MacNaughton Co. v. McGirl

• Decision Date: 10 July 1897
• Citation: 49 P. 651,20 Mont. 124
• Parties: MacNAUGHTON CO. v. McGIRL.
• Court: Montana Supreme Court

49 P. 651

20 Mont. 124

MacNAUGHTON CO. v. McGIRL.

Supreme Court of Montana

July 10, 1897

Appeal from district court, Yellowstone county; George R. Milburn Judge.

Action by the MacNaughton Company, a corporation, against Thomas McGirl, to recover money advanced defendant by plaintiff on his wool clip. From a judgment in favor of defendant plaintiff appeals. Reversed and remanded.

The plaintiff and appellant herein, a corporation organized and existing under the laws of the state of New Jersey, at the time of this suit and of the transaction which brought it about, was doing a commission business, as a wool commission merchant, in the states of New York and Massachusetts, and the state of Montana. The complaint alleged that in July 1892, the defendant, at Billings, Mont., consigned a wool clip to plaintiff, in New York to be sold by plaintiff for defendant on 60 days' credit, the proceeds thereof to be paid to defendant by plaintiff, less the commission on sales interest on moneys advanced, freight and interest thereon, discount on sales not due, cartage, and advances. It is alleged that plaintiff, to accommodate defendant, deposited in the hands of defendant, on account of the transaction between the parties, the sum of $7,019.20, as an advanced payment in case of the sale of said wool, on the net proceeds thereof, to be kept by defendant on account of the net sales of the wool if the said wool sold for enough, less commission and charges, to amount to $7,019.20, but that any amount over and above the net proceeds of the sale of the wool, or the difference between the net proceeds of the sale and the $7,019.20, if any, should be subject to a drawback by the plaintiff, and be to and for the use of plaintiff, and to be returned to plaintiff by defendant if the net proceeds of the wool did not amount to the sum advanced; that pursuant to this agreement the defendant's wool was consigned to plaintiff; and that some time thereafter it turned out that on the accounting pertaining to the transaction between plaintiff and defendant a balance was found due and owing by defendant to plaintiff, inasmuch as the wool did not sell for a sufficient sum to fully pay plaintiff for its advances to defendant, and the charges agreed to be paid. Judgment was asked for the amount claimed to be due as a drawback. The defendant admitted that he had consigned the wool to plaintiff to be sold for him, and that he had been paid by plaintiff, as an advance on said consignment of wool, the sum of $7,019.20, but denied all of the alleged agreement concerning the shipment of the wool subject to the drawback claimed by plaintiff. For an affirmative defense the answer also averred that there was to be no drawback, and that, if the wool did not sell for an amount sufficient to cover the advance made by the plaintiff, it would bear the loss. Among other defenses pleaded, it was averred that plaintiff could not maintain his action for the reason that plaintiff was a corporation organized under the laws of the state of New Jersey, and had not complied with chapter 24, div. 5, Gen. Laws, Comp. St. Mont. in that it had not filed in the office of the secretary of state, or with the county clerk of Yellowstone county, a duly-authenticated copy of its charter or certificate of incorporation, and the statement required by section 442 of the law referred to, and in other respects had not complied with said law, or with the provisions of an act of the Third legislative assembly of the state of Montana entitled "An act to provide the conditions upon which foreign corporations may do business in this state," approved March 8, 1893. The cause was tried to a jury, and evidence heard. The court then, of its own motion, instructed the jury that inasmuch as the plaintiff was a foreign corporation, and had not complied with the act of the Third legislative assembly providing the conditions upon which foreign corporations might do business in Montana, the act and contract of the plaintiff with the defendant was void as to the corporation, and could not be enforced in the district court, and that it was the duty of the jury to find for the defendant. In accordance with this instruction of the court, a verdict was rendered for the defendant for costs. A motion for a new trial was made and overruled. The plaintiff appeals.

Gib. A. Lane, for appellant.

O. F. Goddard, for respondent.

HUNT J. (after stating the facts).

The plaintiff, a corporation of New Jersey, doing business in that state, and in the states of New York and Massachusetts as wool commission merchant, sent an agent into Montana to solicit consignments of wool to its Eastern houses, there to be sold on commission by plaintiff for the benefit of certain consignors, wool growers of the state of Montana. It had various transactions of this nature with wool growers in Montana. In the particular case before us the exact terms of the agreement between the plaintiff and the defendant gave rise to this litigation, but the facts were undisputed that plaintiff advanced a large sum of money to defendant upon his wool, and that the defendant's wool was consigned to plaintiff at New York, to be sold there by plaintiff, who was to credit defendant with the amount of the sale. The real contention between the parties was whether the shipment so made was subject to a drawback by plaintiff against defendant if the wool did not net a sufficient sum in New York to cover plaintiff's advances to defendant, including interest, costs, etc., or whether the burden of any loss that there might be was to fall entirely on plaintiff. The defendant availed himself of several defenses, including the one upon which the court directed a finding in his favor, namely, that the contract sued on was void as to the corporation, and could not be enforced in favor of the corporation. By an act of the legislative assembly of the state of Montana approved March 8, 1893, every foreign corporation, before it commenced to do business in Montana, was required to file a certificate with the secretary of the state, designating an agent, who must be a citizen of Montana, upon whom service of process might be had, and also stating the principal place of business of such corporation in this state. It was also provided by section 2 of said act that, if any foreign corporation failed to comply with the provisions of the law, all its contracts made and entered into with citizens of this state should be void as to the corporation, and that no court of this state should enforce the same in favor of the corporation. Inasmuch as plaintiff did not comply with the statute just cited, the important question raised is whether or not, if the plaintiff's facts alleged in its complaint are true, and the defendant does in reality owe to plaintiff the amount sued for as a drawback, plaintiff can recover on its contract. It has been repeatedly laid down by the supreme court of the United States that interstate commerce carried on by corporations is entitled to the same protection against the exactions of a state which is given to such commerce when carried on by individuals. We are aware that the construction put upon section 2, art. 4, of the constitution of the United States, which provides that the citizens of each state shall be entitled to all privileges and immunities of the citizens of the several states, has been generally uniform, to the effect that the language of that clause relates only to natural persons, and not to artificial bodies, as corporations, and that the privileges and immunities guarantied by the language referred to mean those of the general nature granted to a state's own citizens, and not those special privileges conferred upon corporate bodies. Insurance Co. v. French, 18 How. 404; Bank v. Earle, 13 Pet. 519; Ducat v. Chicago, 10 Wall. 410; Paul v. Virginia, 8 Wall. 168; Philadelphia & Southern S. S. Co. v. Pennsylvania, 122 U.S. 326, 7 S.Ct. 1118. But, in the carrying on of interstate commerce, corporations are guarantied the same rights and are entitled to the same protection as individuals. The supreme court in Gloucester Ferry Co. v. State of Pennsylvania, 114 U.S. 204, 5 S.Ct. 826, expressly held that it did not make any difference whether such commerce is carried on by individuals or by corporations. Justice Bradley, sitting on the circuit bench in the case of Stockton v. Railroad Co., 32 F. 9, used the following language: "And, in carrying on foreign and interstate commerce, corporations, equally with individuals, are within the protection of the commercial power of congress, and cannot be molested in another state by state burdens or impediments. This was held and decided in the case of Gloucester Ferry Co. v. State of Pennsylvania, 114 U.S. 204, 5 S.Ct. 826, and affirmed in the recent case of Philadelphia & Southern S. S. Co. v. Pennsylvania, 122 U.S. 326, 7 S.Ct. 1118; and although the decision in Paul v. Virginia, 8 Wall. 168, conformed to the doctrine of Bank v. Earle, the following striking language was used by the court, to wit: "At the time of the formation of the constitution a large part of the commerce of the world was carried on by corporations. The East India Company, the Hudson Bay Company, the Hamburgh Company, the Levant Company, and the Virginia Company may be named among the many corporations then in existence which acquired, from the extent of their operations, celebrity throughout the commercial world. This state of facts forbids the supposition that it was intended, in the grant of power to congress, to exclude from its control the commerce of corporations. The language of the grant makes no reference to the instrumentality by which commerce may be carried on. It is general, and includes alike commerce by individuals,...