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§ 242. Foreign corporation has right to sue.

A State may open its courts to whom it pleases; no country is bound to be at the expense and trouble of furnishing justice to foreigners. In France, and in most European states, adopting the French legislation, access to the ordinary civil courts is denied to aliens. But the common law has almost from the beginning adopted a more liberal principle, and has allowed foreigners free access to its courts. And in accordance with this general principle a foreign corporation (subject to certain exceptions about to be stated) is permitted to sue in a common-law court. Even if the corporation was formed by residents of the State who incorporated in another State in order to avoid the burdens of their own law, it may nevertheless sue in their State. And it may be said generally that in the absence of a statutory provision forbidding it a foreign corporation, though it has not filed its charter or appointed a resident agent, may sue."

§ 243. Disabilities of alienage.

A few States, departing from the general doctrine of the common law, forbid aliens (including foreign corporations) • access to their courts in certain cases. Thus in New York one alien cannot sue another in tort for a cause of action which accrued abroad. And this disability is extended by statute, both in New York and in several other States, so as to forbid

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2 Roberts v. Knights, 7 All. (Mass.) 449.

3 Savage Mfg. Co. v. Armstrong, 17 Me. 34; Portsmouth Livery Co. v. Watson, 10 Mass. 91; Direct U. S. C. Co. v. Dominion T. Co., 84 N. Y. 153. 4 Cumberland T. & T. Co. v. Louisville H. T. Co., 24 Ky. L. Rep. 1676, 72 S. W. 4.

5 John Spry Lumber Co. v. Chappell, 184 Ill. 539, 56 N. E. 794; Colonial & U. S. M. Co. v. Catlin, 8 Kan. App. 860, 57 Pac. 140; Alliance T. Co. v. Wilson, 9 Kan. App. 891, 59 Pac. 177; Diamond Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. 419; National C. R. Co. v. Wilson, 9 N. Dak. 112, 81 N. W. 285; Bank of Marietta v. Pindall, 2 Rand. (Va.) 465. Gardner v. Thomas, 14 Johns. (N. Y.) 134, 7 A. D. 445.

7 N. Y. Co. Civ. Pro. § 1780.

The statutes are collected in Chapter VII.

a foreign corporation to sue another foreign corporation except on a cause of action arising within the State. This provision is constitutional, even where the result of it is to deny an actionon a judgment of another State obtained by the corporation which now seeks to enforce it.10 The New York statute does not apply to an action against a non-resident individual.11 $244. Disabilities of incorporation: Statutory requirements.

In addition to the ordinary disabilities arising from alienage, a foreign corporation may be subject to statutory disability because of failure to comply with some condition imposed upon corporations before bringing suit. It has been seen 12 that the conditions which must be complied with by a foreign corporation before doing business in a State do not apply to the mere bringing of suit, since that is not doing business. But in many States it is specially provided that a foreign corporation shall not sue until it has complied with the conditions imposed by the statute; and in other States, where doing business is forbidden but no provision against suit is contained in the statute, it is held that suit cannot be brought on a contract made within the State before compliance, either because the contract is in itself void, or because it is against public policy to allow suit upon it. In other States it is held in such a case that though the contract was forbidden it was not void, and suit may be brought upon it. Several cases may therefore arise under the statutes, and must be separately considered.

$245. Statute not expressly forbidding Suit.

It has already been seen 13 that in many jurisdictions a contract made in violation of the statute is void. Where that is

See infra, § 285.

10 Anglo-American Provision Co. v. Davis Provision Co., 50 App. Div. 273, 63 N. Y. S. 987.

11 Colorado State Bank v. Gallagher, 76 Hun (N. Y.), 310, 27 N. Y. S.

688.

12 Ante, § 209.

13 Ante, § 214.

the case, it is obvious that no suit can be brought upon the contract even after subsequent compliance with the statutory requirements.14 But in jurisdictions which do not hold such contracts void, suit may be maintained upon them in the courts of the State whose statutes were violated, in the absence of an express statutory prohibition of suit.15 And since the prohibition of suit by a State statute does not affect the Federal courts, a suit may be brought in such a case in the Federal court though the State statute expressly prohibits suits.16 But even if the contract is not void, it seems to be held in Michigan to be against public policy, and therefore not enforceable in the courts.17

8246. Statute expressly forbidding suit.

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In several jurisdictions suit is forbidden on a contract made within the State before compliance with the Statute 18 or even on a contract made anywhere, until the corporation complies.1 In the former case, it is important to determine whether a compliance with the statute after making the contract will be sufficient. If the contract is regarded as void, of course no subsequent compliance can make it valid or support suit upon it; but if it was valid but unenforceable, a subsequent compliance with the statute would remove the bar to a suit. By

14 Reliance M. I. Co. v. Sawyer, 160 Mass. 413, 36 N. E. 59; Baldwin v. Conn. M. L. I. Co., 182 Mass. 389, 65 N. E. 837; Delaware, R. Q. & C. Co. v. Bethlehem & N. P. Ry., 204 Pa. 22, 53 Atl. 533. In Arkansas, by express statute, such contracts are void when made with citizens, not when made with persons not citizens. St. Louis, A. & T. Ry. v. Fire Ass., 60 Ark. 325, 30 S. W. 350, 24 L. R. A. 83.

15 Rockford Ins. Co. v. Rogers, 9 Colo. App. 121, 47 Pac. 848; C. B. Rogers & Co. Corp. v. Simmons, 155 Mass. 259, 29 N. E. 580; Garratt-Ford Co. v. Vermont Mfg. Co., 20 R. I. 187, 37 Atl. 948, 78 A. S. R. 852, 38 L. R. A. 545.

16 Blodgett v. Lanyon Zinc Co., 120 Fed. 893.

17 Seamans v. Temple & Co., 105 Mich. 400, 63 N. W. 408, 55 A. S. R 457, 28 L. R. A. 430.

18 See Chap. VII.

19 J. Walter Thompson Co. v. Whitehead, 185 Ill. 454, 56 N. E. 1106; Bradley-Metcalf & Co. v. Armstrong, 9 S. D. 267, 68 N. W. 733.

the weight of authority, suit may be maintained after compliance with the statute upon a contract made before compliance.20

It has even been held that compliance with the statute pending suit will be enough; 21 and though in the most important case so holding the decision was rested in part upon the use in the statute of the word "maintain" (rather than "bring") suit, the decision would seem sound in any jurisdiction where the contract itself is valid.

§ 247. Suit by assignee.

It has been urged that though the corporation itself cannot sue before compliance, yet in a State where the contract itself is not void and where an assignee of a chose in action may sue in his own name, an assignee of the contract should be allowed to sue; and in one case it was so held, the court saying that the disability of an assignor does not affect the remedy of the assignee.22 But the prevailing and it would seem the sounder view is that the statute operates not merely to deny a remedy in the ordinary sense, but to take away jurisdiction from the court, and that the court being deprived of jurisdiction by the statute cannot take it merely because the claim has been assigned. 23

20 Crefield Mills v. Goddard, 69 Fed. 141; Goddard v. Crefield Mills, 75 Fed. 818; Simplex Dairy Co. v. Cole, 86 Fed. 739; Security S. & L. Ass. v. Elbert, 153 Ind. 198, 54 N. E. 753; Carson Rand Co. v. Stern, 129 Mo. 381, 31 S. W. 772, 32 L. R. A. 352; Chicago M. & L. Co. v. Sims, (Mo. App.) 74 S. W. 128; Neuchatel Asphalte Co. v. New York, 155 N. Y. 373, 49 N. E. 1043; Reedy Elevator Co. v. American Grocery Co., 23 Misc. 520, 51 N. Y. Supp. 874; Huttig Bros. M. Co. v. Denny Hotel Co., 6 Wash. 122, 32 Pac. 1073; Toledo Tie Co. v. Thomas, 33 W. Va. 566, 11 S. E. 37, 25 A. S. R. 925. Contra, G. Heilman Brewing Co. v. Peimeisl, 85 Minn. 121, 88 N. W. 441; Western P. B. Co. v. Johnson, (Tex. Civ. App.) 38 S. W. 364 (by express provision of the statute).

21 Buffalo Z. & C. Co. v. Crump, 70 Ark. 525, 69 S. W. 572, 91 A. S. R. 87; Carson-Rand Co. v. Stern, 129 Mo. 381, 31 S. W. 772, 32 L. R. A. 352. 22 Lindheim v. Sitt, 33 Misc. 62, 68 N. Y. S. 145.

23 Mueller v. William F. Wall Rope Co., 53 N. Y. S. 255; Herzberg v.

§ 248. Statute subsequent to contract.

If a valid contract has been made by a foreign corporation, the right of the corporation to sue upon it is not affected by the subsequent passage of a statute establishing some condition which the corporation had not performed. This is often expressly provided in the statute itself; but whether so expressly provided or not, it is always held that such a statute is prospective only, and does not affect the right of the corporation to sue upon contracts made before its passage.24

§ 249. Contract made outside State.

There is nothing in the ordinary statutes to prevent a foreign corporation from suing on a contract made outside the State, since the statute forbids only the doing of business within the State before compliance. A foreign corporation, therefore, without complying with the statute, may sue on a contract made outside the State. 25 It has, however, been held in Michigan that a foreign corporation which in evasion of the Michigan law and without complying with its provisions made in another State a contract to insure Michigan property would be forbidden, on the ground of public policy, to maintain an action on the contract in Michigan.26

In accordance with the general view, a foreign corporation

Boiesen, 55 N. Y. S. 256; Kinney v. Reid I. C. Co., 57 App. Div. 206, 68 N. Y. S. 325; Texas & P. Ry. v. Davis, (Tex. Civ. App.) 54 S. W. 381.

24 Standard S. M. Co. v. Frame, 2 Pen. (Del.) 430, 48 Atl. 188; Richardson v. United States M. & T. Co., 194 Ill. 259, 62 N. E. 606 (but see J. Walter Thompson Co. v. Whitehead, 185 Ill. 454, 56 N. E. 1106); Security S. & L. Ass. v. Elbert, 153 Ind. 198, 54 N. E. 753; United States S. & L. Co. v. First M. P. Church, 153 Ind. 701, 55 N. E. 743; Keystone Mfg. Co. v. Howe, 89 Minn. 256, 94 N. W. 723; M. B. Faxon Co. v. Lovett Co., 60 N. J. L. 128, 36 Atl. 692; Atlantic Const. Co. v. Kreusler, 40 App. Div. 268, 57 N. Y. S. 983; Middlebrook v. David Bradley Mfg. Co., (Tex. Civ. App.) 27 S. W. 169.

25 White River L. Co. v. Southwestern Imp. Ass., 55 Ark. 625, 18 S. W. 1055; Ware Cattle Co. v. Anderson, 107 Ia. 231, 77 N. W. 1026; MacMillan Co. v. Stewart, (N. J. L.) 54 Atl. 240; Slaytor-Jennings Co. v. Specialty P. B. Co., (N. J. L.) 54 Atl. 247; Batchelder & Lincoln Co. v. Knopf, 54 App. Div. 329, 66 N. Y. S. 513.

26 Seamans v. Temple & Co., 105 Mich. 400, 63 N. W. 408.

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