APPEAL from the Circuit Court of Lake County; the Hon. MINARD
E. HULSE, Judge, presiding.
MR. JUSTICE GUILD DELIVERED THE OPINION OF THE COURT:
This is a companion case in many respects with Koretz v. All American Life & Cas. Co. (1968), 102 Ill. App.2d 197, 243 N.E.2d 586, and attention is directed to the opinion of this court there sitting in the First District.
The Chicago National Life Insurance Company in November of 1962 issued a prospectus for the sale of 100,000 shares of its common stock at $4 a share. This apparently was not a general offer but an offer to select Illinois residents who would promote the growth and development of the company.
A copy of the prospectus was sent to Louis Telpner on November 30th, 1962, with a covering letter from one Richard T. Christoph, Regional Sales Director for Chicago National, who was also a shareholder of Chicago Management Corporation, a company owning 87% of the Chicago National Life Insurance Company stock. On December 4, 1962, Louis Telpner executed a subscription agreement for 3750 shares at $4 a share and forwarded his check and the subscription depository agreement to the Chicago National Life Insurance Company. The stock subscription and depository agreement reads in part as follows:
"To: Chicago National Life Insurance Company
The undersigned hereby accepts the offer of Chicago National Life Insurance Company as set forth in its prospectus dated November 1, 1962, and acknowledges receipt of a copy of said prospectus and subscribes for 3,750 shares of stock at $4.00 per share in Chicago National Life Insurance Company, of Chicago, Illinois, par value $1.00 per share, and herewith attaches payment in the sum of Fifteen Thousand Dollars ($15,000) as payment in full upon the following terms: * * *."
Other pertinent parts of the Subscription Agreement are as follows:
"Upon receipt of this Agreement * * * the Company will acknowledge said receipt within fifteen (15) days from the date hereof, and issue its Interim Receipt to the subscriber, subject to provisions of paragraph five (5) hereof."
Paragraph four, in part, added:
"Deposit of the funds paid in by the subscriber into the Company's Escrow Account shall constitute acceptance of this agreement by the Company."
and paragraph five partially provided:
"* * * Company shall have the right, at its discretion, at the home office, until delivery of the Interim Receipt, to reject any subscription by returning to the subscriber the payment tendered with this subscription."
About a month later on January 3rd, 1963, Allen Dowling, President of Chicago National acknowledged receipt of Telpner's subscription and check for $15,000. Dowling, like Christoph, was a major shareholder in Chicago National Life Insurance Company, as well as being President of the Chicago Management Company, in substance, the holding company.
Another subscription agreement dated April 1, 1963, was executed by Louis Telpner for 1250 shares of Chicago National Life Insurance Company stock for a total cost of $5,000 at $4 a share. Dowling in his dual capacity as President of Chicago Management Company and Chicago National Life altered the date of this subscription agreement to April 21st, 1963. Telpner then sent his check dated April 30th, 1963, for the aforementioned ...