Armour Packing Co. v. Vinegar Bend Lumber Co. , 149 Ala. 205 ( 1906 )

TYSON, C. J. —

The right of foreign corporations to do business in this state rests upon comity, and not upon any contractual obligations. It Avas, therefore1, entirely competent for. the constitutional convention, in ordaining the present Constitution, to impose upon foreign corporations doing business in this state at the date of its adoption the additional requirement of “filing with the secretary of state a certified copy of its articles of incorporation.”- — Section 232, Const. 1901, This proposition, however, does not seem to be controverted. But the contention is that this requirement does not apX>ly to corporations which had complied in all respects Avitli tlie requirements of the prior Constitution and statutes and Avere doing business in the state when the present one Aims adopted; that the Avords “no foreign corpoiation shall do any business in this state,” etc., haAre reference only to foreign corporations which began to do business after the adoption of the Constitution. The insistence is clearly without merit; and this holding does not give, as seems to be contended, a retroactive effect to the clause.

A foreign corporation having a place of business in this state .and engaged in doing business at the date of the adoption of the Constitution, Avhich continues to do business aftenvards, is doing business as much so as if the same corporation had-not entered the state until after the Constitution Avas adopted and then began to do business. The clause of the Constitution under consideration is prohibitory, and needs no legislation to carry the mere prohibition into effect or to give it force. It is therefore' unlawful for a foreign corporation to transact any business here without a compliance Avith its -conditions, and all contracts into Avhich it may enter, while executory, requiring the aid of the courts to enforce them, are void. — Sullivan v. Vernon, 121 Ala. 393, 25 South. 600, and authorities there cited. See, also, Am. U. Tel, Co, v. W. U. Tel. Co., 67 Ala. 26, 42 Am. Rep. 90. It is wholly unimportant that the prohibitory clause provides no penalty, for its violation, or that it omits to declare that all contracts entered into by the coiporation in violation of it shall be void. — W. U. Tel. Co. v. Young, 138 Ala. 240, 36 South. 374, and cases there cited.

The averments of the plea, also show that defendant, at different times, made payments to plaintiff on the account- for the goods sold to it, without directing their application, aggregating a sum in excess of the value of those which Avere shipped to a point in the state of Mississippi, leaving the balance for .which a recovery is sought, for the goods sold and delivered by plaintiff from its place of business in this state to the defendant at its place of business, AAdiich Avas also in this state. If it be conceded that the constitutional provision has no application to t-lie sales of those goods which wove shipped to a point in Mississippi, because it involved an interstate commerce transaction, a question not necessary to he decided, the payments made must be applied to those sales, no matter whether the sales were antrior or subsequent to the sale of the goods delivered in Ubis state. The rule is that the application of paymets will he to such debts as the debtor is legally bound to pay. The creditor has no right to apply them to the extinguishment of illegal or unenforceable demands without tlie debtor’s consent.- — Royston v. May, 71 Ala. 400; 2 Am. & Eng. Ency. Law (2d Ed.) p. 442, and notes. Of course, if all the sales of the goods made by plaintiff involved the doing of business in this state in violation of the constitutional provision, no recovery could he had, and the plea ivas therefore unobjectionable. There is clearly no error in the record of which the appellant can complain.

Affirmed.

Haralson, Simpson, and Denson, JJ., concur.