GALLER V. GALLER
203 N.E.2d 577 (1964)
NATURE OF THE CASE: Action in equity for accounting and specific performance. Emma Galler (P)appealed from the Appellate Court in a claim based on shareholder agreement purporting to grant to P her husband's share of close corporation following his death.
FACTS: Benjamin and Isadore Galler (D), brothers, were equal partners in the Galler Drug Company. In March, 1954, Benjamin and D, on the advice of their accountant, decided to enter into an agreement for the financial protection of their immediate families and to assure their families, after the death of either brother, equal control of the corporation. While the agreement was in the process of preparation by an attorney Benjamin suffered a heart attack. He was again stricken in February, 1955, and thereafter was unable to return to work. Between the execution of the agreement in July, 1955, and Benjamin's death in December, 1957, the agreement was not modified. Benjamin suffered a stroke late in July, 1955, and on August 2, 1955, D and the accountant and a notary public brought to Benjamin for signature two powers of attorney which were retained by the accountant after Benjamin executed them with D as a witness. Emma (P), Benjamin's wife, did not read the powers and she never had them. One of the powers authorized the transfer of Benjamin's bank account to P and the other power enabled P to vote Benjamin's 104 shares. Benjamin executed an instrument creating a trust naming his wife as trustee. The trust covered, among other things, the 104 shares of Galler Drug Company stock and the stock certificates were endorsed by Benjamin and delivered to P. When P presented the certificates to Ds for transfer into her name as trustee, they sought to have P abandon the 1955 agreement or enter into some kind of a noninterference agreement as a price for the transfer of the shares. Shortly after Benjamin's death, P went to the office and demanded the terms of the 1955 agreement be carried out. Ds refused. During the last few years of Benjamin's life both brothers drew an annual salary of $42,000. In 1957, 1958, and 1959 a $40,000 annual dividend was paid. P has received her proportionate share of the dividend. P brought a suit in equity and the trial court ruled in her favor. The Appellate Court reversed. The Appellate Court found the 1955 agreement void because 'the undue duration, stated purpose and substantial disregard of the provisions of the Corporation Act outweigh any considerations which might call for divisibility' and held that 'the public policy of this state demands voiding this entire agreement'. P appealed.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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