Hamley v. Till

• Decision Date: 14 March 1916
• Citation: 156 N.W. 968,162 Wis. 533
• Parties: HAMLEY v. TILL.
• Court: Wisconsin Supreme Court

162 Wis. 533

156 N.W. 968

HAMLEY

v.TILL.

Supreme Court of Wisconsin.

March 14, 1916.

Appeal from Circuit Court, St. Croix County; James O'Neil, Judge.

Action by F. J. Hamley against John Till. From a judgment for defendant, plaintiff appeals. Affirmed.McNally & Doar, of New Richmond, for appellant.

James R. Hickey, of St. Paul, Minn. (Spencer Haven, of Hudson, of counsel), for respondent.

TIMLIN, J.

The action is by the indorsee of four promissory notes executed by respondent to the Honduras Development Company for $200 each, two of them bearing date October 14, 1911, and two December 27, 1911. Briefly the defenses are that the payee was an unlicensed foreign corporation doing business in this state, and also that it procured the notes by fraudulent representation of one Phillips, and the plaintiff was not a holder in good faith or in due course. The case was tried before the court and jury, and the latter found by special verdict that the plaintiff did not acquire said notes in the usual course of business or for value or in good faith, because, although fraud by the Honduras Development Company was averred, and that averment supported by some evidence, there was no question concerning this fraud submitted to the jury. The court did decide that the evidence showed there was no consideration for the two notes given for preferred stock which the Honduras Company had no authority to issue, and that the other two notes were taken in Wisconsin by an unlicensed foreign corporation contrary to the provisions of section 1770b, Stats., and were void. The jury then found the plaintiff not a purchaser in due course or in good faith. A description of this corporation and its operations and the documents it was engaged in selling to the public would, upon the uncontradicted evidence, warrant the court below in going much farther than he did in passing upon this phase of the case. The Honduras Development Company, ostensibly a corporation organized under the laws of Arizona with a common capital stock of $100,000 divided into 100 shares of $100 each, had an office in St. Paul, Minn., where it was engaged in selling to the public through the agency of its general manager, one Phillips, preferred stock, of which it had none, and so-called certificate contracts which conveyed no rights enforceable at law or in equity and were merely illusory and fraudulent. It does not appear that it had any other business. Its articles of incorporation included almost every known form of human activity from constructing and operating railroads and carrying on banking to trading in real estate and personal property. These articles were executed and acknowledged in St. Paul, Minn., on August 21, 1911, and five days later filed in the office of the county recorder of Maricopa county, in the territory of Arizona, and in the office of the territorial auditor of that territory. It does not appear that any of the incorporators resided within, or indeed was ever within, the territory of Arizona.

[1] We cannot judicially notice the laws of Arizona, but must presume they are like ours. These laws must possess great potency and long range if they can confer corporate status on nonresidents of Arizona. Creation of a corporation is a legislative act, and state statutes have no extraterritorial operation. The Honduras Company had a branch office at St. Paul, Minn., but was not licensed to carry on business in that state or in the state of Wisconsin. Its sale of preferred stock need not be further described than by saying it had no preferred stock. It issued for $150, payable in installments and forfeitable for failure to pay, what it called a certificate contract, purporting on its face to entitle the purchaser to “an undivided one acre interest in and to a two thousand acre tract of land lying and being in the department of Atlantida, in the republic of Honduras, one of the Central American States, a more particular and accurate description of which said two thousand acre tract of land will be contained in the plantation certificate furnished this contract owner when said contract shall have been performed by paying the purchase price designated in the application for said contract.” The Honduras Company agreed to plant and care for the land for a period of...