Sucker State Drill Co. v. Wirtz
| Decision Date | 18 March 1908 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Benson County; Burke, J.
Action by the Sucker State Drill Company against Wirtz Bros.
Judgment for plaintiff, and defendants appeal.
Affirmed.
Scott Rex, for appellants.
A contract by a foreign corporation doing business in this state in violation of law is void. United States Rubber Co. v. Butler Bros. Shoe Co., 132 F. 398; MacNaughton Co. v. McGirl, 49 P. 651; Sherman Nursery Co. v. Aughenbaugh, 100 N.W. 1101; Oakland Sugar Mill Co. v. Fred W. Wolf Co., 118 F. 239; Heilman Brg. Co. v. Peimeisl, 88 N.W. 441; Commonwealth v. Parlin & Orendorff Co., 80 S.W. 791; Fay Fruit Co. v. McKinney, 77 S.W. 160; People v. Wemple, 29 N.E. 1002; New York v. Roberts, 171 U.S. 664; 43 L.Ed. 323; Seamans v. Temple Co., 63 N.W. 408; Kent & Stanley Co. v. Tuttle, 50 P 559; Diamond Glue Co. v. U. S. Glue Co., 187 U.S 611, 47 L.Ed. 328; Ashland Lbr. Co. v. Detroit Salt Co., 89 N.W. 904.
C. W Buttz, (H. L. Halvorson and O. D. Comstock, of counsel) attorney for respondent.
Where a travelling salesman takes an order for goods, submits it for approval to his principals, in another state, who ship pursuant thereto, it is interstate commerce. Mershon v Pottsville Lumber Co., 40 A. 1019; Cooper Mfg. Co. v. Ferguson, 113 U.S. 727, 28 L.Ed. 1137, 5 S.Ct. 739; Robbins v. Taxing Dist. Selby Co., 120 U.S. 489, 30 L.Ed. 694, 7 S.Ct. 592; Brennan v. City of Titusville, 153 U.S. 289, 14 S.Ct. 829; Milan Milling Co. v. Gorton, 27 S.W. 971, 26 L. R. A. 135; Keating Imp. Co. v. Carriage Co., 35 S.W. 417; Allen v. Tyson-Jones Buggy Co., 40 S.W. 393.
It is lawful to make contracts to carry on commerce between states. Cooper Mfg. Co. v. Ferguson, supra; Coit v. Sutton, 60 N.W. 690; 25 L. R. A. 819; Belle City Mfg. Co. v. Frizzell, 81 P. 58; Gun v. White Sewing Machine Co., 20 S.W. 591, 18 L. R. A. 206; Re A. Spain, 47 F. 208, 14 L. R. A. 97; Diamond Glue Co. v. U. S. Glue Co., 187 U.S. 611; Hart v. Machine Co., 17 So. 769; United States v. Telephone Co., 29 F. 17; Cordage Co. v. Mosher, 72 N.W. 117; Rubber Co. v. Butler Bros., 132 F. 398; Oakland Sugar Mill Co. v. Wolf Co., 118 F. 229; Fay Fruit Co. v. McKinney, 77 S.W. 106; Commonwealth v. Parlin & Ordendorf Co., 80 S.W. 791; Com. v. Hogan, 74 S.W. 737.
An agent of a corporation cannot deny its right to do business in the state, in a suit against him for goods sold. U. S. Express Co. v. Lucas, 36 Ind. 361. In Hovey's Estate, 48 A. 311; Penn. Mutual Life Ins. Co. v. Bradley, 37 N.E. 569; Prudential Co. v. Cushman, 106 N.W. 934; De La Vergne, etc., v. Kolischer, 63 A. 971; Spinney v. Miller, 86 N.W. 317; Washburn Mill Co. v. Bartlett, 54 N.W. 544, 3 N.D. 138; Wright v. Lee, 51 N.W. 706.
A foreign corporation may sell in the domestic state by commission merchants or by factors and agents. People v. Roberts, 40 N.Y.S. 417; People ex rel. Soda Fount. Co. v. Roberts, 51 N.Y.S. 487; Bertha Zinc and Mineral Co. v. Clute, et al., 27 N.Y.S. 342.
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 relations 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 quoted, then they are clearly unconstitutional and void as an unlawful interference with, and a restriction upon, interstate commerce. We think such construction is not permissible. The recent case of Butler Bros. Shoe Co. v. U.S. Rubber Co., 156 F. 1, decided by the Circuit Court of Appeals, Eighth Circuit, is directly in point, and fully answers appellants' contention in the case at bar. The opinion by Sanborn, Circuit Judge, is very exhaustive of the subjects treated, and a great many state and federal authorities are there cited and quoted from. We fully agree with the reasoning and conclusions arrived at in that case upon the question here under consideration. A statute of Colorado very similar to the above statute of this state was there held to apply only to foreign corporations when doing an intrastate, as distinguished from an interstate, business. That it will be presumed that such merely was the legislative intent in the enactment of the statute; for otherwise the law would constitute an unlawful attempt to interfere with the exclusive power of congress to regulate the business of interstate commerce. See, also, Hart-Parr Co. v. Robb-Lawrence Co., 15 N.D. 55, 106 N.W. 406, and cases cited; Cooper Mfg. Co. v. Ferguson, 113 U.S. 727, 5 S.Ct. 739, 28 L.Ed. 1137; Coit v. Sutton, 102 Mich. 324, 60 N.W. 690, 25 L. R. A. 819; Rock Island Plow Co. v. Peterson, 93 Minn. 356, 101 N.W. 616; Belle City Mfg. Co. v. Frizzell, 11 Idaho 1, 81 P. 58; Hart v. Machine Co., 72 Miss. 809, 17 So. 769; U.S. v. Telephone Co. (C.C.), 29 F. 17; Cordage Co. v. Mosher, 114 Mich. 64, 72 N.W. 117.
We come, now, to a consideration of the transaction in...
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