Hanson v. Martin

• Decision Date: 13 January 1927
• Citation: 192 Wis. 40,211 N.W. 790
• Parties: HANSON ET AL. v. MARTIN ET AL.
• Court: Wisconsin Supreme Court

192 Wis. 40

211 N.W. 790

HANSON ET AL.

v.MARTIN ET AL.

Supreme Court of Wisconsin.

Jan. 13, 1927.

Appeal from Circuit Court, Trempealeau County; James M. Wickham, Judge.

Suit by H. M. Hanson and others against Robert Martin and others. Judgment of dismissal, and plaintiffs appeal. Affirmed.--[By Editorial Staff.]

A number of farmers attempted to organize a corporation called the Blair Farmers' Exchange, subscriptions were signed, a meeting of the subscribers was held, and the corporation commenced business in 1910. Its present officers and directors from time to time gave corporate notes to the home bank of Blair, of which they became joint indorsers and guarantors. In 1921 the corporation suspended business, and in 1923 the bank sued upon the unpaid notes, joining as defendants those officers and directors, the plaintiff in this case, who had indorsed and guaranteed the notes. The bank had judgment, the officers and directors paid the judgment and now seek contribution from the other stockholders, on the ground that less than 50 per cent. of the authorized capital of the corporation had been subscribed at the time they assumed their liability as guarantors, on the theory that all of the subscribers were jointly liable under section 180.06, Wis. Stats.

Upon the trial, the court found in favor of the defendants, and judgment was entered dismissing the complaint, from which the plaintiffs appeal.Q. H. Hale and George W. Bunge, both of La Crosse, for appellants.

Higbee & Higbee, of La Crosse, for respondents.

ROSENBERRY, J.

[1] Two questions were raised by the assignments of error in this case: First, it is contended that the finding of the trial court, that more than 50 per cent. of the stock in the Blair Farmers' Exchange was duly subscribed, is against the clear preponderance and great weight of the evidence; second, that the court erred in refusing plaintiffs a trial by jury. The defendants urge that there was no error and also seek to support the judgment on the ground that the plaintiffs in this action are estopped from maintaining an action against other stockholders under the provisions of section 180.06, for the reason that the plaintiffs had for many years dealt with and acted for and on behalf of the corporation as such. Maxey v. Peavey, 177 Wis. 140, 187 N. W. 1020;Blum Bros. Box Co. v. Stumbaugh, 189 Wis. 254, 207 N. W. 270.

This contention is met by plaintiffs with the claim that it fails to distinguish between the doctrine of estoppel as applied to an officer or creditor denying the corporate existence of a de facto corporation and such officer or creditor seeking to enforce a statutory liability imposed for incomplete organization; and the plaintiffs further claim that corporate creditors and officers in this regard are similarly situated. A brief analysis of the situation disclosed by the record in this case sufficiently answers plaintiffs' contention.

In the name of the corporation the plaintiffs, as officers and directors of the corporation, entered into a contract with the bank according to the terms of which the corporationbecame obligated to pay to the bank certain sums of money. The plaintiffs guaranteed to the bank that the corporation would perform its contract, and that, in the event of the failure of the corporation to perform, the plaintiffs would perform the contract; i. e. discharge the corporate obligation to the bank. This was in effect a transaction by which plaintiffs loaned to the corporation their credit. The corporation failed to perform, and the bank began an action, not on a statutory liability, but on the note of the corporation and the contract of guaranty given to it...