Halvorson v. Geurkink, 35846
| Citation | 56 N.W.2d 793,238 Minn. 371 |
| Decision Date | 06 February 1953 |
| Docket Number | No. 35846,35846 |
| Parties | HALVORSON v. GEURKINK et al. |
| Court | Supreme Court of Minnesota (US) |
Syllabus by the Court.
1. In action brought on the theory that certain named defendants were partners of a deceased person in the operation of an insurance agency, evidence considered and Held insufficient to support a finding of a partnership relation between the decedent and any of the defendants with respect to the ownership or operation of said business.
2. The principle that stockholders in a defective corporation which is neither De jure nor De facto are liable as a matter of law as partners Held not applicable to the instant case where proposed corporation was completely dormant and carried on no business, no one attempted to use the corporate name or to conduct any business on its behalf, and there was no element of estoppel.
3. Provisions of M.S.A. § 300.27, subd. 1(2), imposing personal liability for corporate debts on stockholders if the corporation fails to comply substantially with the provisions as to organization and publicity, Held not applicable to instant case.
4. Where evidence disclosed that sixteen of plaintiff's claims were based solely upon contract and that two of them were based upon tort, it was error for trial court to dismiss plaintiff's action against the representatives of the decedent's estate on the ground that all of plaintiff's claims were barred by §§ 525.411 and 525.431. Since plaintiff was entitled to a new trial against the representatives of the decedent's estate with respect to these particular two claims, trial court's order denying plaintiff a new trial should be reversed in part as to said representatives of decedent's estate and affirmed as to the other named defendants.
Drake, Drake & Schreiner, Minneapolis, for appellant.
Fowler, Youngquist, Furber, Taney & Johnson by Fred N. Furber, Minneapolis, for respondents Geurkinks, A. P. Sell, Irene Johnson and John Jirasek.
Nyquist & Nyquist, Milaca, for respondents E. William Ericson and Rhoda M. Rolien.
Plaintiff brought this action to recover damages for the conversion of funds and the sale and delivery of forged instruments against the representatives of the estate of Guy E. Rolien, deceased, and against the other named defendants as partners of Guy E. Rolien. At the conclusion of all the testimony the trial court granted defendants' motions to dismiss the action on the merits as to each of them. Plaintiff appeals from an order denying his motion to vacate the order of dismissal and for a new trial.
The pertinent facts are as follows: Guy E. Rolien had operated the G. E. Rolien Insurance Agency, hereinafter referred to as the Agency, in Milaca, Minnesota, for more than ten years prior to his death on December 30, 1949. Beginning in 1945, plaintiff purchased from the Agency various premium financing notes and conditional sales contracts executed by purchasers of insurance to the Agency or assigned to it. In addition, the Agency agreed to make the collections thereon and to remit the proceeds to plaintiff. The Agency's practice was to make the collections and to credit the proceeds to plaintiff's account; then, at irregular intervals after charging plaintiff's subsequent purchases to his account, it would either remit the balance or collect the difference from plaintiff. Plaintiff testified that the Agency had made collections on certain items owned by him and had not remitted the proceeds and that certain other items of commercial paper purchased by him from the Agency were forged.
On May 1, 1944, defendant A. P. Sell transferred his insurance agency located at Onamia, Minnesota, to the Agency and became an employe of the Agency in charge of its Onamia branch as part of an agreement with Rolien whereby Sell would receive 25 shares of stock in the G. E. Rolien Agency, Incorporated, a corporation to be formed by Rolien to take over the business of the Agency. Sell did not take part in the formation of the proposed corporation. In July or August, 1946, Sell received a stock certificate for 25 shares from Rolien and signed a stock receipt which was predated December 22, 1944. Sell testified that he remained an employe of the Agency until Rolien's death unaware that the corporation had not been formed.
On about September 30, 1944, defendant Abraham Geurkink met with Rolien, and at that time Geurkink signed articles of incorporation and a corporate record book which had been previously prepared by Rolien in connection with a prior abortive plan to incorporate the Agency. The minutes of the first meeting of the board of directors which were contained in the corporate record book included the election of Rolien as president and Abraham Geurkink as vice president and authorized Rolien as president to consummate agreements with the various insurance companies previously represented by the Agency. After signing these instruments, Abraham Geurkink gave Rolien checks totaling $6,000 in payment of his and defendant Geurkink Brothers' stock subscriptions. On December 22, 1944, Rolien and Geurkink prepared stock certificates which were issued: One for 90 shares to Rolien and Geurkink Brothers and one for 15 shares to Abraham Geurkink. The Geurkinks were engaged in the cattle business at Pease, Minnesota, and carried considerable insurance with the Agency. Although it was understood that Rolien was to complete the incorporation, no further steps were taken with respect thereto. No assets or property were ever transferred to the corporation, and no change was made in the name of the Agency or in its contracts with the insurance companies.
Defendant Irene Johnson, an employe of the Agency, signed the articles of incorporation and the corporate record book at Rolien's request and received a stock certificate for ten shares on December 22, 1944, for which she paid nothing. This was the sole extent of her participation in the proposed corporation. She left the Agency's employ in 1949 prior to Rolien's death.
Defendant John Jirasek received two stock certificates in the proposed corporation from Rolien which were signed by Rolien alone. One, which was dated July 5, 1945, was for 15 shares, and the other, which was dated April 30, 1946, was for 5 shares. Jirasek testified that he had no knowledge of the corporation, that he intended the moneys he advanced to Rolien to be loans, and that he received irregular interest payments from Rolien.
After Rolien's death, defendant Abraham Geurkink, who testified that he was unaware that the incorporation had not been completed, was in the Agency office frequently in his supposed capacity as vice president of G. E. Rolien Agency, Incorporated. He then discovered that the corporation had not been formed, and subsequently, four to six weeks later, an audit revealed that the Agency was insolvent. Prior to the audit, he had a discussion with plaintiff in which he, Geurkink, stated that the Agency was not a corporation and that he guessed it was a partnership and, if so, plaintiff would not have to worry.
Defendants Sell and Geurkink Brothers filed claims in probate court against Rolien's estate which were allowed, but the estate was insolvent and they realized nothing therefrom. Plaintiff, without filing a claim in probate court, instituted the present action in the district court joining the representatives of Rolien's estate as party defendants.
1. The trial court dismissed plaintiff's action against defendants Abraham Geurkink, William Geurkink, Geurkink Brothers, A. P. Sell, Irene Johnson, and John Jirasek because it was of the opinion that the evidence wholly failed to establish a partnership relation between Rolien and any of these defendants. Plaintiff assigns this as error. Since there was no element of estoppel in the case, it was necessary for plaintiff to establish...
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