Diamond Glue Company v. United States Glue Company

• Decision Date: 05 January 1903
• Docket Number: No. 119,119
• Citation: 47 L.Ed. 328,187 U.S. 611,23 S.Ct. 206
• Parties: DIAMOND GLUE COMPANY, Plff. in Err. , v. UNITED STATES GLUE COMPANY
• Court: U.S. Supreme Court

187 U.S. 611

23 S.Ct. 206

47 L.Ed. 328

DIAMOND GLUE COMPANY, Plff. in Err.,

v UNITED STATES GLUE COMPANY.

No. 119.

Argued December 16, 17, 1902.

Decided January 5, 1903.

Messrs. Edgar A. Bancroft, Sanuel Adams, Franklin D. Locke, and George H. Noyes for plaintiff in error.

Messrs. Charles Quarles, J. V. Quarles, and George Lines for defendant in error.

Mr. Justice Holmes delivered the opinion of the court:

This is an action upon a written contract alleging a breach and claiming damages. It was brought in the United States circuit court for the eastern district of Wisconsin by an Illinois corporation against a Wisconsin corporation. On June 25, 1898, the date when the contract was made, a law had been enacted in Wisconsin, to go into operation later, on September 1, 1898, requiring corporations incorporated elsewhere to file a copy of their charter with the secretary of state, and to pay a small fee as a condition of doing business there. Wis. Stat. 1898, §§ 1770b, 4978. This it was admitted that the plaintiff had not done, and the defendant set up that the contract was a contract to do business in Wisconsin after the statute took effect, and that the defendant was justified by the statute in declining to go on. The judge sustained this defense, and the plaintiff excepted, contending that the statute did not, and could not, constitutionally affect its rights under the contract in question. It brings the case here by a writ of error.

The contract was one by which it was agreed that the plaintiff should supervise the plans for a glue factory to be built by the defendant on a site to be selected within sixty days; that it should have the management of the manufacturing in the same, and should operate it for the defendant; that its officers should give the factory such personal supervision as might be necessary, and give the defendant in the management and operation of the factory the benefit of their experience and of the plaintiff's; that the plaintiff should furnish and keep the defendant supplied with a superintendent; that it should control, handle, and sell the entire output of the factory; that it should refrain from manufacturing hide or calf glues at any of its own factories; and that it should guarantee payment on all sales made by it, and should receive certain commissions for its services. The contract was to run for five years from the time that the plant was finished and began work. It was understood that the proposed factory was to be in Wisconsin. A site was selected near Milwaukee, and in a little over a year from the date of the contract, on July 25 or 26, 1899, the plant was built and put in operation.

The section of the Wisconsin statutes relied on by the de- fendant, stated more at length, forbade corporations organized otherwise than under the laws of that state to transact business in the state until they should have filed a copy of their charter with the secretary of state, which act, by the same statute, constituted the secretary of state the attorney of the corporation for the service of process. A failure to comply with any of the provisions of the section subjected the corporation to a fine. It was provided further that every contract made by such corporation affecting the personal liability thereof or relating to property within the state before compliance with the section should be wholly void on its behalf, but should be enforceable against it. A fee of $25 was to be paid for filing the charter. See Ashland Lumber Co. v. Detroit Salt Co. (Wis.) 89 N. W. 904.

According to the undisputed testimony of the plaintiff's vice president, who executed the contract, the instrument was signed in Wisconsin, and at all events, if it was executed with a view to the carrying on of business in that state by the plaintiff, the law of Wisconsin must be applied. London Assur. Co. v. Companhia de Moagens do Barreiro, 167 U. S. 149, 160, 161, 42 L. ed. 121, 17 Sup. Ct. Rep. 785; Graves v. Johnson, 156 Mass. 211, 15 L. R. A. 834, 30 N. E. 818. There is no controversy on this point. But it is said that the contract did not contemplate the carrying on of business by the plaintiff in Wisconsin, that at most it is ambiguous, and that practically it was construed in accordance with the plaintiff's contention. The declaration is on the contract, and by that the plaintiff must stand or fall. We see no ambiguity in its terms. The plaintiff was to have the management of the manufacturing, was to operate the factory, or at least to assist in operating it, and to keep it supplied with a superintendent. It did assist in operating by its officers, and did supply a superintendent, and whether in his superintendence he in fact acted as agent for the plaintiff or the defendant, what the contract required is plain. It called for a carrying on of business in Wisconsin by the plaintiff at a time when to carry it on without filing a copy of the plaintiff's charter was forbidden by the laws of the state. See Connecticut Mut. L. Ins. Co. v. Spratley, 172 U. S. 602, 611, 43 L. ed. 569, 572, 19 Sup. Ct. Rep. 308. The only complaint of the plaintiff is that the defendant refused to perform that contract when the plaintiff had filed no copy of its charter, and when the performence was forbidden by the law. It is said, to be sure, that the part refused by the defendant was a different and lawful portion. But the contract was an entire contract, as both parties agree, and therefore whatever the defendant had in mind, if it was justified by the law, in refusing to perform a material part, it was justified in refusing to perform any portion. See McMullen v. Hoffman, 174 U. S. 639, 43 L. ed. 1117, 19 Sup. Ct. Rep. 839. It is alleged to have declared the contract at an end. We may add that it is not a question of election, but of the legality of performance, and therefore the justification could not be waived.

It hardly could be contended that the contract was illegal, on the ground just stated, when it was made. If, indeed, it had contemplated the plaintiff's going on without complying with the statute, it would have raised a question which we need not discuss. But it must be taken to have contemplated legal action, and if filing a copy of its charter was a condition precedent of the plaintiff's right to carry out its undertakings, then a promise might be implied on its part to take the necessary steps. But if, when the time came, the plaintiff did not take those steps, the defendant had the legal right to refuse to go on, whether its right be put on the ground of the plaintiff's breach of its implied undertaking or of the illegality of the proposed continuance of the work. The plaintiff contends, however, as we have said, that the statute did not and could not apply to the performance of the contract in suit. It will be remembered that while enacted before the contract was made, it did not go into effect until afterwards, although before the time when the factory was or could have been built in the ordinary course of business. It is said that if the statute is taken to govern the present contract it impairs the obligation of that contract, and encounters the United States...