Opinion ID: 1924942
Heading Depth: 1
Heading Rank: 1

Heading: Absence of Reference to Restriction on the Certificates.

Text: The appellants contend that sec. 183.14, Stats., as construed in Larson v. Superior Auto Parts, Inc. (1955), 270 Wis. 613, 72 N. W. (2d) 316, governs the issue and renders the restriction unenforceable. Sec. 183.14 reads as follows: LIENS OF CORPORATION; RESTRICTIONS ON TRANSFER. There shall be no lien in favor of a corporation upon the shares represented by a certificate issued by such corporation and there shall be no restriction upon the transfer of shares so represented by virtue of any bylaws of such corporation, or otherwise, unless the right of the corporation to such lien or the restriction is stated upon the certificate. Larson v. Superior Auto Parts, Inc., supra , was an action commenced to compel the defendant corporation to purchase the plaintiff's stock pursuant to contract between the corporation and its shareholders to the effect that when any member severs his connection with the company, his stock shall revert to the company, or in the alternative, be purchased by the remaining members. After setting out the provisions of sec. 183.14, Stats., this court stated that the agreement was not enforceable for the reason that the restrictions of the contract were not stated upon the plaintiff's stock certificates. [1] However, neither sec. 183.14, Stats., nor the Larson Case has any application to the facts of the instant action. The statute deals with liens in favor of a corporation, and with stock restrictions whereby the option of first purchase is given to the corporation, and Larson v. Superior Auto Parts, Inc., supra , involved a contract between a corporation and its shareholders. The contract in the instant action, however, is an agreement only among four shareholders; it is not a contract between the corporation and its members, and sec. 183.14 and the Larson Case do not apply to such a situation. In any event, the appellants' argument misses the point, for the question in the instant action is not whether the restriction clause may be enforced where no riders have been attached to the certificates, but only whether the appellants should be made to comply with the terms of the contract one of which requires such riders to be affixed to the individual certificates. The trial court determined that they should, and we agree with that determination.