State ex rel. Wis. Bridge & Iron Co. v. Sullivan

• Decision Date: 10 October 1944
• Citation: 245 Wis. 544,15 N.W.2d 847
• Parties: STATE ex rel. WISCONSIN BRIDGE & IRON CO. et al. v. SULLIVAN, Judge et al.
• Court: Wisconsin Supreme Court

245 Wis. 544

15 N.W.2d 847

STATE ex rel. WISCONSIN BRIDGE & IRON CO. et al.

v.SULLIVAN, Judge et al.

Supreme Court of Wisconsin.

Oct. 10, 1944.

Prohibition to the Circuit Court for Milwaukee County; Daniel E. Sullivan, Judge.

Writ denied.

Original action by State ex rel. Wisconsin Bridge and Iron Company, a corporation, Arthur L. Riemer and Joseph A. Schoenecker, plaintiffs, commenced on June 6, 1944. The purpose of the action is to quash a discovery before pleading in an action pending in the Circuit Court for Milwaukee County. On plaintiffs' motion to quash the discovery subpoena Judge Sullivan limited the examination in certain respects but declined to quash the subpoena.

Except in quotations from papers in the trial court, the plaintiffs here will be referred to as plaintiffs and the defendants here as defendants throughout the opinion, although the positions below were exactly reversed.

Fred R. Wright, of Milwaukee (Hill, Beckwith & Harrington, of Madison, of counsel), for plaintiff.

Charles D. Ashley and George A. Gessner, both of Milwaukee, for defendants.

WICKHEM, Justice.

Walter T. Curtis and Nellie T. Curtis, defendants here, commenced an action in circuit court for Milwaukee County against Wisconsin Bridge and Iron Company, Arthur L. Riemer and Joseph A. Schoenecker. Accompanying the summons were (1) a notice of examination of Arthur L. Riemer and Edmund F. Barkow, the latter being identified as secretary of Wisconsin Bridge and Iron Company; (2) an affidavit of discovery by George A. Gessner, one of the attorneys for the Curtises; (3) a subpoenaduces tecum to Arthur L. Riemer, individually and as president ‘and/or’ treasurer of Wisconsin Bridge and Iron Company; and (4) a subpoena duces tecum to Edmund F. Barkow, as secretary of Wisconsin Bridge and Iron Company. It is the foregoing subpoenas that plaintiff sought to suppress in the lower court and to the same end they prosecute their action in this court for a writ of prohibition.

The affidavit of discovery states that the object of the action is ‘* * * to recover damages sustained by plaintiffs as the result of fraud of defendants in connection with the sale by plaintiffs of one hundred twenty (120) shares of the common stock of the defendant, Wisconsin Bridge and Iron Company, owned by plaintiffs; that discovery is necessary * * * as to certain facts within the knowledge of said persons and not within plaintiffs' knowledge, in order to enable the plaintiffs to prepare their complaint herein.’

The affidavit lists the points on which the discovery is sought as follows:

1. The activities of plaintiff, Arthur L. Riemer, relative to the retirement of defendant, Walter T. Curtis, and the disposition of said one hundred twenty (120) shares of the common stock of said company.

2. The corporate activities of plaintiff corporation relative to the same matter.

3. The activities of other officers and employees of plaintiff company relative to the same matters.

4. The activities of plaintiffs, Riemer and Schoenecker, in acquiring outstanding common stock of the company.

5. The financial condition and the business operations, profits and prospects of the company, both before and after the sale by defendants of the said shares of stock.

The subpoena served upon Riemer requires production (1) of all letters and correspondence between the company and Curtis, individually and officially, with Alex D. Mayer relative to the retirement of Curtis as an employee of the company and relative to the disposition, assignment or ownership of the one hundred twenty (120) shares of stock owned by Curtis; (2) all cancelled checks and orders for the payment of money signed by Riemer, individually or as an officer of the company, wherein money was made available to Walter or Nellie Curtis or made payable to Alex D. Mayer incidental to the disposition of the said one hundred twenty (120) shares of stock; (3) all books of account of the company containing entries of money paid by or to the company as an incident to the transfer of one hundred twenty shares (120) of stock owned by Curtis; (4) Riemer's individual books of account showing entries of money paid by or to Riemer incidental to the transfer of one hundred twenty (120) shares of stock; (5) all written agreements and memoranda, individually or officially between Riemer and Alex D. Mayer or any other persons relative to the disposition of the stock; (6) copies of the state and federal income and capital stock tax of the company for the years 1936 to 1942; (7) general ledger and all books of original entry of the company from 1936 to 1943; (8) originals of the master copies of financial statements and announcements to stockholders of the company from 1939 to date; (9) corporate records of the company showing payments of dividends on preferred and common stock from January 1, 1936 to date.

The subpoena served upon Barkow called for production (1) of all copies of letters and other communications between Barkow as secretary of the company or between any other officer of the company and either Curtis or Mayer relative to the subjects mentioned in the other subpoena; (2) all stock books and all stock transfer records of Wisconsin Bridge and Iron Company; (3) certificate or certificates, cancelled or uncancelled, of stock evidencing the 120 shares of common stock of the company owned by the Curtises and the rider or riders attached and incidental thereto; (4) all written agreements and memoranda between Wisconsin Bridge and Iron Company and Walter T. Curtis ‘and/or’ Nellie T. Curtis ‘and/or’ Alex D. Mayer, relative to the diposition, distribution, allocation, subsequent transfers of this stock; (5) corporate minutes of stockholders and directors of Wisconsin Bridge and Iron Company from 1939 on; (6) original or copies of financial statements to stockholders; (7) corporate records of the company showing declarations and payments of dividends on preferred and common stock from January, 1936 to date; (8) all written bids and commitments, and all contracts submitted, received or executed or performed by the company in the operation of its business from January 1, 1939 to date.

The trial court declined to suppress the subpoenas and held that books and documents specified in the Riemer subpoena under paragraphs 1, 2, 3, 4, 5, 8 and 9 may be relevant and should be produced and that 6 and 7 should not be produced. In the Barkow subpoena No. 8 was excluded and the production limited to the papers and documents set forth in paragraphs 1 to 7, inclusive, with the limitation that the first six paragraphs should include only documents containing statements to persons other than plaintiffs.

The attack upon these proceedings by plaintiffs is based on the claim that there...