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Briskin v. Briskin Mfg. Co.

MAY 19, 1972.

JUNE BRISKIN, PETITIONER-APPELLEE,

v.

BRISKIN MANUFACTURING COMPANY ET AL., RESPONDENTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. EDWARD J. EGAN, Judge, presiding.

MR. PRESIDING JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT:

Rehearing denied August 8, 1972.

This is a mandamus proceeding brought by petitioner June Briskin as owner of 10,000 shares of the Briskin Manufacturing Company seeking a writ of mandamus commanding the defendants to produce corporate books and records for examination by petitioner's attorneys and accountants, pursuant to the Illinois Business Corporation Act. (Ill. Rev. Stat. 1967, ch. 32, par. 157.45.) After consideration of the pleadings and related materials, the trial court granted petitioner's motion for summary judgment and ordered that a writ of mandamus issue against the defendants. Defendants appeal from the trial court's order granting the summary judgment.

Briskin Manufacturing Company, Inc. a closely held corporation (hereinafter referred to as "the corporation") was organized in 1945 with control and ownership revolving around the Briskin family. Defendants Lester Briskin and Elmer Kaplan are the President and Secretary of the corporation, respectively, and two of its directors. Petitioner had been married to Moray Briskin, a son of the corporate founder. Moray Briskin died in 1960 leaving a will in which he disinherited petitioner. Petitioner thereafter acquired 10,000 shares of stock in the corporation in a court order entered February 1, 1966, by virtue of her statutory share upon renunciation of the will of her husband, Moray Briskin. At the time, the outstanding and issued common stock of the corporation was 155,000 shares.

On July 27, 1967, petitioner made a written demand upon the defendants to allow her attorneys and agents to examine specified records of the corporation dating back to its inception in 1945 and to make extracts from those books and records. The demand stated:

"The purposes of such examination are to enable me to ascertain the value of my shares of stock in the corporation, to enable me to secure information as to the financial condition of the corporation, its management and the conduct of its affairs and to enable me to communicate with other shareholders of the corporation respecting the affairs of the corporation."

According to petitioner, this demand was based on information that the corporation had sustained substantial losses as a result of transactions with the Coralware Manufacturing Company and the Century Vitreous Enamel Company, two companies over which defendants exercised substantial control. Petitioner also sought to learn why the corporation had not paid a dividend for a number of years. The demand was refused and this action followed. In their answer to petitioner's complaint, defendants alleged that:

"* * * she had no proper purpose for such examination and acted not in good faith, but rather to harass, annoy and obstruct the regular operations of said corporation."

The issues of the case were joined by answer to the petitions and amendments to the answer. After considering supporting and opposing affidavits, defendants' answers to interrogatories, exhibits and other related material, the trial court granted petitioner's motion for summary judgment and ordered the issuance of the writ of mandamus against the corporation and its officers. Defendants appeal from that summary judgment. No question appears to have been raised on the pleadings.

OPINION

• 1, 2 Defendant's first argument questions the propriety of a summary judgment in a case involving a determination of a "proper purpose." *fn1 Section 45 of the Illinois Business Corporation Act gives a shareholder in a corporation, who qualifies under the statute, the right to examine the corporation's books and records "for any proper purpose." (Ill. Rev. Stat. 1967, ch. 32, par. 157.45.) The Illinois Supreme Court has determined the phrase "for any proper purpose" to include "honest motive" and "good faith." (Sawers v. American Phenolic Corporation (1950), 404 Ill. 440, 89 N.E.2d 374.) With this rule of law in mind, it is defendant's contention that summary judgment is improper in cases in which a question has been raised as to good faith, purpose, motive or other states of mind. We disagree. Summary judgment is available in all cases in Illinois, and its use in a proper case has been encouraged by the Illinois courts of review. See Allen v. Meyer (1958), 14 Ill.2d 284, 291-292, 152 N.E.2d 576, 580; Cibis v. Hunt (1964), 48 Ill. App.2d 487, 496, 199 N.E.2d 246, 250.

Summary judgment has been upheld where an issue formed by the pleadings as to the shareholder's proper purpose is found not to be a genuine issue of fact. In Winger v. Richards-Wilcox Manufacturing Company (1961), 33 Ill. App.2d 115, 178 N.E.2d 659, the court was faced, as we are in the instant case, with a mandamus petition under Section 45 of the Business Corporation Act to compel examination of the corporate records.

At pages 129-130 of Winger, 178 N.E.2d at 666, the court held:

"Although the defendant's amended answer created an issue between the parties, the Defendant's affidavits and other proof wholly failed to support the issue as to Elizabeth Winger. The mere assertion that there is an issue of fact does not prove that there is. A party may be able to assert a good defense in an answer but may fall far short of substantiating the assertion when forced to disclose his defense through affidavits consisting of facts admissible in evidence. As was said in Gliwa v. Washington Polish Loan & Bldg. Ass'n, supra [310 Ill. App. 465, 470, 34 N.E.2d 736, 739]: `The pleadings (important) are not controlling. If it appears from facts stated in affidavits or ...


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