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Conway v. Conners





APPEAL from the Circuit Court of Cook County; the Hon. GEORGE A. HIGGINS, Judge, presiding.


The plaintiff filed suit in equity against the defendants seeking inter alia to recover certain stock in which she had an interest and which defendants had allegedly converted. The trial court dismissed the complaint against three of the defendants with prejudice. We reverse holding that the complaint stated a cause of action in equity and the fact that the complaint is neither plain nor concise is not sufficient grounds for dismissal.

The plaintiff, Margaret Conway, filed suit December 15, 1978, in chancery against Dewey Conners, *fn1 Edward Clem, Kenneth Connor, William N. Sheehan, Anar Chemical Company, Inc. (Anar), and unknown defendants. Subsequently, three amended complaints were filed. The third amended complaint consisting of 12 pages was in two counts, one count against all the parties in equity and one count against all the parties in law. Oversimplified and reduced to its bare essentials, the complaint alleged that Conners, who at the time was plaintiff's boyfriend, obtained money from her and they formed a partnership. Besides money, plaintiff contributed furniture, equipment and labor to the partnership. It was agreed that they would be equal partners. Conners used plaintiff's money to purchase all of the stock of Anar Corporation for the partnership. Conners and Clem induced plaintiff to borrow $48,000 which was used to purchase a soap inventory for Anar. Subsequently, sometime in 1976, Clem and Conners informed plaintiff that she had no interest in Anar or in Conway and Conners and that the latter had been dissolved. In 1978, she discovered that the stock certificate of Anar in the names of Conway and Conners had been converted by Clem and Conners to their own use and cancelled by them on the books of Anar; that Clem and Conners had distributed the stock previously owned by Conway and Conners among themselves to the exclusion of plaintiff by the use of blank stock certificates. Sometime prior to the time Clem and Conners informed plaintiff she had no interest either in the corporation or the partnership, Sheehan became associated with Anar's business. At this time, plaintiff made known to Sheehan her interest as part owner of Anar and her position as an officer of the company. Sheehan purchased from Clem and Conners the stock of Anar and assumed management, operation and exclusive control knowing at all times that the purchased stock had been wrongfully taken from plaintiff and plaintiff was the rightful owner of the stock. The defendants, while in exclusive control of Anar, extracted sums of money under the pretense of salaries and expenses and appropriated all of the monies earned by the businesses to their own use and to the exclusion of plaintiff. The plaintiff prayed for the following relief inter alia:

1. that defendants be enjoined from transferring, assigning or in any way changing the stock ownership of defendants in the corporation or from altering the books and records thereof;

2. that an accounting be conducted;

3. that plaintiff be deemed a 50 percent owner of Anar's stock, that the stock issued to defendants in excess of 50 percent be rescinded and defendant be ordered to issue plaintiff the said 50 percent;

4. that a resulting and constructive trust to the use and benefit of plaintiff be imposed upon the monies, properties and shares of Anar determined to have been wrongfully appropriated;

5. that defendants be removed as officers and directors of Anar and a new stockholder meeting be conducted in which plaintiff would be allowed to participate and vote her 50 percent interest in the selection and election of directors and officers;

6. that the suit constitute a stockholder's derivative action on behalf of Anar and that defendants account for and pay over to Anar the monies wrongfully wasted, mismanaged and appropriated by defendant;

7. that punitive damages be awarded to plaintiff.

Anar and Sheehan moved to dismiss the complaint, contending:

1. the complaint failed to contain any factual allegations of wrong-doing directed against Anar;

2. with respect to Sheehan the complaint did not allege that Sheehan had knowledge of the existence of the purported stock certificate issued to Conway and Conners;

3. the claim was barred by the statute of limitations and laches;

4. the complaint did not contain a plain and concise statement of her cause of action; the allegations were vague, confusing, replete with evidentiary material and could not be answered in their present form;

5. the complaint failed to state a cause of action in equity; in essence plaintiff sought money damages for breach of contract and fraud and her claim, if ...

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