Elmergreen v. Weimer

Kerwin, J. The complaint and grounds of demurrer are set out in the statement of facte and need not be repeated [117] here. Tbe wrong complained of is primarily a wrong to the corporation and through it a wrong to the stockholders; therefore the primary right of suit to redress the wrong rests with the corporation. The Michigan Ore Company therefore had the right to prosecute this action, and, failing to do so, was a necessary party defendant in an action brought by a stockholder. Donnelly v. Sampson, 135 Wis. 368, 115 N. W. 1089; Land, L. & L. Co. v. McIntyre, 100 Wis. 245, 75 N. W. 964; Jenkins v. Bradley, 104 Wis. 540, 80 N. W. 1025; 2 Cook, Corporations, § 738. The complaint alleges that the Michigan Ore Company had been dissolved, and, assuming for the sake of argument that this allegation is sufficient on demurrer, the further allegation that it has “no legal existence at the present time” is insufficient, and not admitted by the demurrer, because such allegation is simply a conclusion of law, and conclusions of law in pleadings are not admitted by demurrer or sufficient .allegations of facts. Brown v. Phillips, 71 Wis. 239, 36 N. W. 242; Kellogg v. Larkin, 3 Pin. 123; Williams v. Williams, 63 Wis. 58, 23 N. W. 110; State ex rel. Weiss v. District Board, 76 Wis. 177, 44 N. W. 967. Where a foreign law is not pleaded the presumption is that it is the same as our law. Rape v. Heaton, 9 Wis. 328; Osborn v. Blackburn, 78 Wis. 209, 47 N. W. 175; St. Sure v. Lindsfelt, 82 Wis. 346, 52 N. W. 308. And this rule applies to statutes subject to some exceptions not necessary to consider here. Hull v. Augustine, 23 Wis. 383; Pierce v. C. & N. W. R. Co. 36 Wis. 283; Schoenberg v. Adler, 105 Wis. 645, 81 N. W. 1055; Bartlett v. Collins, 109 Wis. 477, 85 N. W. 703; Hyde v. German Nat. Bank, 115 Wis. 170, 91 N. W. 230; Edleman v. Edleman, 125 Wis. 270, 104 N. W. 56. Sec. 1764, Stats. (1898), provides: “All.corporations whose term of existence shall expire by their own limitation, or which shall be voluntarily dissolved in the manner provided by law or by its articles of association, or shall be annulled by forfeiture or otherwise, shall never [118] theless continué to be bodies corporate for three years thereafter for the purpose of prosecuting and defending', actions and of enabling them to settle and close up their business, dispose of and convey their property and divide their capital stock, and for no other purpose; and when any corporation shall become so dissolved the directors or managers of the affairs of such corporation at the time of its dissolution, by whatever name they may b© known, shall, subject to the power of any court of competent jurisdiction to make, in any case, a different provision, continue to act as such during said term and shall be deemed the legal administrators of such corporation with full power to settle its affairs, sell or dispose of and convey all its property, both real and personal, collect the outstanding debts, and after paying the debts due and owing by such corporation at the time of its dissolution and the costs of such administration divide the residue of tho money and other property among the stockholders or members thereof.” The legal existence of the Michigan Ore Company at the time this action was commenced not being negatived because of the insufficiency of the allegations in that regard, and the foreign law respecting the existence of corporations for winding-up purposes being presumed, in the absence of allegations to the contrary, to be the same as our own, the Michigan Ore Company continued to be a body corporate for three years after the alleged dissolution for the purpose of prosecuting and defending actions and of enabling it to settle and close up its business as provided by the statute above referred to. Regarding the law of the foreign state, therefore, the same as ours and the corporation consequently having existence, it was incumbent upon the plaintiff to show a demand upon the corporation to bring the suit or some justifiable reason for failure to make a demand. Counsel for respondent, as we understand his argument, undertakes to excuse lack of demand upon the ground that the corporation had no existence after dissolution, and, further, upon the allegation that the defendant had “controlled and dominated the Michigan Ore [119] Company, its officers and directors up to the time of dissolution thereof.” As we have seen, the Michigan Ore Company, upon the allegations of the complaint well pleaded, was still in existence for the purpose of suing and being sued; hence was the proper party plaintiff, unless it was established that plaintiff, a stockholder, had the right to sue. The complaint alleges that the Michigan Ore Company was dissolved April 18, 1906. This action was commenced in October, 1901. There is no positive allegation that the plaintiff was a stockholder when the action was commenced. The only allegation on the subject is that he was a stockholder at the time of dissolution. There is nothing whatever in the complaint showing that when the action was commenced the plaintiff was a stockholder. All the allegations of the complaint may be admitted and yet the plaintiff have owned no stock when this action was commenced. But, aside from this, we think the allegation that defendant controlled and dominated the corporation up to the time of dissolution is wholly insufficient. If the allegation were not limited to the time of dissolution, it might be said that the status of control and domination, having been shown to exist at a certain time, would be presumed to continue. But by the express allegations of the complaint the control and domination is limited to the time of dissolution. A new situation arose by the dissolution, and the corporation under the law was vested with power after dissolution to wind up its affairs and was the proper party to sue for that purpose. It cannot be presumed that defendant, after dissolution,' dominated or interfered with the winding up as provided by law. So we think upon the facts pleaded no case was made entitling plaintiff to bring the action. We think it is also clear under the allegations of the complaint that the laws of the foreign state must be regarded the same as our own, and therefore the corporation had legal existence for three years after dissolution to sue and be sued. The Michigan Ore Company, therefore, was a necessary party defendant [120] if the plaintiff could maintain the action. 10 Cyc. 997; 22 Ency. Pl. & Pr. 1303, 1304. We are convinced tbat tbe complaint fails to sbow a right of action in the plaintiff, and that there is a defect of parties in failure to make the Michigan Ore Company a party defendant. Another ground of demurrer is argued, namely, whether the courts of this state will take jurisdiction of a case of this nature against a foreign corporation. This is an interesting question, but not necessary to consider and which we do not decide. By the Oov/rt. — The order appealed from is reversed, and the cause remanded with instructions to the court below to sustain the demurrer, and for further proceedings according to law. Timlin, J., took no part.