216 Wis. 253 | Wis. | 1934
The suit is to recover from the defendant the superadded liability of stockholders of a North Dakota corporation imposed by the statutes of that state. The defendant Starker owns thirty-four shares of the common stock of the corporation. Under the Wisconsin Blue Sky Law the railroad commission on December 13, 1919, issued an order permitting the sale in Wisconsin of one hundred and fifty shares of the stock of the corporation. The court found that prior to the purchase by the defendant of his stock, the one hundred and fifty shares, the sale of which was authorized by the commission, had been sold. Sec. 1753 — 57, Stats. 1919, declared that the sale of every security issued by any corporation without a permit from the commission, and that a sale of stock not in conformity with the provisions of the permit for sale, should be void.
The defendant claims that, as all the stock authorized by the permit had been sold prior to the sale of his stock, the sale to him was unauthorized, and the sale and the stock issued'thereon were void under the statute stated; that the word “void” in the statute must be given its ordinary and natural meaning, and under such meaning his stock is absolutely void; and that the holder of stock that is absolutely void is not subject to the statutory superadded liability of stockholders.
The plaintiff contends that the word “void” in the statute means voidable at the option of the purchaser; that the defendant by Accepting the stock and dividends thereon and attending stockholders’ meetings exercised his option to con
The defendant claims that the statute declared a public policy of the state, and that no estoppel can arise against asserting the invalidity of a contract that is against public policy.
The plaintiff cites many decisions of this court in which the word “void” in statutes has been held to mean voidable. In cases under old section number 2320, Stats, (now sec. 242.07), declaring conveyances in fraud of creditors void, and under old section number 3914 (now sec. 316.41), declaring sales of property of an estate void in which the executor, administrator, or guardian of the estate has an interest, the word “void” has been construed to mean voidable. This is because the purpose of the statute is fully effected by so holding, and such holding is necessary for the protection of innocent purchasers. In view of this an intent of the legislature to use the word “void” in the sense of voidable is read into the statute. Whenever from the nature of the transaction prohibited and the purpose of its enactment such intent may reasonably be read into such a statute, the word “void” will be construed as so meaning. Such cases are Gibson v. Gibson, 102 Wis. 501, 78 N. W. 917; Hyman v. Landry, 135 Wis. 598, 116 N. W. 236; Melms v. Pabst Brewing Co. 93 Wis. 153, 66 N. W. 518.
The purpose of the statute here under consideration was to protect the purchasers of stock from having foisted upon them fraudulent and improvident issues of stock. By giving the purchasers the right to repudiate sales made contrary to the statute, and recover payments made thereon upon timely rescission under circumstances prescribed in other provisions of the Blue Sky Law, the purpose of the statute is fully effected by construing the word “void” as voidable. Stock
A distinction exists between contracts and sales absolutely prohibited and those prohibited except on performance of specified conditions. Cases cited by respondent are of the former class. Thus in Austin v. Burgess, 36 Wis. 186, a usurious contract was involved, and by statute usurious contracts were declared void. Hale v. Kreisgl, 194 Wis. 271, 215 N. W. 227, involved a contract for a commission of a real-estate broker which was declared by statute void if not in writing as prescribed. In these cases contracts like those involved could not be made valid by first procuring permission from public authorities to make them. Under no conditions could the contracts involved be made valid. The case of Land, Log & Lumber Co. v. McIntyre, 100 Wis. 245, 75 N. W. 964, is another one in which the word “void” in a statute was construed as meaning absolutely void. The statute involved declared void contracts between members of a county board and the county for the purchase of articles. The ruling went upon the considerations that the statute declared a-public policy and its purpose could be effected only by giving to the word “void” its natural and ordinary meaning of absolute nullity. One statement is made in the opinion of this case that we must recall as not applicable to every conceivable situation. It is stated on pages 253, 254, that “where a statute declares a contract void and imposes a penalty for making it, such contract is illegal, it is absolutely void, not voidable merely,” citing the texts of Maxwell and Endlich on Interpretation of Statutes as authority. The text of Max
“If it be doubtful whether a .statute declaring an act, instrument, or contract void, makes it voidable only, another clause in the same statute imposing a penalty on such act, instrument, or contract, is a clear test that it is ipso facto void.”
This may be so where the act or contract is absolutely prohibited as distinguished from prohibited except on performance of conditions precedent. But the rule should not be permitted to override the rule that when the whole purpose of the statute is effected by giving the word the meaning of voidable and public policy is not involved the word should be given that meaning.
This brings us to - the point of determining whether the statute involved declares a public policy. As said in the opinion in Trumpf v. Shoudy, 166 Wis. 353, 359, 164 N. W. 454, 456, “the term ‘public policy’ is admittedly one of vague and uncertain meaning.” As applied to statutes claimed to declare public policy, the definition given at page 2 of Greenhood on Public Policy, seems proper to apply. It is there said:
“By ‘public policy’ is intended that principle of the law which holds that no subject can lawfully -do that which has a tendency to be injurious to the public or against the public good.”
This definition has been accepted in a multitude of cases. 6 Words & Phrases (1st Series), 5813; 4 id. (2d Series), 26; 6 id. (3d Series), 382; 3 id. (4th Series), 264. By this we infer is meant that when a statute declares a public policy in respect to a matter, it applies to all citizens of the state alike, and prohibits each and every citizen from acting con
It is our conclusion that the word “void” in the 1919 statute must be construed as meaning voidable. This is in accord
It may be added that the 1923 legislature by ch. 445 amended the 1919 statute by substituting the words “voidable at the election of the purchaser” for the word “void,” thus putting the provision in its present form. Sec. 189.15 (1), Stats. 1933. We consider, in view of the effect of the contrary construction upon stock sold contrary to the statute in the hands of innocent holders, that the amendment indicates a legislative understanding of the meaning of the word “void” in the 1919 statute rather than an intent to change the meaning of that statute.
The word “void” in the 1919 statute being construed as meaning voidable at the election of the purchaser, the case is ruled by that of Allen v. Fulton, 167 Wis. 352, 167 N. W. 429. In that case a Minnesota corporation had sold its stock in this state without filing its articles of incorporation as required by sec. 1770b, Stats. 1898. The receiver of the corporation sued Fulton to collect the stockholders’ superadded liability prescribed by the Minnesota statute. Fulton de
As the above rules the case against the defendant it is not necessary to consider the other points raised and discussed in the briefs.
By the Court. — The judgment of the circuit court is reversed, and the cause remanded with instructions to enter judgment for the plaintiff.