Opinion ID: 1838702
Heading Depth: 1
Heading Rank: 5

Heading: Should an injunction issue against respondent?

Text: The state contends: It is well settled that an open, continuous and intentional violation of a public statute constitutes an enjoinable public nuisance under sec. 280.02, Stats. The respondent states: If, in the opinion of this court, respondent is violating a Wisconsin statute by its plan, it obviously would desist whether or not an injunction issues. Because the court may be interested in respondent's view as to the merits of the appellant's position on the injunction point, we state that it concurs in the appellant's interpretation of the cases cited by it in the first paragraph on page 37 of its brief. Hence there is no dispute between the parties on this issue. The trial court stated, however, in its conclusions of law: 2. That the right to assert the violation of section 138.05 (1) (a) is a right personal to the persons who contract with defendant under said plan and is not a matter in which the state of Wisconsin has any right or interest nor does it create any common or public nuisance requiring defendant to be enjoined at the instance of the state. The United States Supreme Court, in In re Debs, [47] in discussing the right of the federal government to bring suit to enforce an injunction, stated: ... Every government, entrusted, by the very terms of its being, with powers and duties to be exercised and discharged for the general welfare, has a right to apply to its own courts for any proper assistance in the exercise of the one and the discharge of the other, and it is no sufficient answer to its appeal to one of those courts that it has no pecuniary interest in the matter. Further, many states have held that an injunction is proper in cases involving usury. While many have emphasized the presence of oppressive tactics on necessitous borrowers, only one case requires such factors. [48] Other cases have emphasized the presence of these factors and more as makeweights than as necessary requirements. In State, ex rel., v. Basham , [49] the Kansas Supreme Court enjoined a usurious operation in which there was little more than veiled threats of pressure tactics to collect, and no criminal penalty available to the state. In addition, most of the borrowers knew they were paying illegal interest. The court noted: It is fundamental that courts are open to the state for an action either in its sovereign capacity or as a corporate entity.... The sovereignty of a state embraces the power to execute its law. [50] While it is true that usury laws provide specific remedies for the borrower, it seems beyond question that they are enacted for the benefit of the public generally. If so, the state certainly has an interest in seeing that the law is not continually violated. The trial court placed great stress on the fact that in all the cases in which an injunction was granted by a Wisconsin trial court and approved by this court for the continued violation of a statute, the statute violated carried a criminal penalty. However, this distinction is unwarranted. In State ex rel. Cowie v. La Crosse Theaters Co., [51] which did involve a criminal statute prohibiting lotteries, it was contended that although violations of criminal statutes might be enjoined by the courts, these violations could not be enjoined as nuisances unless specifically declared to be nuisances by statute. The court, in rejecting this argument, stated: ... The proposition as to the power of equity to abate public nuisances is stated in 5 Pomeroy, Eq. Jur. (2d ed.) sec. 1893, where it is said: `Wherever a public nuisance is shown, equity must enjoin it at the suit of the government. Every place where a public statute is openly, publicly, repeatedly, continuously, persistently, and intentionally violated, is a public nuisance.' This definition is taken from State ex rel. Vance v. Crawford, 28 Kan. 726, where there is coupled with the language above quoted after the word `violated,' `in defiance of the constitution and laws of the state.'... [52] A more reasonable view of the availability of injunctive relief than that of the trial court was expressed by the Kansas Supreme Court in State, ex rel., v. Basham . [53] There the defendant, in effect, conceded he was charging interest in excess of the amount allowed by the usury statute, but argued the court could not enjoin his activities (1) because there were no criminal penalties provided; and (2) because his tactics were not sufficiently oppressive to constitute a public nuisance. In answer to the second, the court pointed out that there could be no valid distinction made between violators of the statute on the basis of their collection methods. In answer to the objection that since there were no criminal penalties provided, an injunction should not issue, the court observed: ... This point was considered in State, ex rel., v. McMahon ... and held not to be a bar to an action for injunction by the state. Indeed, the fact a criminal action cannot be maintained makes injunction all the more appropriate, since the state does not have that remedy for the enforcement of the statute. [54] Also, the Minnesota Supreme Court, in State ex rel. Goff v. O'Neil, [55] in enjoining alleged usurious loans to rather necessitous wage earners, noted that, in its view, where no adequate remedy existed at law, equity would relieve by injunction. In noting the necessity for equitable action in that case, the court stated that both the necessitous condition of the borrowers and the small amounts in controversy were factors: ... It appears ... that the remedy available to defendant's victims is ineffective to stop the practice. They have not the means to employ a lawyer. The amounts involved are so small that to seek to recover what has been illegally extorted or defend against the obligation given for the loan would cost more than the amounts involved, besides the loss of time and the annoyance of litigation. [56] In Bartell Broadcasters v. Milwaukee Broadcasting Co., [57] this court stated: ... However, injunctions are not to be issued lightly but only to restrain an act that is clearly contrary to equity and good conscience. Whether or not an injunction should be granted depends upon the facts and circumstances in each case. [58] We take judicial notice of the widespread use of the revolving charge account and of the large number of Wisconsin citizens affected by these practices. We have no hesitancy in endorsing an injunction against the usurious practices which clearly constitute a public nuisance here and should be discontinued. As the Kansas Supreme Court noted: There is no reason defendant should be permitted openly, notoriously, and flagrantly to violate our valid laws enacted for benefit of our people. The state would be weak indeed if it were powerless to prevent it. Criminal prosecution is not available. Injunction is the only remedy. [59] Since an injunction should issue with reference to the transaction which we hold to be usurious under sec. 138.05 (1), Stats., it is unnecessary for us to consider the applicability of sec. 138.09 (9) (a) or the several provisions of ch. 214. By the Court. Order reversed and cause remanded with directions to issue an injunction.