United Mercantile Agencies v. Jackson

• Decision Date: 21 December 1942
• Docket Number: No. 6400.,6400.
• Citation: 166 S.W.2d 807
• Parties: UNITED MERCANTILE AGENCIES v. JACKSON et al.
• Court: Missouri Court of Appeals

166 S.W.2d 807

UNITED MERCANTILE AGENCIES v. JACKSON et al.

No. 6400.

Springfield Court of Appeals. Missouri.

December 21, 1942.

Appeal from Circuit Court, Webster County; C. H. Jackson, Judge.

Suit by United Mercantile Agencies against James (Janes) W. Jackson, and Thursa Jackson, to recover on a note. From a judgment in favor of the defendants, the plaintiff appeals.

Judgment reversed, and cause remanded with directions that judgment be entered for plaintiff.

Haymes & Dickey, of Springfield, and Haymes & Haymes, of Marshfield, for appellant.

J. P. Smith, John C. Pope, and Seth V. Conrad, all of Marshfield, for respondents.

FULBRIGHT, Judge.

This is a suit by plaintiff (appellant) on a promissory note, wherein it seeks to recover from defendants, (respondents), $2,000 principal with interest thereon and also attorney fees. Judgment for defendants and plaintiff appeals.

The petition is in conventional form and among other things alleges that defendants, on November 13, 1933, executed and delivered their note for value received, by which they promised to pay the Citizens Bank of Marshfield, or order, within six months after date thereof, $2,000, with interest at 8% per annum from date, payable semi-annually until paid, interest to be compounded annually, and promised to pay all costs of collection including 10% attorney fees if not paid at maturity. It is also alleged that said bank endorsed said note in writing and delivered same to plaintiff for value and that plaintiff is now the owner thereof.

The answer in substance is a general denial and pleads as an affirmative defense that plaintiff is a Kentucky corporation, organized for pecuniary profit and has not complied with the provisions of Section 5077, R.S.Mo.1939, Mo.R.S.A. § 5077, and cannot maintain this action; that the note sued on is void and uncollectable in the hands of plaintiff due to the fact that plaintiff did not take out a license to do business as a foreign corporation as provided by Section 5074, R.S.Mo. 1939, Mo.R.S.A. § 5074. And for further reason that plaintiff by its action in purchasing said note, engaged in the banking business in violation of the statutes governing the banking business.

In its reply plaintiff admits it is a foreign corporation but denies that it has engaged in business in Missouri, or that it carried on business in the State of Missouri by agents or attorneys and denies all other allegations in defendants' answer except that defendants executed the note described in the petition.

Defendants did not deny the execution of the note and the cause was submitted upon certain stipulations, the pertinent portions of which show that the plaintiff is a corporation, organized for pecuniary profit under the laws of the State of Kentucky, with principal office and place of business located in the City of Louisville, Kentucky; that said corporation has never been licensed to do or transact business as a foreign corporation in the State of Missouri, has not had and does not have any office or place of business in the State of Missouri. It further appears from the articles of incorporation that one of the specific purposes for which the corporation was formed was "buying, selling, leasing, managing, possessing or otherwise dealing in real estate, stocks, bonds or property of any kind and to do all things incident and necessary to any or all of the foregoing enumerated activities."

It further appears in the stipulation that plaintiff bought the note sued upon along with many others, together with some judgments, at a single bid, at public auction, from the Finance Commissioner in charge of the liquidation of the Citizens Bank of Marshfield; that the face value of the notes and judgments so purchased aggregated more than $140,000; that the sum bid and paid therefor was $2,207.

There is but one question presented by the record for our determination. That is, did plaintiff do or transact business in this state within the meaning of Sections 5074 and 5077, R.S.Mo.1939, Mo.R.S.A. §§ 5074, 5077.

Section 5074, supra, provides in part that, "Every company incorporated for the purpose of gain under the laws of any other state, territory, or country, now or hereafter doing business within this state, shall file in the office of the secretary of state a copy of its charter * * * duly authenticated by the proper authority, together with a sworn statement under its corporate seal, particularly setting forth the business of the corporation which it is engaged in carrying on, * * *." And any corporation failing to comply with the provisions of the section shall not be permitted to maintain any suit or action in any of the courts in this state upon any demand arising out of a contract, while such requirement has not been complied with.

Section 5077, provides in part: "Every corporation for pecuniary profit, formed in any other state, territory or country * * * which may hereafter do business in this state, which shall neglect or fail to comply with the conditions of this law, shall be subject to a fine * * * and * * * no foreign corporation, as above defined, which shall fail to comply with said sections, can maintain any suit or action * * * in any of the courts of this state, * * *."

The interpretation of these statutes or similar statutes have frequently been before our courts. In the case of Hogan v. City of St. Louis, 176 Mo. 149, 75 S.W. 604, 605, in passing on the identical proposition it was stated:

"Now, when our statutes say that a foreign corporation shall not `transact business' here until it establishes a public office in this state, where books are kept and process may be served, and until it pays its quasi incorporation tax and takes out its license, do they mean that the corporation must do all those acts before it can lawfully enter into a contract to do any business here? Does our law mean that, when advertisements inviting bids on public or private works in this state are read by foreign corporations, they are to understand that they have not the right to bid and have their bids accepted unless they shall have already complied with the terms of our statute to enable them to transact business here? No; that is not the meaning of our statutes. No such policy of exclusion has ever been shown in any of our legislative acts. Foreign corporations have always been invited and encouraged to come."

The above was quoted with approval in the case of Wulfing v. Armstrong Cork Co., 250 Mo. 723, 157 S.W. 615.

In the case of Parker v. Wear, Mo. Sup., 230 S.W. 75, 78, the identical question that confronts us was raised in a statutory action to determine title. In the chain of title it appeared that one Frazier and wife deeded to the White River Stock & Fruit Co., a corporation, the lands involved and that subsequently said corporation, described as of Arizona, deeded the lands to Frank E. Wear. It was agreed that the White River Stock & Fruit Co., a corporation, was organized and incorporated under the laws of Arizona and it was further agreed that "the charter of this company provided that it could engage in the following business: Buy, sell, and deal in real estate, real estate options, mortgages and leases, railway stock, make contracts," etc. In speaking directly to the point Judge Ragland said:

"We need not determine whether a foreign corporation could from some point outside of the state boundaries conduct a real estate business in the state, and thereby bring itself within the denunciation of the statute which declares that such corporations shall not be permitted to transact business in the state until it has been duly licensed. It is sufficient to say that the taking of a single conveyance of real estate situated in Missouri and afterward conveying the real estate to another, standing alone, is not transacting business in the state within the prohibition of the statute." (And cases cited).

In the case of Meir v. Crossley, 305 Mo. 206, 264 S.W. 882, 889, 35 A.L.R. 611, the court said: "It seems to be the rule that doing business is the exercise of some of the functions and carrying on of the ordinary business for which the company was organized, and that single and isolated transactions do not constitute the doing of business within the meaning of the statute."

In the case of Mergenthaler Linotype Co. v. Hays, 182 Mo.App. 113, 168 S.W. 239, 242, a case decided by our own court and which we think is directly in point, the court said:

"In this case there was at most but one transaction. The contract under which the machine was delivered was to continue for six years if it remained a lease, and the rent was to be paid annually. The different periods of payment and the continued use of the machine by the lessees under the lease for the term made the transaction as to the making of the lease but one piece of business. The sale and delivery of a horse for $100 cash in hand is one transaction. If the payment is to be in installments, and the horse is to be worked in ten different wagons by the purchaser, this would not make the sale and delivery of the horse more than one transaction. So far as the pleadings in our case show, this was the only business the plaintiff did or ever expected to do in Missouri.

"As to isolated transactions, we quote from 19 Cyc. 1268:

"`The general conclusion of the courts is that isolated transactions, commercial or otherwise, taking place between a foreign corporation domiciled in one state and citizens of another state, are not a doing or...