Critchfield & Co. v. Armour

228 Ill. App. 28, 1923 Ill. App. LEXIS 192
CourtAppellate Court of Illinois
DecidedFebruary 13, 1923
DocketGen. No. 27,860
StatusPublished
Cited by4 cases

This text of 228 Ill. App. 28 (Critchfield & Co. v. Armour) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Critchfield & Co. v. Armour, 228 Ill. App. 28, 1923 Ill. App. LEXIS 192 (Ill. Ct. App. 1923).

Opinion

Mr. Justice Gridley

delivered the opinion of the court.

On July 5, 1917, plaintiff commenced a first-class action in assumpsit in the municipal court of Chicago against the above-named defendants, as officers, directors and agents of the Tireoid Company, a corporation for profit organized under the laws of the State of Maine. Other parties were originally made codefendants, but the action was dismissed as to them, Following a trial without a jury the court, on March 22, 1922, found the issues against the defendants, assessed plaintiff’s damages at $15,710.50, and entered judgment in that amount against them and they appealed.

It is alleged in plaintiff’s statement of claim in substance that, during the years 1916 and 1917, defendants, as officers, directors and agents of the Tireoid Co., were doing business in Illinois in the name of the Tireoid Co. and in violation of the act of the Illinois legislature then in force relative to foreign corporations for profit; that during said years plaintiff expended certain moneys and performed certain services, to the amount claimed, for the defendants at their request in the name of the Tireoid Co. in Illinois; and that plaintiff did not at any time know that the Tireoid Co. was not legally authorized to transact business in Illinois until after said moneys had been expended and said services performed. As appears from the affidavit of merits, the defenses were in substance (1) that the moneys were expended and the services performed under an agreement between plaintiff and the Tireoid Co. made prior to July 1, 1916, and at a time when the Tireoid Co. was not doing business in Illinois; (2) that at the time said agreement was made, and said moneys expended and services performed, plaintiff knew that the Tireoid Co. was not legally authorized.to do business in Illinois under said act; (3) that the indebtedness of the Tireoid Co. to plaintiff under said agreement originally exceeded $25,000 and was reduced from time to time by payments which were accepted by plaintiff, and thereby plaintiff is estopped to contend that said agreement is not that of the corporation; and (4) that after plaintiff had threatened to sue defendants on their alleged individual liability, it accepted from the corporation payments on account, whereby it waived any right of action against the defendants, if any it had.

The case was tried on a stipulation of facts, supplemented by other evidence. It was stipulated in substance that plaintiff, an Illinois corporation, was during said years engaged in business in Chicago as advertising and merchandising agents; that the Tireroid Co. was legally organized in Maine on March 14, 1916, for the purpose of manufacturing and selling “Tireoid,” a composition to prevent punctures in automobile tires, but that it never complied with the act of the legislature of Illinois, in force July 1, 1905, regulating the admission of foreign corporations for profit to do business in this State; that it had no office or place of business in Maine, except a statutory office where stockholders’ meetings were held, and had no place of business in Ulinois until July 1, 1916, when it occupied premises at 1200 Michigan Avenue, Chicago, under a written lease executed by it, dated May 18, 1916, for a term beginning July 1, 1916; that at and prior to the time the agreement with plaintiff was made, June 9, 1916, its directors’ meetings were held in Chicago in the office of W. L. Eohrer, an officer and director; that on and after July 1, 1916, for a period of several months, it occupied said premises on Michigan Avenue, Chicago, there manufactured “Tireoid,” there received all orders for and distributed its said product, and there conducted its entire business; that at a meeting of its. board of directors, held in Eohrer’s office on May 9, 1916, a committee, consisting of defendants Markle, Levy and Price, was appointed to “work out an advertising program and merchandising policy”; that at a meeting of said board, held in Bohrer’s office on June 9, 1916, a written proposition, signed by plaintiff by Stanley Clague, its then vice president, and addressed to the “Board of Directors of the Tireoid Company,” was personally presented by Clague; that this proposition related to a comprehensive advertising campaign, advertising “Tireoid,” to be conducted by plaintiff for the benefit of the Tireoid Co., and involved the advancement of large sums of money and the performing of services by plaintiff and at a total estimated cost of about $35,000; that a day or two before, the details of the proposition had been discussed by Clague and the committee; that at said meeting the proposition was further discussed and it was finally decided to accept it; that the agreement was subsequently ratified at a meeting of said board of directors, held at the Michigan avenue premises on July 6, 1916, at which all of the defendants were present; that subsequently plaintiff performed its part of the agreement, made the advancements and performed the services contemplated, and from time to time received payments on account, according to bills which it rendered to the Tireoid Co.; that these payments were made by checks of the Tireoid Co., drawn on a Chicago bank, and the checks were cashed, leaving a balance due plaintiff of $15,710.50; that plaintiff at no time rendered any bills to any of the defendants, except that on June 20, 1917, plaintiff’s attorneys wrote each director, calling attention to the balance then due, to the fact that the Tireoid Co. had never been legally authorized to do business in Illinois, and to the individual liability of the directors, under a recent decision of the Supreme Court of -Illinois; that up to June 1, 1916, the total cash resources of the Tireoid Co. were about $20,000, all resulting from the sale of its stock, which resources on July 31, 1916, had been increased about $7,000 by further sales of stock; and that during the months of June and July, 1916, the company had no assets, except its formulas and patents, the proceeds of said stock sales, and certain machinery, fixtures and merchandise purchased with a part of the proceeds of said stock sales.

It further appeared that the Tireoid Co., after July 1, 1916, manufactured and sold “Tireoid” at and from the Michigan avenue premises, and there conducted its entire business, until the spring of 1917, when it ceased doing business and sold its assets; that an insufficient sum was realized to pay its debts; that its directors made contributions and all claims against it, except said balance due plaintiff, were paid or settled; that on June 25, 1917, and on July 2,1917, it forwarded to plaintiff its checks for $367.60 and $175, respectively, as payments on account; and that plaintiff cashed these checks and at the same time wrote letters to the treasurer of the Tireoid Co., to the effect that by the acceptance of the checks it was not waiving its claim against said defendants, as directors, on their said individual liability.

Among the cases relied upon by counsel for plaintiff to sustain the present judgment is Ryerson & Son v. Shaw, 277 Ill. 524, opinion filed in February, 1917. The plaintiff in that case sought to hold certain defendants, as officers, directors and agents of a de jure Maine corporation for profit, doing business in Illinois without lawful authority, liable for certain merchandise which the plaintiff had sold and delivered to them at their request, in the name of the corporation, in Illinois.

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Bluebook (online)
228 Ill. App. 28, 1923 Ill. App. LEXIS 192, Counsel Stack Legal Research, https://law.counselstack.com/opinion/critchfield-co-v-armour-illappct-1923.