Case ID: ala_149/html/0205-01.html
Source: Caselaw Access Project
Author: {"author": "TYSON, C. J. —", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Armour Packing Company of La., Ltd. v. Vinegar Bend Lumber Co.
    
      Assumpsit.
    
    (Decided Dec. 20th, 1906.
    42 So. Rep. 866.)
    1. Corporations; Foreign Corporations; Right to do Busmess in this Slate. — Tho State has tho power to require a foreign corporation • doing business in this State to file with the secretary of State a certified copy of its articles of incorporation, as provided by section 232 of the constitution of 1901.
    2. Same.' — A foreign corporation .which was doing business in this State at tho time of the adoption of the Constitution of 1901, having complied with all the provisions, of the Constitution and statutes enacted prior to that time, must, in order to continue to do business thereafter, comply with Section 232 of the Constitution of 1901.
    3. Same. — Section 232, Constitution 1901, is prohibitory and mandatory, and it is unlawful for a foreign corporation to transact business in this State without complying with its requirements, although no penalty for its violation is prescribed, and it is not declared that contracts entered into by foreign corporations without a compliance therewith are void.
    4. Payments; Application; Legal and Illegal Claims. — Where a for•eign corporation, which had not complied with Section 232 of the Constitution, sold goods to a buyer and shipped a part of them from its warehouse in Alabama to a point outside of the State, and the balance to the buyer’s place of business in Alabama; and the buyer made payment, without directing the application thereof, in an amount more than enough to pay for the goods shipped outside the State, such payments must be applied to such debts as the debtor was legally bound to pay, and the foreign corporation had no right to apply the payments to the extinguishment of the claim that was illegal, oven conceding that the Constitution did not apply to the sale of the goods shipped outside of the State.
    Appeal from Mobile Circuit Court.
    Heard before Hon, .Samuel B. Browne.
    
      Action by the Armour Packing Company of Louisiana, Limited, against Vinegar Bend Lumber Company. From a judgment for defendant, plaintiff appeals.
    Affirmed.
    This was an action brought by appellant against the appellee in the circuit’ court of Washington county, «(Hiking to recover the sum of $346.89 due by account. The canse was removed by agreement of parties to the circuit court of Mobile county. The defendant interposed the following pleas: “Comes the defendant, and for further plea in this cause, entitled as above on the docket of this court, says that the plaintiff is a foi eign corporation, and the account herein sued upon is on account of shipment of goods on orders of the defendant given to persons acting for plaintiff in the state of Alabama, and the goods were shipped during the month of August and September, 1902, from the store and warehouse of the plaintiff in Mobile, Ala., as folloAvs, viz.: $987.59 Avorth of said goods Avere shipped to Turner, Miss., and received by the defendant at its principal place of business at Vinegar Bend, Ala., and the balance of said goods, amounting to $399.99, Avere shipped to defendant’s place of business in the state of Alabama. That the defendant made payments to the plaintiff generally, Avithout directing their application, on account of its purchases of said goods, as folloAvs, viz.: $693.79 on, toAvit, 15th of November, 1902; $346.89 on, to-Avit, March, 1903. And the defendant avers as negative matter that the plaintiff had not complied Avith the Iuavs of the state of Alabama, so as to entitle the plaintiff to do business in this state, in that it had not, at the time of the said transactions Avith defendant in the matter of the order and shipmens of said goods, filed Avith the secretary of state of state of Alabama a certified copy of its articles of incoiporation or association.” Demurrers were interposed to this plea: Because it is double, in that it attempts to set up payment of the account sued on and also the failure of the plaintiff to comply Avith the laws of Alabama, so as to entitle it to do business in this state; and because it fails to set out any facts shoAving payment of the account sued on, nor does it allege that the plaintiff was not doing business in this state prior to the time when the Constitution of Alabama, providing that no foreign corporation shall do any business in this state without filing with the secretary of state a certified copy of its articles of incorporation or association, became effective; and because said plea fails to allege that the goods shipped by plaintiff to Turner, Miss., have been paid for; and because said plea fails to allege that the .payments made by defendants to the amount' of the purchase price of the goods shipped by plaintiff to Turner, Miss., Avere made in payment of said goods. • These demurrers Avere overruled, and the judgment Avas for defendant upon its plea.
    Mitchell & Tonsmere, for appellant. —
    Section 232 of the Constitution of 1901, does not apply to foreign corporations AAdiicli were doing business in this state at the time the Constitution Avent into effect, and which had complied with all the laws of the state existing at that time. — Htate v. Hartford Fire Jus. Vo., 99 Ala. 221; Southerland on Statutory Construction, § 464; Black m Interpretation, p. 252; Lydecker v. Babcock, 55 N. J. Lraa*, 394; Htate v. Vonnell, 43 N. J. L. 106; Gaston v. Vcriiain, 33 ¡Minn. 271. It- Avill.be presumed in the ah <ence of proof to the contrary that foreign corporations rave complied Avitli the Iravs of the state in reference to loing business therein. — 13 A. & E. Eney. of Law (2nd 3d.) 903; Murphree on Foreign Corporations, § 96. Alune the complaint does not show that plaintiff is a ureign corporation the burden is upon the defendant o set up that fact- and prove it and to show that it has rot complied Avith the laws of the state. — Christian v. 1. F. M. Go., 89 Ala. 198; Eslava v. ÍV. Y. B. & L. Asm., .21 Ala. 484; 6 Thompson’s Corp. § 6345; 2 Enc. of Evdence, 803. The state in its sovereign capacity is the ally party aaIio can take advantage of the failure of the oreign corporations to' comply with its Iravs. — Dar¡nyer v. Derringer., 1 Am. St. Rep. 150; Foster v. ietcher Lbr. Oo., 49: Am. St. Rep. 859.
    Charles M. Bromberg, and Massey Wilson, for apellee. —
    The g'rantin g of the motion of appellee to strike com the file .the replication to the 9th plea cannot be considered, as it is not presented by bill of exceptions.- — ■ Gaston v. Morrongo County, 139 Ala. 465; Jones v. Anniston, 338 Ala. 199; Southern Ry. Go. v. Grmshaw, 136 Ala. 572. The 1st grounds of demurrer to the 9th pdea Avas properly overruled. — 4 Mayf. Dig. p. 468. The second ground Avas also properly overruled. — 4 Mayf. Dig. 468. The matter of doing prior business in the state suggested by demurrer, if meritorious, is in avoidance and must he presented by Avay of replication. — Code 1896, § 3309; Culberson v. A. T. <6 B. Go., 1Ó7 Ala. 457. The state has authority to- exclude foreign corporations altogether and may impose any restrictions Avhich may be proper as a condition upon Avhich they can do business in the state. — Roble v. Mitchell, 300 Ala. 519; 19 Cyc. 3251; Bee. 232 of the Constitution of 1903 is prohibitory and needs no legislative action to give it force and effect.-— A. U. Tel. Go. v. W. U. Tel. Go.,-67 Ala. 26; Sullivm v. Yernon, 121 Ala. 393. The permission granted a foreign corporation to do business in the state rests on comity and may be AvithdraAvn. — State v. Ka-mmoml Packing Go., 110 La. ISO).Bedford v. R. B. & L. Amo., 181 U. B. 227.
    As to the application for payment the law is that the application Avill be to such debt as the debtor is legally bound tq pay and not to such as he is not bound to pay. —Royston v. May, 71 Ala. 400; 2 A. & E. Ency. of Luav (2nd Ed.) A42, Under the facts in this case the shipment aauis not interstate commerce. — 19 Cyc. 1229.
   TYSON, C. J. —

The right of foreign corporations to do business in this state rests upon comity, and not upon any contractual obligations. It Avas, therefore1, entirely competent for. the constitutional convention, in ordaining the present Constitution, to impose upon foreign corporations doing business in this state at the date of its adoption the additional requirement of “filing with the secretary of state a certified copy of its articles of incorporation.”- — Section 232, Const. 1901, This proposition, however, does not seem to be controverted. But the contention is that this requirement does not apX>ly to corporations which had complied in all respects Avitli tlie requirements of the prior Constitution and statutes and Avere doing business in the state when the present one Aims adopted; that the Avords “no foreign corpoiation shall do any business in this state,” etc., haAre reference only to foreign corporations which began to do business after the adoption of the Constitution. The insistence is clearly without merit; and this holding does not give, as seems to be contended, a retroactive effect to the clause.

A foreign corporation having a place of business in this state .and engaged in doing business at the date of the adoption of the Constitution, Avhich continues to do business aftenvards, is doing business as much so as if the same corporation had-not entered the state until after the Constitution Avas adopted and then began to do business. The clause of the Constitution under consideration is prohibitory, and needs no legislation to carry the mere prohibition into effect or to give it force. It is therefore' unlawful for a foreign corporation to transact any business here without a compliance Avith its -conditions, and all contracts into Avhich it may enter, while executory, requiring the aid of the courts to enforce them, are void. — Sullivan v. Vernon, 121 Ala. 393, 25 South. 600, and authorities there cited. See, also, Am. U. Tel, Co, v. W. U. Tel. Co., 67 Ala. 26, 42 Am. Rep. 90. It is wholly unimportant that the prohibitory clause provides no penalty, for its violation, or that it omits to declare that all contracts entered into by the coiporation in violation of it shall be void. — W. U. Tel. Co. v. Young, 138 Ala. 240, 36 South. 374, and cases there cited.

The averments of the plea, also show that defendant, at different times, made payments to plaintiff on the account- for the goods sold to it, without directing their application, aggregating a sum in excess of the value of those which Avere shipped to a point in the state of Mississippi, leaving the balance for .which a recovery is sought, for the goods sold and delivered by plaintiff from its place of business in this state to the defendant at its place of business, AAdiich Avas also in this state. If it be conceded that the constitutional provision has no application to t-lie sales of those goods which wove shipped to a point in Mississippi, because it involved an interstate commerce transaction, a question not necessary to he decided, the payments made must be applied to those sales, no matter whether the sales were antrior or subsequent to the sale of the goods delivered in Ubis state. The rule is that the application of paymets will he to such debts as the debtor is legally bound to pay. The creditor has no right to apply them to the extinguishment of illegal or unenforceable demands without tlie debtor’s consent.- — Royston v. May, 71 Ala. 400; 2 Am. & Eng. Ency. Law (2d Ed.) p. 442, and notes. Of course, if all the sales of the goods made by plaintiff involved the doing of business in this state in violation of the constitutional provision, no recovery could he had, and the plea ivas therefore unobjectionable. There is clearly no error in the record of which the appellant can complain.

Affirmed.

Haralson, Simpson, and Denson, JJ., concur.