Campfire Land Co. v. Jolin

198 N.W.2d 593, 55 Wis. 2d 229, 1972 Wisc. LEXIS 987
CourtWisconsin Supreme Court
DecidedJune 30, 1972
Docket285-288
StatusPublished
Cited by5 cases

This text of 198 N.W.2d 593 (Campfire Land Co. v. Jolin) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Campfire Land Co. v. Jolin, 198 N.W.2d 593, 55 Wis. 2d 229, 1972 Wisc. LEXIS 987 (Wis. 1972).

Opinion

Wilkie, J.

Two issues are presented which dispose of this appeal:

1. Did the trial court properly sustain the demurrer?

2. Are the orders denying the motions for a continuance and for a bill of particulars appealable ?

Was the demurrer properly sustained?

Are the Osiers necessary and indispensable parties?

Appellants primarily contend on appeal that the Oster family are necessary and indispensable parties to these actions.

“ ‘ [A] n indispensable party is one who has such an interest in the subject matter of the controversy that a final decree cannot be rendered between the other parties to the suit without radically and injuriously affecting his interest ....”’ 2

The subject matter of the initial suits here was that the Jolins were misappropriating funds from the corporation; the third-party complaint makes similar accusations against the Osters. While the assertions are perhaps similar, there is no compulsion to join the two related actions. In Borde v. Hake 3 this court said:

“While it is highly desirable that all related factual circumstances be considered in a single trial, there is no *233 requirement that all proper parties under secs. 260.10 and 260.11, Stats., must be joined. It is only those parties who are denominated as necessary or indispensable parties in secs. 260.12 or 260.13 who must be joined and whose absence will result in a defective lawsuit.”

Inasmuch as Campfire could obtain the desired relief against the Jolins without requiring the joinder of the Osters and also because the Osters would not be detrimentally affected by the suit against the Jolins, the Osters are not necessary or indispensable parties within the meaning of secs. 260.12 4 or 260.13, 5 Stats.

Consistent with this conclusion is the rule stated by Fletcher: 6

“In selecting the defendants to a suit by the corporation, all necessary to administration of the relief prayed must be joined, and in equity all who are proper to a full and complete adjudication may be joined; but this does not depend on the corporate character of the plaintiff, and is determined by the nature of the cause of action and the subject matter of the suit.”

Here, Campfire seeks damages from the Jolins. The Jolins, in turn, assert that the Osters should be liable to the corporation. These are related assertions, but they are not such as require litigation in one cause of action. They are the same complaints against different people. Complete relief can be obtained in separate actions, and thus the Osters are not necessary nor indispensable parties to the Campfire v. Jolin litigation.

*234 Do appellants have the legal capacity to bring the third-party action?

Appellants bring the third-party suit as stockholders in Campfire. They cannot bring this suit for two reasons. The first is that “a defendant sued as an individual only is not entitled to counterclaim claims due him only in a representative capacity.” 7 This same rule is stated by Fletcher. 8 This court in Wesolowski v. Erickson 9 followed these rules and concluded that when a stockholder, in his capacity as a stockholder, was suing a corporate officer and the corporation, the defendants could not counterclaim against the plaintiff in his individual capacity. In the present case these rules would preclude the counterclaim because the defendants are sued in their individual capacities, but bring the counterclaims in their representative positions as stockholders.

Appellants also lack the capacity to bring the counterclaim because the cause of action belongs to the corporation, not to its stockholders. This rule was most recently stated by this court in Lee v. Threshermen’s Mut. Ins. Co.: 10

“The general rule is that a stockholder has no individual right of action for an alleged injury to the corporation in which he holds shares.”

Again, Fletcher expresses the same proposition. 11 Appellants contend that “the third-party defendants deny *235 the existence of any joint venture and have wholly excluded the third-party plaintiffs from any participation in the affairs of Campfire Land Company, Inc., since August 10, 1966.” For this reason appellants indicate they did not ask the corporation to bring an action against Oster. But while it is possible that the corporation would have refused, the law clearly requires that the stockholders make such a request before proceeding on their own as representatives of the corporation. As we discuss below, the existence of a joint venture in no way affects this action.

Does the joint venture claim require the joinder of Oster?

As we have noted, appellants argue that because a joint venture was found to exist in Jolin v. Oster, the other joint adventurer, John Oster, Jr., had to be made a party to this suit. But here, as in the Jolin v. Oster case, the parties are confused in their respective discussions of the law of joint ventures and the law of corporations. In Jolin v. Oster, Oster claimed that the suit was an attempt to pierce the corporate veil, while in this action Jolin, in effect, claims that Oster wants to pierce the joint venture veil.

These assertions fail for the same reason. There are two distinct legal entities involved in these actions: A corporation and a joint venture. Under each of these entities the parties acquired rights and obligations. The joint venturers could breach their duties to one another without destroying the corporate structure. In this case, Jolin could be liable for misappropriation of corporate assets totally apart from any joint venture which may have existed. If the misappropriation of funds was a joint act or a concerted effort on behalf of the joint adventurers then perhaps both joint venturers would be necessary parties defendant. Here, each party accuses *236 the other of misapplying funds, but nowhere is there any hint or suggestion that any diminution of corporate assets was a joint project of Jolin and Oster. Where the misappropriation of funds is allegedly the individual act of the stockholders and officers, there is no requirement that the joint venturers be joined together.

The order sustaining the demurrer was proper.

Are the orders denying the motions appealable?

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Related

North Central Dairymen's Cooperative v. Temkin
271 N.W.2d 890 (Wisconsin Supreme Court, 1978)
State v. Ross
242 N.W.2d 210 (Wisconsin Supreme Court, 1976)
Jolin v. Oster
198 N.W.2d 639 (Wisconsin Supreme Court, 1972)

Cite This Page — Counsel Stack

Bluebook (online)
198 N.W.2d 593, 55 Wis. 2d 229, 1972 Wisc. LEXIS 987, Counsel Stack Legal Research, https://law.counselstack.com/opinion/campfire-land-co-v-jolin-wis-1972.