Columbia Stamping & Mfg. Co. v. Reich

• Citation: 137 N.W.2d 45,28 Wis.2d 297
• Parties: COLUMBIA STAMPING & MFG. CO., Inc., a Wis. corp., Appellant, v. Edwin A. REICH, Respondent.
• Decision Date: 05 October 1965
• Court: United States State Supreme Court of Wisconsin

Page 45

137 N.W.2d 45

28 Wis.2d 297

COLUMBIA STAMPING & MFG. CO., Inc., a Wis. corp., Appellant, v. Edwin A. REICH, Respondent.

Supreme Court of Wisconsin.

Oct. 5, 1965.

Herman M. Knoeller, Milwaukee, for appellant.

Donald C. Haberman, Milwaukee, Fredric Mendelsohn, Milwaukee, of counsel, for respondent.

BEILFUSS, Justice.

The issues are: (1) was there an oral agreement between Reich and Reinders that the payment of the V & E note by Reich was to be credited toward the stock subscription, and (2) was the V & E note assumed by Columbia and a liability Columbia?

On appeal the findings of fact of the trial court must be adopted unless they are against the great weight and clear preponderance of the evidence. The evidence must be viewed from the standpoint most favorable to the findings of the trial court. Guinther v. Schucht (1965), 26 Wis.2d 97, 99, 101, 131 N.W.2d 861; Klapps v. American Inc. Co. (1965), 26 Wis.2d 664, 668, 133 N.W.2d 248; Hope Acres, Inc. v. Harris (1965), 27 Wis.2d 285, 290, 134 N.W.2d 462.

The trial court held that the oral agreement did exist. Reich so testified. Attorney Pedersen who was present at several conferences between Reich and Reinders testified to the same effect. Daniel Durovy testified Reinders told him in December of 1960 that all the stock had been paid for. An accountant's balance sheet on Columbia, dated April 30, 1961, does not show any stock subscription account receivable. Clearly there is ample credible evidence in the record to support the finding that the oral contract existed. In no sense can it be said that this finding is against the great weight and clear preponderance of the evidence.

Having approved the finding that the oral agreement did exist, we must decide whether or not it was effective. Columbia argues that Reinders had no authority to make the agreement; the board of directors must act. Columbia further argues that it never assumed the V & E liability and that it remained personal to Reich.

At the time of the oral agreement the directors of Columbia were Edwin A. Reich, Robert J. Reinders, and Kenneth F. Pedersen. The court does take judicial notice of this fact verified by annual reports in the office of the Wisconsin secretary of state under the rule announced in Fringer v. Venema (1965), 26 Wis.2d 366, 372, 373, 132 N.W.2d 565.

Sec. 180.13(2), Stats., provides that the terms of payment for stock subscriptions shall be determined by the board of directors. Sec. 180.91 provides that any informal action by the board may be taken only if all persons entitled to vote at such meeting give consent in writing. No written consent was given here. However, sec. 180.37(2) provides that notice is waived if the director attends unless he objects. Here all directors and shareholders were present at the meeting in Mr. Pedersen's office. Reinders voiced no objection to lack of notice nor the informality. The meeting was for the purpose of discussing the financial problems of Columbia. This meeting constitutes a valid board meeting. Columbia's contention that the oral agreement is invalid because of no official board action is not well taken. All directors and shareholders were present at the meeting at which the oral agreement was consummated. See 19 Am.Jur. (2d), Corporations, pp. 555, 558, secs. 1119-1121.

Finally, the court must determine whether or not the V & E note became a liability of Columbia so that payment of it would constitute a financial benefit to Columbia.

V & E was originally a partnership between Victor Nohl and Reich. Later they incorporated. They desired to dissolve V & E. Instead of filing dissolution papers the parties entered into an agreement whereby Nohl would assume certain liabilities and Reich would assume certain liabilities existing before October 1, 1959. Reich was to get the business and the machinery and equipment. This agreement is dated October 5, 1959. There were certain outstanding liabilities to the First Wisconsin National Bank at this date, and Reich was to assume them.

On October 8, 1959, the deal was consummated by a bill of sale. On the same day Reich gave a bill of sale to Davanzo, identical to the one received from Nohl except for very minor changes,--mostly names. Then, on February 19, 1960, Reich took back the business. Davanzo had, in the...