Netherton v. Frank Holton & Co.

. The following opinion was filed October 12, 1926: Eschweiler, J. In the trial below it was frankly conceded in open court by counsel for both parties, appellant [488] being then represented by other counsel than those on this appeal, that the contract of March 1, 1921, set forth above, was void as against public policy. Such concession was advisedly made under repeated decisions of our own court, to say nothing of authorities elsewhere. Sauerhering v. Rueping, 137 Wis. 407, 413, 119 N. W. 184; Timme v. Kopmeier, 162 Wis. 571, 576, 156 N. W. 961; W. C. Zachow Co. v. Grignon, 172 Wis. 449, 455, 179 N. W. 593. It is contended by plaintiff, appellant here, that such contract of March 1, 1921, may be, in effect, disregarded and his claim asserted and upheld solely upon the alleged facts that the shares of corporate stock here involved were issued to him on the books of the company, certificates made out in his name, indorsed by him, and then pledged as fcollateral security for the payment of the several notes, and pursuant to the terms embodied in such notes, and that being by such writings clothed with the legal title to such shares, his rights as pledgor were violated by the alleged unlawful cancellation of such certificates and the issuance of new stock in lieu thereof to the defendant Frank Holton. We cannot, however, recognize any such proposition as controlling in this case where plaintiff now comes into a court of equity asking for relief. Two fundamental propositions in the law concerning the granting or withholding of equitable relief, too well and long established to now need the citation of authorities, boldly and baldly confront us at the very threshold of consideration of this appeal and plainly require an affirmance. Equity looks at the substance rather than the mere name of things, and he who comes into equity must come with clean hands. The issuance to and pledging by plaintiff with defendant of the certificates of stock in question here, though evidenced by separate writings, are nevertheless but parts of [489] an entire contract embodied in the broader, and including the writing of March 1st above recited. In such a situation a court of equity should not, and the trial court very properly did not, close its eyes- to all but a part of the real transaction between the parties and dispose of claims upon a partial disclosure of- or examination into the entire transaction. In the face of the contract of March 1st it is idle to say that the issuance of the certificates, the pledging to and the placing them in the hands of defendant, was solely, under the terms and conditions expressed in such promissory notes. The slightest scrutiny of this contract, of the legal effect of which plaintiff, a practicing attorney, can illy afford in a court of equity to deny knowledge, demonstrates beyond the need of further recital that the plaintiff’s title, if any, to the certificates of stock attached' by him to the promissory notes was obtained only through, by, and because of the terms and conditions of the original and all-comprehending written contract. He demanded that the court protect him in his title to this stock. His title, therefore, became a legitimate and proper subject of inquiry. He has no option of ■ limiting such inquiry to the features alone which he prefers. With the respective shares of blame, the respective merits or demerits of the parties to such contract, we aré in no wise concerned, and need therefore indulge in no discussion of the various assignments of error presented by appellant here upon certain of the findings of fact. A court of equity leaves the parties to such a situation just where they placed themselves and as the court finds them.; its doors are closed to any applicant for relief from or under such a contract. If authorities were at this day needed to be cited on so plain a proposition, an abundant measure could be furnished. As a perhaps needless addition, however, we cite the following: Twentieth Century Co. v. Quilling, [490] 130 Wis. 318, 325, 110 N. W. 174; Continental W. P. Co. v. Louis Voight & Sons Co. 212 U. S. 227, 262, 29 Sup. Ct. 280; Howe v. Chmielinski, 237 Mass. 532, 536, 130 N. E. 56; Church v. Brown, 247 Mass. 282, 287, 142 N. E. 91. By the Court. — Judgment affirmed. A motion for a rehearing was denied, with $25 costs, on January 11, 1927.