Polacheck v. Michiwaukee Golf Club Land Co.

• Decision Date: 05 February 1929
• Citation: 198 Wis. 78,223 N.W. 233
• Parties: POLACHECK ET AL. v. MICHIWAUKEE GOLF CLUB LAND CO. ET AL.
• Court: Wisconsin Supreme Court

198 Wis. 78

223 N.W. 233

POLACHECK ET AL.

v.MICHIWAUKEE GOLF CLUB LAND CO. ET AL.

Supreme Court of Wisconsin.

Feb. 5, 1929.

Appeal from an Order of the Circuit Court of Milwaukee County; Otto H. Breidenbach, Judge.

Action by Charles Polacheck and others against the Michiwaukee Golf Club Land Company and others. From an order overruling defendants' demurrer to the complaint, defendants appeal. Reversed and remanded.--[By Editorial Staff.]

Action begun May 7, 1928; order overruling defendants' demurrer to the plaintiffs' complaint entered July 21, 1928. The complaint set out the corporate character of the defendant Michiwaukee Golf Club Land Company, hereinafter called the land company, the purposes for which the corporation was organized, and the names and official position in the corporation of the various officers; that the plaintiffs were stockholders in the land company; that the land company acquired about 120 acres of land located near Fox Point in Milwaukee county; that the Michiwaukee Golf Club, hereinafter called the golf club, is a Wisconsin corporation organized principally for the purpose of promoting golf playing among its members; that the officers of the golf club and land company are practically identical; that practically ever since the organization of the land company and the acquirement by it of said land, the officers “have permitted and are continuing to permit the said Michiwaukee Golf Club to have the full and complete use and enjoyment of the said real estate owned by the defendant Michiwaukee Golf Club Land Company on an arrangement or lease without obtaining or requiring the said Michiwaukee Golf Club under the terms and conditions of said arrangement or lease, to pay any adequate compensation therefore.” That in the year 1926, the officers and directors caused to be placed upon the land owned by the land company a mortgage securing the payment of $70,000 in bonds, with the proceeds of which the land company erected a club house at a cost of over $50,000; that the defendants have permitted the golf club “to use the club house and equipment without adequate compensation and as plaintiff is informed and verily believes, without any compensation other than the payment of the interest due upon said outstanding bonds as they severally mature.”“That the acts of the said individually named defendants as specified herein are illegal and that such individually named defendants as officers and directors of said defendant corporation, Michiwaukee Golf Club Land Company, have abused their trust as such officers and such directors in not carrying out the purposes of the said corporation, Michiwaukee Golf Club Land Company, and have been guilty of gross misconduct in office therefore.”

Plaintiffs further allege upon information and belief that the property of the land company can be so managed as to produce a large amount of income; that the property could be sold for a sum in excess of $150,000, to the financial profit of the stockholders. Further allege that the existing arrangement is void for the reasons set forth. Further allege that it would be futile to request the officers and directors of the land company to conduct the business of the corporation in a proper and businesslike manner to the best financial advantage of the land company, and for the same reason it would be futile to request the officers of the land company to bring this action.

Plaintiffs pray that the existing arrangement or lease...