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W. H. Shenners Co. v. Lake Worth Realty & Building Co.

December 9, 1930

W. H. SHENNERS CO.
v.
LAKE WORTH REALTY & BUILDING CO.



Appeal from the District Court of the United States for the Eastern District of Wisconsin; Ferdinand A. Geiger, Judge.

Author: Page

Before ALSCHULER, SPARKS, and PAGE, Circuit Judges.

PAGE, Circuit Judge.

This is a suit to recover from a Wisconsin corporation money claimed by a Florida corporation to be due for capital stock of the latter. This appeal is from a judgment, on the verdict of a jury in the Eastern District of Wisconsin, in favor of plaintiff.

The contentions of appellant (defendant) here are that: (1) Because a receiver had been appointed for plaintiff in Florida, plaintiff could not maintain this suit; (2) there was no subscription; (3) although a certificate was issued to defendant, it was void because issued before the stock increase, of which it was intended to be a part, was completed, and because the certificate, when issued, was not fully paid for, as required by the laws of Florida; (4) if there was a subscription, it had been canceled by agreement between the parties; (5) defendant could not lawfully obligate itself for or hold stock in another corporation.

Defendant's answer treated the suit as the action of the Florida corporation, and defendant urged before the trial court that the corporation was without power to maintain the suit because, upon the appointment of the receiver in the Florida court, the title to the property passed to the receiver, and therefore the suit should have been brought in the receiver's name. The court, considering the statements of defendant's counsel and the broad terms of the order appointing the receiver, held that it was the receiver's suit and properly brought. Defendant excepted. Defendant is not here raising that question, but is asserting, for the first time, that it is a receiver's suit, and that the receiver cannot maintain a suit outside the jurisdiction of his appointment. That is a dilatory defense that should have been raised by plea or demurrer in the trial court. Lombard v. McMillan, 95 Wis. 627, 70 N.W. 673.

The second point was decided by the jury, as a question of fact, adversely to appellant.

One Boutwell had contracts for the purchase of five parcels of Florida land, aggregating 26 acres. Part of it was mortgaged for $36,000, and the balance, $74,000, was to be paid in cash.

Under its Wisconsin charter, defendant's powers were:

"To own, buy, sell, lease, exchange and deal in lands and real estate; to erect buildings and improvements thereon; to borrow and loan money on real estate and other security, to do a general insurance business, and in general to exercise and perform any and all other powers, necessary, incident or convenient to the business aforesaid."

Practically all of its capital stock was owned by Shenners, its president, and one Borst.

Some time in 1925, Shenners and Boutwell agreed that Shenners should furnish $48,000 and Boutwell $26,000 of the $74,000 cash, and that each $1,000 contributed would entitle the contributor to a one seventyfourth interest in the venture.

Shenners went back to Milwaukee, and he and Borst induced various persons to join defendant in the venture to the extent of $28,000. That left defendant to pay the remaining $20,000 of the $48,000 interest taken by it. Defendant's associates in Milwaukee paid it all their part of the money, and in October, 1925, defendant paid to Boutwell all that money and $3,000 of its own, leaving $17,000 balance owing from itself.

Some question having arisen about the title to part of the land, known as the Heit piece, upon which $3,000 had been paid, either Borst or Shenners, who had taken a check for $17,000 to Florida to complete the payment of defendant's $48,000, carried it back to Milwaukee because they thought the Milwaukee banks were more secure than those in Florida. When Shenners sent the money to Boutwell, he told Boutwell to take the titles in his own ...


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