Cooper Manufacturing Co. v. Ferguson - 113 U.S. 727 (1885)
U.S. Supreme Court
Cooper Manufacturing Co. v. Ferguson, 113 U.S. 727 (1885)
Cooper Manufacturing Company v. Ferguson
Argued October 23, 1884
Decided March 18, 1885
113 U.S. 727
The right of a state to prescribe the terms upon which a foreign corporation shall carry on its business in a state has been settled by this Court.
A state act which imposes limitations upon the power of a corporation, created under the laws of another state, to make contracts within the state for carrying on commerce between the states violates that clause of the Constitution which confers upon Congress the exclusive right to regulate that commerce.
A corporation organized under the laws of one state does not, by doing a single act of business in another state with no purpose of doing any other acts there, come within the provisions of a statute of the latter forbidding foreign corporations to carry on business within it except upon filing certificates showing their place or places of business, their agents, and other matters required by the statute.
The Constitution of State of Colorado provided that no foreign corporation should do any business within the state without having one or more known places of business and an authorized agent or agents in the same upon whom process might be served. The legislature of the state enacted that foreign corporations, before being authorized to do business in the state, should file a certificate with the secretary of state and the recorder of the county in which the principal business was carried on designating the principal place of business and the agent there on whom process might be served. A corporation of Ohio, without filing a certificate, contracted in Colorado to manufacture machinery at its place of business in Ohio and to deliver it in Colorado. Held that this act did not constitute a carrying on of business in Colorado, and was not forbidden by its Constitution and law.
An act in execution of a constitutional power passed by the first legislature after the adoption of the Constitution is a contemporary interpretation of the latter, entitled to much weight.
Section ten of Article fifteen of the Constitution of the State of Colorado, adopted in 1876, and still in force, provides as follows:
"No foreign corporation shall do any business in this state without having one or more known places of business, and an authorized agent or agents in the same upon whom process may be served."
To carry into effect this clause of the constitution, the Legislature of Colorado, in the year 1877, in an act entitled "An act to provide for the formation of corporations," enacted as follows:
"SEC. 23. Foreign corporations shall, before they are authorized or permitted to do any business in this state, make and file a certificate, signed by the president and secretary of such corporation, duly acknowledged, with the Secretary of State, and in the office of the recorder of deeds of the county in which such business is carried on, designating the principal place where the business of such corporation shall be carried on in this state, and an authorized agent or agents in this state residing at its principal place of business upon whom process may be served, and such corporation shall be subjected to all the liabilities, restrictions, and duties which are or may be imposed upon corporations of like character organized under the general laws of this state, and shall have no other or greater powers."
Section 26 of the same act provided that a failure to comply with the provisions of section 23 should render the officers, agents, and stockholders of the corporation individually liable on all its contracts made while the corporation was so in default.
These provisions of the organic and statute law of the state being in force, the plaintiff in error, which was a corporation organized and existing under the laws of the State of Ohio, and having its principal place of business at Mount Vernon, Ohio, on February 22, 1880 at the County of Larimer, in the State of Colorado, entered into a contract in writing of that date with the defendants, who were citizens of Colorado, by which it was agreed that the plaintiff should sell to the defendants, and deliver to them on the cars at Mount Vernon, in the
State of Ohio, a steam engine and other machinery, in consideration whereof the defendants were to pay the plaintiff the price stipulated in the contract for such machinery.
This suit was brought by the plaintiff on August 10, 1880, to recover of the defendants damages for their breach of the contract.
The defendants, among other defenses, pleaded first that when the contract was entered into, the plaintiff had not made and filed the certificate required by § 23 of the act of 1877; second, that at the time of making the contract, the plaintiff did not have a known place of business in the State of Colorado, and did not have an authorized agent or agents in the state upon whom process might be served.
The plaintiff demurred to both these answers because they did not state facts sufficient to constitute a defense to the action. Upon the hearing of the demurrer, the judges of the circuit court were divided in opinion, and the presiding judge being of opinion that the demurrer should be overruled, it was overruled accordingly, and the plaintiff electing to stand by its demurrer, judgment was entered against it dismissing its suit, and for costs. By the present writ of error, the plaintiff brings that judgment under review.
The certificate of division of opinion recites the facts above set forth, and states the question upon which the judges differed to be:
"Whether the tenth section of article sixteen [fifteen] of the Constitution of the State of Colorado, and the twenty-third section of an act of the General Assembly of the State of Colorado, passed in the year A.D. 1877, entitled an 'Act to provide for the formation of corporations,' were, or either of them was, under all the circumstances stated, and the various acts passed by the Legislature of the State of Colorado, a bar in this action. "