Dickens-West Mining Co. v. Crescent Min. & Mill. Co.

• Decision Date: 02 June 1914
• Citation: 26 Idaho 153,141 P. 566
• Court: Idaho Supreme Court
• Parties: DICKENS-WEST MINING CO., a Corporation, Respondent, v. CRESCENT MINING & MILLING CO., a Corporation, Appellant

141 P. 566

26 Idaho 153

DICKENS-WEST MINING CO., a Corporation, Respondent, v. CRESCENT MINING & MILLING CO., a Corporation, Appellant

Supreme Court of Idaho

June 2, 1914

MINING CLAIMS-SUIT TO QUIET TITLE-FOREIGN CORPORATIONS-COMPLIANCE WITH STATE LAW - STATUTORY CONSTRUCTION - VOID CONVEYANCE-ANNUAL LABOR-AFFIDAVIT OF-PRIMA FACIE EVIDENCE-SUBSTANTIAL CONFLICT.

1. Where a foreign corporation fails to comply with the laws of this state in filing its articles of incorporation and designating an agent upon whom service of process may be made with the Secretary of State and with the clerk of the district court of the county in which its principal place of business is located, it has no authority to do business in the state.

2. Under the provisions of sec. 2792, Rev. Codes, a foreign corporation cannot take or hold title to any realty within this state prior to making the proper filings of its articles of incorporation and designation of agent, and any deed or conveyance of real property to such corporation prior to such filings shall be absolutely void.

3. Held, that the evidence fails to show that the annual assessment work was performed upon the mining claim, the title to which is involved in this action.

APPEAL from the District Court of the First Judicial District, in and for Shoshone County. Hon. W. W. Woods, Judge.

Action to quiet title to a mining claim. Judgment for plaintiff. Reversed.

Judgment reversed and a new trial granted. Costs awarded to the appellant.

W. H Hanson and Therrett Towles, for Appellant.

When a foreign corporation attempts to allege its compliance with the foreign corporation laws of this state by reciting the things the corporation has done, failure to set forth the performance of all the things required by the constitution and statute leaves the complaint open to demurrer on the ground of failure to show capacity to sue. (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 etc. Co v. Nickerson, 13 Idaho 682, 93 P. 24; Consolidated Wagon & Machine Co. v. Kent, 23 Idaho 690, 132 P. 305.) Sec. 10, art. 11 of our constitution was held in the case of Katz v. Herrick, 12 Idaho 1, 86 P. 873, to be self-acting, but for the purpose of eliminating all question or doubt, the legislature of this state passed sec. 2792, Rev. Codes.

The constitutional and statutory provisions with reference to the qualifications of a foreign corporation to do business in this state are mandatory, and must be complied with in order to enable such corporation to maintain an action in the courts of this state to enforce its contracts. (Tarr v. Western Loan & Savings Co., 15 Idaho 741, 99 P. 1049, 21 L. R. A., N. S., 707; Cincinnati Mut. Health Assurance Co. v. Rosenthal, 55 Ill. 85, 8 Am. Rep. 626.)

The U. S. supreme court held by inference at least that the legislature could declare an absolute forfeiture if it desired to incorporate the same in the statute. (Fritts v. Palmer, 132 U.S. 282, 10 S.Ct. 93, 33 L.Ed. 317.)

Conveyances of real estate to a foreign corporation in violation of such a statutory or charter prohibition are void and do not transfer titles. (Thompson on Corporations, sec. 6688, and cases there cited.)

Mere proof of the expenditure of $ 100 for assessment work is not of itself sufficient. The test as to the reasonable value of any work or improvements is not what was paid for it, or what was supposed to be paid for it, or what the contract price was, but it depends entirely upon whether or not the work or improvements were reasonably worth the sum of $ 100. (Mattingly v. Lewisohn, 13 Mont. 508, 35 P. 111; 2 Lindley on Mines, sec. 635; McCulloch v. Murphy, 125 F. 147.)

Although the burden of proof of forfeiture is conceded in this instance to be upon the party claiming it, if this presumption has been rebutted by concrete evidence of the failure to perform the assessment work, the burden is thrown back upon the owner of the claim to prove that the work was done. (Elliott on Evidence, secs. 86, 91; Wigmore on Evidence, sec. 2487.)

It thus became the duty of the respondent to show by actual evidence, and not by presumptions, where the work had been done and what it was. (Sherlock v. Leighton, 9 Wyo. 297, 63 P. 580, 934; Hausner v. Leebrick, 51 Kan. 591, 33 P. 375; Copper Mountain Mining etc. Co. v. Butte & Corbin Consol. Copper etc. Min. Co., 39 Mont. 487, 133 Am. St. 595, 104 P. 540; Little Dorrit Gold Min. Co. v. Arapahoe Gold Min. Co., 30 Colo. 431, 71 P. 389; Fredricks v. Klauser, 52 Ore. 110, 96 P. 679.)

A. G. Kerns and Featherstone & Fox, for Respondent.

The appellant corporation does not occupy a position where it has either a legal or equitable right to ask a forfeiture of the property of the respondent in its favor. (Fritts v. Palmer, 132 U.S. 282, 10 S.Ct. 93, 33 L.Ed. 317.)

"It has never been held, however, so far as we know, that the single act of taking title to a tract of real estate, as appears in this case, constituted 'doing business' within the meaning of such a constitutional or statutory provision." (War Eagle Consol. Min. Co. v. Dickie, 14 Idaho 534, 94 P. 1034; Foore v. Simon Piano Co., 18 Idaho 167, 108 P. 1038.)

It was not the intention of the legislature in enacting sec. 2792, Rev. Codes, to open a way for adventurers to exploit and confiscate the property of foreign corporations that had in good faith complied or attempted to comply with the laws of the state. And this court has in a number of decisions held that it would not in a collateral proceeding allow a litigant to take advantage of a technical noncompliance with that law. (Keating v. Keating Min. Co., 18 Idaho 660, 672, 112 P. 206; Pennsylvania-Coeur D'Alene Min. Co. v. Gallagher, 19 Idaho 101, 112 P. 1044.)

SULLIVAN, J. Ailshie, C. J., concurs. DUNN, District Judge, Dissenting.

OPINION

SULLIVAN, J.

This is a suit to quiet title to a certain mining claim located and known as the Montana lode mining claim in Yreka mining district, Shoshone county.

Upon the issues made by the pleadings, findings of fact and judgment were made and entered, quieting the title to said mining claim in the plaintiff as prayed for in the complaint. This appeal is from the judgment.

It is alleged in the complaint that the respondent corporation was duly organized and existing under the laws of the state of Washington and that it complied with the laws of the state of Idaho in relation to foreign corporations by filing its articles of incorporation, designating an agent upon whom process might be served, and paying the license fee; that the appellant was a corporation organized and existing under the laws of the state of Idaho; that the respondent corporation was the owner and in the possession and entitled to the possession of said Montana lode mining claim, which claim had been located March 29, 1897, by one Amelia H. Cameron, and upon which respondent or its predecessors in interest had done the annual assessment work during each and every year since last mentioned date up to the year 1912, and that it was prevented from doing such work that year through means of force used by the appellant company, and that unless the respondent is aided by the equitable intervention of the court, the said mining claim would be subject to forfeiture and the respondent's rights imperiled.

A demurrer was interposed to said complaint and overruled by the court. The appellant answered, admitting the incorporation of the respondent, but denied that it had complied with all or any of the laws of the state of Idaho, and affirmatively alleged that respondent had never complied with the laws of the state of Idaho relating to foreign corporations, and denied the performance of the assessment work claimed to have been done by the respondent during the years mentioned in the complaint, and denied the allegation that the respondent was prevented by force from performing the assessment work on said claim in 1912.

The appellant corporation also set up as an affirmative defense by way of cross-complaint that on the 29th of January, 1912, said mining claim was duly located by one Inghram and named by him the "Halfmoon" mining claim, and that long prior to the commencement of this action the appellant became the owner thereof by purchase and ever since has been and now is the owner thereof; that at the time of the location of said Halfmoon lode the area embraced within its boundaries was vacant, unoccupied public land and subject to location, and that on October 7, 1912, the appellant, being in possession of said claim, the agents of the respondent corporation, during the absence of the agents of appellant, entered into possession of said property, and that thereafter the appellant instituted an action in the probate court of Shoshone county for the purpose of securing restitution of said premises and for damages, but before service of process could be secured on the agent of respondent this action was instituted.

The appellant by its cross-complaint prayed for judgment that its title in the said Halfmoon lode claim be quieted and confirmed, and that a perpetual injunction issue in said action against respondents and its agents. Service of said answer and cross-complaint was made upon the attorneys for respondent on April 3, 1913. On May 19, 1913, the default of the plaintiff corporation for not answering the cross-complaint or appearing therein was entered by the clerk of the trial court. The cause was thereafter tried by the court and judgment entered in favor of the plaintiff, as above stated. The court, however, failed to make any findings as to the allegations of the cross-complaint.

The respondent on the trial, to prove that it had complied with the laws of the state of...