Buffington v. Bardon

• Decision Date: 15 December 1891
• Citation: 80 Wis. 635,50 N.W. 776
• Parties: BUFFINGTON v. BARDON ET AL.
• Court: Wisconsin Supreme Court

80 Wis. 635

50 N.W. 776

BUFFINGTON

v.BARDON ET AL.

Supreme Court of Wisconsin.

Dec. 15, 1891.

Appeal from circuit court, Ashland county; J. K. PARISH, Judge.

Action by L. S. Buffington against Thomas Bardon, R. C. Heydlauff, S. S. Fifield, and W. M. Tompkins to enforce defendants' liability as stockholders of a corporation. Plaintiff obtained judgment, from which defendants appeal. Reversed.

The other facts fully appear in the following statement by LYON, J.:

It is alleged in the complaint that before June 8, 1888, the defendants combined together to form a corporation under the laws of this state, to be named the “North Star Iron-Works Company;” that on the date aforesaid they signed and acknowledged articles for the incorporation of such company, which were filed in the office of the register of deeds of Ashland county June 13, and in the office of the secretary of state June 18, 1888; that defendants, acting under the name of such corporation, transacted business and made the contract with plaintiff thereinafter mentioned; that plaintiff (who is an architect) performed work, labor, and services in preparing drawings, plans, and specifications, under an agreement with defendants, acting under the name of such corporation, for certain buildings to be erected in the city of Ashland, Ashland county, Wis., which services were worth $543, and for which defendants agreed to pay that sum, but have failed to do so; that the capital stock of said corporation is $100,000, consisting of 2,000 shares, of $50 each; and that, when such contract was made with plaintiff, one-half of said capital stock had not been subscribed for, nor 20 per cent. thereof paid in. During the trial the plaintiff was permitted to amend his complaint by alleging therein that the defendants were stockholders in the corporation from and after the date of its organization. The defendants answered a general denial of all the material allegations of the complaint. It appeared on the trial that in 1888 there existed a corporation or company in Minneapolis known as the “North Star Iron-Works Company,” which owned a manufacturing plant, and that a verbal agreement was entered into between the owners of such plant and an association of citizens of Ashland, known as the “Business Men's Association,” to the effect that the Minneapolis company should remove its plant, tools, patterns, etc., to Ashland, and turn the same over to a corporation of the same name, to be organized under the laws of this state; the consideration therefor being the conveyance to such owners of certain real estate, and the subscriptions by citizens of Ashland of $15,000 to the capital stock of the Wisconsin corporation. Such owners were to have $85,000 of the stock of the corporation. The Minneapolis property was thereafter taken to Ashland, under the direction of one Rice, who was one of the owners, and who seems to have been the manager of the Minneapolis company, and he proceeded to erect buildings at Ashland, in which to put the property and carry on the business, and to that end procured the plaintiff to make the drawings, plans, and specifications in question. Afterwards the Wisconsin corporation was organized as above stated, the defendants being named in the articles as incorporators, and executing the same as such, and they, together with 90 other citizens of Ashland, subscribed for 300 shares of the stock of the corporation. The secretary of the Business Men's Association (the defendant Heydlauff) collected $9,000 on these stock subscriptions, and paid the same to Rice, to be expended in the prosecution of the enterprise. The Minneapolis parties never actually subscribed for any stock, and no stock certificates were ever issued by the corporation. The testimony is further stated in the opinion. The court refused to direct a verdict for defendants, and instructed the jury that before they could find for plaintiff they must find either that the corporation promised to pay plaintiff for his services, or that after it was organized the corporation, or its duly authorized representative, knowing all the facts, adopted such drawings, etc., and used the same, thus approving and ratifying...