Bonham Nat. Bank of Fairbury v. Grimes Pass Placer Mining Co., Ltd.

• Decision Date: 15 November 1910
• Parties: BONHAM NATIONAL BANK OF FAIRBURY, Respondent, v. GRIMES PASS PLACER MINING CO., LTD., Respondent, and EZRA E. HOWARD and I. V. HOWARD, Appellants
• Court: Idaho Supreme Court

111 P. 1078

18 Idaho 629

BONHAM NATIONAL BANK OF FAIRBURY, Respondent, v. GRIMES PASS PLACER MINING CO., LTD., Respondent, and EZRA E. HOWARD and I. V. HOWARD, Appellants

Supreme Court of Idaho

November 15, 1910

DEFECT OR MISJOINDER OF PARTIES DEFENDANT-JOINT LIABILITY-DEMURRER-FOREIGN CORPORATION-DOING BUSINESS IN THIS STATE-PLEADING BY FOREIGN CORPORATION-SUIT ON FOREIGN CONTRACT-GENERAL DEMURRER TO SEVERAL CAUSES OF ACTION.

(Syllabus by the court.)

1. Where a contract pleaded in haec verba shows on its face a joint and several liability against the defendants and another party who is not made a party defendant, the defect in naming parties defendant, if any exists, cannot be raised by general demurrer going to the sufficiency of the complaint, but must be raised by special demurrer on the grounds of defect or misjoinder of parties defendant.

2. The prosecution of an action in this state for the collection of a debt contracted in another state, and payable in that state, does not constitute "doing business" in this state within the meaning of the constitution (sec. 10, art 11) and the statute (sec. 2792, Rev. Codes).

3. Where a foreign corporation commences an action in this state and discloses upon the face of its pleading that it is a foreign corporation, it must then either show a compliance with the state laws entitling it to do business within the state or else show by the facts constituting its cause of action that the contract sued upon does not arise out of a domestic transaction or by reason of doing any business within this state. If, therefore, the contract sued upon shows upon its face that it is a foreign contract, and that it did not arise out of domestic business or a domestic transaction, the complaint will not be demurrable on account of the failure of the plaintiff to show compliance with the foreign corporation laws of this state.

4. Where a complaint contains several causes of action separately stated, and the demurrer is a general demurrer directed against the complaint as a whole and not against any separate cause of action, it should be overruled if any one of the causes of action is well pleaded.

APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. Fremont Wood, Judge.

Action on two several promissory notes. Judgment for plaintiff and defendants Howard appeal. Affirmed.

Judgment affirmed. Costs awarded in favor of respondent. Petition for rehearing denied.

Jackson & Taylor, for Appellants.

In matters of contract, a foreign corporation cannot transact business in this state nor maintain actions at law in this state in relation to such contracts before complying with the constitution and laws of the state, and can maintain no action on contract created before such compliance. (Katz v. Herrick, 12 Idaho 1, 86 P. 873; Valley Lumber etc. Co. v. Driessel, 13 Idaho 662, 93 P. 765, 15 L. R A., N. S., 299, 13 Ann. Cas. 63; Valley Lumber Co. v. Nickerson, 13 Idaho 682, 93 P. 24; Kiesel v. Bybee, 14 Idaho 670, 95 P. 20; Tarr v. Western Loan & Savings Bank, 15 Idaho 741, 99 P. 1049, 21 L. R. A., N. S., 707.)

The statute (sec. 2792) does not say contracts or agreements, or business transactions, but uses the singular, "contract or agreement," evidently intending that one act is just as offensive as many by the outlaw corporation. (5 Thompson on Corporations, sec. 6718; Central Mfg. Co. v. Briggs, 106 Ill.App. 417.)

Appellants having raised by special demurrer the lack of capacity on part of plaintiff to sue, and it appearing on the face of the complaint that plaintiff is a foreign corporation, appellants have pleaded within the well-settled rule of decision by this court. (Valley Lumber Co. v. Driessel, supra; Kiesel v. Bybee, supra.)

C. S. Polk, for Respondent.

A misjoinder or nonjoinder of parties defendant could not be raised by general demurrer, and if the point had been raised by special demurrer, it would not have been well taken. ( Decker v. Trilling, 24 Wis. 610; People v. Love, 25 Cal. 521.)

If the complaint showed on its face that the action was based on a single transaction, a contract executed without the state, or in the line of interstate commerce, and did not allege that complainant was "doing business" within the state, it would not be demurrable. The complainant was not "doing business" in the state of Idaho and the complaint contains no allegation that it was.

Foreign corporations can sue in this state, although not having complied with the statutes with reference to foreign corporations doing business in this state, where the business was interstate commerce. (Foore v. Simon Piano Co., 18 Idaho 167, 108 P. 1039; Toledo Computing Scale Co. v. Young, 16 Idaho 187, 101 P. 257.)

A single transaction is not "doing business" within the inhibition of a statute requiring foreign corporations to perform certain things before "doing business" within the domestic state. (Cooper Mfg. Co. v. Ferguson, 113 U.S. 727, 5 S.Ct. 739, 28 L.Ed. 1137; Ladd Metals Co. v. Am. Min. Co., 152 F. 1008; Caesar v. Capell, 83 F. 403; Gilchrist v. Helena H. S. & B. R. Co., 47 F. 593; Babbitt v. Field, 6 Ariz. 6, 52 P. 755; Florsheim Bros. Dry Goods Co. v. Lester, 60 Ark. 120, 46 Am. St. 162, 29 S.W. 34, 27 L. R. A. 505; Gates Iron Works v. Cohen, 7 Colo. App. 341, 43 P. 667; Colo. Iron Works v. Sierra Grande Min. Co., 15 Colo. 499, 22 Am. St. 433, 25 P. 325; Miller v. Williams, 27 Colo. 34, 59 P. 740; W. H. Lutes Co. v. Wysong, 100 Minn. 112, 110 N.W. 367; Meddis v. Kenney, 176 Mo. 200, 98 Am. St. Rep. 496, 75 S.W. 633; Penn Collieries Co. v. McKeever, 183 N.Y. 98, 75 N.E. 935, 2 L. R. A., N. S., 127, and note; Del. & H. Canal Co. v. Mahlenbrock, 63 N.J.L. 281, 43 A. 978, 45 L. R. A. 538.)

Where it does not appear that the corporation is doing business in the state, it need not, in the first instance, either allege or prove compliance with acts relating to corporations doing business within the state. (Brown v. Guarantee Sav. Loan & Inv. Co., 46 Tex. Civ. App. 295, 102 S.W. 138; Norton v. Thomas & Sons Co. (Tex. Civ. App.), 93 S.W. 711.)

Taking assignment of valid claims against residents of state and suing thereon is not doing business by foreign corporation. ( A. Booth & Co. v. G. M. Weigand, 30 Utah 135, 83 P. 734, 10 L. R. A., N. S., 693; Keene etc. Bank v. Lawrence, 32 Wash. 572, 73 P. 680.)

A statute prescribing conditions on which foreign corporations may do business in the state does not prohibit such corporations from maintaining actions in the state founded on contracts made in other states. (Mason v. Edward Thompson Co., 94 Minn. 472, 103 N.W. 507; Powder River Cattle Co. v. Custer County, 9 Mont. 145, 22 P. 383; Derringer v. Derringer, 5 Houst. (Del.) 416.)

Compliance with state laws is not essential to the right to sue on contracts made in other states. (Robinson v. Am. Linseed Oil Co., 147 F. 885; Union Sav. Bank & Trust Co. v. Baltimore etc. R. Co., 7 Ohio N. P., N. S., 497; Lilly-Brackett Co. v. Sonneman, 50 Wash. 487, 97 P. 505; 5 Thompson, Corp., sec. 6716.)

The institution and prosecution of a suit does not constitute doing business within the meaning of constitutional and statutory provisions against doing business in a state without compliance with certain requirements. (Utley v. Clark-Gardner Lode Min. Co., 4 Colo. 369; St. Louis O. & T. R. Co. v. Phila. Fire Assn., 55 Ark. 163, 18 S.W. 43, and cases cited in notes to 24 L. R. A. 289.)

AILSHIE, J. Sullivan, C. J., concurs.

OPINION

AILSHIE, J.

This action was instituted to recover judgment on two promissory notes. The defendants Howard appeared and filed a demurrer. The demurrer was overruled and they declined to answer, and judgment was thereupon entered against them. This appeal is from the judgment.

The complaint was filed against the Grimes Pass Placer Mining Co., Ezra E. Howard and I. V. Howard as defendants, and contains two causes of action separately stated.

The first cause of action was on a promissory note for the sum of $ 500 dated at Fairbury, Neb., September 16, 1908, payable to the order of Bonham National Bank of Fairbury, and payable at the Bonham National Bank at Fairbury, Neb. The note was pleaded in haec verba, and the copy set out in the pleadings showed the note to have been signed by one A. E. Woodman in addition to the signatures of the defendants in this action. The allegation of the complaint which immediately precedes the copy of the note is as follows: "That the defendants on or about September 16th, 1908, jointly and severally made, executed and delivered to the plaintiff their promissory note in writing in words and figures as follows, to wit." It is contended by the appellant that the demurrer should have been sustained, for the reason that the note set out in the complaint is not the contract sued upon, for the reason that it purports to be a note signed by the defendants and Woodman instead of a note signed by the defendants as alleged by the foregoing quotation from the complaint.

This objection is not well taken. Although the copy of the note pleaded contained the name of another maker, that fact did not change the liability of the defendants sued. They were still jointly and severally liable for the payment of the note, and the fact that Woodman was also jointly and severally liable with them did not change or alter the liability of the other makers or make them any less jointly and severally liable as between themselves and the holder of the note. (See sec. 4147, Rev. Codes.) The demurrer was taken on the ground of insufficient facts to constitute a cause of action, and not on grounds of "defect or misjoinder of parties defendant." The complaint does state a "cause of action" against these defendants just as fully as it would be stated...