Am. Loan & Inv. Co. v. Boraas

• Decision Date: 05 October 1923
• Docket Number: No. 23620.,23620.
• Citation: Am. Loan & Inv. Co. v. Boraas, 156 Minn. 431, 195 N.W. 271 (Minn. 1923)
• Court: Minnesota Supreme Court
• Parties: AMERICAN LOAN & INVESTMENT CO. v. BORAAS et al.

156 Minn. 431

195 N.W. 271

AMERICAN LOAN & INVESTMENT CO.

v.BORAAS et al.

No. 23620.

Supreme Court of Minnesota.

Oct. 5, 1923.

Appeal from District Court, Goodhue County; Willard L. Converse, Judge.

Action by the American Loan & Investment Company against B. P. Boraas and others. A judgment of dismissal was entered, and from an order denying a new trial, plaintiff appeals. Reversed and remanded.

Syllabus by the Court

A foreign corporation, which has complied with the statutes of this state by appointing a resident agent upon whom service of process against the company may be made, as required by Gen. St. 1913, §§ 6206-6208, cannot thereafter, as to controversies arising out of transactions within the state with citizens thereof, avoid the jurisdiction of the state courts by revoking the authority of the agent and withdrawing its business activities from the state.

As to citizens of the state holding rights arising in the state during the continuance of the authority of the corporation to transact business therein, the authority conferred upon the resident agent is irrevocable.

In contemplation of law, though there be an attempted withdrawal from the state, the corporation remains therein until all controversies arising out of such contracts are adjusted, settled, and disposed of.

Dow Co. v. First Nat. Bank (Minn.) 189 N. W. 653, distinguished. Ed. P. Kelly, of Minneapolis (John O. Hanchett, of Valley City, N. D., of counsel), for appellant.

A. J. Rockne, of Zumbrota, for respondents.

BROWN, C. J.

Plaintiff, a corporation organized under the laws of the state of North Dakota, with its principal place of business in that state, on July 17, 1919, duly complied with the foreign corporation laws of this state (G. S. 1913, §§ 6206-6208), and thereby became authorized to transact business therein. Thereafter, by and through its agents, the company entered into an executory contract for the sale to defendants, residents of this state, of certain North Dakota lands upon the terms and stipulations specified in the written agreement. The transaction took place in this state, and according to the findings of the trial court, which we accept as correct, was a Minnesota contract, though the land involved was in North Dakota. Defendants made a down payment on the purchase price, as provided for by the contract, entered into possession of the land, and cultivated it for a year or two. Default was made in the payment of an installment of the purchase price subsequently accruing, and in an action to recover the same, brought by plaintiff against defendants in the courts of North Dakota, judgment was on August 13, 1921, duly rendered and given plaintiff for the amount due, principal and interest, aggregating $4,104.33. The judgment on appeal to the Supreme Court of that state was affirmed. American Loan & Investment Co. v. Boraas et al., 188 N. W. 302. Defendants were served with process in the action, appeared therein, and interposed to defense on the merits.

Thereafter, and on or about September 1, 1921, as found by the trial court, plaintiff brought the present action in this state to recover upon that judgment. Defendants answered by a general denial. On October 18, 1921, the board of directors of plaintiff corporation duly resolved to withdraw its business affairs from this state, and a copy of a resolution to that effect was on that date filed with the secretary of state of this state; the company at the same time surrendering the certificate of authorization theretofore issued to it. Since that date plaintiff had transacted no business in this state. Subsequent to the withdrawal, or attempted withdrawal, defendants amended their answer and interposed as a plea in abatement the withdrawal of plaintiff from the state, the surrender of its certificate of authorization, and the fact that the company had ceased all business activities in the state, alleging that by reason of such facts the company can no longer maintain the action here, by force of the prohibitions of G. S. 1913, §§ 6206-6208. The trial court sustained the plea in abatement, and for the reasons stated therein, there being no dispute as to the facts, ordered a dismissal of the action. Plaintiff appealed from an order denying a new trial.

The only question presented by the record we deem necessary to consider is whether there was error in the conclusion of the trial court that, because of plaintiff's withdrawal from business activities in the state, it can no longer maintain the action here. In our view of the matter the learned trial court erred in so holding.

The facts are not in dispute. Plaintiff had complied with our statutes in all respects, and was authorized to engage in the transaction of its business in this state. The contract, involved in and made the basis of the judgment upon which this action is founded, was entered into in this state, during the period of such authority, with defendants, who were then and are still residing therein. The authority so vested in the company was in...