Galler v. Galler
Supreme Court of Illinois
203 N.E.2d 577 (Ill. 1964)
Brothers Benjamin and Isadore Galler, equal partners in Galler Drug Company, signed a 1955 agreement ensuring that after either brother's death, his immediate family would retain equal control of the company, including guaranteed dividends and continued salary; Benjamin later put his shares in a trust naming his wife Emma (plaintiff) as trustee. After Benjamin died, Isadore, his wife Rose, and son Aaron (defendants) tried to get Emma to abandon the agreement, and though she initially let Aaron serve as president for a year without interference in exchange for reissuing Benjamin's stock in her name, she later demanded full enforcement of the agreement's guarantees; the defendants refused, and the lower court voided the entire agreement as against public policy for its "undue duration" and disregard of the Corporation Act, and Emma appealed.
Whether a close corporation's shareholder agreement guaranteeing management control, minimum dividends, and continued salary to a deceased director's successor is valid despite technically deviating from the state's Business Corporation Act.