Young v. Stevenson

• Decision Date: 17 June 1899
• Parties: YOUNG v. STEVENSON.
• Court: Illinois Supreme Court

180 Ill. 608

54 N.E. 562

YOUNG

v.STEVENSON.¹

Supreme Court of Illinois.

June 17, 1899.

Appeal from appellate court, Third district,

Action by Miles K. Young, as receiver of the Illinois Building & Loan Association, against W. W. Stevenson. From a judgment for defendant, plaintiff appealed to the appellate court, which affirmed the judgment, and plaintiff again appeals. Affirmed.Kerrick & Bracken, for appellant.

Rowell, Neville & Lindley and J. E. Pollock, for appellee.

This was assumpsit by the appellant receiver against the appellee. The declaration averred that the Illinois Building & Loan Association was a corporation organized by virtue of an act of the general assembly entitled ‘An act to enable associations of persons to become a body corporate to raise funds to be loaned only among the members of the association,’ in force July 1, 1879; that on divers dates between February 17, 1894, and October 1, 1894, the defendant was a stockholder, director, and treasurer of the said Illinois Building & Loan Association; that on said several dates he withdrew from the association the full book value on a large number of shares, amounting in all to $17,712.94; that on said dates the association was insolvent, and had not sufficient assets to pay all stockholders full book value of their shares, all of which was well known by the defendant; that it was his duty, as director and treasurer, to care for and preserve the assets of the association for the use and benefit of all its stockholders in proportion to their respectiveholdings, but that he, in fraud of the rights of the other stockholders and of the association, withdrew from the assets the full amount of his stock that he would have been entitled to withdraw had the association been solvent and sufficient assets to pay in full the book value of all outstanding stock. The second special count, as amended, differs from the first only in averring that, at the dates of withdrawals made by the defendant, the association was in such condition financially as to render its liquidation and the winding up of its affairs inevitable, and in such condition that all stockholders could not be paid in full from its assets, and that the defendant knew it. The only questions arising upon this record are whether the court erred in ruling that two pleas, viz. the amended fifth additional plea and the sixth plea, interposed by the appellee to this declaration, were obnoxious to demurrers presented thereto. The amended fifth additional plea avers that at the times when the defendant is alleged to have withdrawn stock he was indebted to the association for money borrowed upon the stock held by him, for which the association held his promissory note; that the note was due; that the principal and interest thereon amounted to the withdrawal value of his stock; that by agreement with the association he surrendered to it, in settlement of his debt, the stock so held by it as security; that such transaction was in the ordinary course of the association's business, and done at times when it was paying out to all stockholders who presented their stock for withdrawal full book value; and that at the time of such withdrawal the directors of the association had not stopped business, and had not recognized the insolvency of the association. The sixth plea avers that, at the various times when the defendant is alleged to have withdrawn stock, the association was engaged in the prosecution of its ordinary business, and in good faith intended and expected to continue the said business as a going concern until its stock matured; that the association was paying to all stockholders who presented their stock for withdrawal full book value thereof; and that the defendant in the regular way, as prescribed by the by-laws, surrendered his stock, and was paid only what he had paid in and the profits thereon, as determined by the rules of the association.

BOGGS, J. (after stating the...