Summary
In North American Mortgage Company v. Hudson, 176 Miss. 266, 168 So. 79, the mortgage company never had an office in the State. It had purchased mortgages in the State from Mortgagees, and "in a number of cases, acquired land here through foreclosures, and pending the sales of property so acquired would, through its local attorney, rent same, and it had sold some property in Mississippi.
Summary of this case from Snipes v. Commercial Industrial BankOpinion
No. 32254.
May 18, 1936.
1. APPEAL AND ERROR.
Supreme Court would entertain appeal from judgment dismissing bill on plea in abatement without trial on merits where plea was considered without trial on merits by consent of parties, although practice of trying suits in piecemeal was disapproved and pleading in abatement was inconsistent with good chancery practice.
2. CORPORATIONS.
Corporation incorporated under laws of foreign country purchasing commercial paper secured by trust deeds in state and collecting notes and foreclosing trust deeds by agent in state who leased property pending foreclosures to realize on mortgages held not "doing business in state" within statute requiring foreign corporation doing business in state to file charter with secretary of state and appoint agent for service of process (Code 1930, secs. 4140, 4164).
APPEAL from chancery court of Lamar county. HON. BEN STEVENS, Chancellor.
H.M. McIntosh, of Collins, and Dale Coughlin, of Hattiesburg, for appellant.
The court committed error in sustaining the plea in abatement.
It is our contention that appellant never did any business in the state of Mississippi within the meaning of the statutes. It was not shown that appellant purchased in Mississippi any of the Foreman securities. On the other hand, it is fair to infer that such securities were bought out of Mississippi. The Foreman Company maintained their offices in Chicago, Illinois, and appellant maintained its office in Montana and did not have an office of any kind in Mississippi.
So that the only business ever done in Mississippi by appellant was by way of collecting, or endeavoring to collect, through George M. Foreman Company the indebtednesses so bought out of the state. In other words, appellant purchased Mississippi securities outside of Mississippi and collected, or endeavored to collect, the same within the state through George M. Foreman Company.
G.M.A.C. v. Shady Side Coal Co., 135 S.E. 272; Dodds v. Pyramid Securities Co., Inc., 165 Miss. 269, 147 So. 328.
It is our contention that even if appellant had ever been at one time engaged in doing business in the state of Mississippi within the meaning of the statutes, it is not now doing business and was not so doing business at the time of the institution of this suit and, therefore, that it was and is not forbidden to institute and prosecute this suit.
Long Beach Canning Co. v. Clark, 141 Miss. 177, 106 So. 646; Harleston v. West Louisiana Bank, 91 So. 423.
Davis Davis, of Purvis, Heidelberg Roberts, of Hattiesburg, Eaton Eaton, of Gulfport, and Wilbourn, Miller Wilbourn, of Meridian, for appellees.
The appellant cannot seriously contend that the North American Mortgage Company never did any business in the state of Mississippi within the meaning of said statutes. We are not unmindful of the holdings of our own court on the subject of doing business on the part of a foreign corporation where the question of interstate commerce comes into play. However, the question here is not that of interstate commerce. The appellant had dealings with Mississippi people and Mississippi property in the state of Mississippi, through a long period of years.
In the case now before the court we are not dealing with an isolated transaction, but we are dealing with a case where a foreign corporation is doing business in Mississippi contrary to its laws and public policy. It is seeking to maintain an action of suit in the courts of this state without having complied with the terms and provisions of section 4140 of the Mississippi Code of 1930.
One of the earlier and outstanding Mississippi cases dealing with the question here presented, is the case of Quartette Music Co. v. Haygood, 108 Miss. 765, 67 So. 211. In that case, our court quoted with approval from the case of Bohn v. Lowery, 77 Miss. 427, 27 So. 605, as follows: "Every contract made for, or about, any matter or thing which is prohibited and made unlawful by any statute, is a void contract, though the statute itself does not mention that it shall be so, but only inflicts a penalty on the defaulter; because a penalty implies a prohibition, though there are no prohibitory words in the statute."
It cannot be said that the appellant herein was engaged in interstate commerce in the matter out of which the suit here involved grew, but was conducting its business in this state and cannot enforce its rights, if any it has stated in the suit, in the courts of this state.
Peterman v. Blumenfeld, 156 Miss. 55, 125 So. 548; Item Co. v. Shipp, 140 Miss. 699, 106 So. 437.
The courts are unanimous in holding that each case must be decided on its own individual facts and the evidence in the case at bar establishes conclusively, in our opinion, the fact that the North American Mortgage Company was doing business in the state of Mississippi without having been authorized to so conduct business here, as was the finding of facts on the part of the trial court.
Wiley Electric Co. v. Elec. Storage Battery Co., 167 Miss. 842, 147 So. 773; 14A.C.J. 1270, par. 3977; Houston v. National Mutual Building Loan Assn., 80 Miss. 31, 31 So. 540.
The appellant, a corporation under the laws of Friesland, Kingdom of the Netherlands, which had an office and was doing business at Bozeman, Mont., brought suit in the chancery court of Lamar county, Miss., to recover certain property sold by the George M. Foreman Company, of Chicago, Ill., to A.A. Hudson, taking mortgage security for the purchase money, said notes being payable to George M. Foreman, at Chicago, Ill., and sold thereafter to the North American Mortgage Company. The indebtedness thus incurred bore eight per cent interest evidenced by notes for the principal at seven per cent interest, and a separate note for one per cent interest, which one per cent note was to be retained by the Foreman Company for servicing said collections, that is, collecting interest, paying taxes, etc., for the North American Mortgage Company. George M. Foreman Company employed an attorney in this state on a salary basis to attend to this servicing.
The bill set up default in the payments, and asked for relief adjudicating that the rights of Hudson, and the grantees claiming under him, had been forfeited for noncompliance with the contract, and asking that the court appoint a commissioner to sell said lands for the satisfaction of the complainant's claim, said sale to be free from any claim of the defendants, and that when the property should be sold that the proceeds thereof be applied, first, to the payment of the cost of this suit, second, to the payment of the complainant's indebtedness, and third, that the balance be applied or paid to the defendants, as their interest might appear, and that, if mistaken in the relief prayed for, then for such other general or specific relief, as comports with equity and good conscience.
Hudson, after acquiring the property, sold a right of way across it to the Mississippi Power Light Company, and also executed a lease for minerals to an oil company.
At the time the Foreman Company took this deed of trust from Hudson, it had a deed of trust given by Hudson in favor of one Mr. Fillingane, which had been acquired by the appellant, and which the attorney in Mississippi was requested to foreclose for nonpayment.
After the bill was filed, the defendants filed a special plea in abatement, setting up that the appellant should not be entitled to recover or be afforded any relief, because it was a nonresident corporation doing business in this state without having filed a copy of its charter with the secretary of state, and without appointing an agent upon whom service of process might be had, contrary to the statutes of Mississippi which require foreign corporations to so do (Code 1930, secs. 4140, 4164).
By consent of the parties and of the chancellor this plea was considered without a trial of the case on its merits, and this appeal is from the judgment of the court holding said plea to be good and dismissing the bill.
We only consider and entertain this appeal because of the agreement mentioned. We do not approve of this practice of trying suits in piecemeal, and such pleading in abatement is not consistent with the present chancery practice.
From the proof in the case, it appears that the appellant never had an office in Mississippi, and did not do business here, but only purchased mortgages in this state from mortgagees, and, in a number of cases, acquired land here through foreclosures, and pending the sales of property so acquired would, through its local attorney, rent same, and it had sold some property in Mississippi. The George W. Foreman Company had conducted the business of lending money and taking securities in this state, making the notes payable in Chicago and selling them to any purchaser available. The appellant was winding up its affairs with a view of liquidation, and said, among other things, in one letter to its attorney in Mississippi, that, "This company is in liquidation, and our holdings are being disposed of at the best obtainable prices; hence the matter will be more one of selling than of management, and we trust that you will approach the matter with that ambition in mind. Legal work, when and where required, pertaining to the lands, will naturally be referred to you."
We are of the opinion that the court below was in error in holding that the appellant was doing business in the state of Mississippi, contrary to the statutes. This appellant had not done business within the meaning of these statutes. It had purchased commercial paper secured by deeds of trust in this state, and had acquired title to certain property in this state; but it is not within the contemplation of our law that such purchasers of property in Mississippi, where no office is maintained here for that purpose, shall be deemed as doing business here. It is not contrary to the public policy of this state that a foreign corporation may own notes and deeds of trust, and may proceed to collect same through the courts of this state, nor does that constitute the doing of business within the state. The collecting of notes alone, and the foreclosure of deeds of trust by an agent in the state of Mississippi, who may, pending such foreclosures, rent or lease the property, where the purpose of the company is merely to realize upon such mortgages, and other securities, is not doing business within the meaning of the Mississippi statutes on the subject. See Long Beach Canning Co. v. Clark et al., 141 Miss. 177, 106 So. 646, and the authorities there cited; Dodds v. Pyramid Securities Co. Inc., et al., 165 Miss. 269, 147 So. 328; Harleston v. West Louisiana Bank, 129 Miss. 111, 91 So. 423; Hessig-Ellis Drug Co. v. Wilkerson et al., 115 Miss. 668, 76 So. 570, and Saxony Mills v. Wagner, 94 Miss. 233, 47 So. 899, 23 L.R.A. (N.S.) 834, 136 Am. St. Rep. 575, 19 Ann. Cas. 199.
The judgment of the court below will, therefore, be reversed and the cause remanded.
Reversed and remanded.