108 Wis. 520 | Wis. | 1901
The principal contention made by the defendants in support of the demurrers is that the action is one for specific performance of an agreement to sell corporate ■stock, and that the complaint shows on its face that such performance is impossible, because all of the corporate stock •of the corporation is alleged to be held by third persons, not parties to the action, and that for this reason equity will not ■entertain jurisdiction of the action, but willleave the plaintiff to prosecute his action at law for damages. The radical difficulty with the argument is that, in our judgment, this is not an action for specific performance-of a contract to sell stock. The allegations of the complaint show that the executory ■contract to sell stock was fully performed» by the defendant corporation, at least so far as necessary to place the title of the stock in the plaintiff, upon the same day that the contract itself was made. Certificates of the stock were either
These considerations effectually dispose of the claims of respondents to the effect that no equitable cause of action is stated and that there is an adequate remedy at law. It is urged, however, that the action is barred by the six-year statute of limitations. This contention is based on the ground that the complaint shows that the stock was paid for by the profits of the business as early as January 1,1892, and that this action was not commenced until after December 28, 1898; thus showing that more than six years have elapsed since the cause of action accrued. A single consideration, however, disposes of this claim. Under the allegations of the complaint, as before shown, Morey has been the owner of this stock since May 8, 1889, and Johnson simply held it as pledgee and in a certain sense as plaintiff’s trustee. It appears by the complaint that the first denial of Morey's right to the stock took place in October, 1898. Up to that time, so far as appears from the complaint, his right to the stock was not denied, and it did not' become his duty to bring an action to establish his rights so long, as
It has been noted that the contract is that the stock should be paid for in dividends declared, not in profits earned, and that the complaint affirmatively shows that no dividends have been declared. From this it may perhaps be argued that the court has no power to adjudge the stoqli paid for out of earnings, however large, because only the directors of the, corporation have power to declare dividends, and they have not done so. It is undoubtedly true that the courts will not, as a general rule, interfere with the discretion of the directors of a corporation as to the declaration of a dividend; but when it appears that they are guilty of fraud or bad faith, or a wilful abuse of their discretionary powers, either in declaring or in refusing to declare a dividend, a court of equity will interfere and compel the proper action. 2 Cook, Corp. § 545; 1 Morawetz, Priv. Corp. (2d ed.), § 447. As we construe the present complaint, it is charged that the failure to declare dividends here has been in bad faith, for the purpose of defrauding the plaintiff, and we think a sufficient case is stated to call for investigation of the question by the court. Whether it may not be necessary to join the directors of the corporation as parties to the action, in order to obtain such relief, may be an important
The contention on the part of the administrator of the estate of O. R. Johnson that the circuit court has no jurisdiction, because any claim against the estate should have been made in the county court, cannot be sustained. It is very evident that the county court could not afford the plaintiff any adequate remedy. The action is one rightly brought to administer equitable relief, obtainable only in a court of general jurisdiction; and the right to administer that relief is not lost because the interest or right is connected with the estate of a deceased person, which is in course of administration. Gianella v. Bigelow, 96 Wis. 185. While the allegations of the complaint are not as full as might be desired, we think it sufficiently appears from the complaint, giving it that liberal construction to which it is entitled (Stats. 1898, sec. 2668), that the estate of O. R. Johnson, deceased, is necessarily so far connected with the subject matter of the litigation that the administrator is a proper party defendant.
By the Court.— Order reversed, and action remanded with directions to overrule the demurrers.