Holyoke v. Millmann

Barnes, J. The secretary of a corporation performs a ministerial duty in transferring stock by virtue of the provisions of sec. 1752, Stats. (1898). In re Klaus, 67 Wis. 401, 29 N. W. 582. He is not a trier of controversies that should be settled in the courts. He is required by the statute to make a transfer only when “it is his duty” to do so. It is not his duty to make the transfer when there is a tona fide claim on the part of the corporation that the person seeking to have the transfer made is not and never was a stockholder. Much less is it his duty to make the transfer when it seems reasonably certain that the corporation is correct in its contention. It was not the purpose of the legislature in enacting sec. 1752 to permit the secretary of a corporation to disturb the status quo while a contest was pending or was being carried on by rival claimants for stock. The courts were left free to deal with the subject of the controversy pendente lite„ as well as to make final disposition of it. It is hardly necessary to cite authorities to show that the courts are the proper tribunals in which to settle questions of title to corporate stocks. To say that the corporation had substantial grounds for insisting that the petitioner was not one of its stockholders is putting it mildly. The question whether the contract to purchase the stock was void under the statute of frauds was involved. If it was found that the contract was void, the question whether there had been sufficient part performance to avoid the statute became material. Primarily a corporation, when it offers its stock for sale, has the right to select the 554 purchasers. It may sell to one man and refuse to sell to am other. Generally it desires to interest men of means and of good reputation and shuns crooks and cranks. Certain stockholders may be a decided advantage in a business way while others may not be. Undesirable stockholders may be and frequently are as troublesome as undesirable partners, and harder to get rid of Katz v. De Wolf, ante, p. 337, 138 N. W. 1013. Mapel, at best, had but an executory contract for the purchase of stock to the amount of $4,000. As a matter of fact he never purchased that amount. What he attempted to do in reality was to assign to the petitioner his right to purchase $1,500 of the stock covered by the alleged agreement. It is true that in form he attempted to assign the stock itself, but he never owned it. The minds of the parties never met on accepting Holyoke as a stockholder and he never was accepted. Unless Mapel had a right to foist an apparently obnoxious stockholder on the corporation by transferring an interest in his executory agreement to buy stock, no rights were acquired by Holyoke. On this point attention is called to Johnson v. Vickers, 139 Wis. 145, 120 N. W. 837; 3 Page, Contracts, sec. 1262; and 4 Cyc. 22. Enough has been said to show that the case was one where the secretary very properly refused to make a transfer of the stock. The corporation was entitled to its day in court to show if it could that it was within its rights when it refused to accept petitioner as a stockholder. By the Court. — Order affirmed.