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grantee could hold it against a subsequent grantee of the original grantor. In other words, notwithstanding the foregoing constitutional and statutory provisions, a foreign corporation could acquire a title to land in Colorado which it was. capable of transmitting to a third party so long as the State did not intervene.1

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1 Fritts v. Palmer, 132 U. S. 282. Mr. Justice Miller dissented, on the ground that the foreign corporation could not acquire land in Colorado in the face of the prohibition of the statute last quoted. So, under a statute of Pennsylvania (1 Purd. Pa. Dig. 361), which forbids a foreign corporation "to acquire and hold" real estate, a deed of conveyance of land to such a foreign corporation is void, but it passes a title which a corporation may hold subject to the right of escheat in the Commonwealth, its title being merely defeasible at the election of the State like that of an alien. Hickory Farm Oil Co. v. Buffalo &c. R. Co., 32 Fed. Rep. 22; and see ante, § 7913, note. The principle of these decisions is elsewhere alluded to (ante, § 7918). See, in affirmation of the principle, Leazure v. Hillegas, 7 Serg. & R. (Pa.) 313; Goundie v. Northampton Water Co., 7 Pa. St. 233; Runyan v. Coster, 4 Pet. (U. S.) 122; Bone v. Delaware Canal Co. (Pa.), 5 Atl. Rep. 751; Chicago, Burlington &c. R. Co. v. Lewis, 53 Iowa, 101; s. c. 4 N. W. Rep. 842; Missouri Valley Land Co. v. Bushnell, 11 Neb. 192; s. c. 8 N. W. Rep. 389; Jones v. Habersham, 107 U. S. 174; 8. c. 2 Sup. Ct. Rep. 336; Barnes v. Suddard, 117 Ill. 237; s. c. 7 N. E. Rep. 477; National Bank v. Matthews, 98 U. S. 621; National Bank v. Whitney, 103 U. S. 99; Swope v. Leffingwell, 105 U. S. 3; Reynolds v. Crawfordsville Bank,

112 U. S. 405. There is an analogous proposition of law to the effect that a corporation which exists by usurpation and a violation of positive law, is, nevertheless, capable of receiving and transmitting a good title to real estate, so long as the government does not intervene to oust it of the franchise which it usurps: Smith v. Sheeley, 12 Wall. (U. S.) 358, 361. See also Myers v. Croft, 13 Wall. (U.S.) 291, 295; Jones v. Guaranty &c. Co., 101 U. S. 622, 628; Fortier v. New Orleans &c. Bank, 112 U. S. 439, 451. It was also pointed out by Mr. Justice Harlan, in giving the opinion of the court in Fritts v. Palmer, 132 U. S. 282, 293, that an analogy of the principle is found in cases holding that the question whether a corporation having capacity to purchase and hold real estate for certain defined purposes, or in certain quantities, has taken title to real estate for purposes not authorized by law, or in excess of the quantity permitted by its charter, concerns only the State within whose limits the property is situated, and cannot be raised collaterally by private persons, unless there be something in the statute expressly, or by necessary implication, authorizing them so to do: Cowell v. Springs Co., 100 U. S. 55, 60; Jones v. Habersham, 107 U. S. 174, 188. The analogy to the cases of titles held and transmitted by aliens has already been alluded to: Cross v. De Valle, 1 Wall.

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§ 7965. Whether Necessary for Foreign Corporation Plaintiff to Aver and Prove Compliance with Such Statutes. Judicial authority is likewise divided upon the question whether it is necessary, in an action by a foreign corporation to enforce a contract made in the domestic State, to aver and prove compliance on its part with the statutes of the State entitling it to do business therein. We have elsewhere seen that the general presumption of right-acting applies to corporations, both domestic and foreign,' and that it will be presumed that a given act was within the powers of the corporation until the contrary appear. We have also met with cases which hold that it is a presumption, in the absence of evidence to the contrary, that a foreign corporation suing to enforce a contract made in the domestic jurisdiction, has complied with the local laws which entitle it to make that contract. If these principles are sound, then it must follow as a necessary conclusion to be adduced from them, that the foreign corporation need not aver and prove, in the first instance, in order to maintain an action upon a contract made within the domestic State, that it had complied with the domestic law entitling it to do business within the State, and to make that contract. But we find decisions directly to the contrary, which proceed upon the principle that compliance with the

(U. S.) 5; Doe v. Robertson, 11 Wheat. (U. S.) 332; Phillips v. Moore, 100 U. S. 208.

1 Ante, §§ 5642, 5967. Ante, § 7883.

Ante, § 7883; American Ins. Co. v. Smith, 73 Mo. 368; Railway Company v. Fire Association, 55 Ark. 163; 8. c. 18 S. W. Rep. 43; White River Lumber Co. v. Southwestern Imp. Asso., 55 Ark. 625; s. c. 18 S. W. Rep. 1055; Sprague v. Cutler &c. Lumber Co., 106 Ind. 242.

Many illustrations of the principle could be adduced. Thus, in an action for libel by the manager of an opera, against the proprietor of a newspaper, it was held wholly unnec

essary for the plaintiff to aver and prove that he had taken out a license under certain statutes to give operatic representations: Fry v. Bennett, 28 N. Y. 324. So, if a foreign insurance company brings an action upon a premium note given by a policy-holder, it need not prove, in the first instance, that it has complied with the statutes of the State which entitle it to do business therein, but proof of the note will make a prima facie case, and the authority to take it will be presumed, in the absence of affirmative allegations and proof to the contrary by the defendant. American Ins. Co. v. Smith, 73 Mo. 368; American Ins. Co. v. Cutler, 36 Mich. 261.

local statute is a condition precedent to the right to maintain an action in the local courts, which, like other conditions precedent, must be averred and proved by the plaintiff as the foundation of its right of action. These holdings are unphilosophical and contrary to the analogies of good pleading. To illustrate this, let us suppose a single case. The excise laws of the United States prohibit the sale of intoxicating liquors without the taking out of a license, and make every single act of sale a criminal offense; and it may be assumed that the same is true of the excise laws of every State, and of the ordinances of every considerable municipal corporation. Although there is the highest judicial authority for the proposition that, where it has shown in defense of an action by such a dealer to recover the price of a bill of such goods sold, that he has not complied with such laws, he cannot recover, yet it has never been held, as a question of pleading, that he must, in order to maintain such an action, aver and prove that he has complied with such laws. Who, for instance, ever heard of the proposition that a liquor dealer, in order to recover the price of a bill of liquors sold, must aver and prove that he has taken out a license as required by the ordinance of the city within which he carries on his business? And yet we have the authority of the highest national tribunal to the effect that the failure to take out such a license is matter of defense, which being shown, he cannot recover the price of the goods sold. The best opinion, therefore, is, that, in an action by a foreign corporation to enforce a domestic contract, it is not only not necessary for the corporation to aver and prove in the first instance its compliance with the domestic statutes entitling it to do business within the domestic State, but that, unless the defendant makes an averment of non-compliance in distinct terms, he cannot introduce evidence to show that such was the fact.

1 Lycoming Fire Ins. Co. v. Wright, 55 Vt. 526; Christian v. American Freehold &c. Co., 89 Ala. 198; Farrior v. New England Mortgage &c. Co., 83

Ala. 275; Mullens v. American Freehold &c. Co., 88 Ala. 280.

• Miller v. Ammon, 145 U. S. 421. White River Lumber Co. v.

§ 7966. Further of This Subject. When, therefore, a bill in equity by a foreign corporation to foreclose a mortgage, failed to allege such compliance, it was held that a demurrer to it ought to have been sustained.' But if the bill had not shown that its prayer for relief was predicated on a transaction which took place in Alabama, then the objection would be matter of defense which could only be taken by answer or plea. And the rule is analogous in an action at law; so that where the complaint does not show that the contract sued on was made within the domestic State, if it was made by the plaintiff in violation of such a provision, that is matter of defense which must be set up in answer. For stronger reasons, the authority of the foreign insurance company, thus suing on a contract, to make the contract within the domestic State, cannot be questioned for the first time on appeal, nor can such a defense be set up by a plea in abatement to an action by a foreign corporation for trespass.

Southwestern Imp. Asso., 55 Ark. 625; s. c. 18 S. W. Rep. 1055.

1 Christian v. American Freehold &c. Co., 89 Ala. 198; Farrior v. New England Mortgage &c. Co., 88 Ala. 275; Mullens v. American Freehold &c. Co., 88 Ala. 280. Ibid.

Railway Co. v. Fire Association, 55 Ark. 163; s. c. 18 S. W. Rep. 43.

Utley v. Clark-Gardner Lode Mining Co., 4 Colo. 369.

Ibid. A bill in equity, in a court of Alabama, by a foreign corporation, to foreclose a mortgage which merely avers that the complainant "has complied with the laws of Alabama which authorize foreign corporations to do business in this State," is considered as averring that the company had a duly constituted agent and known place of business in that State only at the time when the suit was commenced, and not at the time when the money was loaned or

the mortgage taken,-upon the principle that doubtful averments are to be taken most strongly against the pleader. It is, therefore, not an averment that the corporation had a duly constituted agent and known place of business at the time when the transaction took place, as required by the constitution and the statute; and for that reason such a bill is demurrable. Farrior v. New England Mortgage &c. Co., 88 Ala. 275; Mullens v. American Freehold &c. Co., 88 Ala. 280. Under the Indiana rule already set out (ante, § 7956), an answer defending on this ground, which merely alleges that the agent of the plaintiff corporation failed to comply with the requirements of the statute, is insufficient; but it is necessary to allege that it had failed to comply with such provisions, at or prior to the commencement of the action. Singer Man. Co. v. Brown, 64 Ind. 548.

§ 7967. Rule where the Foreign Corporation is Sued. Turning the question around, and taking the case where an action is brought, we will say, by a domestic citizen against a foreign corporation, to enforce a contract made with the corporation while it was doing business within the State without having complied with the statutes of the State entitling it to do business there, and remembering that all the cases, so far as discovered, hold that the company is estopped to defend on this ground,'-it follows, as a rule of pleading, that it is not necessary for the plaintiff to allege and prove compliance on the part of the defendant with such local statutes."

§ 7968. Effect of Non-compliance upon the Interpretation of Contracts. Although there is judicial opinion to the effect that the situs of a contract of insurance made by a corporation in one State, insuring property situated in another State, is the former, and not the latter State, yet the contrary seems to be the better view. It is that the situs of such a contract is not the place where it is formally written, but the place where it is delivered and accepted. This is especially true, where, as is generally the case with such policies, the policy, by its own terms, is not to be valid until it is countersigned by the local agent within the State where it is delivered. The rule is the same, although there is no local agent who can rightfully sign it and deliver it, by reason of the fact that the foreign insurance company has not complied with the conditions of the local statutes which entitle it to do business within the domestic State.

It

§ 7969. Effect of Withdrawing Agency from State. has been held by the Court of Appeals of Maryland, in a case where a Pennsylvania insurance company had an agency in Maryland, and while so doing business in Maryland, and through its Maryland agency made a contract of insurance

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