Normandie Oil Corporation v. Oil Trading Co., 7863.

• Citation: 163 S.W.2d 179
• Decision Date: 08 April 1942
• Docket Number: No. 7863.,7863.
• Parties: NORMANDIE OIL CORPORATION v. OIL TRADING CO., Inc.
• Court: Texas Supreme Court

Page 179

163 S.W.2d 179

NORMANDIE OIL CORPORATION v. OIL TRADING CO., Inc.

No. 7863.

Supreme Court of Texas.

April 8, 1942.

Rehearing Denied July 8, 1942.

Error to Court of Civil Appeals for First Supreme Judicial District.

Action by the Oil Trading Company, Incorporated, against the Normandie Oil Corporation to recover a broker's commission for procuring the sale of an oil and gas lease. A judgment for plaintiff was affirmed by the Court of Civil Appeals, 147 S.W.2d 557, and defendant brings error.

Reversed and action dismissed.

Lawler, Wood & Childress, Virgil Childress, and Wm. N. Bonner, all of Houston, and Black, Graves & Stayton, of Austin, for petitioner.

Sewell, Taylor, Morris & Connally, Ben G. Sewell, and J. Toll Underwood, all of Houston, and John S. Keith and Joseph W. Murphy, both of New York City, for respondent.

SHARP, Justice.

This is a suit for a broker's commission. Oil Trading Company, Inc., a New York corporation, having no permit to transact business in Texas, hereinafter referred to as plaintiff, instituted this suit in the District Court of Harris County against Normandie Oil Corporation, a Delaware corporation, hereinafter referred to as defendant company, and others, to recover a commission on the sale of an oil and gas lease on land located in Montgomery County, Texas. Trial was to a jury; which found that the defendant company employed the plaintiff to negotiate a sale of the lease to Tide Water Oil Company; that the defendant company accepted the benefits of plaintiff's services; and that the plaintiff was the "procuring cause" of the sale. Based on the jury's verdict, the trial court entered a judgment for plaintiff in the sum of $19,437.50. Defendant requested an instructed verdict, and after the verdict was returned it moved for judgment non obstante veredicto. Both motions were overruled. The Court of Civil Appeals affirmed the judgment of the trial court. 147 S.W.2d 557. This Court granted a writ of error.

The controlling question presented is whether plaintiff, a foreign corporation without a permit to transact business in this State, can maintain a suit in the courts of this State to recover compensation for services rendered, in the face of undisputed evidence that a substantial part of such services, upon which its cause of action is based, were performed in Texas, in violation of Articles 1529 and 1536, Vernon's Annotated Civil Statutes. The pertinent parts of Articles 1529 and 1536 read as follows:

"Article 1529. Any corporation for pecuniary profit, except as hereinafter provided, * * * desiring to transact or solicit business in Texas, or to establish a general or special office in this State, shall file with the Secretary of State a duly certified copy of its articles of incorporation; and thereupon such official shall issue to such corporation a permit to transact business in this State for a period of ten years from the date of so filing such articles of incorporation. If such corporation is created for more than one purpose, the permit may be limited to one or more purposes."

"Art. 1536. No such corporation can maintain any suit or action, either legal or equitable, in any court of this State upon any demand, whether arising out of contract or tort, unless at the time such contract was made, or tort committed, the corporation had filed its articles of incorporation under the provisions of this Chapter."

In the case of Security Co. v. Panhandle Nat'l Bank, 93 Tex. 575, 57 S.W. 22, 23, discussing Article 745, now Article 1529, it was said: "The purpose of the statute was probably twofold, — one, to protect the people of the state from irresponsible foreign corporations, by affording the means by which they could readily ascertain such information in reference to them as is ordinarily afforded by their charters; the other, to place them upon the same footing as like domestic corporations, by requiring them to pay a like fee for a permit to do business, as is required of a domestic company for filing its charter."

Plaintiff alleged that it was a corporation duly incorporated under the laws of the State of New York, and was "legally engaged in the business, among other things, of acting as broker or agent in the purchase and sale of oil, oil products, oil production in bulk, oil leases, and generally in all matters involving the production, transportation, refining, disposition and consumption of oil and oil products." It also alleged that the Alpha Petroleum Company, the predecessor of the defendant Normandie Oil Company, acting through George Frankel, employed Oil Trading Company, Inc., as a broker "for the purpose of entering into negotiations and effecting a sale to and with the Tide Water Oil Company, a New Jersey corporation, of one or more of said defendant's oil and mineral leases in the Conroe oil field near the City of Conroe in Montgomery County, Texas; that pursuant to such employment the plaintiff did enter into such negotiations, and did interest said Tide Water Oil Company in the purchase of said oil, gas and mineral lease and certain oil wells and pipe lines and equipment used in connection with the operation and development of said lease by the defendant Alpha Petroleum Company, such lease being known as the Krohn lease, and covering 120 acres of land." It was further alleged that these negotiations were continued and various conferences held in the City of New York, and "that plaintiff in addition to the above-mentioned conversations, conferences and negotiations, had other and additional negotiations, conferences and conversations in respect to the sale of the above-mentioned lease to the Tide Water Oil Company with another one of its Vice-Presidents, to-wit: Edward H. Salrin."

Plaintiff further alleged that "the Alpha Petroleum Company * * * directed and requested it to make and engage in other and specific negotiations looking to a consummation of said desired and contemplated sale, and did direct it particularly to have conferences with Edward H. Salrin, one of the Vice-Presidents of Tide Water Oil Company, and accepted plaintiff's report as to such negotiations * * *." (Italics ours.)

The petition does not separate the efforts of Oil Trading Company, Inc., in New York from its efforts in Houston, Texas. On the issue of procuring cause it was alleged: "That the services, negotiations and efforts of the plaintiff in its dealings with the Tide Water Oil Company, acting as a broker as above alleged for and on behalf of the Alpha Petroleum Company, were the efficient and procuring cause which enabled said Alpha Petroleum Company to sell the aforesaid lease to said Tide Water Oil Company."

Defendant, among other things, answered that the plaintiff, a foreign corporation, had engaged in business in Texas without a permit to do so, and, therefore, was prohibited by law from maintaining this suit.

It is not alleged by plaintiff that the negotiations conducted in New York, standing alone, constituted the procuring cause of the sale. On this phase of the case the evidence shows that Harvey D. Carter was the president and treasurer of Oil Trading Company, Inc.; that his wife owned all the stock of said company; and that for the past sixteen years it had engaged solely in the brokerage business. In January, 1934, Carter went to Frankel's office in New York, at Frankel's request, and Frankel asked him to interest Tide Water Oil Company in buying some of Alpha Petroleum Company's leases in the Conroe oil field. Thereafter he talked several times with Noel Robinson, vice-president of Tide Water Oil Company, at his office in New York, and Robinson told him that...