Sucker State Drill Co. v. Wirtz Bros.

• Citation: 17 N.D. 313,115 N.W. 844
• Parties: SUCKER STATE DRILL CO. v. WIRTZ BROS.
• Decision Date: 18 March 1908
• Court: United States State Supreme Court of North Dakota

17 N.D. 313

115 N.W. 844

SUCKER STATE DRILL CO.

v.WIRTZ BROS.

Supreme Court of North Dakota.

March 18, 1908.

Syllabus by the Court.

Plaintiff, a foreign corporation, brought this action to recover the purchase price of certain drills sold and delivered by it to defendants. The defense interposed is that plaintiff has not complied with the law of this state, being sections 4695-4699, Rev. Codes 1905, prescribing the conditions upon which such corporations may do business within our borders; it being admitted by plaintiff that it has not complied with such law.

Evidence examined, and it is held that plaintiff did not violate such statute, as in its dealings with defendant out of which its cause of action accrued it was engaged in transacting or doing an interstate, as contradistinguished from an intrastate, business.

The statute aforesaid cannot apply, nor was it intended that it should apply, to foreign corporations while engaged solely in transacting an interstate business. It will be presumed that in the enactment of such statute the Legislature did not intend in any manner to interfere with the exclusive power vested in the Congress of the United States to regulate or restrict the business of interstate commerce.

A portion of the drills sold to defendants were in store at Grand Forks, and were shipped directly to defendants from that place, but it is held, for reasons stated in the opinion. that this shipment did not constitute the transacting or doing business within the state in violation of said statute.

Certain evidence as to prior, but wholly independent, contracts and transactions of plaintiff with other citizens of the state claimed to have been violations of such statute, is held irrelevant.

Appeal from District Court, Benson County; E. T. Burke, Judge.

Action by the Sucker State Drill Company against Wirtz Bros. Judgment for plaintiff, and defendants appeal. Affirmed.Scott Rex, for appellants. C. W. Buttz (H. L. Halvorson and O. D. Comstock, of counsel), for respondent.

FISK, J.

The plaintiff, a foreign corporation, with its place of business and only office at Belleville, in the state of Illinois, brought this action in the district court of Benson county to recover a balance due as the purchase price of certain drills theretofore sold and delivered by it to defendants. Plaintiff recovered in the court below, and the sole question raised on this appeal involves the validity of the contract under which the drills were sold; it being appellants' contention that such contract is void because plaintiff had not complied with the laws of this state prescribing the conditions upon which foreign corporations may do business within its borders. This contention is based upon sections 4695 to 4699 of our Civil Code of 1905. Section 4695 provides: “No foreign corporation * * * shall transact any business within this state or acquire, hold, or dispose of any property, real or personal within this state until such corporation shall have filed in the office of the Secretary of State a duly authenticated copy of its charter or articles of incorporation, and shall have complied with the provisions of this chapter. * * *” Section 4697 requires such foreign corporation before doing business in this state to file a power of attorney in the office of the Secretary of State, constituting such officer its attorney, upon whom process may be served with the same force and effect as if served personally upon the corporation in this state. Section 4699 declares that “every contract made by or on behalf of any corporation * * * doing business in this state without first having complied with the provisions * * * of sections 4695 and 4697 * * * shall be wholly void on behalf of such corporation. * * *” It is an admitted fact in the case that plaintiff was an Illinois corporation, and that it never complied with section 4697, above referred to.

The vital inquiry, therefore, is whether plaintiff was legally bound to comply with said statute before entering into or complying with the contract, pursuant to the terms of which the drills were sold and delivered. In other words, did the nature of plaintiff's dealings with defendant constitute the “transacting” or “doing” business in this state within the meaning of sections 4695 and 4699 aforesaid? Appellants' counsel contend that in answering this question we should take into consideration other contracts entered into and transactions had between respondent and appellants, as well as third persons, in previous years. Testimony as to such other contracts and dealings was received in evidence over appellants' objection, but these rulings were thereafter completely nullified by the trial court by an instruction to the jury at the close of the testimony to wholly disregard the defense of the illegality of the contract. We think this testimony should have been excluded. It related wholly to independent contracts and transactions in no manner connected with the contract or transaction alleged in the complaint, and for this reason it had no relevancy to the defense relied upon; and whether plaintiff violated such statute upon such prior occasions is therefore wholly immaterial to the present inquiry. Conceding all that appellants' counsel claims as to the nature of these prior transactions (which we are inclined to think is an unwarranted concession under the facts), how can it be legitimately asserted that the statute aforesaid may be invoked to nullify an entirely separate and independent contract entered into by the foreign corporation at a later date? If such latter contract, because it relates only to interstate transactions and is therefore within the protection of the federal Constitution, or if for any other reason it does not fall within the inhibition of the state statute above cited, is it not valid and enforceable, regardless of prior violations of such statute by plaintiff? Clearly yes. If this were not so, then the mere fact that plaintiff at some time in the past has violated this statute would forever thereafter preclude it from enforcing perfectly valid contracts made by it with citizens of this state, even though the same relate to transactions involving interstate commerce. If such is to be the construction of the sections above...