The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1891-03-25
Some Light Thrown Upon Their
Rights to Do Business In
This State.
The Montana Statute May Inter-
fore With the Interstate
Commerce Clause.
A Large New York Electric Company
Files Its Articles Of Incorporation
to Do Business Here.

piled with the foreign corporation act Of
the state, have been a matter Of dispute for
some time. A case il pending in depart
ment No. 2 of the district court OF this
county which will probably settle the dis
pute il it is appealed. This is the first time
the question has been brought squarely into
court. The foreign corporation act requires
companies organized under the laws of
other states or countries desiring to do
business here to file a certified cory of their
articles Of incorporation with the secretary
of Montana and their consent to be sued in
this state. II they fail to comply with the
provisions of the act they become
liable to a fine Of $40 for
each day they neglect to file their papers.
Fred j. Kiesel q Co, a wholesale liquor cor
poration, in Ogden, Utah, sued the Union
Warehouse company. of this city, to re-
cover on q promissory note containing a
provision Of reasonable attorneys fees.
The note was made by the Warehouse com
pany to a third person and endorsed before
maturity to Kiesel d Co., who sent it to the
Montana National bank, of this city. for
collection. The Warehouse company
claimed the provision for attorneys fees
rendered the note non-negotiable, and ad-
mitted by way Of defense a counter claim
existing at the time the note was made by
the original parties. The weight of author
ity, in the opinion of the court, is in favor
of the neaotiability of the note, and it has
been held in a case recently decided that
such a note is negotiable. As a further de-
Tense, the Warehouse company maintained
that Kiesel d Co. had never complied with
the laws Of this state applicable to
foreign CORPORATIONS dong bust
ness in Montana. II WIS
also claimed that Kiesel and ompan had
been doing business in Montana and had
travelling agents going through the state
and selling goods: that the transaction
whereby it became the owner of the note
and its presentation through the Montana
National bank, Of this city, to the ware
house company, was doing business within
the meaning of the law, and that the
transaction cannot be enforced under the
laws of Montana.
In his decision Judge Buck says that in
order to avail itself Of a disability of a
foreign corporation under the Montana act
the warehouse company should not only
plead the disability but do it properly. The
claim of the warehouse company that Kiesel
tana and had never complied with the for
eign corporation act might be true. but it
would not necessarily bar Kiesel and COM
ANY from q suit on the note if the endorse
mont had not been made in Montana.
There can be no presumption, says the de-
cision. in the absence of the proper allie.
cation that the endorsement to Kiesel g. Co.
was made IN Montana, even though they
might have been doing business here at the
time unlawfullv. The allegations of the
Warehouse company that Kiesel u Co. were
doing business in the state at certain times
and had agents selling goods here and that
the transaction whereby Kiesel d Co. be-
came the owners of the note was doing bust
ness'in Montana, are insufficient because
they are pregnant with legal conclusions.
The court says it might stop here, but mas
much as the question of what acts or con-
tracts a foreign corporation can do or enter
into in Montana without complying with
the provisions of the act governing these
corporations is a very important one and is
to be raised in this suit and several others
pending; it should receive an answer.
The main difficulty is to define with suf-
ticient accuracy just what acts or contracts
of q foreign corporation failing to comply
with our statute are protected by that
clause in the constitution of the United
A foreign corporation which has failed to
comply with our law certainly cannot be
protected in any of its acts or contracts
committed or entered into in the further
ance of and while doing business by means
of resident agents, who having goods of any
character in their possession sell and de-
liver them in this state as other merchants
and dealers; nor in such acts or contracts
as are necessary or incidental to it's operat-
ing and working mines, tilling the soil,
raising cattle, manufacturing, etc.. or es-
tablishing Offices where moneys are re-
ceived and paid out within the state. But
even the failure of a foreign corporation to
comply with the corporation act would not
place property owned by it in the
state at the mercy of any one
who might desire to take or withhold
it. All the authorities the court can lind
concur in holding that where the laws of a
state, even in the slightest degree, tax or
otherwise impose conditions on foreign cor |
porations so that the practical effect would
be to regulate interstate ommerc they
are in violation of the exclusive right of
congress to regulate interstate commerce
there has been any exercise of such
right by congress or not.
The court holds that the foreign corpora
ton law does not apply to any act or con-
tract of 3 foreign corporation lone or en-
tered into within the limits of this state,
which is not done or entered into directly
or incidentally III the carrying on or fur
therance of u ranch of business operated
by it within Montana by means of resident
agents. In other words. where the act or
contract ia merely incidental to the con-
duct of it's business outside of the state,
any attempt by the state of Montana to
impose conditions upon it would De in viola
A. ~ A.