Spence v. Sturgis Steel Go-Cart Co.

186 N.W. 393, 217 Mich. 147, 1921 Mich. LEXIS 830
CourtMichigan Supreme Court
DecidedDecember 22, 1921
DocketDocket No. 34
StatusPublished
Cited by7 cases

This text of 186 N.W. 393 (Spence v. Sturgis Steel Go-Cart Co.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spence v. Sturgis Steel Go-Cart Co., 186 N.W. 393, 217 Mich. 147, 1921 Mich. LEXIS 830 (Mich. 1921).

Opinion

Steere, C. J.

Defendant, as its name implies, is a manufacturing corporation of the city of Sturgis, engaged in constructing various kinds of go-carts. On June 29, 1917, its factory, machinery and equipment were destroyed by fire, compelling either construction of an entirely new plant for resumption of business, or liquidation. After some discord and delay the directors finally decided to rebuild and resume operations. Plaintiff was then one of defendant’s directors and mayor of Sturgis. His main business activities and interests were with the National Carbon Coated Paper Company, of which he was the general manager, receiving a large salary. Some time after defendant’s fire, its president, Mr. Burdick, told plaintiff if he would take hold of the business of the go-cart company as its general manager and conduct its affairs, he thought harmony could be restored and business resumed, otherwise the industry would be [149]*149lost to their, city; and asked him if he would do so. Plaintiff consented to temporarily become general manager of defendant, retaining his management Of the National Carbon Coated Paper Company.

A meeting of defendant’s stockholders was held September 3, 1917, at which all members of its board of directors and all but one of its stockholders were present and plaintiff was elected general manager, as its records show, and it was decided to continue the business. Plaintiff was authorized at a meeting of the directors to take up the matter of rebuilding, submit plans and prices at the next meeting, which he did, and was empowered to proceed. He at once assumed the duties of the position to which he had been elected and started reconstruction;' the company having arranged to finance its rehabilitation by sale of preferred stock and otherwise. No action was taken at the stockholders’ meeting or by the board of directors fixing his compensation. He held the position of its general manager during reconstruction of the plant and reorganization of its business, retiring about August 14, 1918. During that time a brick and steel factory building was erected having 65,000 feet of floor space with machinery and other equipment installed at a cost of over $100,000; the concern was again put in production with the different styles of go-carts it built reduced from 175 to 71, the business reorganized with prices adjusted to costs and an assistant manager put in charge at the end of six months, or about March 1, 1918, at a salary of $5,000 per year.

Claiming he had been urged by the president and stockholders of defendant to take charge of its business, elected by its stockholders and employed by its directors and president as its temporary general manager, with assurance of compensation for his services, plaintiff made claim to defendant for pay at [150]*150the rate of $200 per month during the first 6 months of his incumbency, or until the business was again in successful operation and an assistant manager took charge. Defendant not recognizing his claim, he brought this action in the circuit court of St. Joseph county.

The case was tried before the court without a jury. Findings of fact with conclusions of law thereon were filed and judgment was rendered for plaintiff in the sum of $1,200, on April 12, 1920. Proposed amendments to the court’s findings were filed by defendant on April 21st, and at the same time a motion was filed for a new trial; plaintiff’s counsel stipulating to extension of time therefor. The two motions were heard together on September 28th, and on October 7th an order was made denying both motions. On October 21st exceptions were separately filed to refusal of both motions, which were the first exceptions filed, in the case.

Beyond the facts already stated, which are practically undisputed, the court found as follows:

“The evidence shows and the court so finds that the board of directors took no part in the rebuilding or management, except to attend directors’ meetings. The entire plant was rebuilt, machinery and equipment selected by Mr. Snence and installed and in the month of January, 1918, the factory was completed, fully equipped with proper machinery and the manufacture of its products, to-wit: go-carts, commenced. A catalogue showing the latest styles and prices was also gotten out by Mr. Spence. He also did the other necessary work in getting the product on the market.
“The court further finds there is no dispute from the evidence but what these services were known to the stockholders and all the directors of the company. Several witnesses testified as to the value of his services. None of the witnesses placed the value of these services at a less value than the amount claimed by plaintiff but most of the witnesses a great deal higher. Defendant does not deny but what these services were [151]*151performed. The court further finds that these services were of such a nature and character that they were clearly outside of his duties as a director. The court further finds that the amount charged is a very reasonable sum considering the character of the services rendered.
“The defendant did not dispute but what these services had been performed or the value of said services but claimed that the plaintiff is estopped in claiming any compensation for the services for the reason stated in the notice to their plea of the general issue. The court further finds that in August, 1918, Mr. Burdick, who was then president of the company, held an option for the sale or purchase of the stock of plaintiff, and some of the other stockholders of said company, that the said F. L. Burdick sold said stock that he held an option of purchase to some other gentlemen from the city of Detroit and that after August 14, 1918, plaintiff was no longer a stockholder of said company. The court finds that Mr. Burdick and one or two others of the original stockholders-still remained in said company and Mr. Burdick was still an officer of said company for some time after the sale of the stock of plaintiff and some of the other stockholders to the Detroit gentlemen. Although there was a change in the owners of some of the stock, the corporate identity of the corporation was not in any manner changed by this sale of stock. The further finding is also made that plaintiff never had any interviews or made any representations to these new stockholders. That although they had an auditor examine the books before they purchased the stock and the records of the company showed that Mr. Spence was general manager and had not received any salary, yef the auditor or representative of these new stockholders did not see fit to interview Mr. Spence.
“It was claimed by the defendant that inasmuch as the salary for the months of September, October, November and December, 1917, was not included as an indebtedness of the company in the annual statement filed in the secretary of State’s office of the State of Michigan that plaintiff was estopped after having signed said statement from recovering for these four [152]*152months. The court finds there was no evidence introduced that these new stockholders relied upon this statement at the time of the purchase or were in any way deceived thereby.”

A careful examination of the testimony results in the conclusion that there is ample evidence in the record to support the court’s material findings of fact.

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Bluebook (online)
186 N.W. 393, 217 Mich. 147, 1921 Mich. LEXIS 830, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spence-v-sturgis-steel-go-cart-co-mich-1921.