Arizona republican., 1920-10-29
NJ LEGAL BAR ID. FINANCING LOCAL
 COTTON RA|SERS
Banks of Los Angeles Need Not Be Placed Under Same Limitations as For eign Corporations, Is Opinion

few days ago it was announced that certain banks Of Los Angeles would undertake the financing of the cotton growers of this valley. But later a question arose in, the minds of the II bankers as to their status. in certain circumstances as foreign corpora tons" under tho laws of this state and \ whether they would be under the same limitations and compelled to qualify Co do business fin this state.
 The Guaranty Trust and Savings Bank of Los Angeles addressed an in- auiry to the office of the attorney gem ernl on this subject and stated that II n should become necessary in the course of It's financing plan to take crop mortgages or other securities and n should become necessary Co enforce such mortgages. the bank would not care to appoint a resident agent or otherwise qualify to transact business in this state. within tho meaning of the | word transact as applied to foreign corporations. Tn an opinion yesterday. ! holding that the proposed business of the bank would not come under the definition of business "transacted" in the state by foreign corporation, As- slstant Clyde Candy of the attorney generals office said.
 Opinion ls Given
 We have no law in this state apply Ing especially to foreign banks Our statute on foreign corporations makes no distinction between banking and other corporations. The requirements of our banking law being such that a foreign bank cannot qualify thereun- dor. it follows that while foreign banking corporation can qualify and obtain a license to do business in this state. it could not engage in strictly banking business but could tranasct any other business authorized under it's charter and permitted by tho laws of it's domicile and the laws of the state of Arizona, such as dealing In negotiable instruments or securities. If such transactions, however, are car ried on and completed outside the state. the corporation engaged therein could not be said to be transacting business in this state. and need not be licensed as a foreign corporation, even though the property pledged or mort gagged by such securities be located within this state. There has been no decision directly to that effect by our supreme court but that conclusion is supported by reason and the great weight of authority, and is deducible from the opinion in Martin vs. Bankers Trust Company. IS Aria 55. 156 Pac n7. decided in 1916.
 A different question is presented however. whom such foreign corpora ton having purchased outside the state crop mortgages or other securities seeks to enforce payment thereof fin the courts of this state. In Martin vs. Bankers Trust CO. supra, 1t was held that,
 ~The prosecution of a suit In the
 courts Of this state is not carry
 ing on business, enterprise or
 occupation in this state within tho
 plafn meaning of the statutory pro
 vision. 10 Cyc. 127s and t2s0. where
 numerous authorities fin support of
 the t4at arc cited"
 That case was decided on Par. 909 of the Clvli Code. Revised Statutes of Arixona. 1901. which read as follows. Any company Incorporated un-
 der kho laws of any other state.
 territory ur foreign country which shah carry on any business, enter prisa or occupation In thls torri-
 tory shall. before entering upon,
 doing or transacting such busi-
 ness. enterprise or occupation in
 this territory, e"
 In tho k9iS Code this paragraph, now numbered z136. reads as follows:
 Any company incorporated un-
 der the laws of any other state, territory or any foreign country.
 which shall carry on, do, or trans
 act any lbusiness, enterprise or oc-
 cupation. 9u this state shall, before
 entering hpon. doing. or transact
 ing such business. enterprise or
 occupatiob. in this state, ."
 You will lnoto that the words "do or transact" Nlhloh have been inserted. materially tincrcase the limitations upon llcansed foreign corporations. Neverthelesa.N on the strength of the above case. we' think that our supreme court would make tho same ruling as to the meaning of Par. 2226 of the 1918 Penal Code. This would accord with the recent decision of the United states circuit court of appeals for the Eighth circuit i'm Lane V. Equitable A Trust Co, 26e Fed.t 1918 In both cases oniv one suit was iinsfitutetd. but the rule therein adhered Co is given gen crai and unrestricted application IT section 5935 or Fletcher. on Privat' Corporations and the numerous case' there cited. It ls thus icOncisely stated by Mir Justice Cooke fts Alpena Port land Cement CO VI Jenkins ~ Reynold CO. PA Ill. 354. 9f ". E.' 4S0:
 "The words doing bslsiness' and
 transacting business as used in statutes regulating foreign cor
 porations. have by numerous judi
 ciaI decfNions been giveh a settled ! and recognized meaning, and refer onIv to thc transaction 0f the or . dfnarv business m which tthe cor
 poration is engaged. and do not in-
 chide acts not constituting any
 mart of its ordinary business, such
 as instituting end prosecuting ac-
 tlons in courts. "'
 We therefore conclude;
 First: That the transactions you hanks contemplate as above referre to looking toward rendering assistanC in financing Arizona cotton crops. VI \ not of themselves require such banl | \ 10 qualify in thls state as foreign coi \porationa. progided of course that sue kransactions are, as I understand tht Aviu be. carried on and completed California.
 second. That instituting proceed fngs in our courts to enforce paymen of mortgages and other securities pu chased pursuant to the arrangemen contemplated will not of itself requi your banks to qualify in this state foreign corporations.
 Third. That there is nothing in ol law which requires your banks 70 licensed as foreign corporations as requisite to instituting such a' lions to enforce payment.
 In view of our opinion expressed q questions you prOpound regardii statutory or resident agents are imm' 4 terial and We therefore do not answ the same.
 Won tt.fU rIe1eo hear In mind th