Sheridan-Brompton & Annex Bldg. Corp. v. Danne

• Decision Date: 23 April 1932
• Docket Number: No. 21006.,21006.
• Court: Illinois Supreme Court
• Parties: SHERIDAN-BROMPTON & ANNEX BLDG. CORPORATION et al. v. DANNE et al.

348 Ill. 306

180 N.E. 779

SHERIDAN-BROMPTON & ANNEX BLDG. CORPORATION et al.

v.DANNE et al.

No. 21006.

Supreme Court of Illinois.

April 23, 1932.

Commissioner's Opinion.

Bill by the Sheridan-Brompton & Annex Building Corporation against Arthur J. Daane and another. A cross-bill was filed by defendants against complainant and others. The bill was dismissed on motion of the complainant. A decree was entered dismissing the cross-bill and providing for an appeal to the Supreme Court.

Cause transferred to the Appellate Court.

Appeal from Superior Court, Cook County; Robert E. Gentzel, judge.

Charles G. Palmer, of Chicago (Clyde C. Fisher, of Chicago, of counsel), for appellants.

Concannon & Dillon, Robert J. Hilliard, Daniel F. Sullivan, Ringer, Wilhartz & Hirsch, and Loucks, Eckert & Peterson, all of Chicago (William Wilhartz and Ben A. Stewart, both of Chicago, of counsel), for appellees.

The Sheridan-Brompton & Annex Building Corporation filed a bill in the Superior court of Cook county against appellants, Arthur J. Daane and Charlotte L. Daane, his wife, to enforce a proprietary lease to a cooperative apartment. Appellants filed an answer and a cross-bill against the Sheridan-Brompton & Annex Building Corporation, Maurice B. Rissman, Irving M. Sevin, and Harry L. Solomon, individually and as trustees of the Sheridan-Brompton Trust, and against Edwin D. Krenn and Edward A. Dato, individually and as partners doing business as Krenn & Dato, and Krenn & Dato, Inc., all of whom are appellees herein. The cross-bill alleged, among other things, that the cross-defendants sold certain class ‘D’ securities to the cross-complainants in violation of the Illinois Securities Act (Smith-Hurd Rev. St. 1931, c. 121 1/2, § 96 et seq.), and it prayed that the sale be declared void. Upon issues being joined the cause was referred to a master to take the testimony and report his conclusions of law and fact. The master found that the Sheridan-Brompton & Annex Building Corporation and Edwin D. Krenn and Edward A. Dato, partners doing business as Krenn & Dato, did not violate the Illinois Securities Act; that Maurice B. Rissman, Irving M. Sevin, and Harry L. Solomon, as trustee of the Sheridan-Brompton Trust, and Krenn & Dato, Inc., did violate section 14 of the act (Smith-Hurd Rev. St. 1931, c. 121 1/2, § 109), and that the cross-complainants had elected to declare the sale void and were entitled to an accounting from the last-named cross-defendants. All of the cross-defendants except the Sheridan-Brompton & Annex Building Corporation filed exceptions to the master's report, which exceptions were sustained, a decree was entered dismissing the cross-bill for want of equity, and the original bill was dismissed on motion of the complainants therein. The decree provided for an appeal to this court on the grounds that the cross-defendants contended that section 37 of the Illinois Securities Act (section 132), if given a certain construction, is unconstructional, and that it appeared to the trial court that the validity of a statute and the construction of State and National Constitutions are involved.

The relief sought by the cross-bill is based upon section 37 of the Illinois Securities Act (Smith-Hurd Rev. St. 1931, c. 121 1/2, § 132, p. 2599), which provides, in part, that every sale and contract of sale made in violation of any of the provisions of the act shall be void at the election of the purchaser, and the seller of the securities so sold, the officers and directors of the seller, and each and every solicitor, agent, or broker of or for such seller who shall have knowingly performed any act or in any way furthered such sale, shall be jointly and severally liable in an action at law or in equity, upon tender to the seller, or in court, of the securities sold to the purchaser for the amount paid, the consideration given or the value thereof, together with his reasonable attorney's fees in any action brought for such recovery. Appellees in their answer to the cross-bill preserved all their rights to contest the constitutionality of this section of the act.

It is contended by appellees that, if the section authorizing the purchaser to proceed either at law or in equity is construed to give the purchaser an election to proceed either at law or in equity, as he may see fit, and thus, at his election, secure a jury trial or not, it is unconstitutional, and is in violation of sections 2, 5, and 19 of article 2 and of section 22 of article 4 of the Illinois Constitution and of the Fourteenth Amendment to the Constitution of the United States. They contend that the proper construction of this section is that a purchaser may proceed at law or in equity, in whichever court, under the particular circumstancesof the case and under the general rules of law, ...