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John Deere Co. v. Hinrichs

JUNE 16, 1962.

JOHN DEERE COMPANY OF MOLINE, A CORPORATION, PLAINTIFF-APPELLEE,

v.

BERT F. HINRICHS, ET AL. (LOUIS SURKIN, ANDREW PETTINGER, B.F. HINRICHS IMPLEMENT COMPANY, INC., A CORPORATION, AND BERT F. HINRICHS COMPANY, A CORPORATION), DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Lee County; the Hon. ROBERT L. BRACKEN, Judge, presiding. Order affirmed in part and reversed in part and cause remanded with directions.

DOVE, P.J.

This is an interlocutory appeal by Louis Surkin, Andrew Pettinger, B.F. Hinrichs Implement Company, a corporation, and Bert F. Hinrichs Company, a corporation, from an order of the Circuit Court of Lee County, entered on January 19, 1962, denying their motion to dissolve a preliminary injunction issued by the Court on December 15, 1961.

The record discloses that on December 7, 1960 the Deere Company, by its Division Sales Manager at the company's office in Moline, Illinois accepted a contract dated November 10, 1960, signed by B.F. Hinrichs Implement Company, a corporation. This contract is designated as a "General Agricultural Dealer's Contract," and covers 37 printed pages of the abstract.

On December 5, 1961 the instant complaint was filed which alleged that the Deere Company and the B.F. Hinrichs Implement Company, hereinafter referred to as the Implement Company, had for several years executed a general agricultural dealers contract under the provisions of which the Implement Company became an agricultural dealer for Deere Company; that the last contract executed by Deere Company was on November 10, 1960; that as an inducement to Deere Company to enter into these contracts, Bert F. Hinrichs executed and delivered to the Deere Company his written unconditional guarantee of payment of any sums the Implement Company might be owing the Deere Company; that in the year 1960-1961 Bert F. Hinrichs organized under the laws of the State of Delaware, a corporation known as the Bert F. Hinrichs Company and hereinafter referred to as the Hinrichs Company; that Bert F. Hinrichs was the principal stockholder of this company and all the assets of the Implement Company were transferred to the Hinrichs Company which assumed all the liabilities of the Implement Company, including its rights and obligations under the B.F. Hinrichs Implement Company contract with the Deere Company and thereafter the Hinrichs Company took over the operation of this contract.

The complaint then alleges, on information and belief, that Hinrichs, Surkin and Pettinger are officers and directors of the Hinrichs Company; that on August 8, 1961 Bert F. Hinrichs and Louis Surkin entered into an agreement whereby Hinrichs transferred to Surkin, 1850 shares of the capital stock of the Hinrichs Company, being a majority of the stock of that company, and Surkin conveyed to Bert F. Hinrichs certain parcels of real estate located in Illinois and in other States.

It is then alleged that in the latter part of October, 1961 the Deere Company learned for the first time, that Bert F. Hinrichs had transferred control of his corporate stock to Louis Surkin and Andrew Pettinger; that upon learning of this, the Deere Company required, as a condition to the continuance of operations under its contract that Bert F. Hinrichs, Louis Surkin and Andrew Pettinger execute and deliver to the Deere Company their respective individual guarantees of the payment of whatever sums the Implement Company might, at any time be indebted to the Deere Company; that such guarantees were thereafter executed and delivered to the Deere Company and copies thereof were attached, as exhibits, to the complaint.

The complaint then alleges that in November, 1961 at a regular monthly review of the status of the account under the contract between the Deere Company and the Implement Company, it was ascertained that a sum in excess of $72,000 was owing and immediately due the Deere Company; that the Implement Company had no funds and Messrs. Surkin, Hinrichs and Pettinger and the Hinrichs Company all refused and failed to pay the Deere Company any part of said sum admittedly due the Deere Company. It was alleged that Louis Surkin had instituted a pending action against Bert F. Hinrichs in which action Surkin charged that he, Hinrichs, had diverted corporate funds of the Implement Company and the Hinrichs Company.

The complaint then alleged, upon information and belief, that the several individual defendants, Surkin, Pettinger and Hinrichs, have all diverted corporate funds to their individual purposes and in so doing acted with a fraudulent intent designed to deprive the Deere Company of money and property to which it is entitled under its contract.

It is then alleged that the plaintiff had filed an action in replevin in the Circuit Court of Lee County against the Implement Company, the Hinrichs Company, Bert F. Hinrichs, Louis Surkin and Andrew Pettinger; that in the execution of said writ of replevin, the sheriff has been unable to locate many of the chattels sought to be replevined; that plaintiff has requested the corporate defendants and Messrs. Hinrichs, Surkin and Pettinger to deliver to it all notes and accounts representing proceeds of sales made under the dealers contract; that these parties have failed and refused to do so and plaintiff fears that such notes and accounts may have been disposed of by defendants in furtherance of the purpose of defendants to defraud plaintiff.

The complaint then alleges that the descriptions and locations of assets owned by Messrs. Hinrichs, Surkin and Pettinger, are not known to plaintiff; that discovery of such information will consume considerable time and that plaintiff's rights against the individual defendants upon their several written guarantees cannot be accomplished until the amount due plaintiff under its dealers contract has been finally determined; that Bert F. Hinrichs has executed two warranty deeds, two trust deeds and one chattel mortgage by the provisions of which, Bert F. Hinrichs has conveyed to Donald Faber, as trustee, and to R.W. Hensel as trustee, to the Ashton Bank, to Ernest Claus and to Robert H. Reck, certain described real and personal property; that said instruments were executed without adequate consideration and were delivered for the purpose of hindering and delaying the plaintiff in the enforcement of its contract and that such instruments should be declared null and void.

It is further alleged that the corporate defendants and Messrs. Hinrichs, Surkin and Pettinger are the owners of growing crops, livestock, poultry and other farm products and equipment and also the owners of various described tracts of real estate and plaintiff charges that these properties or interests therein were acquired by defendants, with funds to which plaintiff was and is entitled and in many instances the ownerships of such properties were the basis of financial statements delivered to the plaintiff, by said several defendants, which induced plaintiff to extend the credits which remain unpaid to the plaintiff.

The prayer of the complaint was:

(a) That the court determine the amount due and owing plaintiff under the dealer contract from the Hinrichs Company and the Implement Company and render a judgment or decree for said sum so found due in favor of the plaintiff.

(b) That the court render a judgment, order or decree against Hinrichs, Surkin and Pettinger upon their several written guarantees, for the sum so found due ...


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