Court Opinion

ID: 9833447
Source: CourtListenerOpinion
Date Created: 2023-09-01 22:43:48.829163+00
Date Added: 2024-06-11T07:44:03.012906
License: Public Domain

On Motions for Rehearing.
In deference to the able motion for rehearing by defendant-in-error (plaintiff in the trial court) in which it is insisted that we erred in reversing the judgment of the trial court, because of plaintiff’s failure to prove that it had a permit to do business in Texas, we have again carefully examined the authorities.
As stated in the original opinion, plaintiff alleged that it was a foreign corporation; that it had its principal office and place of business in Texas; that it was doing business in Texas, and had a permit to do so. Defendant’s general denial raised the issue and we think necessitated proof by plaintiff of its allegation that it had a permit to do business in Texas. In so holding we are not unmindful of decisions to the effect that where it is alleged merely that a plaintiff is a foreign corporation and has a permit to do business in Texas plaintiff is not required to prove that it has such permit. Such decisions are based upon the fact that such allegations do not show a necessity for obtaining a permit. We further concede that even under the allegations found here (if not conflicting), if it were further alleged that the transaction out of which this suit arose was one involving interstate commerce, the prior allegations might be treated as sur-plusage and proof of a permit not be required. But, we think, plaintiff’s allegation that it had obtained a permit cannot be treated as surplusage and proof thereof be dispensed with because plaintiff further alleged (1) that it was a foreign corporation and (2) that it had its principal office and place of business in Texas, and (3) that it was doing business in Texas. Such allegations show that plaintiff was, by virtue of Article 1529, R.S.1925, required to obtain a permit, or suffer the penalty of not being permitted to maintain its suit as provided by Article 1536, R.S.1925, as amended in 1931, Vernon’s Ann. Civ. St. art. 1536.
Article 1529, insofar as it is here material, provides: “Any corporation for pecuniary profit *' * * desiring to transact or solicit business in Texas, or to establish a general or special office in this State, shall file with the Secretary of State a duly certified copy of its articles of incorporation; and thereupon such official shall issue to such corporation a permit to transact business in this State * * * »
Article 1536, provides, in part: “No such corporation can maintain any suit or action * * * in any court of this State * * * unless at the time such contract was made * * * the corporation had filed its articles of incorporation under the provisions of this Chapter.”
Plaintiff definitely brought itself within the purview of Article 1529 by alleging that *it was a foreign corporation; that it- was doing business in Texas and had its principal office and place of business in Texas. Our Supreme Court has said: “To do business in this state imports a carrying on of business of the corporation for the purposes of its organization, while the transaction of business in this state imports the idea of isolated transactions in the line, of course, of - the purposes of its creation.” S. R. Smythe Co. v. Ft. Worth Glass & Sand Co., 105 Tex. 8, 142 S.W. 1157, 1159.
The issue as to plaintiff’s right to maintain the suit must, of course, be raised by the pleadings. Here plaintiff has injected the issue into the case by-the stated allegations; defendant denied such allegations; thus the issue was raised. Plaintiff, having thus assumed the burden, was required to prove that it had a permit or subject its suit to dismissal. If plaintiff did not think it was required to make such proof - and did not expect to make it, why did it make the detailed and extensive allegations quoted in the original opinion? It seems apparent that in drawing its pleadings, plaintiff recognized the necessity of such proof, if the issue should be raised, and attempted to bring itself squarely within the provisions of Article 1529. If not, it could have done all that was necessary in that connection by simply alleging that it was a corporation, duly incorporated. Article 1999. We think the allegations not only bring plaintiff squarely within the stat*857utes, but the reasonable implication from the facts alleged and language used is that the transaction was intrastate. At least, it is shown that it was considered by plaintiff as such a transaction as came within the provisions of Article 1529, requiring a permit. To hold with plaintiff in its present contention would be to say that, notwithstanding the detailed allegations of plaintiff, it was nevertheless incumbent on defendant to allege, in order to raise an issue to be determined on the trial, that the transaction did not involve interstate commerce. If it is to be so decided, and we think it cannot, then who has the burden of proving plaintiff has or has not the right to maintain the suit?
In Smith v. Jasper County Lumber Co., 124 Tex. 156, 160, 76 S.W.2d 505, plaintiff alleged that it was a Louisiana corporation with its principal office and place of business in Jasper County, Texas, and that it had a permit to, do business in Texas. In the Supreme Court said corporation contended that, notwithstanding said allegations, it was not necessary to prove its permit to do business in Texas, unless the petition further showed that the cause of action grew out of an intrastate transaction. The court, in an opinion by Judge Ryan, said [page 507]:
“The precise question came before the Supreme Court on certified question in Taber v. Interstate B. & L. Ass’n, 91 Tex. 92, 40 S.W. 954, 955. The inquiry of the Court of Civil Appeals was whether it is necessary for a foreign corporation doing business and having a branch office iri this state to prove that it had a permit to do business here when the demand arose; the plaintiff having alleged that fact and the defense being a general denial. * * *
“As pointed out by Judge Dibrell, in Smythe Company v. Ft. Worth Glass & Sand Co., 105 Tex. 8 at page 18, 142 S. W. 1157, 1161, a foreign corporation desiring ‘to do either of three things, to transact business, or solicit business, or establish a general or special office in this state, is required to procure a permit.’ * * *
“We think this case comes within .the rule announced in Taber v. Interstate B. & L. Ass’n, 91 Tex. 92, 40 S.W. 954, and the burden was on the plaintiff to allege and prove compliance with the statute. * * *
"Because the company failed to make the necessary proof of its having obtained proper permit to transact business or solicit business or establish an office in this state, judgment in its favor must be reversed.”
In Allen v. Tyson-Jones Buggy Co., 91 Tex. 22, 24, 40 S.W. 393, 714, in answer to a certified question, the Supreme Court, in an opinion by Justice Brown, said: “To the question thus understood, we answer that it was not necessary, in connection with the facts stated, to allege a compliance with the statute, because it does not appear that the plaintiff belonged to anyone of the classes of corporations named. The plaintiff was not desiring to solicit business in this state, nor was it desiring to establish a general or special office in this state.”
The court further stated that plaintiff’s allegations showed a transaction involving interstate commerce and, therefore, it was not necessary to allege or prove that plaintiff had obtained a permit.
In Taber v. Interstate Building & Loan Ass’n, 91 Tex. 92, 94, 40 S.W. 954, plaintiff alleged that it was incorporated and doing business under the laws of the State of Georgia, with its principal office and place of business in Columbus, Georgia, and that it had a branch office at Fort Worth, Tarrant County, Texas, and that it had a permit to do business in Texas. Defendant answered by a general denial. Plaintiff failed to prove that it had a permit. The Court of Civil Appeals certified to the Supreme Court the question: “Whether it is necessary' for a foreign corporation, doing business and having a. branch office in this- state, to prove, that it had a permit to do business ’here at the time of making the contract * * * the petition having alleged that fact and the defense being a general denial.” “To the question propounded we answer that it was necessary for the corporation (plaintiff, below) to prove that it had a permit to do business in Texas at the time that the contract sued upon was made in order that the court might enter judgment in its favor.”
In S. R. Smythe Co. v. Ft. Worth Glass & Sand Co., 105 Tex. 8, 142 S.W. 1157, 1161, the court said: “* * * we direct attention to the peculiar provisions of article 745, in providing that any foreign corporation ‘desiring to transact business in this state, or solicit business in this *858state, or establish a general or special office in this state,’ shall procure a permit before doing so. It will be observed that a desire on the part of the foreign corporation to do either of three things, to transact business, or solicit business, or establish a general or special office in this state, is required to procure a permit.” ,
In Feder v. Texas Bitulithic Co., Tex.Civ.App., 82 S.W.2d 724, 726, the court said: “The petition in the present case showing the existence of an office in Texas, the burden was on the Bitulithic Company to prove that it had been granted a permit to do business in Texas.”
In Jenkins v. Pure Oil Co., Tex.Civ.App., 53 S.W.2d 497, 499, plaintiff' alleged it was a foreign corporation with its home office and principal place of business in Texas, and that it had a permit to do business in Texas. The court said: “The conclusion is therefore inevitable that ap-pellee’s failure to prove that it had a permit authorizing it to transact business in Texas, or to establish an office in Texas, prohibited judgment from being entered in its favor. The provisions of article 1529, supra, not only require a foreign corporation to have a permit to transact intrastate business in this state, but also such permit where a foreign corporation establishes a general or special office in this state. The distinction is thus pointed out in the case of Oklahoma Tool & Supply Co. v. Daniels, supra, viz.: ‘It is thus seen that no foreign corporation is required to take out a permit from our secretary of state, except one who desires “to transact or solicit business” in this state, or to establish an office here.’ ”
In General Motors Acceptance Corporation v. McCracken, Tex.Civ.App., 48 S.W.2d 480, plaintiff alleged it was a foreign corporation with an office in El Paso County, . Texas, 'and doing business in Teyas under a permit' issued by the Secretary of State, and that in the contract sued upon the defendant had promised to pay at the plaintiff’s office in El Paso. The court said [page 482] : “Under such allegations, we think, it became necessary for appellant to prove the existence of a. permit to do business in Texas, before it. would be entitled to recover in this suit.. ⅜ ⅜ ⅜
“Appellant, having pleaded that it was-doing business in Texas and had an office in El Paso county at which place the payments w^re to be made, was called upon to-prove its permit to do business in the-state before it could recover, and the trial court, in the absence of such proof, was clearly justified in dismissing the suit.”
We think it evident from the foregoing authorities that it has been determined in. Texas that a foreign corporation alleging,, as in this case, that it is doing business in Texas, has its principal office and place of business in Texas, and has a permit to engage in business in Texas, is required to-prove that it has such permit. The allegation that it has such permit cannot be treated as surplusage for the reason that the ■ allegation that such foreign corporation is doing business in Texas and has-its principal office there, brings it within, the provisions of the Statute requiring that it obtain a permit to do business in Texas. It is also well established that when plaintiff, has made such allegation the issue as to the truth thereof is raised by defendant’s general denial. Therefore, in this case, we conclude plaintiff must prove such allegation and is not entitled to recover in the absence of such proof. " We do not think, under such pleadings, a plaintiff is entitled to recover regardless thereof, and to dispense with the necessity of proving ■ such allegation merely by the fact that the evidence is such as to justify a finding that the transaction involved was interstate. To do so would, in effect, require the defendant, although facts necessitating proof- that plaintiff had a permit had been alleged by the plaintiff and the issues thereon made by the defendant’s answer, nevertheless to allege and prove that the transaction involved in the suit was in fact intrastate.
We think the original opinion correctly disposed of the case. Therefore, the motions of plaintiff-in-error arid defendant-in-error for a rehearing are overruled.