Burke v. Sidra Bay Co.

• Decision Date: 16 December 1902
• Parties: BURKE v. SIDRA BAY CO.
• Court: Wisconsin Supreme Court

116 Wis. 137

92 N.W. 568

BURKE

v.SIDRA BAY CO.

Supreme Court of Wisconsin.

Dec. 16, 1902.

Appeal from circuit court, Milwaukee county; Lawrence W. Halsey, Judge.

Action by John F. Burke against the Sidra Bay Company. From a judgment for plaintiff for a part of his demand, both parties appeal. Affirmed.

Two gentlemen, by the name of Ewing and Mitchell, having discovered what they believed to be a deposit of infusorial earth in Eau Claire county, from which could be obtained a product valuable in certain manufactures, secured control or ownership of certain lands, and proceeded to make explorations. After a little, one James Douglas was invited to join them in such enterprise, and to be permitted to do so upon equality with the other two upon payment of $500, to be expended in such explorations and development. He accepted, paid his $500, and thereafter certain further explorations were made and at least one additional piece of land purchased, upon a small cash payment. Thereafter they organized the defendant corporation, each of them taking one-third of the $150,000 of the capital stock, and transferring to it the real estate rights which they had obtained. Douglas was elected president and treasurer, Ewing secretary, and all three directors. The company had no money, of course, as its entire capital stock had been issued for the real estate rights. Prior to the incorporation the parties had an understanding that they would advance moneys as they were able for the purposes of experiment and exploratory work. After the corporation was organized, they, all being directors and meeting together, reached a loose and general understanding that they would make advances to the corporation for some experimental reduction of the product to a commercial form, and for such other purposes as the corporation might need; the same to be paid back to each when the corporation had money to pay it. They appear not to have been equally able to advance, and the agreement seems to have been a very loose one, made in expectation of a speedy reduction of product to commercial form and sale thereof in the way of a manufacturing business. They do not seem to have expressed, if they considered, the contingency of failure of such experiments, abandonment of the business, and the sale of the real estate which the company owned. Advances were apparently made by both Ewing and Mitchell, the amounts whereof are not in evidence, but Douglas expended sums amounting to $1,411.94; the earliest large items of such advances being $100 and $475, necessarily advanced to protect and complete the corporation's title to a certain parcel of land purchased before incorporation from one Backstrom. At about this time $200 was paid back to Douglas by his two fellow directors. The other disbursements are of various character,--recording deeds, expenses of himself and others to Eau Claire, and work in getting out a few car loads of the earth and shipping the same to Milwaukee, where was attempted to be erected a reduction plant, to the expenses of which doubtless the others contributed considerable sums. These experiments and expenditures extended from May, 1894, when the corporation was organized, up to an indefinite date prior to March, 1896, when the reducing plant in Milwaukee was burned down. Shortly thereafter both Ewing and Mitchell sold their stock in the corporation to one Whigham for a price not stated, and accompanied the sale by an assignment to him of their respective claims against the corporation for moneys advanced in pursuance of this understanding. Douglas, about the same time, sold his stock to one Rice, but did not assign to him his claims against the corporation for money advanced. He resigned his position as director, president, and treasurer in March, 1896. Thereafter all of the stock became assigned to one Springer, who now holds the whole, except four shares, placed in the names of others in order to qualify them as directors and officers. All attempts to do any business whatever have been abandoned since the spring of 1896. On January 31, 1901, the...