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business in the State except while it maintains one or more known places of business, and has an authorized agent at the same upon whom process may be served. Art. XII, Sec. 11. It has been held, however, that this provision is not self-executing. Railway Co. v. Fire Assn., 60 Ark. 325. Legislation has been enacted carrying the Constitution into effect. The present statute, passed in 1907, provides for the imposition of a fine for violation of the law and further

"As an additional penalty, any foreign corporation which shall fail or refuse to file its articles of incorporation or certificate, as aforesaid, cannot make any contract in this State which can be enforced by it, either in law or in equity, and the complying with the provisions of this act after suit is instituted shall in no way validate said contract." 824r Kirby's Supp. Dig. 1911.

Sec.

Under this provision, it is held that a contract made within the State by an unregistered foreign corporation is not void, but in order to be enforceable the corporation must comply with the statute before suit is brought; it is not sufficient to comply after suit has been brought. Waxahachie Medicine Co. v. Daly, 183 S. W. 741.5

California.

The statutes of this State require a corporation to file with the Secretary of State an instrument designating an agent upon whom process may be served. Sec. 405, Civ. Code. For failure to comply with Sec. 405, it is provided: "Every corporation which complies with the provisions of this chapter is thereafter entitled to the benefit of the laws of this State, limiting the time for the commencement of civil actions, but no corporation not created by or under the laws of this State is entitled to the benefit thereof, nor can any such corporation maintain or defend any action or proceeding in any court of this State until the corporation has complied with the provisions of the preceding sections." Sec. 406, Iď.

Savings & Loan Co., 103 Tenn. 272, where it was held that a mortgage taken by a foreign corporation before compliance with the statute of Tennessee was void, and that a subsequent mortgage taken after compliance, for the secret purpose of validating the first, but under pretense of making concessions to

the mortgagor was likewise void.

5 Under the former statute passed in 1901, it was held that a contract made by a non-complying corporation was not void, and a corporation could comply during suit. Woolfort v. Dixie Cotton Oil Co., 77 Ark. 203, and cases cited.

From the above provision, it would seem that the corporation could comply with Sec. 405 at any time before the trial of a suit. The statute further requires the foreign corporation to file in the office of the Secretary of State a certified copy of its articles of incorporation. Sec. 408, id.; Sec. 1 of Ch. 190, Laws of 1915. For failure so to do, a penalty is provided, and also the following:

"In addition to which penalty, no foreign corporation which shall fail to comply with Sections 408 and 409 of this code can maintain any suit or action in any of the courts of this State, or acquire or convey any legal title to any real property within this State, until it has complied Iwith said sections." Sec. 410, Civ. Code.

Before the enactment of the corporation license tax law of 1915, it was held that a corporation could file the certified copy of its articles after it has begun suit and then make the proper allegations to that effect in an amended complaint. The Court construed the provision strictly and held that it did not prohibit the commencement of an action by a foreign corporation, but merely its maintenance. Ward Land & Stock Co. v. Mapes, 147 Cal. 747, 752-753. It was also held that a foreign corporation which had not complied with Sec. 408 could nevertheless defend an action brought against it in the courts of the State. American DeForest, etc., Co. v. Superior Court, 153 Cal. 533.

Whether the Corporation License Tax Law (Ch. 190, Laws of 1915), has made any change in the law of California on this subject is not clear. The statute applies both to domestic and foreign corporations, but we are concerned only with its application to the latter. Section 1 of the Act contains the same requirements as Section 408, Civ. Code. Section 3 provides as follows:

"No corporation heretofore or hereafter incorporated under the laws of this State, or of any other State, territory, or foreign country, shall do or attempt to do any intrastate business within this State, by virtue of its charter, or certificate of incorporation, without a State license therefor."

Section 4 requires corporations to procure an annual license and to pay a license tax. Sections 7 and 10 provide for the forfeiture of the right of all foreign corpora

tions to do intrastate business in the State, which fail to pay the license tax and penalties by six o'clock p. m. of the Saturday preceding the first Monday in March. Section 12 provides, in part:

"It shall be unlawful for any corporation, either domestic or foreign, which has not paid the license tax, as in this act prescribed, to exercise the powers of such corporation, or to transact any intrastate business in this State after six o'clock p. m. of the Saturday preceding the first Monday in March next following the delinquency."

The balance of the section imposes a penalty for transacting intrastate business after such forfeiture. The statute also provides for relief against such forfeiture by making payment in full. The act does not, in terms, impose any penalty upon a foreign corporation which fails to register, and which thereupon does business in the State without a license. The forfeiture provided for by the act applies only to such foreign corporations as have acquired the right to do business in the State, and are entered upon the record in the Secretary of State's office.

While the quotation from Section 12 above purports to make it unlawful for a non-registered and unlicensed foreign corporation to do business in the State, yet the subsequent part of the section which imposes penalties applies only to foreign corporations which had acquired the right to do business but had forfeited the same. The act is poorly drawn and probably does not carry out, in full, the intention of its framers. On the one hand, it might be urged that a contract made by a non-registered and nonlicensed foreign corporation should be void, since otherwise there would be no penalty or legal result attaching to such failure. As against this, however, it might be argued that the courts are ordinarily slow to declare forfeitures of contract rights. (See Model Heating Co. v. Magarity, 25 Del. 459, and Dunlop v. Mercer, 156 Fed. Rep. 545), and that such a legal result will not be lightly implied. It might also be said that the inhibition of Section 12 applies only by its terms to the transacting of business after the delinquency in payment of the tax. There is no declaration

in the act making it unlawful to transact business during the period between the time when a license should be procured and the time which is designated as the beginning of the delinquency in the payment of the tax. Furthermore, if the act was intended to reverse the settled rule in the State theretofore existing, it would seem that the intent should have been manifested in unmistakable language, and that therefore a court would deem the prior rule to be still existent; this is the writer's view of the matter. Colorado.

In this State, the statutes provide that every foreign corporation now or hereafter doing business in the State shall file a copy of its charter with the Secretary of State. Sec. 916 Courtright's Stat., 1914. And it is further provided that foreign corporations before they are authorized or permitted to do business within the State must file a certificate with the Secretary of State, and with the Recorder of Deeds in the county in which the business is to be carried on, designating its principal place of business in the State and its agent for service of process. Sec. 916. Upon filing the articles of incorporation in the office of the Secretary of State a fee is payable, based upon the amount of capital stock represented by the amount of property located and business transacted in the State. Sec. 904, id. The same section provides that no foreign corporation

"shall have or exercise any corporate powers or hold, or acquire, any real or personal property, franchises, rights or privileges, or be permitted to do any business or prosecute or defend any suit in this State until the said fee shall have been paid."

Sec. 910 provides further:

"No corporation, joint stock company or association, incorporated by or under any general or special law of this State, or by or under any general or special law of any foreign State or kingdom or of any State or territory of the United States, beyond the limits of this statute, shall exercise any corporate powers or acquire or hold any real or personal property, or any franchise, rights or privileges, or do any business or prosecute or defend in any suit in this State until it shall have received from the Secretary of this State a certificate setting forth that full payment has been made by such corporation, joint stock company or asso

ciation, of all fees and taxes prescribed by law to be paid to the Secretary of State. . . .'

"6

Under these provisions the courts of the State are denied to corporations who default in paying the fees prescribed to be paid to the secretary.

No money penalties are prescribed for failure to qualify, but the officers, agents and stockholders are personally liable on contracts made within the State during the period of default. Sec. 919 id. The contracts are not void. Insurance Co. v. Allis Co., 11 Colo. App. 264, 269; Fritts v. Palmer, 132 U. S. 282. These cases were decided before the enactment of the provisions referred to above relating to the inability of corporations to maintain suits if in default in paying fees, but it would seem that these provisions did not change the law to the extent of invalidating contracts.'

Connecticut.

In this State, it is provided as follows:

"Every officer of a foreign corporation transacting business in this State which fails to comply with the requirements of sections 82 and 83 of this act, and every person who transacts business in this State as the agent of such delinquent corporation, shall be fined not more than one thousand dollars; but such failure shall not affect the validity of any contract by or with such corporation. The Secretary of the State shall report such failure to the Attorney-General, who shall thereupon institute proceedings against such corporation to restrain its further prosecution of business in this State." Public Acts of 1903, Ch. 194, Sec. 85.

Inasmuch as there is an express provision that such contracts are valid, no discussion is necessary.

Delaware.

The Constitution of Delaware contains a prohibition against the doing of business by a foreign corporation unless it has an authorized agent in the State upon whom process may be served. Art. IX, Sec. 5. The Foreign Corporation Statute contains an express prohibition against the

6 Secs. 5601 and 5603A, Courtright's Stat., provide for forfeiture of franchise to do business in case of failure to pay the annual license tax.

7 These provisions are referred to in Butler Bros. Shoe Co. v. U. S. Rubber Co., 156 U. S. 1, and held inapplicable to interstate com

merce.

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