Court Opinion

ID: 3254155
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:24:18.941936+00
Date Added: 2024-06-11T13:59:28.712856
License: Public Domain

Section 7216 of the Code provides that:
"All contracts made in this state by any foreign corporation which has not first complied with the provisions of the two preceding sections, shall, at the option of the other party to the contract, be wholly void."
Section 7220 provides that:
"All contracts, engagements, or undertakings or agreements with, by, or to such corporation, made without obtaining such permit, shall be null and void."
These clauses were also included in the relative sections of the Code of 1907. This provision in section 7216 was also in the Code of 1896, having been enacted February 13, 1893, and amended February 18, 1895 (Acts 1895, p. 1024), in which section 5 provides:
"That all contracts made in this state, after * * * July, 1893, by any corporation which has not * * * complied with the provisions of this act, shall be wholly void."
What is now section 7220 of the Code of 1923 was first enacted March 4, 1907 (Acts 1907, p. 290, § 3), and first appeared in a Code as section 3653 of the Code of 1907. The provision quoted from section 7220 relates to the effect of a failure to obtain a permit, and that quoted from section 7216 relates to the effect of a failure to comply with section 7214, relating to the franchise tax (now provided by the Act of 1927, pp. 181-183), and with section 7215, relating to the failure to file the statement required to be filed with the state tax commission. So that the decisions of this court since 1895 have been rendered with the provision of what is now section 7216 in view, and since 1907 with the provisions of the law as now contained in both sections in view.
In 1899 this court rendered its decision in Cotton Oil Co. v. Wheelock, supra, referred to in the former opinion in this case, reaffirming the construction of the law in the Sullivan and Beard Cases, supra, applying the distinction between an act of business in the exercise of corporate functions, and an act in the exercise of corporate powers. Again, in 1899, the same distinction is drawn in the case of State v. Anniston Rolling Mills, supra, a suit for the license fee against a foreign corporation for doing business in Alabama.
Then in March, 1907 (Acts 1907, p. 290, § 3), it was enacted as now appears in section 7220 of the Code, hereinabove quoted. In 1909, the Supreme Court rendered the decision in the Talley-Bates Case, supra, without noting any departure from the construction of the law theretofore placed upon the legislative acts. This case did not relate to the question of jurisdiction or venue of the court, but the validity of a contract. In 1912 the Muller Case, supra, was decided, relating to the validity of a contract, and adhering to the same distinction.
In 1917, the decision of this court in the Holman Case, supra, was rendered, in which the distinction is considered and again affirmed, referring to the Sullivan, Beard and other Cases, supra, and also relates to the validity of a contract.
In 1921, this court rendered the decision in the Baccus Case, supra. It is insisted that the Sullivan, Wheelock, and Baccus Cases, supra, relate to a construction of the law relative to venue, or jurisdiction of the court, and have no application here. While they relate to the jurisdiction or venue of the court over foreign corporations, the right to sue a foreign corporation in Alabama depends upon its doing any business in this state (unless it has qualified under the statute). Jefferson Island Salt Co. v. Longyear Co., 210 Ala. 352,98 So. 119. The transaction of business in Alabama sufficient to give the courts jurisdiction over foreign corporations is held in that case to depend upon the same considerations which determine the inquiry as to whether they are transacting business in violation of the Constitution and laws relating to them as such foreign corporations.
The Code of 1923, with the same provisions, was adopted after this court had rendered its decisions maintaining the construction placed upon the law as to doing business in this state. The adoption of the Code without change in that respect is an adoption of the construction theretofore placed upon the acts.
The question now is not whether the Legislature may enact a law prohibiting the doing of any act within the powers of a foreign corporation except on the conditions stipulated, but whether, in view of the history of such enactments, and in the light of the decisions of this court, such was done by the Legislature. We think the construction placed upon the enactments is firmly fixed, and that it ought not now be disturbed by court decision, even if we were inclined to do so.
The application for rehearing is therefore overruled and denied. *Page 250