Cooper v. Ft. Smith & W. R. Co.
| Decision Date | 29 January 1909 |
| Docket Number | Case Number: 189 |
| Parties | COOPER v. FT. SMITH & W. R. CO. |
| Court | Oklahoma Supreme Court |
¶0 1. CORPORATIONS--Foreign Corporations--"Carrying on Business"--Contracts--Compliance With Statutory Requirements. An answer setting up a plea in bar to a suit on promissory note given in aid of the construction of plaintiff's line of railroad which alleges, in substance, that at the time it was executed plaintiff was and still is a foreign corporation, and as such has failed to comply with Wilson's Rev. & Ann. St. Okla. 1903, secs. 1225 and 1227, is bad, as it was not the intent of the Legislature, by inhibiting such corporation from doing business in the state, to deprive it of the right to sue in its courts or to render void contracts made by it in the state, and a demurrer thereto was properly sustained.
1. SAME--Contracts Antedating State Constitution. Contractual rights accrued prior to the adoption of sections 43 and 44 of article 9 of the Constitution (Bunn's Ed. secs. 258, 259) are not thereby affected
3. SUBSCRIPTIONS--Railroad Bonus Notes--Defenses--Fraud. An answer setting up a plea in bar to a suit on a promissory note given in aid of the construction of plaintiff's line of road, which alleges that prior to the execution of the note the payee, then engaged in building a railroad in a westerly direction from a given point in another state through the Indian Territory and in the general direction of Guthrie, Okla., determined to build said road from its then terminus in the Indian Territory to said city, and on that date, unknown to defendant and the citizens of said city, entered into a contract for its construction; that without disclosing that determination said railroad company, by and through its agents and representatives, afterwards caused a public meeting of the citizens of said city to be held, and then and there submitted to them and others interested a proposition to extend its line of road from its then terminus in the Indian Territory to said city and have the same in operation in 18 months, provided they would raise a bonus of $ 50,000 within 30 days, in the form of promissory notes satisfactory to the payee, to be turned over to it: representing that another city was a strong competitor for the road; that unless satisfactory arrangements were made with it the road would be diverted to some other point, but if the terms of said bonus were complied with, it would build its road to Guthrie; that there was a feeling of rivalry existing between the two cities, which was well known at that time to said railroad company; that said representations were made for the purpose of securing said bonus, and were false and deceptive, and known to be such by the payee, and were intended to, and did, deceive said citizens, including the defendant, and that the note sued on was executed on the strength of such deception--states facts sufficient to constitute a plea in bar of a recovery on said note on the ground of fraud, and a demurrer thereto was improperly sustained.
4. BILLS AND NOTES--Actions--Answer--Sufficiency. An answer setting up a contract in aid of a plea of nonperformance of a condition precedent to recovery in a suit on a promissory note, which shows on its face no privity, but which said answer avers that said contact was made by one of the parties thereto as the special agent of defendant for the purpose of making said contract, is good as showing privity of defendant thereto such as will enable him to take advantage of its terms, and a demurrer thereto was improperly sustained.
5. CONTRACTS--Subscriptions--Time as of the Essence of the Contract--Railroad Bonus Note. Although it is provided (Wilson's Rev. & Ann. St. 1903, sec. 809) that "time is never considered as of the essence of a contract, unless by its terms expressly so provided," no particular form of expression is required, but it must appear from the express provisions contained in such contract that it was the intention of the parties thereto that time should be the essence thereof. And where the answer disclosed that the note sued on contained the stipulation, "Provided always that this note becomes due and payable when said railroad company shall have in operation a line of road from the present terminus of its line in the Indian Territory to the city of Guthrie," and the contract entered into by the note givers and plaintiff prior to the delivery of said note and part thereof fixed the time of completion of said road, which was the only advantage accruing therefrom to said note givers, held, that time was of the essence of the contract, and the completion of said road a condition precedent to a right to recover on said note.
6. SUBSCRIPTIONS--Validity--Railroad Bonus Note. A promissory note payable to a railroad company in aid of the construction of its line of road is not void as against public policy.
T. C. Whitely, C. G. Hornor, and Devereux & Hildreth, for plaintiff in error, contended, inter alia, that the railroad company having failed to comply with the statutes and Constitution of Oklahoma, the contract is void and the action can not be maintained. Wilson's Rev. & Ann. St. 1903, §§ 1225, 1227; Const., art. 9, §§ 43, 44; Tri-State Amusement Co. v. Forest Park Amusement Co., 192 Mo. 404; John Deere Plow Co. v. Wyland, 69 Kan. 255; Chicago Building Co. v. Myton, 24 Pa. Sup. 16; In re Comstock, 6 F. Cas. 244, No. 3078; Diamond Glue Co. v. U. S. Glue Co., 103 F. 838, 187 U.S. 611; Cincinnati, etc., Co. v. Rosenthal, 55 Ill. 85; Bank v. Page, 6 Ore. 431; Haughey v. Loan Ass'n., 140 Ala. 245; Chattanooga B. & L. Ass'n. v. Denson, 189 U.S. 408; Woodstock Iron Co. v. Extension Company, 129 U.S. 654.
Dale & Bierer, Benj. F. Hegler, and A. C. Dustin, for defendant in error.--
Sections 1225-1227, Wilson's Statutes do not apply to foreign railroad corporations, as appears from an examination of sections 1022, 1037, 1039, 1067, 4269, which are applicable. Lewis' Sutherland on Statutory Construction (2nd Ed.) § 387; Boyer v. Northern P. Ry. Co., 8 Id. 74. Even if said sections 1225-1227 do so apply, still failure to comply with same does not invalidate contracts for a foreign corporation. American Buttonhole Co. v. Moore (Dak. 1881) 8 N.W. 131; Wright v. Lee (S. Dak.) 51 N.W. 706; Railway Co. v. Fire Ass'n, 55 Ark. 163; Cook v. Rome Brick Co., 98 Ala. 409; Mill Co. v. Bartlett (N. Dak.) 54 N.W. 544; Wilson's Rev. & Ann. St. 1903, § 933; Bank v. Matthews, 98 U.S. 628; Bank v. Whitney, 103 U.S. 99; Reynolds v. Bank, 112 U.S. 405; Blodgett v. Zinc Co., 120 F. 893; Paugborn v. Westlake, 36 Iowa 546; Mining Co. v. U. S. Fidelity & Guaranty Co., 146 F. 437. The making of the note sued on did not constitute transacting "any business within this territory," within the provisions of the statute. Diamond Glue Co. v. U. S. Glue Co. 187 U.S. 611; Hogan v. St. Louis, 176 Mo. 149; Norton v. Thomas (Texas) 93 S.W. 711. Const. of Okla., art. 9, §§ 43, 44, constitute no bar to the action on notes. Const. Schedule, § 1; Sherwood v. Wilkins, 65 Ark. 312.
For a full discussion of other questions involved counsel refer to briefs filed in a similar case decided by the territorial Supreme Court, viz: Guss v. Federal Trust Co., 19 Okla. 138, 91 P. 1045.
No copies of those briefs reached the reporter.
Error from Logan County Court; J. C. Strang, Judge.
Action by the Ft. Smith & Western Railroad Company against O. P. Cooper. Judgment for plaintiff, and defendant brings error. Reversed and remanded.
On November 26, 1907, the Ft. Smith & Western Railroad Company, defendant in error, plaintiff below, sued O. P. Cooper, plaintiff in error, defendant below, in the county court of Logan county, on the following promissory note:
"$ 250.00.
--the same being one of many, aggregating some $ 50,000, given by various citizens of Guthrie in aid of the construction of the railroad of defendant in error.
On December 6, 1907, defendant filed answer, and afterwards an amendment thereto, which was demurred to by defendant in error, and sustained; and, plaintiff in error electing to stand on his answer, judgment was rendered in favor of defendant in error and against plaintiff in error for the amount of said note, with interest thereon from the date of its execution, from which said judgment plaintiff in error has prosecuted an appeal to this court.
T. C. Whitely, C. G. Hornor, and Devereux & Hildreth, for plaintiff in error
Dale & Bierer, Benj. F. Hegler, and A. C. Dustin, for defendant in error
¶1 The answer sets up various defenses to said note, the first of which is that the defendant in error (hereafter called plaintiff) "is now and was at the time said notes were given, and at the time this action was instituted, and has been continuously, a foreign corporation, created and organized under the laws of the state of Arkansas," and has failed to comply with the law as laid down in Wilson's Rev. & Ann. St. Okla. 1903, which provides:
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