Tolerton & Stetson Company v. Barck
| Decision Date | 06 December 1901 |
| Docket Number | 12,706 - (50) |
| Parties | TOLERTON & STETSON COMPANY v. ALBERT BARCK |
| Court | Minnesota Supreme Court |
Appeal by defendant from an order of the district court for Rock county, P. E. Brown, J., sustaining a demurrer to a portion of the answer. The separate defense demurred to is set forth in the opinion. Affirmed.
Foreign Corporation -- Restrictions by Legislature.
The legislature has the undoubted power and authority to impose limitations and restrictions, not repugnant to the constitution and laws of the United States, as conditions precedent to the right of foreign corporations to do business within this state, and when such limitations and restrictions are imposed by proper legislation it is the duty of the courts to uphold them.
Laws 1895, c. 332, Construed.
Laws 1895, c. 332, construed in the light of this rule of law, and held not intended by the legislature as a prohibition against the transaction of business within the state by foreign corporations except upon compliance with the terms thereof by the appointment of an agent resident within the state, upon whom service of summons or other process against the corporation may be made, but solely for the purpose of providing a method of obtaining jurisdiction of such corporations in our courts by the service of summons or other process in actions or proceedings in which such corporation is a party.
E. H Canfield, for appellant.
F. L Janes and D. C. Shull, for respondent.
Action by plaintiff, a foreign corporation, to recover the value of certain goods, wares, and merchandise sold and delivered by it in the year 1896 to a copartnership doing business at Luverne, in this state, the payment of which was guarantied by defendant. The defendant, among other things, pleaded in defense to the action that plaintiff is a foreign corporation; that the contract on which the action is founded was made and entered into within this state; and that plaintiff had not at that time, nor has it at any time since, in compliance with the provisions of Laws 1895, c. 332, filed with the secretary of state, or caused to be recorded in the office of the register of deeds, the written appointment of an agent resident within this state, upon whom the service of summons or other process against the corporation might be made. Plaintiff demurred to this defense, and the demurrer was sustained by the court below. Defendant appealed.
The only question for consideration is with respect to the construction of Laws 1895, c. 332. Section 1 of that act provides, in substance, that every corporation created or organized under the laws of any other state or territory, before transacting any business in this state, or before acquiring, holding, or disposing of property therein, real, personal, or mixed, shall appoint an agent in writing, who shall reside at some accessible point in the state, authorized by it to accept service of summons or process in any action or proceeding in which the corporation is a party, which written appointment is required to be filed in the office of the secretary of state and recorded in the office of the register of deeds of the county of the agent's residence. Section 2 of the act provides, in substance, that, in case any such corporation shall fail to appoint an agent as provided in section 1, the summons or other legal process in any action against it may be served by delivering a copy thereof to its president, secretary, or other officer, or any agent of the corporation, or, if no such officer or agent can be found within the state, -- of which the return of the sheriff of the county in which the action is brought is conclusive evidence, -- then upon any stockholder thereof; and it is further provided that the service thus made shall be a due and sufficient service upon the corporation.
Counsel for appellant contends that this statute makes it incumbent upon any foreign corporation, as a condition precedent to the right to transact business in this state, to appoint an agent as there provided, and that in case of a failure to do so no contracts entered into by it within the state can be enforced in our courts; that such foreign corporations have no legal entity or existence within this state, and are permitted to maintain actions to enforce their contracts as a matter of comity or favor only; and that, where such corporations neglect or refuse to comply with its laws with respect to the conditions and restrictions imposed upon them as precedent to the right to do business with our citizens, the courts should withhold their aid and assistance in enforcing contracts made.
There is no doubt as to the legislative authority to impose limitations and restrictions, not repugnant to the constitution and laws of the United States, as conditions precedent to the right of foreign corporations to do business within this state; and when such limitations and restrictions are imposed by proper legislation it is the duty of the courts to sustain and uphold them. Such corporations have no legal existence beyond the sovereignty in which created. They exist only in contemplation of law, and their authority is primarily confined to the place of their creation. They are permitted to exercise the functions of their charters in states other than their domicile only by the rules of comity between states, and are not citizens within the privilege and immunity clause of the federal constitution. 13 Am. & Eng Enc. 875, et seq., and cases cited; Norfolk & W.R. Co. v. Pennsylvania, 136 U.S. 114, 10 S.Ct. 958; Paul v. Virginia, 8 Wall. 168; Pembina Con. S.M. & M. Co. v. Pennsylvania, 125 U.S. 181, 8...
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