Beck v. Beck Investment Co.

Full title: BECK, Respondent, vs. BECK INVESTMENT COMPANY and another, Appellants

Court: Supreme Court of Wisconsin

Date published: Jun 22, 1946

23 N.W.2d 453 (Wis. 1946)

23 N.W.2d 453

Opinion

May 20, 1946. —

June 22, 1946.

APPEAL from a judgment of the circuit court for Milwaukee county: ARTHUR W. KOPP, Circuit Judge, Presiding. Affirmed.

William E. Burke of Milwaukee, for the appellants.

Roy R. Stauff of Milwaukee, for the respondent.

Action instituted February 6, 1945, by Ida Beck against Beck Investment Company and John W. Beck, its secretary, to compel them to issue to her a stock certificate for twenty-five shares of stock in the corporation and to record her on its books as the owner of such shares as of January 4, 1945, prior to election of directors at the annual meeting on that day. From a judgment in accordance with the demand of the complaint, the defendants appeal.

The articles of the corporation provided for two hundred shares of capital stock at a par value of $100 per share. Of this number one half, or one hundred shares, was subscribed at the first meeting, and shortly thereafter one half of the amount subscribed, or fifty shares, was issued. At the time the corporation was organized it was planned to issue paid-up shares of stock to its incorporators to the extent of $5,000 in exchange for the surrender of claims held by them against the Apex Corporation from which the property of the corporation was to be acquired. One of the considerations in the transfer of the property from the Apex Corporation was the assumption of this indebtedness. The names of the incorporators and the amount of the claim held by each were:

Nicholas Beck .................................... $ 100.00 Ida Beck ......................................... 1,566.67 John W. Beck ..................................... 100.00 Rose Beck ........................................ 1,566.67 Selma Ganser ..................................... 733.33 Roman A. Ganser .................................. 100.00 Russell A. Shenners .............................. 833.33 --------- Total ........................... $5,000.00 Prior to the first meeting of the incorporators the plaintiff Ida Beck entered into a written agreement with Russell A. Shenners whereby she acquired his right to all except one share of the paid-up stock to which he was entitled. There is a conflict in the contentions as to whether she later acquired the right to that share.

At the first meeting of the incorporators on January 4, 1938, these subscriptions to the capital stock of the corporation were shown by its books to have been made and accepted:

Nicholas Beck ............... 1 share ..............$ 100.00 Ida Beck ................... 48 shares ............. 4,800.00 John W. Beck ................ 1 share .............. 100.00 Rose Beck ............... 32.33 shares ............. 3,233.00 Selma Ganser ............ 15.67 shares ............. 1,567.00 Roman A. Ganser ............. 1 share .............. 100.00 Russell A. Shenners ......... 1 share .............. 100.00 ------------ ---------- Total ...... 100 shares ............ $10,000.00 This record would indicate that Shenners retained his right to one share. The books, however, show that Shenners' name was marked through with a pencil, and the paid-up stock was issued as follows:

Nicholas Beck ............. 1 share ................ $ 100.00 Ida Beck ................. 24 shares ............... 2,400.00 John W. Beck .............. 1 share ................ 100.00 Rose Beck ............. 15.67 shares ............... 1,566.67 Selma Ganser ........... 7.33 shares ............... 733.33 Roman A. Ganser ........... 1 share ................ 100.00 --------- --------- Total ....... 50 shares ............... $5,000.00

At or immediately prior to the opening of the annual stockholders' meeting on January 4, 1945, the plaintiff Ida Beck tendered a money order for $2,500 in payment of what she claimed to be the balance of her original subscription, twenty-five shares. This tender was refused upon the ground that the plaintiff was entitled to only twenty-four additional shares. The trial court found that the plaintiff was entitled to receive twenty-five shares in accordance with her contention.

RECTOR, J.

The only question in this case is whether the finding of the trial court as to the number of shares to which respondent was entitled is sustained by the evidence.

The appellants claim that the twenty-four shares of stock issued to respondent represented one half of the forty-eight shares to which she had subscribed and that she was entitled only to the other twenty-four shares.

The respondent claims, however, that while the written agreement with Shenners showed that he was entitled to retain one share of those due him, it was modified, and that she acquired his entire right to receive paid-up stock; that he was entitled to receive 8.33 shares in exchange for his claim of $833.33; that this amount, added to the 15.67 paid-up shares which she was entitled to receive in exchange for her claim of $1,566.67, totaled twenty-four shares; that the twenty-four shares which she was issued consisted of the one share for which Shenners had subscribed plus twenty-three of the forty-eight shares for which she had subscribed; and that she was thereafter entitled to pay for and receive twenty-five of the forty-eight shares for which she had subscribed.

The evidence is not as clear as it could have been. Shenners testified only that he entered into the original agreement which reserved the one share to him, that he had been issued no stock by the company and had received no dividends or notices of election. It would have clarified the situation considerably had he been asked whether the written agreement reserving the one share to him had been subsequently modified. The respondent, Ida Beck, did not testify except in rebuttal and gave no testimony with respect to her agreement with Shenners.

It is undisputed that the twenty-four shares which were issued to the respondent were considered as paid-up shares. This is consistent only with the theory that the respondent had acquired Shenners' full interest at the time the shares were issued. Had she not done so — had Shenners then been entitled to one share — respondent would have been entitled to but twenty-three paid-up shares and should have been required to pay an additional $100 in order to complete payment for the twenty-four which were issued her. Moreover, John W. Beck testified that Shenners had not been issued a share of stock. He produced the original minutes of the meeting of subscribers on January 4, 1938, showing that the name of Russell A. Shenners had been stricken with a pencil mark, and he stated that after that date Shenners dropped out of the picture and the corporation's liability to Shenners was no longer recognized.

The court below was justified in finding that the corporation treated the twenty-four shares issued to Ida Beck as fully paid up; that it no longer considered Shenners entitled to receive a share after the twenty-four shares had been issued to her; and that the twenty-four shares were in discharge of the corporation's obligation to issue paid-up shares to the respondent and to Shenners.

By the Court. — Judgment affirmed.