Whitney."

Action in this matter was initiated in August of 1956 by Weiland to foreclose a common-law lien upon certain machinery delivered to Weiland by Whitney pursuant to a contract between them and to recover damages from Whitney for alleged breach of the contract, according to which Whitney was to furnish machinery which, after installation and certain adjustment (this term later produced a plethora of problems), would be suitable for the production of a product known as "Hexarmour," supply the steel for the production thereof, pay certain costs in connection with delivering the machinery to Weiland's plant, exercise his best efforts to merchandise and sell Hexarmour, and pay Weiland twenty-two cents for every foot of Hexarmour sold.

Whitney filed an answer and a counterclaim in which he asserted that Weiland was liable to him for damages because of fraud and deceit in inducing him to make the contract, breach of the contract, and conversion of Whitney's property. Weiland answered the counterclaim and the matter was referred to the Master-in-Chancery.

After the closing of proofs, the Master rendered his report finding for Weiland and against Whitney on the contract and assessed the reimbursements to which Weiland was entitled. The trial court subsequently entered a decree determining the amount due to Weiland from Whitney, directing its payment, or in the alternative a sale of the machinery, dies and steel in Weiland's possession at a public auction for the purposes of paying the sum so found to be due, and denying relief on Whitney's counterclaim.

Whitney appealed to this court and Weiland cross-appealed, asserting error in denial of his claim for loss of profits due to business interruption. This court reversed the decree of the trial court, holding that there was a complete written contract between the parties, contained in Whitney's letter of July 9, 1954, and the two letters of July 14, 1954; that this contract required Weiland to assume the expense of putting the machinery furnished by Whitney into production and to manufacture Hexarmour, and that Weiland breached the contract by demanding that Whitney pay for expenses which Weiland was obliged to pay as well as Weiland's failure to make the product as specified. Weiland Tool & Mfg. Co. v. Whitney, 40 Ill. App.2d 70, 188 N.E.2d 756. The cause was then remanded to the trial court for disposal of Whitney's counterclaim on the issue of damages in accordance with the views expressed in our opinion.

After a denial of a petition for rehearing, Weiland filed a timely petition for leave to appeal to the Supreme Court of Illinois. Whitney filed a motion to dismiss Weiland's petition on the ground that the judgment was not final as required by section 75(2)(c) of the Illinois Civil Practice Act governing such petitions. The Supreme Court granted Whitney's motion.

Upon remand an order was entered dismissing Weiland's complaint for want of equity, pursuant to the decision of this court, and retaining jurisdiction for disposition of the counterclaim. Issue was joined in the second amended counterclaim, and the cause was transferred to the Law Division of the Circuit Court of Cook County, Illinois. The second amended counterclaim combined tort actions for trover and conversion, fraud and deceit, extortion, duress, slander of title and larceny by bailee with a contract action for loss of profit and the recovery of expenses allegedly incurred in the performance of Whitney's obligations under the contract. An answer and reply thereto were duly filed.

After hearing evidence, the trial court, sitting without a jury, found that Whitney was entitled to recover on his counterclaim only for conversion of the machinery and the steel involved. The trial court found that the conversion took place on August 23, 1956, and that damages for the conversion of all the equipment, other than the steel should be fixed "quite arbitrarily," at $2,000, and, for the conversion of the steel, at its 1953 purchase price of $17,955. Predicated thereon, the court entered judgment in favor of Whitney and against Weiland in the amount of $19,955 and costs.

Thereupon, Weiland appealed from the decree dismissing the complaint for want of equity and from the judgment entered on the counterclaim, and Whitney cross-appealed. The issues on this appeal involve the propriety of this court's opinion on the prior appeal, the propriety, as a matter of law, of the finding that the counterdefendant, who had retained possession of the machinery and steel claimed to have been converted under the belief that he had a valid lien thereon, was guilty of conversion, and the proper amount of damages; and a determination of the alleged legal errors related to the trial of Whitney's counterclaim actions. No questions are raised on the pleadings.

Further details of the contract between the parties and a closer presentation of the significant facts involved in this case are contained in the record of the prior appeal, 40 Ill. App.2d 70, 188 N.E.2d 756 (1963), to which we shall make liberal reference throughout this opinion.

Turning first to the dismissal of Weiland's complaint in the trial court for want of equity, appellant invokes this court's attention to matters of liability which were first raised and determined by us on the former appeal. Recognizing that the doctrine of the "law of the case" is applicable in Illinois, Weiland argues that this court was palpably in error as to certain matters of substantive law on the former appeal, and we should now take exception to the doctrine by a reexamination of the issues.

When there is an identity of particular issues, facts and evidence from the first to the second appeal, the decision of the former appeal is binding upon us on a second appeal, regardless of whether our former decision is right or wrong. Gillum v. Central Illinois Public Service Co., 250 Ill. App. 617.

Appellant relies heavily on two recent Illinois Appellate Court cases for the proposition that where a decision of a reviewing court is palpably erroneous, the reviewing court may disregard its opinion on the prior appeal and redetermine the issue. Sjostrom v. Sproule, 49 Ill. App.2d 451, 200 N.E.2d 19; Proesel v. Myers Pub. Co., 48 Ill. App.2d 402, 199 N.E.2d 73. However, an examination of the facts in each of these cases reveals that these exceptions to the doctrine of the law of the case followed upon a contrary ruling by our Supreme Court on the precise issues of law which the appellate courts had based their former decisions. Such an exception to the rule of the law of the case is clearly desirable. Subsequent correction of the decision in a former appeal by an appellate court after contrary authority from a higher court whose rulings of law are controlling makes appeal to the Supreme Court unnecessary and actually brings an end to litigation.

Illinois recognizes a second exception to the doctrine of the law of the case. In Presbyterian Distribution Service v. Chicago Nat. Bank, 36 Ill. App.2d 1, 183 N.E.2d 525, the court examined the posture of the law on this question and uncovered a line of cases permitting correction of a former holding by an appellate court where a higher court has announced contrary law in the interval between appeals, and another exception where the prior decision is found to be palpably erroneous. 36 Ill. App.2d 1 at 3. However, in applying this latter exception, the court expressly limited departure from the law of the case to the situation where the case was remanded by the appellate court for a new trial of all the issues. There the court would be reaching a different decision upon an appeal from a judgment entered upon a second trial. Such facts are not present in the case before us. Here the second trial was expressly limited to a consideration of the counterclaim.

After a careful examination of the record and consideration of the briefs and arguments, if this division of the Appellate Court were, in the first instance, deciding the appeal, our holding would be in accordance with the views expressed in the dissenting opinion filed in the prior appeal. However, in view of the cases above cited, we cannot reverse the prior ruling.

Affirmance of this judgment on the ground that the former appellate decision has become the law of the case does not bind the Supreme ...

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