Burke v. Universal Granite Quarries Co.

• Decision Date: 01 May 1923
• Citation: 180 Wis. 520,193 N.W. 517
• Parties: BURKE v. UNIVERSAL GRANITE QUARRIES CO. ET AL.
• Court: Wisconsin Supreme Court

180 Wis. 520

193 N.W. 517

BURKE

v.UNIVERSAL GRANITE QUARRIES CO. ET AL.

Supreme Court of Wisconsin.

May 1, 1923.

Appeal from Circuit Court, Milwaukee County; Walter Schinz, Judge.

Suit for injunction by William P. Burke against Universal Granite Quarries Company and others. From an order overruling their several demurrers to the complaint, defendants appeal. Affirmed in part, reversed in part, and remanded.

Suit in equity to restrain defendants from transferring certain stock, to declare a trust, and for the appointment of a receiver pending litigation.

The amended complaint, after alleging the foreign corporate existence of the defendants Universal Granite Quarries Company and the Wisconsin Granite Company, alleges that:

“That all times hereinafter mentioned the plaintiff was, and now is, the owner of all the outstanding stock of the Universal Granite Quarries Company, and that he paid valuable consideration for the same.

That on or about the 4th day of October, 1919, your plaintiff entered into an oral agreement with the defendant Wisconsin Granite Company through its agent. John J. Sloan, at the city of Chicago, pursuant to which the said Wisconsin Granite Company promised and agreed to finance the Universal Granite Quarries Company, for and in consideration of a payment by the Universal Granite Quarries Company, to the said Wisconsin Granite Company, of two-thirds of the earnings of said company, it being understood and agreed that your plaintiff was to draw a salary of thirty-six hundred ($3,600) dollars per year during the term of a certain lease upon the American Granite Company to the said Universal Granite Quarries Company, which said lease expires in 1925, out of the net profits of the Universal Granite Quarries Company, before the defendant Wisconsin Granite Company should share in any division of profits; that the said defendant Wisconsin Granite Company through its agent, John J. Sloan, agreed to the terms of said contract, and that the parties thereto thereupon proceeded to operate under said agreement, and continued to operate thereunder until on or about the 30th day of November, 1921.

That as security under this agreement your plaintiff delivered in trust to the defendant John J. Sloan, as the agent of the said Wisconsin Granite Company, two-thirds of the outstanding stock of the Universal Granite Quarries Company, to wit approximately five hundred thirteen and one-half (513 1/2) shares, as this plaintiff is informed and believes.

That pursuant to said agreement, and in consideration of all clerical work to be performed by the Wisconsin Granite Company on behalf of the Universal Granite Quarries Company, the Universal Granite Quarries Company promised and agreed to pay to the Wisconsin Granite Company a consideration of five (5¢) cents per ton on crushed rock or rubble stone, or grout, and five (5¢) cents per square yard on paving block; that the parties to said agreement did operate under it, and continue to so operate under it, until the 30th day of November, 1921, as your plaintiff is informed and believes.

That pursuant to the request of the defendant Wisconsin Granite Company and in consideration of the financing by it of the Universal Granite Quarries Company, the said Universal Granite Quarries Company consented to and did elect four directors to its Board of Directors, consisting of five directors, all of which four directors were either officers or employees of the defendant Wisconsin Granite Company.

That at the request of the defendant Wisconsin Granite Company through its agent, John J. Sloan, your plaintiff consented to the transfer on the corporate records of the Universal Granite Company, of approximately five hundred thirteen and one-half (513 1/2) shares, as your plaintiff is informed and believes, from the name of this plaintiff, to the defendant William A. Armstrong, the son-in-law of the defendantJohn J. Sloan; that the plaintiff received no consideration for such transfer of stock, nor did the defendant William A. Armstrong or any other person pay any consideration for such transfer, and for the stock so received; and that the defendant William A. Armstrong, acting in behalf of the said John J. Sloan and the Wisconsin Granite Company, is not a purchaser for value, of said stock, and at all times herein mentioned had, and now has, full knowledge of the agreement between your plaintiff and the said Universal Granite Quarries Company and the said Wisconsin Granite Company.

That on or about November 30, 1921, a special meeting of the directors of the said Universal Granite Quarries Company was held in the city of Chicago, Ill.; that at said meeting a resolution was passed, over the opposition of your plaintiff, discontinuing the contract with the Wisconsin Granite Company, hereinbefore set out, and also discontinuing the salary to your plaintiff, provided for in said agreement; that thereupon your plaintiff gave immediate notice to the defendant Wisconsin Granite Company, by conferring with its agent, John J. Sloan, that he was dissatisfied with the action of the Board of Directors of the Universal Granite Quarries Company, taken over his protest, and insisted to the said John J. Sloan, that the contract then in existence should be carried out; that the said John J. Sloan stated that he had full knowledge of the action taken by the Board of Directors of the Universal Granite Quarries Company,...