Citations
- 79 Ill. App. 105
Full opinion text
Mb. Justice Seaes
delivered the opinion of the court.
The contention of counsel for appellants is based upon the assumption that the building and loan association is a solvent corporation.
The argument proceeds upon the theory that such an association has the right, as a solvent and going concern, to exchange its assets for stock or stock liability; that the provisions of the statute for effecting liquidation contemplate the direction of such liquidators in the discharge of their duties by resolution of the association; and that the association here did by its resolution direct their liquidators to thus exchange assets, i. e., real estate of the corporation, for stock, or in extinguishment- of stock liability of the association.
One difficulty of the argument lies in the fact that it assumes the solvency of the association, while the verified allegations of the bill of complaint, upon which the chancellor acted in granting this order, distinctly aver the insolvency of the same.
The bill of complaint alleges that at the annual meeting of the association held in April, 1897, it was announced by the president that between forty and fifty thousand dollars of the assets of the association had been misappropriated by certain officers of the association, and alleges that “ by reason of the defalcation of its officers the association became insolvent and unable to continue its operations as a building association,” etc.
There is another element in the bill of complaint which is in effect ignored by counsel for appellants in their argument, viz., the allegation that certain of the stock of the association was fraudulently issued as matured, when in fact it was not properly matured stock, and the further allegation that the liquidators were about to accept this fraudulent stock in exchange for the real estate, i.