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Franklin Common Pleas.
corporation would be liable in damages or otherwise. The courts of that state hold that a contract which does not by express covenant or stipulation contained therein affect the personal liability of the corporation does not become subject to the statute even though the foreign corporation is otherwise subject to the registration statutes and has complied therewith. Catlin v. Schuppert, supra.
The Wisconsin decisions recognize the right of foreign corporations, although complying with registration laws, to still enter into the class of excepted contracts that may be interstate transactions, without being subject to the penalty of the statute.
The averment of the petition of sale to defendant "f. o. b. Kansas City, Mo.," is construed to evidence a sale for shipment. Tustin Fruit Ass'n v. Fruit Co. 6 Cal. Unrep. Cases 37 [53 Pac. €93, 697].
It is held that a contract for sale of fruit at "three cents per pound f. o. b. Haywards, is to be construed as showing that the price was to be paid or become due when the fruit was delivered to the carrier at Haywards." Blackwood v. Packing Co. 76 Cal. 212 [18 Pac. 248; 9 Am. St. 199].
In mercantile parlance, it means "free on board" and that the goods are delivered to the carrier at the place named free of drayage charges. Muskegon C. R. Co. v. Mfg. Co. 135 Pa. 132 [19 Atl. 1008].
In Dannemiller v. Kirkpatrick, 201 Pa. St. 218 [50 Atl. 928], it is held that:
"In, the absence of an agreement to the contrary, when a vendor sells goods to a vendee residing at a distant place, a delivery of the goods to a carrier for transportation is a delivery to the purchaser, and especially is this true when a bill of lading naming the purchaser as a consignee is transmitted to and received by the purchaser. The delivery to the carrier vests the title to the property in the purchaser, and the risks of transportation must be assumed by him."
The rule, however, does not obtain where the parties have otherwise stipulated.
The court further points out that if it be the intent of the parties that delivery is to be made at the destination, then deliv
Inter State Vaccine Co. v. Redman.
ery to carrier will not divest the title of the vendor, nor pass it to the purchaser, until it reaches the place of destination.
It may then become a question of where delivery is to be made and when the title is to pass.
If the facts are in dispute it is a question of law; if not in dispute it is then for the jury.
Our sales statute, Sec. 8426, covers this point.
On the facts alleged in the petition it would appear that delivery was at Kansas City, and hence title passed to defendant at Kansas City, Missouri.
It would thus appear to be an interstate transaction, an act of interstate commerce.
That a foreign corporation, though subject to registration under our foreign corporation regulation, whether registered or not, may nevertheless engage in interstate transactions and enforce them in this state, there seems no doubt. It may, therefore, sue and recover on interstate contracts, without being subject to our statutes.
Doing business in this state as contemplated by our statutes of registration comprehends business transactions that are subject to such laws.
Transactions that are not entered into by reason of and on account of owning and using part of the corporate property of such foreign corporation, such as an act of interstate commerce can not be subjected to the penalty of our laws.
The matter submitted being the demurrer to the first defense our consideration is to be confined to the facts alleged therein.
Defendant avers that the contract of sale was entered into in Ohio, and that both parties intended the same to be carried out and completed in this state. It is averred that at the time of making the contract plaintiff was not engaged in interstate
The averment that the contract of sale was entered into in Ohio, is a conclusion.
The first defense does not state sufficient facts to show the locus of the agreement, nor where delivery was to be made, nor any facts showing agreement that delivery f. o. b. Kansas City was not the place where title passed.
Franklin Common Pleas.
Nor does averment of the fact that plaintiff owns and uses part of its working capital in Ohio, and that it was doing business in this state, go to the claim of plaintiff that the contract of sale was f. o. b. Kansas City, Missouri.
Demurrer operates only upon admitted facts. But it will search the record and notice specific admissions by the pleader, which are inconsistent with facts pleaded as a separate defense.
For example in the second paragraph of the second defense, defendant states:
"further answer defendant admits that on or about the 10th day of July, 1915, under an oral contract of sale plaintiff sold to this defendant f. o. b., Kansas City, Missouri, one car load of hogs consisting of 187 in number, for which the defendant agreed to pay the sum of eight cents per pound within four months from date of shipment."
Then follows an an unauthorized improper form of denial : "And further answering said defendant denies each and every allegation in said petition contained not herein specifically admitted to be true."
The above admission is a complete admission of plaintiff's claim in its petition, and is wholly inconsistent with the first defense, as well as the facts stated in the second cause of action. Defendant can not make the claim which he seeks to present without a general denial.
In the second cause of action in defendant's cross-petition there is pleaded an alleged contract of sale of hogs on a verbal contract for the purpose of feeding and fattening them for market, to be paid for when matured and sold, in which contract plaintiff verbally warranted the hogs to be clean, thrifty native stock and straight feeders, and that they had been vaccinated and were immune from cholera, etc. He then pleads a breach of contract of warranty and seeks recovery of damages.
If defendant claims the contract set up by him was the real contract-the whole contract-then he should not have admitted the contract alleged by plaintiff, his qualified denial not serving any purpose whatever.
If defendant does claim the contract set up in his second cause of action to have been the contract made, he should have
Inter State Vaccine Co. v. Redman.
entered a general denial under which he could claim that the contract pleaded by plaintiff was not the contract, and which would enable him to set up the complete contract, as claimed in the second cause, and to show that the amount claimed by plaintiff was not due.
The first defense states that the
"said contract described in said petition was entered into and executed in the state of Ohio," etc.
It fails to state facts therein showing it not to be a contract of sale f. o. b. Kansas City, Missouri, as alleged in the petition. A claim that the contract was entered into in Ohio is in the nature of an argumentative denial.
Each defense must be complete in and of itself. The defense demurred to must set out what defendant claims the real, complete contract to have been. There should be neither a qualified nor argumentative denial.
Defendant either did, or did not enter into the contract f. o. b. Kansas City, Missouri.
His defense in which he seeks to state facts to show that the contract actually made is subject to the penalty of Sec. 5508 must not only be full and complete in itself, but it must disclose a contract made by plaintiff while doing business in this state, and that it was not an interstate transaction.
With the qualified admission of the contract alleged by the petition, and an unauthorized form of denial under which the court will not undertake to ascertain precisely what is admitted and what is denied the defense fails to withstand the attack by demurrer.
Suppose it be assumed that it is an Ohio contract, and that it was made prior to actual compliance by plaintiff with Secs. 179 et seq., does it become subject to a penalty under Sec. 5508, which provides that:
"Every contract made by or on behalf of any such foreign. corporation, affecting the liability thereof, or relating to its property within this state, before it shall have complied with the provisions of section one hundred and seventy-eight of the General Code, shall be wholly void on its behalf and on behalf of its assigns, but shall be enforceable against it or them."
Franklin Common Pleas.
The intent of the statute, no doubt, was to penalize a foreign corporation by rendering void a contract made by it without compliance with Sec. 178, thus preventing it from bringing action thereon.
Every contract made on its behalf, affecting the liability thereof shall be wholly void on its behalf.
Any contract made by the corporation in its own behalf upon which it might have occasion to sue, to vindicate its rights would have relation to the liability of the defendant, not its
Any contract on which a citizen of Ohio would have occasion to bring suit against the corporation would affect the liability thereof.
It is difficult to perceive how any contract may be invalidated by the statute which affects the liability of a corporation, unless it be a contract which by its full terms may give right to the corporation to bring action thereon against a citizen of Ohio, and under which contract defendant may have the right to counter claim for breach.
In such case the contract affects the liability of both the Ohio citizen and the foreign corporation.
The contract as alleged in plaintiff's petition does not affect its liability. It is not subject to the penalty of Sec. 5508, and, therefore, is not void.
But, if on the other hand, the contract is not as claimed by plaintiff, but is that claimed by defendant, not in his first defense, but in his second cause of action, where a liability is alleged against plaintiff upon an alleged contract of warranty, it might then be claimed that there is a contract affecting the liability of the foreign corporation.
As similar statute in Wisconsin was construed to exclude all unilateral contracts, like bills, notes, and contracts fully executed outside that state upon which there remains only an obligation of payment. Catlin v. Schuppert, supra.
"It is contended," says the court, "that the words: 'affecting the personal liability thereof' include all contracts for the breach of which the corporation would be liable in damages or otherwise. This construction is not permissible," etc.