265 N.W. 826 | Minn. | 1936
The so-called blue sky law, L. 1925, c. 192, as amended by L. 1927, c. 66, and L. 1933, c. 408 (§§ 3996-1 to 3996-35, inclusive, 1 Mason Minn. St. 1927 and 1934 Supplement thereof) requires brokers dealing in bonds, stocks, and securities in this state to obtain a license to engage in that business. Section 3996-9 so provides. And § 3996-11 ordains that "every nonresident person shall, before having any securities registered or being licensed as a broker," appoint the commissioner of securities "his attorney, upon whom process may be served in any action or proceeding against such person or in which such person may be a party, in relation to or involving any transaction covered by this act, which appointment shall be irrevocable." The transactions of which plaintiff complains took place when appellants held a license under § 3996-9; and when the summons was served on appellants, as prescribed in § 3996-11, they had on file with the commissioner of securities their appointment of him as their attorney pursuant to said section. Unquestionably the business of dealing as brokers in stocks, bonds, and securities is of such a character that, for the protection of the public, the state may properly license and reasonably supervise and regulate the same. State v. Nordstrom,
"Whenever it shall appear from evidence satisfactory to the Commissioner of Securities that any securities are being sold, have been sold, or are about to be sold, and with fraudulent intent, in violation of any of the provisions of this Act, or that in the issuance, sale, promotion, negotiation, advertisement, or disposition of any securities including any securities exempted by Section 3996-2 of Mason's Minnesota Statutes for 1927, or in any transaction exempted by Section 3996-3 of Mason's Minnesota Statutes for 1927," the commissioner shall have power to proceed by injunction or have a receiver appointed. *33
It would seem that if a broker deprives a customer of securities intrusted to him for sale or of money delivered to purchase securities, it is a fraud or violation of duty — something that establishes bad business repute of the broker and violative of the license under which he operates. And this is so whether the transaction related to securities required to be registered or to securities exempt from registration. Anderson v. Chase Securities Corp.
There is another ground upon which the order appealed from must be affirmed. Appellants answered with a general denial only, and thereafter moved the court to strike out the complaint or that plaintiff be required to make it more certain and particular in many specified paragraphs. This was a general appearance. 1 Dunnell, Minn. Dig. (2 ed. Supp. 1932) §§ 476 and 479, and 2 Mason Minn. St. 1927, §§ 9238 and 9239, provide:
"A voluntary appearance by the defendant shall be equivalent to personal service, unless the same be made for the sole purpose of attacking the jurisdiction."
"A defendant appears in all action when he answers, demurs, or gives the plaintiff written notice of his appearance."
To obviate the effect of their answer and motion for relief, appellants claim that when plaintiff desired to amend the complaint and *34 before the court acted on appellants' motion for relief the parties entered a stipulation which annulled the appearance made by the answer and the motion. The pertinent part of the stipulation reads:
"It is stipulated that the plaintiffs above named will serve an amended complaint, in each of said actions, upon said defendants on or before June 20, 1935; such amended complaints to be served and filed without prejudice to the right of said defendants, following such service, to raise such questions as they shall desire as to jurisdiction, venue, or other questions, by motion or other appropriate procedure, or to demur, answer or otherwise plead to such amended complaint."
We cannot construe this stipulation as a withdrawal of the answer or the general appearance resulting from the motion asking the court for relief against the complaint. The syllabus in Allen v. Coates,
"Appearance waives defects in service of process. A general appearance cannot be set aside unless induced by fraud or mistake."
There is absolutely no suggestion of fraud or mistake in the record. If there was haste for answer, counsel had time for reflection and deliberation before he made the motion to strike or amend the complaint. Feeble is the suggestion that the original complaint was a fraud to induce appellants to come into court; and far-fetched is the supposed analogy of these three cases cited by appellants to show that whenever a defendant by fraud has been induced to bring his property or himself within the reach of the court the court will, on its own motion, when such fraud appears, refuse jurisdiction: Chubbuck v. Cleveland,
The order is affirmed in each case.