Patterson Heating & Air Conditioning Corp. v. Durable Const. Co., Gen. No. 71--83

• Decision Date: 03 February 1972
• Docket Number: Gen. No. 71--83
• Citation: 3 Ill.App.3d 444,278 N.E.2d 410
• Parties: PATTERSON HEATING AND AIR CONDITIONING CORPORATION, an Illinois corporation and J. D. Patterson, Plaintiffs-Appellants, v. DURABLE CONSTRUCTION COMPANY, an Illinois Corporation, et al., Defendants- Appellees.
• Court: United States Appellate Court of Illinois

Page 410

278 N.E.2d 410 3 Ill.App.3d 444 PATTERSON HEATING AND AIR CONDITIONING CORPORATION, an
Illinois corporation and J. D. Patterson,
Plaintiffs-Appellants,
v.
DURABLE CONSTRUCTION COMPANY, an Illinois Corporation, et
al., Defendants- Appellees. Gen. No. 71--83. Appellate Court of Illinois, Second District. Feb. 3, 1972.

[3 Ill.App.3d 445]

Page 411

Dale, Haffner, Grow & Overgaard, Chicago, for plaintiffs-appellants.

Donovan, Dichtl, Atten, Mountcastle & Roberts, Wheaton, for defendants-appellees.

SEIDENFELD, Justice:

Patterson Heating and Air Conditioning Corporation sued to collect for services and material furnished to the defendant Durable Construction Company. In Count I of the complaint it sought judgment against the corporate defendant alone. ¹ Count II purported to state a cause of action against the directors of the corporation; and Count III was a chancery action to impose a trust in funds received by the defendant Jay W. Stream as a shareholder for sale of his stock to the corporation.

The trial court dismissed Counts II and III of the complaint without designating the specific grounds for its decision. Plaintiff appeals, raising issues only with respect to the defendant Stream.

Count II in substance alleges that defendant Stream, as a director of the Durable Construction Company, voted that the company purchase his 10% Of its stock for the sum of $280,345.24 at a time when the company was indebted to the plaintiff in the amount of $60,173.14. This purchase, it is alleged, reduced the company's net assets 'below the sum of its stated capital, its paid-in-surplus, any surplus arising from unrealized appreciation in value or revaluation of its assets and any surplus arising from surrender to the corporation of any of its shares,' and rendered the corporation insolvent, both contrary to Ill.Rev.Stat.1961, ch. 32, par. 157.6. Plaintiff prays for a judgment of $40,073.14, the amount still owing by the corporation.

[3 Ill.App.3d 446] Count III contains the same allegations, and prays that defendant Stream hold the proceeds of the sale in trust for the benefit of the plaintiff and other creditors of the corporation.

Only three points made in Stream's motion to dismiss remain in issue. The first is that the affidavit filed in support of the motion setting forth that the defendant was not a director or officer of the corporation at the time of the acts complained of, shows that Stream did not have the legal capacity to be sued under Section...