Peterman Construction & Supply Co. v. Blumenfeld

• Decision Date: 13 January 1930
• Docket Number: 28298
• Citation: 125 So. 548,156 Miss. 55
• Parties: PETERMAN CONSTRUCTION & SUPPLY CO. v. BLUMENFELD
• Court: Mississippi Supreme Court

125 So. 548

156 Miss. 55

PETERMAN CONSTRUCTION & SUPPLY CO. v. BLUMENFELD

No. 28298

Supreme Court of Mississippi

January 13, 1930

Division A

1 CORPORATIONS. Foreign corporation, soliciting subscriptions within state, with intention of thereafter constructing canning factory, was "doing business" within state (Hemingway's Code 1927, section 4528).

Foreign corporation, soliciting subscriptions from a large number of persons within state, with the intention, after approval and acceptance of subscription contract, of erecting building and equipping it with machinery for operation as a canning factory, was "doing business" within state, within meaning of Hemingway's Code 1927, section 4528 (Code 1906, section 935), requiring the filing of a copy of charter or articles of incorporation.

2 CORPORATIONS. Test of whether foreign corporation is "doing business" within state is whether it is doing acts within function of corporate powers (Hemingway's Code 1927, section 4528).

Test of whether or not a foreign corporation is "doing business" within state, within the meaning of Hemingway's Code 1927, section 4528 (Code 1906, section 935), requiring the filing of a copy of charter or articles of incorporation, is whether or not it is doing such acts as are within function of its corporate powers.

3 CORPORATIONS. Foreign corporation's compliance with law cannot, as respects particular contract, be made to relate back to date of its execution (Hemingway's Code 1927, section 4528).

Foreign corporation's compliance with provisions of Hemingway's Code 1927, section 4528 (Code 1906, section 935), requiring filing of a copy of charter or articles of incorporation, cannot, in so far as it relates to contracts theretofore executed, be made to relate back to date of execution thereof, since contract was either enforceable on date of its execution or unenforceable.

HON. J. I. STURDIVANT, Judge.

APPEAL from circuit court of Oktibbeha county HON. J. I. STURDIVANT, Judge.

Suit by the Peterman Construction & Supply Company against S. F. Blumenfeld. Judgment for defendant, and plaintiff appeals. Affirmed.

Affirmed.

Loving & Loving, of Columbus, for appellant.

The transaction of a single piece of business or an isolated piece of business is not doing business within the state within the meaning of the statute prohibiting foreign corporations doing business without first having been licensed to do so.

Item Company, Ltd., v. Shipp et al., 140, Miss. 699, 106 So. 437; Harleston v. West Louisiana Bank, 129 Miss. 111, 91 So. 423; Long Beach Canning Co. v. Clark et al., 141 Miss. 177, 106 So. 642.

A foreign corporation is not doing, transacting, carrying on, or engaging in business in a state, within the meaning of the statutes under consideration, by the doing of acts therein which are merely preliminary to the transaction of the business for which the corporation is organized. Thus it has been held that a foreign corporation does not come within the meaning of such statutes by offering bids in the state on work to be performed therein; by entering into a contract to perform such work; or by giving a bond to secure its performance of such contract.

14A Corpus Juris, page 1279, section 3896(d); Friedlander Bros., Inc., v. Deal et al., 118 So. 508; State v. American Book Company, 69 Kans. 176, P. 411, 1 L.R.A. (N.S.) 1040, 2 Ann. Cas. 56; Cooper Mfg. Co. v. Ferguson, 113 U.S. 727, 28 L.Ed. 1137, 5 S.Ct. 739; Davis & Rankin Bldg. Co. v. Caigle (Tenn.), 53 S.W. 240.

"Doing business" means a transaction of business during some continuous period, neither a single nor several transactions being conclusive so as to show a doing of business. There must be a doing of some of the work, or an exercise of some of the functions, for which the corporation was created.

New York Architectural Terra Cotta Co. v. Williams, 92 N.Y.S. 808, 811, 102 A.D. 1; Neyens v. Worthington, 114 N.W. 404, 406, 407, 150 Mich. 580, 18 L.R.A. (N.S.); Kirven v. Virginia-Carolina Chemical Co., 145 F. 288, 293, 76 C. C. A. 172, 7 Ann. Cas. 219; Jameson v. Simonds Saw Co., 84 P. 289, 290, 2 Cal.App. 582; First National Bank v. Leeper, 97 S.W. 636, 637, 121 Mo.App. 688; W. H. Lutes Co. v. Wysong, 100 Minn. 112, 110 N.W. 367, 368; Poole v. Peoria Cordage Co., 6 Ind. T. 298, 97 S.W. 105; Simmins Burks Clothing Co. v. Linton, 90 Ark. 73, 117 S.W. 775, 776; Alpena Portland Cement Co. v. Jenkins & Reynolds Co., 244 Ill. 354, 91 N.E. 480, 481; A. Booth & Co. v. Weigand, 30 Utah 135, 83 P. 734, 737, 10 L.R.A. (N.S.) 693.

Magruder, Walker & Magruder, of Starkville, for appellee.

Every contract made for, or about, any matter or thing which is prohibited and made unlawful by any statute, is a void contract though the statute itself does not mention that it shall be so, but only inflicts a penalty on the defaulter, because a penalty implies a prohibition, though there are not prohibitory words in the statute.

Music Company v. Haygood, 108 Miss. 755; Bohn v. Lowery, 77 Miss. 421; 24 L.R.A., page 316; Dudley v. Collier, 87 Ala. 431; Cary-Lombard Lumber Co. v. Thomas, 92 Tenn. 587; Pennington v. Townsend, 7 Wend. 276; Dundee Mortgage Trust & Investment Co. v. Nixon, 95 Ala. 318; Boulden v. Estey Organ Co., 92 Ala. 182.

The real test is the corporation engaged in the transaction of business or any part thereof it was created and organized to transact. If it be, it does business within the meaning of the Constitution. If it be not--if the act it is doing or has done is not within its general powers and franchises--it is not the business to which the constitutional requirement is directed.

Christian v. American Freehold Land Mortgage Co., 89 Ala. 198, 7 So. 427.

With respect where no penalty is imposed, the same conflict is as to unauthorized contracts of foreign corporations and the right of a corporation itself to enforce such contracts is denied in the great majority of its cases, among which are: Jones v. Smith, 3 Gray, 500; Lycoming F. Ins. Co. v. Wright, 55 Vt. 526; Ford v. Buckeye State Ins. Co., 6 Bush, 133, 99 Am. Dec. 663.

OPINION

McGowen, J.

This is an appeal from a judgment in favor of appellee, Blumenfeld, rendered by the circuit court on an appeal from a court of a justice of the peace. The suit was based upon a subscription contract of one hundred dollars, on which a payment of twenty-five dollars was made, leaving a balance due of seventy-five dollars. The subscription contract was finally executed by the appellant on November 27, 1925, with about two hundred subscribers (of which number appellee was one), all citizens of Mississippi, and the appellant was a foreign corporation, chartered under the laws of the state of Illinois, and there domiciled.

At the time of and prior to the date of the execution of this contract, appellant was engaged in the business of promoting the organization of canning factories, creameries, cheese factories, and other such industrial enterprises, and this was accomplished by sending representatives into a community to secure subscribers in a sufficient amount, and when so secured, to the satisfaction of the company, the written subscription was approved as a contract, and this company would thereupon construct a building in the community, and equip it with the machinery adapted to the particular industrial enterprise thus promoted. From the evidence in this case it appears that this foreign corporation was performing a function authorized by its charter, and was engaged in the promotion of its business in securing subscribers, making a contract, and complying therewith.

During the late summer and fall of the year 1925 the appellant had two authorized agents in and around Starkville, Miss., soliciting farmers and others to sign this subscription contract. One of the agents was a native of that county; the other came there to assist the native agent, and was a citizen of Alabama. The written subscription contract provided that each subscriber thereto would pay to appellant the sum of one hundred dollars in partial payments, and in consideration thereof the Peterman Construction & Supply Company were to construct a factory building and equip the plant as a canning factory with the necessary machinery ready to operate. Attached to the subscription paper were detailed specifications as to the house, material, labor, and machinery to be furnished in connection therewith. It was stipulated that, when satisfactory subscriptions were received, amounting to fourteen thousand five hundred dollars, the appellant would accept and approve the subscription contract, and, if there were subscriptions in excess of this sum, the excess was to become the property of the subscribers. More than twenty thousand dollars was subscribed by more than two hundred subscribers, and on November 27, 1925, at Starkville, Miss., the appellant approved and accepted the subscription contract, by which it became bound to erect the building and equip it with machinery to be located in Starkville, Miss. Thereupon appellant secured a permit from the city authorities for the said construction, and began placing the material on the ground, and the actual work of construction began between December 15 and December 20, 1925.

On December 17, 1925, the appellant procured from the secretary of state a certificate that it had complied with section 4528, Hemingway's 1927 Code (section 935, Code of 1906). This statement of fact constitutes the only business transacted by the appellant in this state so far as appears from this record.

The sole defense interposed to appellant's suit herein was that the contract was solicited, procured, and executed by appellant at a time when it had not complied with said section 4528, Hemingway's 1927 Code. Appellee contended...