Court Opinion

ID: 7991735
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:31:57.483324+00
Date Added: 2024-06-11T16:35:23.635937
License: Public Domain

Cook, J.,
delivered the opinion of the court.
It is our opinion that this case is to be decided by a construction of the statutes of our state, and that it is unnecessary to review the decisions of the supreme court of the United States, and of the several states, touching the general law of comity between the states.
Section 849 of the Code of 1892, and section 914 of the Code of 1906, declare the terms upon which foreign corporations may do business in this state, and these stat*800utes likewise prescribe wliat sncb foreign corporations may not do in these words: “But such foreign corporations shall not do or commit any act in this state contrary to the laws or policy thereof, and shall not he allowed to recover on any contract made in violation of law or public policy.” A foreign corporation may conduct any business in' this state which it could conduct in the state which created it, provided such business is not outlawed by the legislature of this state.
It seems clear to us that, inasmuch as foreign corporations “may not do or commit any act in this state contrary to the laws or the policy thereof,” it necessarily follows that such corporations may not do in this state what domestic corporations are prohibited from doing. The policy of this state with reference to limitations upon the value of corporate holdings is expressed in our statutes, and while it may be said that section 849 of the Code of 1892 and section 914 of the Code of 1906 are declaratory of the common-law -rule of comity, yet it seems to us that, the laws and policy of this state being to limit the value of the holdings of domestic corporations, and to penalize domestic corporations for exceeding the statutory limit, it was the intention of the legislature to apply to foreign corporations the same limitations; otherwise, this policy could be thwarted by the simple expedient of incorporating in other states.
If the limitation is not an expression of the state’s policy, binding upon all corporations and enforceable by a proper proceeding, foreign corporations would be free to gobble up all of the lands of the state, and thus defeat the effort of the legislature to carry out a wise and salutary purpose, clearly indicated by statutes forbidding corporations subject to its control from acquiring-lands in excess of a fixed limit of value. There can be no doubt of the legislative intention to limit the size of corporations in this state, and it is difficult to imagine what laws and policies are referred to in section 849, *801Code 1892, and section 914, Code 1906, unless we construe these sections to mean that foreign corporations doing business here may also be forced to conform to the policy of the state, expressed in its statutes.
Having reached this conclusion, the next question is: Do the penalties prescribed by section 838 of the Code of 1892 and section 903 of the Code of 1906 have any application to foreign corporations? We are unable to discover any substantial difference in the two sections. Section 838, Code of 1892, uses the language, “every corporation created under this chapter,” while section 903, Code of 1906, refers to “every corporation of the classes to he or heretofore created under the provisions of this chapter or the laws of this state.” Section 838, Code of 1892, refers to prospective corporations, while section 903, Code of 1906, refers not only to corporations to be created, but also to corporations which had already been created under the provisions of the Code of 1892. The chapters of the two Codes — 1892 and 1906 — entitled “Corporations” in terms exclude certain mentioned corporations, and the words “of the class,” found in section 903, Code of 1906, refer to corporations of the class controlled by chapter 24 of the Code of 1906, and exclude railroads and insurance corporations. For present purposes, therefore, we are of opinion that the Code of 1892 and the Code of 1906 mean one and the same thing.
It is certain that the courts of this state cannot forfeit the charters of foreign corporations doing busines in this state, and to this extent at least the court is powerless to enforce against appellees the penalty prescribed by our statutes. The statutes in question clearly make the forfeiture of charters the main penalty, and in addition thereto it is further provided that the offending corporation “shall also forfeit all property, real and personal, above the amount it may lawfully hold, to the state.” No authority can he found in the statutes for imposing a part of the penalty; hut, on the contrary, the language *802is plain, unambiguous, and mandatory — that the penalty of forfeiture of charter and forfeiture of property must each be imposed upon corporations violating the law. The penalty prescribed by the statutes being in part unenforceable, and the sections fixing tbe penalty in terms limiting its application to corporations to be or hereafter organized under the laws of this state, both concur' to negative the idea that it was the legislative purpose to apply that part of the penalty appropriate to foreign corporations to such corporations, while the entire penalty should aply to domestic corporations.
It is a fundamental rule of construction that penal statutes are to be strictly construed by the court, and it is not within the province of the judicial department to extend the terms of such statutes beyond the subjects selected by the lawmaking department for their application. It would have been an easy matter for the legislature to have provided that foreign corporations acquiring or holding lands in this state in excess of the value fixed for the holdings of domestic corporations should be subject to the penalty of forfeiture of such excess to the state, and such other appropriate penalties as the legislature might see fit to prescribe, but no such penalties were prescribed. In section 914 of the Code of 1906, which is a transcript of section 849 of the Code of 1892, both of which refer to foreign corporations alone and provide the penalty for violation of the laws and policy of this state by such corporations, nothing appears to indicate that the drastic penalties' imposed by statute on. domestic corporations should apply to foreign corporations doing business here.
Section 915, 916, and 917, Code 1906, seem to emphasize the correctness of our views upon the legislative intent. It being apparent that foreign corporations were not in terms subject to the penalties denounced by section 838, Code 1892, and section 903, Code 1906, the three above-mentioned sections were added to chapter 24, Code of *8031906. It will be noted that section 917, Code 1906, concludes with this sentence, viz.: “Any corporation shall, upon compliance with this law, become to all intents and purposes a corporation of this state, and shall he entitled to all the rights and privileges and be subject to all the duties, obligations, restrictions, liabilities, limits and penalties conferred and imposed by laws of this state upon similar corporations incorporated under the laws of this state. ” It is evident that foreign corporations, complying with the law providing for their domestication would become subject to the penalties prescribed by section 838, Code 1892, and section 903, Code 1906, and we are of opinion that foreign corporations not domesticated are necessarily excluded from the operation of these sections. “Ex pressio unius est exdusio alterms.” It would seem that, while the mind of the legislature was directed to foreign corporations, if it was the purpose to place them in the same category with domestic corporations, something would crop out in the particular section controlling such corporations indicative of this purpose.
The natural inquiry will he made: Why did the legislature impose a penalty upon its own creatures, and not impose the same penalty on the corporations of other states ? Any attempt to conjecture reasons might be wide' of the mark, and it can only he said that it was entirely within the power of the lawmaking department to fix the terms upon which foreign corporations of the character here involved might do business in the state, or that department of the government might exclude such corporations from the state entirely. This suit has been pending for several years, and the question as to whether or not the penalty sought to be enforced thereby was applicable to corporations of the character here involved has been thus called to the attention of the legislature, and yet, so far as we are advised, no effort has been made in the legislature to translate the state’s contention here *804into a statute which would put the question beyond controversy.
To restate' our views, we will say that it is the law and the policy of this state to limit the holdings of all corporations, domestic or foreign, doing business in this state; that the penalties prescribed for the forfeiture of the charters of offending corporations, and for the forfeiture to the state pf real estate held above the value such corporations may lawfully hold, do not apply to foreign corporations. The state is not without a remedy entirely adequate to enforce its public policy, but the state has not in this case resorted to that remedy.
It being the main purpose of this proceeding to have the court decree a forfeiture of real estate, we t.hinlr the demurrer to the bill of complaint was properly sustained.

Demurrer sustained.