137 Wis. 407 | Wis. | 1909
Lead Opinion
Tbe jury found that tbe parties agreed November 29, 1905, that the defendants would sell and transfer a half interest in tbe Wisconsin Health & Accident Company to tbe plaintiff and effect tbe removal of tbe principal office of such company to Wausau, Wisconsin, in consideration of $2,000 paid by plaintiff to defendants. Tbe evidence shows without substantial dispute that tbe defendants agreed to transfer their claims against tbe company for services performed and money expended in tbe organization of tbe company, and that they would also secure tbe removal of tbe principal office of such company from Fond du Lac to Wau-sau, Wisconsin, and malee certain changes in tbe officers of such company by procuring tbe resignation of directors and tbe election of others in their stead; that this scheme was carried out to tbe extent of causing four directors to resign and tbe election, or attempted election, of four others named by tbe plaintiff in their respective places; that tbe general management of tbe company was turned over to tbe plaintiff,
The Wisconsin Health & Accident Company was a mutual indemnity insurance company organized under .the laws of Wisconsin, without capital stock, and authorized to do business on the assessment plan. The defendants, therefore, could not sell a half interest or any interest therein, which was well known to the plaintiff when the agreement of November 29, 1905, was made, and particularly when the note was given, January 6, 1906. No claim is made that any fraud or deception was used by the defendants, but, on the contrary, the plaintiff was given access to the books, records, and business of the company and fully examined them.
The evidence further establishes that at the time the agreement was made the defendants had expended considerable money and performed services in the organization of the
Under the statutes the change of location could be made ■only by a vote of at least one half of the members of the ■company at a meeting regularly called. In pursuance of the alleged agreement the resignations of the defendant. Schmidt and four directors were téndered and accepted, and the management and control of the company by such and other manipulations turned over, or attempted to be turned over, to plaintiff. Such an agreement, upon well-established principles, is illegal and contrary to public policy and good morals. The defendants could not use their position of trust and confidence as officers of the company to forward their'own private interest or the interest of plaintiff. Forbes v. McDonald, 54 Cal. 98; Meacham v. Dow, 32 Vt. 721. If the contract weré binding the defendants would be bound as officers of the company to secure its removal to Wausau, regardless of whether such removal was for the interest of the members or not. It is manifest that such an agreement is illegal and in
It is insisted, however, as a basis of recovery on the part of.the plaintiff that the parties were not in pari delicto. This contention cannot be sustained under the evidence. The plaintiff was in possession of all the facts, knew the company was a mutual assessment company without capital stock, and had knowledge of all the facts which rendered the agreement illegal. Under such circumstances the law will not afford him relief. 9 Cyc. 546, 548; Miller v. Larson, 19 Wis.
By the Court. — The judgment of the court below is reversed, and the action remanded with directions to enter judgment dismissing the complaint and counterclaim.
Dissenting Opinion
(dissenting). The real contention on the trial of the case 'was whether Exhibit 1 expressed the contract between the parties as claimed by the plaintiff, or whether the transaction of January 6th, including the execution of Exhibit 2, expressed such contract as claimed by the defendants. On disputed evidence the jury found in favor of the plaintiff, and upon such finding he was entitled to judgment, unless the contract expressed in Exhibit 1 was in contravention of public policy, or unless his testimony was so inherently incredible as to be unworthy of belief. It is improbable that the plaintiff did not know that a mutual insurance company was not subject to barter and sale, but it is not incredible that he should have been innocent upon the subject. Many people who are intelligent along the lines of their respective Callings have very hazy ideas about the fundamental differences between mutual and stock companies. It is likewise improbable that plaintiff Avas not aware of the fact that the insurance company he was purchasing an interest in was not organized as a stock company, but it is not incredible that he
There was no purpose on the part of the buyer or sellers that the company should be looted or that the policy-holders should suffer by the transaction, and there is not a suggestion of any kind in the case that they would suffer. The plaintiff suggested the lowering of the rates then charged and additional hospital facilities for policy-holders. lie also proposed to make a vigorous endeavor to augment the membership which should reduce the expense ratio per policy-holder -of conducting the business. There is no suggestion that the business of the company would suffer by removing the offices ■of the company to Wausau. I should deprecate as quickly as •any one any attempt to exploit a mutual insurance company for the illicit gain of its trustees and officers. I do not think agreements should be avoided as against public policy, however, where theoretical pangs only are alleviated by so doing. Under the great weight of authority the transaction must at least have a tendency to be injurious to the public before the ban of the law operates upon it. 6 Words & Phrases, 5813; 23 Am. & Eng. Ency. of Law (2d ed.) 455, 456, and cases •cited.