Court Opinion

ID: 8654891
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:14:55.699206+00
Date Added: 2024-06-11T16:56:39.725471
License: Public Domain

McCARTT, J.
(dissenting). The complaint in this ease contains three canses of action. The first canse of action is to recover from defendant the snm of $63.54, alleged to be dne plaintiff corporation for goods and merchandise sold by it to defendant; the second canse of action is to recover npon an assigned account for merchandise sold and delivered by the Cudahy Packing Company, a corporation, to the defendant, in the snm of $85.70, and which account, it is alleged, was duly assigned to plaintiff; and the third cause of action is npon an account for merchandise sold by E.. G-. Hines, doing business as the Hines Mercantile & Commission Company, to the defendant, in the sum of $445.95, which account, it is alleged, was duly assigned to plaintiff. Defendant answered, alleging, first, that plaintiff had not legal capacity to sue, because it had not complied with certain provisions of the statutes and the State Constitution which prescribe certain conditions upon which foreign corporations may do' business in this State; and, second, that the contract mentioned in the first cause of action and the assignments of the accounts mentioned in the second and third causes of action were null and void, for the same reasons alleged in his plea “that plaintiff had not legal capacity to sue.” To this answer a demurrer was interposed and sustained. It is to review the action’ of the trial court in overruling defendant’s demurrer that this appeal is taken.
The first question presented is, did plaintiff have legal capacity to sue? Section 4, art. 12, Const., provides, so far as material here, that ‘ ‘ all corporations shall have the right to sue and shall be subject to be sued in all courts in like cases as natural persons. ’ ’ Now, it must be conceded that unless the right thus given ‘c all corporations to sue ’ ’ by the foregoing mandatory provision of the Constitution is made conditional and depends upon the doing of certain things before such right can be exercised, or is limited to domestic corporations by some other provision of the Constitution, plaintiff’s right to sue in the courts of this State *389is coextensive with that of domestic corporations and of natural persons. Defendant contends that section 9, art. 12, Const., imposes upon foreign corporations certain conditions that must be complied with before they can legally bring and maintain suits in the courts of this State. This section of the Constitution provides that “no corporation shall do business in this State without having one or more places of business, with an authorized agent or agents, upon whom process may be served, nor without first filing- a certified copy of its articles of incorporation with the Secretary of State.” Now, it is plain that neither of these sections (4 and 9) of the Constitution modifies or in any way limits the terms of the other, but that they refer to two different subjects. Section 4 refers to the right of “all corporations,” which, of course, includes foreign corporations, to sue in the courts of this State, while section 9 declares what foreign corporations shall do before they shall be entitled to do business in this State. The term “business, ’ ’ as used in section 9, has been construed to mean the general transaction or prosecution of the ordinary business of corporations. In the case of Utley et al. v. Mining Co., 4 Colo. 373, this same question was involved and the court, in construing constitutional and statutory provisions of Colorado similar to those now under consideration, said: “The prohibition extends to doing business before compliance with the terms of the statute. We do not think this an abridgment of the right of a foreign corporation to sue. It extends only to the exercise of the powers by which it may be said to ordinarily transact or carry on its business.” 6 Thomp. Corp., 7936; 2 Morawetz, Corp., 662; Cooper Mfg. Co. v. Ferguson, 113 U. S. 727, 5 Sup. Ct. 739, 28 L. Ed. 1137; W. A. Wood M. Co., etc., v. Caldwell, 54 Ind. 280, 23 Am. Rep. 641; Barse Live Stock Co. v. Range Valley Cattle Co., 16 Utah 59, 50 Pac. 630. Whatever room for doubt there may be as to the validity of contracts entered into in this State by foreign corporations which have failed to comply with the constitutional and stat*390utory requirements referred to in the opinion written by Mr. Justice BARTCH, there can he no question hut what they have the right to sue in the courts of this State, and that, too, without any restrictions, limitations, or conditions other than those imposed by law upon domestic corporations and citizens of the State. To hold otherwise, and thus close the doors of our courts to foreign corporations doing business within the State, and which have failed to comply with the terms of section 9, art. 12, Const., and the statutes relating to the same subject-matter, would subject their property within the state to confiscation, and, no matter haw high-handed and lawless the proceedings might be by which corporations were deprived of their property, they would have no redress. And my attention has not been called to a decision, neither have I been able to find one, that has gone to this extreme, unless it be the opinion written by Mr. Justice BARTCH in this case. Mr. Thompson, in his work on Corporations, section 7979, vol. 6, after discussing the question of a foreign corporation’s right to sue'on one of .its own contracts of the kind in question in the courts of the State where the contract is entered into, says: ‘ ‘ Outside of that question, there is a mass of authority to the effect that although a foreign corporation may have neglected to comply with the provisions of the domestic statutes prescribing the terms and conditions upon which it may enter the domestic state for the purpose of doing business therein, yet it nevertheless does not forfeit the general right of action in the courts of the State, which is conceded alike to nonresident persons and corporations. The meaning of the rule is that a foreign corporation is not, by reason of its failure to comply with such a statute, to be outlawed. It may still bring ah action to recover possession of its real or personal property. It is a just conclusion that the failure of a foreign corporation to comply with a local statute, as, for instance, to file its articles of incorporation in the county where it has property, does not entitle the domestic citizens or *391others to confiscate such property.” A corporation being a creature of the statute, I do not question the power and right of a State, either by its Constitution, and, in the absence of constitutional prohibition, by statute, to place upon corporations, both domestic and foreign, such limitations and restrictions as the lawmaking power deems proper, even to closing the doors of the courts against them. In this State however, nothing of the kind has been attempted. Section 1, art. 12, Const., provides as follows: “All laws relating to corporations may be altered, amended or repealed by the Legislature, and all corporations doing business in this State may as to such business be regulated, limited, or restrained by law. ’ ’ The Legislature is empowered by this provision of the Constitution to regulate and limit the business in which a corporation may be engaged, or to prohibit altogether the carrying on of such business, but nowhere is it provided in the Constitution that the Legislature may deprive a corporation, either domestic or foreign, of its capacity to sue, which is expressly conferred by section 4, art. 12, of the Constitution. Neither has the Legislature, either expressly or by implication, attempted in any way to destroy or even abridge this right. Section 351, Rev. St. 1898, provides that all corporations not organized under the laws of this State shall do certain things and perform certain acts .therein enumerated, and section 352 prescribes the penalties that may be imposed and the privileges withheld in case of failure to do the things and perform the acts therein mentioned, and are as follows: “Any corporation failing to comply with the foregoing section (351) shall not be entitled to the benefits of the laws of this State relating to corporations, and every person acting as agent of a foreign corporation which shall neglect or refuse to comply with the foregoing provisions shall be deemed guilty of a misdemeanor, and shall be personally liable on any and all contracts made in this state by him for and on behalf of such company during the time that it shall remain so in default.” *392Nowhere in the statute is there a provision which even suggests that the Legislature intended under any circumstances to deprive foreign corporations of their capacity to sue in the courts of this State, or to give to section 4, art. 12. Const., a different meaning than that for which I am now contending. It is a familiar rule that, when a statutory or constitutional provision relating to a certain subject is clear, definite, and intelligible, courts will follow the plain meaning of such provision and be governed thereby, as there is nothing- to- construe where the language used is unambiguous and free from doubt. In 8 Cyc. 733, it is said: ‘ ‘In all cases where the meaning upon the face of the instrument is clear and unambiguous, the question is not what was the intention of 'its framers-, but what is the meaning of the language they have used.” And again: “And this meaning, when so ascertained, must be taken as the authoritative rule. There is no occasion for construction, and none is allowable.” In Suth., Stat. Const., 337, the author says: “The Legislature must be understood to mean what it has plainly expressed, and this excludes construction. The legislative intent being plainly expressed, so that the act read by itself, or in connection with other statutes pertaining to the same subject, is clear, certain, and unambiguous, the courts have only the simple and obvious duty to enforce the law according to its terms. ’ ’ Black, Int. of Law, 15; 6 Am. & Eng. Ency. Law (2d Ed.), 922. Applying this rule to the provisions of the Constitution under consideration, we find that the right is given “all corporations to sue . . . in all courts in like cases as natural persons ’ ’ by section 4, art. 12, and, as I have hereinbefore stated, this right is not limited or made conditional by any of the other provisions.
As to whether contracts entered into by foreign corporations while doing business in this state without first having complied with the conditions imposed by section 9, art. 12, Const., and section 351, Rev. St. 1898, can be *393enforced in the courts of this State, presents a much more doubtful question than the one just discussed. This question has been before the courts of many of the States, and there appears to be an irreconcilable conflict in the authorities respecting- the validity of such contracts. In some jurisdictions they are held to be null and void, while in other States contracts thus entered into are held not to be necessarily void because of the failure of a foreign corporation making them to comply with the conditions, imposed by law upon such corporation, which entitle it to do business in the commonwealth where the contracts are made. There is a marked distinction, which is recognized in these States, between a law, the object of which is to restrict and regulate a certain line of business, which without such restriction and regulation might prove inimical and harmful to society, and a law that is directed against and operates upon a corporation only, regardless of the business in which it is engaged. In the one case it is the business at which the statute is aimed, and it has been almost uniformly held that a contract made in violation of such a statute can not be enforced. “While, on the other hand, the statute being directed against the corporations, and not against the business in which they may be engaged, contracts otherwise legal, made by foreign corporations without having complied with the statute, are held to be valid unless the statute expressly declares such contracts to be void, in which ease, of course, they could not be enforced. Mr. Sutherland, in his work on Statutory Construction, 336, says. “When a statute is for revenue purposes, as is a regulation, whether a contract which violates the statute shall be treated as wholly void will depend on the intention expressed in the particular statute. Unless the contrary intention is manifest, the contract will be valid.” Vermont Loan & Trust Co. v. Hoffman (Idaho), 49 Pac. 314, 37 L. R. A. 509, 95 Am. St. Rep. 186; 6 Thomp. Corp. 7957, and cases cited. Now, there is no claim or’ pretense that the business in which plaintiff was engaged is unlawful, *394or in any way detrimental to the public interest, or that it is of such a character that the welfare of the public demands that the same he restricted and put under police regulation; nor. is it contended that such is the intent of the constitutional and statutory provisions under consideration, hut it is admitted that their scope and purpose is to subject foreign corporations to the same rules and regulations in the transaction of business that are imposed by law upon domestic corpor-tions, and to mate them amenable to the process of the State courts. Section 352, Revised Statutes 1898, provides that any foreign corporation failing to comply with the provisions of section 351 shall not be entitled to the benefits of the laws of this State relating to corporations; that is, they could not avail themselves of the right to invoke the law of eminent domain, could not obtain franchises, and would be denied all other special privileges of which corporations may generally avail themselves. And it is further provided that any person acting as agent for a foreign corporation which shall neglect or refuse to comply with the provisions of section 351, Revised Statutes 1898, shall be deemed guilty of a misdemeanor, and shall be personally liable on any and all contracts made for and in behalf of such corporation during the time it shall remain in default. Now, the Legislature has acted on this matter, and by section 352 has declared what privileges shall be denied, obligations created, and the penalties that may be inflicted in case foreign corporations engage in business in this State without having complied with the laws relating to such corporations. And it is to be presumed that the Legislature deemed these a sufficient punishment for the violation of the statute referred to, otherwise additional punishments and forfeitures would have been provided for. Fritts v. Palmer, 132 U. S. 289, 10 Sup. Ct. 93, 33 L. Ed. 317; Kindel v. Lithographing Co., 19 Colo. 310, 35 Pac. 538, 24 L. R. A. 311; Northwestern Mut. Life Ins. Co. v. Overholt, 4 Dill. 287, Fed. Cas. No. 10,338; Insurance Co. v. Walsh, 18 Mo. 238; 2 Morawetz, Priv. Cor. 665, *395666; Insurance Co. v. Matthews, 102 Mass. 224; Lumber Co. v. Thomas (W. Va.), 11 S. E. 37, 25 Am. St. Rep. 925. There can be no question but what the withholding from foreign corporations failing to comply with the laws of the State the privileges mentioned in section 352, Revised Statutes 1898, and the enforcement •of the penal provisions of said section with the same promptness and vigor that other penal statutes are usually enforced, would insure a strict compliance with the provisions of the Constitution and statutes under ■consideration by all foreign corporations doing business in this State.
It is admitted that defendant received from plaintiff goods and merchandise of the value of $85.70, with ■at least an implied promise that he, defendant, would in the usual course of business pay the debt created thereby. This he refused to do. He does not claim that the transaction by which the debt was created is "tainted with fraud, or that the business is one that is restricted or prohibited by law, but his sole defense is that plaintiff was incapacited to make the contract for .reasons hereinbefore stated, and that therefore he is relieved from paying an honest obligation, and that this court, by a strained construction of the statute behind which he is attempting to shield himself, ought to so hold. While courts can not disregard the plain meaning of a statute, or depart from it because its enforcement in accordance with its terms and intent would result in hardship and inconvenience, yet where •a statute is susceptible of two different constructions, one of which, if followed, would lead to an absurdity ■or manifest injustice, and the other, if adopted, would make the statute consistent with reason and justice, ■the latter will be acccepted by the courts as the one intended by the Legislature. “On the general principle of avoiding injustice and absurdity, any construction should be rejected, if escape from it were possible, which énabled a person to defeat or impair the obligation of his contract by his own act, or otherwise to *396profit by Ms own wrong.” Blank, Interp. of Laws, 100; Sutherland, Stat. Const. 372. That the statutory and constitutional provision under consideration are susceptible of two different constructions in determining the validity of contracts, such as the one now before us, is evident from the many conflicting decisions wbicb have been rendered in the different States on this question in construing similar statutes. Mr. Thompson, in his work on Corporations, volume 6, 7955, in discussing that line of decisions which hold that contracts similar to the one under consideration are void, says: “It can not escape attention that these decisions ignore the distinction, often taken by enlightened courts in respect of the validity of contracts, between contracts which are merely malum prohibitum and contracts which are malum in se. Such decisions put the contracts under consideration, although perfectly innocent and meritorious in themselves, on the footing of contracts which are essentially criminal, corrupt, or fraught with moral turpitude, or otherwise opposed to the public policy of the State. In leveling such contracts to the ground, and in allowing their own citizens to repudiate them on such a plea while keeping the consideration, the courts degrade the commercial morals of the people, encourage general dishonesty, expel capital from the State, and bring its judiciary into deserved disrepute.” And again, in referring to this same question he says: ‘ ‘ The spectacle of the demoralization produced by judicial decisions wMch uphold the citizens of the State in repudating their honest engagements with foreign corporations on grounds having no relation to the merits of these engagements was evidently the circumstance which drove the Supreme Court of Indiana to a reconsideration of this question.”
Appellant cites and relies upon the case of Barse Live Stock Co. v. Range Valley Cattle Co., supra, in support of his contention that the contract in question can not be enforced. TMs court, in that case, speak*397Ing through Mr. Justice Miner, said: “It will be conceded in the outset that, if the contract upon which the plaintiff’s action is brought was made in violation •of a law of the State, it can not be enforced by any court in the State.” But the court held in that case, and properly so, that the plaintiff, at the time the contract was made, was not doing business in this State, as contemplated by the provisions of the Constitution and statute in question. Therefore, the court having held that the plaintiff in that case was not doing business in this State, the question involved in the foregoing declaration of the court was eliminated from the case, and was no longer a live issue; hence, while the •expression of the court referred to is entitled to respectful consideration, it can not be regarded as a precedent by which this and other courts of this State must be bound.
The second and third causes of action are based upon contracts which were assigned to plaintiff. The legality of the transactions by which these obligations were incurred on the part of defendant is not questioned, but it is insisted that the assignments by which plaintiff became the owner of them are illegal and void because of its failure to comply with the requirements of the constitutional and statutory provisions referred to. It being admitted that these contracts were legal and binding as between plaintiff’s- assignors and defendant, it necessarily follows that plaintiff is entitled to recover on them, unless this court holds that plaintiff is worse than outlawed in this State, which appears to be the import of the prevailing opinion written by Mr. Justice BARTCH in this case, and, in the language of Chief Justice Taney, in the celebrated Dred Scott decision (Dred Scott v. Sandford, 19 How. 407, 15 L. Ed. 691), has no rights which a white man is bound to respect; which rule, applied to this case, includes all persons, both natural and artificial.
I am unable to concur with my Brethem in the conclusions reached by them, as I am of the opinion that *398the judgment of the district court should be affirmed,, and, for the reasons herein stated, dissent therefrom.