The Toledo Computing Scale Co. v. Young

• Decision Date: 07 April 1909
• Citation: 16 Idaho 187,101 P. 257
• Parties: The Toledo Computing Scale Co., A Corporation, Appellant, v. E. J. Young, Respondent.
• Court: Idaho Supreme Court

101 P. 257

16 Idaho 187

The Toledo Computing Scale Co., A Corporation, Appellant, v. E. J. Young, Respondent.

Supreme Court of Idaho

April 7, 1909

CORPORATION-CONTRACT WITH-DENIAL OF CORPORATE EXISTENCE-DENIALS IN ANSWER - NO ISSUE - WRITTEN CONTRACT - VERBAL CHANGE.

1. Where a party does business with a corporation in its corporate name, and the contract is executed on its behalf such party is estopped from denying the incorporation of the company.

2. The denials of the answer held not sufficient to make an issue and that the court erred in denying plaintiff's motion for a judgment on the pleadings.

3. A foreign corporation, engaged in interstate commerce only, is not required to comply with the laws of this state in regard to filing its articles of incorporation and designating an agent upon whom service of process may be made in order to transact interstate business.

(Syllabus by the court.)

APPEAL from the District Court of the First Judicial District for Bonner County. Hon. William W. Woods, Judge.

Action to recover balance due for certain weighing scales. Motion of plaintiff for judgment on the pleadings denied and judgment entered for defendant. Reversed.

Reed &amp Boughton, for Appellant.

Where a party does business with a corporation in its corporate name and the contract is executed, so far as the corporation is concerned, he is estopped from denying the incorporation of the company. (First Cong. Church v. Grand Rapids School Furn. Co., 15 Colo. App. 46, 60 P. 948; Grande Ronde Lumber Co. v. Cotton, 12 Colo. App. 375, 55 P. 610; Law Guarantee & Trust Co. v. Hogue, 37 Or. 544, 62 P. 380, 63 P. 690; Weill & Co. v. Crittenden, 139 Cal. 488, 73 P. 238; Grangers' Business Assn. v. Clark, 67 Cal. 634, 8 P. 445; Bank of Shasta v. Boyd, 99 Cal. 604, 34 P. 337; Oregonian Ry. Co. v. Oregon Ry. & Nav. Co., 22 F. 245, 10 Saw. 464; Cowell v. Springs Co., 100 U.S. 61, 25 L.Ed. 547; Close v. Glenwood Cemetery, 107 U.S. 466, 2 S.Ct. 267, 27 L.Ed. 408; Bigelow on Estoppel, pp. 527-529; Spelling on Corp., secs. 46, 47; Palatine Ins. Co. v. Santa Fe Merc. Co. (N. M.), 82 P. 363; Sierra Land & Cattle Co. v. Bricker, 3 Cal.App. 190, 85 P. 665. See, also. Cent. Dig., "Corporations." secs. 109-111; 10 Cyc. 245, 246.)

By suing a corporation in its corporate name a party is estopped from denying its corporate existence. (Distilling etc. Co. v. People, 156 Ill. 448, 47 Am.St. 200, 41 N.E. 188; Society etc. Useful Mnfs. v. Morris Canal etc. Co., 1 Saxt. 157, 21 Am.Dec. 41; People v. Stanford, 77 Cal. 360, 18 P. 85, 19 P. 693, 2 L.R.A. 92.)

The failure to deny a material allegation in the complaint is conclusive admission of the fact, and it need not be proved. (Lillienthal v. Anderson, 1 Idaho 673; Parke v. Boulware, 7 Idaho 490, 63 P. 1045.)

"The transaction of the business of interstate commerce is not considered as doing business in the state within the meaning of the state statutes regulating foreign corporations doing business within the state." (Cooper Mfg. Co. v. Ferguson, 113 U.S. 727, 5 S.Ct. 739, 28 L.Ed. 1137; Cook v. Rome Brick Co., 98 Ala. 409, 12 So. 918; Mearshon v. Pottsville Lumber Co., 187 Pa. 12, 67 Am.St. 560, 40 A. 1019; Milan Mining Co. v. Gorten, 93 Tenn. 590, 27 S.W. 971, 26 L.R.A. 135; Davis etc. Building Co. v. Caigle (Tenn. Ch.), 53 S.W. 240; Lyons-Thomas Adv. Co. v. Reading Hdwe. Co. (Tex. Civ. App.), 21 S.W. 300; H. Zuberbier Co. v. Harris (Tex. Civ. App.), 35 S.W. 403.)

A foreign corporation engaged in interstate commerce cannot be compelled to have a known place of business and an authorized agent appointed on whom process can be served, and any act so providing is void. (Cooper Mfg. Co. v. Ferguson, supra; New Orleans etc. Packet Co. v. James, 32 F. 21; Cook v. Rome Brick Co., supra; McNaughton Co. v. Mc- Girl, 20 Mont. 124, 63 Am.St. 610, 49 P. 651, 38 L.R.A. 367; Kent etc. v. Tuttle, 20 Mont. 203, 50 P. 559; Murphy Varnish Co. v. Connell, 10 Misc. 563, 32 N.Y.S. 492; Milan Mining etc. Co. v. Gorten, supra.)

The answer of defendant being insufficient, plaintiff could either move to have the answer stricken out and then take judgment for want of an answer, or move for a judgment on the pleadings, which it did in this case. (Hearst v. Hart, 128 Cal. 327, 60 P. 846; Goldstein v. Krause, 2 Idaho 294, 13 P. 232.) Edwin McBee, for Respondent, cites no authorities.

SULLIVAN C. J.

-This action was instituted in the probate court of Kootenai county to recover the balance due on a written agreement for a certain weighing scale sold and delivered to the defendant. The plaintiff alleged in its amended complaint that it was a corporation duly organized under the laws of the state of New Jersey and doing business at Toledo, Ohio. There is attached to the complaint a copy of the contract of sale, portions of which are as follows: "NOTICE: No scales placed on trial. "ORDER FORM FOR SCALES. "City Rathdrum, County Kootenai, State Idaho.

"Date Feb. 18th, 1907. "Toledo Computing Scale Co., Toledo, Ohio.

"Please ship to us at our place of business, No. street, as soon as possible, 1 of your No. 30 scales. Finish to be blue. In consideration of the above, we agree to pay you ninety dollars ($90.00) in U.S. gold coin or its equivalent, being price of scale F. O. B. Spokane, Wash

"It is agreed that the title to said scales shall not pass until the purchase price or any judgment for the same is paid in full, and shall remain your property until that time.

"It is expressly agreed that this order shall not be counter-manded.

"This contract covers all agreements between the parties hereto.

Yours truly,

"E. J. YOUNG."

The defendant in his answer denies on information and belief that the plaintiff is a corporation. By the second paragraph of the answer he denies that he made any "valid or legal contract with plaintiff on the 18th day of February, 1907, at Rathdrum or any other place," and further alleges that the plaintiff had no right to transact business in this state, as it had not complied with the state laws in regard to foreign corporations; and denies that he made or executed any promissory notes which were "legal and valid in favor of the plaintiff," and in paragraph 4, it is averred that plaintiff has no capacity to bring and maintain this suit. Defendant further alleges that he had the option at any time within a year to rescind the contract and that he did rescind it.

Plaintiff moved for judgment on the pleadings on the ground that the answer did not state a defense. Thereafter the cause was submitted for decision to the district court upon the following stipulation:

"It is hereby stipulated and agreed by and between the plaintiff and defendant as follows: That whereas, the plaintiff has moved for a judgment on the pleadings herein on the ground that the defendant's answer herein does not state a defense to the allegations in plaintiff's complaint, as amended; now, therefore, it is hereby stipulated and agreed that this cause be submitted on said motion and that after the ruling on said motion judgment herein shall be entered as follows: In the event that the said motion is granted, the defendant will decline to amend said answer and judgment may be entered in favor of plaintiff and against defendant in accordance with the prayer of the complaint.

"But in the event that the said motion is denied, then the cause shall be submitted for final decision to the court without a jury on the complaint and answer without the introduction of any further testimony."

The court denied said motion and entered...