Case Title: Parker v. Lin-Co Producing Company

Citation: 197 So. 2d 228

Docket Number: 

State: mississippi

Court: Mississippi Supreme Court

Date: 1967-04-03T00:00:00Z

Document:
197 So. 2d 228 (1967) Ray N. PARKER, Billy E. Fisher, Co-Partners d/b/a Combined Swabbing Service, and Louie Grantham v. LIN-CO PRODUCING COMPANY. No. 44329. Supreme Court of Mississippi. April 3, 1967. Allen & Patterson, Brookhaven, Henley, Jones & Henley, Hazlehurst, for appellants. Stratton & Jones, Brookhaven, for appellee. INZER, Justice. This is an appeal from a judgment of the Circuit Court of Lincoln County which held appellants liable for damage to appellee's oil well. The judgment must be reversed because appellee was doing business in this state as an undomesticated foreign corporation, and as such was not entitled to use the courts of this state to enforce its claim. Lin-Co Producing Company, a Louisiana corporation, was owner of an oil, gas and mineral lease in Warren County. Lin-Co discovered a sand bridge in its oil well and hired appellants to attempt to remove the sand by sand bailing. During the sand bailing operation a wire line attached to the sand bailer broke, leaving the bailer and part of the line in the well. Suit was brought charging appellants with negligence. In its defense appellants offered as a plea in abatement Lin-Co's lack of standing to sue, contending that Lin-Co was a foreign corporation doing business in the state without having qualified to do business and as such did not have a right to sue under Mississippi Code Annotated section 5309-239 (Supp. 1964). This section is, in part, as follows: The circuit court properly found that at the time this cause of action arose and at the time suit was filed, Lin-Co was a foreign corporation doing business in this state *229 without having qualified to do so as required by statute. Although the court held that the suit should be abated, it was not dismissed. The court held that if Lin-Co desired to qualify to do business in this state it could proceed with its suit, and after this ruling Lin-Co did qualify to do business in this state and proceeded with the suit. This ruling was based on the theory that the statute prohibited only the maintaining of the suit and not the bringing of it, and accordingly, since the corporation complied with Mississippi statutes by qualifying to do business, the prohibition would be removed and Lin-Co could prosecute the suit already brought. In his construction of the statute the circuit judge sought to distinguish the word "maintain" from the word "begin," since the latter word did not appear in section 5309-239 (Supp. 1964). In doing so he followed the reasoning found in 23 Am.Jur. Foreign Corporations § 351 (1939), at 328, where it is said: However, the same section, at 328, states: The courts of this country in defining the word "maintain" as applied to actions have given it several different meanings. In 54 C.J.S. at 902 particular applications of "maintain" are discussed as follows: Appellant urges that the purpose of this statute is to insure that foreign corporations comply with our state law, and that the construction placed on the statute (5309-239) by the circuit judge would defeat the purpose of the Legislature, and as a result only those foreign corporations which had litigation develop would have reason to comply with the statute. *230 Prior to the adoption of the Mississippi Business Corporation Act of 1962, the law of this state was clearly to the effect that a corporation which failed to qualify to do business in this state could not subsequently qualify and bring or maintain a suit based upon transactions which occurred while it was doing business without having qualified. See Mississippi Code Annotated section 5319 (1957), before amended, and Peterman Construction & Supply Co. v. Blumenfeld, 156 Miss. 55, 125 So. 548 (1930). Corporation statutes enacted in 1962 are based generally on the Model Business Corporation Act. Mississippi Code Annotated section 5309-239 (Supp. 1964) is based on section 117, Model Business Corporation Act Annotated (1960), which reads in part as follows: The words italicized were part of a bill introduced as Senate Bill 1712 in the 1962 Regular Session of the Legislature. The bill was amended in committee to eliminate the italicized words. This is an indication that the Legislature desired to adhere to the established law of this state relative to foreign corporations doing business in this state without first qualifying. Furthermore, the Corporation Act, as enacted by the Legislature, expressly prohibited a foreign corporation from transacting business in this state until it had procured a certificate of authority to do so. Miss. Code Ann. § 5309-221 (Supp. 1964). It is the opinion of this Court that the Legislature prohibited a foreign business corporation from doing business in this state without first qualifying as required by the act, and in the event such corporation violated this prohibition, it could not use the courts of this state to enforce any right of action that accrued prior to the time it qualified to do business in this state. To allow a corporation that has violated the express terms of the statute to avoid the effect of the statute by qualifying only in the event it found it necessary to enforce a cause of action, would defeat the purpose of the Legislature. We hold that a foreign corporation doing business in Mississippi without having qualified as required by statute cannot use the courts of this state to enforce any cause of action that accrued as a result of doing such business. In order to avail itself of the state courts to enforce a cause of action, a foreign corporation doing business in this state must have qualified to do business when the cause of action accrued. The circuit judge correctly held that Lin-Co was doing business in this state without having qualified as required by statute, and that as a result thereof its suit should be abated. However, he was in error in refusing to dismiss the suit. For this reason the case is reversed, and judgment will be entered here dismissing the suit. In view of this holding we do not reach the other matters assigned as error. Reversed and judgment here for appellant. GILLESPIE, P.J., and RODGERS, SMITH and ROBERTSON, JJ., concur.