Opinion ID: 1513632
Heading Depth: 1
Heading Rank: 1

Heading: The Wingo Act

Text: Section 64-1202 provides, in pertinent part, that [a]ny foreign corporation which shall fail or refuse to file its articles of incorporation or certificate ... cannot make any contract in the State which can be enforced by it either in law or in equity.... Johnny Moore argues that by raising the statutory provision as a defense he placed the burden on Luxor to prove that it had filed its credentials with the secretary of state or that for some reason the provision was inapplicable. That argument is correct, as we have held that raising the act as a defense does place the burden on the corporation to show that it should not be precluded from enforcing its contract in an Arkansas court. Miellmier v. Toledo Scale Co., 128 Ark. 211, 193 S.W. 497 (1917). See also Widmer v. J.I. Case, 243 Ark. 149, 419 S.W.2d 617 (1967). However, we agree with the trial court that the evidence would not support application of the statute so as to preclude Luxor from bringing this action. In the words of the statute, to be precluded from enforcement, the contract must be one made in this State by a noncomplying corporation. Brown Broadcast, Inc. v. Pepper Sound Studio, Inc., 242 Ark. 701, 416 S.W.2d 284 (1967). The place where the last act necessary to the completion of the contract occurs is the place where the contract is made. Hough v. Continental Leasing Corporation, 275 Ark. 340, 630 S.W.2d 19 (1982). Although the security agreement and the guarantee agreements were sent by the Washington company to Arkansas to be signed by Claude and Johnny Moore, the final act of acceptance occurred in Washington when credit was extended on the basis of those agreements. See Moody v. Kirkpatrick, 234 F.Supp. 537 (M.D.Tenn. 1964). We hold that the contracts were not made in this state. We recognize that this issue is presented in a peculiar procedural posture. The trial judge, by the manner in which he ruled that Johnny Moore was not entitled to a directed verdict, seemed to preclude any further consideration of the Wingo Act penalty despite the fact that it was the burden of Luxor to show that it did not apply. No instruction was presented on the matter, and thus the jury was not allowed to consider it. It was as if Luxor had asked for and been granted a directed verdict on that issue. We find no reversible error here because, given the evidence before the court, it could well have granted Luxor such a directed verdict, and no instruction was sought by Johnny Moore on the Wingo Act issue.