Dickson v. Western Tar Products Corp., Inc., 47089

• Decision Date: 07 May 1973
• Docket Number: No. 47089,47089
• Citation: 277 So.2d 430
• Parties: Hugh DICKSON v. WESTERN TAR PRODUCTS CORP., INC.
• Court: Mississippi Supreme Court

Page 430

277 So.2d 430

Hugh DICKSON v. WESTERN TAR PRODUCTS CORP., INC.

No. 47089.

Supreme Court of Mississippi.

May 7, 1973.

Cox & Dunn, Ltd., William H. Cox, Jr., Jackson, for appellant.

Case & Montgomery, Canton, for appellee.

INZER, Justice:

This is an appeal by Hugh Dickson from a judgment of the Circuit Court of Madison County rendered in favor of appellee, Western Tar Products Corporation, Inc.

Appellee, hereinafter referred to as Western Tar, filed suit against appellant in the Circuit Court of Madison County seeking to recover a judgment on a promissory note executed by appellant. Appellant included in his answer a motion to dismiss and a plea in bar asserting that Western Tar was a foreign corporation and it had violated Section 5309-239, Mississippi Code 1942 Annotated (Supp.1972), in that it had not qualified to do business in the State of Mississippi and that its suit was based upon a cause of action which arose out of such transacted business. The pertinent part of Section 5309-239 supra, reads as follows:

Section 5309-239. Transacting business without certificate of authority.

No foreign corporation transacting business in this state without a certificate of authority shall be permitted to maintain any action, suit or proceeding in any court of this state. Nor shall any action, suit or proceeding be maintained in any court of this state by any successor or assignee of such corporation on any right, claim or demand arising out of the transaction of business by such corporation in this state.

The failure of a foreign corporation to obtain a certificate of authority to transact business in this state shall not impair the validity of any contract or act of such corporation, and shall not prevent such corporation from defending any action, suit or proceeding in any court of this state.

In response to this plea, Western Tar alleged that appellant was barred from offering the defense of Section 5309-239 by the doctrine of res judicata and also under the concept of compromise and settlement. It alleged a lawsuit based upon the same considerations, sales and receipts, represented by the promissory note sued upon was settled in the District Court of the United States, Southern District of Mississippi, Jackson Division, wherein an order was entered dismissing with prejudice all issues in that suit; in that suit, the same defense was raised by the appellant, and the order of dismissal disposed of the defense adversely to appellant. Western Tar also denied that it had or was presently doing business in Mississippi in violation of the foregoing section.

When the case came on for trial, the special plea and response thereto was called up for hearing in advance of the trial on the merits. The court after hearing argument of counsel held that the doctrine of res judicata applied and consequently as a matter of law the plea in bar of appellant based upon Section 5309-239 could not be maintained because of the order entered in United States District Court dismissing that suit with prejudice. After this ruling appellant proffered testimony to show that Western Tar was a foreign corporation doing business in the state without a certificate of authority at the time this cause of action accrued. The court ruled that in view of the foregoing ruling appellant could not introduce such evidence. The cause was then heard upon its merits and the court again stated that the appellant could not introduce evidence to show that Western Tar was in violation of Section 5309-239.

It appears that the note now sued upon was executed by appellant in settlement of the suit in Federal Court and that the order of dismissal with prejudice was entered before any issue was litigated or determined by that court.

One of the assignments of...