24 N.E.2d 205 (Ill.App. 1 Dist. 1939), 40656, Galinski v. Adler

Docket NºGen. No. 40656.
Citation24 N.E.2d 205, 302 Ill.App. 474
Case DateDecember 13, 1939
CourtCourt of Appeals of Illinois

Page 205

24 N.E.2d 205 (Ill.App. 1 Dist. 1939)

302 Ill.App. 474




Gen. No. 40656.

Court of Appeals of Illinois, First District, Third Division.

December 13, 1939

Page 206

[302 Ill.App. 475] Irwin J. Kaplan and Paul Freeman, both of Chicago, for appellants.

Edward J. Warren and Joseph L. Mack, both of Chicago, for appellees.

DENIS E. SULLIVAN, Presiding Justice.

A claim was filed in the Superior Court for a discovery and accounting against several defendant banks and a corporation known as the Bancorporation and some hundreds of other defendants, wherein it was [302 Ill.App. 476] alleged that the defendants, some of which are the stockholders of various banks, have surrendered their stock certificates and taken in exchange therefor certificates of stock of the Bancorporation. The stockholders of the United American Trust and Savings Bank were among those who were holding stock of the Bancorporation, so-called, and that they were the real owners of the stock, although it was carried in the name of the Bancorporation.

It appears from said claim that by this method the Bancorporation had obtained possession, control and management of a number of banks, and that this was done for the purpose of evading the extra stock liability under the Constitution and statutes of the State of Illinois relating to added liability to stockholders of State Banks, Smith-Hurd Stats.Const. art. 11, § 6; Ill.Rev.Stat.1937, c. 16 1/2, § 6; that this also was done to escape the inhibition against branch banking in this State. Ill.Rev.Stat.1937, c. 16 1/2, § 9. One set of officers practically managed the various banks. The defendants, who are quite numerous, made motions to dismiss and in so doing they admitted the truth of all allegations in the bill that are well pleaded and the legal inferences to be drawn therefrom.

The amended complaint contained the following: "* * * that the actual plan, intent and purpose of the organizers of said Bancorporation and of those parties who thereafter become stockholders thereof, including each and every of the defendants herein named, was to organize a bank stock holding company which would acquire, by exchange of shares of the capital stock thereof for shares of stock of various banks in the Chicago metropolitan area, a majority of shares of such banks and thereby to operate a group of unit banks or system of branch banks, all to be under the domination, control and direction of said Bancorporation; and it was the further purpose and intent of said organizers of said Bancorporation, and each and every of those parties who became stockholders thereof, including the defendants herein named, that the dividends earned by each such banking institution comprising[302 Ill.App. 477] said group of banks or system of branch banks, to the extent of the shares thereof held by the Bancorporation, should be paid and delivered to the stockholders of Bancorporation in...

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