{ "id": 3344737, "name": "LEO CALLIER, Plaintiff-Appellee, v. SCOTT CALLIER et al., Defendants-Appellants", "name_abbreviation": "Callier v. Callier", "decision_date": "1978-07-13", "docket_number": "No. 76-164", "first_page": "1011", "last_page": "1016", "citations": [ { "type": "official", "cite": "61 Ill. App. 3d 1011" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "264 Ore. 614", "category": "reporters:state", "reporter": "Or.", "case_ids": [ 2133729 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/or/264/0614-01" ] }, { "cite": "74 A.2d 914", "category": "reporters:state_regional", "reporter": "A.2d", "year": 1950, "pin_cites": [ { "page": "918", "parenthetical": "\"Succinctly stated, a deadlocked corporation is one which, because of decision or indecision of stockholders, cannot perform its corporate powers\"" } ], "opinion_index": 0 }, { "cite": "9 N.J. Super. 401", "category": "reporters:state", "reporter": "N.J. Super.", "case_ids": [ 356779 ], "year": 1950, "pin_cites": [ { "page": "409", "parenthetical": "\"Succinctly stated, a deadlocked corporation is one which, because of decision or indecision of stockholders, cannot perform its corporate powers\"" } ], "opinion_index": 0, "case_paths": [ "/nj-super/9/0401-01" ] }, { "cite": "119 N.E.2d 563", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1954, "opinion_index": 0 }, { "cite": "307 N.Y. 1", "category": "reporters:state", "reporter": "N.Y.", "case_ids": [ 2234399 ], "year": 1954, "opinion_index": 0, "case_paths": [ "/ny/307/0001-01" ] }, { "cite": "320 N.E.2d 132", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1974, "opinion_index": 0 }, { "cite": "23 Ill. App. 3d 679", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2506828 ], "year": 1974, "opinion_index": 0, "case_paths": [ "/ill-app-3d/23/0679-01" ] }, { "cite": "170 N.E.2d 131", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1960, "opinion_index": 0 }, { "cite": "20 Ill. 2d 208", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2738498 ], "year": 1960, "opinion_index": 0, "case_paths": [ "/ill-2d/20/0208-01" ] }, { "cite": "141 N.E.2d 45", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1957, "pin_cites": [ { "page": "51" } ], "opinion_index": 0 }, { "cite": "10 Ill. 2d 566", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2724411 ], "weight": 2, "year": 1957, "pin_cites": [ { "page": "576" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/10/0566-01" ] }, { "cite": "134 N.E.2d 653", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1956, "opinion_index": 0 }, { "cite": "10 Ill. App. 2d 245", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5158740 ], "year": 1956, "opinion_index": 0, "case_paths": [ "/ill-app-2d/10/0245-01" ] }, { "cite": "208 N.E.2d 419", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1965, "opinion_index": 0 }, { "cite": "60 Ill. App. 2d 99", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2605167 ], "year": 1965, "opinion_index": 0, "case_paths": [ "/ill-app-2d/60/0099-01" ] }, { "cite": "147 N.E.2d 371", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1958, "pin_cites": [ { "page": "372" } ], "opinion_index": 0 }, { "cite": "13 Ill. 2d 45", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2775284 ], "year": 1958, "pin_cites": [ { "page": "48" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/13/0045-01" ] } ], "analysis": { "cardinality": 772, "char_count": 13335, "ocr_confidence": 0.883, "pagerank": { "raw": 1.5803003095707766e-07, "percentile": 0.680269776346034 }, "sha256": "677a954caafd77a785d0760a970c1eb42fab809b85fe014fcf494b91982dbc8f", "simhash": "1:328f5c47be14b284", "word_count": 2203 }, "last_updated": "2023-07-14T16:49:01.727672+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "LEO CALLIER, Plaintiff-Appellee, v. SCOTT CALLIER et al., Defendants-Appellants." ], "opinions": [ { "text": "Mr. JUSTICE WINELAND\ndelivered the opinion of the court:\nThis is an appeal from a judgment of the Circuit Court of St. Clair County ordering liquidation of the assets and business of All Steel Pipe and Tube, Inc., an Illinois corporation, pursuant to section 86(a)(1) of the Business Corporation Act of 1933, as amended (Ill. Rev. Stat. 1975, ch. 32, par. 157.86(a)(1)).\nThe complaint alleged that the directors of the corporation were deadlocked in the management of corporate affairs, that the shareholders were unable to break the deadlock, and that irreparable injury to the corporation was being suffered or threatened because of the deadlock, and prayed that the court liquidate the assets and business of the corporation. The answer admitted that there were differences of opinion between the two equal shareholders, but denied that there was a deadlock of directors or that irreparable injury had been suffered or threatened. The answer affirmatively alleged that the plaintiff was not entitled to relief because he had unilaterally terminated the operations of All Steel and established a \u201cmirror image\u201d corporation with many of All Steel\u2019s employees and customers. After a hearing, the court on January 12, 1976, entered its \u201cJudgment and Decree,\u201d finding that all the material allegations of the complaint had been proved, and ordering the appointment of a liquidating receiver pursuant to section 87 of the Business Corporation Act (Ill. Rev. Stat. 1975, ch. 32, par. 157.87). Post-trial motions filed within 30 days of the judgment were denied on March 15, 1976. Defendants\u2019 notice of appeal was filed on April 14, 1976.\nWe must first address plaintiff\u2019s contention that this court is without jurisdiction because the defendants\u2019 notice of appeal was not timely filed. Plaintiff argues that the January 12 order was an interlocutory one, and therefore, under Supreme Court Rule 307 (Ill. Rev. Stat. 1975, ch. 110A, par. 307), the appeal had to be perfected within 30 days of that order. We cannot agree, because we do not agree that the court\u2019s \u201cJudgment and Decree\u201d was an interlocutory order. The order in question decided all the material issues raised by the pleadings, and disposed of the entire controversy between the parties on the merits. (See, e.g., Village of Niles v. Szczesny, 13 Ill. 2d 45, 48, 147 N.E.2d 371, 372 (1958).) The mere fact that the court below retained jurisdiction to enter an order dissolving the corporation after liquidation and distribution of the corporation\u2019s assets does not make the order any less final. (Impey v. City of Wheaton, 60 Ill. App. 2d 99, 208 N.E.2d 419 (2d Dist. 1965).) Thus the notice of appeal filed within 30 days of the order denying the post-trial motions was timely, and the motion to dismiss this appeal is denied.\nThe facts necessary to an understanding of the merits of the appeal are as follows. All Steel Pipe and Tube is a close corporation formed in 1969 to engage in the business of selling steel pipes and tubes. The two equal shareholders, plaintiff-appellee Leo Callier and defendant-appellant Scott Callier, each made an initial investment of $500 in the corporation. Scott is Leo\u2019s uncle. Defendant-appellant Felix Callier, one of the two directors of the corporation, is Scott\u2019s father and Leo\u2019s grandfather. It is undisputed that Felix, who is in his 80\u2019s, is the \u201cnominee\u201d of Scott on the board of directors, and that he has never taken an active role in the day-to-day management of the business. Leo is the other director, and is president of the corporation. Scott\u2019s title is general manager; he was appointed to that position by unanimous resolution of the board, and can only be removed by the board.\nIncreasingly over the years of their business association, Scott and Leo had differences of opinion about various aspects of the operation of the company. Despite the steady deterioration of the owners\u2019 relationship, the company flourished. From about *200,000 in 1970, gross sales had increased to *25,000,000 a year in 1974.\nIn early 1975, the series of events leading to this litigation took place. Scott was involved in preparing and sending to each employee of the corporation, and each employee\u2019s spouse, a letter warning that \u201csocial and/or emotional and/or physical relationships between male and female employees for other than business purposes\u201d would thenceforth be grounds for immediate dismissal. This so called \u201cfraternization letter\u201d created a furor within the company, and resulted in Leo\u2019s informing Scott that he no longer wanted to be associated with him.\nNegotiations looking towards the redemption of Scott\u2019s shares by Leo began immediately, but despite the diligent efforts of their attorneys the parties could not reach an agreement. In April 1975, the discussion turned to voluntary dissolution and liquidation of the corporation, but still no agreement could be reached.\nOn April 30,1975, Leo sent a telegram to Scott purporting to fire him as general manager. On the next day, without any prior notice, Leo called all the employees together and announced that the business was being closed down immediately. During the next month, Leo began to wind down the business of All Steel. On May 5 he formed a new Delaware corporation, Callier Steel Pipe and Tube, Inc. On May 30, all operations at All Steel ceased. Callier Steel opened for business on June 2, employing about 40 of All Steel\u2019s previous employees. On June 11, Leo filed the complaint in the instant cause.\nThe issue on this appeal is whether the plaintiff sustained his burden of proof under section 86(a)(1) of the Business Corporation Act. The defendants contend that there was insufficient proof of either a deadlock or irreparable injury within the meaning of the Act to justify dissolution and liquidation of the corporation.\nCorporations, which are creatures of statute, can only be dissolved according to statute. (Central Standard Life Insurance Co. v. Davis, 10 Ill. App. 2d 245, 134 N.E.2d 653 (3d Dist. 1956), aff'd, 10 Ill. 2d 566, 141 N.E.2d 45 (1957).) As our supreme court said in the Davis case, \u201cCorporate dissolution is a drastic remedy, and the teachings of generations of chancellors admonish us that it must not be lightly invoked.\u201d 10 Ill. 2d 566, 576, 141 N.E.2d 45, 51; see also Gidwitz v. Lanzit Corrugated Box Co., 20 Ill. 2d 208, 170 N.E.2d 131 (1960); Glickauf v. Moss, 23 Ill. App. 3d 679, 320 N.E.2d 132 (1st Dist. 1974); 19 C.J.S. Corporations \u00a7\u00a71647, 1648 (1940).\nThe statute at issue here is as follows:\n\u201cCircuit courts have full power to liquidate the assets and business of a corporation:\n(a) In an action by a shareholder when it appears:\n(1) That the directors are deadlocked in the management of the corporate affairs and the shareholders are unable to break the deadlock, and that irreparable injury to the corporation is suffered or threatened by reason thereof 0 \u00b0 Ill. Rev. Stat. 1975, ch. 32, par. 157 \u2014 86(a)(1).\nSection 86(a)(1) has not been a frequently used basis for dissolution, presumably because of the \u201csubstantial problems of interpretation\u201d connected with its provisions. (C. Murdock, Illinois Business Corporation Act Annotated 481 (3d ed. 1975).) The terms deadlock and irreparable injury are both undefined and troublesome. It has been said that mere dissension among stockholders is not a ground for dissolution unless it is of such serious proportions as to defeat the end for which the corporation is organized. (See 19 C.J.S. Corporations \u00a71672, at 1447-1448 (1940); see also In Re Radom & Neidorff, Inc., 307 N.Y. 1, 119 N.E.2d 563 (1954); RKO Theatres, Inc. v. Trenton-New Brunswick Theatres Co., 9 N.J. Super. 401, 409, 74 A.2d 914, 918 (1950) (\u201cSuccinctly stated, a deadlocked corporation is one which, because of decision or indecision of stockholders, cannot perform its corporate powers\u201d). This formulation would seem consistent with the dictionary definition of the word deadlock:\n\u201cA counteraction of things producing entire stoppage; hence, a state of inaction or of neutralization caused by the opposition of persons or factions, as in a government or in a voting body.\u201d (Emphasis added.) Webster\u2019s New International Dictionary, Unabridged 674 (2d ed. 1956).\nAfter a careful review of the entire record, we have concluded that plaintiff\u2019s proof was insufficient to show either deadlock in the management of corporate affairs or the threat of irreparable injury to the corporation. What the evidence shows, instead, is two equal shareholders who were unable to get along and unable to reach agreement within a four-month period as to the redemption of one\u2019s shares by the other or to the terms of voluntary dissolution. This is not equivalent to an inability of the corporation to perform the functions for which it was created. Without adopting the position of defendants that the threat of irreparable injury can never be shown under this statute so long as a corporation is making a profit, we must agree with defendants that such a threat was not proved here.\nIt appears to us that Leo Callier simply decided that he was not going to have anything more to do with Scott Callier, and when their redemption-liquidation negotiations stalled, he made a unilateral decision \u2014 without consulting the other director or shareholder \u2014 to shut down the corporation. On the day that he informed the employees of the closing of the corporation, corporate affairs were being managed, and quite successfully. In fact, the company appeared on its way to the second best year of its history, despite a general downturn in the pipe industry. Neither Scott nor Felix Callier was interfering with the management of the corporation; Scott had in fact intentionally stayed away from the company and allowed Leo to run things alone while the redemption discussions were going on.\nThus, absent sufficient proof of the jurisdictional facts of deadlock and irreparable injury, the court below erred in ordering liquidation of the corporate assets.\nA further consideration impels us towards reversal of the trial court\u2019s decision. At the time that he was winding down the affairs of All Steel, Leo Callier was in the process of forming another company to carry on the same kind of business, with many of the same employees and the same customers. That company is now doing business; All Steel is not. Should we sanction what appears to be a flagrant breach of Leo\u2019s fiduciary duty as a director of All Steel, we would be permitting him to siphon off the going-concern value of All Steel, leaving the 50-percent shareholder who was opposed to dissolution with only half of whatever assets are in the control of the receiver. This, we think, would be manifestly unfair. See L. Miller, The New Illinois Close Corporation Law: A Preliminary Analysis, 66 Ill. Bar J. 378, 380-81 (1978).\nWe realize, of course, that merely by reversing the order of the court below we cannot revivify All Steel Pipe and Tube in this appeal. We cannot, however, sustain a judgment which is not founded on proof of the statutory requirements for dissolution and which permits one owner of a corporation to deprive one of who is an equal owner of his equal share of the corporate assets by means of self-help.\nAppellants in their brief would have us take certain steps in order to revitalize the corporation. There is little doubt that a court of equity has power to achieve a just result in such cases. (Baker v. Commercial Body Builders (1973), 264 Ore. 614, 507 P.2d 387.) We remain content at this time however to reverse the judgment of the trial court, leaving it to the further pleadings of the parties, and to the trial court to determine what further action should be decreed to fashion a fair and equitable remedy for the redress of the wrong done to appellants. Trial courts are ordinarily much better equipped to deal with such matters than are courts of appeal.\nFor the foregoing reasons the judgment of the Circuit Court of St. Clair County is reversed, and this cause is remanded to that court for further proceeding consistent with this opinion.\nReversed and remanded.\nG. J. MORAN and JONES, JJ., concur.\nWe note parenthetically that on October 1, 1977, the new Close Corporation Act came into effect. (Ill. Rev. Stat. 1977, ch. 32, par. 1202 et seq.) Section 14(a) of that Act requires before involuntary dissolution proof of deadlock, failure of any remedy provided in a written agreement of the shareholders, and \u201csuch internal dissension among the shareholders of the corporation that the business and affairs can no longer be conducted in the best interests of the shareholders.\u201d (Ill. Rev. Stat. 1977, ch. 32, par. 1214(a).) The profitability of the corporation will no doubt remain a touchstone of what is in the best interest of the shareholders, as making a profit is presumably the end for which a corporation is organized.", "type": "majority", "author": "Mr. JUSTICE WINELAND" } ], "attorneys": [ "C. Glennon Rau and James M. Martin, both of Rau & Martin, of Waterloo, for appellants.", "Gene M. Zafft, Merle L. Silverstein, and Steven J. Stogel, all of Rosenblum, Goldenhersh, Silverstein & Zafft, of Clayton, Missouri, and David J. Letvin, of Cohn, Carr, Korein, Kunin & Brennan, of East St. Louis, for appellee." ], "corrections": "", "head_matter": "LEO CALLIER, Plaintiff-Appellee, v. SCOTT CALLIER et al., Defendants-Appellants.\nFifth District\nNo. 76-164\nOpinion filed July 13, 1978.\nRehearing denied August 1, 1978.\nC. Glennon Rau and James M. Martin, both of Rau & Martin, of Waterloo, for appellants.\nGene M. Zafft, Merle L. Silverstein, and Steven J. Stogel, all of Rosenblum, Goldenhersh, Silverstein & Zafft, of Clayton, Missouri, and David J. Letvin, of Cohn, Carr, Korein, Kunin & Brennan, of East St. Louis, for appellee." }, "file_name": "1011-01", "first_page_order": 1033, "last_page_order": 1038 }