Sawyer v. Dubuque Printing Co.

• Decision Date: 08 May 1889
• Citation: 42 N.W. 300,77 Iowa 242
• Parties: SAWYER v. DUBUQUE PRINTING CO. ET AL.
• Court: Iowa Supreme Court

77 Iowa 242

42 N.W. 300

SAWYER

v.DUBUQUE PRINTING CO. ET AL.

Supreme Court of Iowa.

May 8, 1889.

Appeal from district court, Dubuque county; C. F. COUCH, Judge.

This is an action to recover damages for an alleged unauthorized and fraudulent disposition of the property of the Dubuque Democrat Printing & Publishing Company, a corporation, whereby plaintiff, as a stockholder in said corporation, was damaged. The action was originally brought at law, and on motion of the plaintiff, against the objections of the defendants, was transferred to and tried as an equitable proceeding. The case was referred to S. P. Adams, Esq., who made a report of his findings of fact and of law, and upon a re-reference amended his report in certain respects, and recommended judgment for plaintiff for $306.95, instead of for $422.48, as recommended in the first report. The court held that, as no fraud is reported, the plaintiff is not entitled to judgment; that the recommendation for judgment is based upon causes of action not stated in the pleadings, therefore not approved. The judgment was entered dismissing the case at plaintiff's costs, from which the plaintiff appeals. Among other findings the referee reported: “ Ninth. I find the charge of fraud made by plaintiff is not sustained. Tenth. That the sale and transfer of the property of Democrat Co. to the parties who composed the Printing Co. was made in good faith.” The Democrat Company was organized in 1882, for the purpose of printing and publishing a daily and weekly newspaper. The stockholders were practical newspaper men, and were employed by the company under contracts by which part of their wages was applied in payment of their stock. Hence but $100 or $200 was ever paid in money on the stock. Aside from this $100 or $200, the company had no income except the receipts from its business, and had no outlays except the expenses incident to the business. That the receipts were not always sufficient to meet expenses is evidenced by the fact that there was no money on hand with which to meet overdue bills at the time of the sale complained of. The only assets owned by the company were its subscription lists, advertising contracts, book-accounts, goodwill, a safe, a limited quantity of cases, type, and paper, most of which was of uncertain value, and but little of which could be relied upon for funds with which to pay the $2,525.79 of existing indebtedness. The Dubuque Telegraph was being published in competition with the Democrat. The appellant claims that the Democrat was the more prosperous of the two. If so, its condition financially shows that there was not room for both papers to prosper. The value of the Telegraph's property is indicated by Quigley's purchase of one-half interest therein for $3,750, he assuming one-half of the indebtedness, not exceeding $3,800. Under these circumstances negotiations for a consolidation of...