Lanz-Owen & Co. v. Garage Equip. Co.

• Decision Date: 08 January 1913
• Citation: 151 Wis. 555,139 N.W. 393
• Court: Wisconsin Supreme Court
• Parties: LANZ-OWEN & CO. v. GARAGE EQUIPMENT CO.

151 Wis. 555

139 N.W. 393

LANZ-OWEN & CO.

v.GARAGE EQUIPMENT CO.

Supreme Court of Wisconsin.

Jan. 7, 1913.

Concurring Opinion, Jan. 8, 1913.

Appeal from Circuit Court, Milwaukee County; W. J. Turner, Judge.

Action by Lanz-Owen & Co. against the Garage Equipment Company. From an order overruling a demurrer to the answer, the plaintiff appeals. Affirmed.

Plaintiff, a foreign corporation, on the 30th day of April, 1910, entered into a written lease with the owner of a building situated in Milwaukee, a part of which was occupied by the defendant, for three years commencing on the 1st day of April, 1910. Plaintiff claims defendant's lease of the premises in question expired May 1, 1910. On said date it notified defendant of its lease and demanded possession of the portion of the premises held by defendant. Possession was refused and withheld from plaintiff from May 1 to July 1, 1910. This action, begun on the 5th day of July, 1911, is brought to recover damages caused by the alleged unlawful detention of the premises by the defendant. As a first defense to the cause of action the defendant alleged upon information and belief that prior to the 25th day of June, 1910, the plaintiff had in no wise complied with any of the provisions of section 1770b, Stats., and acts amendatory thereof, alleging the same in detail, and that by reason of a noncompliance therewith it was not at any time prior to the 25th day of June, 1910, authorized or licensed to lease or hold real estate or to transact business in the state of Wisconsin; that the lease set forth in the complaint, if made at all, was made and delivered to plaintiff within the state of Wisconsin, prior to the 25th day of June, 1910, and before plaintiff had complied with the requirements of section 1770b, Stats., and the acts amendatory thereof; and that the same was null and void and ineffective to give plaintiff any right to the possession of the premises mentioned in the complaint. The first defense also contained allegations to the effect that during the month of November, 1910, plaintiff brought an action against the defendant in the circuit court of Milwaukee county to recover damages for the same wrong complained of by it in the present action; that after a demurrer to the complaint on the ground that it did not state facts sufficient to constitute a cause of action had been overruled, by consent of both parties the action was duly discontinued on the 27th day of March, 1911. Plaintiff demurred to the first defense on the ground that it appeared upon the face thereof that it did not constitute a defense. From an order overruling such demurrer, it appealed.Lines, Spooner, Ellis & Quarles, of Milwaukee, for appellant.

Flanders, Bottum, Fawsett & Bottum and C. E. Monroe, all of Milwaukee, for respondent.

VINJE, J. (after stating the facts as above).

The issue raised by the demurrer calls for the construction of chapter 142, Laws of 1911, as amended by section 12, c. 664, Laws of 1911. The enactment is as follows:

“Section 1. There is added to the statutes a new section to read: Section 1770j. (1) Any corporation organized otherwise than under the laws of this state, having acquired, or attempted to acquire, legal title by deed, or lease to any real property in this state, before complying with the terms of section 1770b of the Statutes, or acts amendatory thereof, and which has thereafter, and before the passage of this act, complied with said section, shall be and is hereby relieved from any disability provided in said statute or prohibition therein contained, so far as said section relates to the acquisition and holding of the property so acquired, or attempted to be acquired. (2) Any person claiming that the legal title of any corporation or of any person claiming by, through or under such corporation, to any real property acquired, or attempted to be acquired, is invalid by reason of the failure of any corporation coming within the terms of subsection 1 of this act, to comply with section 1770b of the statutes, or acts amendatory thereof, shall commence action to recover the property, or to declare the legal title of said corporation void, or interpose a defense on such grounds, within one year from the passage and publication of this section, and in case of failure to do so his right of action or defense based upon the failure to comply with said section by any such corporation shall be deemed to have expired; provided that this section shall not affect any action now pending.

Sec. 2. This act shall take effect and be in force from and after its passage and publication.”

The plaintiff contends that this amendment to section 1770b, Stats., relieves from disability any corporation that, before its passage, complied with section 1770b, and that such removal of disability relates back to the date of the instrument through which legal title was acquired or attempted to be acquired, and validates the instrument from its inception. Hence that plaintiff, having complied with section 1770b on June 25, 1910, had its disability to lease property within this state removed as of the date of its lease, to wit, April 30, 1910, and was therefore entitled to the possession of the premises in question on May 1, 1910, when defendant's lease expired.

[1] The correctness of this contention must be tested by the language and manifest purpose of the amendatory act. Prior to its passage every contract made by or on behalf of any foreign corporation included in section 1770b affecting the personal liability of such corporation or relating to property within this state, before it had complied with said section, was wholly void on its behalf and on behalf of its assigns, but was enforceable against it or them. Reference to the decided cases affected by this section shows that the contract entered into is not absolutely void. Ashland Lumber Co. v. Detroit Salt Co., 114 Wis. 66, 89 N. W. 904;Beaser v. Barber Asphalt Paving Co., 120 Wis. 599, 98 N. W. 525;Allen v. City of Milwaukee, 128 Wis. 678, 106 N. W. 1099, 5 L. R. A. (N. S.) 680, 116 Am. St. Rep. 54, 8 Ann. Cas. 392;Duluth Music Co. v. Clancy, 139 Wis. 189, 120 N. W. 854, 131 Am. St. Rep. 1051;Rib Falls Lumber Co. v. Lesh & Mathews Lumber Co., 144 Wis. 362, 129 N. W. 595;Hanna v. Kelsey Realty Co., 145 Wis. 276, 129 N. W. 1080, 33 L. R. A. (N. S.) 355, 140 Am. St. Rep. 1075. In the first case cited the proper limitation is found on page 78 of 114 Wis., 89 N. W. 904, by declaring it a nullity in so far as it is sought to be enforced on behalf of the foreign corporation by way of counterclaim. In the last case cited, language declaring it void without limitation is used; but the court was dealing with a case in which a foreign corporation sought to assert the validity of its deed, and it was held that plaintiff, though not a party to, but affected by, it, could invoke the aid of the statute. The decision upon this branch went no further. The contract is void only at the election of the party dealing with the corporation. Neither the corporation nor its assigns could enforce it against the other party. But such party may affirm or disaffirm the contract at his election. And as the law stood prior to the amendment of 1911, no period of limitation, within which such right of affirmance or disaffirmance must be exercised, was prescribed. By the first section of the amendment the disability of a foreign corporation...