Louisville Property Co. v. Mayor and City Council

• Decision Date: 04 February 1905
• Citation: 84 S.W. 810
• Parties: LOUISVILLE PROPERTY CO. v. MAYOR AND CITY COUNCIL OF NASHVILLE.
• Court: Tennessee Supreme Court

84 S.W. 810

LOUISVILLE PROPERTY CO. v. MAYOR AND CITY COUNCIL OF NASHVILLE.

Supreme Court of Tennessee.

February 4, 1905.

Error to Circuit Court, Davidson County; W. C. Cherry, Special Judge.

Action by the Louisville Property Company against the mayor and city council of Nashville. From a judgment for defendant, plaintiff brings error. Reversed.

Slemons & Barthell, for plaintiff in error. McConnico & McAlister, for defendant in error.

BEARD, C. J.

In changing the grade of Broad street, in the city of Nashville, the municipality inflicted injury on three lots of the Louisville Property Company which abutted thereon, and this action was brought by the company, under the authority of section 1988 of Shannon's Code, to recover damages for this injury. There was a statutory finding by the circuit judge, who tried this case without the intervention of a jury. The finding of facts was in accordance with the above statement, but a recovery was denied upon the ground that, at the time the Louisville Property Company took a deed to these lots, it, being a Kentucky corporation, had failed to comply with certain legislative acts regulating the transactions of foreign corporations with regard to business and property in this state.

The facts out of which this phase of the controversy grew, and with regard to which this legal conclusion was reached, are that on the 16th of April, 1898, the lots in question were conveyed by the then owner to the Louisville Property Company. At that date the company had not complied with our foreign corporation acts, but on the 11th of June, 1898, it filed with the Secretary of State a copy of its charter, and two days thereafter, to wit, on the 13th of June, 1898, assuming this was necessary, it filed an abstract of its charter in the register's office of Davidson county, where the property is situate.

In view of the conclusion reached by the circuit judge, the soundness of which is seriously challenged by the plaintiff in error, it is necessary to consider the acts which, it is assumed, preclude the plaintiff in error from maintaining the present suit.

On the 21st of March, 1877, there was passed the first of the acts regulating the admission of foreign corporations into this state for the purpose of doing business and acquiring and holding real estate. This act is chapter 31, p. 44, of the Session Acts of 1877, and, by its terms, was limited so as to affect only foreign corporations organized for mining and manufacturing purposes. By the second section of the act it was provided that each of such corporations desiring to carry on business in this state should first file in the office of the Secretary of State a copy of its charter, and also cause an abstract of its charter to be recorded in the office of the register of each county in the state in which it proposed to carry on business or to acquire land. By chapter 122, p. 264, of the Acts of 1891, this act of 1877 was amended so as to apply to all corporations which might desire to own property or to do business in this state. By the third section of this act it was provided that it should be "unlawful for any foreign corporation to do, or attempt to do any business, or to own or to acquire any property in this state without having first complied with the provisions of this act"; and a violation of the statute, it was provided, should subject the offender to a fine of not less than $100, nor more than $500. On the 30th of April, 1895, the Legislature passed another act, which is chapter 81, p. 123, of the published Acts of that year. This act is entitled "An act to amend sections 2, 3 and 4 of an act passed March 21, 1891, being chapter 122 of said Acts, and providing for the authentication of copies of charters to be filed with the Secretary of State, and registering abstracts of same in the register's office in each county in which the company desires or proposes to carry on business." Section 1 of this amendatory act provides as follows: "That section 2 of an act passed March 21, 1891, being chapter 122 of said Acts, be so amended so as to read as follows: That each and every corporation created or organized under or by virtue of any government other than that of the state for any purpose whatever, desiring to own property or carrying on business in this state of any kind or character, shall first file in the office of the Secretary of State, a copy of its charter. * * *" Section 2 provides "that section 3 of said act, passed March 21, 1891, be amended so as to read as follows: `That it shall be unlawful for any foreign corporation to do business or attempt to do business in this state without first having complied with the provisions of this act, and a violation of this statute shall subject the offender to a fine of not less than one hundred ($100) dollars, nor more than five hundred ($500) dollars, in the discretion of the jury trying the case.'"

The effect of an amendment made in this form was to substitute language of the new act, in the sections indicated, for that used in the old act, and these new provisions took effect at and from the time of the mandatory enactment. Cent. P. R. R. v. Shackelford, 63 Cal. 265; Ely v. Holton, 15 N. Y. 598.

Now, comparing these two acts — that is, the amendatory act and the one amended — it will be found that there are at least two material differences between them. In the act of 1891 it was required of each foreign corporation coming into this state, either to do business or acquire property, not only to file a copy of its charter with the Secretary of State, but also to cause an abstract of its charter to be recorded in each county in which it might see proper to go for either purpose, to be recorded in the register's office of such county; and by section 3 of the act it was made equally unlawful for any such corporation to do or to attempt to do business, or to own or acquire any property, in the state, without having first complied with these requirements. Chapter 81, p. 123, of the Acts of 1895, however, in its first section, simply requires that a foreign corporation desiring to own property or to carry on business in this state shall first file in the office of the Secretary of State a copy of its charter, while section 2 only makes it illegal for such corporation to do business or attempt to do business without meeting the requirements imposed by the first section. While, by the third section of the act of 1891 it was an offense, punishable by fine, for a foreign corporation to own or acquire any property in the state without having first complied with the statutory requirements, this legislative ban by the act of 1895 is no longer placed upon the acquisition of property, but is confined to the doing of business, or the attempt to do business, by such corporation in this state. Thus it will be seen, as was said in regard to a very similar statute of Colorado in Fritts v. Palmer, 132 U. S. 282, 10 Sup. Ct. 93, 33 L. Ed. 317, that this amendatory act does not prohibit foreign corporations altogether from purchasing or holding real estate within the limits of this state. It does not declare a purchase of land by such corporation, made before it qualified itself to do business in the state, as unlawful, or the conveyance of the land so purchased as absolutely void as to all persons and for every purpose, or that the title to the land remains in the grantor despite his conveyance.

This act of 1895 was the one in force at the time the plaintiff in error took its deed to this property, and its rights are to be determined with regard to the terms of that act and the rules of law arising therefrom.

No controversy is made here, and none at this day could be made, as to the right of the state to prescribe the terms upon which a foreign corporation may carry on business (save that of interstate or foreign commerce) or hold real estate within its limits. But, while this is well settled, the question is, will it be permitted to the municipality of Nashville, which has injured the real estate in...