Milwaukee Smelting & Refining Co. v. Lindenberger

The following opinion was filed January 11, 1910: Siebeokee, J. The facts show that the defendant and five other persons had subscribed for the capital stock of the plaintiff company and agreed “to pay his subscription to the amount of five (5) shares forthwith in cash without resolution or call/’ and the remainder upon-call of the board of directors; that this agreement was accepted by the- company by corporate action, in which the defendant took part as stockholder; and that the defendant pursuant to such agreement paid for one share, participated in the company’s organization, accepted the offices of director and president, and entered upon the discharge of his official duties by engaging in the conduct of the business and the management of its affairs. This amply establishes that the defendant was a member of the company and a stockholder and was liable for the amount of his unpaid stock upon the terms and conditions of the subscription agreement theretofore accepted by the company. We find no stipulation or condition in this stock-subscription contract requiring tender of a certificate-as a condition of payment for the stock. It is apparent that nothing of this nature was contemplated by the parties, and it is manifest from the facts and circumstances that the company was ready and willing to deliver the proper certificate of stock to the defendant whenever he performed his obli277 gatiou by payment of the amount due on Ms stock subscription. It is claimed that the plaintiff released and canceled defendant’s liability as a stock subscriber. This claim is founded on the defendant’s letter to the company of August 30, 1906, and the action thereon. In this letter the defendant tendered his resignation as president of the board of directors and as a director of the company. He also states that he had “decided not to take any more stock than he had paid in,” and if it were preferred not to have him hold any stock he would be pleased to sell the paid-up share at the ■cost price. The board of directors on the following day, at a regular meeting, accepted defendant’s resignation as president and director and instructed the secretary to notify the defendant thereof, and, in view of his expressed desire to withdraw from the company, to send him formal agreements for the transfer of his capital stock. Notice of this action of the board of directors was immediately communicated to the defendant by the letter of the secretary, which stated that his resignation from the offices did not release him from liability on his stock subscription, suggested that other parties stood ready to purchase his unpaid stock, and stated that if he would sign and return the inclosed agreements, assigning the stock, he would be released from further liability. Defendant never executed or returned these agreements. The steps taken by the officers of the- corporation are insuffi-cient to effect a cancellation of defendant’s stock subscription, nor do they operate to release him from his liability. The claim that defendant’s stock had in fact been sold by the company’s officers is not sustained by the evidence.- In their most favorable light the evidential facts tend to show that there may have been negotiations for such a sale by some of the officers, but the evidence fails to show that a sale -of the stock was ever consummated. The contention that there was an abandonment of the en [278] terprise for wbieb tbe corporation was organized is not established. Tbe facts at most sbow a sale of tbe property it owned and a suspension of business activity for tbe time being. There is, however, no showing that there has been a total and final abandonment of the business enterprise for which the corporation was organized, nor does it appear but that the company may resume its business upon payment of the unpaid stock subscription. Under the circumstances the defendant is not relieved from liability upon this ground. An exception is urged to the refusal of the court to permit the appellant, under sec. 4068, Stats. (1898), as amended by ch. 271, Laws of 1907, to examine the company’s former secretary as an adverse witness. We have examined the record and find that the ruling in no way affected the substantial rights of the appellant. He was substantially accorded the privilege of a full examination upon everything pertaining to the issues of the controversy, and the material facts were presented to the court. Hence the substantial rights of the defendant were not affected. Sec. 2829, Stats. (1898), and sec. 3072m, Stats. (Laws of 1909, ch. 192). By the Court. — Judgment affirmed. TiMLiN, J., took no part. A motion for a rehearing was denied March 16, 1910.