Johnson Service Co. v. Hamilton

• Citation: 281 N.W. 127,225 Iowa 551
• Decision Date: 05 August 1938
• Docket Number: 44236.
• Parties: JOHNSON SERVICE CO. v. HAMILTON.
• Court: Iowa Supreme Court

281 N.W. 127

225 Iowa 551

JOHNSON SERVICE CO. v. HAMILTON.

No. 44236.

Supreme Court of Iowa.

August 5, 1938

Appeal from Municipal Court of Des Moines; D. G. Allen, Judge.

Action at law for balance due on contract. At the close of all the evidence the trial court directed a verdict in favor of the plaintiff and entered judgment thereon. A motion of the defendant to set aside judgment and verdict and for a new trial was also overruled by the trial court. From such verdict and judgment, and from the order of the trial court refusing to overrule same and grant a new trial, the defendant appeals.

Reversed.

Gillespie & Moody, of Des Moines, for appellant.

C Glenn Garten and Richard F. Boyer, both of Des Moines, for appellee.

DONEGAN, Justice.

In this action the plaintiff brought suit to recover the balance claimed due it under a contract for the installation of a duostat and equipment therefor, in connection with the heating system in a flat building owned by the defendant in the city of Des Moines, Iowa. There was a trial to a jury and, at the close of all the evidence, the court sustained the plaintiff's motion for a directed verdict in its favor and entered judgment thereon. Defendant filed a motion to set aside the verdict and judgment and for a new trial which was overruled. From such judgment and the order of the court overruling defendant's motion to set aside the verdict and judgment and for a new trial, the defendant appeals.

Two errors are alleged and relied on by the defendant for reversal. The basis of the first error relied on is that there was no evidence to show that the plaintiff, a foreign corporation, had secured permission to carry on business in Iowa, and that, without such showing, it could not maintain this action.

In its petition the plaintiff alleged that it " is a corporation organized and existing under and by virtue of the laws of the state of Wisconsin and duly authorized to carry on business in the state of Iowa." In his answer the defendant denied each and every allegation of plaintiff's petition, except those thereafter expressly admitted, modified or plead to. The answer contained no admission, modification or plea to the allegation of the petition that the plaintiff was duly authorized to carry on business in the state of Iowa. The Appellant contends that, under the statutes of this state, it was not only incumbent upon the appellee to plead, but also to prove this allegation; that the proof of such authorization is a condition precedent to the plaintiff's right to maintain this action; and that, in the absence of proof of such condition precedent, the trial court was in error in directing a verdict for the plaintiff. The appellee's position is, that the provisions of the statutes in question apply only to stock corporations; that there was no evidence that the plaintiff is a stock corporation; and that the allegation of plaintiff's petition that it was duly authorized to carry on business in the state of Iowa was not put in issue by the general denial of defendant's answer, and there was no burden on plaintiff to present proof to support it. Section 8420 of the Code of Iowa, 1935, requires that any corporation for pecuniary profit organized under the laws of another state, that desires to transact business in this state shall file with the secretary of state a certified copy of its articles of incorporation and request the issuance to it of a permit to transact business in this state. Sections 8421 to 8425 inclusive contain further provisions in regard to the contents of the application, the investigation to be made by the secretary of state, the fees to be paid before permit issues, and other matters not here involved. Sections 8426 and 8427 of the Code of Iowa, 1935, are as follows:

" 8426. Issuance of permit-effect . The secretary of state shall thereupon issue to such corporation, a permit, in such form as he may prescribe, for the transaction of the business of such corporation, and upon the receipt of such permit said corporation shall be permitted and authorized to conduct and carry on its business in this state. 8427. Denial of right to sue . No foreign stock corporation doing business in this state shall maintain any action in this state upon any contract made by it in this state unless prior to the making of such contract it shall have procured such permit. This prohibition shall also apply to any assignee of such foreign stock corporation and to any person claiming under such assignee of such foreign corporation or under either of them."

It is undisputed in the evidence and is conceded in argument, that the contract here sued on is an Iowa contract, and, under the express provisions of Section 8427, the plaintiff would have no right to maintain this action, without previously having procured the permit required by the statutes, unless, as contended by plaintiff, the burden was on the defendant to show that the plaintiff was a stock corporation and that it had not obtained a permit to carry on business in this state. The language of Section 8420 is: " Any corporation for pecuniary profit organized under the laws of another state, * * * which * * * desires hereafter to transact business in this state, * * * shall file with the secretary of state a certified copy of its articles of incorporation, * * * accompanied by a resolution of its board of directors or stockholders authorizing the filing thereof, * * * and requesting the issuance to such corporation of a permit to transact business in this state * * *." Appellee has not cited and we know of no authority holding that this statute is not applicable, unless it first be shown that the corporation involved is a stock corporation. The statute refers to corporations for pecuniary profit. The business in which the appellee was engaged in transacting in this state, under its contract with appellant, appears to us to be such as is ordinarily carried on for the purpose of pecuniary profit, and, even if the burden were on the defendant in this regard, we think the nature of the business transacted was such as to raise a presumption, at least, that the appellee was a corporation for pecuniary profit. Such was the holding under a similar statute of the state of New York in Portland Co. v. Hall & Grant Const. Co., 123 A.D. 495, 108 N.Y.S. 821, and in Wilson & Co. v. Bazaar, Sup., 168 N.Y.S. 188.

Nor are we able to agree with the appellee's contention that the general denial in appellant's answer was not sufficient to put in issue the allegation of the petition that the plaintiff was duly authorized to transact business in the state of Iowa. Under appellee's contention, not only was...