Gager v. Marsden

Citation77 N.W. 922,101 Wis. 598
PartiesGAGER ET AL. v. MARSDEN ET AL.
Decision Date10 January 1899
CourtUnited States State Supreme Court of Wisconsin

OPINION TEXT STARTS HERE

Appeal from circuit court, Rock county; John R. Bennett, Judge.

Action by C. M. Gager and others against Henry Marsden, impleaded with the Bank of Edgerton and others. From an order overruling defendant Marsden's demurrer to the complaint, he appeals. Affirmed.

Henry Marsden, as a stockholder of the defendant banking corporation, commenced, as sole plaintiff, an action against such corporation, as sole defendant, for the appointment of a receiver and settlement of its affairs because it was insolvent. A receiver was appointed with the usual powers in winding-up proceedings, who duly qualified and took charge of the property of the corporation. Later the complaint was amended so that Marsden appeared as a stockholder and creditor as well. It contained the necessary allegations in an action to dissolve and fully settle the affairs of an insolvent corporation, and a prayer for appropriate relief in such cases. Later C. M. Gager and other creditors of the bank, who now appear as plaintiffs, petitioned the court, setting forth their creditor relations to the corporation and facts tending to show that the directors of the bank negligently permitted the money deposited therein to be lost, squandered and stolen; that they knowingly permitted false reports as to the condition of the bank to be filed with the state treasurer and with the register of deeds of Rock county; that said reports, though false, were attested as true by directors for the purpose of deceiving persons into depositing money with the bank, and that on the faith of such representations the petitioners so deposited money; that with knowledge of the insolvency of the bank dividends were paid to stockholders; that the capital stock was not fully paid; that through fraudulent practices of the directors the entire capital and surplus of the bank, and a large part of the money deposited by stockholders, had been stolen, wasted and lost; that plaintiff Marsden was one of the guilty parties, and all the stockholders and officers of the bank should be made parties to the action to the end that the liabilities of each might be determined and enforced, and all the affairs of the corporation wound up. The prayer was that petitioners be substituted as plaintiffs in place of Marsden, that he be made a defendant, that the officers and stockholders of the bank should all be made parties defendant, and that the complaint be amended, setting forth the facts mentioned in the petition, with appropriate prayer for relief. The petition was granted and an order entered accordingly, and enjoining proceedings on the part of other creditors against the defendants till the further order of the court. The complaint was amended accordingly, to which Marsden, as defendant, demurred, first, for want of legal capacity of plaintiffs to sue; second, for defect of parties plaintiff; third, for defect of parties defendant; fourth, for the improper joinder of several causes of action; fifth, for want of facts stated sufficient to constitute a cause of action against Marsden. The demurrer was overruled and Marsden appealed.Fethers, Jeffris, Fifield & Mouat and E. D. McGowan, for appellant.

Sutherland & Nolan and Olin & Butler, for respondents.

MARSHALL, J. (after stating the facts).

In support of the objection to the complaint that plaintiffs have not legal capacity to sue, appellant's counsel say the court erred in substituting Gager and his associates as plaintiffs in place of Marsden. It is a sufficient answer to that suggestion to say that mere error of the court in making the substitution of plaintiffs, if there be such error, and none is perceived, does not go to legal capacity of the plaintiffs to sue. The order of the court substituting the present plaintiffs for Marsden, stands as the law of the case till reversed or set aside in some proper proceedings. It is not subject to review on demurrer to the complaint. The complaint stands as if the action were orginally commenced by the present plaintiffs against the present defendants. It cannot be seriously contended but that plaintiffs, as creditors of the bank, were competent to institute and prosecute such an action, and that is the only subject covered by the demurrer on the ground of want of legal capacity to sue. Murray v. McGarigle, 69 Wis. 483, 34 N. W. 522.

In support of the demurrer that several causes of action were improperly joined, counsel for appellant ingeniously argue that the several provisions of chapter 140, Rev. St. 1878, relating to the winding up of corporations and distributing their assets, and enforcing the liability of stockholders and officers, contemplate several distinct actions on separate and distinct causes of action to enforce distinct species of liability, and they argue with much earnestness and learning that the law governing the subject is in much confusion and uncertainty, and appeal to the court to clear that up and make the practice plain to the bench and bar in this very important field of litigation. If all uncertainties in regard to a subject involving such a diversity of interests can be removed, precluding all opportunity for different legal minds to come to different conclusions, “'tis a consummation devoutly to be wished;” but human experience does not leave room for hope that the desired end can be reached. The law will probably never be settled with sufficient definiteness to prevent learned counsel, stimulated to exertion by new situations or old but unfamiliar situations, from suggesting and urging upon the attention of the court over and over again old questions which, in the light of some unusual hardship appear, to those whose desired course is barred thereby, to have been settled wrong or not to cover at all the particular environment in which they find themselves. It was supposed that Hurlbut v. Marshall, 62 Wis. 590, 22 N. W. 852, determined for all time in this court, and for all courts of this state having to do with the subject, that but one windingup suit to settle the affairs of a corporation is proper, and that in such suit all the rights and all the liabilities of creditors, officers and stockholders are to be worked out. This court so understood it then and has never departed from that view, as indicated in the opinion of Mr. Justice Winslow in Gager v. Bank (decided herewith) 77 N. W. 920. The careful practitioner hardly need go astray because of cases where only a part of the relief obtainable in a winding-up proceeding was sought and which were sustained for that particular relief. Gianella v. Bigelow, 96 Wis. 185, 71 N. W. 111,Booth v. Dear, 96 Wis. 516, 71 N. W. 816, and Williams v. Meloy, 97 Wis. 561, 73 N. W. 40, were solely to enforce the personal statutory liability of stockholders, sustained as such and properly so, but in perfect harmony with Hurlbut v. Marshall, supra, that the same liability, and all other liability of stockholders and officers of corporations may be enforced as part of the relief obtainable in a general winding-up suit. Gores v. Day, 99 Wis. 276, 74 N. W. 787, a...

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29 cases
  • Boyd v. Mut. Fire Ass'n of Eau Claire
    • United States
    • Wisconsin Supreme Court
    • May 19, 1902
    ...officers, stockholders, and members were to be worked out in this suit. Gager v. Bank, 101 Wis. 593, 77 N. W. 920; Same v. Marsden, 101 Wis. 598, 77 N. W. 922;Foster v. Posson, 105 Wis. 99, 81 N. W. 123;Finney v. Guy, 106 Wis. 256, 82 N. W. 595, 49 L. R. A. 486;Killen v. Barnes, 106 Wis. 54......
  • City of Columbus v. Town of Fountain Prairie
    • United States
    • Wisconsin Supreme Court
    • February 18, 1908
    ...v. Fairchild, 87 Wis. 258, 58 N. W. 413;Laird v. Otsego, 90 Wis. 25, 62 N. W. 1042; 20 Encyc. Pl. & Pr. 1021, 1026, 1052; Gager v. Marsden, 101 Wis. 598, 77 N. W. 922;Wechselberg v. Michleson et al., 105 Wis. 452, 81 N. W. 657;Smith v. Scott, 93 Wis. 453, 67 N. W. 705;Reinhart v. Fire Ass'n......
  • Finney v. Guy
    • United States
    • Wisconsin Supreme Court
    • March 20, 1900
    ...To the same effect are Gianella v. Bigelow, 96 Wis. 186, 71 N. W. 111;Booth v. Dear, 96 Wis. 516, 71 N. W. 816;Gager v. Marsden, 101 Wis. 598, 77 N. W. 922;Foster v. Posson (Wis.) 81 N. W. 124,--in which cases adjudications of the Minnesota court are cited as authority. The supreme court of......
  • Boerschinger v. Elkay Enterprises, Inc.
    • United States
    • Wisconsin Supreme Court
    • January 5, 1965
    ...for adjudication.' 'The following cses were cited: South Bend C. P. Co. v. Geo. C. Cribb Co., 105 Wis. 443 , 81 N.W. 675; Gager v. Marsden, 101 Wis. 598, 77 N.W. 922; Herman v. Felthousen, 114 Wis. 423, 90 N.W. 'In State v. P. Lorillard Co., 181 Wis. 347, 193 N.W. 613, 619, the complaint ch......
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