Standard T. M. Co. v. Detroit F. S. Co.

Full title: STANDARD TILE MARBLE COMPANY, Appellant, v. DETROIT FIDELITY SURETY…

Court: Supreme Court of Iowa

Date published: Feb 5, 1929

223 N.W. 356 (Iowa 1929)

223 N.W. 356

Opinion

February 5, 1929.

CORPORATIONS: Foreign Corporation — Right to Maintain Action. A foreign corporation which has not been authorized to do business in this state may, nevertheless, maintain an action in this state on a contract entered into in a foreign state.

Headnote 1: 12 R.C.L. 98.

Corporations: 14a C.J., § 4013, p. 1309, n. 81.

Appeal from Marshall District Court. — B.F. CUMMINGS, Judge.

Action on a surety bond executed to secure performance of a certain building contract. The sole question involved in this appeal is whether or not a foreign corporation can recover in this state on a contract made by it in the state of Minnesota. — Reversed.

C.H.E. Boardman and H.G. Cartwright, for appellant.

Kelly, Bauers Carlson and A.B. Hoover, for appellee.

FAVILLE, J.

The contract involved in this action was made between two corporations, both nonresidents of the state of Iowa, and was made and executed in the state of Minnesota. The parties agree that the sole question involved in this case is whether, under the Iowa statute, the plaintiff can maintain this action in this state.

Section 8427, Code of 1927, is as follows:

"No foreign stock corporation doing business in this state shall maintain any action in this state upon any contract made by it in this state unless prior to the making of such contract it shall have procured such permit. This prohibition shall also apply to any assignee of such foreign stock corporation and to any person claiming under such assignee of such foreign corporation or under either of them."

The identical question presented in this appeal was recently before us in the case of Service System v. Johns, 206 Iowa 1164. We there held that the prohibition in said section of the statute "only forbids foreign corporations from bringing an action in the courts of this state `upon any contract made by it in this state.'"

In said cause it appears that the contract had been made in the state of New Jersey, and we held that the said section of the statute was not controlling, and that the plaintiff in said action had the right, regardless of said section, to bring and maintain an action on the contract in this state. The case is conclusive against the appellee's contention in the instant case, and following the rule therein laid down, the judgment in the case at bar is — Reversed.

ALBERT, C.J., and EVANS, KINDIG, and WAGNER, JJ., concur.