APPEAL from the Circuit Court of Cook County; the Hon. RICHARD
L. CURRY, Judge, presiding.
JUSTICE ROMITI DELIVERED THE OPINION OF THE COURT:
The plaintiff in this case was previously a party to a divorce action in Indiana. In that case he testified, under oath, that he owned 31% of certain stock, his wife 29% and his children 40%. The Indiana court accepted this testimony and so divided the particular property. Now the plaintiff has filed a lawsuit in Illinois claiming beneficial ownership of the stock which in Indiana he had testified was owned by the children. The trial court, while aware that Indiana will not apply collateral estoppel unless mutuality is present, held that even though the children were not parties to the Indiana action, it would be contrary to Illinois public policy to allow plaintiff to deny either his own previous testimony or the Indiana decree and to carry this issue further, and dismissed the action. We agree and affirm.
In 1954 the plaintiff, Charles Finley, organized a previously founded insurance brokerage business into Charles O. Finley & Co., Inc., an Illinois corporation. At that time, in view of his poor medical history and for tax reasons in the event of his early death, he put 10% of the stock in each of his four children's names. The remaining 60% was divided between Finley and his wife. Although other children were born after 1954, no stock was given to them.
At the time of its formation in 1954, the total capitalization of the corporation was $5,000, all of which was contributed by Finley. In 1961, the corporation became the owner and operator of a major league professional baseball franchise; this was sold in 1980. At the same time the corporation, which now has a shareholder equity in excess of $20,000,000, adopted a plan of liquidation and distribution. Finley in the present action claims that although 40% of the stock is registered in the children's names they are not entitled to any part of the liquidating distributions of the corporation.
As already stated, Finley filed this declaratory judgment action seeking a declaration that the children are not beneficial owners of the stock and that he is the beneficial owner of the stock. Defendants filed a motion to dismiss, pursuant to section 48(d) of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 48) on the grounds of res judicata. The pleadings and briefs of the parties in the trial court disclose that in about 1974, Shirley M. Finley, then the wife of the plaintiff, filed a suit for divorce in Indiana. At the hearing on her motion for temporary support, Finley testified:
"* * * So I said, `Well, that does sound like a good idea to give the stock to the kids and the wife.' So I decided that I'd give her 29 percent and the four children 10 percent each. That was a total of 69 percent of the stock that I gave at the time I formed the corporation for tax purposes. That was my thinking in the event of an early death.
Q. Let me ask this: Was that done, then, as part of an estate plan contemplating your early death perhaps?
A. Yes, yes, it was part of the beginning of my estate planning.
Q. * * * — by the way, does the stock still remain in the same percentage — 29 percent to Mrs. Finley, 31 to you and 10 to each of the four children.
Q. (Continuing) — that it did in 1954?
Q. How was that stock set up?
A. Identical to the stock of the Chicago corporation. I gave Mrs. Finley 29 percent and the children 10 percent each — and for the same reason, for my estate planning, especially in event of an early death. In the event of an early death, I might say, ...