Bondurant v. Dahnke-Walker Milling Co.

• Decision Date: 25 May 1917
• Parties: BONDURANT v. DAHNKE-WALKER MILLING CO.
• Court: Kentucky Court of Appeals

195 S.W. 139

175 Ky. 774

BONDURANT v. DAHNKE-WALKER MILLING CO.

Court of Appeals of Kentucky.

May 25, 1917

Appeal from Circuit Court, Fulton County.

Action by the Dahnke-Walker Milling Company against C. T. Bondurant. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

B. T Davis, of Hickman, and W. J. Webb, of Mayfield, for appellant.

Robbins & Robbins, of Mayfield, for appellee.

HURT J.

This action was instituted in the Fulton circuit court by the appellee, Dahnke-Walker Milling Company, against the appellant, C. T. Bondurant, to recover damages for the alleged breach of a contract, which the appellant and appellee had made, involving the sale and delivery of about 14,000 bushels of wheat, as estimated. After the pleadings had been made up, a trial followed before the court and a jury, and as a result the jury found a verdict in favor of the appellee, and a judgment was rendered accordingly. The appellant's motion for a new trial was overruled, and he seeks a reversal of the judgment against him.

Several grounds for reversal are urged, among which is the contention that the court erred in denying appellant's motion for a directed verdict at the close of the testimony for appellee and at the close of all the evidence. One of the grounds urged as a reason for a directed verdict is that the appellee is a foreign corporation, and engaged in doing business, in the state of Kentucky, without having complied with the requirements of section 571, Ky. St., and for that reason the contract between him and appellee was not enforceable. The appellant presented as one of his defenses, that appellee was a foreign corporation and was engaged in doing business in the state of Kentucky, and that in making the contract sued upon was so engaged, and that it had never complied with any requirement of section 571, supra, by having one or more places of business in this state and an authorized agent or agents thereat upon whom process could be served, and had not filed in the office of the secretary of state a statement signed by its president or secretary, giving the location of its office or offices in this state, and name or names of its agent or agents thereat, upon whom process could be served, the appellee, admitted that it was a foreign corporation, organized and having its chief place of business in the state of Tennessee, and had not complied with the requirements of section 571, supra, but denied that it was engaged in doing business in the state of Kentucky, and alleged that the making of the contract sued upon was an engagement in interstate commerce, and hence its actions could not be and were not affected by the provisions of section 571, supra; while appellant contends that the business transacted with him, which was the basis of the action against him, was purely an intrastate transaction.

There were some minor differences in the evidence, as to the terms of the contract, but the undisputed facts proven, about which there were no contradictions, show that the terms of the contract were that about the 15th day of June, 1915, or a few days thereafter, the appellant and John Creed, an agent of appellee, entered into the contract sued upon at Hickman, Ky.; that both appellant and Creed were citizens of Kentucky; that appellant agreed to sell and deliver the crop of wheat grown by him upon his lands, in this state, during the year 1915, to appellee or to its agent, on board the cars at Hickman, Ky. within a reasonable time after same should be threshed, not later than the 10th day of August, and appellee, or its agent, was at the time of such delivery and at the place of delivery and concurrent therewith to pay to appellant the contract price for the wheat, which was $1.04 per bushel. The appellant testified that Creed did not represent to him that he was making the contract for or on behalf of appellee, and the testimony of Creed fails to show that he disclosed his principal, although he makes the statement that appellant knew in what capacity he was contracting. This difference, however, is not important. The evidence does not disclose that the contract contained any stipulation that the wheat was to be consigned to any one or to any place by appellant when put on board the cars, and hence it must be assumed that the appellee, when the wheat was delivered, might consign it to such person or to such destination or to do with it, as it saw fit.

This court has heretofore held that section 571, supra, does not have any application to a foreign corporation, which is engaged strictly in interstate commerce with citizens of this state, and that, so far as the provisions of the section may seem to require a foreign corporation to comply with its requirements as a condition precedent to engaging in interstate commerce with citizens of this state, it is void. Such commerce can be regulated by the federal Congress only. Louisville Trust Co. v. Bayer S. S. B. Co., 166 Ky. 746, 179 S.W. 1034; Three States Buggy Co. v. Com., 105 S.W. 971, 32 Ky. Law Rep. 385; Com. v. Baldwin, 96 S.W. 914, 29 Ky. Law Rep. 1074; Com. v. Eclipse Hay Press Co., 104 S.W. 224, 31 Ky. Law Rep. 824; Ryman Steam Boat Co. v. Com., 125 Ky. 253, 101 S.W. 403, 30 Ky. Law Rep. 1276, 10 L.R.A. (N. S.) 1187; Com. v. Hogan, 74 S.W. 737, 25 Ky. Law Rep. 41; Com. v. McMorrow, etc., 74 S.W. 737, 25 Ky. Law Rep. 41. It is also well settled that a state may impose any condition it desires upon a foreign corporation for permitting it to engage in intrastate business. Com. v. Read Phosphate Co., 113 Ky. 32, 67 S.W. 45, 23 Ky. Law Rep. 2284; Mfg. Co. v. Ferguson, 113 U.S. 727, 5 S.Ct. 739, 28 L.Ed. 1137; Insurance Co. v. Cravens, 178 U.S. 389, 20 S.Ct. 962, 44 L.Ed. 1116; Hooper v. California, 155 U.S. 648, 15 S.Ct. 207, 39 L.Ed. 297; Waters-Pierce Oil Co. v. Texas, 177 U.S. 29, 20 S.Ct. 518, 44 L.Ed. 657. In so far as section 571, supra, regulates the transaction of business by foreign corporations within this state, other than interstate commerce, it is not in conflict with the provisions of the federal Constitution. Knoxville Nursery Co. v. Com., 108 Ky. 6, 55 S.W. 691, 21 Ky. Law Rep. 1483; Com. v. M. & O. R. Co., 64 S.W. 451, 23 Ky. Law Rep. 784, 54 L.R.A. 916. Hence, if the contract sought to be enforced was an interstate commerce transaction, the failure to comply with section 571, supra, would not affect the right of appellee to sue and recover upon its contract, but, if it was an intrastate business, the failure to have complied with section 571, supra, is fatal to appellee's right of recovery for the breach of such a contract, as it was held by this court, in Oliver v. Louisville Realty Co., 156 Ky. 628, 161 S.W. 570, 51 L.R.A. (N. S.) 293, Ann.Cas. 1915C, 565, that it was unlawful for a foreign corporation, without first having complied with section 571, supra, to engage in business in this state, other than interstate commerce, and contracts entered into for the transaction of such business were unlawful, and that the courts would not give their assistance in the enforcement of unlawful contracts. Fruin-Colnon Contracting Co. v. Chatterson, 146 Ky. 504, 143 S.W. 6, 40 L.R.A. (N. S.) 857. A contract is always void, if it is prohibited by statute, although the statute does not declare contracts to be illegal which are made in violation of it. ...