Court Opinion

ID: 3544726
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:56:09.013459+00
Date Added: 2024-06-11T14:22:22.838180
License: Public Domain

This is an original proceeding to determine the validity of that certain contract heretofore on the 17th day of July, 1937, entered into by four justices of the supreme court as the parties of the first part and Bancroft-Whitney Company, a corporation *Page 343 
of California, party of the second part. The whereas clause of the contract suggests that it is made under the provisions of sections 378 to 384, inclusive, and section 283.1, Revised Codes of Montana of 1935. The contract presumes, at stated prices, to provide for an option to the state and to its citizens for the printing, binding, and publication of the volumes of the Montana Reports for the next six years; and further it provides for the sale to the state and to individuals of all back volumes of Montana Reports at prices named. The contract also further presumes to provide for the preservation, in fire-proof vaults, of matrices of all volumes to date so that the same could be reproduced on short notice.
The contract is presumed to be signed by the justices of the supreme court on behalf of the state, and by Fred B. Moss, president, and M.A.F. Madison, secretary, of the Bancroft-Whitney Company, recited in the contract to be a corporation of California. As no suggestion is made that the company is authorized to do business in Montana, we may presume that the recital of its place of business as California excludes its business situs from the state of Montana; that is, we conclude that it is a foreign corporation doing business in Montana without having acquired a situs in the state.
Probably the first question that confronts us is that of the authority of a foreign corporation to do business in the state without compliance with our laws. That the Bancroft-Whitney Company, in making a contract to deliver books in Montana for a period of the next six years at stated prices, delivery and payment therefor to be made in Montana, is doing business in Montana under every intendment of our statute, seems certain and settled. The question then arises as to whether this state can, under our Constitution, make contracts of this character binding upon the state. Certainly, there is no constitutional or statutory provision directly authorizing such contracts. If there is any implied authority so to do, it must arise from necessity. Such necessity has not been made to appear, nor is it alleged that such necessity exists. Therefore, we seek in vain for authority *Page 344 
to make a contract with a foreign corporation not authorized to do business in the state.
We assert this principle of law that corporations, being a creation of law, have only such authority as is granted to them, no implication arises that they have authority not specifically granted. The question reaches the vitals of contract procedure. Probably because of its simplicity it is not often mentioned. In this instance, the contract proceeds upon the general presumption that a corporation may come into a state and do business therein with the state or with the citizens of the state with the same right and presumption of authority as a natural person, a right that I do not concede. The subject invites extensive argument but the circumstances of this case do not require that argument. Therefore, I pass it with the foregoing statement.
Second, the contract assumes to present a contract covering a period of six years. It is the only state contract I have in mind (and I assert with confidence, the only one attempted in the state) that covers a longer period than two years unless specifically authorized by definite constitutional provision. (See section 12, Article XII, Constitution of Montana.)
If we can make a proviso for payment not exceeding two years, how can we make the contract to cover a longer period? To ask the question is to answer it, and I think it is safe to say that this contract could under no circumstances extend for a period longer than two years. If we cannot make such contract for a longer period than two years, it may, perhaps, be argued the Bancroft-Whitney Company would be presumed to understand that such is the law and it would necessarily follow that it would be presumed as a two-year contract only.
If such is the case, may we assume that the bond is defective which presumes to cover a six-year period, a different contract in an important essential from that signed by the parties, and guaranteed by the bonding company. A contract that might be limited to a two-year period might be presumed to bind the principals, but might not be effective when considered as binding third parties. In all events, it would appear to be unwise to *Page 345 
make a contract for six years that can be legally effective for only two years.
Third, referring now to the provisions of the contract which recite the fact that the supreme court justices caused the publication of notice of intention to let the contract in the "Helena Independent," such publication was in effect not made, but was made by the state purchasing agent, and the recital in the contract is incorrect in the light of the facts. However, if we hold, as I think we must, that the advertisement should be made in the name of the state purchasing agent, we must then consider how it came into the hands of the justices of the supreme court. Were they acting as officers, or in what capacity were they acting? The Constitution of the State, section 1, Article VIII, provides: "The judicial power of the state shall be vested in the senate sitting as a court of impeachment, in a supreme court, district courts, justices of the peace, and such other inferior courts as the legislative assembly may establish in any incorporated city or town."
Section 35 of that same Article defines the powers of the justices: "No justice of the supreme court or district judge shall hold any other public office while he remains in the office to which he has been elected or appointed." Is not this another office?
On the other hand, we have section 32 of the same Article which provides: "The legislative assembly may provide for the publication of decisions and opinions of the supreme court." Possibly my associates consider this provision authorizes the legislature to delegate such authority to the supreme court justices, but the authority would be very questionable at least, particularly in view of contradictory legislative provisions which delegate this authority more appropriately to administrative officers. Why digress from the general stated rule limiting the authority of justices to duties within their line. Article VIII, section 35, is sufficient and should be final.
Expressing myself generally, I am opposed to this contract as an attempt to grant a practical monopoly to a foreign corporation that cannot be in any manner practically controlled by our *Page 346 
courts. The contract sought to be made among other things attempts to provide for the sale of law books, i.e., Montana Reports, to private citizens at a fixed price, a procedure which may tend to save the private purchasers of these books some money in the long run, but it penalizes the state by providing for such purchases of its books at an excessive price and is at best an undesirable species of contract. It could not be enforced by a private citizen in any practical way in the event of a controversy. But in particular its monopolistic tendency should be discouraged by the state and particularly by the supreme court of the state, which necessarily understands the monopolistic character of this contract.
In view of the fact that it does not compel private citizens to purchase these books, it cannot be definitely and directly characterized as a monopoly. But its effect so closely approaches monopoly that the practice should not be approved and thereby encouraged by this supreme court. If a law should be enacted providing for the purchase by the state of these matrices, either at the present time or at the option of the state at some future time, under circumstances that would be fair to the state, subject to use by any printing concern in or out of the state, such an arrangement would place the people of the state of Montana in an independent position, although the necessity for these reprint matrices is greatly overrated.
Let us assert our independence now while we may do so, and give our own printing concerns and our own printers a fair opportunity to compete.
With these observations I express my dissent and express the hope that this contract will be rejected and the matter taken up by the next legislature in a constructive, businesslike manner. The damage resulting from a failure to print the volumes of the Reports that would ordinarily come out in the next two years would not work a hardship upon anyone. Unless we do assert ourselves, the matter will probably drag on for many years in its present unsatisfactory manner. *Page 347