Opinion ID: 1923134
Heading Depth: 1
Heading Rank: 2

Heading: Does sec. 180.847, Stats., preclude an answer and defense by defendant?

Text: While not decisive of any issue before us which requires a decision in the present posture of this case, we would observe that it has been held that the term doing business is not synonymous with transacting business, the criterion under sec. 180.847(1), Stats. [4] In the recent case of Nagle Motors v. Volkswagen North Central Distributor (1971), 51 Wis. 2d 413, 420, 187 N. W. 2d 374, this court stated: We therefore cannot assume, even though we had no other clarifying guidelines, that the terms, `transacting business' and `doing business,' are to be read interchangeably in these differing contexts. Moreover, the two statutes have entirely different purposes. The annotations to sec. 180.847(1), Stats., 22 Wis. Stats. Annot. 298, make it clear that the purpose of that statute was to facilitate the collection of a registration fee. It is apparent that this portion of sec. 180.847 no longer has any function in respect to the acquisition of jurisdiction over a foreign corporation, since the jurisdictional aspects are treated in secs. 180.847(4) and 262.06(5). In urging that sec. 180.847(1), Stats., precludes a defense by a noncomplying foreign corporation, the plaintiff directs our attention to the unquestioned longevity of sec. 1770(b) (Rev. Stats. of 1898), the predecessor to sec. 180.847, to support the proposition that denying a noncomplying corporation the right to defend is a valid constitutional exercise of legislative authority. Under that section, a contract was wholly void as to a defendant foreign corporation if it failed to file a copy of its charter or articles of incorporation with the secretary of state. In Rib Falls Lumber Co. v. Lesh & Mathews Lumber Co. (1911), 144 Wis. 362, 366, 367, 129 N. W. 595, the court construed this statute so as not to disallow a defense, but only to bar a counterclaim: . . . If the answer alleges such a defense [which, if established would in whole or in part defeat plaintiff's right to recover upon the cause of action alleged in the complaint] .., then the defendant is entitled to be heard in the case to protect itself against any demand of the plaintiff not warranted by law. The right to defend when sued is well established and recognized. As stated in Windsor v. McVeigh, 93 U. S. 274, 277: `Wherever one is assailed in his person or his property, there he may defend, for the liability and the right are inseparable. This is a principle of natural justice, recognized as such by the common intelligence and conscience of all nations.' The principle is so well recognized that citation of authority is unnecessary. A denial of the right to defend a judicial proceeding raises obvious constitutional objections. 17 Fletcher, Cyc. Corp. (perm. ed.), p. 787, sec. 8535; Windsor v. McVeigh (1876), 93 U. S. 274, 23 L. Ed. 914; Hovey v. Elliott (1897), 167 U. S. 409, 17 Sup. Ct. 841, 42 L. Ed. 215. This court has frequently expressed its reluctance to declare a legislative enactment unconstitutional. Every effort will be made to reasonably construe a statute so as to save its constitutionality. We consider sec. 180.847, Stats., should be considered in its entirety. Sec. 180.847(4) provides a means whereby a defendant may answer or demur to a process served upon it. Appellant would have us so construe these statutes so that a nonresident-defendant corporation could raise only certain limited issues by answer or demur. We do not believe this to be a reasonable interpretation of the legislative intent. The legislative authorization to answer carries with it a comparable right to defend. We, therefore, hold that the provisions of sec. 180.847 constitute a bar to a noncomplying foreign corporation from seeking any affirmative relief. The order overruling plaintiff's demurrer to the amended answer is affirmed. The other orders of the trial court from which appeal and cross-appeal are taken are reversed. The cause is remanded for a jurisdictional trial of the issue of whether Kux Machine Company, Inc., was dissolved both in law and in fact under the laws of Illinois. The order of the trial court permitting plaintiff to amend the complaint to include Wickes Corporation subsequent to this appeal is not at issue. By the Court. Orders affirmed in part, and reversed in part, and cause remanded for further proceedings. No costs allowed to either party.