Parish v. Awschu Props., Inc.

• Decision Date: 15 June 1945
• Citation: 247 Wis. 166,19 N.W.2d 276
• Parties: PARISH et al. v. AWSCHU PROPERTIES, Inc., et al.
• Court: Wisconsin Supreme Court

247 Wis. 166

19 N.W.2d 276

PARISH et al.

v.AWSCHU PROPERTIES, Inc., et al.

Supreme Court of Wisconsin.

June 15, 1945.

Appeal from a judgment of the Circuit Court for Dane County; Alvin C. Reis, Judge.

Reversed.

Action commenced by plaintiffs, Lester Parish, Charlie Bakken, Dewey Durnbaugh, and A. R. Haven, individually and as members of a committee of the employees of the Stoughton Company and the New Stoughton Company, on behalf of said plaintiffs and certain other employees of said corporations, against Awschu Properties, Inc., and certain other corporations and individuals, as the stockholders of the Stoughton Company, to recover from them, under sec. 182.23, Stats., for unpaid balances of plaintiffs' claims for wages earned by them in 1935 and 1936. Some defendants failed to answer and a default judgment entered for a recovery under sec. 182.23, Stats., from them by the plaintiffs was affirmed in Parish v. Awschu Properties, Inc., 243 Wis. 269, 10 N.W.2d 166.

The other defendant stockholders filed answers to plaintiffs' amended complaint; and pursuant to an order therefor obtained by defendants, plaintiffs furnished a bill of particulars. Thereafter those defendants made a motion upon the pleadings, complaint and bill of particulars, and affidavits filed by the parties and all other records and files in the action, for a summary judgment dismissing the complaint. The court granted the motion and entered the summary judgment from which plaintiffs appealed.

Lowell T. Thronson and Joseph G. Hirschberg, both of Madison, for appellants.

Kaumheimer, Alt & Likert and Ben G. Slater, all of Milwaukee, Loverud & Mennes, of Stoughton, M. A. Tollund, of Mt. Horeb, Schubring, Ryan, Petersen & Sutherland and Dudley Davis, all of Madison, Schneider & Clarke, of Stoughton, August C. Moeller, of Milwaukee, and Ela, Christianson & Ela, of Madison, for respondents.

FRITZ, Justice.

In the allegations in plaintiffs' verified complaint, which detail some transactions at unnecessary length, there are ambiguities and inconsistencies which tend to confuse and obscure and render it difficult to understand the basis upon which they apparently are seeking to recover under sec. 182.23, Stats., from the defendants (who are respondents on this appeal) on the theory that they were stockholders of the Stoughton Company, which is indebted to plaintiffs for wages earned by them as its employees in 1935 and 1936. Liberally construed in favor of the pleader and briefly summarized, their allegations as to facts relied upon as basis for plaintiffs' theory are to the following effect.

Prior to and after May 7, 1932, plaintiffs and their co-employees, on whose behalf they seek to also recover herein, were employed by the Stoughton Company, a Wisconsin corporation, and the respondents were then and thereafter, at all of the times mentioned in the complaint, stockholders owning the number of shares of non-par stock specified in a schedule attached to the complaint. That corporation, from May, 1927, to July 8, 1936, owned and operated a manufacturing business and plant located in the city of Stoughton; and on May 7, 1932, a corporation, ‘The New Stoughton Company’, was incorporated under Wisconsin laws for the purpose of owning and operating that business and plant, and its articles provided that its capital stock shall consist of 600 shares of common stock of non-par value. On May 6, 1932, at a meeting of the stockholders of the Stoughton Company a resolution was adopted which authorized its president and secretary to sell and transfer all of its property for such consideration and terms of sale as they approved, provided that ‘any such sale shall either directly or through this corporation preserve to the stockholders thereof their ratable rights on the basis of present stock holdings'; and at a meeting of that corporation's board of directors on May 7, 1932, its president and secretary were authorized to sell and transfer all of its assets and business to the New Stoughton Company under a written contract which provided that as part of the consideration therefor the latter agreed to assume and pay all of the indebtedness of the Stoughton Company, including all unpaid factory payroll and office salary, and pay to the Stoughton Company $35,000 in specified installments due in two, three, four and five years, respectively, and also to pay $510 by issuing 510 shares of its common stock without par value, at the agreed price of $1, to the Stoughton Company or to whom it shall designate. On May 7, 1932, the Stoughton Company subscribed for the 510 shares of the non-par value stock and agreed to pay therefor at the rate of $1 per share by transferring and assigning all of its right, title and interest in and to all of its assets to the New Stoughton Company; and in written instructions the Stoughton Company directed that when the New Stoughton Company issued stock on that subscription it should be issued to the stockholders of the Stoughton Company at the rate of one share for each twenty shares held by them in the latter company; and that its rights to the stock were thereby assigned to its said stockholders.

In addition there is alleged in the complaint the following: ‘That no other or further action of the stockholders or board of directors of the said The Stoughton Company was ever taken in relation to the sale of its assets to The New Stoughton Company; that no certificates of stock in The New Stoughton Company were ever issued; that no part of the consideration agreed to be paid by The New Stoughton Company to The Stoughton Company was ever paid; that nothing was ever paid to The Stoughton Company by the New Stoughton Company as consideration for the purchase by The New Stoughton Company of its assets under the agreement ‘Exhibit B’; that no part of the Thirty Five Thousand Dollars ($35,000) agreed to be paid by the terms of said ‘Exhibit B’ was ever paid; that no permit was ever applied for and no permit was ever issued by the State of Wisconsin under chapter 189 of the Wisconsin Statutes then in force for the sale of the securities of the said The New Stoughton Company. That it was contemplated by the stockholders of the said The Stoughton Company, the defendants in this action, that the business of said company should be continued by The New Stoughton Company and that it was in fact continued by The New Stoughton Company in substantially the same manner as before by the same persons, that is to say the same persons who were officers and employees in The Stoughton Company continued in The New Stoughton Company in like capacities and there was no interruption in the running of said business until the appointment of the receiver (in 1936) as hereinafter set forth. * * * That no other stock in The New Stoughton Company than those 510 shares was ever subscribed for or issued; and that no money or other thing of value was ever paid to The New Stoughton Company by any one in consideration for the issuance of any of its stock; that no part of the $510 mentioned in the subscription agreement and no part of the $35,000 mentioned in said agreement between The Stoughton Company and The New...