Commercial Inv. Trust, Inc. v. Gaines

• Decision Date: 23 February 1927
• Docket Number: 383.
• Citation: 136 S.E. 609,193 N.C. 233
• Parties: COMMERCIAL INVESTMENT TRUST, Inc., v. GAINES et al.
• Court: North Carolina Supreme Court

136 S.E. 609

193 N.C. 233

COMMERCIAL INVESTMENT TRUST, Inc., v. GAINES et al.

No. 383.

Supreme Court of North Carolina

February 23, 1927

Appeal from Superior Court, Guilford County; Shaw, Judge.

Action by the Commercial Investment Trust, Inc., against Frank Gaines and others. Judgment for plaintiff, and defendants appeal. No error.

Action to recover amount due on note executed by defendants Frank Gaines and David Gaines, payable to their codefendants trading as the Motor Company, or order. Plaintiff, a corporation organized under the laws of the state of New York, is now the holder of said note. Payment of said note was guaranteed in writing by defendants John P. Bishop, Rex F. Bishop, and John F. Fulton, as individuals, prior to the purchase of the note by plaintiff.

Defendants deny liability on said note; they contend that plaintiff, a foreign corporation, having failed to comply with statutes relative to foreign corporations doing business in this state, cannot maintain this action. David Gaines having died since the commencement of the action, plaintiff submitted to a nonsuit as to him.

The issue submitted to the jury was answered as follows:

"Are the defendants indebted to plaintiff, and, if so, in what amount? Answer: Yes; $198.04, with interest from September 30, 1924."

From judgment upon this verdict, defendants appealed to the Supreme Court.

H. R Stanley, of Greensboro, for appellants.

Shuping & Hampton, of Greensboro, for appellee.

CONNOR J.

Plaintiff is a corporation, organized under the laws of the state of New York, with its principal office and place of business in said state. Defendants are citizens and residents of the state of North Carolina.

On August 30, 1924, defendants Frank Gaines and David Gaines, at Greensboro, N. C., executed their promissory note, negotiable in form, by which they promised to pay to the Motor Company or order, the sum of $245.04, in accordance with the terms set out therein. The Motor Company is a partnership, engaged in business as a dealer in automobiles at Greensboro, N. C., and composed of defendants John P. Bishop, Rex F. Bishop, and John F. Fulton. The consideration of said note was the balance due on the purchase price of an automobile sold by the Motor Company to the makers of said note.

Plaintiff purchased the said note from the Motor Company, in due course of business. Prior to said purchase, John P. Bishop, Rex F. Bishop, and John F. Fulton in writing guaranteed its payment. Certain payments, made on said note, have been duly credited; the balance due, at the commencement of this action, was $198.04.

With respect to defendant's contention that plaintiff, a foreign corporation, could not maintain the action for that it had not complied with the provisions of C. S. § 1181, and therefore under the provisions of subsection 16, § 82, c. 34, Pub. Laws 1921, the transaction upon which plaintiff relies for its right of action is wholly void, the court instructed the jury as follows:

"There is an interesting question of law in this case, gentlemen, but, after considering the argument of counsel and hearing the authorities read, the court is of the opinion that there is not sufficient evidence to go to the jury that plaintiffs engaged in business in North Carolina." Defendants excepted to this instruction, and assign same as error.

It has been generally held that a foreign corporation cannot be held to be doing business in a state and therefore subject to its laws, unless it shall be found as a fact that such corporation has entered the state in which it is alleged to be doing business, and there transacted, by its officers agents, or other persons authorized to act for it, the business in which it is authorized to engage by the state under whose laws it was created and organized. The presence, within the state, of such officers, agents, or other persons, engaged in the transaction of...