{ "id": 3120692, "name": "Lanzit Corrugated Box Company et al. On appeal of Michael Gidwitz and Jacob Gidwitz, Appellants, v. Lillian Cohn and Maurice A. Barancik, Appellees", "name_abbreviation": "Lanzit Corrugated Box Co. v. Cohn", "decision_date": "1925-10-06", "docket_number": "Gen. No. 30,101", "first_page": "227", "last_page": "232", "citations": [ { "type": "official", "cite": "238 Ill. App. 227" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "42 Atl. 1078", "category": "reporters:state_regional", "reporter": "A.", "pin_cites": [ { "page": "1079" } ], "opinion_index": 0 }, { "cite": "5 Ill. 269", "category": "reporters:state", "reporter": "Ill.", "opinion_index": 0 }, { "cite": "20 Ill. 197", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2596205 ], "opinion_index": 0, "case_paths": [ "/ill/20/0197-01" ] }, { "cite": "195 Ill. 152", "category": "reporters:state", "reporter": "Ill.", "opinion_index": 0 }, { "cite": "288 Fed. 829", "category": "reporters:federal", "reporter": "F.", "case_ids": [ 3614952 ], "opinion_index": 0, "case_paths": [ "/f/288/0829-01" ] }, { "cite": "303 Ill. 154", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5005087 ], "weight": 2, "pin_cites": [ { "page": "167" } ], "opinion_index": 0, "case_paths": [ "/ill/303/0154-01" ] }, { "cite": "289 Ill. 413", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 4964138 ], "pin_cites": [ { "page": "420" } ], "opinion_index": 0, "case_paths": [ "/ill/289/0413-01" ] }, { "cite": "204 Ill. 229", "category": "reporters:state", "reporter": "Ill.", "opinion_index": 0 }, { "cite": "171 Ill. 480", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3176705 ], "opinion_index": 0, "case_paths": [ "/ill/171/0480-01" ] }, { "cite": "155 Ill. 491", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 839755 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ill/155/0491-01" ] }, { "cite": "189 Ill. 414", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5570566 ], "opinion_index": 0, "case_paths": [ "/ill/189/0414-01" ] } ], "analysis": { "cardinality": 519, "char_count": 8714, "ocr_confidence": 0.528, "pagerank": { "raw": 1.0678041250728425e-07, "percentile": 0.5589619317574114 }, "sha256": "1c28948bba8c08250fe478ca6f08575b744a77be7e5fea278248341b040c9edf", "simhash": "1:3ee09113363cfd75", "word_count": 1462 }, "last_updated": "2023-07-14T20:00:21.859488+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Lanzit Corrugated Box Company et al. On appeal of Michael Gidwitz and Jacob Gidwitz, Appellants, v. Lillian Cohn and Maurice A. Barancik, Appellees." ], "opinions": [ { "text": "Mr. Presiding Justice Barnes\ndelivered the opinion of the court.\nThis is an appeal by Michael Gidwitz and Jacob Gidwitz, two of the original complainants in a bill of equity, from a decree dismissing the bill for want of equity upon a demurrer thereto filed by defendants, appellees, after the bill had been dismissed as to a third complainant, the Lanzit Corrugated Box Company.\nError is assigned by appellants not only as to dismissal of the bill as to them but as to said company. The company did not appeal, and it is settled practice that an appellant cannot assign error, for another party to the record.\nBut the order was proper, it appearing affirmatively without question, partly by the bill and partly by affidavit, that the suit was being prosecuted in the name of the company without lawful authority. It appeared that its secretary had no authority, by virtue of his office or by implied or express delegation, to sign the bill or institute the suit, and any presumption that the attorney who entered his appearance for the company was retained for that purpose was repelled by the undisputed facts set forth in the affidavit. (Bell v. Farwell, 189 Ill. 414.)\nWith the company eliminated as a party, the bill becomes one in which two of its stockholders seek in effect the dissolution of a solvent corporation. The bill asks for the appointment of a receiver pendente lite to conduct the business of the corporation and that its assets be sold and the proceeds be used first to pay the creditors and then in distribution to the stockholders, and for an injunction restraining defendants from injuring the corporation or its business. From the averments of the bill it would appear that the corporation is still functioning, and that it is solvent and \u201ca successful dividend paying concern.\u201d\nThe occasion for filing the bill is found in the facts that difference and a \u201cdeadlock\u201d have arisen between complainants, who own half of the company\u2019s stock, and defendants, who own the other half. The directors are complainant, Michael Gidwitz, and defendant, Lillian Cohn, the widow of Charles Cohn, who at the time of his death was the third director and president. The deadlock has arisen from the failure to fill the vacancy caused by his death, complainants being unwilling to elect another member of the Cohn family as director and president of the corporation, and defendants unwilling to elect another member of the Gidwitz family to such positions. It is alleged that such condition \u201cmay develop to such extent as to cause injury to persons extending credit to the corporation.\u201d\nIt is further alleged that defendants have entered into a conspiracy, which, from the averments, consists mainly in demanding an examination of the corporation\u2019s books, papers, vouchers, etc., at a time and in a manner alleged to be \u201cembarrassing\u201d to the conduct of the business and \u201cunreasonable,\u201d and in Lillian Cohn\u2019s revoking the authority she gave as a director to pay Michael Gidwitz a salary of $12,000 a year and in defendants\u2019 informing the bank, where the company keeps its deposit account, of that fact. The alleged object of the conspiracy seems to be either to force complainants to sell a portion or all of. their stock or to secure a place for defendant Barancik in the corporation. But we fail to see in the facts constituting the alleged conspiracy any ground for equitable relief.\nIn view of such deadlock and conditions it is alleged that the corporation can no longer \u201cproperly\u201d function, although it is admittedly functioning, and that \u201csaid condition may be detrimental not only to the stockholders of this corporation but to possible creditors of the corporation,\u201d and that as it Would be \u201cimpossible\u201d for either party to buy the stock interest of the other, the only possible way to remedy the conditions is to have the corporation managed by the court and sold at public sale and the proceeds used as above stated.\nViewing the bill of complaint as one seeking the dissolution of the -corporation, it was repugnant to the demurrer, first, because, as said in People v. Weigley, 155 Ill. 491: \u201cIt is well settled by the decisions of this court as well as the authorities generally, that courts of chancery are without jurisdiction to decree the dissolution of corporations, except in so far as that jurisdiction is conferred by statute.\u201d (See also, Coquard v. National Linseed Oil Co., 171 Ill. 480-485; Lincoln Park Chapter v. Swatek, 204 Ill. 229; Blanchard Bro. & Lome v. S. G. Gay Co., 289 Ill. 413, 420; Abbott v.. Loving, 303 Ill. 154; Goldman v. McKey, 288 Fed. 829; Tresslev. Union Fuel Co., 238 Ill. App., post.) Most of these cases were decided with reference to the remedy furnished by section 25, eh. 32, of the Illinois Statute, wMch is similar to sections 53 and 54, eh. 32, of the present Illinois Corporation Act (Cahill\u2019s St. 1925, p. 622). That remedy, however, is in favor of creditors only, and has application only to insolvent corporations. (See People v. Weigley, supra.) The bill fails to allege either that the corporation has creditors, or that it is insolvent. On the contrary its averments clearly indicate that it is solvent.\nSection 54 of the present Corporation Act provides:\n\u201cCourts of equity shall have full power, on good cause shown, to dissolve or close up the business of any' corporation, to appoint a receiver therefor # * * >>\nLike language is found in section 25 of the former Act. The words \u201cgood cause shown,\u201d as there used, have been defined to be \u201cthe doing or refraining from doing some act which shall subject the corporation to a forfeiture of its charter or corporate power,\u201d etc. (Bixler v. Summerfield, 195 Ill. 152; Abbott v. Loving, 303 Ill. 154, 167.) It is clear from what was said in the last two cited cases that the alleged facts in the bill of complaint do not bring this case within the causes which will authorize a court of equity to dissolve a corporation or close up its business, or appoint a receiver. None of its alleged facts constitutes the \u201cdoing or refraining from doing some act which shall subject the corporation to a forfeiture of its charter or corporate power.\u201d\nA dissolution is not effected by the failure to elect a director to fill the vacancy or to hold armnal meetings. The statute expressly so provides. (Section 43, ch. 32, Cahill\u2019s St. 1925. See also Town of Mendota v. Thompson, 20 Ill. 197; People v. Wren, 5 Ill. 269, and Cook on Corporations, vol. 2, 6th Ed., p. 1777.) And where a corporation is functioning mere dissatisfaction of its stockholders, in the absence of fraud or insolvency, or mere disagreements among its directors will not authorize or justify the appointment of a receiver. (Pomeroy\u2019s Eq. Jur., vol. 4, 4th Ed., \u00b6 1545; L. R. A. 1918 D, pp. 229, 232; Sternberg v. Wolff [N. J.], 42 Atl. 1078, 1079.)\nThe authorities cited by appellants do not conflict with those views. We think, therefore, there was no error either in the order dismissing the company out of the case, or in dismissing the bill for want of equity.\nAffirmed.\nG-ridley and Pitch, JJ., concur.", "type": "majority", "author": "Mr. Presiding Justice Barnes" } ], "attorneys": [ "Edward J. Kelley, for appellants.", "Moses, Kennedy, Stein & Bachrach, for appellees; Hamilton Moses, of counsel." ], "corrections": "", "head_matter": "Lanzit Corrugated Box Company et al. On appeal of Michael Gidwitz and Jacob Gidwitz, Appellants, v. Lillian Cohn and Maurice A. Barancik, Appellees.\nGen. No. 30,101.\n1. Appeal and error \u2014 one cannot assign error for another party. An appellant cannot assign alleged error for another party to the record.\n2. Attorneys and counselors \u2014 rebuttal of presumption of authority. Presumption that attorney who entered his appearance for a corporation was retained for that purpose could be repelled by undisputed facts set forth in an affidavit.\n3. Corporations \u2014 dissolution in equity. Courts of chancery are without jurisdiction to decree dissolution of a corporation except in so far as that jurisdiction is conferred by statute.\n4. Corporations \u2014 dissolution and receivership. Remedy provided by Cahill\u2019s St. 1925, p. 622, ch. 32, secs. 53, 54, relating to dissolution and receivership, has application only to insolvent corporations in favor of creditors.\n5. Corporations \u2014 stockholders\u2019 rights to dissolution and receivership. Cahill\u2019s St. 1925, p. 622, ch. 32, secs. 53, 54, do not give stockholders of a corporation right to dissolution and receivership where corporation is solvent simply because there is equal ownership of stock and a resultant deadlock in election of directors.\nAppeal by plaintiffs from the Circuit Court of Cook county; the Hon. Hugo M. Friend, Judge, presiding. Heard in the second division of this court for the first district at the March term, 1925.\nAffirmed.\nOpinion filed October 6, 1925.\nEdward J. Kelley, for appellants.\nMoses, Kennedy, Stein & Bachrach, for appellees; Hamilton Moses, of counsel." }, "file_name": "0227-01", "first_page_order": 257, "last_page_order": 262 }