American Food Products Co. v. American Milling Co.

138 N.W. 1123, 151 Wis. 385, 1912 Wisc. LEXIS 306

• Court: Wisconsin Supreme Court
• Decided: December 10, 1912
• Status: Published

Opinion

KekwiN, J.

This case was here before on appeal by Winter from a former order dismissing a petition filed by him praying that the examination be suppressed and dismissed. The order from which Winter appealed dismissed the action as to him and it was held that he was not aggrieved by the balance of the order. American F. P. Co. v. Winter, 147 Wis. 464, 133 N. W. 595.

The appellant now makes several contentions for reversal which we shall consider in the order made.

1. It is first insisted that the affidavit for examination is not sufficient under sec. 4096, Stats.; that the examination should be denied and the action dismissed; and further, that the examination should have been denied for the reason that it appears that the plaintiff has all the information required in order to plead. The statute provides that, if the examination shall be taken before issue joined, the notice of talcing the same shall be accompanied by an- affidavit stating the general nature and object of the action, that discovery is sought to enable the party to plead and the points on which discovery is desired, and such examination shall be limited to the discovery of facts relevant to such points, unless the court or presiding judge shall before the examination is begun, by order, further limit the subjects to which it shall extend. The statute extends the right of examination to the president and other officers named of a foreign corporation.

It is argued by appellant that when from the statement made by a party of the nature and 'object of his action in order to enable him to plead it appears that he has no cause of action, the examination will be denied under the doctrine laid down in State v. Milwaukee E. R. & L. Co. 136 Wis. 179, 116 N. W. 900; Madison v. Madison G. & E. Co. 129 Wis. 249, 108 N. W. 65; Schultz v. Strauss, 127 Wis. 325, 106 N. W. 1066. The rule of these cases may be conceded to be good law, but we think it does not apply' here, because it does not appear from the statement made in the affidavit of respondent of the nature and object of the action that no cause of action exists, but on the contrary we think the affidavit is sufficient.

We have set out in the statement of- the case, substantially, the affidavit upon which discovery is sought in order to enable the respondent to plead, from which it appears that the cause of action is based upon a contract of subscription to the capital stock of the respondent, tender of performance by respondent, and failure to perform by appellant. Upon the face of the affidavit it does not appear that the respondent has no cause of action, unless no power to make the contract existed.

Under this head it is argued that the action cannot be maintained in this state, because respondent has not complied with sec. 17706, Stats., and is not authorized to transact business nor to acquire property within this state. That the privilege accorded to foreign corporations to sue in this state rests on comity and therefore is subject to such terms as the state may impose is well established under the rule laid down in Wyman v. Kimberly-Clark Co. 93 Wis. 554, 67 N. W. 932; Chicago T. & T. Co. v. Bashford, 120 Wis. 281, 97 N. W. 940; Pozorski v. Gold Range C. Corp. 142 Wis. 595, 126 N. W. 24; and Presbyterian M. Fund v. Thomas, 126 Wis. 281, 105 N. W. . An examination of the foregoing cases will show that the actions were in contravention of the statutes and public policy of the state, therefore held not maintainable. In the absence of legislative prohibition, foreign corporations may maintain actions in the courts of this state in certain cases without compliance with sec. 17706, Stats. Charter Oak L. Ins. Co. v. Sawyer, 44 Wis. 387; Chicago T. & T. Co. v. Bashford, supra. In so far as the record now before us shows, the cause of action sued upon does not come within the prohibition of sec. 17706, Stats.

Subd. 10, sec. 17706, ’ Stats.: “. . . Every contract made by or on behalf of any such foreign corporation, affecting the personal liability thereof or relating to property within this state, before it shall have complied with the provisions of this section, shall be wholly void on its behalf and on behalf of its assigns, but shall be enforceable against it or them.”

Subd. 2 of sec. 1770b prohibits the transaction of business or the acquiring, holding, or disposing of any property in the state by certain corporations until the statute respecting filing with the secretary of state of a copy of its charter, articles of association or incorpoi*ation, and all amendments thereto, have been complied with. Conceding for the present, as the certificate of the secretary of state tends to show, that the respondent failed to file a copy of its charter or articles of in-, corporation as required by the statute, we find no objection to the maintenance of the present action. Subd. 10, sec. 1770b, Stats.; Catlin & P. Co. v. Schuppert, 130 Wis. 642, 110 N. W. 818; Chickering-Chase Bros. Co. v. White, 127 Wis. 83, 106 N. W. 797. There is nothing in the record showing that the contract was made or to be performed in this state, or that it relates to property within this state; and further it appears that performance had been tendered on the part of the respondent and the action brought for nonperformance by appellant.

Counsel contends that by the present action respondent is either seeking to obtain conveyance' to itself of property which the statute forbids it to acquire or hold, or for specific performance of an agreement to' convey land situated outside of Wisconsin, which the courts of this state have no jurisdiction of. The affidavit does not support counsel’s contention. True, it is alleged that appellant has' property in Wisconsin, Illinois, Indiana, and Kentucky. But the real estate alleged to have been exchanged for respondent’s stock is stated in the affidavit to be situate in Peoria, Illinois, Lindon, Indiana, and Owensboro, Kentucky. Whether an action could be maintained in this state to enforce specific performance of a contract to convey land in another state, see Dickson v. Loehr, 126 Wis. 641, 106 N. W. 793. But it is immaterial whether specific performance can be maintained or not. It is sufficient if some kind of an action can be maintained. The affidavit says the action is brought to enforce the promises and undertakings, or, if specific performance be impossible, to recover damages. Obviously, respondent has not yet made its election as to which remedy it will pursue.

It is further argued by counsel that there was no service of the notice of examination upon Winter as officer of the defendant. The objection is more technical than substantial. The return of the officer making the service shows a good service upon Winter as president of defendant corporations. It is perfectly clear that even if there was any irregularity in service, which does not appear, it was not prejudicial, therefore should be disregarded. Harvey v. C. & N. W. R. Co. 148 Wis. 391, 134 N. W. 839.

It is further urged that the service upon Winter as president was not a good service on defendant, a foreign corporation, since it is claimed he was not in the state as officer or agent of defendant corporation. As to whether Winter was in the state as officer of the corporation is a matter of dispute. But we regard it wholly immaterial whether he was at the time of service in the state on business of defendant corporation or not. It appears from tbe record that the defendant had property in this state and that Winter was its president at the time of service and within the state. That is sufficient to make a valid service' upon defendant. Subd. 13, sec. 2637, Stats. (1898). This statute provides that service may be made upon such a foreign corporation by service upon an officer thereof, being within the state, when the corporation has property within the state or the cause of action arose therein.

It is strenuously argued by counsel for appellant that the affidavit for discovery shows that the respondent had all the information necessary in order to plead. This contention is not based solely upon the original affidavit for discovery made by Hayes, but also upon a subsequent affidavit made by Winter, president of defendant, and petition of defendant to dismiss, which affidavit and petition upon information and belief set forth knowledge on the part of one Alfred von Cotzhausen of 'Milwaukee, who, it is alleged, is president of respondent, if respondent has any president, and also some other facts which appear from the whole record and papers used on the motion to dismiss and suppress the examination in connection with the original affidavit for discovery. It also appears from the record that Mr. Hayes made a second affidavit tending to meet the allegations made in the Winter affidavit and petition of appellant. But whether these subsequent affidavits respecting the right of the respondent to the examination are material or not we need not consider, because they do not substantially change the situation as shown by the original affidavit of Hayes. The affidavit for discovery set out in the statement of facts, we think, shows sufficiently that the respondent was entitled to discovery upon the points therein specified. All that the statute, sec. 4096, requires is that the general nature and object of the action be stated, and that discovery is sought in order to enable the party applying for it to plead. The statute does not require that sufficient facts be stated to constitute a cause of action, nor is it even necessary that the respondent should know that a canse of action exists. Gratz v. Parker, 137 Wis. 104, 106, 118 N. W. 637. Of course if the affidavit affirmatively, shows that no cause of action exists, the examination will be denied. Madison v. Madison G. & E. Co. 129 Wis. 249, 108 N. W. 65; State v. Milwaukee E. R. & L. Co. 136 Wis. 179, 116 N. W. 900.

It is also true that when the matters upon which discovery is sought are obviously within the knowledge of the party applying for the examination, it will be denied. Badger B. Mfg. Co. v. Daly, 137 Wis. 601, 119 N. W. 328. But such is not the case here. It cannot be said from the affidavit for discovery or from the whole record that the court below was wrong in refusing to suppress the examination. Ordinarily where it appears that a cause of action exists in favor of the party applying for discovery, and the facts sought to be discovered are not obviously within the knowledge of such party, and the affidavit is in compliance with the statute, the right to examination should not be denied, 'and the discretion of the trial court respecting such examination-will not be interfered with, except in cases of clear abuse. Badger B. Mfg. Co. v. Daly, supra; Ellinger v. Equitable L. A. Soc. 138 Wis. 390, 120 N. W. 235.

The court below was warranted in finding upon the records presented that the minutes, proceedings, and other documents relating to the contract between the appellant and respondent were within the custody of Winter, president of the defendant ; also that the information asked for was necessary on the part of the respondent to enable it to plead, namely, the liability of the American Milling Company, a consolidated corporation, transactions between the different-corporations, defendants, respecting their liability, -and the property acquired by them in pursuance of the contract, the nature of the respondent’s relief, and upon other points specified in the affidavit for discovery in so far as the same shall be relevant to the controversy. The examination is at all times under the supervision of tbe trial court and tbe witness cannot be compelled to answer questions not relevant to tbe controversy. We find no error in the refusal of tbe court to dismiss tbe action or suppress tbe examination. As before observed, tbe matter of examination under sec.. 4096, Stats., is very largely in tbe discretion of tbe trial court and tbe order of tbe court in proceedings under this statute can only be disturbed for clear abuse of discretion.

By the Court. — The order appealed from is affirmed.