Relator is a corporation organized and exist
In 1907, in the regular course of its business in this State, the relator appointed Fayette De Puy and John Holmes (a copartnershiр doing business as De Puy & Holmes) its agents for the sale of its products at Grand Ledge and vicinity. During the continuance of this agency — that is, during the spring and summer months of 1907 — the said De Puy & Holmes became indebted to the relator in the claimed sum of about $1,500, a large portion of which was for moneys collected by said De Puy Sc Holmes as agents of relator, and the remainder was for
_ (1) That the plaintiff, at the time the indebtedness mentioned was created, was a “trust,” as defined by the statutes of this State, and hence any contract made by defendant with thе plaintiff was null and void, and against public policy. That the said plaintiff is a corporation organized and existing under the laws of the State of Wisconsin. That the purpose of said corporation is, to wit, the control of the manufacturing of all harvest machinery and other agricultural implements, to carry out restrictions in trade of the said agricultural implements, to limit or reduce the price of said implements, to prevent competition in the manufacture of said implements, to fix the price to the consumer, thereby controlling and establishing the price to the public at large by entering into an agreement whereby it has bound itself with the several harvester companies not to sell any of their or its manufactured products below a certain standard, by them and the plaintiff fixed. That the plaintiff is a pool and combine, whereby the interest of all, or nearly all, of the great harvester companies of the world are united, and the interest of all such companies is fixed by the said рlaintiff. And that the plaintiff thereby fixes and controls the price of their products.
(2) That the plaintiff had never filed a copy of its articles of incorporation with the secretary of State of the State of Michigan, or paid the lawful fees by it to be paid, before doing business in this State, and hence any contract made by defendant with the plaintiff was null and void, and could not be enforced.
We note in passing that the second allegation of the notice is in direct conflict with the relator’s рetition for
After issue was thus joined, defendant De Puy filed a petition under Circuit Court Rules 50-57 (
At the outset it may be well for us to distinguish this case from the several cases in this court cited by respondent’s counsel, to the proposition that contracts of an unlicensed foreign corporation made in this State are illegal, аnd that such corporations will be denied the aid of our courts in enforcing such contracts. Most of the cases cited are insurance cases, in which the contracts were expressly prohibited, and some of them are cases of foreign mercantile corporations, in which the statute expressly declared that such contracts should be void. Such corporations have sometimes been spoken of as having no legal existence here, and as having no standing in our courts. Among such cases are the following: Richardson v. Buhl,
It was, however, held in People v. Hawkins,
We are here dealing with a corporation that is alleged to be a “trust” or monopoly; one, however, which, as appears by its articles of incorporation, was lawfully organized for a legitimate purpose and business, under the laws of Wisconsin. It has complied with the laws of this State regulating foreign corporations. It comes into a court of this State, and sues upon an independent eollat
“In National Distilling Co. v. Importing Co.,86 Wis. 352 (56 N. W. 864 ,39 Am. St. Rep. 902 ), which was an action to recover the price of goods sold and delivered, one of the defenses was that the plaintiff was a member of an illegal ‘ trust5 or combination to interfere with the freedom of trade and commerce. The supreme court of Wisconsin said:
“ ‘The first defense does not deny any allegation of the complaint, but the substance of it is that the sale and delivery of the goods in question to the defendant was void as against public policy, bеcause the vendor was at the time a member of an unlawful*61 trust or combination, formed to unlawfully interfere with the freedom of trade and commerce, and in restraint thereof, and to accomplish the ends therein set forth. * * * Conceding, for the purposes of this case, that the trust or combination in question may be illegal, and its members may be restrained from carrying out the purposes for which it was created by a court of equity in a suit on behalf of the public, or may be subject to indictment and punishment, thеre is, nevertheless, no allegation showing or tending to show that the contract of sale between the plaintiff and defendant was tainted with any illegality, or was contrary to public policy. The argument, if any the case admits of, is that, as the plaintiff was a member of the so-called “ trust” or “combination,” the defendant might voluntarily purchase the goods in question of it at an agreed price, and convert them to its own use, and be justified in a court of justice in its refusal to pay the plaintiff for them, becаuse of the connection of the vendor with such trust or combination. The plaintiff’s cause of action is in no legal sense dependent upon or affected by the alleged illegality of the trust or combination, because the illegality, if any, is entirely collateral to the transaction in question, and the court is not called upon in this action to enforce any contract tainted with illegality, or contrary to public policy. The mere fact that the plaintiff is a member of a trust or combination, created with the intent and purposes set forth in the answer, will not disable or prevent it in law from selling goods within or affected by the provisions of such trust or combination, and recovering their price or value. It does not appear that it had stipulated to refrain from such transactions. A contrary doctrine would lead to most startling and dangerous consequences.’
“That case was cited * * * in Dennehy v. McNulta,86 Fed. 825 , 827, 829,80 C. C. A. 422 (41 L. R. A. 609). * * *
“It is undoubtedly the general rule that a contract made in violation of a statute is void, and no recovery can be had uрon it; as in Embrey v. Jemison,131 U. S. 336 , 348 (9 Sup. Ct. 776). That was an action upon a promissory note given in execution of a contract for the purchase of ‘ future delivery ’ cotton, neither the purchase nor delivery of the actual cotton being contemplated by the parties, but the settlement in respect to which was to be on the basis of the ‘ difference ’ between the contract price and the market price of cotton futures, according to the fluctuations in the market. The contract was held tо be a wagering contract, and therefore illegal and void.”
See, also, Miller v. Ammon,
Assuming therefore that relator is a “trust” or monopoly as defined by our laws, its independent or collateral contracts, such as is sued on in this case, are just as valid and enforceable as are the contracts of any other person or corporation, unless some statute has changed the rule of the common law in that respect. The only statutes touching the matter are Act No. 255, Pub. Acts 1899, and Act No. 329, Pub. Acts 1905. Subdivision 5 of sectiоn 1 and sections 2, 3, and 8 of the act of 1899 are here referred to. Act No. 329 of 1905 is entitled:
“ An act relative to agreements, contracts and combinations in restraint of trade or commerce.”
It is declared to be supplementary to, and declaratory of, and in addition to, Act No. 255, Pub. Acts 1899. Its-first five sections are material here, and are referred to. Neither of the acts undertakes to prohibit or forbid the making of such contracts as the one involved in this suit. It is evident that by the language of seсtion 8 of the act of 1899, and section 5 of the act of 1905, above referred to, the legislature did not leave to inference or implication the illegality of the particular contracts which it was dealing with.
The language of Justice Harlan, in Connolly v. Union Sewer Pipe Co., supra, where he deals with the special defense in that case based upon the “Sherman anti-trust act,”is pertinent here:
“ The special defense based upon Act Cong. July 2, 1890, c. 647, 26 Stat. 209 [U. S. Comp. St. 1901, p. 3200], was also properly rejected. * * * Much of what has just been said in reference to the first special defense, based on the common law, is applicable to this part of the case. If the contract between the plaintiff corporation and the other named corporations, persons, and companies, or the combination thereby formed, was illegal under the act of congress, then all those, whether persons, corporations, or associations, directly connected therewith, be*63 came subject to the penalties prescribed by congress. But the act does not declare illegal or void any sale made by such combination, or by its agents, of property it acquired or which came into its possession for the purpose of being sold; such property not being at the time in the course of transportation from one State to another or to a foreign country. The buyer could not refuse to comply with this contract of purchase upon the ground that the seller was an illegal combination which might be restrained or supprеssed in the mode prescribed by the act of congress; for congress did not declare that a combination illegally formed under the act of 1890 should not, in the conduct of its business, become the owner of property which it might sell to whomsoever wished to buy it. So that there is no necessary legal connection here between the sale of pipe to the defendants by the plaintiff corporation and the alleged arrangement made by it with other corporations, companies, аnd firms. The contracts under which the pipe in question was sold were, as already said, collateral to the arrangement of the combination referred to, and this is not an action to enforce the terms of such arrangement. * * * In the case of The Charles E. Wisewall,74 Fed. 802 , which was a libel in rem by certain tug owners against a steam dredge to recover the value of certain services rendered by the tug in towing the dredges, it was sought to avoid payment for the services thus rendered upon the ground that the tug' owners were members of an assoсiation which was illegal and void under the Sherman act. The court, assuming that the agreement by which the tugs acted in unison was prohibited by that act, said:
“‘He (the claimant) should not be permitted to repudiate his just debts to the individual tugs because their association was illegal. Having asked for their services, and having accepted the benefit thereof, he should pay. * * * An agreement by the tug Mayflower to tow the dredge Wisewall, for a reasonable sum, from Albany to Troy, is not void because the Mayflower is associated with other tugs to regulate the price of towing at Albany. Should the claimant purchase a pair of trousers at an Albany clothing shop, he would find it difficult to avoid paying their actual market price because the vendor and other tailors of that city had combined to keep up prices.’
"Nor can the defendants refuse to pay for what they bought upon the ground that the seventh section of the*64 Sherman act gives the right to any person ‘ injured in his business or property by any other pеrson or corporation by reason of anything forbidden or declared to be unlawful ’ by the act to sue and recover treble the damages sustained by him. We shall not now attempt to declare the full scope and meaning of that section of the act of congress. It is sufficient to say that the action which it authorizes must be a direct one, and the damages claimed cannot be set off in these actions based upon special contracts for the sale of pipe that havе no direct connection with the alleged arrangement or combination between the plaintiff and other corporations, firms, or companies. Such damages cannot be said, as matter of law, to have ■directly grown out of that arrangement or combination. * * * If the act of congress expressly authorized one who purchased property from a combination organized in violation of its provisions to plead, in defense of a suit for the price, the illegal charaсter of the combination, that would present an entirely different question. But the act ■contains no such provision.”
Chicago Wall Paper Mills v. General Paper Co.,
£C The objection that the appellee is an illegal trust or monopoly condemned by the law of the State of Illinois, and so declared by the supreme court of that State, cannot be sustained. We have held, in the case of an injurious combination of the nature here asserted, that the rem*65 edy is by direct proceedings; that with respect to a contract which is independent of the illegal combination, and is merely incident to other and innocent purposes, one who voluntarily and knowingly deals with parties so combined cannot on the one hand take the benefit of his bargain, and on the other hand defend against the contract on the ground of the illegality of the combination. Dennehy v. McNulta, 30 C. C. A. 422,86 Fed. 835 (41 L. R. A. 609). See, also, National Folding Box & Paper Co. v. Robertson,99 Fed. 985 .”
Reference is also made to Connolly v. Sewer Pipe Co., supra. Hadley-Dean Plate Glass Co. v. Highland Glass Co.,
“That it does not render illegal or prevent a recovery on this contract is shown by Connolly v. Union Sewer Pipe Co.,184 U. S. 540 (33 Sup. Ct. 431).”
The only provision in either the act of 1899 or 1905 which gives any force to the claim that the collateral con
If the articles of the relator state a purpose for which the statute authorizes a corporation to be formed, then, if other requirements of the law are compiled with, it is not only a corporation de facto, but it is a corporation de jure. In such a case the illegality of its organization cannot be attacked at all, and it can only be shown that the corporation is guilty of a misuser of its corporate franchises by attempting, under the guise of a legal corporate existence, to conduct a business not authorized by its charter, or in a manner contrary to law, or some principle of public policy; and this by a direct proceeding to test its right. Attorney General v. Lorman,
In conclusion, we quote the following from 10 Cyc. p. 256:
“This brings us to the doctrine, founded in public policy and convenience and supported by an almost unanimous consensus of judicial opinion, which is that rightfulness of the existence of a body claiming to act, and in fact acting in the face of the State, as a corporation, cannot be litigated in actions between private individuals, or between private individuals and the assumed corporation, but that the rightfulness of the existence of the corporation can be questioned only by the State; in other words, that the question of the rightful existencе of the corporation cannot be raised in a collateral proceeding.”
More than 100 cases are cited in the note from 30 States of the Union and United States Supreme Court. The Michigan cases are Montgomery v. Merrill,
It seems very clear to us that persons who buy goods or receive services from members of a combination cannot interpose the defense that the plaintiff is a party to an independent combination in restraint of trade in no way affecting the contract sued upon, unless, as in some few States, there is an explicit statutory provision creating such a defense; and that there is no such statutory provision in Michigan.
We are of opinion that the claimed defense is not available to, and cannot be maintained by, the defendant in the pending suit.