Wisler v. Wisler

DRAPER, P. J.

This is a proceeding brought under Corporations Code sections 2236-2238. The trial court determined that of the 5,000 shares of Skate Arena, Inc., plaintiff is entitled to vote 2,550, defendant Veneta D. Wisler, his wife, 2,400, and defendant Doolittle, Mrs. Wisler’s son by a previous marriage, 50. Defendants appeal.

The Wislers married in September 1956. In 1958 they determined to open a new skating rink. Wife supplied substantially all the capital, and her experience in this field was utilized. However, she wanted husband to be manager of the business. An agreement of husband and wife dated April 1, 1958, and minutes of the corporation fix plaintiff’s salary and indicate that salary not drawn by him was to be deemed a loan to the business.

Articles of incorporation were filed April 14,1958, but application for permit to issue the corporation’s shares was not filed until May 19, 1959. Balance sheets of December 31, 1958 and March 31, 1959, filed with the application, show as net worth the “investment” of plaintiff and that of Mrs. Wisler, the latter being larger. It is completely clear from the application and from the testimony of the assistant commissioner of •corporations that the equity in the going business was the

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consideration moving to the corporation. It is equally clear that even though plaintiff’s advance originally had been a loan to the business, it had become an investment—an ownership of an equity.

The permit issued on this application July 15, 1959, authorized issue of 5,000 shares to “any or all” of the three persons who are parties to this action. Four certificates, all dated July 15, 1959, were issued : No. 1 to plaintiff for 2,450 shares ; No. 2 to Mrs. Wisler for 2,400 shares; No. 3 to defendant Doolittle for 50 shares; and No. 4 to plaintiff for 100 shares. The latter was endorsed by plaintiff to his wife, and all four certificates were thereafter deposited with a bank as escrow holder under the terms of the permit. There is little doubt that wife knew of the issuance of these shares, and there is evidence that she approved their issue before made.

In April of 1960, after domestic difficulties between Mr, and Mrs. Wisler had arisen, a special meeting of the share holders was called. Mr. Wisler was represented by proxy. Or. a motion to remove the directors, Mrs. Wisler, acting as president, ruled that Mr. Wisler’s shares were not properly issueo and that only her shares could be voted. The motion was defeated, and a motion to elect new directors was declared out of order. Mr. Wisler brought this proceeding, and Mrs. Wisler and her son appeal from the judgment determining that plaintiff is entitled to vote 2,550 shares.