First National Bank v. Winona Savings Bank

BURCH, J.

This case is before us on appeal from an order sustaining a demurrer to the complaint of plaintiff.

The complaint alleges the due incorporation of the First National Bank, plaintiff, under the laws of South Dakota, and the incorporation of the Winona Savings Bank, defendant, under the laws of the state of Minnesota; that defendant Goss is the duly-elected, qualified, and acting sheriff of Codington county; that Neis E. Halseide was the owner in fee of the north half of section 26, township 119, range 51, in said county, and that he and his wife executed and delivered a mortgage to Gold Bros. Security Company, a corporation organized under the laws of South Dakota, to secure a note for $5,750; that this mortgage was a first mortgage on said land; that the said Halseide and his wife made and executed a second mortgage on the same land to O’. M. Kirlin, to secure a note for $7,400, which was duly assigned to plaintiff, First National Bank; that the Gold Bros, sold and assigned the note secured by the first mortgage to the Winona Savings Bank, which foreclosed such mortgage by advertisement and bid in the land- at the sale held on May 24, 1924, and received a certificate of sale from the sheriff, Goss; that said bank threatens to amdf will demand' and receive a sheriff’s deed at the expiration of the time of redemption; that the Winona Savings Bank has not in any manner complied with the laws of South Dakota relative to foreign corporations, nor filed with the secretary of state a statement in writing constituting the secretary of state its agent for the service of process as prescribed by section 8902, R. C. 1919; that the assignment of the first mortgag’e from the Gold Bros. Security Company to the AVinona Savings Bank was void; and that the second mortgage is still owned by plaintiff and unpaid.

Defendants demur on three grounds namely; That the court has no jurisdiction of the subject-matter of the action; that the plaintiff has no legal capacity to sue; and that the facts stated are not sufficient to constitute a cause of action.

The first two grounds of demurrer, are untenable, and the sole question tó determine is: Does the complaint state facts sufficient to constitute a cause of action? The theory of plaintiff is that sections 8900 to 8916, inclusive, R. C. 1919, and laws amendatory thereof, forbid foreign corporations acquiring property within this state or transacting business without first filing with the secretary of state a statement in writing, by its president, secretary, treasurer or general manager, that it constitutes the said secretary of state its agent for the service of process.

The complaint does not state sufficient facts, for the following reason: There is nothing in the law which indicates that property so assigned is confiscated. If the assignment by the Gold Bros. Security Company was void, then the Gold Bros. Security Company are owners of the mortgage, which still remains a first mortgage, and plaintiff is in no position to attack the validity of the assignment, having no interest therein. The complaint does not show that the amount of the mortgage has been tendered, or the payment thereof offered. The foreclosure of the mortgage was not made until May 24, 1924, aridi the law was amended in 1921 (chapter 157, Laws 1921), which expressly excepts savings banks and trust companies from the operations of the law.

The court was right in sustaining the demurrer, and the order of the court is affirmed.