Strang v. Thomas

• Decision Date: 19 May 1902
• Citation: 91 N.W. 237,114 Wis. 599
• Parties: STRANG ET AL. v. THOMAS ET AL.
• Court: Wisconsin Supreme Court

114 Wis. 599

91 N.W. 237

STRANG ET AL.

v.THOMAS ET AL.

Supreme Court of Wisconsin.

May 19, 1902.

Appeal from circuit court, Richland county; George Clementson, Judge.

Action by G. H. Strang and others against C. G. Thomas and others. From a judgment for plaintiffs, defendant Thomas appeals. Affirmed.

In 1890 the defendants J. B. and W. Brimer owned and operated a yarn and woolen mill in the town of Orion, in Richland county. They were desirous of doing business on a more extensive scale, but, not having the capital, they solicited residents of Richland Center to join in the organization of a company. The proposition met with favor, and at a meeting held April 12, 1890, of the parties interested, articles of agreement were submitted and considered. At a later date in the same month the agreement was entered into, and officers and directors were elected. The written articles provided that the parties should become copartners in the business of manufacturing wool into yarn and cloth. The Brimers were to be general partners, and furnish their machinery at the price of $3,500 as their share of the capital, and the others were to be special partners, contributing the sum of $4,000, each holding interests, as specified in the agreement, according to the amount each contributed. The agreement provided for the election of a superintendent, and the special parties were to elect three directors; such special partners having one vote for each $100 contributed. The agreement made provisions for the manner in which the business was to be conducted, and specified that “the division of the profits or losses in conducting the business shall be equal, and in proportion with amount of stock held by each party.” It was to continue for five years. The attempt was to form a limited partnership under the statutes, but they failed to comply with several of its provisions. No sign, as required by section 1713, Rev. St., was put up, and the business was transacted largely by officers and directors elected by the members, instead of by the general partners. In January, 1891, they increased their capital to $10,000, and “shares” were thereafter issued to the members amounting to $2,300, so that the total amount paid in was $9,800. On January 22, 1891, F. P. Lawrence, who had contributed $200 to the original capital, sold his interest to the defendant A. L. Hatch. January 14, 1891, Isaac McCann sold his interest, amounting to $100, to the plaintiff J. W. Lybrand, and in March, 1891, Geo. Bennett sold his interest, amounting to $200, to the plaintiff W. H. Pier. On February 14, 1891, the Brimers transferred $1,000 of their interest to the defendant C. G. Thomas. At the meeting in January, 1891, it was voted to issue certificates of stock to the members for the interest each held, and certificates were so issued, including one for $1,000 to Thomas. The business was conducted for five years, but was unprofitable. The company was then $4,000 or $5,000 in debt. All the members knew that the business had been unprofitable, but, in hopes that it might be made to pay, on May 1, 1895, all the members signed an agreement to continue the business for three years. Subsequently, the company borrowed more money. Business was continued for a time, and finally ceased. Attempts were made at various times to settle the affairs of the partnership, which failed. This action was commenced to wind up the affairs of the company, and a receiver was appointed. All of the creditors, and all of the original signers, and such as subsequently came in, were made parties. The court found the debts to be $9,787.38 and the net assets $1,843.30, the net indebtedness being $7,944.08. He also found that the partnership, from the beginning, was a general one, and all the members were liable for the indebtedness in proportion to the interest each had in the business. The defendants J. B. Brimer, W. Brimer, and H. T. Bailey were found to be insolvent. Judgment was entered against each of the other parties interested in the concern for his proportionate share of the debts, according to his interest therein, less the net assets, saving, to the parties who paid, the right to enforce contribution from the ones who were found to be insolvent. No judgment was entered against Bennett, McCann, or Lawrence. The amount found due from the appellant, C. G. Thomas, was $1,168.20. All parties acquiesced in the judgment except Thomas, who brings this appeal.F. W. Burnham,...