CORPORATIONS-DERIVATIVE STOCKHOLDERS' SUITS-STANDING OF SUBSEQUENT TRANSFEREE OF "TAINTED SHARES"

In a derivative suit the plaintiff, a minority stockholder, sought an accounting by officers and directors for salaries he alleged they had illegally caused the corporation to pay to themselves. The defendants' answer averred that all the alleged wrongful acts complained of occurred before the plaintiff acquired his stock, and that his vendor had acquiesced. It appeared from the record that the plaintiff's vendor had been an officer in the corporation prior to the time when the payments complained of occurred; that during his incumbency he had himself received payments similar to those in question, and that at a stockholders' meeting, subsequent to the payments to the defendants, but prior to the assignment of his stock to the plaintiff, he had suggested that the directors' salaries be increased. The trial court dismissed the case for want of equity.

On appeal, held, affirmed. Russell v. Louis Melind Co., (Ill. App. Ct. 1947) 72 N.E. (2d) 869.