#### Johnson, Respondent, vs. Huber, Appellant.

*February 6*

February *24, 1903.*

*Penalties: Refusal to discharge judgment: Good faith.*

The penalty denounced in sec. 2915, Stats. 1898, for refusal to satisfy a judgment after full payment thereof is not recoverable where there' was no intentional wrong in the refusal, but rather a reliance, in good faith, upon some supposed legal right. *Schumacher v. Falter,*113 Wis. 563, followed; *Shields v. Klopf,*70 Wis. 69, overruled.

Appeal from a judgment of tbe circuit court for Pierce county: James O’Neill, Judge.

*Reversed.*

Tbe defendant, on December 23, 1897, recovered judgment against tbe plaintiff for $595.81, which judgment became paid by an accord and satisfaction about November 7, 1898, under an agreement to receive $300 and a release of tbe judgment plaintiff from certain claims of tbe judgment defendant. Tbe validity of that accord and satisfaction was denied by tbe present defendant, and a suit in equity to declare its validity and tbe satisfaction of tbe judgment was commenced January 9, 1899, which, after an appeal to this court, decided March 20, 1900 (106 Wis. 282, 82 N. W. *59137), resulted in a judgment as prayed. A few days before commencing tbat suit, namely> December 21, 1898, plaintiff served upon defendant a written demand tbat be satisfy of record sucb paid judgment, wbicb was repeated more formally on August 2, 1899, but defendant did not satisfy tbe judgment. Tbe present action, commenced October 9, 1900, was to recover tbe statutory penalty of $50, and actual damages resulting from defendant’s refusal to satisfy sucb paid judgment. After trial, disclosing substantially the foregoing facts, tbe court directed a verdict in favor of tbe plaintiff for tbe statutory $50 penalty and $260.49 as damages, composed mainly of tbe plaintiff’s expenses in prosecuting tbe suit in equity to obtain cancellation. Erom judgment upon said verdict tbe defendant appeals.

For tbe appellant there was a brief by *A. OombacJeer*and *J. W.*Hancock, and oral argument by *Mr. Combacker.*

*Walter G. Owen,*for tbe respondent.

Dodge, J.

In this case we think it entirely apparent tbat at tbe time respondent demanded of appellant tbat be cancel tbe judgment in question tbe latter contended in good faith tbat tbe same bad not been paid. Tbat question was litigated in tbe suit in equity mentioned in tbe statement of facts, was decided in appellant’s favor by tbe trial court, and not until it reached this court on appeal was it established tbat tbe judgment bad been satisfied by tbe settlement made. It was, therefore, not a case of contumacious and wilful refusal to cancel of record a judgment wbicb tbe creditor knew bad been paid. In tbe recent case of *Schumacher v. Falter,*113 Wis. 563, 89 N. W. 485, we held tbat tbe penalty denounced by sec. 2256, Stats. 1898, for failure, on demand, to discharge a paid mortgage, was not recoverable under sucb circumstances; where there is no intentional wrong in tbe refusal to discharge, but rather a reliance, in good faith, upon *60some supposed legal right. The court quoted with approval the language of Cooley, J., in *Burrows v. Bangs,*34 Mich. 304:

> “But as there has been an honest difference between these parties regarding their rights, we do not think the defendant is subject to the statutory penalty for not discharging the mortgage.”

Sec. 2915, Stats. 1898, upon which the present action is based, is in this respect the entire equivalent of sec. 2256; applicable, however, to judgments.1 The same reasoning that would control in the construction of one, must as to the other; and the case of *Schumacher v. Falter*is therefore direct authority against the recovery of the judgment now appealed from.

Our attention is, however, now called to the case of *Shields v. Klopf,*70 Wis. 69, 35 N. W. 284, where an entirely contrary conclusion was reached as to the construction of sec. 2256. That case was not mentioned, nor was it considered, in deciding *Schumacher v. Falter,*and the two are undoubtedly in conflict. One or the other must be overruled. After deliberation, the examination of the authorities tending to sustain the conflicting views of these two cases and of the reasons governing the situation, we are persuaded that the latter case declares the true construction of the statute. Penalties are not to be favored, and penal statutes are to be strictly construed. Ordinarily, it is to be presumed that penalties are denounced against wilful misconduct, and not against efforts made sincerely and in good faith to vindicate what one be*61lieves to be bis legal rights. It is tbe policy of the law that parties shall have full and.free opportunity to submit their controversies to courts, and to receive their judgments thereon. Indeed, such right is, in general terms, guarantied by sec. 9, art. I, of our constitution, and while we need not, and of course do not, decide that secs. 2915 and 2256, if construed as they were in *Shields v.*Klopf, would be so in derogation of this constitutional provision as to be invalid, yet the spirit of that constitutional provision is so averse to the imposition of penalties upon the good-faith effort to vindicate one’s rights that we may well hesitate in believing the legislature so intended. We adhere to the conclusion reached in *Schumacher v.*Falter, which is equally applicable to sec. 2915, Stats. 1898, and constrains us to the holding that the court erred in directing a verdict in favor of the plaintiff and in refusing to direct one in favor of the defendant.

*By the Court.*— Judgment reversed, and cause remanded for new trial.