Howard v. Swift

190 N.E. 102, 356 Ill. 80
Illinois Supreme Court·Decided March 13, 1934·No. No. 22361. Judgment affirmed.·Published·Cited by 37 cases

Opinion

Mr. Justice Herrick

delivered the opinion of the court:

The appellant (hereinafter called the claimant) filed his claim in the sum of $37,308,646 against the executors of the will of Edward F. Swift, deceased, appellees herein', (hereinafter called the defendants,) in the probate court of Cook county. The claim is divided into 4 sub-heads numbered from 1 to 4, inclusive, viz.:

(1) Charges the purchase of stock of the Corporation Securities Company of Chicago (hereinafter called the Securities Company) from June 11, 1930, to April 16, 1932, through the fraudulent direction and action of the officers and directors of the Securities Company, of which com- . pany Edward E. Swift was one of the directors, for the fraudulent and unlawful purpose of creating and maintaining a false and fictitious market value on the capital stock of the corporation. Amount of claim, $9,708,350.

(2) Charges the purchase of 188,734 shares of capital stock of the Middle West Utilities Company on August 8, 1930, by the Securities Company through the fraudulent action of the officers and directors of the Securities Company, including the deceased, for the fraudulent and unlawful purpose of creating and maintaining a false and fictitious value on the capital stock of the Middle West Utilities Company. Amount of claim, $5,567,653.

(3) Charges that on December 31, 1930, 20,300 shares of the capital stock of the Peoples Gas, Light and Coke Company, which were the property of the Securities Company, were exchanged and delivered by the latter to the Insull Utilities Investments, Inc., for shares of the capital stock of the latter, such stock last named being without value on said date, and that such exchange and delivery were effected through the fraudulent action of the officers and directors of the Securities Company, including the deceased. Amount of claim, $7,105,000.

(4) Charges that the Securities Company expended money in the purchase of stock rights issued by the Insull Utilities Investments, Inc., and in the exercise of such rights in subscribing for the capital stock of the latter on September 15, 1930; that such shares of stock were without value on said day, the purchase of such rights and such subscription to said stock being effected through the fraudulent action of the officers and directors of the Securities Company, including the deceased, Samuel Insull and divers other persons. Amount of claim, $14,852,643.

The defendants filed a written motion in the probate court to dismiss the claim for want of jurisdiction, assigning, with other grounds in support of such motion, that the alleged claim is not a claim within the meaning and intent of section 20 of article 6 of the State constitution, and that such alleged claim could not be considered and adjudicated by the probate court in the administration and settlement of the estate; that the alleged claim is one arising out of tort, and under section 20 the probate court had no jurisdiction to pass upon and adjudicate such claim; that if the alleged claim is within the terms and provisions of sections 60, 61, 66, 67 and 70 of the Administration act, such sections are severally in that respect unconstitutional. Attached to this motion was the verified statement of an auditor and accountant. The affidavit is quite voluminous. Amongst other things it states, in substance, that such accountant had on different occasions assisted in making audits of the so-called Insull Utilities Companies, stating in a general way the immense and complicated nature of the business of the company, the involved accountings and appraisals that would be necessary to be made in order to determine the value of the stocks of such companies on any given date; that the Securities Company was not an operating utility company but an investment securities company; that its assets substantially consisted of securities of numerous other corporations, several of which were holding companies, which in turn owned the stocks and securities of other companies. One of the operating companies was the Peoples Gas, Light and Coke Company. Another of such holding companies was the Middle West Utilities Company, which on August 8, 1930, controlled various companies, to the number of 239 operating utility subsidiaries, 24 holding companies and 13 non-utility subsidiaries, having consolidated resources of $1,500,000,000. The affidavit set out a diagrammatic representation as of April 14, 1932, of the Middle West Utilities Company and its leading subsidiaries. The affidavit further stated facts disclosing the enormity and complexity of the task of determining the actual value of stocks and securities of the various companies listed as owned by Insull Utilities Investments, Inc., covering the period of time included by the alleged claim.

The record shows that the claimant asked for and was allowed by the probate court ten days to answer the motion and the affidavit. However, no answer to the motion and no counter-affidavits were filed by the claimant. The probate court allowed the motion and dismissed the claim. From that judgment the claimant appealed to the circuit court. In that court the defendants made a motion to dismiss, supported by such affidavit. The circuit court dismissed the claim and entered a written order finding and holding, amongst other rulings, that such claim was not within the jurisdiction of the probate court as defined and limited by section 20 of article 6 of the constitution of this State. From such final order the claimant has prosecuted an appeal direct to this court.

The contentions made by the claimant may be summarized under two headings: (1) That the probate court has general jurisdiction to hear and adjudicate upon all claims that may be made against the estate of a decedent; (2) that the claim in question does not arise out of tort but is a money claim equitable in its nature, of which the probate court has jurisdiction.

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Howard v. Swift, 190 N.E. 102, 356 Ill. 80 (Ill. 1934).

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