International Trust Co. v. A. Leschen & Sons Rope Co.

• Decision Date: 04 November 1907
• Citation: 92 P. 727,41 Colo. 299
• Parties: INTERNATIONAL TRUST CO. v. A. LESCHEN & SONS ROPE CO. et al.
• Court: Colorado Supreme Court

92 P. 727

41 Colo. 299

INTERNATIONAL TRUST CO. v. A. LESCHEN & SONS ROPE CO. et al.

Supreme Court of Colorado

November 4, 1907

Appeal from District Court, Dolores County; James L. Russell, Judge.

Action by the A. Leschen & Sons Rope Company against the International Trust Company and another. From a judgment for plaintiff, defendant International Trust Company appeals. Affirmed.

A Leschen & Sons Rope Company, appellee, and herein referred to as plaintiff, was at the time of the transaction involved in this controversy a corporation organized under the laws of the state of Missouri, with its plant and office in St Louis, Mo., and was engaged in selling goods in the state of Colorado and other states of the Union. On August 17, 1901 in pursuance of a sale made by one of its traveling salesmen it entered into a written contract at the town of Rico Colo., with the Pro Patria Mining & Milling Company, a corporation organized under the laws of this state, to furnish certain manufactured materials and supplies f. o. b. St. Louis, Mo., to be used by the milling company in the erection and construction of a wire rope tramway which the latter company was about to build upon its property and right of way from, or near, its group of mines in Dolores county, Colo., to a concentrating plant about to be built by the milling company at Rico, at and for the agreed price of $2,775, payable 50 per cent. on receipt of bill of lading, and 50 per cent. on final delivery of materials. These materials and supplies were furnished between August 17 and December 31, 1901. On September 1, 1901, the Pro Patria Mining & Milling Company executed a trust deed on all its property to the International Trust Company, a corporation organized under the laws of Colorado, to secure a certain bond issue. This trust deed was recorded September 18, 1901. On January 22, 1902, the plaintiff filed a lien statement under the provisions of our mechanic's lien law. On February 8, 1902, the plaintiff filed a complaint in the district court of Dolores county to recover the sum of $3,016.74, the balance due for the materials aforesaid, and for other materials subsequently ordered and furnished, averring that the materials and supplies were furnished by plaintiff and used by the milling company in the erection and construction of the tramway. The appellant, the International Trust Company, was made a party to the action because it claimed some interest in the property sought to be subjected to the mechanic's lien by virtue of the lien created by the trust deed aforesaid. Prayer for judgement for $3,016.74 against the Pro Patria Mining & Milling Company; that the same be adjudged a lien upon the property and premises described in the lien statement prior in time and right to the lien of the trust deed; that the property and premises be sold and the proceeds applied to the payment of the same. The defendants filed separate answers, setting up (1) that said plaintiff had never filed with the Secretary of State a copy of its charter or of its certificate of incorporation; (2) that said plaintiff had not filed with the Secretary of State a certificate designating its principal place of business and an agent upon whom process might be served, and that plaintiff had not complied with the requirements of sections 4 and 10 of 'An act relating to corporations, and prescribing certain fees to be paid by corporations, foreign and domestic, and to repeal certain acts and all acts and parts of acts in conflict therewith,' approved April 6, 1901. Laws 1901, pp. 118, 121, c. 52.

These sections read as follows:

'Sec. 4. Every corporation, joint stock company or association, incorporated by or under any general or special law of any foreign state or kingdom, or any state or territory of the United States, beyond the limits of this state, having a capital stock divided into shares, shall pay to the Secretary of State, for the use of the state, a fee of thirty dollars in case the capital stock which said corporation, joint stock company or association is authorized to have, does not exceed fifty thousand dollars; but in case the capital stock thereof is in excess of fifty thousand dollars, the Secretary of State shall collect the further sum of thirty cents on each and every thousand dollars of such excess, and a like fee of thirty cents on each thousand of the amount of each subsequent increase of stock. The said fee shall be due and payable upon the filing of the certificate of incorporation, articles of association or charter of said corporation, joint stock company or association in the office of the Secretary of State, and no such corporation, joint stock company or association shall have or exercise any corporate powers or hold or acquire any real or personal property, franchises, rights or privileges, or be permitted to do any business or prosecute or defend in any suit in this state until the said fee shal have been paid.'

'Sec. 10. No corporation, joint stock company or association, incorported by or under any general or special law of this state, or by or under any general or special law of any foreign state or kingdom or of any state or territory of the United States, beyond the limits of this state, shall exercise any corporate powers or acquire or hold any real or personal property, or any franchises, rights or privileges, or do any business or prosecute or defend in any suit, in this state until it shall have received from the Secretary of this State a certificate setting forth that full payment has been made by such corporation, joint stock company or association, of all fees and taxes prescribed by law to be paid to the Secretary of State, and every such corporation, joint stock company or association shall pay to the Secretary of State for each such certificate, a fee of five dollars. Nothing in this section shall apply to corporations not for pecuniary profit, or corporations organized for religious, educational or benevolent purposes.'

The plaintiff filed replications to these answers, averring that its headquarters and principal place of business is in St. Louis, state of Missouri; that it had no established agency or place of business in Colorado; that it had traveling salesmen who are continuously traveling through the various states and territories of the United States; that the orders for the appurtenances and materials mentioned in the complaint were taken by one of its traveling salesmen while traveling through the state of Colorado, at the instance of the milling company, and were sold to be delivered to the milling company on board the cars at St. Louis, and were to be paid for at the city of St. Louis, in the state of Missouri, and denies that the transaction described in the complaint, out of which the action arose, constituted doing business in the state of Colorado within the meaning of the foregoing statutes. On May 19, 1904, a supplemental and further reply to the answers was filed, setting forth that on, to wit, the 23d day of October, A. D. 1903, the plaintiff did comply with all the requirements of the statute, and had done all things necessary to qualify and authorize the plaintiff corporation to transact business in the state of Colorado, and to sue and defend all suits in the courts of said state. Upon the trial it was expressly stipulated that all the facts in this supplemental reply were true. There was no controversy as to the indebtedness of the milling company to the plaintiff, and that there was $3,577.87 due from said company to the plaintiff. Appellant moved for judgment on the pleadings. The court overruled said motion, and sustained a motion of plaintiff for judgment against the milling company for the amount claimed, whereupon testimony was taken on the part of plaintiff in support of its mechanic's lien claim, and also as to the priority of such lien to the lien of the trust deed. Appellant excepted to the overruling of its motion for judgment, and also objected to the introduction of evidence in support of the mechanic's lien claim, upon the ground that plaintiff had failed to comply with the statutes of the state, and had no right to transact business in the state, or to acquire a lien upon the property, either at the time of instituting the suit or the filing of the lien statement. A final decree was rendered in favor of plaintiff against the milling company for the amount aforesaid, and adjudging and decreeing to it a lien upon the tramway and the premises described in the complaint for the amount agreed upon to date from September 1, 1901. To reverse this judgment, the International Trust Company brings the case here on appeal.

Macbeth & May, for appellant.

L. W. Allen and Goudy & Twitchell, for appellees.

GOODARD, J. (after stating the facts as above).

1. The Legislature has power to prescribe the terms and conditions upon which foreign corporations may do business within the state, and require a compliance with such terms and conditions as a condition precedent to their invoking the jurisdiction of its courts. In Paul v. Virginia 8 Wall. (U. S.) 168, 181, 19 L.Ed. 357, Mr. Justice Field, speaking for the court, said: 'The corporation, being the mere creation of local law, can have no legal existence beyond the limits of the sovereignty where created. * * * The recognition of its existence even by other states, and the enforcement of its contracts made therein, depend purely upon the comity of those states--a comity which is never extended where the existence of the corporation or the exercise of its powers are prejudicial to their interests or repugnant to their policy. Having no absolute right of recognition in other states, but depending for such recognition and the enforcement of its contracts upon their assent, it...