Galler v. Galler
203 N.E.2d 577 (1964).
Galler brothers, in an effort to provide for their families if something were to happen to either brother, entered into a shareholder agreement that would guarantee certain protections for their spouses.
- After plaintiff spouse’s death, defendants tried to destroy all copies of the agreement.
- Plaintiff sued to review the agreement in order to enforce the provisions therein.
- Defendant argued that the shareholder agreement was unenforceable because it violated state statutes.
Rule: Particularly in close corporations, agreements that technically violate the letter of the Business Corporation Act can nevertheless been upheld in the light of the existing practical circumstances, such as:
- no apparent public injury,
- absence of a complaining minority interest, and
- no apparent prejudice to creditors.