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Saikin v. New York Life Ins. Co.





APPEAL from the Circuit Court of Cook County; the Hon. FRANCIS T. DELANEY, Judge, presiding.


Minnie Saikin, plaintiff, was the owner of four life insurance policies issued by the New York Life Insurance Company (New York Life), the defendant. New York Life made cash advances of $9243 on the basis of four applications for advances under forged signatures of Minnie Saikin apparently by her husband, Samuel Saikin. Minnie Saikin was a partner with Samuel Saikin and with her sons, Bertram, Leslie and Joel, d/b/a Biological Research Products Co. (Biological). The cash advances were sent to Minnie Saikin at an address which was the same address as the business address of Biological. These checks were deposited with forged endorsements in Biological's checking account.

Minnie Saikin filed suit against New York Life asking that the loans be declared null and void and sought to have the policies reinstated. She was successful in her suit and this appeal by New York Life follows.

New York Life filed counterclaims and third-party actions against Minnie Saikin, Samuel Saikin, Bertram Saikin, Leslie Saikin and Biological Research Products Co. New York Life's actions were based on certain sections of the partnership act and also on a claim of unjust enrichment. Joel Saikin was not named in the suit and Leslie Saikin was not served. Judgment was entered in favor of Minnie Saikin, Bertram Saikin and Biological and against New York Life on these counts. New York Life also appeals from that judgment. The record does not reveal the disposition of the action of New York Life under these theories against Samuel Saikin.

There was also a claim by New York Life against Samuel Saikin based on the forgeries of the applications and endorsements for which it received a judgment. There is no appeal from that judgment.

On December 31, 1965, Minnie Saikin entered into a partnership agreement with her husband, Samuel Saikin and her sons, Bertram, Leslie and Joel in a partnership known as Biological Research Products Co. Prior to that agreement, Minnie had operated this business with her husband for at least 15 years. The partnership was engaged in the preparation of anatomical and embryological specimens for use in schools and colleges. Minnie Saikin took an active part in the business management of Biological until at least June 12, 1970. She was in charge of the bookkeeping while her husband handled production. From the inception of the partnership both Minnie Saikin and Samuel Saikin were signatories on the partnership bank account at the East Side Bank in Chicago and both had authority to borrow money for the partnership.

On June 12, 1970, at the office of Biological, Samuel Saikin handed Minnie Saikin four application forms for cash advances against the policies and asked her to sign them. Minnie Saikin did not do so and consulted her attorney. She never did file any document with New York Life or any of its agents that would authorize New York Life to honor any signature other than her own. Although Minnie Saikin did not remember at trial any discussions with her husband relating to the reason why he wanted her to obtain cash advances on her policies, she answered an interrogatory that Samuel Saikin needed the money allegedly for Biological. In 1967 at the request of Samuel Saikin, Minnie Saikin did borrow on the policies and lent it to the partnership. She did not know if the money was repaid.

On June 25, 1970, New York Life received four applications for cash advances with a transmittal letter on the stationery of Biological. Both the letter and the applications contained the purported signature of Minnie Saikin. When the money was deposited in the account of Biological there was a balance of slightly over $900. Two weeks after the checks were deposited the Biological checking balance was $69.11. Minnie Saikin contends that the checks issued from that account were for both partnership and personal debts of Samuel Saikin. The only personal debt alleged is to an attorney for $1000. That attorney testified that he had performed legal services for the partnership and for Samuel Saikin, personally, but was unable to ascertain which client owed the $1000 fee.

We will first consider the counterclaims and third-party claims of New York Life. New York Life contends that it was entitled to a judgment against Biological, Bertram and Minnie Saikin under sections 13, 14 and 15 of the Uniform Partnership Act (Ill. Rev. Stat. 1969, ch. 106 1/2, pars. 13, 14 and 15). Those sections provide:

"§ 13. Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership, or with the authority of his co-partners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act." (Emphasis added.)

"§ 14. The partnership is bound to make good the loss:

(a) Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and

(b) Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in ...

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