McNaughton Co. v. McGirl

38 L.R.A. 367, 49 P. 651, 20 Mont. 124, 1897 Mont. LEXIS 102
CourtMontana Supreme Court
DecidedJuly 10, 1897
StatusPublished
Cited by12 cases

This text of 38 L.R.A. 367 (McNaughton Co. v. McGirl) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McNaughton Co. v. McGirl, 38 L.R.A. 367, 49 P. 651, 20 Mont. 124, 1897 Mont. LEXIS 102 (Mo. 1897).

Opinion

Hunt, J.

The plaintiff, a corporation of New Jersey, doing business in that state, and in the states of New York and Massachusetts, as wool commission merchant, sent an agent into Montana to solicit consignments of wool to its Eastern houses, there to be sold on commission by plaintiff for the benefit of certain consignors, woolgrowers of the State of Montana. It had various transactions of this nature with woolgrowers in Montana. In the particular case before us the exact terms of the agreement between the pjaintiff and the defendant gave rise to this litigation, but the facts were undisputed that plaintiff advanced a large sum of money to defendant upon his wool, and that the defendant’s wool was consigned to plaintiff at New York, to be sold there by plaintiff, who was to credit defendant with the amount of the sale. The [127]*127real contention between the parties was whether the shipment so made was subject to a drawback by plaintiff against defendant if the wool did not net a,sufficient sum in New York to cover plaintiff’s advances to defendant, including interest, costs, etc., or whether the burden of any loss that there might be was to fall entirely on plaintiff.

The defendant availed himself of several defenses, including the one upon which the court directed a finding in his favor, namely, that the contract sued on was void as to the corporation, and could not be enforced in favor of the corporation.

By an act of the Legislative Assembly of the State of Montana approved March 8, 1893, every foreign corporation, before it commenced to do business in Montana, was required to file a certificate with the Secretary of State, designating an agent, who must be a citizen of Montana, upon whom service of process might be had, and also stating the principal place of business of such corporation in this state. It was also provided by Section 2 of said act that, if any foreign corporation failed to comply with the provisions of the law, all its contracts made and entered into with citizens of this state should be void as to the corporation, and that no court of this state should enforce the same in favor of the corporation. Inasmuch as plaintiff did not comply with the statute just cited, the important question raised is whether or not, if the plaintiff’s facts alleged in its complaint are true, and the defendant does in reality owe to plaintiff the amount sued for as a drawback, plaintiff can recover on its contract.

It has been repeatedly laid down by the Supreme Court of the United States that interstate commerce carried on by corporations is entitled to the same protection against the exactions of a state which is given to such commerce when carried on by individuals. We are aware that the construction put upon Section 2, Article 4 of the Constitution of the United States, which provides that the citizens of each state shall be entitled to all privileges and immunities of the citizens of the several states, has been generally uniform, to the effect that the language of that clause relates only to natural persons, [128]*128and not to artificial bodies, as corporations, and that the privileges and immunities guaranteed by the language referred to mean those of the general nature granted to a state’s own citizens, and not those special privileges conferred upon corporate bodies. (Lafayette Insurance Co. v. French, 18 How. 401; Bank v. Earle, 13 Pet. 519; Ducat v. Chicago, 10 Wall. 410; Paul v. Virginia, 8 Wall. 168; Philadelphia & Southern S. S. Co. v. Pennsylvania, 122 U. S. 326, 7 Sup. Ct. 1118.) But, in the carrying on of interstate commerce corporations are guaranteed the same rights and are entitled to the same protection as individuals. The Supreme Court in Gloucester Ferry Co. v. State of Pennsylvania, 114 U. S. 204, 5 Sup. Ct. 826, expressly held that it did not make any difference whether such commerce is carried on by individuals or by. corporations.

J ustice Bradley, sitting on the circuit bench in the case of Stockton v. Railroad Co., 32 Fed. 9, used the following language : “And, in carrying on foreign and interstate commerce, corporations, equally with individuals, are within the protection of the commercial power of congress, and cannot be molested in another state by state burdens or impediments. This was held and decided in the case of Gloucester Ferry Co. v. State of Pennsylvania, 114 U. S. 204, 5 Sup. Ct. 826, and affirmed in the recent case of Philadelphia & Southern S. S. Co. v. Pennsylvania, 122 U. S. 326, 7 Sup. Ct. 1118; and although the decision in Paul v. Virginia, 8 Wall. 168, conformed to the doctrine of Bank v. Earle, the following striking language was used by the court, to wit: ‘At the time of the formation of the constitution a large part of the commerce of the world was carried on by corporations. The East India Company, the Hudson Bay Company, the Hamburg Company, the Levant Company, and the Virginia Company may be named among the many corporations then in existence which, acquired, from the extent of their operations, celebrity throughout the commercial world. This state of facts forbids the supposition that it was intended, in the grant of power to congress, to exclude from its control the commence of corpo[129]*129rations. The language of the grant makes no reference to the instrumentality by which commerce may be carried on. It is general, and includes alike commerce by individuals, partnerships, associations and corporations.’

“We may fairly supplement this language by adding that, when the constitution was adopted, it could not have been supposed that the regulations of commerce to be made by congress might be of no avail to commercial corporations, or at least might be rendered nugatory, with regard to them, in consequence of state restrictions upon their power to act as corporations in any other state than that of their origin. ’ ’

We may, therefore, proceed with the investigation of the case, relying upon the truth of the proposition that, if the transactions between the plaintiff and the defendant in this case were commerce among the several states, congress alone could regulate such commerce, under the Constitution of the United States, and the state had no power to regulate that commerce, or impose any obligation or exaction upon the plaintiff which it could not impose or exact upon an individual transacting the same business.

Now we inquire, what was the nature of the business done, and was it interstate commerce ? If we find that it was interstate commerce, did the statute obtain requiring the corporation to file the certificate referred to as a condition precedent to its right to purchase the wool of the defendant in the manner that it did, and was it an attempt on the part of the state to regulate commerce among the several states, and, therefore, null and void ?

In the case of Gibbons v. Ogden, 9 Wheat. 1, Chief Justice Marshall, in one of his greatest opinions, discussed Section 8, Art.

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Bluebook (online)
38 L.R.A. 367, 49 P. 651, 20 Mont. 124, 1897 Mont. LEXIS 102, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcnaughton-co-v-mcgirl-mont-1897.