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HOMER C. BAER v. WASECA MILLING COMPANY

Minnesota Supreme Court1919-04-17No. No. 21,366
143 Minn. 483

Summary

Holding. The order requiring the defendant to make its answer more definite and certain by setting forth the substance and date of the bylaws on which it relied is appealable as an order involving the merits of the action, and the trial court did not abuse its discretion in issuing this order. The order is affirmed.

Baer sued Waseca Milling Company, a South Dakota corporation licensed to do business in Minnesota, seeking to compel the transfer of capital stock shares he had purchased. The company's answer claimed a lien on the stock under South Dakota law and company bylaws, but did not specify which bylaws or provide their text. Baer moved to require the company to clarify its answer by setting forth the relevant bylaws and their adoption dates. The trial court granted this motion, ordering the company to amend its answer within ten days.

The company appealed, arguing the order was not appealable. The court rejected this challenge, holding that an order requiring a pleading to be made more definite and certain is appealable when it could result in striking the pleading or barring evidence if the defendant fails to comply. The court also addressed the merits, finding no abuse of discretion in requiring the company to specify its bylaws, since a stock transferee cannot reasonably be expected to know a corporation's internal rules. The court confirmed it had jurisdiction to grant the relief sought, as the matter involved only the transfer of stock, not the corporation's internal management.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Appealability of orders requiring a pleading to be made more definite and certain
  • Trial court discretion in requiring clarification of pleadings
  • Jurisdiction to order stock transfer when a lien is claimed under foreign corporation bylaws
  • Whether a stockholder can be charged with knowledge of corporate bylaws

Procedural posture

The defendant appealed from a trial court order requiring it to amend its answer to set forth the substance and date of the bylaws supporting its claimed lien on the stock.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Per Curiam.

On plaintiff’s motion the court made an order requiring defendant to make its answer more definite and certain by setting out in words or substance the by-laws under which it asserted a lien on the capital stock in controversy. Defendant appealed from this order, and plaintiff moves to dismiss the appeal on the ground that the order is not appealable.

An order refusing to require a pleading to be made more definite and certain is not appealable. American Book Co. v. Kingdom Pub. Co. 71 Minn. 363, 73 N. W. 1089; State v. OBrien, 83 Minn. 6, 85 N. W. 1135. An order requiring a pleading to be made more definite and certain, and providing that the p’eading shall be stricken out unless made more definite and certain, is appealable. Lovering v. Webb Pub. Co., 108 Minn. 201, 120 N. W. 688, 121 N. W. 911. This latter case distinguished the order there considered from the orders considered in the prior cases on the ground that it was in effect an order striking out the pleading and therefore involved the merits of the action. The order in the instant case makes no provision for the situation which would exist in the event of a failure to obey it. But a failure to comply with the order would be a sufficient ground for the court to strike the indefinite allegations from the answer, or bar defendant from introducing evidence in support of them. 31 Cyc. 651; Lipman v. Bechhoefer, 141 Minn. 131, 169 N. W. 536. This order may produce the same result as the order in the case cited, and we are of opinion that it is within the doctrine of that case and appealable as an order involving the merits. The motion to dismiss the appeal is denied.

On July 18, 1919, the following opinion was filed:

Per Curiam.

Action against a South Dakota corporation, authorized to do business in this state, to compel the transfer upon the books of the corporation of certain shares of its capital stock which plaintiff purchased of the person to whom the corporation hud issued the same. The answer alleged as one defense that the court had no jurisdiction of the subject matter of the action. And as a further defense alleged that plaintiff’s assignor had never paid for the stock; that its par value was $10,000; and “under and by virtue of the statute of the state of South Dakota and the by-laws passed pursuant thereto the defendant has a lien upon all the stock until the same is paid in full and no stock can be or is entitled to transfer on the books of said company -until paid for in full and all liens satisfied.” Plaintiff moved that the part quoted be made more definite and certain and the by-laws referred to, be set out in full, as well as the date of the passage thereof. The court granted the motion and required defendant within ten days from the date of the order to serve an amendment to the -answer, setting out either in words or substance the by-law referred to and the date of its passage. The appeal is from this order.

Orders requiring a pleading to be made more definite and certain rest largely in the discretion of the trial court. Young v. Lindquist, 126 Minn. 414, 148 N. W. 455. If it be necessary to plead the existence o,f the by-law, there surely was no abuse of discretion in requiring defendant to set forth its substance and date of adoption. It cannot be presumed that a transferee of stock in a corporation has knowledge of the corporation by-laws.

The case of Guilford v. Western Union Tel. Co. 59 Minn. 332, 61 N. W. 324, as we read it, sustains the proposition that the courts of this state have jurisdiction to grant the relief asked by plaintiff. The relief does not involve the exercise of visitatorial powers or the management of the internal affairs of the corporation. It merely involves whether a citizen of this state, who has bought stock from one to whom the corporation has issued it, is entitled to have it transferred on the books of the corporation. The corporation is duly licensed to do business in this state. If there is any amount due the corporation from the seller of the stock which is a lien thereon, the courts of this state should have no difficulty in protecting and enforcing the same as against the holder of the stock.

Order affirmed.