DocketNumber： No. 4,928
Citation Numbers： 65 Mont. 371, 211 P. 308
Judges： Callaway, Farr, Galen, Holloway, Lynch, Place
Filed Date： 12/18/1922
Status： Precedential
Modified Date： 9/9/2022
delivered the opinion of the court.
This action was instituted by the plaintiff to recover the sum of $1,933.34, together with interest and costs, the sum stated claimed to be due it under contract for installing and equipping a three-story building and basement at Billings, belonging to the defendant, with a system of automatic sprinklers and fire-extinguishing apparatus. It is alleged in the first count of plaintiff’s complaint that the plaintiff agreed to install the system in such building for the sum of $5,530, provided that the number of the sprinklers installed did not exceed
By its answer the defendant denied that there was any sum or amount whatsoever due the plaintiff, and that the plaintiff had performed its contract, admitting that it had paid to the plaintiff the amounts stated in plaintiff’s complaint on the dates alleged, and that it had not made any other or further payments. The defendant then pleaded in special defense many matters not necessary here to be recited, other than the following: The breach of the terms of plaintiff’s contract, which is set forth and made a part of the answer, and that the plaintiff is a foreign corporation, not authorized to do business in the state of Montana at the time the alleged contract was made, at the time of the filing of the complaint, or at all, by reason of having failed to comply with the law regulating the conditions under which foreign corporations may do business in this state. Several counterclaims for damages are pleaded by the defendant in its answer, aggregating a total of $14,386.66.
Plaintiff’s replication denies all new matters alleged in defendant’s answer, save that it is admitted that it is, and was at all times mentioned in the complaint, a foreign corporation.
Judgment was entered upon the verdict. This appeal . is both from the judgment and from an order denying defendant’s motion for a new trial.
As we view this appeal, there are ‘but two questions presented necessary for decision, viz.: (1) May the plaintiff, not having complied with our laws regulating foreign corporations doing business within this state, maintain this action; and (2) was the plaintiff guilty of such a breach of its contract as to defeat its right of recovery?
1. Section 6651 of the Revised Codes of 1921 provides the conditions under which a foreign corporation, other than “insurance companies and corporations otherwise provided for,” may do “business within this state”; and section 6653 provides that any corporation commencing or attempting “to d'o business in this state” without complying with the law shall be without remedy to enforce its contracts until it shall have complied with the law. The plaintiff falls within the
In volume 9 of Fletcher’s Cyclopedia Corporations, section 5919, we think the rule is well stated as follows: “In construing the effect of statutes prohibiting a foreign corporation from ‘doing business’ or ‘doing any business’ in the state until it has complied with specified requirements, there is some conflict, but the great weight of authority is to the effect that isolated transactions, especially commercial, do not constitute a ‘doing, transacting or carrying on a business’ within the meaning of such statutes, but that such statutes contemplate some continuance in business. It has been said that ‘doing business’ impliés, in this connection, corporate continuity of conduct in that respect, suffi as might be evinced by the investment of capital in the state, with the maintenance of an of
Again the same author states the rule as follows: ‘ ‘ The transaction or doing of business within the state, within the prohibition of the statute relating to foreign corporations without compliance with certain requirements, does not cover a single business transaction or an isolated transaction. An isolated act of a foreign trust company in acting as trustee under a deed of trust and as such collecting interest, taking title to property, etc., does not constitute ‘carrying on business’ within the state. The making of a contract by a trust company administering a trust, to sell trust property in another state, is not ‘doing business’ in that state, so as to bar an action because of failure to obtain the permit required of foreign corporations.” (Vol. 10, 1921 Supp., Fletcher’s Cye. Corp., sec. 5919.)
Numerous authorities will be found collected to the same effect under “Doing Business” in 2 "Words and Phrases, Second Series, 108, and the decisions of this court fully uphold the doctrine, and conform to the views here expressed. (Powder River C. Co. v. Commissioners of Custer County, 9 Mont. 145, 22 Pac. 383; Uihlein v. Caplice Commercial Co., 39 Mont. 327, 102 Pac. 564; Dover Lumber Co. v. Whitcomb, 54 Mont. 141, 168 Pac. 947.) In the Uihlein Case, above cited, it was held that the shipping of beer into this state by a foreign corporation, and sale thereof to a distributing agent, does not constitute doing business in the state, within the meaning of the statute.
We entertain the view that isolated transactions, whereby a foreign corporation sells goods or other manufactured products on sample or specifications, the same being fabricated in another state and shipped into this state by such corporation for use or installation, does not constitute the doing of business in this state, within contemplation of the statute. Were the law given a contrary construction, it is easy to see the far-reaching and absurd consequences which would result. Transactions of this character were never in legislative contemplation.
2. Plaintiff contends that the proposal made through its contracting agent, Russel Bontieou, for the installation of the proposed fire-extinguishing apparatus in defendant’s building; was modified before the goods were supplied and the work performed by the plaintiff, and that under the express terms of the proposal submitted it could not, and did not, become effective until approved by an executive officer of the plaintiff, which was not accomplished until after such modification. On the other hand, defendant insists that there was no modification of the proposal, and after its acceptance it constituted the agreement of the parties, and claims damages because of its breach hy the plaintiff.
It appears that Roekwood Brown, vice-president of' the defendant company, negotiated for several days with Russel Bontieou, the plaintiff’s traveling representative, respecting the proposed installation of the fire-extinguishing apparatus in defendant’s building, resulting in a proposal being made up in plaintiff’s behalf by Bontieou, dated August 6, 1917, the portions thereof necessary to be considered being as follows:
“General Fire Extinguisher Company to the Northwestern Auto Supply Co., Billings, Montana:
“Proposal for equipping one three-story and basement building, the property of the Northwestern Auto Supply Co., located at Billings, Montana, on North Broadway, with a dry-pipe system of automatic sprinklers and fire extinguishing apparatus, as described in the within specifications, which are made a part hereof, all of the material to be of standard quality, and the work to be done in a thorough and workmanlike manner, under the rules and regulations of Johnson & Higgins and subject to inspection by them, Johnson & Higgins acting as the agent of both parties, and whose inspection and report shall be conclusive evidence of the proper completion of the work, e # =» This contract is made contingent upon your being
“Dated August 6, 1917.
“General Fire Extinguisher Company,
“By Russel Bonticou,
“Contracting Agent.
‘ ‘ Approved by:
“(President or other executive officer.)
“Acceptance.
“The above proposal is accepted as of this 10th day of August, 1917, and the General Fire Extinguisher Company is authorized to do the work therein specified, and we agree to pay therefor as therein proposed.
“Northwestern Auto Supply Co.,
“By Rockwood Brown.
“Witness: Faith H. Rossiter.”
“The writer noticed that Mr. Bonticou had a contingency clause that read as follows: ‘ This contract is 'made contingent upon your being able to obtain a net rate of 35^ on the building and 60^ on the contents in companies acceptable to you, the former rate being obtained by writing insurance for three years if necessary.’ This has been accomplished, and these rates have been quoted by Johnson & Higgins, and we trust you will, upon receipt of our letter, write to the effect that we may now proceed with this contract.”
On October 11, 1917, the defendant wrote a letter to plaintiff, which was in due course of the mail delivered to it at its Kansas City office, reading: “Replying to your favor of September 19th relative to installation of automatic sprinkler in the Northwestern Auto Supply Company building at Billings, Montana, I wish to advise that you may go ahead with the installation of this. Kindly advise when the work will be started and whether or not it is necessary for us to take any further steps in the matter.”
On October 19, 1917, a letter was written from the Cleveland, Ohio, office, by Albert Fritzsehe, general sales manager of the General Fire Extinguisher Company, to the defendant herein, and was received in the regular course of mail, the text of which was as follows: “Our Kansas City office has forwarded to us your letter of October 11-th authorizing us to proceed with the contract and also waiving the contingency
On December 19, 1917, the defendant wrote to the plaintiff as follows: “We wish to acknowledge receipt of blue-prints showing proposed arrangement of fire protection work in the Northwestern Auto Supply Company building. The plans are satisfactory in so far as I am able to find out. This, however, is considerably of an assumption On my part, as I am not at all familiar with such matters, and am placing my dependence upon you.”
On November 12, 1918, the plaintiff wrote the defendant as follows: “The inspector for Johnson & Higgins has recently examined the automatic sprinkler equipment, which we installed for you, and we are pleased to 'hand you herewith letter of approval. J. & H. advise ‘that they are willing to write your business at the rate furnished by our Kansas City representatives; consequently we consider that we have fulfilled our part of the contract and are now justified in calling on you for a settlement of the account. Your cheek for $1,933.34 at an early date will oblige, or if you prefer we will issue draft November 20th, which please protect. Statement herewith.”
On November 18, 1918, the defendant wrote as follows to the plaintiff: “In Re: 17544. Your letter of November 12th last has? been referred to me, as secretary of the Northwestern Auto Supply Company. You state therein that Messrs. Johnson & Higgins advised you that they were willing to write our insurance at the rates furnished in the contract, but upon a reading of the letter from Messrs. Johnson & Higgins to yourself, it appears to the writer that they have made no definite statement that the insurance will be written at the contract rates. We are perfectly willing to pay you the balance due on the contract as soon as the terms thereof have been complied with, but must request that you have Messrs. Johnson & Higgins advise ns direct that they will write this insurance at the rates specified in companies which may be indicated by us.
The fire-extinguisher system was installed complete in the defendant’s building, the work being finished about April 18, 1918. Defendant admits that 462 sprinklers were required and were installed, and that all provisions and specifications contained in plaintiff’s contract were fully performed on or about April 18, 1918, excepting the provisions of the so-called “contingency clause” as to insurance rates. This action was commenced March 24, 1921. It is in evidence, without contradiction, that the .“contingency clause,” guaranteeing reduced insurance rates, was the moving cause of the execution of the contract by the defendant, and that after the work was completed the defendant learned for the first time that such reduced rates were not obtainable. Rockwood Brown testified: “Referring now to the letter dated September 19, 1917, that has been called to my attention by Mr. Cunningham, Johnson & Higgins never at any time quoted to me or to the Northwestern Auto Supply Company a rate of thirty-five cents on the building or sixty cents on the contents, as provided for on that contract, and I repeatedly tried to get this quotation from them and from other individuals. In this letter of September 19, 1917, just referred to, in which they state ‘this has been accomplished,’ this meant to me that it had been accomplished in so far as the plaintiff company was concerned; that
“I took up with the firm of Johnson & Higgins,- mentioned in this contract and correspondence here, the question of obtaining the rates quoted in the contract, on the defendant’s building and on the contents. I have already stated that I was not able to obtain that rate from Johnson & Higgins or any other concerns. I took it up, not only with Johnson & Higgins, but with the board of fire underwriters at Butte, and with their agency at San Francisco, and was advised by the board of fire underwriters it was absolutely impossible for Johnson & Higgins to give a better rate than could be granted by the board of fire underwriters at Butte. We were willing to give the insurance business to Johnson & Higgins if they could have quoted us the rate quoted in the contract, provided the insurance was acceptable to us, and I so notified the plaintiff company. * * * By the expenditure of a considerable sum of money, under the direction of the board of fire underwriters at Butte, we have been able to get a rate, cut materially since the installation of this system was completed, so that by carrying ninety per cent co-insurance, written for five years on the building, and we have just recently suceeded in getting the rate down to thirty-five cents on the hundred. The rate on the stock, after doing everything possible, as suggested by the board of fire underwriters, and the expenditure of these various sums of money in the shape of improvements,
“Immediately after the installation of the sprinkler system was completed, and after I had discovered that the statements which the plaintiff company had made to me that they had secured these rates was false, I took the matter up with the board of fire underwriters at Butte, to ascertain from them, if possible, the lowest rate that could be secured with the system in its present condition, and what changes, if any, could be made by the Northwestern Auto Supply Company, so that the rate could be reduced further. They sent an inspector down here from Butte, who went over the building very carefully, and advised certain changes to be made. I have a memorandum of it here; there were six doors installed on the stairways, at a cost of $120; an elevator door, at a cost of $22; two bins that •were steel lined, or iron lined, to-hold excelsior or waste, at a total cost of $50; one steel lined bin that cost $85; the elevator shaft was lined or sheathed at a cost of $190; and a Gamewell fire-alarm system, which works automatically, and connected with the chief of the fire department’s office, costing $248.40—making a total cost of $695.40. All of this work was done in the summer of 1918, commencing in about June. These amounts of money were expended in order to reduce the insurance rate in order to get it down to thirty-five and sixty cents, in accordance with the contract with the plaintiff company.
“I do not recall whether at that time I took up with any officer of the plaintiff company the question of these changes, in order to bring these insurance rates down. I had a good deal of correspondence with them from time to time. As to the insurance we were paying on the building at the time the plaintiff had installed this sprinkler system, and before these improvements I have just now mentioned were made, after
Plaintiff’s rights in this case are wholly dependent upon the terms of the contract. The statutory definitions and rules of construction applicable to contracts need not be set forth. They have frequently been adverted to by this court, and recently in the cases of State Bank of Darby v. Pew, 59 Mont. 144, 195 Pac. 852; Emerson-Brantingham Co. v. Raugstad, ante, p. 297, 211 Pac. 305.
It is the province of the court to interpret contracts which are open to interpretation, not to make new ones for the parties, or to alter or amend those which they have made. (Frank v. Butte & Boulder Co., 48 Mont. 83, 135 Pac. 904; State Bank of Darby v. Pew, supra; Emerson-Brantingham Co. v. Raugstad, supra.)
If the terms of the original proposal as accepted by defend- ant constitutes the contract, there being no waiver or modification of its terms, then plaintiff, not having fulfilled the contract, is without right of recovery. But the plaintiff contends there was a waiver of the terms of the proposal before ratification by an executive officer of the defendant company, and in advance of the furnishing and installation of the appliances called for in the contract; that the contract was fully performed under the modified terms thereof, and in conse
Defendant made reply October 11, 1917, but we do not find one word therein referring to the contract, the insurance clause thereof, or anything waived whatsoever. After acknowledging receipt of plaintiff’s letter of September 19, it merely directs plaintiff “to go ahead with the installation,” and inquiry is made as to when the work will be started and whether or not it will be “necessary for” defendant “to take any further steps in the matter.” Then comes plaintiff’s letter of October 19, 1917, wherein it is s.aid: “Our Kansas City office has forwarded to us your letter of October 11th authorizing us to proceed with the contract, and also waiving the contingency clause.” Again let us stop to inquire what contract was referred to, and upon what possible word or statement of the defendant is an assumption warranted that the “contingency clause” was to be waived? These questions are effectually answered by the language employed.
On December 19, 1917, the defendant by letter acknowledged receipt of blue-prints, “showing proposed arrangement for fire-protection work,” disclaimed familiarity with such matters, and stated entire dependence was placed upon the plaintiff. In its letter of November 12, 1918, plaintiff advises that the work has been inspected and approved by Johnson & Higgins, and also that “J. & H. advise that they are willing to. write your business at the rate furnished by our Kansas City representatives; consequently we consider that we have fulfilled our part of the contract, and are now justified in calling upon you for a settlement of the account.” This language is explicit, and an acknowledgment of its liability on the insurance clause of the contract.
Again, December 2, 1918, plaintiff in its letter says: “If you will give your insurance business to Johnson & Higgins, we are
From all of this it is clear that plaintiff’s contention as to a waiver is wholly unjustified and untenable.
As above showm, months after the work was completed, both parties by their correspondence construed the insurance clause as binding. Their construction should be, and is, accepted. Although independent thereof, we are of opinion that neither plaintiff’s letter of September 19, 1917, nor defendant’s letter of October 11, 1917, nor plaintiff’s letter of October 17, 1917, in any manner effected a waiver of the clause.
We are not unmindful of the settled rule that “Where, at the close of all the testimony, as in the instant case, both parties move for a peremptory instruction directing a verdict, and do nothing more, it is to be assumed that they deem the material facts undisputed, and submit the case to the trial court for determination on the inferences proper to be drawn from such facts. The whole case was thereby submitted on the motions, and the directed verdict will not be disturbed if there was substantial evidence to support it and the law warrants it. (St. Louis etc. R. Co. v. Mulkey, 100 Ark. 71, Ann. Cas. 1913C, 1339, 139 S. W. 643; Wells Fargo & Co. v. Townsend, 134 Ark. 560, 204 S. W. 417; Share v. Coats, 29 S. D. 612, 137 N. W. 402; Van Woert v. Modern Woodmen, 29 N. D. 442, 151 N. W. 224; Beuttell v. Magone, 157 V. S. 154, 39 L. Ed. 654, 15 Sup. Ct. Rep. 566 [see, also, Rose’s U. S. Notes]; Empire State Cattle Co. v. Atchison etc. R. Co., 210 U. S. 1, 15 Ann. Cas. 70, 52 L. Ed. 931, 28 Sup. Ct. Rep. 607; Fifty Associates Co. v. Quigley, 56 Mont. 348, 185 Pac. 155; Bank of Commerce v. United States F. G. Co., 58 Mont. 236, 194 Pac. 158; 38 Cyc. 1582.) ” (Stoltze Land Co. v. Westberg, 63 Mont. 38, 206 Pac. 407.)
However, where, as in this case, there is not only no substantial evidence to support the verdict, but the same is contrary to both the law and the evidence, this court will not hesitate to set it aside in justice to an injured party.
Reversed cmd remanded.