Larson v. Aultman & Taylor Co.

• Decision Date: 07 November 1893
• Citation: 56 N.W. 915,86 Wis. 281
• Court: Wisconsin Supreme Court
• Parties: LARSON v. AULTMAN & TAYLOR CO.

86 Wis. 281

56 N.W. 915

LARSON

v.AULTMAN & TAYLOR CO.

Supreme Court of Wisconsin.

Nov. 7, 1893.

Appeal from circuit court, Eau Claire county; W. F. Bailey, Judge.

Action by Ole Larson against the Aultman & Taylor Company for damages resulting from a breach of warranty in the purchase of machinery. From the judgment rendered, both parties appeal. Reversed on plaintiff's appeal.

The other facts fully appear in the following statement by CASSODAY, J.:

This action was commenced March 6, 1891, against the defendant, a corporation organized under and by virtue of the laws of Ohio. The complaint alleges, in effect, that July 31, 1884, at Menominee, Wis., the defendant sold and delivered to the plaintiff certain machinery to be used in and about the plaintiff's sawmill, in Barron county, upon a warranty that said machinery would do good work, and be of good quality, and capable of sawing from twenty-five to thirty-five thousand feet of pine lumber per day, and be fit for the purposes of manufacturing lumber in the plaintiff's mill; that the plaintiff, relying upon said warranty, purchased said machinery; that said machinery was not of as good quality as warranted, nor capable of sawing any more than 10,000 feet of pine lumber per day; that a part of said machinery consisted of a second-hand rotary saw, which was old and worthless, and not of the kind ordered by the plaintiff; that after a fair trial the same was returned by the plaintiff to the defendant, as not complying with said warranty; that the defendant received the same, and sent another worthless saw in lieu thereof; that by reason of the facts stated the plaintiff was damaged in the sum of $1,365; that the plaintiff had given the defendant on said purchase two negotiable promissory notes, of $325 each, and that both of them had been sold by the defendant to innocent purchasers thereof; that the plaintiff had unsuccessfully attempted to defend against one of them, and was liable to pay both. The answer consists of admissions and denials, and, in effect, alleges that the plaintiff kept and used the first saw named for several months, and by his own negligence burned and injured the same, and then returned it to the defendant, and requested the defendant to send to him a Henry Disston 52-inch saw, 52 teeth, 6 by 7 gauge; that at such request the defendant did order for, and cause to be sent to, the plaintiff, such Henry Disston saw, and directed him that, if he should desire to return it, he should do so directly to the makers, Henry Disston & Sons; that the machinery so sold to the plaintiff was examined and inspected by the plaintiff before purchasing, and was in good order, and fit for sawing lumber; that the defendant had from the time of purchase, and ever since has had, and now has, agents in this state, conducting its business therein; that the pretended cause of action alleged arose in this state, and took place more than six years prior to the commencement of this action, and is therefore barred by section 4222, Rev. St. At the close of the trial, the jury returned a verdict to the effect that they found against the defendant, and assessed the plaintiff's damages at $145.08. From the judgment entered thereon accordingly, each party appeals to this court.Wickham & Farr, for plaintiff.

W. P. Bartlett, for defendant.

A foreign corporation may plead the statute of limitation; citing McCabe v. Railroad Co., 4 McCrary, 496, 13 Fed. Rep. 827; Express Co. v. Ware, 20 Wall. 543; Railroad Co. v. Harris, 12 Wall. 65; Ex parte Schollenberger, 96 U. S. 369-376;Wall v. Railway Co., 69 Iowa, 498, 29 N. W. Rep. 427;Trust Co. v. Parker, (Neb.) 51 N. W. Rep. 139;Bristol v. Railway Co., 15 Ill. 436;Chicago, D. & V. Ry. Co. v. Bank of North America, 82 Ill. 495;Pennsylvania Co. v. Sloan, 1 Ill. App. 364; Huss v. Railroad Co., 66 Ala. 472.

CASSODAY, J., (after stating the facts).

It is conceded that the defendant is a corporation created and organized under the laws of Ohio. It exists only in contemplation of, and by force of, the law of that state. Since such law has, of itself, no extraterritorial force, the corporation cannot migrate to another state, but must dwell in the state of its creation. Bank v. Earle, 13 Pet. 588; Railroad Co. v. Wheeler, 1 Black, 286;Shaw v. Mining Co., 145 U. S. 449, 450, 12 Sup. Ct. Rep. 935. While it can only live and have its being in that state, yet its residence there creates no insuperable objection to its power to contract in other states, and having its legal existence recognized in such other states. Id. A suit against a corporation in a court of the United States is regarded as brought against its stockholders, all of whom are, for the purposes of jurisdiction, conclusively presumed to be citizens of the state in which the corporation was created. Muller v. Dows, 94 U. S. 444;Whitton v. Railway Co., 13 Wall. 270; Railroad Co. v. Wheeler, 1 Black, 286. Foreign corporations are not compelled to do business in this state. If they voluntarily choose to do so, however, they must submit to such conditions and restrictions as the legislature has seen fit to impose. State v. United States Mut. Acc. Ass'n, 67 Wis. 629, 31 N. W. Rep. 229;Stanhilber v. Insurance Co., 76 Wis. 291, 45 N. W. Rep. 221;Paul v. Virginia, 8 Wall, 181;Philadelphia Fire Ass'n v. People, 119 U. S. 117, 7 Sup. Ct. Rep. 108;Fritts v. Palmer, 132 U. S. 282, 10 Sup. Ct. Rep. 93. The defendant, by voluntarily doing business in this state, thereby voluntarily submitted itself to the laws of this state. Id.

The learned counsel for the defendant contends that the plaintiff's cause of action is barred by the six-years limitation prescribed by section 4222, Rev. St., as pleaded in the answer. Among the exceptions to that statute is the one which declares that “if, when the cause of action shall accrue against any person, he shall be out of this state, such action may be commenced within the terms herein respectively limited, after such person shall return to or remove to this state.” Section 4231, Rev. St. The words, “if * * * he shall be out of this state,” found in the exception thus quoted, has been construed by this court to apply to the mere temporary absence of a resident of the state. Parker v. Kelly, 61 Wis. 552, 21 N. W. Rep. 539. The opinion of Mr. Justice Orton in that case, and the adjudications there cited, seem to dispose of the question suggested in the case at bar, if the defendant is subject to the same rule as a personal defendant. Speaking of the clause quoted, as found in the New York Code, Mr. Chief Justice Fuller, in a recent case, and commenting upon the decisions in that state, in effect, said that, as to the statute of limitation, there were two exceptions to its operation, and that one was “where the debtor was absent from the state when the cause of action accrued,” and that under that exception mere “absence was sufficient to avert the bar, because the statute did not commence to run until the return of the debtor into the state, and such return * * * must be open and notorious, so that a creditor might, with reasonable diligence, find his debtor, and serve him with process.” Barney v. Oelrichs, 138 U. S. 534, 11 Sup. Ct. Rep. 414, citing Engel v. Fischer, 102 N. Y. 404, 7 N. E. Rep. 300, where numerous other cases are cited. In a more recent case, Mr. Justice Gray, speaking for the whole court, in respect to a similar clause in a Kansas statute, said: “It was therefore rightly held by the circuit court that the statute of limitations did not run while the debtor was personally absent from the state, notwithstanding that he continued to have a usual place of residence in the state, where service of a summons could be made on him.” Bauserman v. Blunt, 147 U. S. 657, 13 Sup. Ct. Rep. 466. In that case it was held that the construction given by the supreme court of a state to a statute of limitations of the state would be followed by that court. Id. Sanborn v. Perry, (Wis.) 56 N. W. Rep. 337.

But counsel further contends that a foreign corporation is not a nonresident, in the sense that it cannot plead the statute of limitations, and he cites adjudications to that effect. In Tioga R. Co. v. Blossburg & C. R. Co., 20 Wall. 137, it was held: “The highest courts of New York, construing the statutes of limitations of that state, have decided that a foreign corporation cannot avail itself of them; and this, notwithstanding such corporation was the lessee of a railroad in New York, and had property within the state, and a managing agent residing and keeping an office of the company.” 147 U. S. 654, 13 Sup. Ct. Rep. 466. See Thompson v. Railroad Co., 36 Barb. 79;Olcott v. Railroad Co., 20 N. Y. 210;Rathbun v. Railway Co., 50 N. Y. 656. Under our statutes, the word “person,” as used in the clause quoted from section 4231, Rev. St., “may extend and be applied to bodies politic and corporate, as well as to individuals.” Subdivision 12, § 4971, Rev. St. Such being the law applicable, it is obvious that the defendant was “out of the state” when the plaintiff's cause of action accrued, within the meaning of our statutes. We must held that the plaintiff's cause of action is not barred by the statute of limitations pleaded. It follows that the exceptions of the defendant must be overruled, and that the judgment, in so far as it is questioned on the defendant's appeal, must be affirmed.

The question recurs whether any of the errors assigned in behalf of the plaintiff are available. The evidence on the part of the...