Mergenthaler Linotype Co. v. Hays

• Decision Date: 16 June 1914
• Docket Number: No. 1220.,1220.
• Citation: 182 Mo. App. 113,168 S.W. 239
• Parties: MERGENTHALER LINOTYPE CO. v. HAYS et al.
• Court: Missouri Court of Appeals

168 S.W. 239

182 Mo. A. 113

MERGENTHALER LINOTYPE CO. v. HAYS et al.

No. 1220.

Springfield Court of Appeals. Missouri.

June 16, 1914.

1. CORPORATIONS (§ 672)—FOREIGN CORPORATIONS—NECESSITY OF PLEADING—NONCOMPLIANCE WITH STATE LAW.

The failure of a foreign corporation doing business in the state to file a copy of its charter and procure a license to do business in the state, as required by Rev. St. 1909, §§ 3037-3041, is a matter of defense which must be affirmatively alleged by the party relying on it to defeat the corporation's action on a contract.

2. CORPORATIONS (§ 672)—FOREIGN CORPORATIONS—PLEADING—NONCOMPLIANCE WITH STATE LAW—SUFFICIENCY.

In an action on a contract by a foreign corporation, an answer alleging that it had not complied with the foreign corporation law, but not alleging that it was doing business in the state contrary to law, and a reply admitting such allegations and alleging that plaintiff had no office in the state and that the contract sued on was made in another state, were insufficient to raise the issue of whether plaintiff was doing business in the state; "doing business in the state" being an essential averment to raise such issue.

3. CORPORATIONS (§ 642)—FOREIGN CORPORATIONS—DOING BUSINESS—ISOLATED TRANSACTIONS.

Isolated transactions by a foreign corporation with the citizens of another state is not a doing or carrying on of business by the foreign corporation in the other state, even where the transaction constitutes a part of the corporation's ordinary business.

4. CORPORATIONS (§ 642)—FOREIGN CORPORATIONS—DOING BUSINESS IN STATE.

The traveling salesman of a foreign corporation, having no office or place of business in a state, negotiated a lease of a linotype machine, by which the lessor agreed to furnish employés to set it up and instruct the lessee's employés in its operation, the expenses thereof to be paid by the lessee, who was given an option to purchase the machine, and who also agreed to pay the taxes thereon, and to pay the lessor the cost of insurance. The lease was subject to the approval of, and was executed by, the lessor at its home office. Held, that the transaction was interstate commerce, and hence not subject to Rev. St. 1909, §§ 3037-3041, requiring foreign corporations doing business in the state to file a copy of their charter and to obtain a license to do business.

5. CORPORATIONS (§ 655)—FOREIGN CORPORATIONS—DOING BUSINESS IN THE STATE.

The mere ownership of personal property in the state by a foreign corporation is not prohibited by Rev. St. 1909, §§ 3037-3041, requiring such corporations to file a copy of their charter and to obtain a license to do business in the state, but as to such property, standing idle, the corporation may be required to pay taxes, and may protect it by insurance, and sue to recover from one in wrongful possession.

Appeal from Circuit Court, Butler County; J. P. Foard, Judge.

Action by the Mergenthaler Linotype Company against W. B. Hays and another. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

The plaintiff is a New York corporation, and at the time of making the contract and lease—the basis of this suit—had not complied with sections 3037 to 3041, inclusive, R. S. 1909, providing for foreign corporations doing business in Missouri, and prescribing penalties. The penalty particularly involved in this case is that denying a foreign corporation doing business in this state without having complied with these sections of the law the right to maintain an action in our courts arising out of contract or tort.

The plaintiff alleged that it is engaged in the manufacture, sale, and distribution of linotype machines; that there is due it $1,265, representing two annual rental charges of $632.50 each, payable in advance on the 14th day of June for the years 1911 and 1912; that the defendants are the owners and proprietors of the Citizen-Democrat, a publishing company in Poplar Bluff, Mo.; that the lease was for a term of six years commencing in June, 1910; that the first year's rent, beginning June 14, 1910, had been paid; and that after demand for the payment of the rent for the two years named it was refused. Plaintiff further alleged that, pursuant to the contract, it shipped the machine to Poplar Bluff, and set it up in perfect working order, and that plaintiff fully performed its contract.

The defendant Hays answered by a general denial and the following plea:

"Further answering, this defendant states that the plaintiff, the Mergenthaler Linotpye Company, at the time of the execution of the contract and lease set out in plaintiff's petition, was and is still a foreign corporation incorporated, organized, and existing under the laws of the state of New York; and that said corporation is a corporation organized for pecuniary profit, and, as such, has not complied with the laws of the state of Missouri relating to foreign corporations, in this: That said Mergenthaler Linotype Company of New York had not, at the time of the making of this contract and at the time of bringing this suit, filed with the secretary of state of the state of Missouri a copy of its articles of association and charter granted by the state of New York, and had not then procured from the secretary of state a license to do business in the state of Missouri. Defendant further states that the Mergenthaler Linotype Company of New York not having complied with the laws of this state regulating foreign corporations as aforesaid, and not having received a certificate for a license from the secretary of state authorizing it to do business in this state as aforesaid, it was and is unlawful for said corporation to transact business in this state without a compliance with the statute in such cases made and provided, and that the contract and lease referred to in plaintiff's petition is unlawful and void, and plaintiff cannot maintain this suit."

The plaintiff replied as follows:

"Plaintiff admits that it was at the time of the execution of the contract and lease set out and referred to in plaintiff's petition, and now is, a foreign corporation organized and existing under the laws of the state of New York, and that it was organized for pecuniary benefit. Plaintiff denies that at the date of said contract and lease it had not complied with the laws of the state of Missouri relating to foreign corporations. Plaintiff admits that at the time of the making of the contract and lease set out in its petition it had not filed with the secretary of state of Missouri a copy of its articles of association and charter granted by the state of New York; also admits that at the time of the making of the contract and lease referred to it had not filed with the secretary of state of the state of Missouri a copy of its articles of association and charter granted by the state of New York; also admits that at that time it had not procured from the secretary of state a license to do business in the state of Missouri. Further replying to said amended answer, this plaintiff states, that at the time of the execution of the contract and lease referred to in its petition it was not doing business in the state of Missouri, nor did it keep an office in said state for the purpose of transacting its business authorized to be transacted by its charter and articles of incorporation; that at the time of the making of said contract and lease plaintiff had a salesman traveling in Missouri soliciting persons to buy the linotype machine mentioned in plaintiff's petition; that the said traveling saleman employed by plaintiff at that time made the contract and lease referred to in plaintiff's petition with these answering defendants, W. B. Hays and S. W. Davis, subject to the approval and ratification of plaintiff at its office in New York; that said contract and lease referred to was agreed to, approved, and executed by, plaintiff at its office in New York on the date it bears; that plaintiff's salesman in Missouri presented its contract and lease to these answering defendants, who executed the same, and that said linotype machine was delivered to these answering defendants, W. B. Hays and S. W. Davis. Plaintiff alleges it did not open an office in Missouri for the transaction of business until the 1st of January, 1913."

Thereafter, a motion for judgment on the pleadings was filed, alleging the following grounds:

"First. Because it appears from the allegations in plaintiff's replication filed herein that the plaintiff is not entitled to recover in this case.

"Second. Because, upon the pleadings filed in this case, judgment should properly be awarded the defendant W. B. Hays herein."

This motion was sustained, and judgment entered, from which judgment this appeal is prosecuted.

Both parties rely upon so many of the contract provisions as sustaining their respective positions that we find it necessary to burden this statement with a copy of the contract.

It follows:

"This agreement, made and entered into this 12th day of May, 1910, by and between Mergenthaler Linotype Company, a body corporate, organized and existing under the laws of the state of New York, hereinafter designated the lessor, of the first part, and William B. Hays and Samuel W. Davis, copartners, of Poplar Bluff, Missouri, proprietors of the Citizen-Democrat, hereinafter designated the lessees, of the second part, Witnesseth: That for and in consideration of the mutual covenants, obligations, and considerations hereinafter mentioned, the respective parties hereto have agreed and do hereby agree together as follows:

"First. The lessor agrees to deliver to the lessees on the terms and conditions hereinafter named: One (1) two-letter linotype machine, model 5, No. 14,088, and one two-letter duplex equipment.

"Second. The lessor agrees that said machine shall be in operative condition and capable of setting, when operated by an expert, at least 5,000 ems nonpareil per hour.

"Third. The lessor...