J. R. Watkins Medical Company v. Mosley

• Decision Date: 23 June 1919
• Docket Number: 54
• Citation: 213 S.W. 385,139 Ark. 294
• Parties: J. R. WATKINS MEDICAL COMPANY v. MOSLEY
• Court: Arkansas Supreme Court

213 S.W. 385

139 Ark. 294

J. R. WATKINS MEDICAL COMPANY v. MOSLEY

No. 54

Supreme Court of Arkansas

June 23, 1919

Appeal from Lawrence Circuit Court, Eastern District; Dene H Coleman, Judge; reversed and judgment here for appellant.

Judgment reversed.

W. E Beloate, for appellant.

Appellant was entitled to recover after it later complied with the laws of Arkansas requiring foreign corporations to qualify. The contract here is very similar if not identical with that of Watkins Medical Co. v. Hogue, decided by this court March 24 1919. The contract created the relation of vendor and vendee and not principal and agent. 126 Ark. 597; 131 Id. 15. Defendant guaranteed the payment of the debt and was liable on the third and last contract. 70 Minn. 84; 72 N.W. 829; 68 Am. St. 512. Mosley acknowledged the debt by letter and his admission binds his sureties. 25 N.D. 268; 141 N.W. 479; 2 Brandt on Sur. & Guar. (3 ed.), § 795.

It was prejudicial error to refuse to sustain the demurrer to par. 2 of the answer and in giving instructions 2, 3 and 4 on the theory that a contract entered into by a foreign corporation which had not complied with Act No. 313, Acts 1907, p. 744. 77 Ark. 203; 91 S.W. 306; 113 Am. St. Rep. 139; 77 Ark. 203; 91 S.W. 306; 113 Am. St. 139, following its previous decision in 61 Ark. 1; 54 Am. St. 191; 31 S.W. 157; 29 L. R. A. 712, and afterwards followed in 122 Ark. 451; 132 Id. 108; 200 S.W. 283. See also Hogan v. Intertype Corporation, 136 Ark. 52. The contract was not void and the sale was not unlawful. 132 Ark. 108. Only the right to sue or recover is prohibited until the foreign corporation qualifies under our act of 1907, supra; 236 U.S. 165.

Towney, Smith & Towney (of Minnesota), of counsel for appellants, join in the above brief.

George A. Burr, for appellees.

1. This case is not controlled by 122 Ark. 651, as it differs in material facts as do the other cases cited by appellant. The law of 1899 as amended by act of 1907, provides that any foreign corporation which fails or refuses to comply with the law can not make any contract which can be enforced in this State either in law or equity, and a subsequent compliance with the act after suit shall not validate the contract, etc. The words of this amended act should be given full force and effect as it was evidently the intention to change the former law. Every act thus penalized or prohibited is void, and hence the contract here. 47 Ark. 378; 9 Cyc. 479; 54 Ala. 150; 81 Ark. 41; 85 Id. 106; 103 Id. 288.

2. The verdict establishes the fact that appellant was doing business in this State through its agent Mosley, during the period covered by the contract; that it is a foreign corporation and had not complied with our laws. It is prohibited by law and the contract is null and void. 29 Ark. 386; 32 Id. 619; 47 Id. 378; 77 Id. 580; 2 Mechem on Sales, 1044; 1 Page on Cont., § 327. See also, 6 Humph. (Tenn.) 36; 91 Ark. 69, and cases cited supra.

A penalty implies a prohibition and the Wingo Act is a prohibition unless the act is complied with. 103 Ark. 288; 124 Id. 539; 115 Id. 166.

3. The amendment of the Wingo Act, act No. 687, invalidates the contract here sued on and renders it unenforceable and the judgment is right and should be affirmed.

4. The basis of the objections to the introduction of documentary evidence is not clearly defined, but the court was right in admitting it. 115 Ark. 166; 124 Id. 539.

OPINION

HUMPHREYS, J.

On the 27th day of April, 1917, appellant, a foreign corporation, instituted suit against appellees in the Circuit Court of the Eastern District of Lawrence County, for $ 548.14, alleging that said sum was a balance due under the terms of a contract entered into by and between appellant, on the one part, and appellee, J. M. Mosley, together with his sureties, on the other part. The contract in all material parts was identical with the contract made in the case of J. R. Watkins Medical Co. v. Hogue, 138 Ark. 105, 210 S.W. 628.

Appellee defended upon the ground that the contract sued upon was entered into by appellant, a foreign corporation, for the sale of its medicines, extracts and other articles in the State of Arkansas, through its agent, J. M. Mosley, one of the appellees herein, before qualifying to do business in the State in accordance with Act No. 313, Acts 1907, of the General Assembly of the State of Arkansas.

The cause was submitted to a jury upon the pleadings, evidence and instructions of the court. By the verdict and judgment, appellees were exempted from liability, and an appeal has been duly prosecuted to this court.

The undisputed evidence disclosed that, on December 1, 1913, appellee, J. M. Mosley, was indebted to appellant in the sum of $ 588.97 for goods furnished by appellant and sold by appellee; that, on that date, the contract in question was entered into by and between appellant and appellee with his sureties, in which said amount was expressed as due for goods received and sold under a former contract; that appellee agreed to pay, and said sureties guaranteed the payment of said sum, together with all amounts that might accrue on account of shipments of medicines, extracts and articles furnished during the life of the contract; that all goods subsequently furnished by appellant and sold by appellee were paid for, and that $ 40 was paid on the old indebtedness, leaving a balance due of $ 548.14; that all goods received and sold under the contract in question were received and sold prior to November 30, 1915; that, on said date, and not before, the appellant qualified as a foreign corporation to do business in the State of Arkansas, under act No. 313, Acts of 1907 of the General Assembly of the State of Arkansas. Over the objection of appellant, much evidence was introduced tending to show that, prior to the contract of date December 1, 1913, appellee, J. M. Mosley, sold the goods and products of appellant in the State of Arkansas for a number of years, as its agent. Under our view of the law, as applied to the undisputed facts above recorded, it is unnecessary to set out that evidence.

The cause was sent to the jury upon the theory that appellant, being a foreign corporation and not having qualified to do business in the State of Arkansas, could not recover for the medicines, extracts and other articles shipped to appellee if they were furnished to him and sold by him as the agent of appellant.

Appellant insists that it was entitled to recover for goods furnished and sold by appellee, even though received and sold by him as its agent.

In construing the statute law prescribing conditions upon which foreign corporations might do business in Arkansas, as it stood before the passage of the act in question, this court held in many cases that...