WILMA FAY MORRIS, as Independent Ex‘r of the Estate of Donald J. Morris, et al., Appellees, v. BANTERRA BANK OF HAMILTON COUNTY et al., Appellants.
No. 76046
Supreme Court of Illinois
August 4, 1994
October 3, 1994
159 Ill. 2d 551
BILANDIC, C.J., dissenting.
BILANDIC, C.J., dissenting.
James V. O‘Brien and Eric D. Paulsrud, of Lewis, Rice & Fingersh, of St. Louis, Missouri, for appellants.
Charles E. Jones, of McLeansboro, for appellees.
The substantive merits of this case are wholly immaterial to the narrow procedural issue which it presents. Plaintiffs, the appellees herein, filed a section
On appeal, the appellate court found that the circuit court correctly denied the plaintiffs’ motion for judgment on the pleadings in its behalf. The аppellate court held, however, that the trial court erred in granting the alternative motion and entering judgment in favor of defendants, finding that “it was not the intention of the plaintiffs to terminate the litigation when they made their alternative motion; that plaintiffs intended to circumvent the trial court‘s denial of their section
It is well settled in this State that “a party cannot claim error when it induced the trial judge‘s mistake.” (J.L. Simmons Co., Inc. ex rel. Hartford Insurance Group v. Firestone Tire & Rubber Co. (1985), 108 Ill. 2d 106.) In this case, plaintiffs induced the circuit court to enter a judgment in fаvor of defendants. While this judgment may arguably have been premature and thus improper, the party inducing the error must bear its consequences.
The only appealable order in this case was the judgment in favor of defendants. If plaintiffs do not contend that this judgment was in error, they have nothing to appeal. The fact that plaintiffs intended to use the alternative motion only to effect an end run to gain review of an unreviewable interlocutory order is of importance only in the plaintiffs’ minds. The plaintiffs’ motivation, hope, or expectation for this procedural maneuver is beside the point.
We hold that a party who requests the trial court to enter a judgment in favor of the opposing party cannot later claim error and appeal that judgment. The judgment of the appellate court is accordingly rеversed and the judgment of the circuit court is reinstated.
Given our disposition of defendants’ appeal, we do not reach the issues raised by plaintiffs on cross-appeal.
Appellate court reversed; circuit court affirmed.
CHIEF JUSTICE BILANDIC, dissenting:
The majority exalts form over substance, disregards the policy and purpose of modern civil procedure, and by means of legal prestidigitation, denies the plaintiffs the opportunity to be heard. The majority‘s flawed reasoning compels me to voice my dissent.
The plaintiffs filed a complaint in the circuit court of Hamilton County against the defendant Bank and its directors, alleging the following facts. Before November 21, 1989, the plaintiffs owned 85 shares of capital stock in the Banterra Bank of Hamilton County. At that time,
On October 11, 1989, the Bank gave notice that a shareholders meeting would be conducted on November 15, 1989, to vote on a proposal to amend the Bank‘s charter. The proposed amendment would reduce the number of outstanding shares from 3,000 to 34 shares, and would abolish any fractional shares. Along with the notice, the Bank sent a proxy statement that described the manner in which the Bank would execute the proposed amendment. According to the proxy statement, the number of shares would be reduced pursuant to a reverse stock split. As a result of the stock split, only the plaintiff shareholders would own a fraction of one share (less than one share) of common stock. The proposed amendment required these fractional shareholders to present their stock for redemption, thereby eliminating the fractional shares. In exchange, upon redemption, the owners would be paid cash for their fractional shares. The proxy statement explained thаt the purpose of the reverse stock split was to reduce the number of shareholders and to consolidate ownership of stock in the Banterra Corporation. The proxy statement also explained that, after the fractional shares were eliminated, the number of capital shares would then be restored to 3,000 shares.
The plaintiffs filed objections to the prоposed amendment, which would effectively squeeze out the minority shareholders and deprive them of their equity ownership in the Bank. Notwithstanding the plaintiffs’ objections, the proposal to amend the charter was adopted by the majority shareholders. The Bank carried out the reverse
The plaintiffs’ first complaint contained three counts. Count I alleged that the defendants breached their fiduciary duty to the plaintiffs. Count II alleged that the defendants’ actions were motivated by bad faith, rather than a valid corporate purpose. Count III alleged that the defendants’ actions violated the Illinois Banking Act and other statutes. In their second-amended complaint, upon which this appeal is based, the plaintiffs abandoned both the fiduciary-duty count and the bad-faith count. The complaint alleged only that the Bank‘s actions were illegal and contrary to common law and the Banking Act.
Specifically, the complaint alleged that, as a result of the freeze-out maneuver, the plaintiffs’ shares vested either in the Bank as treasury stock or in another shareholder of the Bank (Banterra Corporation). The complaint further alleged that either alternative was contrary to the Banking Act, unauthorized and void. Thе complaint alleged that, although the Banking Act permits a bank to acquire shares of its own stock to hold as treasury stock, the defendants failed to follow the procedures laid out in that statute for acquiring treasury stock. The complaint alleged that the plaintiffs’ shares therefore did not vest in the Bank as treasury stock. The complaint alleged that, instead, the defendants acquired the plaintiffs’ shares solely for the benefit of another stockholder, in violation of particular sections of the Banking Act. The complaint alleged that the Banterra Corporation, another shareholder of the Bank, acquired all of the plaintiffs’ shares. As support
The defendants filed an answer to the plaintiffs’ second-amended complaint, admitting many of the allegations of the complaint, but denying those allegatiоns that contended that the Bank‘s actions were illegal. In their answer, the defendants also alleged that the plaintiffs’ complaint failed to state a claim upon which relief may be granted and prayed that the complaint be dismissed with prejudice and that judgment be entered in favor of the defendants and against the plaintiffs.
The plaintiffs subsequently moved for judgment on the pleadings (
I
The majority concludes that, since the plaintiffs asked the trial court to enter judgment fоr the defendants, with prejudice, they are barred from asking a reviewing court to consider the legality of the defendants’ alleged misconduct. The plaintiffs did not confess judgment and waive their right to appeal, as the majority would lead us to believe.
The plaintiffs did not choose to sell their stock in the Bank. The Bank, through the majority shareholders, targeted the plaintiffs’ shares for exterminаtion. In seven days (November 15 to November 22, 1989), the plaintiffs’ shares were involuntarily converted from the plaintiffs and transferred to the Banterra Corporation (the majority shareholder). Other minority shareholders (the officers and directors) were permitted to continue as minority shareholders. As the chart below demonstrates, on November 15, 1989, the Bank had 3,000 shares outstanding. On November 22, 1989, the Bank still hаd 3,000 shares outstanding. It still had the defendant officers and directors as minority shareholders and the Banterra Corporation as the majority shareholder. The disappearance of the plaintiffs from the corporate scene is the real issue that this court must consider.
| Shareholders | Outstanding shares | |
|---|---|---|
| Nov. 15 | Nov. 22 | |
| Banterra Corporation | 2,491 | 2,648 |
| Officers and Directors | 424 | 352 |
| Plaintiffs | 85 | 0 |
| 3,000 | 3,000 | |
As in other democratic organizations, the majority of corporate shareholders have the pоwer to control the affairs of the corporation. However, this power does not give the majority the right to oppress the minority. The plaintiffs here were justly outraged by the defendants’ oppressive actions, and sought immediate injunctive relief to avoid the irreparable damage they would suffer if the defendants’ plan to exterminate their shares succeeded.
The plaintiffs rationally believed that the allegations in the complaint, when considered in conjunction with the proxy statement and the defendants’ admissions, amply demonstrated that another shareholder of the Bank (the Banterra Corporation) acquired ownership of the plaintiffs’ shares in the freeze-out maneuver, and that no other inference or conclusion was possible. The plaintiffs further argued that the trial court was faced only with a question of law, that is, whether the defendants’ actions violated the Banking Act or whether those actions were somehow authorized by statutes or common law. The trial court disagreed with the plaintiffs’ position that the facts alleged in the complaint and the exhibits attached thereto established a valid cause оf action against the defendants. Accordingly, the trial court dismissed the plaintiffs’ complaint.
Now the plaintiffs simply want to obtain their statutory right to review of the trial court‘s judgment on the merits. They do not want another opportunity to present additional evidence in the trial court. Rather, they continue to make the same argument that they
The majority nevertheless concludes that the plaintiffs are not entitled to a review of their claim on the merits, because the plaintiffs asked the trial court to enter a final judgment, thereby permitting an immеdiate appeal. The majority‘s reasoning is flawed in several respects.
First, the majority completely ignores the fact that the defendants also specifically asked the trial court to dismiss the plaintiffs’ complaint and enter judgment in their favor. The defendants’ answer to the second-amended complaint states, in pertinent part:
“Count I fails to state a claim upon which relief can be granted.
WHEREFORE, defendants pray that Count I of the plaintiffs’ Second Amended Complaint be dismissed with prejudice, that judgment be entered in favor of defendants and against plaintiffs, and that defendants be awarded such further relief as the Court deems appropriate in the circumstances.”
The plaintiffs’ alternative motion may be construed, therefore, as simply a request that the trial court act upon the defendants’ prior request for a judgment in their favor.
Second, even if the plaintiffs’ request for a final judgment is considered, the majority‘s conclusion that the plaintiffs are not entitled to a review on the merits is contrary to case law and to common sense. The facts of this case are analogous to those in innumerable cases where the trial court concludes that a plaintiff‘s complaint fails to state a cause of action and dismisses the complaint with leave to amend. Such an order, like the trial court‘s order denying judgment on the pleadings in this case, is not final, and, thus, not appealable. (See,
The cases discussed above, where a plaintiff elects to stand on an unamended complaint and seeks dismissal of that complaint with prejudice, are no different procedurally from the one now before us. In such cases, the trial court enters an interlocutory order dismissing the plaintiff‘s complaint and informs the plaintiff that he or she must amend the complaint by pleading additional facts оr allegations to state a cause of action. When the plaintiff informs the trial court that there are no additional facts or allegations to plead, the trial court enters an order dismissing the complaint with prejudice. On appeal, the plaintiff does not contest the order dismissing the complaint. Rather, the plaintiff claims that the trial court erred in concluding that the complaint was insufficient and that additional facts and allegations were necessary to state a cause of action.
Similarly, the trial court here refused the plaintiffs’ request for judgment on the pleadings and insisted that the plaintiffs present additional evidence at an evidentiary hearing. In their motion to reconsider, the plain-
“It appearing from plaintiffs’ motion that they have no evidence to present in support of their case other than the exhibits attached to their Second Amended Complaint and defendants’ admissions thereto. It further appearing that on the basis of plaintiffs’ allegations and exhibits in their Second Amended Complaint, without more, that plaintiffs are not entitled to the relief sought.
It is therefore the decision of the court that judgment is entered against plaintiffs and in favor of defendants, with prejudice, ***.” (Emphasis added.)
The substance of the court‘s order demonstrates that the trial court dismissed the plaintiffs’ complaint, not because the plaintiffs asked it to do so, but because the court believed that the facts stated in the plaintiffs’ complaint and the exhibits attached thereto, standing alone, did not warrant the relief sought.
The majority concludes that the plaintiffs may not appeal from the trial court‘s judgment, because they do not complain that the trial court erred in entering judgment for the defendants. In fact, however, the plaintiffs claim that the trial court erred in concluding that additional evidence was necessary to sustain their complaint. The plaintiffs continue to argue, as they did in both the trial and the appellate courts, that the facts alleged establish, as a matter of law, that the defendants’ freeze-out maneuver violated the Illinois Banking Act. Because they had no additional evidence to present in support of this claim, the plaintiffs had no choice but to
II
The majority opinion stands in direct opposition to the policy expressed in our Code of Civil Procedure, which states:
“This Act shall be liberally construed, to the end that controversies may be speedily and finally determined according to the substantive rights of the parties.” (Emphasis added.) (
735 ILCS 5/1-106 (West 1992).)
The majority thwarts this policy, exalts form over substance, and relies upon procedural technicalities to deprive the plaintiffs of a hearing on the merits of their appeal. It is evident that we should, within the spirit and the letter of the law, determine the merits of the plaintiffs’ cross-appeal. I believe that justice requires us to address the question of law raised in the plaintiffs’ cross-appeal. Accordingly, I dissent from the majority‘s decision.