Baden v. Washington Loan & Trust Co.

Decision Date16 January 1919
Docket Number84.
Citation105 A. 860,133 Md. 602
PartiesBADEN v. WASHINGTON LOAN & TRUST CO.
CourtMaryland Court of Appeals

Appeal from Circuit Court, Montgomery County, in Equity; Edward C Peter, Judge.

Bill by the Washington Loan & Trust Company against William H. Baden. Decree for plaintiff, and defendant appeals. Affirmed.

Argued before BOYD, C.J., and BRISCOE, BURKE, THOMAS, URNER, and STOCKBRIDGE, JJ.

Robert B. Peter, of Rockville, for appellant.

Arthur Peter, of Washington, D. C., for appellee. URNER, J.

The Washington Loan & Trust Company is a corporation of the District of Columbia empowered by its charter to conduct a safe deposit, loan, and mortgage business, and to accept and execute trusts of every description. It is the residuary devisee and legatee, upon certain trusts, under the will of Brainard H. Warner, deceased. Included in the estate which passes to the trustee under the will was an undivided interest of the testator, which he held as tenant in common in a number of lots of ground at Takoma Park, in Montgomery county, Md. In the exercise of a power of sale and exchange conferred by the will, the trustee joined with the other cotenants of the lots in a deed of partition by which some of the lots were vested in the trustee in severalty. One of the lots thus acquired was later sold by the trustee to the appellant in this case, who, having questioned the vendor's ability to convey a good title and having declined on that ground to consummate his purchase, was made defendant in this apparently amicable suit for specific performance. The appeal is from a decree, on bill and answer sustaining the validity of the title and enforcing the contract of sale.

The only objection urged against the title on appeal was based on the theory that the trust company, as a foreign corporation has not become authorized to execute in this state, and as to property within its limits, the power of sale conferred by the will. The contention is that it would be contrary to the policy of our laws to permit a foreign trust company to conduct and enforce a sale of property in this state, except after complying with the statutory requirements to which corporations of that class, regularly engaged in business here, are subject. It does not appear from the record that the Washington Loan & Trust Company has performed any of the conditions which are prerequisite under our statutes to the prosecution of the business of a trust company in Maryland. Neither is it shown to have undertaken or contemplated any transaction in this state apart from the disposition of the property with which, in part, we are now concerned.

The general policy of Maryland with respect to foreign corporations is defined by section 91 of article 23 of the Code, as follows:

"No foreign corporation shall engage or continue in any kind of business in this state, the transaction of which by domestic corporations is not permitted by the laws thereof. And every foreign corporation doing business in this state shall be deemed thereby to have assented to all the provisions of the laws thereof."

It is further provided by section 93 of the same article that every foreign corporation "which has a usual office or place of business in this state, except insurance companies" for which other provisions are made, "shall, before doing business herein," file with the secretary of state a certified copy of its charter, and a certificate, to be renewed annually, containing certain information as to its organization, stock, and stockholders, its principal office in this state and in that of its incorporation, and the appointment of a resident agent with authority to accept service of process. By chapter 469 of the Acts of 1918, amending section 167 of article 81 of the Code, a franchise tax is levied upon safe deposit and trust companies, of foreign as well as of domestic origin, "which are doing business in this state."

The question of primary importance in the case is whether the corporate act involved in the sale by the Washington Loan & Trust Company of the property in Maryland acquired by it in the manner described is to be regarded as the prosecution of its business within the meaning of the statutes imposing the requirements to which we have referred. In other words, the inquiry is whether it is necessary for the trust company, before it can legally sell the lot mentioned in the bill, to comply with all the conditions required of foreign trust companies which enter this state for the purposes of their regular and continuing business activities.

In 19 Cyc. 1268, it is said to be the general conclusion of the courts that-

"Isolated transactions, commercial or otherwise, taking place between a foreign corporation domiciled in one state and citizens of another state, are not a doing or carrying on of business by the foreign corporation within the latter state, even, according to the weight of authority, where the transaction is of such a character as to constitute a part of the ordinary business of the corporation."

The effect of the decisions on this subject is thus stated in 12 Ruling Case Law, p. 69:

"It seems to be the consensus of opinion that a corporation, to come within the
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