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06/15/94 KNIGHT'S PRAIRIE HUNTING CLUB v. JIM

June 15, 1994

KNIGHT'S PRAIRIE HUNTING CLUB, INC., AN ILLINOIS CLOSE CORPORATION, AND KNIGHT'S PRAIRIE HUNT CLUB, AN ILLINOIS NOT-FOR-PROFIT ASSOCIATION, AND GERRY MACKENZIE, AN INDIVIDUAL SHAREHOLDER IN KNIGHT'S PRAIRIE HUNTING CLUB, INC., PLAINTIFFS-APPELLANTS,
v.
JIM HOLMES, AN INDIVIDUAL, DEFENDANT-APPELLEE. JIM HOLMES, COUNTERPLAINTIFF-APPELLEE, AND RUTH HOLMES, COUNTERPLAINTIFF, V. KNIGHT'S PRAIRIE HUNTING CLUB, INC., AN ILLINOIS CORPORATION, AND KNIGHT'S PRAIRIE CLUB, AN ASSOCIATION, COUNTERDEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Hamilton County. No. 90-L-12. Honorable David L. Underwood, Judge Presiding.

Maag, Lewis, Chapman

The opinion of the court was delivered by: Maag

JUSTICE MAAG delivered the opinion of the court:

The plaintiffs, Knight's Prairie Hunting Club, Inc., an Illinois close corporation, Knight's Prairie Hunting Club, an Illinois not-for-profit association, and Gerry MacKenzie, an individual and shareholder in Knight's Prairie Hunting Club, Inc., appeal from a judgment of the circuit court of Hamilton County, claiming that the circuit court erred in the following ways: (1) by holding that the corporation did not ratify the lease because the corporation was never organized and did not function; (2) by failing to recognize that Knight's Prairie Hunting Club, Inc., had de facto corporate status when the lease was signed; (3) by ruling prospectively on the manner in which the stock in Knight's Prairie Hunting Club, Inc., should be split; and (4) by holding that the stock would not be held in trust for the benefit of Knight's Prairie Hunting Club.

Jim Holmes and Gerry MacKenzie met in the summer of 1988. Holmes expressed an interest in purchasing some property for the purpose of hunting. After touring the Triple T Farm with MacKenzie, Holmes decided that he would like to purchase it. He later called MacKenzie and asked him if he would object to Holmes buying the property himself. Ultimately, Holmes bought the Triple T Farm. Thetwo men then discussed the possibility of forming a hunt club to help Holmes finance the acquisition.

On November 23, 1988, Holmes and MacKenzie signed the articles of incorporation as the original incorporators of the Knight's Prairie Hunting Club, Inc. (hereinafter "the corporation"). James Van Winkle, attorney for MacKenzie, prepared a lease agreement. Holmes and the "corporation" entered into the lease agreement on December 4, 1988. The lease was filed in the Office of the Recorder of Deeds of Hamilton County on November 22, 1989. Holmes signed as lessor, and MacKenzie signed on behalf of the corporation as its president. Pursuant to the terms of the lease, the corporation would pay rent to lease certain property from Holmes for the express purpose of operating a hunting club. The lease provided that the corporation would have exclusive control over all hunting privileges, and Holmes reserved the right for him and his immediate family to hunt on the premises. The Office of the Secretary of State of the State of Illinois issued the articles of incorporation on December 7, 1988.

In September of 1989, an organizational meeting was held in order to form the Knight's Prairie Hunting Club (hereinafter "the club"). Because the prospective members of the club determined that they did not want to become stockholders in the corporation, they decided that they would pay dues, and that would enable them to hunt in the year in which they paid their dues. Hence, the corporation and the club were to remain separate entities with Holmes and MacKenzie as the sole stockholders. Although the membership fee was $2,000 per person, Holmes and MacKenzie did not have to pay membership dues. It was determined that the club would use the property that the corporation leased for its hunting excursions. In fact, the rental payments provided in the lease were paid by the club and accepted by Holmes.

Eventually, a dispute arose over the parties' rights under the lease. Holmes believed that he had reserved the right for him and his family to hunt anytime he pleased without being restricted by the control of the club or its rules. In fact, even though Van Winkle drafted the lease for MacKenzie, he testified:

"It was my understanding that * * * [Holmes] and his family had the right to go * * * hunting at any time * * *. There had been Discussion about * * * [Holmes'] occupation and that he didn't have per se a schedule and if he wanted to come out on Tuesday afternoon and go hunting, or whenever, it was my understanding that he reserved full hunting privileges that he and his family would come out at any time and go hunting whenever he pleased."

The lease, however, stated as follows:

"9. CONTROL OF HUNTING: LESSEE SHALL HAVE THE EXCLUSIVE CONTROL OF ALL HUNTING PRIVILEGES ON THE PREMISES. LESSOR RESERVES THE RIGHT FOR LESSOR AND LESSOR'S IMMEDIATE FAMILY TO HUNT ON THE PREMISES." (Emphasis added.)

The members of the club recognized that Holmes should be allowed to hunt; however, they believed that he should abide by the same rules that other members of the club faced pertaining to safety and wildlife code provisions. One of the rules that all of the members abided by was booking advance reservations to hunt. This was necessary so that no more than one hunting party would be on the premises at the same time which, in turn, made the hunting experience safer and more enjoyable.

Although the parties attempted to settle their differences, an agreement was never reached regarding Holmes' hunting privileges or the distribution of the stock. On August 9, 1990, the corporation and MacKenzie filed a complaint against Holmes, seeking to determine the hunting rights and privileges between the parties.

Initially, it is necessary to address the defendant's motion to strike Exhibits B - F that are attached to the appellants' brief filed by plaintiff. Supreme Court Rule 329 (134 Ill. 2d R. 329) allows the parties to supplement the record with documents that were before the trial court but were not contained within the record on appeal. In the instant case, Exhibits B - F were never filed in the trial court or considered by the trial Judge. Attachments to briefs that are not a part of the record cannot be used to supplement the record. (See Nameoki Township v. Cruse (1987), 155 Ill. App. 3d 889, 895, 508 N.E.2d 1080, 1084, 108 Ill. Dec. 503.) Since ...


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