Lloyd Thomas Co. v. Grosvenor

• Decision Date: 29 June 1921
• Citation: 233 S.W. 669,144 Tenn. 347
• Parties: LLOYD THOMAS CO. v. GROSVENOR.
• Court: Tennessee Supreme Court

233 S.W. 669

144 Tenn. 347

LLOYD THOMAS CO. v. GROSVENOR.

Supreme Court of Tennessee.

June 29, 1921

Appeal from Chancery Court, Shelby County; I. H. Peres, Chancellor.

Suit by the Lloyd Thomas Company against C. N. Grosvenor. From decree in favor of defendant, complainant appeals. Reversed and decree entered for complainant.

HALL J.

The bill in this cause was filed by complainant against defendant to recover the sum of $2,290.93. Complainant is a foreign corporation with its general offices located in the city of Chicago, state of Illinois, and is engaged in the business of appraising property.

On January 18, 1919, the complainant entered into a contract with the defendant, Grosvenor, who is a resident of Memphis Tenn., by the terms of which complainant agreed to appraise for Grosvenor certain real estate belonging to the estate of the late Napoleon Hill, situated at Mammoth Springs, Ark. The contract was solicited by the traveling representative of complainant from Grosvenor at Memphis. It was agreed and understood between the defendant and complainant's representative, at the time the contract was reduced to writing and signed by the defendant, that it was not to be binding upon complainant until it had been duly approved and accepted by it at its general office in the city of Chicago in fact, it is so stipulated in the face of the contract. After being reduced to writing and signed by the defendant it was forwarded by complainant's representative to its general office at Chicago, and on January 20, 1919, was duly accepted and approved by complainant and defendant notified of its acceptance.

The reason which prompted the defendant to have an appraisal made of said property was that there was to be a sale of said property for division among the heirs of Napoleon Hill deceased, and defendant, being a son-in-law of Hill, was contemplating bidding on the property at the sale, and being unfamiliar with its value, contracted with the complainant to make an appraisal of the property to guide him in bidding on the same. The property of the Hill estate at Mammoth Springs consisted of a roller mill, hotel, a number of storehouses, gin, cotton mill warehouse, and some residences. The contract expressly provided for the appraisal of the roller mill, and it was agreed between the parties that such other property belonging to the estate, and located at Mammoth Springs, should be appraised by complainant, as defendant might desire appraised, and it was agreed that defendant would have such other of the property as he might desire appraised pointed out to complainant's engineer upon his arrival at Mammoth Springs to secure the necessary data to be used in appraising the roller mill. It was agreed that complainant should have 65 cents for each $100, "new replacement" value put on the property by complainant, which should be paid by defendant within five days after the delivery of the appraisement to him. The "new replacement" value is the amount it would cost to replace the property new at the date of the appraisal. Complainant was also to put on the property a "sound" value, which is its actual fair cash value, after making necessary allowances for depreciation, and also a "prewar" value, which was its actual fair cash value as of date March 1, 1913. In the event the values exceeded $200,000, then complainant should have 60 cents on each $100, "new replacement" value. It was further stipulated that complainant should make the appraisal and deliver its report to defendant on or before March 5, 1919.

It is not disputed that the appraisement was made by complainant according to the terms of the contract, except in one particular to be hereinafter mentioned; and that the appraisement was delivered to defendant in April, 1919, which was after the time specified in the contract for delivery, but no question is made by the defendant on account of complainant's failure in this regard.

The two defenses set up by defendant to complainant's right to recover upon said contract are: (1) That complainant, at the time said contract was entered into, was a foreign corporation doing business in the state without having complied with the provisions of chapter 31, Acts of 1877, chapter 122, Acts of 1891, and chapter 81, Acts of 1895, respecting foreign corporations, and was therefore not entitled to enforce said contract in the courts of the state; and (2) that if complainant could recover at all, it could only recover upon a quantum meruit, as the minds of the parties to the contract did not meet as to the work to be performed by complainant.

The chancellor decreed that complainant was not entitled to recover of the defendant, because it had not complied with the provisions of the statutes hereinbefore referred to respecting foreign corporations at the time the contract with defendant was entered into and the service performed, and dismissed complainant's bill. From this decree complainant has appealed to this court, and has assigned the action of the chancellor for error.

The evidence shows that after the contract was received, approved, and accepted by complainant at its home office in the city of Chicago, it sent one of its appraising engineers, Henry P. Mollarus, to Mammoth Springs, to secure data, notes, diagrams, and other information necessary to enable complainant to make a report as to the value of said property. Mollarus performed this service by measuring the buildings, making drawings of them, counting and estimating the various kinds of material in them, and the quantity of same, including the excavations, masonry work, number of brick in the walls, carpentry work, mill work, plumbing, etc.; and after this was done he sent this data to complainant's office at Chicago, where the same was assembled, the valuations of the property worked out, and a report of said values formulated, which was then forwarded to the defendant at Memphis. It is not controverted that in order to make the appraisal it was necessary for complainant to send one of its engineers to the situs of the property to secure this data. It is further undisputed that no part of the work necessary to make said appraisal was done in the state of Tennessee. It appears, however, that in the year 1919 the complainant entered into 11 other contracts with parties in Tennessee, and made 11 similar appraisals of property situated in Tennessee, during said year, 5 of which were made in the city of Memphis, and during the 10 years of its corporate existence it has made about 100 appraisals of property in Tennessee. It is further undisputed that complainant had not complied with the statutes of this state respecting foreign corporations at the time these contracts were made and performed, including the one now involved.

It is well settled in this state that a foreign corporation which has not complied with its statutes prescribing the terms upon which said corporation may do business in the state cannot enforce any contract in the courts of the state made and performed while such corporation is unauthorized to transact business therein. Lumber Co. v. Thomas, 92 Tenn 587, 22 S.W. 743; Harris v. Light Co., 108 Tenn. 245, 67 S.W. 811; Lumber Co. v. Moore, 126 Tenn. 313, 148 S.W. 212; Cunnyngham v. Shelby, 136 Tenn. 176, 188 S.W. 1147, L. R. A. 1917B, 572; Association v. Cannon, 99 Tenn. 344, 41 S.W. 1054; Insurance Co....