Garratt Ford Co. v. Vt. Manuf'g Co.

• Decision Date: 12 July 1897
• Parties: GARRATT FORD CO. v. VERMONT MANUF'G CO. et al.
• Court: Rhode Island Supreme Court

37 A. 948

20 R.I. 187

GARRATT FORD CO.

v. VERMONT MANUF'G CO. et al.

Supreme Court of Rhode Island.

July 12, 1897.

Action by the Garratt Ford Company against the Vermont Manufacturing Company. To a refusal of the judge to make a certain charge, defendant petitions for a new trial. Dismissed.

Bassett & Mitchell, for plaintiff.

Lee & Tillinghast, for defendant.

STINESS, J. The plaintiff, a corporation located in Boston, Mass., sold to the defendant a tank, through a salesman who took the order in Providence, and it now seeks to recover the price in this suit. The defendant asked the judge presiding at the trial to charge that the plaintiff, being a foreign corporation, which had not complied with the law of this state in appointing a resident of this state as its attorney (Gen. Laws, c. 253, §§ 36-41), was not entitled to maintain this action. To the refusal of the judge so to charge, the defendant asks for a new trial, on the ground of erroneous ruling.

The question whether a corporation of one state can do business in another state without complying with the laws of such state is one which has frequently arisen, and upon which decisions are conflicting, although many decisions turn upon the language of a statute. Thus, it is held that a statute prohibiting a foreign corporation from doing business in a state without complying with its terms makes such business illegal and void, and that no such corporation can maintain an action to enforce its illegal contracts; and, where the statute does not provide for the consequences of noncompliance, the argument is that the acts of the corporation must be void, or else the statute would be nugatory. In Massachusetts a penalty is imposed upon the agent doing business; but the statute (St. 1884, c. 330, § 3) says that a failure to comply with the conditions shall not affect the validity of an act of the corporation. Rogers v. Simmons, 155 Mass. 259, 29 N. E. 580. Some statutes declare the acts to be void. In such cases there can be no question of validity. Some cases hold that where the statute imposes a penalty upon the agent, but is silent as to the validity of the act, it is to be presumed that the legislature intended the penalty as a sufficient safeguard for compliance, and that to declare the acts of the corporation void would go further than the statute, and impose an additional penalty, by construction, which should not be done. A notable case of this kind is Fritts v. Palmer, 132 U. S. 282, 10 Sup. Ct. 93, in which the court says: "The fair implication is that, in the judgment of the legislature of Colorado, this penalty was ample to effect the object of the statutes prescribing the terms upon which foreign corporations, might do business in that state. It is not for the judiciary, at the instance or for the benefit of private parties, claiming under deeds executed by the person who had previously conveyed to the corporation, according to the forms prescribed for passing title to real estate, to inflict the additional and harsh penalty of forfeiting, for the benefit of such parties, the estate thus conveyed to the corporation, and by it conveyed to others. * * * If the legislature had intended to declare that no title should pass under a conveyance to a foreign...