Buchen v. Wisconsin Tobacco Co., Inc., s. 431
| Decision Date | 29 June 1973 |
| Docket Number | Nos. 431,432,s. 431 |
| Citation | 208 N.W.2d 373,59 Wis.2d 461 |
| Parties | James E. BUCHEN, Appellant, v. WISCONSIN TOBACCO CO., INC. et al., Respondents. James E. BUCHEN et al., Appellants, v. David PERLE et al., Respondents. |
| Court | Wisconsin Supreme Court |
E. H. Snyder, Milwaukee, for appellants.
Aberg, Bell, Blake & Metzner, Madison, for respondents.
On or about July 18, 1967, Scotten, Dillon acquired from Ralph R. Power and James E. Buchen all the outstanding voting common stock of Wisconsin Tobacco. At the time of sale, Power was the president, chief executive officer and director of Wisconsin Tobacco; Buchen was vice-president, chief operating officer and director; and Lynn E. Tryggestad was the plant and warehouse manager. Power, Buchen and Tryggestad occupied these positions with Wisconsin Tobacco until December, 1970. December 10, 1970, they were notified that the board of directors of Scotten, Dillon voted to terminate their employment, allegedly because a loss of 43,000 bales of leaf tobacco, having an inventory value of $936,000, was discovered at Wisconsin Tobacco. After Buchen's dismissal, Perle acted as plant manager of Wisconsin Tobacco.
These dismissals have been challenged as being in violation of the bylaws of Scotten, Dillon and void. Resolution of this dispute is not before this court. However, the alleged loss of tobacco and the circumstances surrounding the dismissals produced the litigation now before this court.
The three orders from which this appeal is taken are: (1) An order, entered June 22, 1972, which denied the plaintiffs' motions to set aside the prior order of dismissal on the merits and with prejudice of the defendants, Wisconsin Tobacco and Scotten, Dillon; (2) an order, entered June 22, 1972, which refused to require production by the defendants of additional documents for inspection by the plaintiffs pursuant to a subpoena duces tecum; and (3) an order, entered July 12, 1972, which vacated a prior temporary restraining order but refused to restore the plaintiffs to possession of the properties and assets of Wisconsin Tobacco.
Order refusing to vacate a prior order of dismissal.
September 30, 1971, the trial court, upon plaintiffs' ex parte motion, dismissed the above entitled actions upon their merits with prejudice as to the defendants, Wisconsin Tobacco and Scotten, Dillon. Plaintiffs' affidavit in support of their motions to dismiss averred that they believed there was no merit to their claims against the defendants, Wisconsin Tobacco and Scotten, Dillon.
Plaintiffs contend that the trial court committed error in refusing to exercise its discretion to relieve the plaintiffs from the order of September 30, 1971.
Sec. 269.46, Stats., insofar as it is relevant to the instant appeals, provides:
'. . . The court may, upon notice and just terms, at any time within one year after notice thereof, relieve a party from a judgment, order, stipulation, or other proceeding against him obtained, through his mistake, inadvertence, surprise or excusable neglect and may supply an omission in any proceeding. . . .'
The relief sought under the statute is addressed to the discretion of the trial court, and upon appeal from its order, this court will only reverse where there has been a clear abuse of discretion. Ochiltree v. Kaiser (1963), 20 Wis.2d 191, 121 N.W.2d 890; Padek v. Thornton (1958), 3 Wis.2d 334, 88 N.W.2d 316; Gowran v. Lennon (1913), 154 Wis. 566, 143 N.W. 678. This court in Gowran, supra, at page 569, 143 N.W. at page 679, stated:
In support of their motion to vacate the order of September 30, 1971, plaintiffs contend that they, in reliance upon the advice of counsel, and upon the express representation of Power, that he was the president of Wisconsin Tobacco and had the power and authority to enter into a binding and effective settlement agreement with the plaintiffs, entered into the settlement agreement, dated September 29, 1971. Plaintiffs assert that they were mistaken as to the facts, circumstances and law; that apparently Power did not have the authority to enter into the settlement agreement; and that they have not received any consideration for said settlement agreement or for settling their claims in these actions against Wisconsin Tobacco.
The record reveals that plaintiff, Buchen, and Power, fully cognizant of their purported dismissals on December 10, 1970, met on September 29, 1971, and conducted what was denominated a 'special meeting of the directors of Wisconsin Tobacco Company, Inc.' At that meeting they resolved that they were the only lawful directors of Wisconsin Tobacco and had the power and authority to conduct its business. Thereupon, they proceeded to take action on behalf of the corporation. This included such acts as the appointment of new directors and officers; changing of the names of those authorized to draw upon the corporate bank account; the 'settlement' of the plaintiffs' actions against the defendant, Wisconsin Tobacco, including the corporate payment of compensatory damages and the fees, costs and disbursements of plaintiffs' counsel; the execution of a new employment contract between Wisconsin Tobacco and the plaintiff, Buchen; a retroactive corporate payment to plaintiffs, Burchen and Tryggestad, of wages between December 10, 1970, and September 29, 1971; and filing by the corporation, with the office of the secretary of state, the annual report of the corporation under the signature of Power, reflecting the officers and directors as reconstituted. The so-called 'settlements' were effective without consultation with or approval of counsel of record for Wisconsin Tobacco and Scotten, Dillon.
The following day, September 30, 1971, the plaintiffs appeared in court and moved for the dismissal of their actions against Wisconsin Tobacco and Scotten, Dillon. The settlement agreements purportedly reached the day before were not brought to the attention of the trial court, and the order dismissing the defendants, Wisconsin Tobacco and Scotten, Dillon, was not contingent thereon.
The trial court, in refusing to vacate its prior order of September 30, 1971, stated:
'. . . plaintiffs ask to be relieved of the actions which they took prior to September 30, 1971. It appears from the affidavits and documents which are a part of these motions that plaintiffs proceeded on the assumption that they were in a position to in effect take control of Wisconsi(sic) Tobacco Company and that apparently they were dealing with someone who was in authoritative position in Scotten Dillon Company so they could enter into certain agreements, take certain actions, enter into certain stipulations, and settle these lawsuits. Now the facts such as they existed at that time certainly were within the knowledge and province of the plaintiffs. It was they who proceeded on the basis that they could deal with these corporations and reach their settlements and then proceeded to stipulate for the dismissal of these lawsuits on the merits as to the corporate defendants. The dismissals which were secured by the plaintiffs did not contain any reservations whatsoever.
Under the facts of this case, the trial court did not abuse its discretion in
denying plaintiffs' motion. Order refusing to require
production of documents pursuant to a subpoena duces tecum.
December 16, 1970, in the action for slander, a subpoena duces tecum was served upon the defendant Perle, together with the summons in the case, the complaint, and a copy of the notice of taking the examination, 'otherwise than as a witness on the trial,' and 'under the provisions of section 887.12 of the Wisconsin Statutes,' before a court commissioner. December 18, 1970, and in the same action, a subpoena duces tecum was served upon Summers as an officer, director, agent and employee of the defendant, Wisconsin Tobacco. The subpoenas requested Perle and Summers to bring with them to the examination all the books, records and other recordings of Wisconsin Tobacco relating to the alleged inventory shortage, including the minute or corporate books of Wisconsin Tobacco. Prior to the dismissal of the litigation as to Wisconsin Tobacco and Scotten, Dillon, there were intervening proceedings relating to the adverse examination and subpoena duces tecum, which, in our opinion, are not relevant to this appeal.
However, December 9, 1971, the defendants filed a motion with the trial court to rescind all prior orders as to discovery and production of certain documents and for return of the documents of Wisconsin Tobacco theretofore filed with the clerk of court. The affidavit in support of defendants' motion averred that Perle was no longer an agent or representative of either Wisconsin Tobacco or Scotten, Dillon, and is not authorized to produce or control any of the documents or records of said companies, and that Wisconsin Tobacco, as of September 30, 1971, had been dismissed as a party defendant. June 22, 1972, the trial court ordered:
'. . . That the prior Order of the court dated June 18, 1971,...
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