tion which has complied with the law has all the rights of a similar domestic corporation, it would seem to follow that, conversely, it can have no greater rights. It must, like them, obey the local laws;75 for example, laws requiring books to be kept at its office and open to inspection.76 And it is like them. subject to taxation." And if it fails to obey state laws, it may by quo warranto be ousted from the exercise of corporate privileges within the State.78

Since a State has the power to set terms on the right of a foreign corporation to enjoy the benefit of its laws it would seem to be clear that when it has set terms, a corporation which has not complied cannot avail itself of privileges under state corporation laws,79 nor can it obtain a mandamus to the Secretary of State to compel the issue to it of a license.80 Nor can it invoke the aid of court to prevent interference with it.81 In short, the effect of compliance with the statute is to place. the foreign corporation with regard to its rights and duties

75 London, Paris & Amer. Bank v. Aronstein, 117 Fed. 601; Glen Falls Portland Cement Co. v. Trav. Ins. Co., 42 N. Y. S. 285; 11 App. Div. 411; Hiskey v. Pacific S. S. L. & B. Co., (Utah) 76 Pac. 20; Floyd v. Nat'l Loan & Inv. Co., 49 W. Va. 327, 38 S. E. 653, 87 A. S. R. 805, 54 L. R. A.

536.

76 Recknagel v. Empire Self Lighting Oil Lamp Co., 52 N. Y. S. 635, 24 Misc. 193; Cox v. Island Mining Co., 73 N. Y. S. 69, 65 App. Div. 508; People v. Knickerbocker Trust Co., 77 N. Y. S. 1000, 38 Misc. 446; People v. Montreal & Boston Copper Co., 81 N. Y. S. 974, 40 Misc. 282.

77 Erie Ry. Co. v. Pa., 21 Wall. 492, 22 L. ed. 595; People v. Feitner, 65 N. Y. S. 518, 31 Misc. 553; People v. Feitner, 70 N. Y. S. 836, 60 App. Div. 628; People v. Comrs. of Taxes, 74 N. Y. S. 485, 39 Misc. 282.

78 State v. Standard Oil Co., 61 Neb. 28, 84 N. W. 413, 87 A. S. R. 449. 79 Rio Grande W. Ry. Co. v. Telluride Power Transmission Co., 23 Utah, 22, 63 Pac. 995, but see Kelley v. Rice-Blake Lumber Co., 167 Mass. 28, 44 N. E. 1090. In that case the Supreme Judicial Court held that a corporation could file a petition in insolvency under Massachusetts law though it had not complied with the statutes on foreign corporations. The ground taken by the court seems to be that as the statute made the officers subject to a penalty for failure to comply, that penalty was exclusive.

80 English & Scot.-Am. Mtg. & Inv. Co. v. Hardy, 93 Tex. 289, 55 S. W. 169. 81 Elec. News & Money Trans. Co. v. Perry, 75 Fed. 898.

in the exact position it would occupy if the statute had not been passed, and it were left to the common law.

§ 212. Effect of non-compliance with the statute.

An interesting question is presented when a corporation which has not complied with the law does business within the State. Do any rights arise as a result of those acts? On this point there is a conflict of authority. There is no doubt that a State might ipsis verbis say an act which would complete a contract if performed by an individual or a domestic corporation, or for his or its benefit, shall not complete a contract, if the party performing or to be benefited is a foreign corporation. But the laws regulating the business of foreign corporations are not usually so explicitly framed. They do not in terms change the common law as to the making of contracts, or the creation of rights. It becomes necessary, therefore, to interpret them, and to determine whether their effect is to make the contract void or merely to bar remedy on it.

On the one side it is urged that the power of the corporation to contract is undoubted; that the statute is in derogation of common-law rights, and should be strictly interpreted; and that the penalty provided in the act for non-compliance (usually a fine) should be exclusive. "Its purpose was not to avoid contracts; but to provide for an effective supervision and control of the business proposed to be carried on here by foreign corporations. It provided no penalty, in the event of a non-compliance, other than the suspension of civil remedies. Such, and such only, were the consequences of the violation of the statute and none others will be implied as intended by the legislature. The offense aimed at was only an offense because declared by the statute to be so, and its particular proportion and consequences were defined therein. The concluding clause of section 15, which prescribed the consequences to follow upon a failure to comply with the statute, qualified the absolute nature of the earlier prohibitory declaration and, unless it were given that effect, it could have no practical

operation. "82 This represents the prevailing, and it would seem the better, doctrine.

But it is strongly and forcibly urged on the other side that since the corporation can acquire a right by its acts done in the State only by consent of the laws of the State, and since it is admitted to do business in the State only by comity, it can acquire no legal rights in the State through an act done in violation of the laws of the State. "The [foreign] bank then has no power to make a contract within this State without its permission or assent. If the State is silent on the subject, by the comity of nations, its permission is presumed, unless it would be contrary to its policy or interest. But the State has spoken on the subject and given its consent to the transaction of business within its jurisdiction by the bank, not absolutely, but upon a condition or a limitation. . . . It follows, of course, from these premises, that the bank had no power to contract in the State until it had complied with the terms upon which the permission to do business was granted. It was required to perform the condition before it transacted business. This act, being mandatory, is therefore a prohibition against the transaction of business by the bank in this State without first complying with its terms, and as a necessary consequence all acts done in violation of it are illegal and void.” 83

This difference of opinion is partly due to some special provisions of the statutes in question; 84 but statutory differences are not sufficient to account for the conflict of decision. It must be recognized that courts have taken opposite views on the general question.

It will be noticed that under the retaliatory act in force in several States, a contract made before compliance will be unenforceable, no matter what the view held by the courts of

82 Gray, J., in Neuchatel Asphalte Co. v. New York, 155 N. Y. 373, 377, 49 N. E. 1043.

83 Deady, J., in In re Comstock, 3 Sawyer, 218, Fed. Cas. No. 3077. 84 See e. g. Northwestern M. L. I. Co. v. Overholt, 4 Dill. 287, Fed. Cas. No. 10338; C. B. Rogers & Co. v. Simmons, 155 Mass. 259, 29 N. E. 580.

the State, if by the courts of the State of charter that view is held.85

§ 213. Authorities holding the transaction valid.

The weight of authority supports the view that contracts made by the foreign corporation within the State before compliance with the statute are not void, and that suit may be brought upon them either by the other party or (after compliance, if that is, as often happens, made a condition of suing) by the corporation.86

In accordance with this doctrine, it is held that in spite of noncompliance with the statute suit may be brought on the contract in the courts of another State, 87 or in the Federal courts.88

85 Wolf v. Lancaster, (N. J. L.) 56 Atl. 172.

86 Northwestern M. L. I. Co. v. Overholt, 4 Dill. 287, Fed. Cas. No. 10338; Goddard v. Crefield Mills, 75 Fed. 818; Sullivan v. Beck, 79 Fed. 200; JarvisConklin M. T. Co. v. Willhoit, 84 Fed. 514; Sherwood v. Alvis, 83 Ala. 115, 3 So. 307, 3 A. S. R. 695; Boyington v. Van Etten, 62 Ark. 63, 35 S. W. 622 (semble); Sutherland-Innes Co. v. Chaney, (Ark.) 80 S. W. 152; Kindel v. Beck & P. L. Co., 19 Colo. 310, 35 Pac. 538, 24 L. R. A. 311; Rockford Ins. Co. v. Rogers, 9 Colo. App. 121, 47 Pac. 848; Helvatia S. F. I. Co. v. Edward P. Allis Co., 11 Col. App. 264, 53 Pac. 242; Watertown F. I. Co. v. Rust, 41 Ill. 85, 30 N. E. 772; Security S. & L. Assoc. v. Elbert, 153 Ind. 198, 54 N. E. 753; North Mercer N. G. Co. v. Smith, 27 Ind. App. 472, 61 N. E. 10; State v. American Book Co., (Kan.) 76 Pac. 411; C. B. Rogers & Co. v. Simmons, 155 Mass. 259, 29 N. E. 580; Enterprise Brewing Co. v. Grime, 173 Mass. 252, 53 N. E. 855; People v. Hawkins, 106 Mich. 479, 64 N. W. 736 (semble); Hart v. Livermore F. & M. Co., 72 Miss. 809, 17 So. 769; Columbus Ins. Co. v. Walsh, 18 Mo. 229; Chicago, M. & L. Co. v. Sims, (Mo. App.) 74 S. W. 128; King v. National M. & E. Co., 4 Mont. 1, 1 Pac. 727 (changed by express provision of statute, Powder R. C. Co. v. Comrs., 9 Mont. 145, 22 Pac. 383; Neuchatel Asphalte Co. v. New York, 155 N. Y. 373, 49 N. E. 1043 (superseded by statute, see ante, § 173); Union M. L. I. Co. v. McMillen, 24 Oh. S. 67; Wright v. Lee, 2 S. D. 596, 51 N. W. 706; Dearborn Foundry Co. v. Augustine, 5 Wash. 67, 31 Pac. 327; Huttig Bros. Mfg. Co. v. Denny Hotel Co., 6 Wash. 122, 32 Pac. 1073; Edison G. E. Co. v. Canadian P. N. Co., 8 Wash. 370, 36 Pac. 260, 24 L. R. A. 315, 40 A. S. R. 910; Whitman Agricultural Co. v. Strand, 8 Wash. 647, 36 Pac. 682; La France F. E. Co. v. Mt. Vernon, 9 Wash. 142, 37 Pac. 287, 43 A. S. R. 827; Toledo T. & L. Co. v. Thomas, 33 W. Va. 566, 11 S. E. 37, 25 A. S. R. 925. 87 Allegheny Co. v. Allen, (N. J. L.) 55 Atl. 724.

88 Sullivan v. Beck, 79 Fed. 200.

The same doctrine is held as to other transactions. Thus mortgage or trust deeds taken by corporations before complying with the statutes are not void; 89 and on subsequent compliance with the statute are good as from the date of making.90

The same holds true of other securities taken by a corporation.91 So titles to land acquired by foreign corporations by purchase are valid; 92 and titles given on foreclosure of mortgages to foreign corporations are likewise valid.93

§ 214. Authorities holding the transaction void.

On the other hand, there is much respectable authority to the effect that the acts of the corporation give rise to no rights, even as against the corporation, when such acts were the making of contracts 94 or the taking of a mortgage.95 In such

89 Lauter v. Jarvis-Conklin Mtg. Trust Co., 85 Fed. 894; Miller v. Williams, 27 Colo. 34, 59 Pac. 740 (semble); Spinney v. Miller, 114 Iowa, 210, 86 N. W. 317, 89 A. S. R. 351 (semble); Mutual Benefit Life Ins. Co. v. Winne, 20 Mont. 20, 49 Pac. 446.

90 Guarantee & Trust Co. v. Jones, 103 Tenn. 245, 58 S. W. 219.

91 Lauter v. Jarvis-Conklin Mtg. Trust Co., 85 Fed. 894; Hart v. Livermore Foundry & Mach. Co., 72 Miss. 809, 17 So. 769.

92 Chattanooga R. & C. R. R. v. Evans, 66 Fed. 809. This is so though the officers of the corporation are subject to penalties for taking title. Middis v. Kenney, (Mo.) 75 S. W. 633.

93 Gamble v. Caldwell, 98 Ala. 577, 12 So. 424; Shahan v. Tethero, 114 Ala. 404, 21 So. 951; Electric Lighting Co. v. Rust, 117 Ala. 680, 23 So. 751; Miller v. Gates, 22 Mont. 305, 56 Pac. 356.

94 In re Comstock, 3 Sawy. 218, Fed. Cas. No. 3077; Semple v. Bank of British Columbia, 5 Sawy. 88, Fed. Cas. No. 12659; McCanna & Fraser Co. v. Citizens' Trust & Surety Co., 76 Fed, 420, and note in 24 C. C. A. 13; Oakland Sugar Mill Co. v. Fred W. Wolf Co., 118 Fed. 239 (semble); Rough v. Breitung, 117 Mich. 48, 75 N. W. 147; Hoskins v. Rochester Sav. & Loan Ass., (Mich.) 95 N. W. 566; Henni v. Fidelity Building & Loan Ass., 61 Neb. 744, 86 N. W. 475, 87 A. S. R. 519; Bank of British Columbia v. Page, 6 Ore. 431; Thorne v. T. Ins. Co., 80 Pa. 15; 21 A. R. 89; Mutual B. L. I. Co. v. Bales, 92 Pa. 352; Phoenix S. M.

95 Illinois Bldg. & Loan Ass. v. Walker, (Tenn. Ch. App.) 42 S. W. 191; U. S. Nat'l Bldg. & Loan Ass. v. Cannon, 99 Tenn. 344, 41 S. W. 1054. As the mortgage was regarded as wholly void and of no effect, a bill would not lie in Tennessee to cancel such mortgage as a cloud on title. N. Y. Nat'l Bldg. & Loan Ass. v. Cannon, 99 Tenn. 344, 41 S. W. 1054.