A.H. Andrews Co. v. Colonial Theatre Co.

• Decision Date: 23 September 1922
• Docket Number: 249.
• Citation: 283 F. 471
• Parties: A. H. ANDREWS CO. v. COLONIAL THEATRE CO.
• Court: U.S. District Court — Eastern District of Michigan

283 F. 471

A. H. ANDREWS CO. v. COLONIAL THEATRE CO.

No. 249.

United States District Court, E.D. Michigan, Northern Division.

September 23, 1922

Warren Cady, Hill & Hamblen, of Detroit, Mich., for plaintiff.

Farley & Selby, of Flint, Mich., for defendant.

TUTTLE District Judge.

This is a motion by the plaintiff to set aside the verdict directed by the court in favor of the defendant and to grant a new trial. The action was brought by an Illinois corporation which was not authorized to do business in Michigan, against a Michigan corporation, which occupied and was preparing to equip a new theater building, for the recovery of damages under a contract between the parties for the sale and installation in said theater, by plaintiff, of certain theater chairs. The contract provided in substance that 'the party of the first part (plaintiff) agrees to manufacture, transport, deliver and set up ready for use in Colonial Theatre at Flint, Mich.,' said theater chairs which were to be shipped by plaintiff to Flint and there installed in said theater by it within a specified time, in accordance with a diagram to be furnished by the defendant. It was agreed, by said contract, that the defendant should give plaintiff free access to, and possession of, the auditorium (with plenty of heat and light in the same, free of charge, and the floor to be clear of all obstruction and debris) wherein said 'seating' was to be placed, and should furnish to plaintiff, free of charge, the electrical current necessary to properly operate the motor generator drills, and other tools used in fastening said chairs to the floor. The contract called for the payment of a stated amount per chair, no division being made as between the purchase price of such chair and the charge for installation thereof. There is no direct evidence as to the place where the contract was made, but it was apparently consummated in Illinois. After manufacture, but before transportation, delivery, or installation of the chairs involved, defendant refused to accept them, and this action was thereupon brought to recover from the latter the unpaid balance alleged to be due under said contract; a payment on account having been already made by defendant.

The testimony shows that, according to the practice of plaintiff in the installation of such chairs by it, one man, called by it a 'superintendent,' is sent to the theater in question with a blueprint and diagram (supplied by the purchaser) of the floor of such theater, and, if the floor be, as here, of cement, with an electric drill to bore holes in the floor. He employs the necessary help in the local community, and shows such help (which need not be skilled labor) how to install the chairs. He first marks with a crayon the places where, according to the aforesaid diagram, the holes are to be, and are, bored by said drill. An expansion bolt is placed over an expansion shield, which is driven into the hole. A leg of a chair is next set over this bolt which projects slightly upward from the hole above the surface of the floor. A nut is then fastened to the protruding top of the bolt and tightened, until the shield expands and fastens the leg of the chair, previously set upon and over the bolt, securely to the floor by friction. This process is repeated with each chair. The chairs are shipped from the factory to the theater in a knocked-down condition, and on arrival at the place where they are to be installed are set up (by a simple and well-known operation) and installed by ordinary workmen employed by the plaintiff in the manner just described. The method and appliances thus employed are common practice and easily understood, and often used in fastening chairs securely to cement floors in theaters, schools, and other buildings.

The defense to this action is based upon the contention that the contract hereinbefore mentioned is void and unenforceable, because it required the carrying on of business in Michigan by the plaintiff corporation, which the latter was prohibited by the Michigan statutes from doing by reason of its failure to comply with the statutory requirements applicable. Section 1 of Act 206 of the Michigan Public Acts of 1901, as amended, being section 9063 of the Michigan Compiled Laws of 1915, provides:

'It shall be unlawful for any corporation organized under the laws of any state of the United States, except the state of Michigan, or of any foreign country, to carry on its business in this state, until it shall have procured from the secretary of state of this state a certificate of authority for that purpose.'

Section 6 of the same act (section 9068 of the Michigan Compiled Laws of 1915) provides as follows:

'No foreign corporation, subject to the provisions of this act, shall be capable of making a valid contract, in this state until it shall have fully complied with the requirements of this act, and at the time holds an unrevoked certificate to that effect from the secretary of state.' Section 8 of the act (section 9070, Compiled Laws of 1915) concludes thus:

'Nor shall this act be construed to prohibit any sale of goods or merchandise which would be protected by the rights of interstate commerce.'

It is undisputed that at the time of the making of the contract in suit the plaintiff was a corporation organized under the laws of the state of Illinois, and that it had not procured from the secretary of state of Michigan a certificate of authority to carry on its business in the latter state. If, therefore this...