Court Opinion

ID: 8185672
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:08:06.834489+00
Date Added: 2024-06-11T16:40:21.762361
License: Public Domain

MARSHALL, J.
There is no controversy but that the judgment appealed from is sustained by the findings of fact and conclusions of law. Questions of law are discussed in the briefs of counsel but not reached in the consideration of the case, unless some of the findings of fact, to which reference will be made, are first disturbed. The findings, as they stand, are to the effect that defendant Hugo Koeffier, at an expense of $6,000, obtained the right to purchase of Yan Eimeren a tract of land for $31,000, payable $600 down, $13,400 January 2, 1893, and the balance January 2, 1898, with interest; that he then associated with him defendant Preusser in a scheme to form a corporation to take the land for $55,000 and to divide the profits of the transaction between himself and Preusser, two thirds to the former and one third to the latter; that pursuant to such scheme they prepared a subscription paper so worded as not to disclose the true ownership of the land, but to induce signers to believe that it belonged to Yan Eimeren, and to bind them to join in forming a corporation to purchase such land for $55,000, payable $25,000 down, $13,000 January 2,1895, and $17,000 January 2, 1898, with annual interest; that in order to induce signers not in the scheme to believe that the promoters purposed becoming stockholders on the some basis as others who joined in the apparently mutual enterprise, they each signed for $10,000 of the stock, and' one Eernekes, who was employed to assist in obtaining subscriptions, signed for $3,000, to make it appear that he was going in with others, while such subscription was in fact for Koeffier; that the - whole stock of $55,000 was subscribed and the corporation was thereupon organized; that Koeffier and Preusser procured themselves to be elected as directors and managing officers, and the sale of the real estate to the corporation to be consummated, ostensibly by Yan Eimeren for $55,000, but really for $31,000, the promoters taking the difference over the cost to them for profits of the deal, without the *320■other stockholders having any idea but that the purchase was made of Yan Eimerea for the full sum of $55,000.
It needs no discussion of the subject to show that such facts make a clear’ case for relief against the promoters, ■either in equity, by or for the benefit of the corporation, to rescind the sale and" recover the consideration paid for the property, orín any one of several other ways that mighthave been adopted. Pittsburg Mining Co. v. Spooner, 74 Wis. 307; Fountain Spring Park Co. v. Roberts, 92 Wis. 345; Franey v. Warner, 96 Wis. 222. The last case cited was very recently decided by this court and the subject there fully discussed and the law stated in substance that, ‘if a person invites others to join him in the purchase of property at a given price, falsely representing that the purchase is to be made of a third person and that all are to share equally in the cost and equally in the benefits of the enterprise, and such others join with such person on the faith of such representations’,"and the purchase be made accordingly, each of the bona fide purchasers paying his proportion of the money, and such person acquires secretly a profit to himself by reason of having obtained the property after the making of the mutual agreement at a less sum than the price made to his associates, or by reason of having acquired the property himself at a less price before the sale, it is a fraud upon such others, and each may, by restoring such person to his original situation, rescind the transaction and recover his money in an action at law, or he may offer to rescmd7aiTc[7 by keeping such offer good, sue in ■equity for a rescission of the contract and for a. recovery of his money, or, without restoring, he or all similarly interested joining, may sue in equity to charge such person as trustee ofThe profits fraudulently retained by him. a~nd for an accounting; or each may sue such person at law for damages'for the fraud to the extent .of the enhanced value he paid by reason thereof. A person so_circu.matanced stands in a relation of trust and confidence "to all his bona fide as*321•sociates, and bolds all the profits secretly made for the common benefit of all engaged in the common enterprise, in proportion to their respective interests; and such is the case whether the purchase be made by such person before or after the agreement for the mutual enterprise.’
Appellant, in order to avoid the result of the facts found ■by the trial court and the settled law applicable thereto, •assigns as error that the eighteenth finding of fact is contrary to the evidence, and says that, if such be not the case, the salé to the corporation was nevertheless ratified by the stockholders with knowledge of the facts, contrary to the twenty-seventh finding. Such eighteenth finding is to the effect that when the corporation proceedings were had, directing the purchase of the land for $55,000 and providing a fund to make the down payment of $25,000 by calling in forty-sis per cent, of the amounts due on the stock subscriptions, the stockholders, except those in the fraudulent scheme, believed that the purchase was to be made of Yan Eimeren for the full sum of $55,000; and the twenty-seventh finding is to the effect that none of the plaintiffs, after the time mentioned in the eighteenth finding, in any way ratified the conduct of the promoters. It is clear that if the eighteenth finding stands, in view of the other facts in respect to which there is no serious controversy, the judgment cannot be disturbed unless the twenty-seventh finding be contrary to the ■evidence. The evidence in the record bearing on each of .such findings has been examined with care. No valuable purpose can be served by referring to it at length or in detail. It is enough to say that it is ample to support the findings; hence the judgment appealed from must be affirmed.
By the Court.— So ordered.