Breon v. Genger

Vinje, C. J. The trial court evidently construed the allegations of the fifth paragraph of the answer to admit that dividends were declared to the stockholders in goods at a time when there were no pfofits to divide and when the cofn-pany was in fact bankrupt. So construed the court reached the proper conclusion, for the defendant, though'a co-operative corporation, was within the statute (sec. 1765, Stats. 1921; sec. 182.19, Stats. 1923) and subject to the prohibition thereof not to declare dividends when there were no net profits to divide. It is a familiar principle of law that a pleading should be liberally construed in favor of the pleader. Applying this principle to the contents of the fifth paragraph, we reach the conclusion that the pleader intended to^ and did allege that what the defendants received were only the customary trade discounts that were given by stores generally in that vicinity to their customers, and that these discounts were given to all customers of the company whether members of it or not. 618 So construing the answer, we think the trial court erred in sustaining the demurrer. If the proof should disclose that the so-called discounts were not ordinary trade discounts, but were in fact dividends declared out of capital and not out of net profits, then there would be liability on the part of the defendants to repay them. By the Court. — Order reversed, and cause remanded with directions to overrule the demurrer and for further proceedings according to law.