Supreme Tool & Mfg. Co., In re

• Decision Date: 08 April 1958
• Citation: 3 Wis.2d 554,89 N.W.2d 292
• Parties: , 34 Lab.Cas. P 71,438 In re Voluntary Assignment of SUPREME TOOL & MFG. CO., a Wis. corporation. Erwin E. NEMMERS, Appellant, v. Albert C. HELLER, Receiver, etc., et al., Respondents.
• Court: Wisconsin Supreme Court

Page 292

89 N.W.2d 292

3 Wis.2d 554, 34 Lab.Cas. P 71,438

In re Voluntary Assignment of SUPREME TOOL & MFG. CO., a Wis. corporation Erwin E. NEMMERS, Appellant, v. Albert C. HELLER, Receiver, etc., et al., Respondents.

Supreme Court of Wisconsin.

April 8, 1958.

Erwin Esser Nemmers, Milwaukee, in pro. per.

Wolf & Haese, Milwaukee, for Harold Townsend.

Joseph W. Swinnell, Milwaukee, for Erich Singer.

FAIRCHILD, Justice.

The fundamental question presented is whether a receivership proceeding instituted by a voluntary assignment made under Ch. 128, Stats. by a corporation is a proceeding in which the statutory liability of stockholders for unpaid wages can be adjudicated.

It has been decided that where an action is commenced against a banking or insurance corporation and a receiver appointed under the forerunners of sec. 286.12 ff. Stats. (Sec. 3218 ff, R.S.1878), such action is the exclusive remedy for determination of liabilities of stockholders. Hurlbut v. Marshall, 1885, 62 Wis. 590, 22 N.W. 852; Gager v. Bank of Edgerton, 1899, 101 Wis. 593, 77 N.W. 920; Gager v. Marsden, 1899, 101 Wis. 598, 77 N.W. 922. The court found, particularly in sec. 3227, now in substance, sec. 286.22, authorizing an injunction against proceedings by any other creditor evidence of legislative intent that there should be only one proceeding. 'The legislative scheme is that the whole subject of winding up a corporation, settling with its creditors and distributing its assets, shall be brought before the court as one cause of action. The various liabilities enforceable in such action are not separate causes of action, but are mere incidents or parts of one subject or cause of action: the settlement of the corporate affairs.' Gager v. Marsden supra, 101 Wis. at page 604, 77 N.W. at page 924.

With reference to receiverships of corporations, other than banks and insurance companies, it has been decided that where a receiver had been appointed in an action brought for that purpose, the stockholders' statutory liability for unpaid wages should be determined in the receivership proceeding. Cullen v. Abbott, 1930, 201 Wis. 255, 229 N.W. 85. It is, however, only an irregularity not to do so and such corporate receivership proceeding will not preclude a subsequent action by the employees against the stockholders. Kreutzer v. Gallagher, 1938, 229 Wis. 273, 282 N.W. 22.

In R.S.1878, the provisions now appearing as secs. 286.12 to 286.23 appeared in at least similar form in secs. 3218 to 3228. They were grouped together with secs. 3216 and 3217 under a title 'Proceedings Against Insolvent Corporations.' Sec. 3216 authorized the circuit court to sequestrate the assets of a domestic corporation and appoint a receiver upon petition of a judgment creditor, execution having been returned unsatisfied. Sec. 3217 provided that in the final order in such action, the court direct a just and fair distribution among creditors in accordance with a specified schedule of priority. Sec. 3216 later became sec. 286.10. In 1935 as a result of a revisor's bill, it was added to a list of grounds for appointment of a receiver in sec. 268.16(7). Up to this time voluntary assignments were covered by Ch. 128. This chapter was entitled 'Voluntary Assignments.' Chapter 431, L.1937 repealed Ch. 128, Statutes, sec. 268.16(7) and 286.11 (formerly sec. 3217) and created Ch. 128, Stats. under the title 'Creditors' Actions.' This chapter covered voluntary assignments for the benefit of creditors, proceedings termed 'involuntary' (secs. 128.06 and 128.08(a)) and proceedings when an execution against a domestic corporation is returned unsatisfied. (sec. 128.08(b)) The provisions for involuntary proceedings were considered to be superseded by the Federal Bankruptcy Act, 11 U.S.C.A. § 1 et seq. in In re Wisconsin Builders Supply Co., 7 Cir., 1956, 239 F.2d 649, and substantially removed from Ch. 128 by Ch. 274, Laws of 1957. Sec. 268.16(4) still authorizes appointment of a receiver when a corporation has been dissolved, is insolvent, in imminent danger of insolvency, or has forfeited its corporate rights.

In 1951 the new Wisconsin Business Corporation Law provided for procedure in the matter of liquidation of corporations by the circuit court. Secs. 180.771-180.787. In notes to Bill No. 763S, 1951, it appears that the committee considered that there should be a further study of Ch. 128, sec. 268.16 and Ch. 286 insofar as they relate to corporate receiverships. They appeared to suggest that some uniform corporate liquidation proceeding might eventually result. There are important differences now existing in the procedures provided by Ch. 128, Ch. 180, Ch. 268 and Ch. 286, e. g. priority of claims and time within which claims must be filed. Differences expressly provided for could not, of...