Elmergreen v. Weimer

• Decision Date: 16 February 1909
• Citation: 138 Wis. 112,119 N.W. 836
• Parties: ELMERGREEN v. WEIMER.
• Court: Wisconsin Supreme Court

138 Wis. 112

119 N.W. 836

ELMERGREEN

v.WEIMER.

Supreme Court of Wisconsin.

Feb. 16, 1909.

Appeal from Circuit Court, Milwaukee County; Warren D. Tarrant, Judge.

Action by Ralph Elmergreen against John Weimer. From an order overruling a demurrer to the amended complaint, defendant appeals. Reversed and remanded.

This is an appeal from an order overruling a demurrer to the amended complaint.

The complaint is as follows:

“That all times hereinafter mentioned, and up to about April 18, 1906, the Michigan Ore Company was a corporation duly organized and existing under and by virtue of the laws of the state of Utah, and that said Michigan Ore Company was incorporated and organized by the defendant and certain of his business allies and associates for the avowed purpose of conducting mining operations; that the capital stock of the said Michigan Ore Company was $1,000,000, divided into 1,000,000 shares, of the par value of $1 each, and that as the plaintiff is informed and verily believes, at the time of the organization of said corporation, 500,000 shares of said stock were duly set apart as treasury stock, and placed in the treasury of said corporation, and were the property of the said Michigan Ore Company; that from the organization of the said Michigan Ore Company, and up to the time of the dissolution of said corporation, the defendant John B. Weimer was the principal stockholder therein, and by himself and his agents held the controlling interest in the capital stock in the said Michigan Ore Company, and elected the board of directors thereof, personal friends and business associates of the said John B. Weimer, who have at all times conducted the business of the said Michigan Ore Company in strict accordance with directions given by the said John B. Weimer, and have in all things pertaining to the said corporation been absolutely under the domination and control of the said John B. Weimer, and that the said John B. Weimer continued to control the directors and officers of said Michigan Ore Company up to the time of the dissolution thereof; that at all times herein mentioned, and up to the time of the dissolution of said corporation, the plaintiff was a stockholder in said company and held 50,000 shares of the capital stock of said company; that on or about the month of October, 1904, the defendant unlawfully took and carried away from the treasury of said company said treasury stock the property of said company, and unlawfully sold the same for a large sum of money, the exact amount of which is unknown to plaintiff, and converted the proceeds thereof to his own use; that the amount realized by said defendant on the sale of said treasury stock exceeded the sum of $10,000 as plaintiff is informed and verily believes; that about the same time the defendant unlawfully, and in violation of the rights of said company and its stockholders, seized upon the cash in the treasury of said Michigan Ore Company, amounting to about $8,600, as plaintiff is informed and believes, and converted the same to his own use; that after the taking and conversion of the said treasury stock and cash by the defendant, and in order to silence the minority stockholders, the defendant caused said board of directors and officers of said company to transfer and convey to the Ophir Tunnel Company, another mining corporation organized by the defendant and incorporated under the laws of the state of Utah, certain mining claims to which the Michigan Ore Company had record title, thus rendering the Michigan Ore Company insolvent, and exchanged with said minority stockholders other than the plaintiff stock in the Ophir Tunnel Company for their holdings in the Michigan Ore Company, and thus further increased his holdings of stock in the Michigan Ore Company, and deprived the plaintiff of the support and assistance of the other minority stockholders; that, as plaintiff is informed and believes, the defendant called a special meeting of the stockholders of the Michigan Ore Company, which was held in Salt Lake City, Utah, on or about April 18, 1906, and that at said meeting by a vote of the stock owned and controlled by the defendant, as aforesaid, said corporation was dissolved and ceased to be a body corporate, and, as plaintiff is informed and believes, said corporation has no legal existence at the present time; that the plaintiff brings this action on his own behalf and on behalf of all other stockholders of the Michigan Ore Company similarly situated, if any there be, and for the purpose of compelling an accounting by the defendant and restitution to plaintiff and such other persons as may be entitled thereto as stockholders of the Michigan Ore Company of the moneys so taken by defendant and of the value of the treasury stock of the Michigan Ore Company so taken by defendant and converted to his own use.

And for another and separate cause of action the plaintiff repeats all the allegations contained in the first cause of action regarding the organization of the Michigan Ore Company by the defendant and his ownership and control by himself and his agents of the majority of the capital stock thereof, and his consequent control of the board of directors of said corporation at all times herein mentioned, and hereby refers to and makes the same a part of this cause of action as if again set out in full herein, and plaintiff further alleges that at the times herein mentioned, and up to the time of the dissolution of said corporation, he was a stockholder in the Michigan Ore Company, and was the owner of 50,000 shares of the capital stock of said company, and, further complaining, plaintiff respectfully alleges and shows that, as plaintiff is informed and believes, certain mining claims in the state of Utah were turned into the Michigan Ore Company at the time of the organization of said corporation in payment of the capital stock thereof, and that the title of said mining claims were held in the name of the defendant, John B. Weimer, in trust for said Michigan Ore Company; that, upon demand of certain stockholders of said company at some time in the summer of 1904, the defendant, who was then secretary and treasurer of the Michigan Ore Company, executed to said company assignments of said mining claims so held in his name and delivered the same to said company; that, as such secretary and treasurer, it was his duty to place said assignments upon record, but that he withheld the same, and thereafter and with intent to defraud the Michigan Ore Company and the stockholders thereof he executed new assignments of said mining claims to the Ophir Tunnel Company, and placed the same upon record; that this was all done without the knowledge of the minority stockholders and without any authority; that the Ophir Tunnel Company is a corporation organized by defendant and incorporated under the laws of the state of Utah, and defendant is the principal stockholder in said corporation, as plaintiff is informed and believes, and that the said Ophir Tunnel Company claims to be the owner of said mining claims under said...