Int'l Text-Book Co. v. Lynch

• Decision Date: 10 April 1908
• Citation: 69 A. 541,81 Vt. 101
• Court: Vermont Supreme Court
• Parties: INTERNATIONAL TEXT-BOOK CO. v. LYNCH.

69 A. 541

81 Vt. 101

INTERNATIONAL TEXT-BOOK CO.

v. LYNCH.

Supreme Court of Vermont. St. Johnsbury.

April 10, 1908.

Exceptions from Caledonia County Court; W. W. Miles, Judge.

Action by the International Text-Book Company against Connell R. Lynch. From a judgment for plaintiff, defendant excepts. Reversed.

G. C. Frye, for plaintiff. Harland B. Howe and Herbert W. Hovey, for defendant.

TYLER, J. This action is general and special assumpsit brought to recover the sum claimed to be due upon a contract for a course of correspondence instruction. The plaintiff is a corporation chartered in the state of Pennsylvania and having its principal office in Scranton in that state. At the time this contract was made it had an agent with an office at St. Johnsbury in this state in which office some of the plaintiff's supplies were kept. The office rent was paid by the plaintiff. The duties of the agent were to solicit persons to receive the instruction furnished by the plaintiff and obtain from them an agreement, called "Contract for Scholarship," and $5 in money, which sum the agent forwarded, with the contract, to the plaintiff for its acceptance or rejection. In January, 1905, the defendant at the agent's solicitation, entered into a written contract with the defendant, the substance of Which was that the plaintiff was to furnish him a course of correspondence instruction in said school upon the subjects embraced in the "Building and Contractors Scholarship," with copyrighted instruction papers, examination questions and drawing plates prepared for such scholarship, for which the defendant was to pay the plaintiff $5 when he signed the contract and $5 each month until $63.90 was paid, or $57.60 if full payment was made within CO days. Upon full payment the defendant was to be entitled to a certificate of scholarship, etc. The first $5 and the contract were forwarded to and accepted by the plaintiff, which, in return, sent volumes of instructions to the defendant, who subsequently made four monthly payments upon the contract, when he notified the plaintiff's agent that he should make no more payments and proceed no further under the contract The plaintiff has always been ready to perform the contract on its part. The defendant never took any of the instructions furnished him. The plaintiff suffered no damage except the failure to receive the money in full that it would have been entitled to if the defendant had performed the contract. The plaintiff never paid the annual license tax that is due under our statute from foreign corporations, nor obtained the required certificate from the Secretary of State. Upon these facts the trial court rendered judgment for the plaintiff for the full contract price for instruction, to which the defendant excepted.

Section 55 of Act No. 20, p. 28, passed in 1902 and in force when this contract was made, provided that, if any corporation or association organized under the laws of this state, or any corporation or association organized under the laws of any state or government other than Vermont and doing business herein, shall not have paid the annual license tax required of such corporation or association, on or before the 1st day of May in each year, such corporation or association shall not maintain an action in this state subsequent to such date, unless prior to the making of such contract it shall have paid its annual license tax.

1. The plaintiff contends that the contract did not contemplate the transaction of business by the plaintiff in this state within the meaning of the statute, but it does not state in its brief the grounds upon which it bases this claim. The case evidently does not fall within the class of cases denominated isolated transactions. It does not appear whether orders were solicited and taken by the agent from other persons besides the defendant. If it was the only order taken in this state it would not determine the question whether it constituted doing business here. Many cases might be cited where foreign corporations made single transactions in other states, and in the usual course of their business, and were not held to be doing business in those states. The prohibition is upon foreign corporations engaging in business in the domestic state, and the test is not that it is a single transaction, but that it is done with the intent to engage in business therein, and if so, then a single act in that business is in violation of the statute. So it was held in Florsheim, etc., Co. v. Lester, 60 Ark. 120, 29 S. W. 34, 27 L. R. A. 505, 46 Am. St. Rep. 162, that the taking of a single mortgage to secure a past due debt, with no intention apparent to transact other business of the kind in the state, was not doing business within the meaning of the statute. On the other hand, the appointment of agents in the domestic state for the purpose of working up a loan business and inducing people to effect loans, and the effecting of loans is held to be doing business in that state. U. S. Saving, etc., Co. v. Miller (Tenn, Ch. App.) 47 S. W. 17. The same is held in case of the transmission to an agent of insurance policies made out on his application in the domestic state and sent to him there for delivery to the persons insured on receipt of the premium. Berry v. Knights Templars', etc. (C. C.) 46 Fed. 439. The state of Maryland has a statute providing that any corporation not chartered therein shall be deemed to hold and exercise its franchises within the state and be liable to suit in any of the courts of the state on any dealings or transactions therein. An agent within the state was appointed jointly by two railroad companies—one domestic and the other foreign—to solicit traffic over both roads, the agent having an office and advertising for business over both connecting roads; held, that the foreign corporation was transacting business in Maryland within the meaning of the law. Central of Georgia Ry. Co. v. Eichberg (Maryland Court of Appeals) 68 Atl. 690. In Metropolitan L. Ins. Co. v. New Orleans, 205 U. S. 395, 27 Sup. Ct. 499, 51 L. Ed. 853, it was held that those engaged in the business of lending money in a state, being nonresidents, might be taxed upon the capital employed in such business precisely as the state could tax the capital of its own citizens. In the same line of reasoning is New York ex rel. Burke v. Wells (decided by the U. S. Supreme Court at the October term, 1907) 28 Sup. Ct. 193, 52 L. Ed. — In this case an office was hired by the plaintiff, and presumably suitably...