Sayers & Muir Service Station v. Indian Refining Co.

• Decision Date: 27 November 1936
• Parties: SAYERS & MUIR SERVICE STATION v. INDIAN REFINING CO.
• Court: Kentucky Court of Appeals

100 S.W.2d 687

266 Ky. 779

SAYERS & MUIR SERVICE STATION v. INDIAN REFINING CO.

Court of Appeals of Kentucky

November 27, 1936

Rehearing Denied Feb. 12, 1937.

Appeal from Circuit Court, Jefferson County, Common Pleas Branch First Division.

Action by the Indian Refining Company against the Sayers & Muir Service Station. From an adverse judgment, the defendant appeals.

Affirmed.

Justice & Fitzpatrick, of Louisville, for appellant.

Booth &amp Connor, of Louisville, for appellee.

THOMAS Justice.

The appellant and defendant below, Sayers & Muir Service Station is a partnership composed of A. D. Sayers and J. W. Muir. The appellee and plaintiff below, Indian Refining Company, is a corporation created under the laws of the state of Maine. Prior to and on November 14, 1933, it had acquired and owned a gas filling station at 119 South Second street, Louisville Ky. On that day it leased the premises to defendant on terms not necessary to be stated. That lease, pursuant to its provisions, was terminated and defendant was notified to vacate the property. It declined and refused to do so, followed by this forcible detainer proceeding instituted by plaintiff in the Jefferson county court. That court found defendant guilty and it prosecuted a traverse to the Jefferson circuit court. The pleadings in the county court aside from plaintiff's complaint were oral; but on the trial of the traverse in the circuit court defendant abandoned all contentions, except that contained in the written plea filed by it in that court in which it was averred that plaintiff was a foreign corporation and had not complied with the provisions of section 570 of our Statutes and that its failure to do so barred its right to maintain the action. Plaintiff's demurrer filed to that defense was sustained with exceptions and defendant declined to plead further, followed by a finding that it was guilty of the forcible detainer complained of, and to reverse that judgment it prosecutes this appeal.

Section 570 so relied on by defendant says: "No law shall be passed for the benefit of, or in the interest of, any corporation heretofore created or organized by or under the laws of this state or any other state; nor shall any corporation avail itself of the provisions of this chapter, unless such corporation shall have previously, by a resolution adopted by its board of directors and filed in the office of the secretary of this state, accepted the provisions of the Constitution of this state; and such resolution, or a certified copy thereof, shall be evidence for and against such corporation." It was enacted in 1893 and is a part of chapter 171, page 612, of the Session Acts of that year relating to private corporations. It will be noticed that the section does not prescribe any penalty for its violation as does section 571, immediately following it, and which is also true of other sections of the same genus contained in the chapter; nor is there any provided penalty for the violation of section 570 contained anywhere in the chapter of which it is a part, or in any other statute that has been called to our attention or that we have been able to discover. It is, therefore, to that extent different from section 571 or any of the other sections referred to.

It is also true, and which is conceded, that a state may absolutely forbid a foreign corporation from doing business within its boundaries when in doing so there is no discrimination against corporations of the same kind and nature. That power and right necessarily embraces the lesser one of regulating the right to prosecute the business for which the foreign corporation was created by the foreign jurisdiction--all of which is also conceded--and when such a statute is so framed as to deny to a corporation the right which it proposes to exercise in the foreign jurisdiction to that of its creation, it would no doubt be the duty of the court, howsoever drastic the imposed consequences might be, to decline the enforcement of the right. But it is equally true that "the statute being penal in its nature and in derogation of the common law, it should not be construed so as to include within its purview cases which do not clearly come within it. Commonwealth v. Louisville & N. R. R. Co., 112 Ky. 783, 66 S.W. 753, 23 Ky.Law Rep. 1986; Commonwealth v. Malone, 141 Ky 441, 132 S.W. 1033." Hayes v. Providence Citizens' Bank & Trust Company, 218 Ky. 128, 290 S.W. 1028, 1029, 59 A.L.R. 450. The same rule of interpretation was announced by the Supreme Court of Maine in the case of Dominion Fertilizer Co. v. White, 115 Me. 1, 96 A. 1069, 1070, wherein the court said: "The courts generally have shown a marked tendency to construe such statutes with considerable strictness, and not to extend their meaning beyond what is fairly expressed. And we think this rule of construction is the correct one." Proceeding upon that theory, and with the declared rule as our guide, we will now undertake the task of determining whether or not the court correctly sustained plaintiff's demurrer to the only defense interposed in the Jefferson circuit court.

It will be observed that the involved and inserted section (570) in its first part withholds the benefit to a violating corporation (either domestic or foreign) of any laws that may be passed "for the benefit of, or in the interest of," any corporation; but it is clear that no right therein withheld is involved in this action. However, it is insisted by defendant's counsel that the latter part of the section does apply to the facts of this case so as to deny plaintiff the right to maintain the action. The part of the section so invoked for that purpose says: "Nor shall any corporation avail itself of the provisions of this chapter, unless," etc. We have searched in vain for any provision in the chapter or any statutory enactment elsewhere, denying either in express or necessarily implied terms the right of a foreign corporation to maintain an action within this commonwealth, ex contractu or ex...