Thronson v. Universal Manufacturing Co.

Maeshall, J. It is considered that appellant was properly denied relief, irrespective of whether the trial court reached the right conclusion in respect to whether he was induced to purchase the stock by false representations of material facts. It is undisputed that appellant purchased original stock from the corporation and the certificate therefor was issued to him for less than par value. Sec. 1153, Stats., provides as follows: “No corporation shall issue any stock or certificate of stock except in consideration of money or of labor or property estimated at its true money value, actually received by it, equal to the par value thereof, . . . and all stocks . . . issued contrary to the provisions of law . . . shall be void.” Under such statute this court held in Clarke v. Lincoln L. Co. 59 Wis. 655, 18 N. W. 492, that a sale by a corporation of its corporate stock, as in this case, for less than par value, [49] being prohibited by law and in violation of the public policy of the state, is void and that the purchaser and seller are participants in an illegal transaction and, so, notwithstanding the illegality, judicial remedies axe not available to the former to recover back the consideration paid. By the same reasoning with which that conclusion was reached, such a purchaser of stock is not entitled, under any circumstances, to judicial aid to secure a rescission of the transaction and restoration of the consideration he parted with. The courts will leave both parties where they have placed themselves. True, the cited case dealt with a domestic corporation, but since language wras used, referring to corporations in general, it does not seem that the decision can be restricted to domestic corporations in view of sub. 10, sec. 1110b, which is as follows : “All foreign corporations and the officers and agents thereof doing business in this state, shall be subjected to all the liabilities and restrictions that are, or may be imposed upon corporations of like character, organized under the laws of this state, and shall have no other or greater powers.” That was adopted from the state of Illinois. The purpose of it was “to produce uniformity in the powers, liabilities, duties and restrictions of foreign and domestic corporations of like character and bring them all under the influence of the same law.” Stevens v. Pratt, 101 Ill. 206; Floyd v. Nat. L. & I. Co. 49 W. Va. 321, 38 S. E. 653; Farmers’ L. & T. Co. v. Lake St. E. R. Co. 173 Ill. 432, 51 N. E. 55; Connolly v. Union S. P. Co. 184 U. S. 540, 22 Sup. Ct. 421. So we are unable to see why Clarke v. Lincoln L. Co. 59 Wis. 655, 18 N. W. 492, does not apply here. It clearly does by the reasoning of the Illinois court which must be presumed to have been adopted by the legislature in adopting the statute of that state. No more need be said in this ease. If it was open for a decision on the merits, aside from the statutory condemnation, a different result might he reached; but we seem to be [50] precluded by tbe settled law from efficiently going into that subject. We do not overlook tbe point made by appellant that respondents cannot properly have tbe benefit of tbe statutory prohibition because of noncompliance by tbe corporation with tbe law as regards becoming licensed to do business here. That might be true if tbe situation were not one where tbe public policy of tbe state is involved. In such a situation, it is tbe duty of tbe court to enforce such policy, irrespective of whether it is invoked by a litigant or not. Pearson v. Kelly, 122 Wis. 660, 100 N. W. 1064. By Hie Court. — Tbe judgment is affirmed.