Ammons v. Brunswick-Balke-Collender Co.

ADAMS, Circuit Judge, after making the foregoing statement, delivered the opinion of the court. The contention that the summons was void merits little consideration. Section 5658 of Sandels & Hill’s Digest of the Statutes of Arkansas, relating to summons in civil actions, is as follows: “The summons shall be directed to the sheriff of the county and command' him to summon the defendant or defendants named therein, to answer the-complaint filed by the plaintiff (giving his name) at the time stated therein,, under the penalty of the complaint being taken for confessed, or of the defendant being proceeded against for contempt of court on his failure to do so. The summons shall be dated the day it is issued and signed by the clerk.” The summons in this case was embraced in and constituted a part of the order of delivery o’f the property. After commanding the officer to take from the defendant the possession of the property, the summons proceeds as follows: “You are also commanded to summons the said J. H. Ammons to appear in the United States Court in the Indian Territory, Central District, at South McAlester, in said Indian Territory, on the first day of the next January, 1903, term thereof, the same being on the 5th day of January, 1903, to answer the claim of said plaintiff for said property and also for damages amounting to fifty dollars (350.00) for the detention thereof, and notify the said J. H. Ammons of the time and place of trial and then and there make due return of this order.” Defendant claims that this summons was defective, because it failed to embody the words found in section 5658, supra, namely, “Under the penalty of the complaint being taken for confessed.” We cannot agree with this contention. The summons was explicit with respect to the court, term, time, and place at which defendant was required to appear. The summons also notified the defendant that he was required to answer -the claim of the plaintiff, not only for the property, but also for the damages for detention thereof. The mere fact that the summons did not contain a statement of the consequence following a failure to appear does not avoid the summons itself. The omission of these words was, at most, an irregularity—a defect in form, not of substance. In the case of Rice Stix Co. v. Dale & Richardson, 45 Ark. 34, the Supreme Court of Arkansas had occasion to construe the section of the statute in question. The court there says: “The process served upon him [the defendant] distinctly shows that an action had been instituted against him and that he was required to answer it. This is a special office of a summons. * * * The statutory form of writs and process should be strictly observed, but the court is required to disregard any defect which does not affect the substantive rights of a party.” We are of opinion that the omission of the words in question in no manner affected the substantive rights of the parties. The summons performed its function. It brought the defendant into court, and in due time thereafter the defendant and the plaintiff entered — 573 — into a stipulation continuing the case until the next term, and in doing so made use of the following words: “We agree that the summons and the order of delivery was served upon the defendant on the 26th day of May, 1902, by delivering to him a true copy of the annexed, which is by this agreement made the original, order herein on said day, and defendant waives all irregularities in the same, and it is further agreed that the case be continued until next term of this court” Language cannot more clearly express a thought than does this language express the thought that all irregularities in the summons and order of delivery were waived by the defendant. The word “same” in the concluding clause of the agreement grammatically and naturally refers to the subject of the sentence in which it appears, namely, to the' “summons and the order of delivery.” For both reasons, therefore, because the summons was not substantively defective on account of the omission of the words in question, and because the defendant, in order to secure a continuance of the case, agreed to waive all irregularities in the summons, we conclude that there is no merit in the first assignment of error. We are now brought to consider the question whether the failure to file the certificate as alleged in the answer and as admitted in the agreed statement of facts constitutes a defense to plaintiff’s action. The law making provision for the certificate is found in an act of Congress, entitled “An act to put in force in the Indian Territory certain provisions of the laws of Arkansas relating to corporations and to make said provisions applicable to said territory,” approved February 18, 1901, 31 Stat. 794. Section 4 (page 795) of this act reads as follows: “That before any foreign corporation shall begin to carry on business in the Indian Territory it shall, by its certificate, under the hand of the president and seal of such company, filed in the office of the clerk of the United States ■Court of Appeals for the Indian Territory, designate an agent, who shall reside where the United States Court of Appeals for the Indian Territory is held, upon whom service of summons and other process may be made. Such certificate shall also state the principal place of business of such corporation in the Indian Territory. Service upon such agent shall be sufficient to give jurisdiction over such corporation to any of the United States Courts for the Indian Territory. If any such agent shall be removed, resign, die or remove from the Indian Territory or otherwise become incapable of acting as such agent, it shall be the duty of such corporation to appoint immediately, another ■agent in his place as hereinbefore provided.” Section 5 of this act reads as follows: “That if any foreign corporation shall fail to comply with the provisions of the foregoing sections, all its contracts with citizens and residents of the Indian Territory shall be void as to the corporation, and no United ^States ■Court in the Indian Territory shall enforce the same in favor of the corporation.” The defendant invokes these provisions of law for his protection. In so doing he pleads affirmatively that plaintiff was a foreign corporation at the time it sold him the goods in question, and was carrying on business in the Indian Territory without having filed the certificate required by the act of Congress. The burden of proof was on him to sustain this plea. This he sought to carry by the use of the — 574 — agreed statement of facts. This agreed statement is the equivalent of a special finding of facts. Supervisors v. Kennicott, 103 U. S. 554, 26 L. Ed. 486; Lehnen v. Dickson, 148 U. S. 71, 13 Sup. Ct. 481, 37 L. Ed. 373. Accordingly, no question is or can now be raised except the one question whether the facts found in the special finding or its equivalent, the agreed statement, are sufficient to support the judgment. Lehnen v. Dickson, supra; Citizens’ Bank v. Farwell, 11 C. C. A. 108, 63 Fed. 117, and cases there cited. The facts disclose, without doubt, that plaintiff was a foreign corporation, and had not filed the certificate required by the act of Congress, but the question is still open whether the defendant has shown that the plaintiff was carrying on business within the true meaning of the act of Congress in the Indian Territory at the time it sold the goods to the defendant. The purchase of the goods was the result of _ correspondence between plaintiff and defendant. The goods were paid for partly in cash, and the balance was to be paid at some later day; the payment of the same being secured by a chattel mortgage. Plaintiff, whose general office was in Chicago, prepared the note and mortgage for execution by defendant and sent them, together with a bill of lading for the goods which it cotemporaneously shipped, to the First National Bank of South McAlester, Ind. T., with instructions to secure the execution of the note and mortgage by defendant, and upon so doing to deliver to him the bill of lading, which constituted a symbolical delivery of the goods themselves. These instructions were followed, and defendant, upon executing the note and mortgage at South McAlester, delivered the same to the cashier of the First National Bank of South McAlester for plaintiff, and at the same time received from him the bill of lading entitling him to take possession of the goods purchased. It thus appears that the transaction between plaintiff and defendant was concluded at South McAlester. It was there that plaintiff delivered the goods to the defendant, and that defendant settled for the same by executing his note and mortgage and delivering the same to the cashier of the bank for plaintiff. The cashier was plaintiff’s agent to perform the executory contract entered into by prior correspondence, and this performance constituted a business transaction between plaintiff and defendant within the Indian Territory. But this is the only transaction which defendant has shown, to bring plaintiff within the denunciation and penalty of sections 4 and 5 of the act of Congress of February 18,1901, supra. The language of the agreed statement of facts that plaintiff “only sells goods to parties on order in the Indian Territory” is quite too indefinite and uncertain as proof of such actual transactions to subject-plaintiff to the highly penal provisions of the act in question. The language of the agreed statement just quoted could obviously be truthful if the transaction between plaintiff and defendant was the only one which plaintiff had ever conducted in the Indian Territory. If there had been businéss transactions between plaintiff and citizens and residents of the Indian Territory besides the one between plaintiff and defendant which affords the occasion of this suit, or if other such transactions had been contemplated, such facts could doubtless — 575 — have been readily shown; but, whether so or not, the burden was on defendant to establish his defense, and if he failed to do so for want of proof it was his own misfortune. We consequently have the question presented whether proof of one business transaction in the Indian Territory, with nothing more, without filing the certificate required by the act of Congress, is sufficient evidence of a purpose “to carry on” a business, to subject plaintiff to the provisions of the act in question. An analysis of the act, in our opinion, discloses that Congress had in mind the conduct of some regular or systematic business. The requirement for filing a certificate is predicated upon the existence of a purpose to “carry on business.” To “carry on” means, according to lexicographers, to “promote,” “advance,” or “help forward” (Webster). “Business” means (1) “That which busies” or “that which occupies the time, attention, or labor of one as his principal concern, whether for a longer or shorter time.” (2) “Any particular occupation or employment engaged in for a livelihood or gain, as agriculture, trade, art, or a profession.” (3) “Mercantile transactions or traffic in general.” (Webster.) All these definitions imply, if not express, the idea of some permanency or durability; something more than a single temporary or spasmodic undertaking. This thought, in our opinion, is involved in that portion of the act providing what the certificate shall contain. It says: “Such certificate shall also state the principal place of business of such corporation in the Indian Territory.” This necessarily implies that the business of a foreign corporation • before the filing of the required certificate becomes imperative, shall have become of such serious contemplation that it has some principal place in the Indian Territory where it is to be carried on. The foregoing considerations seem to strongly indicate that a single transaction like that disclosed in the agreed statement of facts was not intended by Congress to subject the actor to the confiscation denounced by section 5 of the act. In this view of the statute we are supported by abundant authority. The case of Cooper Manufacturing Co. v. Ferguson, 113 U. S. 727, 5 Sup. Ct. 739, 28 L. Ed. 1137, was one involving a statute of the state of Colorado similar to the act of Congress now under consideration. The Legislature of that state, with a view of carrying into effect a constitutional provision, enacted that: “Foreign corporations shall, before they are authorized or permitted to do any business in this state, make and file a certificate, * * * designating the principal place where the business of such corporation shall be carried on in this state and an authorized agent or agents in this state residing at its principal place of business upon whom process may be served.” It appears that a foreign corporation, having its principal place of business in Ohio, entered into a contract with the defendants, citizens of Colorado, by which it was agreed that the corporation should sell and deliver to the defendants, a steam engine and other machinery, in consideration whereof the defendants were to pay the corporation the price stipulated in the contract. The machinery was de — 576 — livered and the purchasers refused to pay, pleading, among - other defenses, that when the contract was entered into the plaintiff corporation had not made and filed the certificate required by the statute of Colorado already quoted. Mr. Justice Woods delivered the opinion of the court. He observes as follows: “Reasonably construed, the Constitution and statute of Colorado forbid, not the doing of a single act of busipess in the state, but the carrying on of business by a foreign corporation without the filing of the certificate and the appointment of an agent as required by the statute. The Constitution requires the foreign corporation to have one or more known places of business in the state before doing any business therein. This implies a purpose at least to do more than one act of business. For a corporation that has done bqt a single act of business, and purposes to do no more, cannot have one or more known places of business in the state. * * * The statute passed to carry the provision of the Constitution into effect, makes this plain, for the certificate which it requires to be filed by a foreign corporation must designate the principal place in the state where the business of the corporation is to be carried on.” Then, after defining some words employed in the act, he continues: “The obvious construction, therefore, of the Constitution and the statute, is that no foreign corporation shall begin any business in the state, with the purpose of pursuing or carrying it on, until it has filed a certificate designating the principal place where the business of the-corporation is to be carried on in the state, and naming an authorized agent, residing at such principal place of business, on whom process may be served. To require such a certificate as a prerequisite to the doing of a single act of business when there was no purpose to do any other business or have a place of business in the state, would be unreasonable and incongruous.” To the same effect, also, is the case of Florsheim, etc., Co. v. Lester, 60 Ark. 120, 29 S. W. 34, 27 L. R. A. 505, 46 Am. St. Rep. 162. The Legislature of that state passed an act to carry into effect a constitutional provision of the state that: “Before any foreign corporation shall begin to carry on business in the state, it shall, by its certificate * * * filed in the office of the Secretary of State, designate an agent * * * upon whom service, summons and other process may be served.” Plaintiff in that case had taken a mortgage from the defendant in the state of Arkansas to secure payment of money which the defendant owed for the purchase price of goods sold him on credit. Suit was brought to foreclose the mortgage. A defense was interposed that the plaintiff, a corporation, had failed to file a certificate pursuant to the provisions of the Arkansas statute. The Supreme Court of that state in its opinion says: “The only question in this case is whether the taking of a single mortgage in this state, by a foreign corporation, for a past-due indebtedness for goods sold in the foreign state, the domicile of the foreign corporation, is doing business in this state within the meaning of the Constitution and the act of the General Assembly above quoted. * * * There is a division of authorities on this question. But we think the better view of the question is presented in Cooper Manufacturing Co. v. Ferguson, 113 U. S. 727, 5 Sup. Ct. 739, 28 L. Ed. 1137.” After quoting generously from the opinion in the last-mentioned case, the Supreme Court of Arkansas follows it, and rules accord — 577 — ingly. Of similar import are the following cases: Steam Heating Co. v. Gas Fixture Co., 60 Mo. App. 148; Gates Iron Works v. Cohen, 7 Colo. App. 341, 43 Pac. 667; Potter v. Ithaca Bank, 5 Hill, 490; Suydam v. Morris Canal & Banking Company, 6 Hill, 217; Milan Milling, etc., Co. v. Gorten, 93 Tenn. 590, 27 S. W. 971, 26 L. R. A. 135; Babbitt v. Field (Ariz.) 52 Pac. 775; Gilchrist v. Helena H. S. 6 S. R. Co. (C. C.) 47 Fed. 593. The foregoing would seem to be decisive of the present case; but counsel for defendant insists that the case of Chattanooga Building, etc., Association v. Denson, 189 U. S. 408, 23 Sup. Ct. 630, 47 L. Ed. 870, is inconsistent with the views so far expressed, and fully sustains him in his contention. That case arose in Alabama, and turned upon the proper interpretation of a constitutional and legislative provision of that state. Article 14 of its Constitution (1875) ordains that no foreign corporation “shall do any business” in that state without having at least one known place of business and an authorized agent or agents therein. Section 1316 of the Code of Alabama of 1896, enacted in execution of the constitutional provision, provides that every foreign corporation, “before engaging in or transacting any business” in the state, shall file a statement in writing, designating its place of business and appointing an agent. It cannot escape observation that these constitutional and statutory provisions are more restrictive than the act of Congress now in question. In Alabama the certificate is required to be filed by foreign corporations before “engaging in or transacting any business” in the state. In the Indian Territory the certificate is required to be filed before the “foreign corporation shall begin to carry on business in the Indian Territory.” The Supreme Court of Alabama had, before that suit was instituted, placed its own construction upon the constitutional and statutory provisions referred to. In Farrior v. New England Mortgage' Security Co., 88 Ala. 275, 7 South. 200, it held that these provisions were violated by the doing of a single act of business by a foreign corporation in the exercise of its corporate functions. See also, Ginn v. New England Mortgage Security Co., 92 Ala. 135, 8 South. 388, and Sullivan v. Sullivan Timber Co., 103 Ala. 371, 15 South. 941, 25 L. R. A. 543. It is a well settled rule that the construction placed upon local laws by the highest court of the state which enacted them is followed by the National courts; and this rule seems to have been followed in the Chattanooga Building, etc., Association Case. After discussing the Farrior Case and the other Alabama cases just cited, the Supreme Court uses the following language: “These eases constitute an interpretation of the constitutional and statutory provisions, and clearly hold that any act in the exercise of corporate functions is forbidden to a corporation which has not complied with the Constitution and statute.” For the reasons, therefore, that the phraseology of the act of Congress applicable to the Indian Territory is essentially different from that employed in the Alabama Constitution and statutes, and for the further reason that the Supreme Court of Alabama had placed an interpretation upon its own laws which was necessarily followed in the Chat — 578 — tanooga Building, etc., Association Case, we are of opinion that the last-mentioned case is not controlling authority in favor of the defendant in this case, and, for the same reasons, that it is not inconsistent with the doctrine of Cooper Manufacturing Co. v. Ferguson, supra. It results that the judgment of the United States Court of Appeals in the Indian Territory was correct. It is therefore affirmed.