Wulfing v. Armstrong Cork Company

• Decision Date: 31 May 1913
• Citation: 157 S.W. 615,250 Mo. 723
• Parties: JOHN W. WULFING, Appellant, v. ARMSTRONG CORK COMPANY
• Court: Missouri Supreme Court

157 S.W. 615

250 Mo. 723

JOHN W. WULFING, Appellant, v. ARMSTRONG CORK COMPANY

Supreme Court of Missouri, First Division

May 31, 1913

Appeal from St. Louis City Circuit Court. -- Hon. William M. Kinsey Judge.

Affirmed.

W Scott Hancock and W. Hall Trigg for appellant.

Contracts made in this State by an unlicensed foreign corporation doing business here, are illegal and void. Amusement Co. v. Amusement Co., 192 Mo. 404; Mill & Lumber Co. v. Sims, 197 Mo. 507; Roeder v. Robertson, 202 Mo. 522; Machinery Co. v. Ramlose, 210 Mo. 631, 231 Mo. 508; Zinc & Lead Co. v. Mining Co., 221 Mo. 7. A fortiori, such contracts are nullities where they are to be performed in this State, and have for their subject-matter realty situate here. Zinc & Lead Co. v. Mining Co., 221 Mo. 7. It is not the inhibition of the statute against such corporations maintaining suits in the courts of this State, but the unlawfulness of transacting their corporate business here, which strikes at the essential validity of their contracts, and affects them with nullity. Therefore, the question is not one of remedy, but of right. The infirmity being one going deeper than the remedy, and fixing itself upon the contract itself, the position of the parties thereto before the court, either as plaintiff or defendant, or whether the statute be used as a defense, or as a ground for affirmative relief, are alike unimportant. Baptist Church v. Baptist Church, 73 N.Y. 82; Parkersburg v. Brown, 106 U.S. 487; King v. Wilson, 95 N.W. 494; Toby v. Schultz, 51 Ill.App. 487; White v. Bank, 22 Pick. (Mass.) 181; Pinckston v. Brown, 3 Jones Eq. (N. C.) 494; Gorringe v. Reed, 23 Utah 121. Subsequent procurement of license, authorizing such a corporation to transact business in this State, has no ex post facto operation. It speaks for the future, not the past. Amusement Co. v. Amusement Co., 192 Mo. 404; Zinc & Lead Co. v. Mining Co., 221 Mo. 7; Mill & Lumber Co. v. Sims, 197 Mo. 507; Blevins v. Fairley, 71 Mo.App. 259; B. & L. Assn. v. Denson, 189 U.S. 408. Leases made by unlicensed foreign corporations, doing business in this State, pass no estate or interest, and confer no rights in the subject-matter thereof. Zinc & Lead Co. v. Mining Co., 221 Mo. 7; Machinery Co. v. Ramlose, 210 Mo. 631, 231 Mo. 508; Roeder v. Robertson, 202 Mo. 522. A lease, in order to create a tenancy other than from month to month, must be executed both by the lessor and the lessee. R.S. 1909, sec. 7883; Valle v. Kramer, 4 Mo.App. 570; Combs v. Transfer Co., 58 Mo.App. 112. No such unlicensed foreign corporation, doing business in this State, has any local existence. It is not recognized here as an entity. Accordingly in the lease in question there was no lessee. Rowden v. Daniell, 151 Mo.App. 15; Ehrhardt v. Robertson, 78 Mo.App. 404. Furthermore, the lease itself being a nullity, the defendant's possession is that of a trespasser. Berni v. Boyer, 90 Minn. 469.

Joseph H. Zumbalen and Henry T. Ferriss for respondent.

A subsequent purchaser of real estate cannot invoke the aid of the statute prohibiting unlicensed foreign corporations from doing business in this State, to defeat an outstanding lease on the premises, made by his grantor to such an unlicensed corporation. In ejectment by such purchaser against the corporation, it can assert its rights under the lease. Blodgett v. Zinc Co., 58 C. C. A. 79; Tel Co. v. Superior Court, 153 Cal. 533; Lumber Co. v. Lesh & M. L. Co., 144 Wis. 362. In ejectment against a foreign corporation it may assert a lease under which it is holding, made to it before it obtained a license to do business in this State. Such a lease, being an executed conveyance or grant, is not assailable on the ground that the lessee was an unlicensed foreign corporation when it was made. Die fenbach v. Vaughan, 116 Ala. 150; Kindred v. Mortgage Sec. Co., 116 Ala. 192; Light Co. v. Rust, 117 Ala. 680; Rachels v. Cooperage Works, 128 S.W. 348; Heiskell v. Lodge, 87 Tenn. 668; 19 Cyc. 1303; Manufacturing Co. v. Construction Co., 124 Mo.App. 349. The lease having been fully executed by the lessee's entry into possession, vested an estate in the land in the lessee, for the term of the lease, although it had not complied with the statute concerning foreign corporations doing business in the State, which estate could only be defeated by the State in a direct proceeding. 19 Cyc. 308, 1240; Fritts v. Palmer, 132 U.S. 282; Seymour v. Gold Mines, 153 U.S. 523; Chattanooga Co. v. Evans, 14 C. C. A. 116; Reed v. Todd 127 N.W. (S. D.) 527; War Eagle Co. v. Dickie, 14 Idaho 534; Miller v. Williams, 27 Colo. 34; Carlow v. Aultmann, 28 Neb. 672; Loan & Trust Co. v. Gordon, 113 Iowa 481; Rogers v. Nashville Co., 33 C. C. A. 534; Rothchild v. Memphis Co., 51 C. C. A. 310. The foreign corporation statute affects merely the capacity of the corporation to contract; and after the transfer of an interest in land to the corporation has reached completion, the transaction cannot be questioned collaterally by a private suitor. The same rule applies as in the case of a purchase of land by an alien. Ins. Co. v. Smith, 117 Mo. 289; Property Co. v. Nashville, 114 Tenn. 213; Pembroke v. Huston, 180 Mo. 627. The acceptance of rent by the lessor under the lease, for more than five years after the corporation procured a license to do business in this State, was a ratification thereof which estops him and his grantee from now questioning its validity. Applebaum v. Galewski, 34 Misc. 281; Earl v. Steffens, 1 N. J. L. 53; Hassard v. Tomkins, 108 Wis. 186. The statute is directed against carrying on of its charter business by a foreign corporation, until it has complied with its terms. The acquisition of real property or an interest therein, is not within the prohibition, unless that be the charter business of the corporation. 19 Cyc. 1303; Property Co. v. Nashville, 114 Tenn. 213. Appellant cannot repudiate the lease, even if it be void, without first returning or offering to return the rents received under it. Roeder v. Robertson, 202 Mo. 522; Tarr v. Western L. & S. Co., 15 Idaho 741; Hanchey v. B. & L. Assn., 140 Ala. 245.

BROWN, C. WOODSON, P. J. concurs.

OPINION

BROWN, C.

This is ejectment for the property and building in the city of St. Louis known as numbers ten and eleven North Second street, which was, up to the sixth day of May, 1907, owned by Lavinia S. Shallcross and others. At the date last named it was purchased by the plaintiff at a partition sale made by one Charles F. A. Mueller, a special commissioner appointed by the St. Louis Circuit Court for that purpose in a suit pending between the owners.

The defendant is a Pennsylvania corporation and has been engaged in business in the city of St. Louis since 1895, and from November, 1896, up to the time of the trial it maintained an office and place of business in the premises in controversy, where it carried on the business of buying and selling corks and other brewery supplies; and it had a warehouse in St. Louis from which to make its deliveries. During all that time Mr. Sidney L. Gilbert has been its business manager in that city. Its principal office was in Pittsburg, Pennsylvania. Up to January 13, 1902, it had not complied with the laws of the State of Missouri entitling it to a license to do business in the State, but on that date having complied with those laws its license issued and was delivered by the Secretary of State.

By a lease dated October 10, 1901, the owners of the premises, parties to the partition suit, by Wyatt Shallcross, their trustee, leased the premises to the defendant for use as a store and cork factory for a term of ten years from and after the first day of January, 1902, "at an annual rental of fifteen hundred dollars payable monthly in installments of one hundred and twenty-five dollars each." At the trial, which occurred at the February term, 1908, Mr. Mueller, the commissioner, testified that prior to the sale of the property by him the plaintiff asked him to ascertain for him the nature of the tenancies of the parties in possession of the property, which included other buildings than those in controversy, and on October 8, 1907, he went to defendant's office and in a conversation with Mr. Gilbert, its manager, was told by the latter that defendant had no lease on the premises in question; that the lease it had had expired, and that he supposed they would have to vacate; that thereafter, and before the sale, he saw the plaintiff and communicated to him the statements of Mr. Gilbert. Mr. Gilbert testified that prior to the sale Mr. Mueller came to his office asking permission to place a sign in front of the building, and stating that the property was to be sold; that the witness thereupon, in Mr. Mueller's presence, turned to his bookkeeper saying: "Mr. Sharing, they tell me they are going to sell the building, and I am under the impression they have got us short here;" that the two talked the matter over in the hearing of Mr. Mueller and were uncertain as to whether or not their lease on the property had expired, or was still in force; that during the conversation it was stated that the lease was in Pittsburg, and the witness said that, as he was going to Pittsburg within a week or two to attend a director's meeting he would then find out how matters stood; that Mueller asked nothing concerning the terms of defendant's tenancy or the duration of its lease; that he said nothing to Mueller to the effect that the tenancy of the defendant was from month to month.

Mr Shallcross testified that before the sale Mr. Mueller had asked him to bring the leases covering the several properties in the sale, so that they might be referred to in case any questions were asked about them; that he then knew that defendant's lease had not expired, and,...