Marshfield Clinic v. Doege

69 N.W.2d 558, 269 Wis. 519, 1955 Wisc. LEXIS 532
CourtWisconsin Supreme Court
DecidedApril 5, 1955
StatusPublished
Cited by21 cases

This text of 69 N.W.2d 558 (Marshfield Clinic v. Doege) 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
Marshfield Clinic v. Doege, 69 N.W.2d 558, 269 Wis. 519, 1955 Wisc. LEXIS 532 (Wis. 1955).

Opinions

Steinle, J.

When there is excess of parties plaintiff, a motion to strike, and not a demurrer, is the proper procedure with which to challenge the complaint of a party plaintiff who has no interest in the subject matter alleged therein. State ex rel. Kratche v. Civil Court (1923), 179 Wis. 270, 272, 191 N. W. 507. See also 2 Wisconsin Pleading and Practice (3d ed.), p. 132, sec. 13.43.

A motion to strike is addressed to the sound discretion of the court. 41 Am. Jur., Pleading, p. 532, sec. 354.

The complaint sets forth the provisions of the contract upon which the individual plaintiffs rely in their position that they are entitled to remain as parties to the action. Such contract provisions are stated as follows:

“ ‘9. Any stockholder-employee whose membership in the Marshfield Clinic is terminated in any manner, shall not within five years from the date of such severance engage in the practice of his profession or become a competitor in any degree of the Marshfield Clinic or any of its employee members, directly or indirectly, personally or in association with others within a radius of 50 miles from the city of Marsh-field. In the event such stockholder-employee breaches this agreement then such employee, his heirs, personal representatives, and assigns shall immediately pay to the Marshfield Clinic or its assigns $5,000 as liquidated damages for such breach, said sum being agreed to be the amount of damages which shall be done to the business of the Marshfield Clinic by said act or acts.
“ ‘It is further agreed, that in such event, the Marshfield Clinic shall be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation thereof by the employee, his partners, agents, servants, employees, and employers, and all persons acting for or with him.’ ”

[523]*523Under provision of sec. 260.13, Stats., every action must be prosecuted in the name of the real party in interest, except as otherwise provided in sec. 260.15. The exception as contained in sec. 260.15 provides that a trustee of an express trust, which includes a person with whom or in whose name a contract is made for the benefit of another, may sue, without joining with him the person for whose benefit the action is being prosecuted. In Chase v. Dodge (1901), 111 Wis. 70, 72, 86 N. W. 548, it was held that “The rule that every action must be prosecuted in the name of the real party in interest . . . [as declared by statute] is imperative, but is satisfied when it is shown that the party suing is the one who has the right to control and receive the recovery.” The same principle was expounded in Gross v. Heckert (1904), 120 Wis. 314, 320, 97 N. W. 952, where the court said “The test of whether one is the real party in interest within the meaning of the statute is, Does he satisfy the call for the person who has the right to control and receive the fruits of the litigation?” In the same case, Gross v. Heckert, supra, the court cited with approval from 15 Encyc. PI. & Pr. p. 710, the following:

“ ‘The real party in interest, within the meaning of this provision of the code, is the person who will be entitled to the benefits of the action if successful; one who is actually and substantially interested in the subject matter, as distinguished from one who has only a nominal, formal, or technical interest in or connection with it.’ ”

A defense that the plaintiff is not the real party in interest is, in general, an absolute bar to the action. Landauer v. Espenhain (1897), 95 Wis. 169, 173, 70 N. W. 287.

In the case at bar the right to collect damages from the defendant or to obtain injunctive relief against him is predicated entirely upon the contract. Although the corporation did not join in the signing of the contract, it is the beneficiary of it. However, the corporation has chosen to in[524]*524stitute this suit in its own name and right, for damages and relief as provided in the contract for the alleged breach. Under well-established principles it is entitled as the beneficiary to do so.

Appellants contend that they are entitled to be included as parties plaintiff under provision of sec. 260.15, Stats. However, it does not appear that they are suing on behalf of the beneficiary, the corporation. They bring the action for wrongs to them as individuals. In Natter v. Isaac H. Blanchard Co. (1912), 153 App. Div. 814, 818, 138 N. Y. Supp. 969, 972, where the court dealt with a statutory provision identical with sec. 260.15, it declared that:

“We do not think that the plaintiff comes within the provisions of said section, because it is not set up in the complaint that he is such trustee, or that he sues in such capacity. Even if he should be held to be such trustee, he could take no comfort, because the second cause of action is clearly brought in his individual capacity upon his personal contract, so that in any event there is an improper joinder of actions.”

Under this complaint, the individual plaintiffs are not suing on behalf of the beneficiary, and hence they do not come within the provisions of sec. 260.15, Stats. As previously pointed out, the corporation has commenced the action in its own name, and according to the provisions of the contract, it alone has the right to control and receive the recovery. No such right is reserved by or extended to the individual stockholders-employees of the corporation.

It is damage to the business of the Marshfield Clinic, the corporation, and not damage to the interests of the individual members that is protected by the contract. It seems clear that since only the business of the corporation and not that of the individual members is protected, and that the corporation alone is entitled to the fruits of the litigation, and that it is actually suing for them, therefore, the others, who join [525]*525as parties and make identical demand, must be considered in the category of excess parties.

The individuals suing here are employees of the corporation. An employee is one who is engaged in the business of his employer. The individual doctors who are parties to the contract have agreed to confine their professional pursuits to the interests of their employer, the corporation, and have bound themselves not to engage in a medical practice of their own in the area involved. In view of such arrangement of their own choosing, we fail to perceive from the record before us, how they are entitled to relief in any individual capacity. The corporation can only carry on its purposes through the activities of its employees. The professional services of the individual employees are rendered for and on behalf of the corporation. When competing against the employees of the corporation, it seems that the defendant under circumstances as alleged, competes only against the corporation. In the light of the contract provisions, he could not be competing against his fellow practitioners as individuals, because they are not engaged in their own private practice of medicine. They have hired their skill and services to the corporation. The penalty and relief prescribed for breach of contractual duty inures only to the benefit of the employer, and not to that of the employees. Likewise, it does not inure to the benefit of the stockholders.

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Marshfield Clinic v. Doege
69 N.W.2d 558 (Wisconsin Supreme Court, 1955)

Cite This Page — Counsel Stack

Bluebook (online)
69 N.W.2d 558, 269 Wis. 519, 1955 Wisc. LEXIS 532, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marshfield-clinic-v-doege-wis-1955.