Lee v. Industrial Research Corp.
Lee v. Industrial Research Corp.
Opinion of the Court
This case is a counterpart of Lee v. Industrial Research Corporation, 329 Mich 636, in which our opinion sets forth much of the factual background herein. Mr. Justice Boyles, speaking for the Court, said there “that when the corporation (principal defendant) obtained the government contract, being without operating capital, Mrs. Guy, together with one Thelma Morris, supplied'the funds.” In this case said Zelma Morris
Defendant Morris seeks to avoid application of our holding of liability on the part of the garnishee defendant in the former case by urging distinctions between the character of her relationship and that of Mrs. Guy to the defendant corporation. She stresses, (1) that Mrs. Guy made the loan to the corporation out of a bank account which she owned jointly with her husband, who then was the secretary-treasurer of the corporation and held to occupy a .fiduciary relationship to unpaid creditors of the corporation, while Mrs. Morris was neither a stockholder, director or employee, but merely a creditor of the
The record in this case discloses that Mr. Guy became connected with the corporation and its secretary and treasurer at the time the loans from his wife and from Mrs. Morris were being negotiated and that he withdrew as such as soon as they were repaid ; that he took an assignment of all the stock of the corporation from the sole stockholder as security for the loans; that as further security the sole stockholder also assigned a land contract to Mr. Guy as trustee for Mrs. Guy and Mrs. Morris; that it does not appear that the corporation authorized Mr. Guy to execute, as its secretary-treasurer, and to give Mrs. Morris the corporation’s 6% promissory note for a principal sum of $800 more than the amount of the loan which she had advanced, representing an $800 bonus, all of which he did, apparently without the collaboration of any other corporate official, while acting in the dual capacity of officer of the corporation and trustee for Mrs. Morris,; that later, as secretary-treasurer, he repaid the loan to Mrs. Morris, together with interest and the bonus, out of corporate funds, while the corporation was indebted to plaintiff for the sum on which the judgment herein is based.
The fact that Mrs. Guy was the wife of Mr. Guy while Mrs. Morris was not, and that the Guy loan came from a bank account in which he had a joint
Defendant urges that the trial court’s denial of plaintiff’s motion, before trial, for judgment on the pleadings, is res judicata of plaintiff’s.right to recover against the defendant because the proofs adduced on trial presented no facts which were not before the court on the motion. The record disproves the claim. The pleadings upon which the motion was based failed to disclose, as did subsequent proofs, the dual role of Mr. Guy and the resultant fiduciary relationship.
Affirmed, with costs to plaintiff.
Zelma Morris is the same party as Thelma Morris, mentioned in Lee v. Industrial Research Corporation, 329 Mich 636.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.