Commonwealth v. Read Phosphate Co.

Oinxrox ok the corRT by JUDGE WHITE

Reversing.

This is a penal action, brought by the Commonwealth of Kentucky against the appellee, Read Phosphate Company, a corporation organized in the State of West Virginia, seeking to recover the penalty imposed by statute for engaging in business in this State without filing in the office of the Secretary of State1 a statement, as required by section 571, Kentucky Statutes, giving tbe location of its office in this State, and' ilie name of an officer or agent thereat upon whom process might be served; the petition averring that ihe appellee had engaged in business in this State without having filed such statement. Appellee, by answer, admitted that it was a corporation created by the'laws of West Virginia ; denied it had engaged in business in this State as alleged, or at all; and denied it had failed to file tne statement required by law to be filed with the Secretary of State. In a separate paragraph the appellee pleaded facts which showed that it simply took orders for fertilizin' by and through a traveling salesman, and that the'fertilizer was shipped to *36 the purchaser direct from the company's ware room in Nashville, Tenm; the plea evidently being framed to show that, if appellee was at all engaged in business in this State, it was interstate commerce, and therefore could not be prohibited, or penalty imposed by the State for a failure to observe any regulation provided by our law. A reply denied the facts pleaded to show that appellee was engaged in interstate commerce. Upon the issues thus made a trial was had before a jury, and at the conclusion of all the evidence the court gave a peremptory instruction to find for appellee,, which was done, and judgment entered accordingly, and tO' reverse that judgment, this appeal is prosecuted.

We are informed by counsel in brief that the reason given by the court for directing a verdict, for defendant was that the State had failed to prove that appellee had failed to fih' in the office of the Secretary of State a. statement as required by law, and that the burden of proving this failure was on'the State. From the bill of exceptions in this record if appears that there was no proof as to the filing or failure to file this statement by either party, and although the / president of appellee company was sworn as a witness Ik; was not asked about the statement, whether it had been filed or not. If this failure on the part of the appellant, plaintiff below, to prove a failure to file the statement, was the reason that moved the trial court to give the peremptory instruction, there was error. The rule has long been settled in this State that in indictments for retailing spirituous liquors without a license the case was made out when the sale and venue was shown, and that the accused must show a license, if such he has. In Haskill v. Com., 3 B. Mon., 342 , decided in 1842, the court,said: “The presentment or indictment presents at once the issue as to the license, and, if the person charged is not without it, he is immediately *37 relieved by its production. Tims, to show himself within the exception by the production of the requisite evidence of the fact in his possession, subjects him to no hardship, and, as we think, most appropriately devolves upon him.” This rule of evidence is generally accepted as the true one in this class of cases in many of the States. See 5 Am. & Eng. Ency., Law (2d Ed.), p. 42. Under this well-settled rule of evidence in this State the duty of showing a compliance with statute by filing any required statement rested on defendant, and recovery of the penalty may be had when it is .shown that a foreign corporation has engaged in business in this State without a showing by the State that a statement had not been filed. If the peremptory instruction was -predicated on the idea of a failure of proof as to whether appellee was engaged in business in this State, there was also error. While wre express no opinion on the evidence or facts proved, we are of opinion there was sufficient evidence to submit the case to the jury on the question as to whether or not it engaged in business in this State.

Counsel for appellee .seriously contends that the statute requiring this statement to 'be filed is unconstitutional and void, being in contravention of the federal Constitution. The statute, (section 57.1) reads: “All corporations except foreign insurance companies formed under the laws of this or any other State and carrying on any business in this State, shall at all times have one or more known places of business in this State, and an authorized agent or agents thereat upon whom process can be served; and it shall be unlawful for any corporation to carry on any business in this State, until it shall have filed in the office of the Secretary of State a statement, signed by its president or secretary, giving the location of its office or offices in this State, and the name or names of its agent or agents thereat upon *38 whom process can be served; . . . and if any corporation fails to comply with the' requirements of this section, such a corporation, and any agent or employe of such corporation, who shall transact, carry on or conduct, any business in this State for it, shall be severally guilty of a misdemeanor, and fined not less than one hundred nor more than one thousand dollars for each offense.” It will be noticed that the section applies alike to all corporations, domestic as well as foreign, except foreign insurance companies. There is no difference made between the domestic and foreign corporation. P>oth alike are required to file the statement, and the penalty is alike for a failure. The reason for the exception of foreign insurance companies is that those companies are required to designate the insurance coifimissioner in addition to their local agents as persons upon whom process may be served. It is now well .settled that a State may impose any conditions it may desire on a foreign corporation upon permiting it to do business in the State. They may be excluded altogether. Waters-Pierce Oil Co. v. Texas, 177 U. S., 29 , 20 Sup. Ct., 518, 44 L. Ed., 657 ; Hooper v. California, 155 U. S., 648 , 15 Sup. Ct., 207, 39 L. Ed., 297 ; Insurance Co., v. Cravens, 178, U. S., 389, 20 Snp. Ct., 962, 44 L. Ed., 1116 ; Manufacturing Co. v. Ferguson; 113 U. S., 727 , 5 Sup. Ct., 739, 28 L. Ed., 1137 . The only exception to this rule is as to corporations, engaged in federal business or interstate commerce; and even as to corporations engaged ordinarily in interstate commerce the State may prohibit business by that corporation that is, wholly within the State — that is, intrastate commerce, — while at the same time it might engage in the interstate commerce. A State can not prohibit nor regulate by licenses or restrictions, except fop public health, tlid bringing -into the State from another any article *39 of commerce, but may prevent, license, or regulate its sale by a corporation after the article has been brought here. We are dearly of the opinion that the act in question is not in conflict with the Federal Constitution (Knoxville Nursery Co. v. Com., ( 108 Ky., 6 ), ( 21 R., 1483 ), ( 55 S. W., 691 ); Com. v Mobile & O. R. Co. 24 R., 784 , 64 S. W., 451 ; Manufacturing Co. v. Ferguson, supra,) at least in so far as it regulates the conduct of business within this State by foreign corporations.

As to the question whether a corporation is engaged in business within this State or is engaged in interstate commerce, that depends entirely on the facts proven. If, from the facts proven, it be'determined tfliat a corporation has transacted, carried on, or conducted any business in this State, that corporation will be liable to the penalty if it has failed to file the statement required. However, if the corporation has transacted, carried on, or conducted only i.itersrate commerce business it would not be liable, for such corporation is not subject to the statute. The question as to whether the business is one or the other is always one of fact to be determined by the proper tribunal. In view of another trial, we refrain from a discussion of the evidence in any way; wherefore we conclude that the trial court-erred in giving a peremptory instruction to the jury to find for the defendant, but, on the contrary, should have submitted to rbe jury the issues presented under tlie proof introduced.

For the reasons indicated, the judgment is reversed, and cause remanded for a new trial, and for further proceedings consistent herewith.