judiciary power," it was observed, "may, to a very great extent, defeat the manifest intent of the legislature. For although the penalty may be sued for and recovered, yet circulation may be given to bills received upon such illegal contracts, and the penalty may never be exacted." But such a statute has been held not to avoid a promissory note executed in another State, and payable there, though the parties knew that the note was to be indorsed and used in the State containing the prohibitory legislation." 1 Springfield Bank v. Merrick, 14 Mass. 322, 325. Thus, a statute of Massachusetts (Mass. Stat. 1839, ch. 38, subsequently repealed), made it unlawful for any bank to loan, negotiate, receive in payment, or otherwise to deal in the bank bills of other States, and imposed a heavy penalty on any who should transgress its provisions. With this statute in force, a bank of that State discounted a note payable "in facilities." It was proved that facilities meant certain notes of some of the banks of the State of Connecticut, which were made payable two years after the close of the war of 1812, and which were at a considerable discount. It was held that the bank could not recover upon the note, and that it made no difference that, subsequently to the transaction, and before the trial, the statute had been repealed; for " as well might a contract, made for the purpose of trade with an enemy during the war, be purged of its illegality by the return of peace." Springfield Bank v. Merrick, 14 Mass. 322, 325. This decision proceeds upon the principle that where the purpose of the legislature is to prohibit the making of the particular contract, and the contract is nevertheless made in violation of the prohibition, it cannot be made the foundation of an action in the courts of the same sovereignty. 2 Merchants' Bank v. Spalding, 9 N. Y. 53. The court, after an examination of the question, were "of opinion that when the act to be done in another State, the knowledge of which is sought to affect the contract, is simply a violation of a positive law, having in it nothing of an immoral nature, and when it is not shown that the parties were cognizant that the act was forbidden by the local law of such other State, and they therefore chargeable with a confederacy to defeat those laws, the contract is valid and should be enforced in such other State." Merchants' Bank v. Spalding, 9 N. Y. 53, 63. The court conceded the principle that where parties make a contract to be performed in a foreign country, it is reasonable that they should be presumed to know the law of that country with reference to the subject of the contract. Holman v. Johnson, Cowper, 341. They also conceded the proposition that should parties abroad conspire to do an act within the domestic State, forbidden by its laws, a foreign contract, unobjectionable in its provisions, but made in furtherance of the general design, would be regarded as void in the domestic State, upon its connection with the illegal enterprise being shown: Lightfoot v. Tenant, 1 Bos. & Pul. 551. But they referred, for a justification of their conclusion, to decisions of the § 7943. State Statutes not Applicable to Corporations Vending Patented Articles. The Constitution of the United States provides that "the Congress shall have power. . . . to promote the progress of science and useful arts, by securing for limited times, to authors and inventors, the exclusive right English courts to the effect that a foreigner selling and delivering goods abroad may recover the price in the English courts, though he knows, at the time of the sale and delivery, that the buyer intends to smuggle them into England: Pellecat v. Angell, 2 Comp, Mees. & Ros. 311; Holman v. Johnson, Cowper, 341. They also refer to a decision in Massachusetts to the effect that a sale of lottery tickets made in another State, where such sale was lawful, to a citizen of Massachusetts, was a valid transaction, though the seller knew that the purchaser bought them for the purpose of selling them in Massachusetts, where such sale was prohibited by statute: M'Intyre v. Parks, 5 Met. (Mass.) 207. They distinguished Pratt v. Adams, 7 Paige (N. Y.), 615, where it was one of the express provisions of the loan that the small bills of the foreign bank should be taken, and the cashier of the bank actually bought and delivered them to the borrower in the city of New York. Construction of Missouri statute excluding foreign banking and loan associations from that State: Bank of Louisiana v. Young, 37 Mo. 398; Connecticut Mutual Life Ins. Co. v. Albert, 39 Mo. 181; Long v. Long, 79 Mo. 645; Ferguson v. Soden, 11 Mo. 208; 8. c. 19 S. W. Rep. 727; 33 Am. St. Rep. 512; overruling dicta in the last preceding case. That an express company doing a banking business is not within the meaning of such statutes: Wells Fargo & Co. v. North ern Pac. R. Co., 23 Fed. Rep. 469; 8. c. 10 Sawy. (U. S.) 441. What is a "banking" or a "loan and investment" business, within the meaning of the Massachusetts Act, 1889, ch. 452, prohibiting a foreign corporation from engaging in the banking or loan and investment business under a name similar to that of a domestic corporation: International Trust Co. v. International Loan &c. Co., 153 Mass. 271; 8. c. 26 N. E. Rep. 693; 9 Rail. & Corp. L. J. 510; 10 L. R. A. 578. Construction of early statutes of New York leveled against foreign banking corporations:-That the statute prohibited lending money upon a mortgage, under the designation of the business of banking: Silver Lake Bank v. North, 4 Johns. Ch. (N. Y.) 370. That an agreement to redeem notes issued in violation of the statute was void: De Groot v. Van Duzer, 20 Wend. (N. Y.) 390; reversing s. c. 17 Wend. (N. Y.) 170. That statutes prohibiting foreign corporations from keeping office of discount and deposit within the State did not prohibit a single loan: Suydam v. Morris Canal Co., 6 Hill (N. Y.), 217; affirming 8. c. 5 Hill (N. Y.), 491. That it was a violation of the statute for an agent of a foreign banking company to attend, from time to time, at a place in New York to receive deposits and discount notes: Taylor v. Bruen, 2 Barb. Ch. (N. Y.) 301. That a national bank was within the prohibition of the statute: National Bank v. Phoenix Warehousing Co., 6 Hun (N. Y.), 71. to their respective writings and discoveries." Under this constitutional provision and acts of Congress in pursuance thereof, it is generally provided that the letters patent granted to inventors shall contain, among other things, a grant to the patentee, his heirs or assigns, for a specified and limited period, of the exclusive right to make, use, and vend the invention or discovery, throughout the United States and the Territories thereof. This right, in the patentee or his assignee, to vend the patented article throughout the limits of the United States, cannot, obviously, be restrained by unfriendly State legisla tion. "The property in inventions," said Mr. Justice Davis at circuit, "exists by virtue of the laws of Congress, and no State has a right to interfere with its enjoyment, or to annex conditions to the grant. If the patentee complies with the law of Congress on the subject, he has a right to go into the open market anywhere within the United States and sell his property. If this were not so, it is easy to see that a State could impose terms which would result in a prohibition of the sale of this species of property within its borders, and in this way nullify the laws of Congress which regulate its transfer, and destroy the power conferred upon Congress by the constitution." This exclusive right of the assignee of the patentee to vend the patented article, throughout the limits of the United States and Territories, must, according to one view, be as large, where the assignee is a corporation, as where it is an individual; and it cannot be abridged by State legislation founded on the theory of imposing the terms on which a foreign corporation shall be permitted to do business within the State. The Supreme Court of Indiana have accordingly held that a statute of that State which requires foreign corporations, as a condition precedent to the transaction of their business in any county of the State, to deposit in the office of the county clerk, a power of attorney authorizing their agents to transact busi 1 Const. U. S., art. 1, § 8. To this effect, see Rev. Stat. U.S., § 4884. Ex parte Robinson, 2 Biss. (U.S.) 309; quoted with approval in Helm v. First Nat. Bank, 43 Ind. 167; s. c. 13 ness for them, and to accept service of process in actions against them, is inoperative in respect of foreign corporations engaged in the manufacture and sale of articles covered by letters patent of the United States.' § 7944. Ousting Foreign Corporations by Quo Warranto. The information in the nature of quo warranto is now fre quently resorted to for the purpose of ousting foreign corporations from the exercise of their franchises within the domestic State, and it is held to be an appropriate remedy. The issuing of a license to a foreign corporation to do business within the domestic State, by the Superintendent of Insurance or other officer of such domestic State, is a ministerial, and not a judicial act, and is therefore not a bar to a proceeding by quo warranto to oust the foreign corporation from exercising franchises which it is not entitled to exercise under the domestic law.3 ARTICLE II. EFFECT OF VIOLATING THESE RESTRAINTS UPON CONTRACTS, AND RIGHTS OF ACTION THEreon. SECTION cover on contracts made in 7951. Doctrine that domestic citizen 1 Grover & Baker Sewing Machine Co. v. Butler, 53 Ind. 454; s. c. 21 Am. Rep. 200; Wood Mowing Machine Co. v. Caldwell, 54 Ind. 270; s. c. 23 Am. Rep. 641; Shook v. Singer Man. Co., 61 Ind. 520. State v. Boston &c. R. Co., 25 Vt. 433; State v. Fidelity &c. Ins. Co., 39 Minn. 538; s. c. 41 N. W. Rep. 108; 26 Am. & Eng. Corp. Cas. 11; State v. Western U. Life Ins. Co., 47 Ohio St. SECTION may defend against the contract so far as unexecuted on his part. 7953. Illustration in the case of premium notes of foreign insurance companies. 7954. Exception in case of bona fide holders of such notes for value. 167; 8. c. 24 N. E. Rep. 392; 8 L. R. A. 129; State v. Insurance Co., 49 Ohio St. 440; s. c. 34 Am. St. Rep. 573; 31 N. E. Rep. 655; 20 Wash. Law Rep. 485; 21 Ins. L. J. 673; State v. Fidelity &c. Ins. Co., 77 Iowa, 648. State v. Insurance Co., 49 Ohio St. 440; s. c. 34 Am. St. Rep. 573; 31 N. E. Rep. 655; 21 Ins. L. J. 673; 20 Wash. L. Rep. 485. SECTION 7955. Illustration in the case of mortgages taken by foreign corpo rations. 7956. Doctrine that the failure of the foreign corporation to comply with domestic statutes merely suspends its remedy on contracts until compliance. 7957. Doctrine that failure to comply with such statutes does not render contracts void. 7958. Doctrine where the statute gives a specific penalty. 7959. Doctrine that neither party can 7960. Corporation estopped to set up SECTION 7962. Non-compliance with such statutes prevents agent from recovering commissions. 7963. Legislature may validate such contracts. 7964. Foreign corporation can acquire and transmit valid titles without complying with local law. 7965. Whether necessary for foreign 7966. Further of this subject. 7968. Effect of non-compliance upon 7969. Effect of withdrawing agency from the State. 7970. Situs of the contracts of foreign corporations for purposes of jurisdiction. 87950. Foreign Corporations cannot Recover on Contracts Made in Violation of Such Restrictions. Upon the question whether the failure of a foreign insurance company to comply with restrictive statutes, such as those under consideration, before undertaking to do business in the domestic State, will render its contracts, made with the citizens of that State, voidable, the decisions are in a state of irreconcilable contradiction. So far as practicable, an effort will now be made to group them, and to state what doctrine is held by the respective groups, and to give the reasons adduced therefor. And first, of those decisions which hold that such contracts are void as against the corporation. A numerous class of holdings are to the effect that where a statute of a State provides that foreign, corporations shall not do business within the State except upon compliance with certain conditions, and such a corporation does do business in the State in violation of the statute, and, through the business so done, a contract accrues |