Title: S & a REALTY COMPANY v. Hilburn

State: mississippi

Issuer: Mississippi Supreme Court

Document:

249 So. 2d 379 (1971) S & a REALTY COMPANY, a Corporation, Complainant/Appellant, v. L.B. HILBURN and Wife, Jane B. Hilburn, Defendants/Appellees. No. 46274. Supreme Court of Mississippi. June 14, 1971. *380 Wells, Wells, Marble & Hurst, Jackson, for complainant-appellant. L. Breland Hilburn, Jackson, for defendants-appellees. PATTERSON, Justice. This appeal is from a final decree of the Chancery Court of Madison County which sustained a motion by L.B. Hilburn and his wife to dismiss the bill of complaint of S & A Realty Company for specific performance of a contract. The basis of the motion was that the complainant, a foreign corporation, was transacting business within the state, but had not qualified so to do, and was therefore barred from maintaining a suit in the courts of this state. S & A Realty Company, a lessee of the Hilburns, filed its bill for specific performance of a lease contract which was executed on January 10, 1952, on certain lands in Madison County. The lease was for a span of ten years with an option to renew for an additional ten years and in the event of renewal the lessee was thereby granted an option to purchase the property. The lessee alleges that it had complied with all provisions of the lease and has now offered to exercise its option to purchase, but that the lessors, appellees, have refused to comply with the contract. This refusal precipitated this suit. The lessors filed a sworn motion to dismiss the bill. It states: Whereupon, the appellant, S & A Realty Company, filed an affidavit contra to the motion to dismiss. It provides in short: The trial consisted of the introduction of certificates of the Secretary of State which indicate that Alvin Siteman, Inc. and S & A Realty Company, a Missouri corporation, had not qualified to do business within this state. A certificate and articles of incorporation of the S & A Realty Company of St. Louis, Missouri, were introduced, as was a certificate of amendment, indicating that the name of the corporation had been changed from Alvin Siteman, Inc. to S & A Realty Company. The lease between the parties was introduced as was a certificate of incorporation of Rainbow Oil Company, a Mississippi corporation. The pleadings, including the sworn motion and counter-affidavit and the exhibits, compose the record on appeal. There was no oral testimony for the Court to consider. The sole question before the trial court, and which is now before this Court, is whether the complainant, a foreign corporation, was "doing business" within this state without qualifying as required by Mississippi Code 1942 Annotated section 5309-239 (Supp. 1970) so that the courts of this state are barred to it as a party complainant. In Davis-Wood Lumber Co. v. Ladner, 210 Miss. 863, 877-878, 50 So. 2d 615, 620-621 (1951), we stated: It is our opinion that a strict construction of Mississippi Code 1942 Annotated section 5309-239 (Supp. 1970), is required, it being penal, before access to the state courts is precluded to a foreign corporation found to be "doing business" in the state. Alabama Live Poultry, Inc. v. Ervin, 246 So. 2d 915 (Miss. 1971). It is equally clear, we *382 think, since all of the facts are set out either in the pleading or the exhibits, there being no oral testimony of witnesses, that this Court is in the same position as the trial court in evaluating the facts and that the chancellor may be reversed if he erred in his interpretation thereof, whether manifestly in error or not. The question of whether a foreign corporation is doing business within the state must be determined upon an ad hoc basis. Republic-Transcon Industries, Inc. v. Templeton, 253 Miss. 132, 175 So. 2d 185 (1965); Davis-Wood Lbr. Co. v. Ladner, 210 Miss. 863, 50 So. 2d 615 (1951); and Wiley Electric Co. of Jackson v. Electric Storage Battery Co., 167 Miss. 842, 147 So. 773 (1933). Having considered the facts, we conclude that the lower court did not err in finding that the complainant was doing business within the state. The record reflects that the lease was executed on January 10, 1952, and was to take effect the first day of the month following completion of new Highway 51 from Jackson, Mississippi, to its intersection with old Highway 51 in Madison County. The construction of the highway being accomplished, the complainant notified the defendants of this fact giving effect to the lease. Subsequently, S & A renewed the lease for an additional ten years. It paid the agreed rentals under the provisions of the initial and renewal terms of the lease and now proposes to exercise the purchase option afforded thereby. All of these acts indicate a continuity of purpose over a protracted period of time and are in accord with the corporate function expressed by the charter issue to Alvin Siteman, Inc., now S & A Realty Company. Article 8 of the charter provides: The general rule with regard to leasing of realty as within the statutory provision of doing business within a state is expressed in 36 Am.Jur.2d, Foreign Corporations, section 343 (1968): This latter theory was expanded somewhat in Case v. Mills Novelty Co., 187 Miss. 673, 193 So. 625 (1940), by this Court in announcing that a foreign corporation was doing business within the state when a contract it had entered into required servicing a dispenser within the state, a local transaction, and being in violation of Section 4164, Code of 1930, was unenforceable. In Marx & Bensdorf, Inc. v. First Joint Stock Land Bank of New Orleans, 178 Miss. 345, 351-352, 173 So. 297, 298 *383 (1937), this Court stated in quoting from Peterman Construction & Supply Co. v. Blumenfeld, 156 Miss. 55, 125 So. 548, 550 (1930), the following test: Assuming, as we do, that a strict construction of a penal statute is necessary, nevertheless, we cannot state that the lower court erred in finding the appellant was doing business in this state without qualifying as required by statute. The violation being ascertained, it follows that the prohibition imposed by the legislature must prevail. See Parker v. Lin-Co Producing Co., 197 So. 2d 228 (Miss. 1967). Affirmed. ETHRIDGE, C.J., and RODGERS, SMITH and ROBERTSON, JJ., concur.