General Fire Extinguisher Co. v. Northwestern Auto Supply Co.
| Decision Date | 18 December 1922 |
| Docket Number | 4928. |
| Citation | 211 P. 308,65 Mont. 371 |
| Parties | GENERAL FIRE EXTINGUISHER CO. v. NORTHWESTERN AUTO SUPPLY CO. |
| Court | Montana Supreme Court |
Appeal from District Court, Yellowstone County; Robert C. Stong Judge.
Action by the General Fire Extinguisher Company against the Northwestern Auto Supply Company. From a judgment for plaintiff and from an order denying defendant's motion for new trial, defendant appeals. Judgment and order reversed and remanded, with directions.
Grimstad & Brown, of Billings, for appellant.
Waldo & Cunningham, of Billings, for respondent.
This action was instituted by the plaintiff to recover the sum of $1,933.34, together with interest and costs, the sum stated claimed to be due it under contract for installing and equipping a three-story building and basement at Billings belonging to the defendant, with a system of automatic sprinklers and fire extinguishing apparatus. It is alleged in the first count of plaintiff's complaint that the plaintiff agreed to install the system in such building for the sum of $5,530, provided that the number of the sprinklers installed did not exceed 444, and that if more or less than this number were required, they should be charged for or credited, whichever way it might be, at the rate of $5 each that the amount to be paid for such installation and equipment should be one-third cash when the work was commenced, one-third when the water was turned on and the property under protection, and the balance after the completion of the work specified; further that the plaintiff completed its work in accordance with contract on or about the 18th day of April, 1918, and that 462 sprinklers were required and installed in the building; that by reason thereof the defendant became indebted to the plaintiff in the sum of $5,620; and that no part thereof was paid, save and except the sum of $1,843.33, paid on April 13, 1918, and $1,843.33, paid on June 8, 1918, leaving a balance due of $1,933.34, made the basis of the action. In a second count of the complaint the plaintiff seeks a recovery of the same amount, with interest and costs, based upon a quantum meruit.
By its answer the defendant denied that there was any sum or amount whatsoever due the plaintiff, and that the plaintiff had performed its contract, admitting that it had paid to the plaintiff the amounts stated in plaintiff's complaint on the dates alleged, and that it had not made any other or further payments. The defendant then pleaded in special defense many matters not necessary here to be recited, other than the following: The breach of the terms of plaintiff's contract, which is set forth and made a part of the answer, and that the plaintiff is a foreign corporation, not authorized to do business in the state of Montana at the time the alleged contract was made, at the time of the filing of the complaint, or at all, by reason of having failed to comply with the law regulating the conditions under which foreign corporations may do business in this state. Several counterclaims for damages are pleaded by the defendant in its answer, aggregating a total of $14,386.66.
Plaintiff's replication denies all new matters alleged in defendant's answer, save that it is admitted that it is, and was at all times mentioned in the complaint, a foreign corporation. It is then alleged by the plaintiff that the transaction with the defendant was one in interstate commerce, in consequence whereof no duty rested on the plaintiff to comply with the law regulating the transaction of foreign corporations in this state. And among other things pleaded affirmatively in its reply was a modification and waiver by the defendant of certain of the terms of plaintiff's proposed contract before the execution of the work by it. Upon issue thus joined, the case was tried before a jury. At the conclusion of all of the testimony in the case, both the plaintiff and the defendant made separate motions for a directed verdict. Plaintiff's motion was granted, and the defendant's denied. Thereupon a verdict was rendered and filed as follows:
"We, the jury, impaneled and sworn in the above-entitled action by direction of the court, do find the issues herein in favor of the plaintiff, and assess damages at nineteen hundred thirty-three and 34/100 dollars ($1,933.34), with interest thereon at 8 per cent. per annum from the date when the last payment was due under the contract, to wit, May 18, 1918, and that defendant take nothing by its counterclaim."
Judgment was entered upon the verdict. This appeal is both from the judgment and from an order denying defendant's motion for a new trial.
As we view this appeal, there are but two questions presented necessary for decision, viz: (1) May the plaintiff, not having complied with our laws regulating foreign corporations doing business within this state, maintain this action; and (2) was the plaintiff guilty of such a breach of its contract as to defeat its right of recovery?
1. Section 6651 of the Revised Codes of 1921 provides the conditions under which a foreign corporation, other than "insurance companies and corporations otherwise provided for," may do "business within this state"; and section 6653 provides that any corporation commencing or attempting "to do business in this state" without complying with the law shall be without remedy to enforce its contracts until it shall have complied with the law. The plaintiff falls within the category of foreign corporations required to comply with section 6651 before doing business in this state, and the question arises as to whether the business done by the plaintiff, such as is disclosed by the record in this case, constituted doing business within the state, in violation of the statute. The record discloses that the plaintiff sent its agent to Montana to secure a contract for the installation of plaintiff's fire-extinguishing apparatus; that the sprinklers and apparatus were fabricated at Warren, Ohio; Chicago, Ill.; Auburn and Providence, R. I.; that they were then shipped to Billings, where they were installed in defendant's building under the direction of a trained and experienced expert in plaintiff's employ; that in connection with such installation, plaintiff employed certain local labor necessary, and made purchase at Billings of many small articles required, such as "nails, strips of tin, and stuff like that." The plaintiff has never established any office or place of business in Montana, nor does it manufacture any of its apparatus or materials within the state. The plaintiff company equipped one other building in Montana with fire-extinguishing apparatus shortly before the job done by it for the defendant, all in the same manner and under circumstances similar as to process of installation and place of securing necessary incidental labor and materials, in a warehouse of the Great Western Sugar Company, at Billings.
In volume 9, Fletcher Cyclopedia Corporations, § 5919, we think the rule is well stated as follows:
Again the same author states the rule as follows: Volume 10, 1921 Supp., Fletcher Cyc. Corp. § 5919.
Numerous authorities will be found collected to the same effect under "Doing Business" in 2 Words and Phrases, Second Series, 108, and the decisions of this court fully uphold the doctrine, and conform to the views here expressed. Powder R. C. Co. v. Commissioners Custer County, 9 Mont. 145, 22 P. 383; Uihlein v. Caplice Commercial Co., 39 Mont. 327, 102 P. 564; Dover Lumber Co. v. Whitcomb, 54 Mont. 141, 168 P. 947. In the Uihlein Case, above cited, it was held that the shipping of beer into this state by a foreign corporation, and sale thereof to a distributing agent, does not constitute doing business in the state, within the meaning of the statute.
We entertain the view that isolated transactions, whereby a foreign corporation sells goods or other manufactured products on sample or specifications, the same being fabricated in another state and shipped into this state by such corporation for use or installation, does not constitute the doing of business in this state, within contemplation of the statute. Were the law given a contrary construction, it is easy to see the farreaching and absurd...
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