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FIFTH DIVISION
August 24, 2001

First National Bank of Northbrook, as trustee under trust agreement No. 274 (First National), held title to a parcel ofreal estate in Northbrook, Illinois, pursuant to the terms of atrust agreement dated November 9, 1984, which designated LilyGross (Lily) as the owner of the beneficial interest and theholder of the power of direction. Some time thereafter, FirstNational, as trustee, executed a mortgage in the sum of $210,000and an instrument creating a line of credit in the sum of$125,000 encumbering the premises that were the subject matter ofthe trust. These loans were granted by Success National Bank(Success).

The letters of direction to First National that directed theexecution of the security documents, seemingly executed by Lily,the holder of the power of direction, were apparently forged byher husband, Jeffrey Gross (Jeffrey), without the authority orapproval of Lily.

Ultimately, Success secured a judgment of foreclosure and ajudicial sale by reason of the default of the indebtednessevidenced by the security documents.

Lily filed a complaint against First National for breach offiduciary duty as trustee and for negligence in connection withthe execution of the several security documents.

First National thereafter filed a counterclaim againstJeffrey and Success, the lender, seeking indemnity from any sumsit might have to pay to Lily. All of these matters wereconsolidated into a single action which included the dissolutionof marriage between Jeffrey and Lily.

The essence of First National's claim against Success isthat Success delivered the mortgage documents and forged letterof direction to First National and that First National reliedupon Success's somehow warranting that the letter of directionwas signed by the appropriate party.

The trial court entered summary judgment in favor ofSuccess. Although First National initially alleged that Successhad delivered the loan documents and letter of direction to it,its employee, in a deposition, in response to the question "Doyou know how this letter of direction came to you?", answered"No." Thereafter the same employee filed an affidavit stating:"In conformity with the foregoing practice and custom *** SuccessNational Bank submitted to Northbrook *** the loan documents."

The trial court determined that the employee's original answer of"No" estopped First National from submitting the affidavit.

Apparently, First National believes that there is somewiggle room in the word "no" and that "no" was not a judicialadmission.

Clearly if the initial testimony had been ambiguous orunclear, the employee's subsequent affidavit might not have beencontradictory, but there is little room for doubt as to themeaning of the word "no." It seems clear and unequivocal.  Tongate v. Wyeth Laboratories, 220 Ill. App. 3d 952 (1991);Schmall v. Village of Addison, 171 Ill. App. 3d 344 (1988).Moreover, the later pronouncement is so speculative in its naturethat it is hardly likely to establish an additional fact whichwould have to be submitted to the trier of fact. The affiantdoes not offer any chain of circumstances that showed thatSuccess submitted the documents to First National, but, rather,she merely states that it is First National's "custom andpractice" as to who is assumed to have delivered the documentsand the manner of delivery of the documents. It is unclearwhether the documents came by mail or personal delivery, or were delivered by Jeffrey, or delivered by Success, or might have beendelivered by Jeffrey's counsel. The witness just does not knowand answered truthfully when she said "No."

Success cites Schmall v. Village of Addison, 171 Ill. App.3d 344 (1988), which identified subsequent testimony inconsistentwith earlier testimony and holds that the earlier testimony mustbe "deliberate, repeated and unequivocal." Again, we note thatthe word "no" is certainly unequivocal and deliberate. Additionally, in the deposition testimony the witness was asked,"[D]o you know how this letter of direction came to you?" whichwas answered by the witness "No," and the witness was againasked, "You don't know how you received it, is that correct?" andagain the witness answered "No."

Accordingly, the court was correct in determining thewitness's original answer was a judicial admission. Moreover,the deposition testimony of First National's employee makes itclear that the trustee did not rely on the fact that Success hadtendered documents but, instead, the trustee "would look at thetrust agreement and compare it to the letter of direction" andwould have looked at Lily Gross's signature on the trustagreement and compared it with the signature on the letter ofdirection.

Even if we were to give credibility to First National'semployee's statement, its argument would still fail. In thesecurity documents, First National expressly warrants to Successthat it has authority to act as trustee. For example, themortgage granted by First National, as trustee, states:

"(b) Grantor has full right, power and authority to execute and deliver this mortgage to the lender"

and

"Grantor hereby warrants that it possesses full power and authority to execute this instrument."

The instrument then goes on to indicate that all of the otherwarranties provided in the instrument are not personal warrantiesbinding on the grantor, personally, and all of the otherundertakings in the mortgage are "expressly waived by lender" as far as the grantor (trustee, First National).

Accordingly, by the very terms of the mortgage, the warrantythat it possesses full power and authority to execute theinstrument is expressly made to the lender (Success). Theinstrument creating the revolving credit loan contains a similarwarranty that the instrument is executed "in the exercise ofpower and authority conferred upon and vested in it as suchtrustee." See La Salle National Bank v. Federal EmergencyManagement Agent, No. 84 C 9066, (N.D. Ill. July 26, 1985).

 "An Illinois land trust is a unique creature of Illinois law whereby real estate is conveyed to a trustee under an arrangementreserving to the beneficiaries the full management and control of the property.

The trustee executes deeds, mortgages or otherwise deals with the property at the written direction of the beneficiaries. The beneficiaries collect rents, improve and operate the property and exercise all rights of ownership other than holding or dealingwith the legal title.... While legal title to the real estate is held by the trustee, the beneficiaries retain 'the power of direction' to deal with the title, to manage and control the property, to receive proceeds from sales or mortgages and all rentals and avails on the property. The trustee agrees to deal with the res of the trust only upon written direction of the beneficiaries.... The trustee is not required to 'inquire' into the propriety of any 'direction' received from the authorized person...." La Salle,slip op. at ____, quoting Robinson v. Chicago National Bank, 32Ill. App. 2d 55, 58 (1961) (in its description of Illinois landtrusts).

The trustee accordingly is a mere vessel of title. Itexercises no control over the property and only acts according tothe beneficiaries' directions. People v. Chicago Title & TrustCo., 75 Ill. 2d 479 (1979). Accordingly, the single warranty orrepresentation that a trustee makes upon execution of documentsis that it has the power and authority to appropriately executethe instruments.

Therefore, we would affirm the summary judgment entered bythe trial court in favor of Success.

Affirmed.

[The unpublished material under SupremeCourt Rule 23 removed here]

QUINN, P.J., and THEIS, J., concur.