Rasmussen v. Schweizer

194 Wis. 362 | Wis. | 1927

Owen, J.

This appeal presents the question of whether that portion of the judgment of the trial court sfetting aside the trustees’ deed can be sustained. The reasons which prompted this action on the part of the trial court are probably voiced in the findings of that court, to the effect that the purchase of the stock of the complaining stockholders on the part of the corporation “was in furtherance of an intention to dissolve and wind up the affairs of said corporation,” and “that if such trust agreement were to be carried out, the plaintiffs and other stockholders similarly situated would receive, on'the final distribution of the assets of the corporation, very much less than the par value of their stock; while those coming under said agreement would receive par or more.” We have made diligent search of the record and we can find no suggestion therein which justifies any finding that the purchase of the stock “was in furtherance of an intention to dissolve and wind up the affairs of said corpo*366ration.” On the contrary, it appears very plainly that Mr. Roberge had confidence in the corporation; that he proposed to carry on the business of the corporation, and that the purchase of the stock held by the complaining stockholders was to eliminate internal discord and dissatisfaction. There is nothing in the evidence which indicates that at the time of the annual, or the- adjourned annual, meeting in February there was any thought on the part of any one that the affairs of the corporation should be wound up. If such were in contemplation, it is not likely that the majority stockholders would have proposed a plan that would have given the minority stockholders a substantial preference in the distribution of'the assets of the corporation.

The case must be treated as though a going corporation were buying the stock owned and held by a portion of the stockholders of the corporation. That a corporation has power so to buy its own stock is settled by the decisions of this court. Shoemaker v. Washburn L. Co. 97 Wis. 585, 73 N. W. 333; Calteaux v. Mueller, 102 Wis. 525, 78 N. W. 1082; Marvin v. Anderson, 111 Wis. 387, 87 N. W. 226; Pabst v. Goodrich, 133 Wis. 43, 113 N. W. 398; Gilchrist v. Highfield, 140 Wis. 476, 123 N. W. 102; Atlanta & W. B. & C. Asso. v. Smith, 141 Wis. 377, 123 N. W. 106; Turner v. Goetz, 184 Wis. 508, 199 N. W. 155. These decisions are. all to the effect that a corporation may thus buy its own stock so long as its assets are in substantial excess of its liabilities, and that for such purpose its capital stock is not to be considered as a liability. This is especially held in Marvin v. Anderson, 111 Wis. 387, 87 N. W. 226. That the corporation was solvent in this sense in February, 1926, is conceded.

It seems that the lower court considered the trust arrangement unlaw fül either because it was a step in winding up the affairs of the corporation, thus giving some of the stockholders an unlawful preference, or that the corporation was *367insolvent because its assets did not exceed its debts plus the amount of its capital stock. There is no evidence to sustain the first ground, and the second ground rests on an erroneous assumption of law. We can see no reason why the trust arrangement was not within the power of the corporation, and there appears to be no justification for that portion of the interlocutory judgment setting aside the trust deed.

The respondents moved to dismiss the appeal because, they say, the appealing trustees have waived the right to appeal from the interlocutory judgment by asking for and receiving benefits under and by virtue thereof, within the rule of Cogswell v. Colley, 22 Wis. 399; Flanders v. Merrimac, 44 Wis. 621; McKinnon v. Wolfenden, 78 Wis. 237, 47 N. W. 436. This motion is based upon the fact that during their tenure as trustees they incurred certain indebtedness to real-estate brokers in their efforts to make as sale of trust property, to recover which an action was brought against them in the circuit court for La Crosse county. After the entry of the interlocutory judgment herei in setting aside said trust deed, said trustees made application to the court to have the receiver appointed herein substituted as the defendant in that action. Pursuant to such application said receiver was made a party defendant in said action, and thereafter, by authority of the court, he compromised and settled said action for $250, paying the same out of the funds in his possession as such receiver. The contention is made that because the claim thus made against them as such trustees was paid out of the funds of the estate in the hands of the receiver, thus relieving them of that liability, they had accepted the fruits of the‘ judgment of the court which amounts to a waiver of their right to appeal. The principle upon which respondents rely may be stated to be, that one waives his right to appeal when he accepts the fruits of a judgment to which he may not be entitled if his appeal succeeds. Alexander v. Alexander, 104 N. Y. 643, 10 N. E. *36837. “If the benefit received is dependent upon, or was granted as a condition of, the order or judgment attacked, clearly the party ought not to be permitted to carry on his warfare. But if the conditions of the order or judgment under which he is granted a favor are independent and separable from those sought to be overturned, there seems to be nothing in reason or justice to prevent him from seeking to vindicate in the appellate court the right denied him in the trial court.” Fiedler v. Howard, 99 Wis. 388, 75 N. W. 163. See, also, Grand Rapids v. Bogoger, 141 Wis. 530, 124 N. W. 659; Puffer v. Welch, 144 Wis. 506, 129 N. W. 525.

In this case the appeal is taken from that portion of the judgment setting aside the trust deed. This portion of the judgment involves the rights of the beneficiaries of the trust and is taken by the trustees in their representative capacity to protect the interest of their cestuis que trustent. The proceedings by which their personal liability to the real-estate brokers was shifted to the receiver involved only the personal interest of the trustees. They are entirely separate and distinct. The personal liability of the trustees incurred in carrying out the purposes of the trust was a matter in which the cestuis que trustent had no interest, and their right to have the validity of the trust deed determined by this court could not be affected by any efforts put forth by the trustees to relieve themselves of personal liability incurred in the administration of the trust.

By the Court. — Judgment reversed, and cause remanded for further proceedings in accordance with this opinion. Costs payable out of estate.