Despres, Bridges & Noel v. Zierleyn , 163 Mich. 399 ( 1910 )

Bird, C. J.

Plaintiff brought this suit in assumpsit, against the defendants, to recover upon a promissory note and an open account. The jury awarded plaintiff the full amount of its claim, and the defendants assign error.

The plaintiff is a foreign corporation and is engaged in the wholesale jewelry business in the city of Chicago. The defendants are retail dealers, doing business in the city of Grand Rapids, in this State. The defendants have been customers of the plaintiff for several years. Plaintiff’s usual method of calling on its customers in Michigan, including the defendants, was for its agents to carry their stock in trunks and to allow their customers to select therefrom such goods as they desired, and deliver them from the trunks. In case the customers desired any goods not carried in the trunks, their orders were taken and forwarded to the Chicago house, and the goods were sent from there direct to the customers. At the time suit was begun, defendants were owing plaintiff for 28 separate invoices of goods, aggregating the sum of $473.19. These invoices were furnished to the defendants between the 10th day of July and the 25th day of November, 1907, and it was claimed by plaintiff that all of the invoices, save one of $360.79, were mail orders. On February 17, 1908, a 30-day promissory note of $148.28 was given by the defendants to apply on the invoices. When the note became due, suit was begun on it and on the open account. A bill of particulars was filed showing the said invoices and the date of each item.

The defense made to this action was that the plaintiff was a foreign corporation and that in disposing of these goods it was doing business within the State of Michigan in violation of Act No. 34, Pub. Acts 1903, which required foreign corporations, as a condition precedent to maintaining any >action in this State, upon any contract, to file its articles of association with the secretary of State and pay its franchise fee. And also that the plaintiff was doing business in violation of Act No. 310, Public Acts 1907, which superseded Act No. 34 and declared void all contracts of a foreign corporation which were made prior to a compliance therewith. The jury found for the plaintiff in the sum of $473.19; the same being the amount of its entire claim.

Most of the assignments of error are based upon the following instructions to the jury:

“ I instruct you that you may give a verdict for all of the sales and amounts in the bill of particulars found to be due up to September 28, 1907, which plaintiff claims amounts to $412.81, and I do not recall that the items of that bill of particulars were disputed, but that is a question of fact for you to determine. Now, after that date, .September 28th, there were a few other sales; little items of |2, $3, $5, and $9, up to the last of November, amounting to some $60.38, that they would be entitled to recover for if they were orders sent to Chicago from home and the orders filled by sending the goods back from Chicago. That is what is called interstate commerce.”

The court was right in charging the jury that the plaintiff would be entitled to recover for all goods that were ordered from the Chicago house, and sent from there to the defendants at Grand Rapids. That was clearly interstate commerce. Coit & Co. v. Sutton, 102 Mich. 324 (60 N. W. 690, 25 L. R. A. 819).

The court held that the balance of the bill, $412.81, which was contracted while Act No. 34 was in effect, was in violation of that act, but that a recovery could now be had because that act had been repealed and ceased to have any effect on the 28th day of September, 1907. We agree with the trial court in his view of the law that selling and delivering goods from trunks in the manner disclosed in this case was not interstate commerce. The selling of goods, as conducted by the plaintiff, was not the doing of a single act of business by a foreign corporation in the domestic State, because plaintiff was not only selling goods to defendants, but to other customers, and not once but several times a year. It was not the case of a foreign corporation shipping goods in an original package to the domestic State, because these goods were brought into the State in bulk, to be sold by its agents, in such quantities as the purchaser desired. It was not the case of a sale of goods by sample, in the domestic State, by a foreign corporation, through itinerant salesmen, because the goods were not only sold, but were delivered at the same time. It was not the case of a foreign corporation placing its goods in the hands of a local merchant, to be sold on commission; but it was a case of a foreign corporation coming into this State, by its agents, who brought with them a small stock of goods, with the expectation that their customers would purchase them. The goods were brought into the State in bulk and became a part of the mass of the property of this State as soon as they arrived and were offered for sale. The exhibition of them, the offer to sell, the sale, and the delivery of the goods, all took place within this State. Tested by the rules by which it is usually determined whether commerce is interstate, none of them brings plaintiff’s methods of selling goods within the protection of interstate commerce. Emert v. Missouri, 156 U. S. 296 (15 Sup. Ct. 367); City of Muskegon v. Hanes, 149 Mich. 460 (112 N. W. 1077); People v. Smith, 147 Mich. 391 (110 N. W. 1102); City of Muskegon v. Zeeryp, 134 Mich. 181 (96 N. W. 502).

Was plaintiff entitled to recover for goods sold in violation of Act No. 34, after that act was repealed? This depends upon the construction of the act. Act No. 34, Pub. Acts 1903, provided in part:

“No foreign corporation, subject to the provisions of this act, shall maintain any action in this State, upon any contract made by it in this State, after the taking effect of this act, until it shall have fully complied with the requirements of this act, and procured a certificate to that effect from the secretary of State.”

Act No. 310, Pub. Acts 1907, provides, in part, as follows:

“No foreign corporation subject to the provisions of this act shall be capable of making a valid contract in this State until it shall have fully complied with the requirements of this act, and at the time hold an unrevoked certificate to that effect from the secretary of State.”

The effect of Act No. 34 upon contracts made in violation thereof was considered in Hastings Industrial Co. v. Moran, 143 Mich. 679 (107 N. W. 706), and Neyens v. Worthington, 150 Mich. 580 (114 N. W. 404, 18 L. R. A. [ N. S. ] 142), and it is held in those cases that the contract was not void, but the right of enforcement was suspended until compliance with the act. If we say, as we must under the construction placed upon Act No. 34 by these cases, that the contract was not void, but the right of enforcement merely suspended, I think it follows that, when that act was repealed, the plaintiff would have the same right to enforce the contract that it would have had if no such law had ever been passed. The repeal of the penalty imposed by the statute, pardoned all past offenses against it. Wharton v. State, 45 Tenn. 1 ( 94 Am. Dec. 214). It would be different, however, under Act No. 310, which went into effect on September 38, 1907. Contracts made after that date would never have any validity, and there could be no recovery on them, unless they grew out of transactions which were interstate commerce. The court left it to the jury to determine whether the items which were purchased after Act No. 310 went into effect were mail orders, and, as the jury found for the plaintiff for the full amount of his claim, we must assume they so found. We think the court took the right view of the law, and there was no error in this instruction.

Counsel for appellant contend that, even though the penalty imposed by Act No. 34 has been repealed, the contract in question is void because Acts Nos. 34 and 310 declared unlawful the carrying on of business in this State by noncomplying foreign corporations. This claim is based upon the general rule of law that contracts made in violation of law are void. Counsel overlooks the exception to that rule, which provides that, where the legislature has imposed a penalty for the infraction of a statute, the penalty so provided is exclusive of any other; at least, no other can be implied. 13 Am. & Eng. Enc. Law, p. 876; La France Fire Engine Co. v. Town of Mt. Vernon, 9 Wash. 142 (37 Pac. 287, 38 Pac. 80, 43 Am. St. Rep. 827); Toledo Tie & Lumber Co. v. Thomas, 33 W. Va. 566 (11 S. E. 37, 35 Am. St. Rep. 925); 2 Morawetz on Corporations, §§ 663-666; Clay, etc., Ins. Co. v. Manufacturing Co., 31 Mich. 346.

The trial court instructed the jury that the promissory note sued upon was void, and that no recovery could be had thereon, but that the consideration for the note was valid, and it should be treated as a part of the account, the same as though the note had never been given. We see no error in this instruction. The consideration for the note passed to the defendants while Act No. 34 was in force, which permitted a valid contract to be made, while the note was not executed until after Act No. 310 had taken effect.

Appellants also insist that a verdict should have been directed for the defendants because the plaintiff was doing business contrary to section 5324, 2 Comp. Laws, which is known as the peddlers’ law. The appellee makes the point that no notice of that defense was given in the pleadings. We are unable to find any in the record. That is a defense which would require a special plea or a notice under the general issue before it could be raised in the trial court. This was not given, and we do not think the question is properly before the court, and therefore shall refrain from discussing it.

The judgment of the trial court should be affirmed.