KEOUGH v. ST. PAUL MILK CO.

(1939)
Per Curiam
Patrick Keough and his brother, James, partnered with Ryan and Hanson for their dairy
business, contributing $20,000 from the Keoughs, $15,000 from Ryan, and $5,000 from
Hanson. Soon, the partners incorporated St. Paul Milk Co. with Ryan as president, Patrick as
vice president, and Hanson as secretary. Of the 597 shares, 285 were issued to Patrick, 240 to
Ryan, and 72 to Hanson. The corporation, whose corporate affairs were single-handedly
conducted by Ryan without objection from Patrick or Hanson, proved to be a success. In 1930,
Patrick left, selling 185 of his shares to James while keeping the 100. After Ryan died in 1933,
his widow and three sons succeeded him and a friction developed, prompting James to call for
an examination of company records where certain irregularities were allegedly discovered. This
case is a consolidation of three suits filed against St. Paul Milk Co. namely a salary suit brought
by Patrick to recover his salary as an officer and employee; a stock division suit brought by
Patrick and James as his trustee to recover 13 ½ shares of stock and the dividends which had
accrued thereon since their original issue, and a representative suit brought by Patrick and
James on behalf of themselves, the corporation, and all other stockholders to recover the
wrongful diversion of corporate assets and to compel the declaration of cash dividends.