Casey v. Trecker

• Decision Date: 09 November 1954
• Citation: 66 N.W.2d 724,268 Wis. 87
• Parties: , 28 Lab.Cas. P 69,151 John L. CASEY, Appellant, v. Francis J. TRECKER, as adm'r of the Estate of Joseph L. Trecker, deceased, et al., Respondents.
• Court: Wisconsin Supreme Court

Page 724

66 N.W.2d 724

268 Wis. 87, 28 Lab.Cas. P 69,151

John L. CASEY, Appellant, v. Francis J. TRECKER, as adm'r of the Estate of Joseph L Trecker, deceased, et al., Respondents.

Supreme Court of Wisconsin.

Nov. 9, 1954.

Action under sec. 182.23, Stats. (now sec. 182.223), to enforce a stockholders' liability for debts due to a servant of a corporation for services rendered on its behalf. The plaintiff-appellant, John L. Casey, was a sales employee of Athea Laboratories, Inc., a corporation which became insolvent and was adjudicated a bankrupt. Joseph L. Trecker, deceased, and Haswell T. Bonfield, also deceased, were the stockholders of the corporation. The defendants-respondents, Francis J. Trecker and Florence V. Trecker, are the administrators of the estate of Joseph L. Trecker. Haswell T. Bonfield left no estate. His widow, Wreathyl Bonfield, was made a defendant to the action in her own right as an alleged wage claimant and as the only known heir of her husband, who also had alleged a claim for wages. By stipulation the action was dismissed as to Wreathyl Bonfield. The defendants, John J. Monfrey and Basil Monfrey, also claimed wages from the corporation. No answer to the complaint of the plaintiff was interposed on their behalf.

The trial court determined that the plaintiff-appellant's claim did not accrue within two years before the commencement of this action and that it is barred by provisions of sec. 330.21(5), Stats., which enactment was found to apply. The judgment directed a dismissal of the complaint upon its merits. It is from said judgment that the appeal was taken. The only defendants below included as respondents upon this appeal are the administrators of the Joseph L. Trecker estate.

Other material facts appear in the opinion.

Benjamin S. True, Milwaukee, for appellant.

Quarles, Spence & Quarles, Arthur Wickham and John F. Forde, Jr., Milwaukee, of counsel, for respondents.

STEINLE, Justice.

The principal question presented is whether an action to enforce a stockholders' statutory liability as provided in sec. 182.23, Stats., is governed by the six year statute of limitations provided in sec. 330.19(4), Stats., or by the two year statute of limitations prescribed in sec. 330.21(5), Stats.

Sec. 182.23, Stats., provided:

'Stockholders' liability; wages of employes. The stockholders of every corporation, other than railroad corporations, shall be personally liable to an amount equal to the face or par value stock owned by them respectively, and to the consideration for which their nonpar value stock in such corporation was issued, for all debts which may be due and owing to its clerks, servants and laborers for services performed for such corporation, but not exceeding six months' service in any one case.'

In 1951 this section of the Statutes was renumbered as sec. 182.223.

Sec. 330.19(4), Stats., provides that an action upon a liability created by statute when a different limitation is not prescribed by law, must be commenced within six years after the cause of action has accrued.

Sec. 330.21(5), Stats., which became effective on August 28, 1947, provides for a two year limitation of 'any action to recover unpaid salary, wages or other compensation for personal services, except fees for professional services; provided, that any such action founded on a cause of action which accrued between July 1, 1941, and January 1, 1946 may be commenced at any time prior to February 1, 1948.'

It appears of record that the present action was commenced on April 15, 1952, pursuant to an order of the county court of Milwaukee county as hereinafter described. In the complaint it is alleged (insofar as material here) that Athea Laboratories, Inc., a Wisconsin corporation, which was engaged in the business of manufacturing and selling cosmetics, etc., in October, 1946, employed the appellant, John L. Casey, in a sales capacity and agreed to pay him $500 a month for his services together with expenses advanced by him. It is also alleged that the appellant worked for the corporation until October 31, 1947, at which time the company owed him seven months salary for services, totalling $3,500 and $618 for expense money. It is further alleged that on February 16, 1948, the corporation was adjudicated a bankrupt and that appellant thereafter filed a claim in the bankrupt estate for his services and expenses and was paid $41.37 by the trustee. It is further asserted that Joseph L. Trecker, a stockholder of the corporation, died on October 7, 1947; that his estate is in process of probate in the county court of Milwaukee county; that on March 1, 1948, appellant filed a claim for his services and expenses against said estate; that objection to the allowance of the claim was filed by the administrators; that a hearing on the claim was held on January 25, 1952; that on April 3, 1952, the county court entered an order requiring the appellant to institute a separate suit in the circuit court for Milwaukee county in order that all other persons having similar wage claims and all stockholders of the company could be joined in one action in which the respective claims and liabilities could be adjudicated.

In the amended answer interposed on behalf of the administrators (respondents herein), there is denial on information and belief, that the corporation hired the appellant as a salesman or agreed to pay him as claimed in the complaint, or that he worked until October 31, 1947, or that he filed a claim and was paid by the trustee as alleged. The amended answer also contains a specific averment to the effect that the complaint shows that the alleged cause of action did not accrue within two years before the commencement of this action, and that the same is barred by reasons of the provisions of sec. 330.21(5), Stats. On information and belief there also appears in the amended answer an allegation that in the bankruptcy proceedings it was determined that Mr. Casey left the employ of Athea Laboratories on or about August 29, 1947, at which time he was entitled only to five months salary at $500 per month and no expense money.

Of record it appears that on July 1, 1953, the circuit court remanded the case to the equity side of the court and directed discovery proceedings to bring in all persons asserting claims for wages and services and all stockholders. In February 1954, the circuit court filed a written decision and also findings of fact and conclusions of law holding that the appellant's cause of action was barred by the two year statute of limitations. It determined that the action was one for wages; that appellant was not required to file a claim in the county court; that the filing of a claim in the county court did not constitute the commencement of an action; that appellant's cause of action did not accrue within two years before the commencement of this action; that the cause of action accrued either on October 31, 1947, as alleged in the complaint or on August 29, 1947, as alleged in the amended answer (both dates being after August 28, 1947, when sec. 330.21(5), Stats., became effective). Judgment was entered upon the findings of fact and conclusions of law, although no evidence had been received by the court.

On this appeal it is contended on behalf of the appellant that a stockholders' liability action does not become barred until after six years from the time that the claim has accrued. Respondents contend that such action is barred by the two year statute of limitations.

Liability exists only by virtue of its having been created by the statute. In essence, the claim asserted in the complaint is one for unpaid salary, wages or other compensation for personal services rendered on behalf of the corporation. The statute does not change the species of the claim. It merely gives to such claimant an additional remedy for the enforcement of the claim. As was said in Cullen v. Abbott, 1930, 201 Wis. 255, 229 N.W. 85, 86, 'the corporation was primarily liable to its employees for the amount of their wages. The statute was a further assurance to the employees that the wages for services rendered during the six months should be paid.'

In Sleeper v. Goodwin, 1887, 67 Wis. 577, 31 N.W. 335, an action to enforce liability against stockholders, the court found that the six year statute of limitations was applicable. However, it is of importance to note that while, when Sleeper v. Goodwin was decided, the statute provided for a six year limitation when a different limitation was not prescribed by law, actually at that time no different limitation was so prescribed. The two year statutory limitation as to actions against stockholders for claims arising out of unpaid salaries, wages or other compensation for personal services has existed in this state only since August 28, 1947, when sec. 330.21(5), Stats., became effective. Previous to that time the six year statute of limitations was applicable.

In its memorandum decision the learned trial court analyzed the appellant's contention that this is not an action to recover unpaid salaries or wages but is one to enforce a stockholders' liability. The trial court said 'Does the language at the end of Section 330.19(4), to-wit: '* * * when a different limitation is not prescribed by law,' take this case out of the operation of Section 330.19(4), especially when we find that Section 330.21(5) specifically covers actions brought for wages, salary, etc.?

'Counsel for the plaintiff argues that the pending action 'is not an action to recover unpaid wages or salary;' that 'it is an action to enforce a stockholder's statutory liability imposed by Section 180.40(6).' ¹

'It is true that the plaintiff was employed by the corporation and that the stockholders would not be liable for wages due from the corporation to the plaintiff in the absence of section 180.40(6).

'It is also true that Section 330.19(4) is a limitation on actions brought to recover on a statutory...