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Chaitman v. Enm Company

OCTOBER 5, 1973.

BERNARD C. CHAITMAN, PLAINTIFF-APPELLEE,

v.

ENM COMPANY, INC., DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. RAYMOND E. TRAFELET, Judge, presiding.

MR. PRESIDING JUSTICE DRUCKER DELIVERED THE OPINION OF THE COURT:

Plaintiff as assignee for the benefit of creditors under a common law assignment for benefit of creditors filed suit for $7526.55 for merchandise ordered by and delivered to defendant. Defendant filed an answer denying the alleged transactions and denying that any sums were due as a consequence of the alleged transactions and also filed a counterclaim.

The counterclaim alleged that plaintiff's assignor owed defendant $28,146.75 for counseling services, $3919.98 for goods and services and $19,489.63 for monies paid by defendant on behalf of assignor on a guaranteed loan. On November 3, 1971, plaintiff filed a motion to dismiss the counterclaim. No hearing was held. On February 3, 1972, plaintiff filed an amended complaint. Thereafter defendant requested leave to file an answer and amended counterclaim to plaintiff's amended complaint.

The record does not contain any transcript of the proceedings. Briefs were filed in the trial court regarding the sufficiency of the amended counterclaim.

On May 25, 1972, the following order was entered:

"Now comes the defendant herein and moves the Court for leave to file an amended answer and counter-claim and the Court being fully advised in the premises, denied said motion.

Now comes the plaintiff and moves the Court for summary judgment and the Court being fully advised in the premises, sustained said motion and thereupon it is ordered by the Court that judgment be and the same is hereby entered against defendant ENM COMPANY, INC., a Corporation, and assesses damages in the sum of SEVENTY FIVE HUNDRED TWENTY SIX AND 25/100 DOLLARS ($7526.25) in form as aforesaid assessed, together with the costs by the plaintiff herein expended and that execution issue therefor."

On June 20, 1972, the order of May 25 was modified and the following order was entered:

"1. That the Order of this Court of May 25, 1972, in the above-captioned matter be and is modified to read in its entirety as follows:

`Motion for leave to file Amended Answer and Counterclaim is hereby denied and Defendant takes nothing by way of counterclaim or set-off and goes hence without day. It is expressly found that there is no just reason for delaying appeal of this order.'

2. That Defendant is ordered to file an amended answer in fourteen days."

Defendant appealed from this order.

OPINION

• 1, 2 It is apparent from the record that the court denied defendant leave to file the amended answer and counterclaim because it agreed with plaintiff's (counter-defendant's) argument submitted in a memorandum to the court "that a creditor of an assignor who has assigned its assets to an assignee for the benefit of creditors can bring no legal action against the assignee." Reliance was placed on Hexter v. Loughry, 6 Ill. App. 362, which is also cited in this court. In Hexter creditors of an insolvent who had made an assignment for the benefit of creditors sued the assignee for the money due them. The form of action used was assumpsit (money had and received). The court held that an action of assumpsit would not lie against the assignee until there had been a determination as to the pro rata share of the insolvent's estate each creditor was to receive, a dividend declared and a refusal to pay by the assignee. Rather, a bill in equity was the proper method of determining a creditor's pro rata share. In the case at bar ...


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