Comstock v. Morgan Park Trust & Sav. Bank

• Decision Date: 03 June 1936
• Docket Number: No. 23180.,23180.
• Citation: 2 N.E.2d 311,363 Ill. 341
• Court: Illinois Supreme Court
• Parties: COMSTOCK et al. v. MORGAN PARK TRUST & SAVINGS BANK et al.

363 Ill. 341

2 N.E.2d 311

COMSTOCK et al.

v.MORGAN PARK TRUST & SAVINGS BANK et al.

No. 23180.

Supreme Court of Illinois.

April 17, 1936.

As Modified on Denial of Rehearing June 3, 1936.

Suit by Katherine B. Comstock and others against the Morgan Park Trust & Savings Bank and others. From an adverse decree, defendants appeal.

Cause transferred to the Appellate Court.

SHAW, J., dissenting.Appeal from Circuit Court, Cook County; George Fred Rush, judge.

Enoch J. Price and Owen N. Price, both of Chicago, for appellants.

Friedman, Schimberg & Alster and Aaron Soble, all of Chicago (Irving Goodman, of Chicago, of counsel), for appellees.

JONES, Justice.

The circuit court of Cook county entered a decree in a creditors' suit against a number of stockholders in the Morgan Park Trust & Savings Bank, an Illinois banking corporation. The suit was a representative proceeding in equity to enforce the stockholders' liability in favor of creditors of the defunct corporation. Appellants are a few of the stockholders against whom the decree was entered. They have raised numerous questions. Among them are, that the suit was premature because no decree had been entered by any court declaring the corporation insolvent; that the suit was brought for mercenary and inequitable purposes; that the court erred in ruling on the admissibility of evidence and in overruling exceptions to the master's report; that the court allowed exorbitant and illegal fees, and that appellants' cross-bill was wrongfully dismissed for want of equity. These alleged errors involve question which do not authorize a direct appeal to this court.

The seventh, ninth, thirteenth, and fifteenth errors assigned relate to constitutional provisions. The seventh challenges the validity of the amendment of 1929 to section 11 of the General Banking Act (Laws 1929, p. 179, § 11 [see Smith-Hurd Ann.St. c. 16 1/2, § 11]), which empowers the court to authorize the payment of complainants' solicitor's fees and other costs of litigation out of moneys collected from stockholders. Appellants are in no position to raise this question. The decree appealed from made no allowance of solicitor's fees. They were allowed in former orders to which no objections were made and from which no appeal was perfected. Even if there were grounds for resistance to the allowance of such fees, the creditors, and not the stockholders, are the only ones who could object, as the stockholders have no interest whatever in the distribution of the funds which they are compelled to pay. The stockholders are not concerned about how much or how little may be allowed as solicitor's fees or whether any are allowed at all. Their liability is neither increased nor diminished by such an allowance, if made.

The ninth and fifteenth errors assigned are, that the due process and contract clauses of the Federal and State Constitutions (Const.U.S. art. 1, § 10, cl. 1; Amend. 14; Const.Ill. art. 2, §§ 2, 14) are violated by section 11 of the General Banking Act, which purports to authorize one creditor to represent all the creditors of the bank in enforcing the stockholders' liability. We have repeatedly held that the statute is not violative of those clauses of the Constitutions. Golden v. Cervenka, 278 Ill. 409, 116 N.E. 273;Sanders v. Merchants' State Bank, 349 Ill. 547, 182 N.E. 897;Leonard v. Bye, 361 Ill. 185, 197 N.E. 546, 101 A.L.R. 569;Heine v. Degen, 362 Ill. 357, 199 N.E. 832.

The thirteenth error assigned is based on the claim that section 6 of article 11 of State Constitution places the stockholders'...