Bus. Brokers Ass'n, Inc. v. McCauley

• Decision Date: 07 June 1949
• Citation: Bus. Brokers Ass'n, Inc. v. McCauley, 255 Wis. 5, 38 N.W.2d 8 (Wis. 1949)
• Parties: BUSINESS BROKERS ASS'N, Inc., et al. v. McCAULEY et al.
• Court: Wisconsin Supreme Court

255 Wis. 5

38 N.W.2d 8

BUSINESS BROKERS ASS'N, Inc., et al.

v.McCAULEY et al.

Supreme Court of Wisconsin.

June 7, 1949.

Appeal from a judgment of the Circuit Court for Milwaukee County; Daniel W. Sullivan, Judge.

Affirmed.

Proceedings begun October 1, 1947, by Business Brokers Association, Inc., a Wisconsin corporation, Henry Zastrow, doing business as Lincoln Appraisal Co., Harvey R. Bitter, doing business as American Business Co., Stewart H. Ingram, doing business as United Appraisal Co., and Edward J. Winslow, doing business as The Winslow Co., to restrain William J. McCauley, district attorney for Milwaukee county, Harvey L. Neelen, Judge of the district court of Milwaukee county, August C. Schmidt, clerk of the district court of Milwaukee county, and F. E. Altendorf, Oscar A. Swenby, J. S. Miller, and Elliott N. Walstead, members of the Wisconsin Real Estate Brokers' Board, from enforcing the provisions of secs. 136.19 to 136.36, Stats., inclusive, which regulate ‘business opportunity brokers' on the ground that the statutes are in violation of the ‘equal protectionof the law’ and ‘due process of law’ provisions of the state and federal constitutions.

Plaintiffs are business opportunity brokers in the city of Milwaukee and they brought this action to enjoin the enforcement officers from carrying out the provisions of secs. 136.19 to 136.36, Stats., inclusive, requiring business opportunity brokers to be licensed.

The pertinent provisions are as follows:

‘136.19 * * * Definitions. * * *

‘(2) ‘Business opportunity broker’ means any person, firm or corporation, not excluded by subsection (3):

‘(a) Who for another, and for commission, money or other thing of value, sells exchanges, buys or rents, or offers or attempts to negotiate a sale, exchange, purchase or rental of any business, its good will, inventory, fixtures or an interest therein; or

‘(b) Who is engaged wholly or in part in the business of selling business opportunities or good will of an existing business or who is engaged wholly or in part in the business of buying and selling, exchanging or renting of any business, its good will, inventory, fixtures or an interest therein.

‘(3) The term ‘business opportunity broker’ does not include:

‘(a) Receivers, trustees, administrators, executors, guardians or other persons, appointed by or acting under the judgment or order of any court; or

‘(b) Public officers while performing their official duties; or

‘(c) Any bank, trust company, savings and loan association, or any land mortgage or farm loan association organized under the laws of this state or of the United States, when engaged in the transaction of business within the scope of its corporate powers as provided by law; or real estate brokers holding a license issued by the Wisconsin real estate brokers' board; or

‘(d) Employes of persons, companies or associations enumerated in paragraphs (a), (b) and (c) when engaged in the specific performance of their duties as such employes.

‘(4) ‘Business opportunity salesman’ means anyone who is employed by a business opportunity broker to perform any act authorized by sections 136.19 to 136.36 to be performed by a business opportunity broker.

‘136.20 Brokers licensed. No person, firm or corporation shall engage in or follow the business or occupation of, or advertise or hold himself or itself out as or shall act temporarily or otherwise as a business opportunity broker or business opportunity salesman in this state, without first procuring a license therefor as provided in sections 136.19 to 136.36. Licenses shall be granted only to persons who are trustworthy and competent to transact the business of a business opportunity broker or business opportunity salesman in such a manner as to safeguard the interests of the public, and only after satisfactory proof thereof has been presented to the board.’

‘136.22 * * * (2) In determining competency, the board shall require proof that the applicant for a business opportunity broker's license or a business opportunity salesman's license has a fair knowledge of the English language, a fair understanding of the general purposes and general legal effects of bills of sale, chattel mortgages, conditional sales contracts, the provisions of the bulk sales law, leases, and a general and fair understanding of the obligations between principal and agent as well as of the provisions of sections 136.19 to 136.36.’

Plaintiffs contend that these provisions are unconstitutional because they do not give plaintiffs the equal protection of the laws and deprive them of their property without due process of law. This claim is based on the contention that in exempting the persons and corporations in sec. 136.19(3)(a) through (c) the legislature has made an unconstitutional classification.

On October 1, 1947, the trial court issued an order to the defendants to show cause why they should not be enjoined from enforcing these provisions and issuing a temporary injunction.

The defendants filed a general demurrer to the complaint. The Attorney General representing the Wisconsin Real Estate Brokers' Board moved that the action be dismissed as to Business Brokers Association, Inc., because it appeared on the face of the complaint that it was not a real party in interest and for change of venue to Dane County pursuant to sec. 261.01(9), Stats., because the action was in fact against the Wisconsin Real Estate Brokers' Board.

The trial court granted the motion to dismiss as to Business Brokers Association, Inc., because it was not a real party in interest but denied the motion for change of venue. It ruled that the classification in the statute was a valid one and sustained the demurrer with leave to plaintiffs to amend their complaint within twenty days or the court would dismiss it with costs. On April 23, 1948, judgment dismissing plaintiffs' complaint was entered. Plaintiffs appeal.

George A. Burns, Milwaukee, for appellants.

Thomas E. Fairchild, Attorney General, Stewart G. Honeck, Deputy Atty. Gen., Henry Wozniak, Asst. Dist. Atty., Milwaukee, for respondents.

FAIRCHILD, Justice.

If the statute in question is unconstitutional, the plaintiffs are entitled to the relief they seek. In Olson v. State Conservation Commission, 235 Wis. 473, 478, 293 N.W. 262, 264, this court said: ‘Courts unquestionably have the power to enjoin state officials from enforcing statutes which contravene the constitution. John F. Jelke Co. v. Beck, 208 Wis. 650, 661, 242 N.W. 576.’ See also Williams v. Hudson, 219 Wis. 119, 262 N.W. 607 (city officials enjoined from enforcing an unconstitutional city ordinance); Bonnett v. Vallier, 136 Wis. 193, 116 N.W. 885, 17 L.R.A.,N.S., 486, 128 Am.St.Rep. 1061 (injunction against enforcement by state officials of building statute or ground that the statute was unconstitutional).

It is conceded that a ‘business opportunity broker’ is a proper subject for regulation under the police power. Plaintiffs object to the classification because certain persons and corporations are exempt from the provisions of the statute. On this appeal they confine their attack to the exemption of real estate brokers.

The rule is that ‘ * * * in the exercise of its police power to require licenses, a state may make any reasonable classification which it deems necessary to the police purpose intended to be attained by the legislation.’ 33 Am.Jur. 353. ‘* * * the legislature may, without denial of equal protection of the laws, classity businesses and occupations for purposes of regulation, provide different rules for different classes, limit a regulation to particular kind of business, extend to some persons privileges denied to others, or impose restrictions on some but not on others, where the classification or discrimination is based on real differences in the subject matter and is reasonable, and the legislation affects alike all persons pursuing the same business under the same conditions.’ 16 C.J.S., Constitutional Law, § 510, page 1013.

Furthermore the discretion of the legislature in making these classifications is great. As was said in State v. Neveau, 237 Wis. 85, 99, 294 N.W. 796, 803,296 N.W. 622: ‘* * * We are not required under the law to find a proper basis of classification, but the classification made by the legislature is presumed to be valid unless the court can say that no state of facts can reasonably be conceived that would sustain it. All reasonable doubts must be resolved in favor of the legislative classification. * * *’ See also Servonitz v. State, 133 Wis. 231, 113 N.W. 277,126 Am.St.Rep. 955;State v. Wetzel, 208 Wis. 603, 243 N.W. 768, 86 A.L.R. 274.

In State ex rel. Ford Hopkins Co....