White River Lumber Co. v. Southwestern Improvement Association

• Decision Date: 26 March 1892
• Parties: WHITE RIVER LUMBER CO. v. SOUTHWESTERN IMPROVEMENT ASSOCIATION
• Court: Arkansas Supreme Court

18 S.W. 1055

55 Ark. 625

WHITE RIVER LUMBER CO. v. SOUTHWESTERN IMPROVEMENT ASSOCIATION

Supreme Court of Arkansas

March 26, 1892

APPEAL from Monroe Circuit Court, MATTHEW T. SANDERS, Judge.

The Southwestern Improvement Association, a Missouri corporation sued the White River Lumber Company, a corporation of Arkansas, to recover rents due under a contract for the lease of land situated in this State. Defendant has appealed from a judgment in plaintiff's favor. The facts sufficiently appear in the opinion.

Affirm.

Sanders & Watkins for appellant.

1. By Acts 1887 (April 4th), all contracts of foreign corporations are absolutely void unless the act is complied with. Such acts have been held valid. 8 Wallace, 168; 13 U.S. 381; 1 Am. & Eng. Corp. Cases, 1, 19; 3 id., 131; Morawetz on Private Corp., secs. 500, 512; Beach on Priv. Corp., secs. 414, 418.

2. The court erred in excluding testimony showing that appellee came within the terms of the act.

3. Compliance with the act was a pre-requisite to its authority to make a valid contract in this State. 4 A. & E. Corp. Cases, 6.

H. A Parker for appellee.

The contentions of appellant are all settled against it in 18 S.W. 43. It was not proved that the contract was made in this State. Ib.

OPINION

HEMINGWAY, J.

The only defense to the action in this case was that the contract sued upon was made by a foreign corporation which had not complied with the constitution and statutes prescribing the terms on which such corporations may do business in the State. It appeared by the complaint that the plaintiff was a foreign corporation; and the defendant offered to prove that it had done business in the State and had not complied with the law relating thereto, but the court excluded the evidence. The defendant asked that the court instruct the jury, in substance, that the plaintiff could not recover unless it had complied with the law, but the court refused the instruction. The question presented is, was there any error in these rulings? Suppose it had been admitted that the plaintiff had done business in the State and had not complied with the laws regulating its right to do so, would that defeat the action? If not, there was no error in the court's ruling.

The law affords no relief upon contracts made against its prohibition; but relief is withheld, not because the plaintiff has done illegal acts, but because the cause of action is a part of or connected with them. Although the plaintiff may have violated provisions of the law in particular transactions, it does not refuse relief upon a contract not connected with or a part of the prohibited acts. So if the plaintiff did business in this State contrary to law, and in connection therewith made a contract, no recovery could be had upon that contract; but, notwithstanding such illegal business, if the plaintiff made an independent contract abroad, a recovery thereon would not be defeated by the...