International Text-Book Company v. Gillespie

• Decision Date: 22 June 1910
• Parties: INTERNATIONAL TEXT-BOOK COMPANY, Appellant, v. CHARLES R. GILLESPIE
• Court: Missouri Supreme Court

129 S.W. 922

229 Mo. 397

INTERNATIONAL TEXT-BOOK COMPANY, Appellant, v. CHARLES R. GILLESPIE

Supreme Court of Missouri, First Division

June 22, 1910

Appeal from St. Louis City Circuit Court. -- Hon. Daniel D. Fisher Judge.

Reversed and remanded.

Hall & Dame for appellants; David C. Harrington of counsel.

(1) Appellant's operations in this State do not constitute doing business within the meaning of statutes relative to foreign corporations. The following points cover the whole scope of appellant's activities in this State: (a) The soliciting of enrollments for courses of instruction is not doing business. Beard v. Publishing Co., 71 Ala. 60; Steel Tube v. Riehl, 9 Pa. Sup. 220; Union v Yaunt, 101 U.S. 352; State v. Looney, 214 Mo 216; Hogan v. St. Louis, 176 Mo. 149. (b) The making of collections of payments on account of scholarships is not doing business. Beard v. Publishing Co., 71 Ala. 60; State v. Looney, supra; Hovens v. Diamond, 93 Ill.App. 557. (c) Having a local office is not per se doing business. People ex rel. v. Campbell, 139 N.Y. 68; Plow Co. v. Peterson, 101 N.W. 616. (d) The making of contracts in another State with citizens of this State is not doing business in this State. Amusement Co. v. Forest Park, 192 Mo. 404; State v. Book Co., 69 Kas. 1; Milliken v. Fullerton, 91 N.Y.S. 1104; Plow Co. v. Peterson, 101 N.W. 616; Mfg. Co. v. Frizzell, 81 P. 58; Holder v. Aultman, 169 U.S. 81. (e) Contracts which must be accepted in another State before becoming binding are made in such other State and are valid and enforceable in this State. Holder v. Aultman, 169 U.S. 81; Scruggs v. Mortgage Co., 54 Ark. 566; 9 Cyc. 670. (f) The making of a contract even in this State is not doing business in this State. Hogan v. St. Louis, 176 Mo. 149. (g) The appointing of agents is not doing business. Bank v. Leeper, 121 Mo.App. 688; Morgan v. White, 101 Ind. 413. (h) Advertising is not doing business. State v. Book Co., 69 Kas. 1. (i) The selling of commodities in this State, which are afterwards and in pursuance of such sale to be sent into this State from another State, is not doing business in this State, but is interstate commerce and not subject to regulation by statutes of this State. Corn v. Hogan, 74 S.W. 737; Packet Co. v. Holder, 68 F. 467; State Freight Tax, 15 Wall. 264; McCall v. California, 136 U.S. 104; Railroad v. Pennsylvania, 136 U.S. 114; Hooper v. California, 155 U.S. 648; Oil Co. v. Texas, 177 U.S. 46; Connolly v. Railroad, 184 U.S. 558; 17 Am. and Eng. Ency. Law (2 Ed.), 75 and 106; Mfg. Co. v. Frizzell, 81 P. 58; Sponge Co. v. Drug Co., 102 N. W. (Wis.) 888; Mason v. Edward Thompson Co., 103 N. W. (Minn.) 507; Davis v. Dix, 64 F. 406; Minnesota v. Barber, 136 U.S. 313; State v. Looney, 214 Mo. 216. (j) The enforcement of a contract after it is made is not doing business. If this were not the law, no contract of any foreign corporation could be enforced without complying with the statutes, and the effects of comity would be nil. 13 Am. and Eng. Ency. Law (2 Ed.), 869; Christian v. Amer., etc., 89 Ala. 198; Texas Co. v. Worsham, 76 Tex. 556; Conn. Co. v. Way, 62 N.H. 622; L. & T. Co. v. Clifford, 90 Minn. 358; McMillan Co. v. Stewart, 54 All. (N. J.) 240; Miller v. Goodman, 91 Tex. 41; Milan Co. v. Garten, 93 Tenn. 590; Beale, Foreign Corps., sec. 209. (2) If the business and transactions of appellant, as shown by the evidence, are within the purview of the statutes of Missouri relating to foreign corporations, to-wit, of sections 1024-5-6, R. S. 1899, the provisions of such statutes are violative of the commerce clause of the Federal Constitution and void as to appellant. Shoe Co. v. Rubber Co., 156 F. 1; Mfg. Co. v. Ferguson, 113 U.S. 727; Robbins v. Taxing Dist., 120 U.S. 489; Asher v. Texas, 128 U.S. 129; Stontenburg v. Hennick, 129 U.S. 140; Lyng v. Michigan, 135 U.S. 161; Crutcher v. Kentucky, 141 U.S. 47; Brennan v. Titusville, 153 U.S. 289; Stockard v. Morgan, 185 U.S. 27; Caldwell v. North Carolina, 187 U.S. 622; Conolly v. Railroad, 184 U.S. 558; Mfg. Co. v. Dix, 64 F. 406; Tel. Co. v. Kansas, 30 U.S. 190; Pullman Co. v. Kansas, 30 U.S. 232.

Roy M. Eilers, John W. Calhoun and Lester I. Heyman for respondent.

(1) A foreign corporation engaged in transacting business in this State, without having complied with our laws respecting foreign corporations, cannot enforce an executory contract growing out of such unlawful business. The cause of action is void. R. S. 1899, secs. 1024-25-26; McCanna v. Trust Co., 24 U.S.C. C. A. 11; Rubber Co. v. Shoe Co., 132 F. 198; Insurance Co. v. Harvey, 11 Wis. 394; Assurance Co. v. Rosenthal, 55 Ill. 85; Hoffman v. Banks, 41 Ind. 1; Williams v. Scullin, 59 Mo.App. 30; Heating Co. v. Fixture Co., 60 Mo.App. 148; Carson-Rand Co. v. Stern, 129 Mo. 381; Ehrhardt v. Robertson Bros., 78 Mo.App. 404; Hogan v. St. Louis, 176 Mo. 149; TriState Co. v. Amusement Co., 192 Mo. 404. (2) Even though the business of appellant corporation should come within the meaning of the term interstate commerce, it has so entered the State of Missouri that it becomes amenable to the provisions of sections 1024-5-6, R. S. 1899. Fay Fruit Co. v. McKinney, 103 Mo.App. 304; Ehrhardt v. Robertson Bros., 78 Mo.App. 404; Williams v. Scullin, 59 Mo.App. 30; Commonwealth v. Schoelenberger, 156 Pa. St. 201; Preston v. Farley, 72 F. 850. (3) The evidence submitted to the lower trial court and the finding of such court conclusively show that the transactions which the appellant corporation conducts within the State come within the meaning of the term "doing business" so as to compel the appellant to comply with the provisions of sections 1024-5-6, R. S. 1899. Fay Fruit Co. v. McKinney, 103 Mo.App. 204; People v. Mining Co., 105 N.Y. 76; Caesar v. Capell, 83 F. 403; Smythe v. Assurance Co., 35 How. Prac. (N. Y.) 126; Price v. Ins. Co., 3 Mo.App. 262; Indem. Co. v. Jarman, 187 U.S. 197; Ins. Co. v. Smith, 19 Mo.App. 627. (4) The business in which appellant corporation is engaged, and which is authorized by its charter, is not such as comes within the meaning of the term interstate commerce. State v. Morgan, 48 N.W. 314; Dorsey v. Conn. Mut., 108 Tenn. 567; Paul v. Virginia, 75 U.S. 168.

WOODSON, J. Valliant, J., concurs in result in separate opinion.

OPINION

WOODSON, J.

This suit was instituted by the appellant, a foreign corporation, against the respondent, before a justice of the peace in the city of St. Louis, to recover the sum of $ 61.20, alleged to be due it on a certain contract mentioned in the complaint filed with the justice.

A trial was had before the justice, which resulted in a judgment in favor of the respondent, and from that judgment the appellant appealed to the circuit court. The trial had in the latter court also resulted in a judgment in favor of the respondent, from which the appellant duly appealed to this court.

The facts will sufficiently appear from the findings made and filed in the cause by the trial court, which are as follows:

"The court finds the facts in the case to be as follows:

"That the plaintiff is a corporation organized and doing business under and by virtue of the laws of the State of Pennsylvania and is authorized, among other things, to originate, write, compile, illustrate, edit, publish and sell instruction papers, text-books, drawing plates, periodicals, magazines, pamphlets, articles and letters for the dissemination of literature, technical education and other information; that the principal executive officers of said corporation reside in Pennsylvania and exercise their functions as such at Scranton; that the plaintiff conducts what it designates as International Correspondence Schools.

"Its method of conducting such schools is to furnish students in various parts of the country with text-books, and written instruction and question papers are delivered to the students from time to time through the United States mails; that such instruction papers are furnished for pay by parties with whom the plaintiff makes written contracts; that all the contracts of said plaintiff for scholarship with parties residing in this State are addressed by the proposed students to the plaintiff at Scranton, Pennsylvania, and are subject to final acceptance or rejection by the officers of said plaintiff there; that the plaintiff conducts what it designates as International Correspondence Schools; that all instruction and question papers of said corporation are prepared at Scranton, and are sent from there through the mails to the respective students of the plaintiff residing in this State; that the money paid by such students on account of instruction or scholarships is received, in most cases, in the first instance, by agents of the plaintiff called solicitors or representatives of the district in which the students reside and thereupon remitted by such solicitor, or representatives, to the superintendent of the plaintiff at Cincinnati, Ohio, and deposited in a bank at Newport, Kentucky, to the credit of the plaintiff; that the text-books used for instructing students after their contracts are accepted are sent by the plaintiff from Scranton direct to the student as provided in said contract; that offices or agencies of the plaintiff are maintained in this State for the purpose of furnishing and conducting the sale of scholarships and securing the purchase thereof in the manner hereinafter set forth; that the plaintiff's method of doing business is to divide the country in which it operates into districts and the districts into divisions. The districts are put under the supervision of a local superintendent, and under him, in each division in each district, is a division superintendent, and under each such division superintendent are three or four solicitors.

"Plaintiff...