The John Deere Plow Company v. Wyland

• Decision Date: 07 May 1904
• Docket Number: 13,436. 13,513
• Citation: 69 Kan. 255,76 P. 863
• Parties: THE JOHN DEERE PLOW COMPANY v. W. W. WYLAND et al. THE JOHN DEERE PLOW COMPANY v. B. F. SPATZ
• Court: Kansas Supreme Court

76 P. 863

69 Kan. 255

THE JOHN DEERE PLOW COMPANY v. W. W. WYLAND et al. THE JOHN DEERE PLOW COMPANY v. B. F. SPATZ

No. 13,436. No. 13,513

Supreme Court of Kansas

May 7, 1904

Decided January, 1904.

Error from Jewell district court; R. M. PICKLER, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. FOREIGN CORPORATIONS -- Single Transaction May Constitute a Doing of Business. A single transaction by a foreign corporation may constitute a doing of business in this state within the meaning of section 1283, General Statutes of 1901 making certain requirements of foreign corporations doing business in the state, where such transaction is a part of the ordinary business of the corporation, and indicates a purpose to carry on a substantial part of its dealings here.

2. FOREIGN CORPORATIONS -- Certain Corporations Held Not Exempt. It was not the legislative intent that foreign corporations maintaining resident agents in this state through whom orders for the purchase of goods are solicited, and to whom such goods are sent for delivery to the buyers, should be exempt from the requirements provided by such section.

3. FOREIGN CORPORATIONS -- Requirements Held Not in Violation of Federal Constitution. That part of said section which provides that no foreign corporation doing business in this state shall maintain an action in any of the courts thereof without first filing certain statements with the secretary of state is not violative of the commerce clause of the federal constitution, even when applied to corporations engaged solely in interstate commerce.

Boyle, Guthrie, Hurt & Davidson, and E. P. Hot hotchkiss, for plaintiff in error; W. F. Guthrie, of counsel.

R. C. Postlethwaite, B. A. Mason, and Burnham & Dashiell, for defendants in error.

MASON J. All the Justices concurring.

OPINION

MASON, J.:

These cases are submitted together and involve the same questions. In each the John Deere Plow Company, a foreign corporation, sued in the district court upon a note; a defense was interposed by answer, based upon the law relating to foreign corporations, and especially upon section 1283 of the General Statutes of 1901, which forbids any corporation doing business in the state to maintain an action in any of the courts thereof without first filing certain statements with the secretary of state; a reply admitted non-compliance with the statute, but set out matters claimed to exempt plaintiff from its operation, and judgment was rendered for the defendant upon the pleadings. The plaintiff asks the reversal of the judgments upon these grounds: (1) That in each case the pleadings disclose but one transaction, and that this does not constitute the doing of business within the meaning of the act; (2) that the only business engaged in by the corporation was the sale of merchandise from a point outside the state to buyers within it, and that the statute is not intended to apply in such cases; or, if so intended, that it is to that extent in contravention of the federal constitution as an attempt to regulate interstate commerce.

The statute requires every foreign corporation seeking to do business in the state to make application to the charter board for permission to do so, which is granted only upon compliance with certain requirements, including the payment of fees. Section 1283, above referred to, reads:

"It shall be the duty of the president and secretary or of the managing officer of each corporation for profit doing business in this state, except banking, insurance and railroad corporations, annually, on or before the 1st day of August, to prepare and deliver to the secretary of state a complete detailed statement of the condition of such corporation on the 30th day of June next preceding. . . . No action shall be maintained or recovery had in any of the courts of this state by any corporation doing business in this state without first obtaining the certificate of the secretary of state that statements provided for in this section have been properly made."

The reply in each case shows that the note sued upon was given for the purchase-price of machinery sold by plaintiff to defendant, the negotiations for such sale having been made, and the order for such machinery having been taken, by an agent of plaintiff residing in Kansas; that the order was in writing, made by defendant and delivered to the local agent, by whom it was forwarded to plaintiff at Kansas City, Mo., for acceptance or rejection; that plaintiff then accepted the order and shipped the machinery to the local agent for delivery to defendant. It is contended by plaintiff in error that as but one transaction is referred to in each case, and as each must be decided solely upon its own record, it cannot be said that it is made to appear that the corporation was engaged in business in this state. It is said in volume 13 of the second edition of the American and English Encyclopedia of Law, at page 869:

"The doing of a single act of business in the domestic state by a foreign corporation does not constitute the doing or carrying on of business within the meaning of the statutory and constitutional provisions."

Many decisions are there cited in support of this declaration, to which may be added: Commercial Bank v. Sherman, 28 Ore. 573, 43 P. 658, 52 Am. St. Rep. 811; Henry v. Simanton, 64 N.J.Eq. 572, 54 A. 153; Oakland Sugar Mill Co. v. Fred. W. Wolf Co., 118 F. 239, 55 C. C. A. 93; Florsheim etc. Co. v. Lester, 60 Ark. 120, 29 S.W. 34, 27 L. R. A. 505, 46 Am. St. Rep. 162; D. & H. Canal Co. v. Mahlenbrock, 63 N.J.L. 281, 43 A. 978, 45 L. R. A. 538. (See, also, 6 Thomp. Corp. § 7936.) For the most part these authorities merely hold that the expression "doing business," is not to be given such a strict and literal construction as to make it apply to any corporate dealing whatever. They turn upon the character, rather than upon the amount, of business done. This is illustrated by the fact that the particular transactions under consideration are frequently described as "independent," "isolated," "occasional," "incidental," "accidental," "casual," "not of a character to indicate a purpose to engage in business within the state," as well as "single." In the decision most frequently cited in this connection, Cooper Manufacturing Co. v. Ferguson, 113 U.S. 727, 5 S.Ct. 739, 28 L.Ed. 1137, stress is laid upon the circumstance that there was no purpose to do any other business in the state. The controlling principle involved in these cases has already been applied by this court in Commission Co. v. Haston, 68 Kan. 749, 75 P. 1028. The scope of the rule invoked is stated, and the limitations to which it is subject are suggested, in the third paragraph of the syllabus in that case, which reads:

"Isolated, independent transactions in this state, incidentally necessary to the business of a foreign corporation conducted at its domicile, fully completed before action commenced, will not prevent recovery in the courts of this state by such corporation under section 1283, General Statutes of 1901, when no repetition of such acts is in contemplation and the territory of the state is not being made the basis of operations for the conduct of any part of the corporation's business at the time the suit is begun."

Although the record in each case discloses but one transaction of the corporation, that transaction was not merely incidental or casual; it was a part of the very business for the performance of which the corporation existed it did distinctly indicate a purpose on the part of the corporation to engage in business within the state, and to make Kansas a part of its field. of operation, where a substantial part of its ordinary traffic was to be carried on. Therefore, although a single act, it constituted a doing of business in the. state within the meaning of the statute, while several acts of a different nature might not have had that effect. See, in this connection, Farrior, v. New England Mortgage Security Co., 88 Ala. 275, 7 So. 200, and other Alabama cases cited in Chattanooga Building &c. Assn....