Sioux Remedy Company v. Cope

Decision Date30 November 1914
Docket NumberNo. 37,37
Citation59 L.Ed. 193,35 S.Ct. 57,235 U.S. 197
PartiesSIOUX REMEDY COMPANY, Plff. in Err., v. F. M. COPE and D. C. Cope
CourtU.S. Supreme Court

Messrs. Joe Kirby, C. E. More, and A. W. Bulkley for plaintiff in error.

Messrs. Charles O. Bailey, John H. Voorhees, Alan Bogue, Jr., Andrew S. Bogue, Peter G. Honegger, and Theodore M. Bailey for defendants in error.

[Argument of Counsel from page 198 intentionally omitted] Mr. Justice Van Devanter delivered the opinion of the court:

This is an action by an Iowa corporation to enforce payment of the purchase price, amounting to $80, of merchandise sold in interstate commerce under a written contract which was made in South Dakota, and required that the merchandise be shipped by the plaintiff from its place of business in Iowa to the defendants at their place of business and residence in South Dakota. The action was brought in a court of the latter state, and the defendants interposed a plea to the effect that the action could not be maintained because, as was the fact, the plaintiff had not complied with a South Dakota statute prescribing conditions upon which corporations of other states would be permitted to sue in the courts of that state. The plea was sustained and the action dismissed. An appeal to the supreme court of the state resulted in in a judgment of affirmance,1 from which one member of the court dissented. 28 S. D. 397, 135 N. W. 683.

In that court it was contended that the statute upon which the plea was grounded is, when applied in a case like this, repugnant to the commerce clause of the Constitution of the United States.

The statute (Rev. Civ. Code 1903) declares (§ 883) that no corporation created under the laws of any other state or territory, for other than religious and charitable purposes, 'shall transact any business within this state, or acquire, hold, and dispose of property, real, personal, or mixed, within this state, or sue or maintain any action at law or otherwise in any of the courts of this state,' until it shall have filed in the office of the secretary of state an authenticated copy of its charter or articles of incorporation, and also (§ 885) that 'no action shall be commenced or maintained in any of the courts of this state by such corporation on any contract, agreement, or transaction made or entered into in this state by such corporation,' unless it shall have appointed a resident agent upon whom process may be served in any action to which it may be a party, and shall have filed an authenticated copy of such appointment in the office of the secretary of state and of the register of deeds of the county where the agent resides. The corporation is also required to pay the fees, amounting to about $25, for filing and recording these instruments.

The supreme court of the state construed the statute as requiring a foreign corporation to subject itself to the jurisdiction of all the courts of the state as a condition to invoking the aid of any one of them, and as embracing actions to enforce contracts directly arising out of and connected with interstate commerce equally with actions having no relation to such commerce; and after so construing the statute, the court held it to be a reasonable exercise of the police power of the state and in no wise repugnant to the commerce clause of the Constitution of the United States. In two earlier cases the court had taken a different view of the statute (Rex Buggy Co. v. Dinneen, 23 S. D. 474, 122 N. W. 433; Sioux Remedy Co. v. Lindgren, 27 S. D. 123, 130 N. W. 49), but in the opinion rendered in this case they were disapproved.

Recognizing that it was within the province of the supreme court of the state to construe the statute, and to depart from prior decisions upon the subject, if deemed untenable, we accept the construction applied in this case, and confine our attention to the Federal question whether, as so construed, the statute, by its necessary operation, materially or directly burdens interstate commerce.

Through a long series of decisions dealing with the scope and effect of the commerce clause it has come to be well settled that a state, while possessing power to adopt reasonable measures to promote and protect the health, safety, morals, and welfare of its people, even though interstate commerce be incidentally or indirectly affected, has no power to exclude from its limits foreign corporations or others engaged in interstate commerce, or, by the imposition of conditions, to fetter their right to carry on such commerce, or to subject them in respect to their transactions therein to requirements which are unreasonable or pass beyond the bounds of suitable local protection. Crutcher v. Kentucky, 141 U. S. 47, 35 L. ed. 649, 11 Sup. Ct. Rep. 851; Minnesota Rate Cases (Simpson v. Shepard) 230 U. S. 352, 401, 402, 410, 57 L. ed. 1511, 1542, 1543, 1546, 48 L.R.A.(N.S.) 1151, 33 Sup. Ct. Rep. 729, and cases cited; Barrett v. New York, 232 U. S. 14, 31, 58 L. ed. 483, 490, 34 Sup. Ct. Rep. 203, and cases cited. And so the solution of the question here presented lies within narrow lines.

The contract and sale out of which the action arose were transactions in interstate commerce, and entirely legitimate notwithstanding the plaintiff's noncompliance with the state statute. International Textbook Co. v. Pigg, 217 U. S. 91, 54 L. ed. 678, 27 L.R.A.(N.S.) 493, 30 Sup. Ct. Rep. 481, 18 Ann. Cas. 1103; Buck Stove & Range Co. v. Vickers, 226 U. S. 205, 57 L. ed. 189, 33 Sup. Ct. Rep. 41; Flint & W. Mfg. Co. v. McDonald, 21 S. D. 526, 14 L.R.A.(N.S.) 673, 130 Am. St. Rep. 735, 114 N. W. 684. After delivery of the merchandise according to the contract, the plaintiff was lawfully entitled to the purchase price. The defendants were likewise obligated to pay it. And by reason of their refusal the plaintiff had a right of action on the contract. Thus much was recognized by the supreme court of the state and is now conceded by counsel for the defendants. But it was held by that court, and is here contended, that while the state could not make noncompliance with the statute a ground for forbidding or invalidating sales in interstate commerce, it could make such noncompliance a ground for preventing the maintenance of any action in the courts of the state, based upon such a sale; in other words, that the state, although unable to condition the right to make the sale or its validity upon a compliance with the statute, could so condition the right to sue for the purchase price in the courts of the state.

The argument advanced in support of this position is, first, that the right to demand and enforce payment for merchandise sold in interstate commerce is no part of such commerce, and therefore may be encumbered without burdening the latter; second, that a state may impose such conditions as it deems appropriate upon the right of foreign corporations to sue in its courts; and, third, that in any event the conditions imposed by the statute are not unreasonable or burdensome. The supreme court of the state sustained...

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