Hinz v. Van Dusen

• Decision Date: 16 March 1897
• Parties: HINZ v. VAN DUSEN ET AL.
• Court: Wisconsin Supreme Court

95 Wis. 503

70 N.W. 657

HINZ

v.VAN DUSEN ET AL.

Supreme Court of Wisconsin.

March 16, 1897.

Appeal from circuit court, Chippewa county; A. J. Vinje, Judge.

Action by William F. Hinz against George W. Van Dusen and others. From a judgment in favor of defendants, plaintiff appeals. Affirmed.

This action was brought by plaintiff as a stockholder and director of the Fifield Manufacturing Company, a corporation, against such corporation and against George W. Van Dusen, O. D. Van Dusen, F. D. Arnold, and G. O. Van Dusen, stockholders and directors of such corporation, for equitable relief from alleged fraudulent conduct on the part of said defendant stockholders and directors, having for its purpose to cheat and defraud the corporation, and particularly plaintiff as a stockholder and creditor thereof. Issue was joined in the action by the separate answers of O. D. Van Dusen and G. W. Van Dusen and the joint answer of G. O. Van Dusen and F. D. Arnold. The cause was referred to a referee to hear, try, and determine, and such proceedings were thereafter duly had that such referee filed his findings of fact and conclusions of law, to which plaintiff seasonably filed exceptions. Thereafter a motion was duly made on the part of the plaintiff to set aside or modify the report of the referee, and a motion was made on the part of defendants to confirm such report, and for judgment in accordance therewith. The former motion was denied, and the latter granted. An order was accordingly entered, to which plaintiff filed written exceptions on the 21st day of June, 1896. The findings of the referee are in substance as follows: (1) Since the 26th day of December, 1889, O. D. Van Dusen, F. D. Arnold, G. O. Van Dusen, and plaintiff have been stockholders and directors, and have managed the affairs, of the defendant corporation. (2) Plaintiff was treasurer from the 26th day of December, 1889, to the 7th day of May, 1891, but was not permitted to receive and disburse the moneys of the corporation; but the same were used by the other officers of the corporation for its proper use and benefit. (3) The charge, contained in the complaint, that money was fraudulently credited to defendants O. D. and G. O. Van Dusen and F. D. Arnold, is not proven. (4) G. O. Van Dusen used the planing mill belonging to the corporation for his personal benefit during the winter of 1892 and 1893, but it was by an agreement with the corporation, and for a sufficient consideration. (5) On the 20th day of February, 1893, the corporation owned unincumbered real estate and personal property to the value of $100,000. (6) On said day, at a meeting of the directors of the company, including plaintiff, a partial statement of the indebtedness of the corporation, amounting to $63,048.41, was exhibited; and it was then determined, plaintiff only voting “No,” that the corporation should mortgage its real estate to George W. Van Dusen for such amount as he was willing to pay of the corporation indebtedness. The company then owed, among others, G. W. Van Dusen $13,289.86, and O. D. Van Dusen $18,020.20. A six-months note of the corporation for $63,048.41, secured by mortgage on its real estate, was then made and delivered to G. W. Van Dusen, whereupon he credited the company with its debt to him, and O. D. Van Dusen with the debt of the corporation to him, charging both such debts against such note and mortgage. He then paid other indebtedness of the company to the amount of $30,698.97. (7) All the above-mentioned transactions were pursuant to a resolution of the board of directors of the company authorizing the same, and all the indebtedness thereby funded into the said note and mortgage was just. (8) In September, 1893, an action to foreclose such mortgage was begun, in which plaintiff appeared. Judgment therein by default was rendered October 16, 1893. (9) A chattel mortgage mentioned in the complaint was executed in good faith to the holder of the other mortgage. It covered property necessarily belonging to the mill on the lands covered by the first mortgage, and was in fact included in such mortgage. (10) An unintentional mistake of $1,039.38 was made in favor of G. W. Van Dusen in computing the amount of money advanced by him to the corporation on the note and mortgage, which error was corrected by an indorsement on the foreclosure judgment. The amount due at the time of the rendition of such judgment was $64,733.82. (11) On December 31, 1893, G. W. Van Dusen sued plaintiff to recover of him as indorser on an $8,000 note of the corporation given September 16, 1891, payable to the order of F. G. Bigelow in 60 days after date. Such note was not included in the corporation indebtedness G. W. Van Dusen agreed to pay on account of the loan of February 20, 1893. (12) The capital stock of the corporation is $100,000, of which O. D. Van Dusen owns $50,000, and has paid thereon $25,000; plaintiff owns $25,000, upon which he has paid $5,000; G. O. Van Dusen owns $12,500, upon which he has paid $2,000; F. D. Arnold owns $12,500, upon which he has paid $2,000. The conclusion of law was that the defendants were entitled to a judgment dismissing the complaint, with costs. Judgment was accordingly entered February 6, 1896, from which this appeal was taken.

Hooper & Hooper, for appellant.

Jones & Jones, for respondents.

MARSHALL, J. (after stating the facts).

Error is assigned in that the referee excluded evidence offered by the plaintiff material to the issues. We fail to find that the exceptions to the rulings excluding such evidence, made before the referee, were renewed on the motion to confirm the report, or otherwise; hence the questions raised by such alleged errors are not before us...