Weld v. Johnson Manuf'g Co.

• Decision Date: 29 December 1893
• Docket Number: No. 150.,150.
• Citation: 57 N.W. 374,86 Wis. 552
• Parties: WELD ET AL. v. JOHNSON MANUF'G CO.
• Court: Wisconsin Supreme Court

86 Wis. 552

57 N.W. 374

WELD ET AL.

v.JOHNSON MANUF'G CO.

No. 150.

Supreme Court of Wisconsin.

Dec. 29, 1893.

Appeal from circuit court, Brown county; Samuel D. Hastings, Jr., Judge.

Ejectment by Amos C., Howard A., Ray A., and Pearl E. Weld, by C. H. Forward, their guardian ad litem, against the Johnson Manufacturing Company. Judgment for defendant. Plaintiffs appeal. Affirmed.Phillips & Kleist, (Gary & Forward, of counsel,) for appellants.

F. C. Weed and Geo. W. Bird, for respondent.

ORTON, J.

This is an action in ejectment, brought by the minor heirs of Julius T. Weld, deceased, by their guardian ad litem, to recover from the defendant corporation the possession of an undivided one-half of certain lands in town 27, range 13 east, and $500 damages and $3,000 special damages for cutting and removing valuable timber from the premises and converting the proceeds thereof to its own use. The answer alleges. First. That the defendant is the owner and entitled to the possession of the premises. Second. As a counterclaim, that the said Julius T. Weld, deceased, and one R. S. Johnson, were copartners on the 22d day of July, 1888, and had been for six or seven years, engaged in the business of manufacturing and selling lumber, etc., under the firm name of Weld & Johnson; and that the lands described in the complaint were purchased by said firm with its partnership funds, and were used by it in connection with and to enable it to carry on its said business, and were a part of the said firm's partnership property at the time of the said Weld's death. Third. That the indebtedness of said firm at the time last aforesaid amounted to about $21,000, and its assets consisted of said lands and other lands, also its partnership property situated in the counties of Waupaca and Shawano, in this state, and stock and personal property of the value of not to exceed $10,000. Fourth. That at the time of said Weld's death said firm were under contracts with different persons and companies for the manufacture and delivery of a large quantity of lumber during the then coming year, upon which contracts had been advanced to it about the sum of $5,300. Fifth. That, in order to pay the said indebtedness, and perform said engagements, it was necessary that its business should be continued without interruption. Sixth. That said firm was then without money or available means to accomplish said purposes, and the only satisfactory means to carry on and continue said business and obtain the necessary funds therefor was the formation of a corporation, to which should be conveyed all the property of said firm, and which should assume the payment of said indebtedness, and the performance of said engagements; and the formation of said corporation was necessary for the accomplishment of said purposes, and for the interests of the plaintiffs as the heirs of the said Julius T. Weld, deceased, and of said estate, and to pay the debts, and prevent a sacrifice of the property. Seventh. That thereupon said R. S. Johnson, surviving partner, Amos Rugg, administrator of said estate, and Ada L. Weld, the widow of said Julius, and guardian of said heirs, entered into an agreement that such a corporation should be formed under the general law of this state for the purpose of continuing said business, and the payment of said indebtedness, and the performance of said engagements; and, to enable it to do so, that all the property of said firm, including said lands, should be conveyed to it. Eighth. That the interests of the surviving partner and of the estate should be ascertained, and thereafter represented by stock in said corporation. Ninth. That in pursuance of said agreement the said Ada L. Weld, as guardian of said plaintiffs, conveyed to the said R. S. Johnson, surviving partner, all the interests of said plaintiffs in the said lands in October, 1888, by guardian deeds, and at the same time the said Ada conveyed all her interest therein as the widow of said Julius to the said Johnson, so that he might convey said interests to said corporation when formed. Tenth. That the said corporation was duly formed according to the laws of this state by the name of the Johnson Manufacturing Company, and on the 14th day of February, 1889, the said Johnson delivered to the defendant a warranty deed theretofore duly executed by him to said defendant, whereby he duly conveyed to the defendant corporation all of the aforesaid lands of the firm; and thereupon said defendant took possession of all the said property of said firm. Eleventh. That the interest of said Johnson in said firm and the interest of the plaintiffs were duly ascertained to be as follows: R. S. Johnson, $5,645.91; the estate of the plaintiffs, $4,694.61, and the stock of said corporation was duly issued to them accordingly, and the stock of the plaintiffs delivered to the said Ada L. Weld, as their guardian; and there was also paid to her, in lieu of stock, the sum of $500; and that the only consideration of said stock and said $500 was the conveyance to said corporation of said lands and property of the firm. Twelfth. That said corporation has continued said business by the consent of all parties concerned, performed the engagements of the firm, and applied all of its said property, to the full value thereof, to the payment of said $21,000 indebtedness. The prayer is that the title to the premises be adjudged to be in the defendant, and the plaintiffs be adjudged to have no interest therein, and the title be quieted in the defendant, and the plaintiffs be required to release and quitclaim to the defendant all right, title, and interest claimed by them in the premises, and for other and further relief and for costs. To this counterclaim the plaintiffs demurred, on the ground that it does not state facts sufficient to constitute a counterclaim, and on other grounds; and on motion of the defendant said demurrer was stricken from the files as being frivolous, which is tantamount to overruling it, and the plaintiffs have appealed.

1. The counterclaim fails to show any necessity for such a disposition of the said lands. First, it does not show the exact amount of the indebtedness of the firm, and what it consists of, and when due; second, it does not show the specific values of these lands or the “other lands,” or what were the other lands, or what was the amount or value of the partnership property in the counties of Waupaca and Shawano; third, the corporation paid back in stock, money, and property, after the payment or assumption of the $21,000, to the amount of $10,841.52,--more than half of the debts,--which shows that there was no necessity of selling at least half of these lands; fourth, if it had been shown what the value of the “other lands” and the value of the partnership property in those two counties were, added to or including the stock and personal property of the value of $10,000, it might, and probably would, have shown that there was no necessity of selling any of these lands; fifth, it fails to show what were the property and assets of the new corporation directly after it commenced business, and the value thereof. It fails to show what advantage it was to the estate or the heirs to continue the business of the firm in this way, and how much profit and advantage it was to the said R. S. Johnson, the surviving partner.

2. The counterclaim shows that these lands have been disposed of in violation of law. First, the guardian and the administrator had no...