Silberman v. Roethe

218 N.W.2d 723, 64 Wis. 2d 131, 1974 Wisc. LEXIS 1338
CourtWisconsin Supreme Court
DecidedJune 17, 1974
Docket330
StatusPublished
Cited by16 cases

This text of 218 N.W.2d 723 (Silberman v. Roethe) 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
Silberman v. Roethe, 218 N.W.2d 723, 64 Wis. 2d 131, 1974 Wisc. LEXIS 1338 (Wis. 1974).

Opinion

Wilkie, J.

Because of the relatively complicated fact situation surrounding this dispute, a summary of the pertinent testimony is appropriate before we consider the issues on this appeal.

Morry A. Silberman — plaintiff.

Morry testified that in November of 1966 his brother Irv told him that Nasco was quite sincere and interested in acquiring Milway and he showed Morry the letter from Leo Eoethe, except for the portion of the letter relating to Irv’s salary, which he concealed. Morry testified that Irv asked him to reduce the debt owed him by Milway. He then testified that he contacted his attorney, Alan Marcuvitz, who handled the matter for him. An agreement was worked out and Marcuvitz recommended that he sign the agreement. Morry testified that his attorney told him he felt the agreement was a fair deal and that he would be in a better position and more secure in the money he had coming to him and that Nasco would strengthen Milway and put it on a sound financial basis and he would have a chance of receiving his money. *137 Morry testified that it was three or four months before he became informed that Nasco was not running Milway.

On cross-examination Morry testified that he had never met Roethe or Burgess and had never negotiated with anyone. His attorney handled that and all his information came from his attorney. Morry testified that they did discuss concern over Milway’s financial condition and he admitted that the receipt of $65,000 in cash was important to him at that time.

Irv Silberman.

Irv Silberman testified (by deposition since he was in California at the time of the trial) that he sold his stock interest in Milway on December 17, 1965, after negotiating with Nasco through its president, Leo W. Roethe. Irv testified that after receiving a letter from Roethe proposing a purchase by Nasco, he showed the letter to his brother Morry, except for one paragraph which he covered. Irv testified that he attended at least two meetings with Leo Roethe and Walter Davis and that there was never any question that Nasco was acquiring the stock. Irv testified in the deposition that there was never any mention of Leo Roethe or Burgess acquiring the stock, and that to his knowledge the question of the indebtedness to Morry was never raised. Irv testified that he had conversations with Roethe in which Roethe talked about the assets of Nasco.

Leo W. Roethe — one defendant a/nd president of Nasco.

Mr. Roethe (called adversely) testified that he had sent the original letter to Irv Silberman on behalf of Nasco with the proposed purchase subject to approval of the board of directors. Roethe testified that the question of the reduction of Morry’s note was handled by Burgess. He testified that reduction of the note was a condition of the offer to purchase. Roethe also testified that he *138 thought he mentioned to Irv Silberman, prior to the December 14, 1965, board meeting that if Nasco did not buy Milway, they would try to work out a deal whereby he and Burgess would buy it. Roethe also testified that Irv was informed that the board of Nasco had declined to acquire Milway. Roethe testified that the reorganization agreement entered into between Nasco and Milway was an accommodation to Irv Silberman so that he would have tax advantages from the form of transfer and that Irv Silberman and Van Deuren knew at the time that Nasco was not actually going to purchase Milway. Roethe testified that he was interested in purchasing Milway only because he hoped to get his money out of Selective Finance which was formed to purchase Milway’s receivables. Roethe testified again that he did not give final approval to the reduced indebtedness figure of $137,500. Roethe testified that at the time of the reduction agreement, Nasco had already withdrawn its proposed acquisition. At this point in the trial, documents were introduced showing that Milway had gone into receivership within one and one-half years after the sale.

Walter Davis — general counsel for Nasco in 1965.

Mr. Davis testified that prior to the Nasco board meeting he attended at least two meetings with Irv Silberman, Milway’s attorney and Leo Roethe, at which meetings he believed that the necessity of Morry’s reducing his claim was discussed. Davis testified that prior to the board meeting of December 14, 1965, they were representing Nasco. Davis testified that the minutes of the December 14, 1965, Nasco board meeting indicated that Nasco decided they did not want to own Milway, but also that they did not want to turn down the proposition and give it to Burgess and Roethe without some claim on Milway if it became successful. Therefore, they agreed to participate in the acquisition and immediately sell Milway to *139 Burgess and Roethe with an option to repurchase within ten years.

Davis testified that there were negotiations between the 14th and the 17th of December in which he was involved and that he informed Mr. Van Deuren that Nasco was not going to hold the Milway stock after the December 14, 1965, meeting. Davis testified that he did not see the reduction agreement until after it was signed by Morry Silberman and it was shown to him as part of the closing papers “so that we knew, in fact, what had been negotiated, had been accomplished.” Davis testified that he was aware that there were negotiations on reduction of the debt and that Roethe or Burgess made the final judgment on whether the terms were satisfactory. Davis testified that he did not recall any telephone conversations in regard to the terms but he did recall being in Van Deuren’s office and being advised as to what Morry was going to agree to. Davis testified that he never spoke to Morry Silberman to inform him of Nasco’s decision not to acquire Milway. He testified that he did not believe that he, Roethe or Burgess ever said one word to Morry Silberman about anything because it was a matter that Irv and Morry had to work out between themselves and he had no idea at all how Van Deuren and Irv Silberman communicated with Morry. Davis testified that his dealings with Van Deuren were strictly as attorney for Milway and apparently he believed that Van Deuren was communicating with Morry Silberman as attorney for Milway.

On cross-examination (plaintiff had failed to call Davis adversely) Davis testified that after Nasco decided not to acquire Milway, personal guarantees of Irv Silberman’s salary and a rental agreement were executed by Burgess and Roethe because Nasco no longer wished to execute any guarantees. On redirect, Davis testified that to his knowledge no one told Morry about the change in *140 guarantees. On recross Davis testified that the form of the transaction (a stock reorganization) was desired by Irv Silberman and Milway and on redirect Davis stated there was no misrepresentation because he had told Van Deuren that the stock would be transferred to Eoethe and Burgess eventually.

Alan Marcuvitz — Morry Silberman’s attorney in 1965.

Marcuvitz testified that he first discussed the reduction of Morry’s claim with him on December 11, 1965, when he learned that Nasco was interested in buying Milway. Morry told him to contact Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
218 N.W.2d 723, 64 Wis. 2d 131, 1974 Wisc. LEXIS 1338, Counsel Stack Legal Research, https://law.counselstack.com/opinion/silberman-v-roethe-wis-1974.