Cream City Mirror Plate Co. v. Donahue
| Decision Date | 26 April 1910 |
| Parties | CREAM CITY MIRROR PLATE CO. v. DONAHUE ET AL. |
| Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Milwaukee County; Warren D. Tarrant, Judge.
Action by the Cream City Mirror Plate Company against Thomas F. Donahue and others. From an order overruling a general demurrer to the complaint, defendants appeal. Affirmed.
This is an appeal from an order overruling a general demurrer to the complaint. The complaint, in substance, alleges that on and prior to January 7, 1906, the net assets of the plaintiff corporation exceeded $54,000, and that all of the stock therein was owned by John M. Goetzinger and his wife and daughter; that on January 3, 1906, it was agreed between Goetzinger and the defendant Donahue that the capital stock of the company should be increased to $50,000, and that Goetzinger should sell and assign all of said stock to Donahue in consideration of the payment of $50,000, $20,000 of which amount was to be paid in cash and the remainder in six equal annual installments, the deferred payments to be evidenced by promissory notes; that the payment of such notes should be secured by an assignment from Donahue to Goetzinger of $40,000 of the capital stock of said company to be issued to said Donahue, such stock to be held by said Goetzinger until all the notes were fully paid; that it was further agreed between the parties that Goetzinger should be elected a director and treasurer of the corporation, and act in an advisory capacity and countersign all checks and obligations for the payment of money, and that such employment should begin January 2, 1906, and end when the notes given him by Donahue were fully paid, and that he should be paid a salary of $1,800 per year; that, pursuant to such agreement, the capital stock was increased, and Goetzinger was elected to the offices specified; that on January 6, 1906, Donahue paid Goetzinger $20,000 in cash and delivered his notes for $30,000 as agreed upon, and there was then issued to Donahue $48,900 of the capital stock of the corporation, to Goetzinger $100, and to one Coggeshall $1,000; that the stock issued to Coggeshall was issued at the request of Donahue; that of the stock issued to Donahue $39,900 was eventually transferred and assigned to Goetzinger as collateral security for the indebtedness of $30,000; that there was also issued to Goetzinger 1 share of stock of the face value of $100 as collateral security for the payment of said notes; that the agreement as to the employment of Goetzinger and the salary which he should receive was reduced to writing on January 6, 1906; that on February 1, 1907, Donahue sold $5,000 of the capital stock of said corporation to the defendant Schroeder, and stock to that amount was legally transferred on the books of the company to said Schroeder. On information and belief the plaintiff alleges that Donahue guaranteed Schroeder against loss of the moneys paid for said stock; that at the annual election of officers held on the 1st day of February, 1907, Donahue, Coggeshall, and Schroeder were elected directors; that on said day, without just cause, the directors unanimously passed a resolution dispensing with the services of Goetzinger as treasurer, and thereafter and until April 1, 1909, combined and confederated together to exclude, and did exclude, Goetzinger from all participation in the affairs of the plaintiff corporation; that on said last-named day the defendants ceased to be directors and officers of the company, and John M. Goetzinger, his wife, and daughter were elected officers and directors in their places; that three of the notes given by Donahue to Goetzinger have been paid, but those due January 6, 1910, 1911, and 1912 are unpaid; that Goetzinger has at all times owned said notes and at all times held and still holds $40,000 of the stock of the plaintiff as collateral security for the payment of said notes; that, so long as Goetzinger was retained as treasurer and financial manager, the business was profitably conducted, but thereafter the business...
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