Court Opinion

ID: 3917249
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:44:53.768395+00
Date Added: 2024-06-11T13:52:19.960791
License: Public Domain

On Rehearing.
The appellee insists that we were in error in holding that the appellant was legally entitled to maintain the claim proceeding in the circumstances, notwithstanding it was a foreign corporation not regularly admitted to do business within the limits of the state. After a further consideration of the case, it is thought that such ruling was correct under the facts as developed in the present trial as to 82 of the logs in controversy. The statute being considered does not apply to the 82 logs because: (1) The shipment of the logs constituted a transaction peculiar to interstate commerce, and therefore not subject to the prohibition of such statute; (2) the statute does not apply to an action in claim brought to recover merely the possession of personal property of which the claimant at the time was the absolute owner.
The precise facts are that appellant, in its home state of Tennessee, was engaged in the business of manufacturing logs into hardwood flooring. In the light of the court's findings of fact appellant "acquired in the name of T. H. Lemastus by timber deed" a certain tract of growing trees in Texas, and then "moved its camping outfit into Texas, and was hiring labor and cutting (into logs) its own timber" to be shipped to its mill in *Page 867 
Tennessee. It had acquired the growing trees, and the logs in suit were cut from such trees prior to the levy of the attachment and prior to the date of the claimant's affidavit and bond. Of the "150 logs" attached 82 had actually been delivered to the railway company for through shipment to appellant at its mill in Tennessee. The evidence in this respect was undisputed. The witness stated: "There were 48 logs loaded on cars, and 34 logs were on the dump," or right of way, for loading. The railway company had placed cars at that place for the purpose of receiving the logs, and the cars were being loaded. And as further testified:
T. H. Lemastus "was paid on July 15, 1925, for all these 82 logs that were attached. He had received every cent due him in the shape of what he had coming on these 82 logs. The logs were brought in and dumped alongside the railroad track in such shape that they could be loaded on cars. After they were dumped we scaled them, measured the number of feet, numbered and branded with `Bruce' — these logs had been scaled, stamped, and branded and paid for all before the attachment."
T. H. Lemastus stated:
"As to who owned these logs that were attached at the time they were attached, they had passed into the hands of Bruce  Co. I did not have any further claim on these logs, and had no control over them. They paid me up in full."
The evidence is without conflict in this respect.
The court was authorized to find, as he did, that the other 68 logs had not been delivered to and received by the railway company. Further the court was authorized to find that T. H. Lemastus had not surrendered to appellant the complete control of the 68 logs. As found by the court, T. H. Lemastus held the bare legal title by deed to the timber as trustee for appellant, the real beneficiary owner. As to the 82 logs, T. H. Lemastus had passed to appellant by delivery the actual possession and complete control over the same in full discharge of the trust.
It can be conceded that in such circumstances the appellant's "moving of its camping outfit into Texas and hiring labor" to "cut its own timber" into logs to be shipped to its mill in Tennessee was "doing of business" in Texas in furtherance of appellant's business in its home state. Smythe Co. v. Fort Worth Glass  Sand Co., 142 S.W. 1157,105 Tex. 8 . And it may be generally conceded that in virtue of such fact of doing business in Texas without a permit the appellant was under the statute, denied the right to enforce in the courts of the state any demand arising in contract or tort through the business so done. Art. 1536, R.S. Even so, it would not necessarily follow in the facts that the claim for all the logs was prohibited to appellant. As to claim for 68 logs, the statute could be said to be applicable, for it became necessary for appellant to prove that by contract with T. H. Lemastus it was entitled to the possession of the said 68 logs. In effect the claim would be enforcing a contract for possession, and it would be dependent upon a contract for possession. Lemastus had the legal right to hold possession as trustee, and he had not surrendered that right by actual delivery. Appellant at the time of the claim was not in complete control and possession of such property independent of any contract with respect thereto, although beneficial owner. But that is not the situation respecting the 82 logs claimed. In fact, on the trial the appellant appeared to be claiming that "only 82 logs belonged to the company at the time of the attachment." As proven, the appellant was the absolute owner, in complete control and possession, of the 82 logs at the time of the attachment and claim action. If T. H. Lemastus previously held the apparent legal title to the growing trees as trustee for appellant, still the trees had been reduced to personalty in the shape of "logs," and the logs were actually delivered to appellant. By the delivery of the logs the trust was discharged and both the legal and equitable title were combined in appellant. Lemastus was no longer holding or withholding the possession of the 82 logs by virtue of or by reason of a contract. The contract had been fully performed and finally discharged as to such logs. The full title became vested in the appellant in the logs, and was such legal title as could have been transmitted to a third party. It was no longer necessary to enforce any contract to obtain possession. In virtue of such ownership together with complete control and possession of the 82 logs, the appellant delivered same to the railway company for interstate shipment, and they had been received by the railway company for that purpose. Therefore, in the circumstances, as to the 82 logs, the statute being considered would not have application in denial of appellant's right to maintain the claim proceeding. Appellee does not deny the matters peculiar to interstate commerce are not subject to the prohibition of the statute; further, the statute does not apply to an action in claim brought to recover the possession of personal property claimed to be absolutely owned at that time. The failure to obtain the required permit before doing business in the state does not forfeit the title to the property or make null and void the purchase of the same. The consequences of violating the statute imposing conditions upon the right of a foreign corporation to do business in Texas would be the prohibition to maintain "any action in any court of this state" upon any demand, arising in contract or tort, through the business so done. The statute does not annex the penalty nor intend that the violation of such statute shall operate to make void and unenforceable contracts and purchases of property made *Page 868 
before its conditions were complied with. As expressly stated in the case of Smythe Company, supra:
"The law of this state does not render void the contract made and performed in the transaction of business in this state by the foreign corporation without a permit, but only denies such corporation the right to enforce such contract or cause of action arising out thereof in the courts of this state."
Consequently, being both the legal and equitable owner of the 82 logs, the appellant had the right, as a legal incident of such ownership, to the absolute and continued lawful possession thereof. It is easily apparent in such case that appellant was, legally speaking, "deprived" of its property when it was physically taken from it to be wrongfully subjected to the debt of another. And the constitutionality of a statute would be manifestly involved, in effect operating to deprive an owner of his property without an opportunity to save by showing its nonliability. The statute was not intending to accomplish that result. Its terms indicate that it was not intended to be applicable to such circumstances. A claim seeking merely to recover possession of property of which the claimant is absolute owner and in complete control and possession at the time of attachment cannot properly be termed "a demand arising out of contract." Such claim at the time made is entirely independent of any existing contract as between the parties to the claim; it simply seeks the return of the property absolutely belonging to the claimant at the time. Such claimant is not at the time enforcing any contract. The contract and trust had been discharged; the full title, with right of actual possession, had vested absolutely on the delivery of the 82 logs. Had he, the trustee, Lemastus, not surrendered possession and control by actual delivery of the 82 logs, a different situation would probably have been presented. Neither can a claim proceeding, such as is here, be termed an action "for tort," that grew out of or was coincident with an existing contract between the parties. Therefore the statute does not prevent an unregistered foreign corporation from maintaining a judicial proceeding for recovering merely the possession of personal property absolutely owned by it; such possession in no wise being withheld under or by virtue of any existing contract between the parties. It has been held that replevin of bonds is not within the prohibition of a similar statute (Mfg. Co. v. Cauffiel, 89 A. 798, 243 Pa. 24); that claim of possession of a cash register is not prohibited (Cash Register Co. v. Wilson, 81 N.W. 285, 9 N.D. 112).
A correction in the original opinion is made so as to say that the preliminary work to be performed of felling the timber for the purpose of putting it into a state of preparation and readiness for transportation did not constitute the property a subject of interstate commerce, before hauling and de, livering it to the common carrier.
The motion is overruled.