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$ 1069. Use of seal.-- A deed, not under the corporate seal of a bank but under the private seal of its president, is not the deed of the corporation. Bank of Metropolis v. Guttschlick, 14 Pet., 30. See $$ 788, 1038.
& 1070. If the seal of a corporation is not affixed to an instrument purporting to be its deed or mortgage by the proper corporate officers, but was surreptitiously obtained, then the deed or mortgage is not duly executed, is not legally its mortgage, and cannot be foreclosed as such. (Citing Jackson v. Campbell, 5 Wend., 572; Damon v. Granby, 2 Pick., 345, 353; Bank of Ireland v. Evan, 32 Eng. L. & E., 23.) Koehler v. Black River Falls Iron Co., 2 Black, 717.
§ 1071. A corporation may bind itself by a contract —. g., the assignment of a patent not under seal, when the law does not require the contract to be evidenced by a sealed instrument. (Citing Bank of Columbia v. Patterson, 7 Cr., 299; Fleckner v. Bank of United States, 8 Wheat., 338; Andover, etc., T. Co. v. Hay, 7 Mass., 102; Dunn v. Rector, 14 Johns., 118; Kennedy v. Baltimore Ins. Co., 3 Har. & J. (Md.), 367; Stanley v. Hotel Co., 13 Me., 51; Fanning v. Gregoire, 16 How., 524.) Gottfried v. Miller, 14 Otto, 525.
$ 1072. The presumption that the corporate seal of an instrument was lawfully placed upon it is not conclusive and may be overthrown by parol evidence. Koehler v. Black River Falls Iron Co., 2 Black, 717.
$ 1073. Where an appeal bond was signed in the name of a corporation by one B., its president, and attested by the seal of the corporation, it was held to be presumed that the seal was affixed by proper authority; that this presumption was not conclusive; that the bond having been approved by the judge, it must be presumed that proof of authority to affix the seal was made to the judge, and that this authority could not be questioned by a mere motion, and that an affidavit showing reasonable ground to doubt the authority was necessary. Union Gold Mining Co. v. Bank, * 2 Colo. T'y, 226.
$ 1074. Evidence that a corporation, through its counsel, in the course of a trial, treated the instrument sued on as bearing the corporate seal and relied upon it as a deed of the corporation, is admissible to prove that the seal attached is the seal of the corporation. Philadelphia, etc., R. Co. v. Howard, 13 How., 307.
$ 1075. Whatever may have been the original correctness of the doctrine that a corporation can act only through the instrumentality of its common seal, as applied to corporations existing by the common law, in respect to which it has been certainly broken in modern times, it has no application to corporations created by statute whose charters contemplate the business of the corporation to be transacted exclusively by a special body or board of directors, and the acts of such body or board, evidenced by a written vote, are as completely binding upon the corporation, and as complete authority to their agents, as the most solemn acts done under the corporate seal. In respect to banks, from the very nature of their operations in discounting notes, in receiving deposits, in paying checks, and other ordinary and daily contracts, it would be impracticable to affix the corporate seal as a confirmation of each individual act. Where corporations have po specific mode of acting prescribed, the common law mode of acting may be properly inferred; but every corporation created by statute may act as the statute prescribes, and the common law cannot control, by implication, that which the legislature has expressly sanctioned. So the vote of the directors of a bank authorizing an act pursuant to power granted in its charter is as valid to bind the bank as its act under seal. Fleckner v. Bank of United States, 8 Wheat., 35.).
8 1078. and no resolution.— Agreements held to be valid contracts of a company, although the plaintiff relying upon them was unable to produce any resolution or order in writing by the trustees or board of directors, and although the seal used was the private seal of one of the officers of the company instead of the corporate seal. Eureka Co. v. Bailey Wall., 491.
IX. FOREIGN CORPORATIONS.
SUMMARY Power derived from laws of state where created, § 1077.-- Right to do business
in another state, SS 1078–1084, 1092.—Where found, $ 1085. – Citizenship. $ 1036. – Where suable, $ 1087, 1083, 1120, 1121, 1122. — Judgment against, entitled to faith and credit, $ 1089; by a wrong name, $ 1090.- Powers limited by charter, $ 1091.– Dealing in bills of exchange, $ 1092.- Repeal of law as to right to do business, $ 1093.- Banking business, SS 1093, 1094.– Franchise not held without a grant, $ 1095.- Power to hold lands, SS 1096, 1111-1113.– Agent to receive service of process, ss 1097, 1119.- Policy of insurance issued without compliance with law, SS 1093–1100. — Duty to appoint an attorney and file papers, 65 1101, 1102.- Effect of failure to comply with law, ss 1103-1108.- Right to take a mortgage; effect of decree in favor of, &$ 1109, 1110.- Act not creating a new corporation, $ 1114.– Created by several states, SS 1115, 1116.- Liability for injuries on roads running through two states, § 1117.- Becoming a corporation of another state by adoption, SS 1116, 1118, 1119, 1121.– Waiver by appearance and answer, $ 1122.
§ 1077. A corporation has no legal existence beyond the limits of the state which creates it, and every power exercised by it in another state depends for its validity upon the laws of the latter, except where the right is claimed under the federal constitution. Runyan v. Coster, SS 1162–65; In re Comstock, SS 1150–54.
$ 1078. A corporation cannot claim in a foreign state “the privileges and immunities? (including the right to make a contract) which its members as citizens might claim in such state. Bank of Augusta v. Earle, SS 1123–35, See & 1199.
$ 1079. By comity of nations the existence of a foreign corporation will be recognized in other countries, and if not prejudicial to their rights or repugnant to their policy it will be permitted to transact business therein. In re Comstock, SS 1150–54.
$ 1080. The rule of comity by which corporations created in one state are permitted to make contracts and do business in another state, and to sue in the latter's courts, may be regulated by statute, by which such permission may be restricted or even entirely prohibited. Bank of Augusta v. Earle, SS 1123–35.
$ 1081, Conditions imposed on the right of foreign corporations to transact business in a state are valid, if not in contravention of the constitution and principles of natural justice. La Farette Ins. Co. v. French, SS 1140–45.
$ 1082. Though the domicile of a corporation is in the state which created it, it may nevertheless make contracts and acquire property in other states, unless forbidden so to do by its charter or the laws of such other state. Christian Union v. Yount, &$ 1136–39.
$ 1083. By interstate comity a corporation, unless distinctly forbidden, may exercise in any other state the powers granted to it in the state of its domicile. Ibid.
$ 1084, A corporation cannot migrate, but can exercise its authority in the foreign territory upon such conditions as may be prescribed by the law of the state, assent to which will be presumed from the act of the corporation doing business in such foreign territory. Railroad Co. v. Harris, SS 1166–74.
$ 1085. A foreign corporation is “ found” in any district wherein it does business according to law. Blackburn v. Selma, etc., R. Co., S$ 1179–86.
$ 1086. For the purposes of federal jurisdiction a corporation is regarded as if it were a citizen of the state where it was created, and no averment or proof as to the citizenship of its members elsewhere will be permitted. This presumption of law is conclusive. Railroad Co. v. Harris, SS 1166–74. See $ 1190.
$ 1087. A foreign corporation doing business in a state is suable in the courts of such state. Ibid.
$ 1088. A person injured in Nebraska, and resident therein at the time of the commencement of the suit, cannot bring suit in a federal court against an Iowa railway company which has built its road and filed its articles of incorporation in Nebraska, and thereby become a corporation in that state. The action must be in the state court of Nebraska. Stout u. Sioux City & Pac. R. Co., $S 1175–76.
$ 1089, Judgment against a foreign corporation, following service of process on its agent, is entitled to faith and credit in other states as a judgment against the corporation. La Fayette Ins. Co. v. French, SS 1140–45.
$ 1090. Judgment against a corporation by a wrong name is binding where there is no plea in abatement. Ibid.
$ 1091. A corporation can make no contracts and do no acts, either within or without the state that creates it, except those which are authorized by its charter, and those acts must be in such a manner and by such officers and agents as are described by the charter. Bank of Augusta v. Earle, SS 1123-35.
$ 1092, Authority to deal in bills of exchange includes foreign as well as domestic bills. A corporation as well as a natural person may purchase a bill of exchange or make a contract in a foreign state, but such contracts are not valid without the sanction of the foreign state, express or implied. Where there is no express law or constitutional provision prohibiting a foreign corporation from making a contract, governmental assent to such contract will be implied from that rule of comity which permits corporations to make contracts in foreign states without express permission by such states. Ibid.
§ 1093. The Alabama constitution being silent upon the subject, the repeal by the legislature of that state of a restrictive banking act indicates that the state banking policy is to throw the business open to the competition of foreign as well as domestic corporations. Ibid.
$ 1094. Banking is not a franchise in the sense that franchise includes the right to purchase bills of exchange, for if banking, including the purchase of such bills, is to be regarded as a franchise, no individual can purchase such a bill. Franchises are special privileges conferred by government upon individuals, and which do not belong to the citizens of the country generally of common right. Ibid. $ 1095. A franchise cannot be held without a grant from a government. Ibid.
$ 1096. The American and Foreign Christian Union and other such benevolent and charitable societies, created by New York and other states, are not prohibited by the laws of Illinois from taking lands in Illinois, by gift, devise or purchase. Christian Union v. Yount, SS 1136–39.
$ 1097. A condition imposed by the statute of Ohio with reference to foreign insurance corporations, that the agent who shall reside in Ohio and enter into contracts of insurance there in behalf of the foreign corporation, should also be deemed its agent to receive service of process in suits founded on such contracts, is not unreasonable and not in conflict with any principle of public law; nor is it objectionable as being an attempt improperly to extend the jurisdiction of the state of Ohio beyond its own limits to a person (corporation) in another state. La Fayette Ins. Co. v. French, SS 1140-45. See $ 1212.
$ 1098. If a premium note is made in Indiana by the agent of a foreign insurance corporation, and a policy be issued there, neither the agent nor the corporation having complied with the statute of Indiana regulating the transaction of business in Indiana by foreign insurance companies, held, that such note and policy are invalid, which fact would be a good defense to an action upon the note. Lamb v. Bowser, &$ 1146–49.
$ 1099. But where the policy and note are not made with the agent of the insurance compauy, but directly with the company itself, the agent being merely the instrument to receive the application for the insurance and the note, and forward them to the company, both the note and policy are valid contracts and not within the prohibition of the statute of Indiana regulating the transaction of business by foreign insurance companies in that state. Ibid.
$ 1100. If a policy issued by a company be binding, the premium note given therefor must also be held binding, the obligation of the two contracts being reciprocal. Ibid.
$ 1101. A statute of Oregon providing that “a foreign corporation, before transacting business in the state, must duly execute and acknowledge a power of attorney and cause the same to be recorded in the county clerk's office of each county where it has a resident agent,” prohibits the Bank of British Columbia from making any contract within the state of Oregon, without first complying with this requirement. A contract made without such compliance being first made is invalid, and cannot be the basis of a claim by the bank against the assignee in bankruptcy of the contracting party. In re Comstock, ss 1150-54.
$ 1102. A statute providing that foreign corporations, before transacting any business in the state enacting the statute, must appoint an attorney, and providing no penalty for violation of the statute, is mandatory, not directory, and acts done in violation of it are illegal and void. Ibid.
81103. Where a contract is made in a state by a foreign corporation which has not complied with the statutory requirements as to the transaction of business by such corporations in that state, the assignee in bankruptcy of the other contracting party is not estopped to show the invalidity of the contract because the bankrupt was a party to it. Ibid.
$ 1104. Where a foreign corporation, not having complied with the requirements of the state in which it seeks to do business, is in such state not even a corporation de facto, the doctrine of estoppel in pais will not be carried so far as to prevent the party who contracts with it from showing that it had not the power to do the particular act or contract, or that it was done in violation of a statute and ultra vires. Ibid.
$ 1105. A party to a contract (or his assignee in bankruptcy) made with a foreign corporation, in violation of a law of the state, is not estopped from showing that the contract is illegal and void. Ibid.
$ 1106. A statute of Oregon required foreign corporations, doing business in that state, to appoint a resident agent there. The Bank of British Columbia neglected to do so. Held, that a note and mortgage taken by that bank from a citizen of Oregon were illegal and void. Semple v. Bank of British Columbia, S$ 1155-61.
$ 1107. The wife of the mortgagor or maker of the note in such case is not estopped from denying the validity of the note and mortgage, by reason of the failure of the corporation to comply with the law. Ibid.
$ 1108. An act of the legislature of Oregon, relieving foreign banking corporations from the duty of making deposits in that state for the security of local creditors of such corporations, and from paying taxes on the same, held, not to relieve such corporations from the duty of appointing resident agents in Oregon before transacting business there. Ibid.
$ 1109. A decree of foreclosure in favor of a foreign corporation amounts to an adjudication of the right of such corporation to take the mortgage foreclosed. Ibid.
$ 1110. A decree in favor of a foreign corporation, not authorized to do business in Oregon, does not enable such corporation to buy at sheriff's sale under it, or to receive a conveyance of the property from the sheriff, and the foreign corporation purchasing at such sale takes no title. Ibid. $ 1111. Where a corporation created by New York is empowered by it to hold lands in
Pennsylvania, the right to do so depends upon the assent or permission, expressed or implied, of the latter state. Runyan.v. Coster, SS 1162–65.
§ 1112. Under the laws of Pennsylvania (Act of April 6, 1833), a foreign corporation may take and hold lands in that state subject to forfeiture to the state by proceedings in its behalf. Ibid.
$ 1113. Such right of forfeiture can be exercised only within the discretion of the state, and cannot be set up in defense in an ejectment suit. Ibid.
$ 1114. The acts of the Virginia legislature and the acts of congress, authorizing the Baltimore & Ohio Railroad Company, a corporation created by the laws of Maryland, to continue its road through Virginia and the District of Columbia, in the same manner and upon the same terms and liability as provided in its charter from the state of Maryland, did not create a new corporation, but were merely enabling acts permitting the corporation created by Maryland to continue its road through Virginia and the District of Columbia in the manner specified by them, and, as relating to responsibility for injuries to a passenger on the road, there is a unity of ownership throughout. Railroad Co. v. Harris, S: 1163–74.
$ 1113. Several states may, by competent legislation, unite in creating the same corporation or in binding several pre-existing corporations into a single one. Ibid.
$ 1116. One state may make a corporation of another state, as there organized and conducted, a corporation of its own quo ad hoc any property within its territorial jurisdiction. Ibid. See § 1222.
$ 1117. The responsibility for damages for injuries to passengers of a railroad company created by charter from one state and extending its road through other states, under mere enabling laws of the latter (by which no new corporation is created), is not changed by a condition on its tickets that “responsibility for safety of person or loss of baggage on our portion of the road is confined to the proprietors of that portion alone.” There is but one proprietor of each portion of road, namely, the company first created and made the subject of the subsequent enabling statutes. If several connecting railway companies issue a through ticket signed by one agent, such agent will be presumed to be the representative of all the companies, and the contract evidenced by such ticket is the joint contract of all such companies, on which they are jointly liable, unless the knowledge of a memorandum on the ticket restricting “responsibility for safety of person or loss of baggage of each portion of the road ”.
“to the proprietors of that portion alone,” and the assent of the passenger thereto, are clearly brought home to him. Ibid.
$ 1118. A statute of Nebraska providing that any railroad company which has been organized under the laws of Iowa, Kansas or Missouri, and which has built its railroad in Nebraska, and filed a copy of its articles of incorporation with the secretary of state, shall be “a legal corporation in this state, and entitled to all the rights, privileges and franchises of railroad companies organized under and in pursuance to the laws of the state of Nebraska," constituted an Iowa railway company which complied with these terms a domestic corporation of Nebraska with respect to all its transactions within that state. Stout v. Sioux City & Pac. R. Co., SS 1175–76.
$1119. Where a statute of Nebraska made an Iowa railroad company which built a road in Nebraska and filed articles of incorporation with the secretary of the state a corporation of Nebraska, held, that an agent of such railway company engaged on the extended line of its road in Nebraska was not an agent of the Iowa but of the Nebraska company, and that service of process upon such agent would be service upon the Nebraska and not upon the Iowa company. Ibid.
$ 1120. The stock of a Pennsylvania corporation was subscribed for by a Maryland corporation, which transferred to citizens of Pennsylvania enough shares to qualify them to act as directors of the Pennsylvania company, which preserved its nominal existence in Pennsylvinia, and made reports to the legislature as a Pennsylvania company, although its rolling stock was furnished by the Maryland company which operated its road. The profits were nominally divided between the companies. The plaintiff's patent was infringed by the use of certain cars upon the Pennsylvania company's road. Held, that the Pennsylvania corporation was liable for damages for such infringement, and could not successfully defend an action therefor in a state court in Pennsylvania by showing that the company really responsible was the Maryland corporation. York & Maryland Line Company v. Winans, SS 1177–78.
s 1121. When a foreign corporation is adopted by a state no new organization is necessary to make it suable in such state. Blackburn v. Sel etc., R. Co., SS 1179–36.
$ 1122. Appearance and answer of a foreign corporation waives its right to be sued only in the state which created it. Ibid. (NOTES. - See SS 1187-12 18.]
BANK OF AUGUSTA V. EARLE.
(13 Peters, 519-597. 1839.)
ERROR to U. S. Circuit Court, Southern District of Alabama.
STATEMENT OF Facts.--— These three cases involve the same principles, and have been brought before us by writs of error directed to the circuit court and southern district of Alabama. The first two have been fully argued by counsel, and the last submitted to the court upon the arguments offered in the other two. There are some shades of difference in the facts as stated in the different records, but none that can affect the decision. We proceed, therefore, to express our opinion on the first case argued, which was The Bank of Augusta v. Joseph B. Earle. The judgment in this case must decide the others.
The questions presented to the court arise upon a case stated in the circuit court in the following words: “ The defendant defends this action upon the following facts that are admitted by the plaintiffs: That plaintiffs are a corporation, incorporated by an act of the legislature of the state of Georgia, and have power usually conferred upon banking institutions, such as to purchase bills of exchange, etc. That the bill sued on was made and indorsed for the purpose of being discounted by Thomas M'Gran, the agent of said bank, who had funds of the plaintiffs in his hands for the purpose of purchasing bills, which funds were derived from bills and notes discounted in Georgia by said plaintiffs and payable in Mobile; and the said M'Gran, agent as aforesaid, did so discount and purchase the said bill sued on in the city of Mobile, state aforesaid, for the benefit of said bank and with their funds, and to remit said funds to the said plaintiffs. If the court shall say that the facts constitute a defense to this action, judgment will be given for the defendant, otherwise for plaintiffs, for the amount of the bill, damages, interest and cost; either party to have the right of appeal or writ of error to the supreme court upon this statement of facts and the judgment thereon."
Upon this statement of facts the court gave judgment for the defendant; being of opinion that a bank incorporated by the laws of Georgia, with a power among other things to purchase bills of exchange, could not lawfully exercise that power in the state of Alabama, and that the contract for this bill was therefore void, and did not bind the parties to the payment of the money.
§ 1123. A corporation cannot claim in a foreign state the “privileges and immunities” (including the right to make a contract) which its members as citizens might claim in such state.
It will at once be seen that the questions brought here for decision are of a very grave character, and they have received from the court an attentive examination. A multitude of corporations for various purposes have been chartered by the several states; a large portion of certain branches of business has been transacted by incorporated companies, or through their agency; and contracts to a very great amount have undoubtedly been made by different corporations out of the jurisdiction of the particular state by which they were created. In deciding the case before us, we in effect determine whether these numerous contracts are valid or not. And if, as has been argued at the bar, a corporation, from its nature and character, is incapable of making such contracts, or if they are inconsistent with the rights and sovereignty of the states in which they are made, they cannot be enforced in the courts of justice. Much of the