205 Wis. 193 | Wis. | 1931
The following opinion was filed April 7, 1931 :
It is well established in this state that a corporate by-law which prohibits the alienation of shares of stock, or which amounts to an unreasonable restraint upon their transfer, is void. In re Klaus, 67 Wis. 401, 29 N. W. 582; Farmers M. & S. Co. v. Laun, 146 Wis. 252, 131 N. W. 366. In the casé last cited it is recognized, however, that there is a distinction between charter provisions or by-laws absolutely or unreasonably restrictive of transfer and those placing reasonable conditions upon the transfer of stock. The court said:
“The object and purpose of such regulations, restricting in a degree, but not prohibiting, the transfer of shares, are familiar. It is sometimes necessary and often desirable that a corporation protect itself against the acquisition of shares of its stock by rivals in business or other disturbers, who might purchase shares merely for the purpose of acquiring information which might thereafter be used against the interests of the company. Similar restrictions upon the transfer of shares are generally recognized and held valid, where they form part of the charter or articles of organization of the corporation, and are matters of contract between the shareholders.”
From these cases it appears that such restrictions upon the alienation of stock as are provided by the charter and by-laws in this case are sustained as reasonable provisions for preserving the company against purchase of stock by outsiders, rivals or other disturbers. These restrictions are
It is our conclusion that the contentions of the appellant are sound. In the articles of incorporation it is stated that a stockholder desiring to sell must first offer his shares “to the remaining stockholders, it being the intention hereof to give them a preference in the purchase of the same.” It is then provided that such stockholder shall be required to file notice in writing with the secretary of the corporation, stat
In this view of the case, it is not necessary to consider appellants’ contention that the restrictions are void under
For the foregoing reasons the judgment must be reversed.
By the Court. — Judgment reversed, and cause remanded with directions to dismiss plaintiff’s complaint.
A motion for a rehearing was denied, with $25 costs, on June 12, 1931.