American Copying Co. v. Eureka Bazaar

108 N.W. 15, 20 S.D. 526, 1906 S.D. LEXIS 44
CourtSouth Dakota Supreme Court
DecidedJune 13, 1906
StatusPublished
Cited by9 cases

This text of 108 N.W. 15 (American Copying Co. v. Eureka Bazaar) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Copying Co. v. Eureka Bazaar, 108 N.W. 15, 20 S.D. 526, 1906 S.D. LEXIS 44 (S.D. 1906).

Opinions

FULLER, P. J.

On the 13th day of January, 1903, plaintiff, a foreign corporation, commenced this action on contract in file-name of William B. Graham and Alonzo L. Utz, as copartners doing business under the firm name and style of the American Copying Company, but, after the answer was served and the case noticed for trial at the June, 1903, term, leave was applied for and obtained to amend the verified complaint bjr alleging plaintiff's corporate-capacity by virtue of the laws of Illinois. By the terms of such-contract, which was executed in this state September 8, 1902, with-reference to a trading stamp scheme, the defendant, a retail mcr-[529]*529chant, was obligated upon certain conditions to pay 50 cents per 100 for all stamps required and $175 for' 100 picture frames designed to be given with portraits to customers purchasing $25 worth of goods at his store. It was conclusively shown that plaintiff had not at the time of making the contract, nor when the action was commenced, complied with the statute prohibiting a nonresident corporation from transacting any business, acquiring or disposing of any property, instituting or maintaining any action at law, or otherwise on any contract made in this state, unless its articles of incorporation shall have been filed in the office of the Secretary of State and a resident agent appointed upon whom service of process may be had. Sections 883-885, Rev. Civ. Code.

In the early case of Wright v. Lee, 2 S. D. 596, 51 N. W. 706, the only question relating in the slightest degree to the point now under consideration was whether a foreign corporation doing business in this state, without complying with the statute as it then existed, could make an assignment for the benefit of creditors, and, upon the anomalous theory that the Legislature did not intend to give our citizens the right to1 question the unlawful acts of foreign corporations, and that none but the sovereign state could complain, the assignment was held valid. Although the case covers 34 closely printed pages, composed principally of citations and quotations from nearly all the states to the effect that foreign corporations are prohibited from transacting business therein until they have complied with the terms upon which permission is granted, and that contracts in violation of a statute are void, the reasoning of the opinion is at variance with all the authorities, and, while thp conclusion that a delinquent foreign corporation may make an assignment for the benefit of creditors is now considered to be well settled, neither of Judge Bennett’s associates concurred in the proposition, and Judge Corson declined to express an opinion with reference thereto. That no question as to the right of a foreign corporation to transact business or maintain an action in this state was then before the court •is clear from the fact that the making of an assignment in this state, by officers elected in this state, for the benefit of creditors in this state, was not within the statutory prohibition, and in no sense is [530]*530that case an authority bearing, even remotely, upon the question now before us.

From a most exhaustive article on the law of corporations written for 19 Cyc., at page 1280, by Judge Seymour D. Thompson, we quote as follows: “The doing of matters of which the ordinary business of a foreign corporation does not consist, but which it does in the exercise of its general rights for the purposes of its safety, or in order to do.justice to its creditors, or to comply with some other provision of the local law, are not the ‘doing of business, within a state, within the meaning of statutes like those under consideration; but, under a sound interpretation of such statutes, the doing of business consists only of carrying on the operations of its trade for the making of profit. It is accordingly held that there is no doing of business in the state, within the meaning of such statutes, where foreign corporations make an assignment of their property for the benefit of their creditors, or confess a judgment in favor of a particular creditor.” In discussing the question vitally pertinent to every court called upon to construe a statute like ours the same distinguished jurist and author, as late as the year 1904, says: “If, as is sometimes the case, the statute expressly declares that all contracts of á foreign corporation in violation thereof shall be void, or that no1 action shall be maintained thereon, then of course there is no doubt as to the intention of the Legislature, and there can be no recovery thereon by the corporation.” 19 Cyc. 1292. Speaking further, and to the point that when a statute provides that foreign corporations shall do no business within the state except upon compliance with the statute, Judge Thompson says: “When such corporation does business in the state in violation of the statute, and, through the business so done, a con-traer accrues to it which would otherwise be enforceable in the courts of the state, the corporation cannot, because of the statutory prohibition maintain an action upon such contract in the courts of the state.” In support of the proposition he cites numerous cases in the notes from each of the following states: Alabama, Colorado, Illinois, Indiana, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, Tennessee, Texas, Utah, Vermont, Wiscon[531]*531sin, United States and the provinces of Canada. 19 Cyc. 1289 to 1291, incl.

Construing a statute of Colorado enacted in 1901, and. which does n t in terms prohibit the institution of an action based on a contract in violation of such, provision, the federal court, in the case of U. S. Rubber Co. v. Butler Shoe Co. (C. C.) 132 Fed. 398, say: 'Complainant could sell its goods to respondent or to any ■other purchaser without paying tribute to the state. But, when they brought goods into the state to be sold in the general market, they became subject to the general law of the state in respect to foreign corporations. Not having complied with the act of .assembly of 1901, it must be said that they have no right of action upon the contracts mentioned in the bill of complaint. It matters not that the act of assembly does not declare the contracts to be void, and when the plaintiff cannot establish a cause .of action without relying upon an illegal contract he cannot recover. Miller v. Ammon, 145 U. S. 421, 12 Sup. Ct. 884.” From the headnote, fully sustained by the opinion, in New Hope Delaware Bridge Co. v. Poughkeepsie Silk Co., 14 N. Y. Common Law Rep. 648, we.quote as follows: “A foreign corporation keeping an office in this state for receiving deposits, and discounting notes without being expressly authorized by the laws of this state to do so, cannot maintain an action for the money loaned either on a nóte or other security taken on such loan, or on the count for money lent.” In the very recent case of South Amboy Terra Cotta Co. v. Poerschke 90 N. Y. Supp. 333, it is said: “A foreign corporation doing business in New York, and having a regular place of business there, at which its directors met, and its books and most of its money were kept, and at which contracts and payments were made, cannot maintain a suit on a contract made in New York prior to a compliance with the General Corporation Law, Laws 1892, p. 1805, c. 687, §. 15, as amended by Laws 1901, p. 1326, c.

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Bluebook (online)
108 N.W. 15, 20 S.D. 526, 1906 S.D. LEXIS 44, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-copying-co-v-eureka-bazaar-sd-1906.