Ross-Higgins Co. v. Protzman

• Decision Date: 06 February 1922
• Docket Number: 3676.
• Citation: 278 F. 699
• Parties: ROSS-HIGGINS CO. v. PROTZMAN et al.
• Court: U.S. Court of Appeals — Ninth Circuit

278 F. 699

ROSS-HIGGINS CO. v. PROTZMAN et al.

No. 3676.

United States Court of Appeals, Ninth Circuit.

February 6, 1922

Louis K. Pratt, of Fairbanks, Alaska, for plaintiff in error.

A. R Heilig, of Portland, Or., and Kerr, McCord & Ivey and James A. Kerr, all of Seattle, Wash., for defendants in error.

Before GILBERT, MORROW, and HUNT, Circuit Judges.

HUNT Circuit Judge.

This action was based upon a forthcoming bond executed in 1908 by Protzman and Gordon, defendants in error, payable to the United States marshal and conditioned that, if the Ross-Higgins Company should recover a judgment against Ohlsen in an action by Ross-Higgins Company against Ohlsen, then pending in the courts of Alaska, they would redeliver certain goods attached or pay the value thereof to the marshal. In December, 1910, the marshal assigned the bond to the present plaintiffs, who brought this action in 1911.

Plaintiff pleaded that, when it transacted mercantile business during 1906 and 1907, it complied with the local law (chapter 23 pt. 5, Carter's Alaska Code), requiring filing of a certificate of incorporation. Defendants answered that on July 18, 1906, and continuously thereafter, the Ross-Higgins corporation had not complied with the laws concerning the filing of articles of incorporation in Alaska, and for that reason the forthcoming bond involved was void; also that the stock of merchandise attached did not belong to Ohlsen at the date of levy, and that one Vachon had a chattel mortgage lien on the goods. Demurrers to the answers were overruled, and plaintiff replied by denials and pleas of fraudulent conduct and estoppel. The court found as follows:

Ross-Higgins Company, an Oregon corporation, in 1906 and part of 1907 did business in Alaska, with its principal place at Fairbanks, in the then Third judicial district of Alaska, and sold merchandise to one Ohlsen, for which, in August, 1907, Ohlsen owed the company $1,689. Before April 7, 1908, Vachon, a merchant in Fairbanks, Alaska, sold merchandise to Ohlsen for which Ohlsen owed Vachon about $1,400. Ohlsen, wishing further credit, mortgaged all his goods, including those to be sold, to Vachon, thus securing several promissory notes by Ohlsen to Vachon. The mortgage was recorded and Ohlsen continued in business; but on August 20, 1908, the Ross-Higgins Company sued Ohlsen, and in 1911 recovered judgment for $1,404, and sued out writ of attachment against the property of Ohlsen. Execution was had by the marshal. When Vachon learned of the attachment, with the permission of Ohlsen, who was then in possession of the goods, he took possession of the mortgaged goods and sold them, but for a sum insufficient to pay Ohlsen's secured debt. Ross-Higgins Company never filed in the office of the clerk of the District Court for the Third Division of Alaska any copy of its charter or articles of incorporation, or other statements required by law, except an annual report for the year 1906.

The court concluded that the Ross-Higgins Company, while carrying on business in Fairbanks, Alaska, failed to comply with the provisions of the Alaska law relating to foreign corporations, and that the court was 'prohibited from enforcing' its claim against Protzman and Gordon; that the claim of the plaintiffs against defendants upon the bond sued upon 'is invalid and unenforceable,' and the bond without valid consideration; that 'no valid attachment' was ever made, and the bond executed for the 'supposed release' from the attachment was without consideration and null and void. To review judgment for defendants, writ of error was brought.

The statutes of Alaska provide (Comp. Laws 1913, Secs. 657, 660):

'Sec. 657. If any such corporation or company shall attempt or commence to do business in the district without having first filed said statements, certificates, and consents required by this chapter, it shall forfeit the sum of twenty-five dollars for every day it shall so neglect to file the same; and every contract made by such corporation, or any agent or agents thereof, during the time it shall so neglect to file such statements, certificates, or consents, shall be voidable at the election of the other party thereto. It shall be the duty of the United States attorney for the District to sue for and recover, in the name of the United States, the penalty above provided, and the same, when so recovered, shall be paid into the treasury of the United States.'

'Sec. 660. If any such corporation or company shall fail to comply with any of the provisions of this chapter, all its contracts with citizens of the district shall be void as to the corporation or company, and no court of the district, or of the United States, shall enforce the same in favor of the corporation or company so failing.'

In the consideration of the cited provisions of the Code, we cannot ignore an allegation of the complaint to the effect that the Ross-Higgins Company transacted a mercantile business at Skagway and Fairbanks, in Alaska, with principal place of business at Skagway after 1900, but that in July, 1907, it sold out its stock in trade and closed out its business in Alaska, and thereafter transacted no corporate business in the territory, other than such as was necessary in winding up its affairs, in paying its debts, and collecting outstanding accounts. This averment is not answered, except by denials that the principal place of business of plaintiff corporation was ever at Skagway, and that at any time other than August 14, 1906, the...