Conrad v. Evans

• Decision Date: 05 April 1955
• Parties: Edwin CONRAD, Receiver of Suburban Builders, Inc., a Wisconsin corporation, Appellant, v. Fred M. EVANS, Respondent.
• Court: Wisconsin Supreme Court

Page 478

69 N.W.2d 478

269 Wis. 387

Edwin CONRAD, Receiver of Suburban Builders, Inc., a Wisconsin corporation, Appellant, v. Fred M. EVANS, Respondent.

Supreme Court of Wisconsin.

April 5, 1955.

Vernon W. Thomson, Atty. Gen., and George F. Sieker, Asst. Atty. Gen., for appellant.

Spohn, Ross, Stevens, Lamb & Pick, Madison, for respondent.

BROWN, Justice.

We quote from the memorandum opinior of the trial judge:

'The material allegations of the complaint, with the paragraphs in which they are to be found indicated, are as follows:

'(3) Suburban Builders, Inc., is a Wisconsin corporation, organized September 20, 1945, and still in existence and doing business.

'(4) On August 16, 1949, the Wisconsin Department of Taxation made an income tax assessment against Suburban Builders, Inc., for the fiscal years ending August 31, 1946, August 31, 1947, and August 31, 1948, in the sum of $4,343.52. On August 30, 1949 the Wisconsin Department of Taxation issued a delinquent tax warrant against Suburban Builders, Inc., based on said income tax assessment, and delivered the same to the Sheriff of Dane County for collection. On September 2, 1949 said delinquent tax warrant was docketed in the office of the Clerk of Circuit Court for Dane County, and was returned by the Sheriff wholly unsatisfied. That Suburban Builders Inc., is now indebted to the State of Wisconsin for delinquent income taxes in the sum of $4,343.52 together with interest.

'(5) That the plaintiff is the duly appointed, qualified, and acting receiver of Suburban Builders, Inc., and vested with the usual rights and powers of receivers under Chapter 273, Wisconsin Statutes.

'(6) That at sundry times between September 20, 1945 and October 16, 1947, the defendant received from Suburban Builders, Inc., the sum of $9,108.79 in the form of labor and materials for his own use and benefit without consideration. That at sundry times between July 26, 1946 and February 27, 1947, Suburban Builders, Inc., paid to First National Bank, K. Joas, and Agnes Cleary, out of its capital assets, the sum of $12,182.50 for the account of the defendant and pursuant to his direction, for his own use and benefit without consideration. That at all times mentioned in the complaint, defendant was in fact a stockholder in Suburban Builders, Inc.'

The only question raised by the appeal is whether foregoing allegations set forth a cause of action against the defendant.

Under the Wisconsin Stats., sec. 263.03(2), a complaint shall contain:

'A plain and concise statement of the ultimate facts, constituting each cause of action, without unnecessary repetition.'

Sec. 263.27, Stats., commands:

'In the construction of a pleading for the purpose of determining its effect its allegations shall be liberally construed, with a view to substantial justice between the parties.'

When the sufficiency of a complaint is challenged by demurrer every reasonable intendment and presumption is to be made in favor of the complaint and the plaintiff is entitled to all reasonable inferences which can be drawn from the facts pleaded. Christenson & Arndt, Inc., v. Wisconsin Tel. Co., 1953, 264 Wis. 238, 243, 58 N.W.2d 682.

We examine the present complaint with the foregoing principles in mind.

Appellant is a receiver appointed in proceedings supplementary to execution under the provisions of ch. 273, Stats. His rights were defined by Nick v. Holtz, 1941, 237 Wis. 407, 411, 297 N.W. 387, 390 (cited by both parties) where, referring to a supplementary receiver, we said:

'Upon his appointment the receiver stands in the shoes of the debtor. He is obliged only to act to protect and secure the debtor's interest in the mortgaged property. Whatever rights of title and possession the debtor may have had at the time of the receiver's appointment went to the receiver, but upon the happening of the conditions there set out appellant could no more be deprived of his right of possession by the receiver than by the debtor himself. * * *'

Appellant submits that the receiver has more rights than the debtor corporation because he also represents creditors and may recover property to which the creditors have a right though the debtor himself may have lost or parted with his right. It has been so held, but with the proviso that the receiver is bound by the legal acts of the debtor. '* * * It is only those which are illegal which he can impeach.' Porter v. Williams & Clark, 9 N.Y. 142, 150.

The demurrer admits the complaint's allegations that at various times between September 20, 1945 and October 16, 1947, defendant received from Suburban Builders, Inc. various sums, labor and material without consideration, which plaintiff demands that he now return or pay for. Under what obligation shall defendant be required to do so? The complaint does not allege that defendant, at the time he received such value expressly agreed to reimburse the corporation for it. It does not allege that the money was lent him or that he ever agreed to repay it or that either he or the corporation expected repayment...