105 Wis. 48 | Wis. | 1899
Appellant’s counsel mainly rely on the proposition that where one corporation goes out of existence by being annexed to or merged in another, no arrangements
The learned counsel for appellant, overlooking, as it seems, tbe reason of tbe rule which makes a successor corpoi’ation liable for the debts of its predecessor, seek to apply it as broadly as the literal sense of the language of the proposition of law will permit, that is, to take in every case of a corporation that succeeds to the property of another, regardless of whether it thereby takes anything of value to which creditors have a legal or equitable right, or whether the succession is by contract and voluntary or adverse and involuntary as to the old proprietor. To maintain that defendant is a successor corporation, within the meaning of the doctrine under discussion, because of having absorbed the old water company, reliance is placed on sec. 1788, Stats. 1898, which provides that, “Any person or association of persons which shall have or may hereafter become the owner or assignee of the rights, powers, privileges and franchises of any corporation created or organized by or under any law of this state by purchase under a mortgage sale, . . . may, at any time within two years after such purchase or assignment, organize anew by filing articles of organization as provided in this chapter or elsewhere in these statutes respecting corporations for similar purposes, and shall thereupon have the same rights, privileges and franchises which such corporation had or was entitled to have at the time of such purchase and sale and such as are provided by these statutes applicable thereto.” That idea has not the merit of novelty. It has often been presented to this and other courts in behalf of persons circumstanced as plaintiff is, and as often the new corporation has been held free from all liabilities to the creditors of the old corporation. The decisions to that effect are so numerous and so clear that we must assume that they have not escaped the notice of the learned counsel for appellant. The first instance where the ques
The same subject was again presented in Neff v. Wolf River B. Co. 50 Wis. 585, where sec. 1788, Stats. 1898, as originally enacted in ch. 115, Laws of 1872, was considered and construed. The trial judge decided, as appellant’s counsel here contend, that the reorganized corporation was a mere continuation of the old company and liable for a wrong-committed by it. That was reversed on appeal, this court holding that there is nothing in the statute which furnishes
The foregoing is but a small part of the numerous cases in the books on the question under consideration. They •show how frequently the principle, which protects the right •of creditors to be paid out of corporate property against schemes worked out by contract or by legislative enactment to merge one corporation or all the property of one •corporation in another, has been confounded with the circumstance of a corporation, by adverse proceedings to en
In view of the foregoing it is not important to inquire whether the franchise to exist as a corporation, possessed by the Oconto Water Company, passed by the foreclosure sale to Andrews & Whitcomb and was by them conveyed to the defendant, or whether such right is included in the term “ rights, powers and privileges ” used in sec. 1788, Stats. 1898. Counsel for appellant rely on the affirmative of those propositions. Whether they are right or wrong is immaterial to this controversy, for, as indicated in Neff v. Wolf River B. Co. 50 Wis. 585, the reorganized corporation, so called, is not the old corporation revived by authority of sec. 1188, but a new organization under the general statutes governing the creation of such bodies, clothed, however, by the statute, with the undoubted right to use the rights conveyed to it, in form, by a chain of title based on the foreclosure sale, the plain purpose of the law being to place the new organization in the same situation as the old corporation as regards the use of rights, privileges, and franchises derived from sovereign authority, in connection with the tangible property covered by the mortgage, freed, however, from the liabilities of such corporation not, before the sale,
It is further contended that the maxim “ Qui sentit com-mo&wm sentvre debet et onus ” (He ought to bear the burden who would derive the advantage) applies. One of the essentials to the application of that maxim is that the interest in the thing enjoyed, from which springs the duty of bearing its burdens, legally or equitably belongs to him to whom the duty is due. The duty grows out of such ownership. Another essential is that the burden must really rest on the thing and be paramount to the right of him who appropriates the advantages. The extent of the advantages is the limit of the burdens.
To satisfy the above indicated requirements, we are told that when Andrews & Whitcomb purchased the waterworks property at the foreclosure sale they knew that plaintiff had an adjudged lien thereon for the amount of their claim, good against the common debtor, and that the respondent was likewise circumstanced when it took the title; therefore, though it may be conceded that title passed to the respondent, it was subject to the lien judgment, and the respondent should not be allowed to use such property except upon condition of paying the appellant’s charge upon it. If that is good law, all a junior lien claimant need do to acquire precedence over the prior lien is to obtain a judgment for the enforcement of it in an action to which the prior lien claimant is not a party. We cannot agree with that proposition. The rights of Andrews & Whitcomb under their mortgages, relative to the rights of the appellant under the claim for a lien on the mortgage property, were not affected in the slightest degree by the judgment in the federal court in the lien suit. They were not parties to it or in privity with the Oconto Water Company so as to be
Pfeifer v. S. & F. du L. R. Co. 18 Wis. 155, and other cases of similar character are confidently cited to our attention. The Pfeifer Oase involved the liability of a successor railway company to pay for land wrongfully taken by its predecessor for right of way, as a condition of being permitted by the owner to use such land for that purpose. The foundation of the claim adjudged was that the land belonged to the claimant and could not be appropriated for the use of another except on condition of rendering an equivalent therefor. Obviously, before that principle can be applied to this case, it must be demonstrated that defendant is in possession of property which belongs to the appellant or in which it has an interest paramount to the rights of the respondent. That stands in the way of all the learned counsel’s contentions. The erroneous assumption that respondent has appropriated something which belongs to appellant seems to be an infirmity which pervades and condemns substantially all the propositions advanced. If the property was not subject to a lien under ch. 143, R. S. 1878, and this court has so decided, and respondent is not affected by the judgment in the action in the federal court to which its grantors were not parties, and that has been decided in previous litigation between the parties to this cause, then the premises are all absent which are necessary to give effect to Pfeifer v. S. & F. du L. R. Co. It will not do to assume that Andrews & Whitcomb, by the legitimate enforcement of their
The question of whether the trial court erred in deciding that the judgment of the federal court is res adgudiaata on all points upon which appellant relies to recover, is presented for consideration. It is elementary that all questions appertaining to a cause of action, within the issues, and actually litigated or which might have been liligated, are irrevocably answered by the final decree, so far as affects the parties to such action as regards the subject thereof. That, of course, includes not only the primary right sought to be enforced by the action, but matters germane to and actually involved in it. Wentworth v. Racine Co. 99 Wis. 26. It is conceded that under that rule it was not open for appellant in this case to litigate the question of whether its lien judgment was binding on the respondent. But it is said, the right of appellant to hold the respondent liable for its. claim, upon the ground that the latter took the property in controversy subject to its lien claim, was not involved in the former litigation or presented to the court or decided. It is with some difficulty, we confess, that we éan follow the course of reasoning which leads to the statement of such premises as correct or the conclusion based thereon. The
It is further contended that the state court had no jurisdiction to decree the foreclosure and sale under the mortgages, because, prior to the commencement of the foreclosure action, the federal court had acquired jurisdiction to enforce appellant’s lien, which drew to that court all questions regarding the rights of the mortgagees. The one sufficient answer to that is, as counsel for respondent suggests, that the appellant’s lien having been adjudged void as to respondent, and- it being conceded or undisputed that respondent is legally in possession of the mortgaged property, with at least the rights of mortgagees so circumstanced, it cannot be ousted from that possession without payment of the mortgage indebtedness, nor can it be made to pay junior liens as a condition of enforcing its primary right.
But it is not the law that the commencement of a suit in the federal court, to enforce a mechanic’s or materialman’s lien on property, precludes the foreclosure of a mortgage on the same property in the state court. The lien action was not m r&m, except in a qualified sense. There was no seizure of property, and no possession of it taken by the court, or necessary to the lien action at any stage of it. The situation was essentially different from one where the property is in the actual custody of the federal court. It is held, in the latter case, that an action cannot be instituted in the state court and proceedings had therein to the extent of disturbing such possession. Where there is no possession other than constructive, a suit on a different cause of action may be commenced in the state court and carried to judgment and actual possession of the property obtained under it, notwithstanding the pendency of the action in the fed
The only other question that need be noticed is a claim that-the court erred in granting affirmative relief to respondent. The theory advanced is that in the absence of a counterclaim, or prayer for affirmative relief, no such relief whatever can be granted. On that, Casgrain v. Milwaukee Co. 81 Wis. 113, is cited. The affirmative relief there involved was the reformation of a written instrument. Also Weld v. Johnson Mfg. Co. 86 Wis. 549, where an accounting was necessary to make the defense effective; moreover it was an action of ejectment where an equitable defense was pleaded under the statute, which says that the defendant shall demand such judgment as he claims. 1STeither case has any bearing on the point here raised. Reynolds v. Stockton, 140 U. S. 254, is also cited. There the matter ad
A judgment granting affirmative relief on a matter properly the subject of a counterclaim, and which cannot be made effective without such relief, as in case of the reformation of a written contract, of course is not proper. The rule above discussed does not apply to such a case. Where, however, facts pleaded as a defense, when established, are ef
The foregoing leaves nothing further to be said. The record appears to be free from error. The judgment must be affirmed.
By the Gov/rt.— Judgment affirmed.