O'Neill v. Continental Ill. Co.

• Decision Date: 02 June 1950
• Docket Number: Gen. No. 44787
• Citation: 341 Ill.App. 119,93 N.E.2d 160
• Parties: O'NEILL v. CONTINENTAL ILLINOIS CO. et al.
• Court: United States Appellate Court of Illinois

Page 160

93 N.E.2d 160

341 Ill.App. 119

O'NEILL v. CONTINENTAL ILLINOIS CO. et al.

Gen. No. 44787.

Appellate Court of Illinois, First District, Second Division.

June 2, 1950.

Rehearing Denied June 14, 1950.

Levisohn & Levisohn, Chicago, William J. Corrigan, Chicago, for appellant.

Mayer, Meyer, Austrian & Platt, Chicago, Frank D. Mayer, Leo F. Tierney, Harry Adelman, all of Chicago, of counsel, for appellees Lloyd A. Sturtz and Walter J. Cummings.

SCANLAN, Justice.

Europa D. O'Neill, plaintiff, filed her complaint against Continental Illinois Company (hereinafter referred to as the Company) and Continental Illinois National Bank and Trust Company of Chicago (hereinafter referred to as the Bank). She appeals from an order quashing service of summons on the Company and dismissing her suit as to it. After the entry of that order the Bank filed its answer to the complaint, and plaintiff's suit as to the Bank is pending in the trial court.

The verified complaint, filed October 22, 1948, alleges, in substance, that in 1929, at the direction of plaintiff's late husband, William L. O'Neill, the Company purchased for plaintiff $350,000 of United States Treasury Certificates, which matured June 16, 1930; that the Company received said certificates for plaintiff and it then became its duty to deliver such certificates to her; that said certificates were never delivered to her; that on April 3, 1947, and since that date she has demanded delivery of said certificates; that in 1939 Articles of Dissolution were issued to the Company, but that the statement therein to the effect that all debts, obligations and liabilities of the Company had been paid and discharged, or that adequate provision had been made therefor, was false and untrue, and that by reason thereof the Certificate of Dissolution was void; that pursuant to the provisions of the Articles of Dissolution the assets of the Company were delivered to trustees, who then delivered the assets to the Bank; that the Company was in effect a department of the Bank and its subsidiary. Plaintiff prays that the Articles of Dissolution be cancelled, that it be found that she has a valid claim against the Company, and that its assets be impressed with a lien. A summons directed to the Company was served on Walter J. Cummings, who appeared specially, filed a motion to quash the service of summons and return, and in his motion states that he was not then and never had been an agent of the Company; that the company ceased to exist as a corporation after its dissolution on January 21, 1939, and therefore, under the provisions of Section 94 of the Business Corporation Act, was not subject to suit in an action commenced more than two years after its dissolution, and that service could not be had upon him or upon said dissolved corporation. Attached to the motion was an affidavit of Cummings which states that the Company, a corporation, was organized under the laws of Illinois on November 12, 1928, and continued its existence until January 21, 1939, at which time its Articles of Dissolution were filed in the Office of the Secretary of the State of Illinois pursuant to the provisions of Section 80 of the Business Corporation Act, Ill.Rev.Stat.1949, c. 32, § 157.80, and that by reason thereof said corporation thereafter ceased to exist. Plaintiff subsequently caused a summons to be served upon L. A. Sturtz, who appeared specially, filed a motion to quash the service of summons and return thereon directed to the Company, for substantially the same reasons stated in the motion of Cummings, and in support of his motion filed his affidavit setting forth substantially the same facts as were contained in the affidavit of Cummings. On January 6, 1949, an additional affidavit, made by James R. Leavell, was filed in support of the motions to quash service of process, and therein Leavell states that prior to the dissolution of the Company he was its president and the person who executed the Articles of Dissolution in behalf of the Company; that at the time of the filing of the statement of intent to dissolve said corporation and at all times subsequent thereto and at the time of the filing of the Articles of Dissolution of said corporation, to the best of his knowledge and belief, no claim had ever been made by plaintiff against said corporation; that the statement contained in the Articles of Dissolution to the effect that all debts, obligations and liabilities of the corporation had been paid and discharged or that adequate provision had been made therefor, was based upon the balance sheets of the corporation prepared by the proper accounting officer of the corporation and that said balance sheets showed no such claim as is made in plaintiff's complaint; that although diligent search had been made for the ledger sheets and other books of original entry of said corporation, they could not be found and that affiant was informed and believed that said ledger sheets and other books and records had been destroyed in the regular course of business because of the dissolution of said corporation in 1939; that to the best of his knowledge and belief no claim, liability or obligation as is presented by plaintiff in her complaint ever appeared in any of the ledgers or other books or records of original entry of said corporation; that no information relating thereto ever appeared on any records of said corporation except upon a so-called 'bond record and security card,' which card formed for basis of the letter written by the Bank to plaintiff, which letter is referred to in the complaint. The affiant further states that he is informed and believes that the bond record and security cards were made and maintained for the use of salesmen of the Company, and did not contain original entries, and he was informed and believes that said card was erroneous in that the said United States Treasury Certificates described in the complaint filed by plaintiff were purchased by her husband, William L. O'Neill, and not by or for plaintiff; that to the best of affiant's knowledge and belief the statements contained in the Articles of Dissolution are true and correct in that there never was any obligation or liability to plaintiff, and that plaintiff made no claim until shortly before the filing of her complaint. After a hearing upon the motion to quash the Superior court entered the order from which plaintiff appeals.

Plaintiff states: 'Plaintiff's theory is that the alleged voluntary dissolution of Continental Illinois Company, is not a bar to her action, for the reason that a corporation is a creature of the statute, and its 'birth'--'existence' and 'death' are controlled by detailed statutory provisions, and it is only upon compliance with such provisions that the corporation has either 'life' or 'death'. The Illinois Busioness Corporation Act gives in minutest detail the steps to be taken on a voluntary dissolution, and one of these requirements is prior payment and discharge (or provisions therefor) of corporate obligations. The securities purchased for plaintiff were never delivered to her, although the defendant received full payment. The defendant's obligation to the plaintiff was not paid or discharged and no provision was made therefor. Hence there could be no valid dissolution, and the plaintiff has a right to maintain her action. * * * The plaintiff concedes that the records do show a purported dissolution, but asserts that such dissolution is inoperative and of no effect, for the reason that her claim was not paid or discharged, nor was any provision made therefor.'

Defendant Company states: 'The trial court did not err in sustaining the motion to quash the service of summons upon the company and in dismissing the suit as to said defendant because the said defendant had been dissolved pursuant to The Business Corporation Act more than two years prior to the institution of this action.'

Section 94 of the Business Corporation Act of 1933 (Chap. 32, par. 157.94, Ill.Rev.Stat.1949), provides:

'The dissolution of a corporation either (1) by the issuance of a certificate of dissolution by the Secretary of State, or (2) by the decree of a court of equity when the court has not liquidated the assets and business of the corporation, or (3) by expiration of its period of duration, shall not take away or impair any remedy available to or against such corporation, its directors, or shareholders, for any right or claim existing, or any liability incurred, prior to such dissolution if action or other proceeding thereon is commenced within two years after the date of such dissolution. Any such action or proceeding by or against the corporation may be prosecuted or defended by the corporation in its corporate name.'

Plaintiff bases her right to recover upon Section 80 of the Act, which reads, in part, as follows:

'When all debts, liabilities, and obligations of the corporation shall have been paid and discharged, or adequate provision shall have been made therefor, and all of the remaining property and assets of the corporation shall have been distributed to its shareholders, articles of dissolution shall be executed * * * which shall set forth:

'* * *

'(c) That all debts, obligations, and liabilities of the corporation have been paid and discharged or that adequate provision has been made therefor.

'* * *

'(e) That there are no suits pending against the corporation in any court * * *.'

Section 80 was amended in 1941 by the addition of the following language to subparagraph (e): 'or that adequate provision has been made for the satisfaction of any judgment, order, or decree which may be entered against it in any pending suit.'

Plaintiff contends that the two-year limitation provision in Section 94 does not bar her suit because her claim was not paid or discharged and no provision was made therefor, hence the alleged dissolution is not a bar to her suit.

Section 81, Ill.Rev.Stat.1949, c. 32, §...