Waisbren v. Blink

• Decision Date: 05 April 1932
• Citation: 242 N.W. 169,207 Wis. 619
• Parties: WAISBREN v. BLINK.
• Court: Wisconsin Supreme Court

207 Wis. 619

242 N.W. 169

WAISBREN

v.BLINK.

Supreme Court of Wisconsin.

April 5, 1932.

Appeal from a judgment of the Circuit Court for Milwaukee County; John J. Gregory, Circuit Judge.

Action by B. Waisbren against Sam Blink. From a judgment in favor of plaintiff, defendant appeals.--[By Editorial Staff.]

Reversed with directions.

Action commenced September 16, 1929. Judgment for plaintiff entered July 7, 1931, and defendant appealed.Corrigan & Backus and Ruppa & Bortin, all of Milwaukee, for appellant.

Julius O. Roehl, of Milwaukee, for respondent.

FRITZ, J.

In this action for money had and received, plaintiff seeks to recover the purchase price which he paid for shares of stock of an Illinois corporation, which was not licensed to engage in business in Wisconsin. No permits had been obtained, authorizing the sale of that stock, or authorizing defendant to sell stock in Wisconsin, as was required by section 183.27, Stats. 1923 (sec. 189.07, Stats. 1925 et seq.), and section 183.29, Stats. 1923 (sections 189.12, 189.13, Stats. 1925 et seq.), of the so-called Blue Sky Law. Upon the trial, the learned circuit judge, after finding the essential facts as to plaintiff's purchase and payment for the stock in January, 1924, further found that no notice had been given of an election by plaintiff to void the sale within thirty days after he had notice that the stock had been sold without first obtaining a permit; and that this action was not commenced within three years after such sale. The court concluded that the provision in section 189.22 (4), Stats. 1925 et seq. (sec. 183.34, Stats. 1923), that “no action shall be brought for relief under this section after three years from the date of such sale or contract for sale,” did not affect plaintiff's right to recover in assumpsit for money had and received because, as the transaction was in violation of sections 183.27 and 183.29, Stats. 1923, it constituted a criminal offense, under section 183.35, Stats. 1923 (section 189.23, Stats. 1925 et seq.), and was therefore void; and that, as the transaction was void, plaintiff had a common-law right to recover, which would become barred only upon the expiration of the six-year period of limitations prescribed by section 330.19, Stats. Judgment was ordered accordingly.

[1][2] Plaintiff's claim for the recovery of the purchase money is not based upon any such ground as fraud, mistake, failure of consideration, or incapacity to contract, etc., by reason of which a purchaser would be entitled to rescind and recover at common law in an action for money had and received. His only right to recover his purchase money under the facts of this case would exist solely by reason of sections 183.07 and 183.29, Stats. 1923, which prohibited the sale of such securities without the permit, and by an unauthorized broker. No such right to avoid his purchase on any such ground existed at common law. Those sections of the statutes were in 1923, and still are, in pari materia with section 183.34, Stats. 1923 (section 189.22, Stats. 1925 et seq.), prescribing the civil remedy for violations by such unauthorized sales, and also with section 183.35, Stats. 1923 (section 189.23, Stats. 1925 et seq.), which provides that such selling is a criminal offense. Being in pari materia, all of those statutory provisions must be construed with reference to each other. Bacon Abr. Statute (I 3), 36 Cyc. 1147.

[3][4][5][6] So construed the validity or invalidity, and the civil consequences of such unauthorized transactions, are as provided in section 183.34, Stats. 1923 (section 189.22(1), Stats. 1925 et seq.). That section provides that every such sale of a security “shall be voidable at the election of the purchaser.” It does not provide that such sale shall be void absolutely. The express provision that the sale is voidable excludes the conclusion that it is absolutely void. That result is not to follow excepting at the election of the purchaser. To exercise and perfect such election, and thereby avoid his voidable purchase, the purchaser was required by section 183.34, Stats. 1923, to give notice of election to the party from whom recovery is sought, within thirty days (section 189.22(3), Stats. 1927 et seq. allows three months) after the purchaser had notice that the sale was without a permit. Even then, as to sales which have become void by the purchaser's exercise of his right of election, and his giving due notice to that effect, section 183.34, Stats. 1923, provided (so far as here material) that “no action shall be brought for the recovery of the purchase price or the cancellation of such contract after three years from the date of such sale. * * *” In 1925 section 183.34, Stats. 1923, was renumbered as section 189.22, and in subdivision (4) thereof that provision was amended to read: “No action shall be brought for relief under this section after three years from the date of such sale or contract for sale. * * *” That three-year limitation in those provisions applies to every action brought for the recovery of the purchase price, when the underlying ground for the purchaser's recovery is the want or absence, in the first instance, of the permit or authority to sell the security. However, as stated above, such want of permit or authority to sell does not ipso facto render the sale absolutely void, even though such a sale was prohibited and was punishable as a...