Green Bay Fish Co. v. Jorgensen
| Decision Date | 15 May 1917 |
| Citation | 163 N.W. 142,165 Wis. 548 |
| Parties | GREEN BAY FISH CO. v. JORGENSEN. |
| Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Municipal Court of Brown County; Carlton Merrill, Judge.
Action by the Green Bay Fish Company against Tom Jorgensen, in which defendant filed a counterclaim, but withdrew it during the trial. From so much of a judgment as gives plaintiff less damages than it claims, plaintiff appeals; and from the judgment denying him relief, defendant appeals. Modified on plaintiff's appeal; defendant takes nothing on his appeal.
The plaintiff was one of the original stockholders and directors of the plaintiff, a Wisconsin corporation organized in May, 1914. The defendant and one John Ketter, also a stockholder and director, both lived in Green Bay before and after the incorporation, and defendant, as treasurer and manager of the company, and John Ketter, as director and assistant manager, conducted the affiairs of the company at its place of business in Green Bay. Jorgensen, as such treasurer, had authority to draw checks upon the company's account kept at Green Bay. The remaining stockholders, Benjamin Sachs and Meyer N. Finder, both of Chicago, Ill., were directors, and the said Sachs president of the company. By the by-laws of the plaintiff the following was described as the duties of the president:
That at about the time of the incorporation Jorgensen, who had had many years' practical experience in the fish business, was by resolution of the board of directors employed under a written contract, to be executed by the company, as manager for five years from April, 1914, at a salary of $50 per week, and John Ketter by a similar resolution was employed as assistant manager for five years, at $35 per week. The stock was equally divided between the Chicago and the Green Bay stockholders as follows: Sachs and Finder each 15 shares, Jorgensen 20 shares, and Ketter 10 shares, of a par value of $100 each.
At the time of the organization neither Jorgensen nor Ketter had sufficient cash to pay for all of their subscriptions. By the common understanding they were permitted to make payments thereon from time to time. At about the time of the organization it was proposed by the four to make a written agreement, which in substance provided that the stock of all should be deposited with the Chicago Title & Trust Company of Chicago, so that in case of differences arising between the parties such Title & Trust Company, its president or some person selected by it, should act as arbiter between the parties or carry on the business. This agreement was signed by Jorgensen and Ketter, but never by Sachs and Finder. Jorgensen, however, knew of this failure on their part to sign at least a year before his discharge. The corporation from the beginning borrowed about $40,000 from the company in which Sachs was interested in Chicago and used the same in the construction of buildings and the conduct of the business, and also owed about $10,000 to the bank at Green Bay for loans, together with other accounts, and was in May, 1916, with less assets than liabilities. The corporation continued with varying business success until the spring of 1916. In May, 1916, the president, Sachs, learned of substantial overdrafts by Jorgensen, among others, a check to pay his life insurance premium of $30.50, another for his personal use of $40, and a third to pay his taxes of $186.68, all drawn in April, and finally that he drew out practically all the cash on hand, and as found by the court converted the same to his own use to an amount of $1,601.97 by a check on May 8th, and thereupon Sachs discharged defendant. From defendant's own testimony it appears that at the time this money was drawn out he knew that the corporation was practically insolvent, and owed large sums of money that it had borrowed; that he had no authority to withdraw the sum; that it was without the consent of the president and over his specific objection to any such overdraft. It also appeared that Jorgensen had permitted Ketter to overdraw his account, so that at this time Ketter's overdraft practically equaled the amount he had theretofore paid for his stock, namely, $1,000. Ketter thereupon resigned and surrendered his stock.
The defendant claimed that he was authorized to withdraw this money for the purpose of protecting what he thought were his rights against the plaintiff in the belief that the $2,000 worth of stock to which he subscribed had not been issued to him, and was withheld, and that the Chicago directors had not treated him fairly in that the contract with reference to the depositing of the stock in escrow with the Chicago Title & Trust Company of Chicago had not been signed by them or...
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...some jurisdictions this is held to be an inherent right in the president, an incident to the office * * *.' In Green Bay Fish Co. v. Jorgensen, 165 Wis. 548, 163 N.W. 142, 144, the court declared: 'There is no need that express authority to commence such an action should be given by the boa......
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