Opinion
April 16, 1942.
1. CORPORATIONS: Home Owners' Loan Corporation Not a Foreign Corporation. The Home Owners' Loan Corporation is not a foreign corporation within the meaning of the Missouri statutes dealing with qualification in Missouri of foreign corporations.
2. APPEAL AND ERROR: Constitutional Law: Jurisdiction: Supreme
Appeal from Circuit Court of St. Louis County. — Hon. Julius R. Nolte, Judge.
TRANSFERRED TO ST. LOUIS COURT OF APPEALS.
Ephrim Caplan for appellants.
(1) Plaintiff corporation, having been created by Act of Congress, is a corporation "incorporated under the laws of another state" as provided by the corporation laws of Missouri. Sec. 4596, R.S. 1929; Smith v. Pacific Ry. Co., 61 Mo. 17; Sec. 4599, R.S. 1929. (a) The provisions of the State laws respecting corporations incorporated under the laws of another state are applicable to plaintiff without being in conflict with any Act of Congress or of the powers delegated to the federal government. Federal Land Bank v. Priddy, 295 U.S. 229. (2) Plaintiff corporation, though created by Act of Congress, is a business corporation, to be treated like any other business corporation. Pennell v. H.O.L.C., 21 F. Supp. 497; Herman v. H.O.L.C., 200 A. 742; Central Market v. King, 272 N.W. 244, 246; McAvoy v. Weber, 88 P.2d 448. (3) In determining whether plaintiff shall be treated like any other business corporation, it is immaterial: (a) That all of its capital stock is owned by the federal government. United States v. Strang, 254 U.S. 491; In re Eastern Shore, 274 F. 893; The Lake Monroe, 250 U.S. 254; Bank of United States v. Planters Bank, 9 Wheat. 904; (b) or, that Congress created it to be a governmental instrumentality. Kiefer v. Reconstruction Finance Co., 306 U.S. 381; Federal Housing Adm. v. Burr, 84 L.Ed. 427; United States v. Winkle Terra Cotta Co., 110 F.2d 919; Gould v. U.S. Shipping Board, 261 F. 716. (4) The fact that Congress created plaintiff to be a governmental instrumentality but as a separate corporate entity, and granted it no immunities from State corporate control, is assurance that Congress did not intend it to be free of State control. Reconstruction Finance Corp. v. Menihan Corp., 85 L.Ed. 548; Reagan v. Mercantile Trust Co., 154 U.S. 413; Federal Housing Adm. v. Burr, 84 L.Ed. 427. (a) Plaintiff corporation though created by Act of Congress as a governmental instrumentality, it partakes of no sovereign immunity from the corporation laws of this State. Federal Housing Adm. v. Moore, 90 F.2d 32; In re Miller, 105 F.2d 926. (5) Congress having granted plaintiff exemptions only from certain specified taxation, such enumeration cannot be spread by construction to immunity from compliance with the foreign corporation laws of this State. State v. Christopher, 2 S.W.2d 621, 630; State v. Richman, 148 S.W.2d 796. (6) Section 4599, R.S. 1929, expressly prohibiting the maintenance of a class of actions, such as plaintiff's suit, in any of the courts of this State, and prohibiting the maintenance of any such suit by this plaintiff because not a proper party, that creates a lack of jurisdiction in the court over the subject matter. Ballew Lumber Co. v. Mo. Pac. Ry., 232 S.W. 1015; United Cemeteries Co. v. Strother, 119 S.W.2d 762. (7) Defendants' plea to the jurisdiction being adequately pleaded, it was the duty of the court to hear and to adjudicate upon the facts and the law, and the right of defendants to have a hearing and adjudication of those issues. State v. Missouri Compensation Comm., 113 S.W.2d 1034. (a) And the failure and refusal of the court to adjudicate those issues but sustaining plaintiff's motion to strike out that plea is contrary to the established rules of practice and procedure and law of the State, and is in violation of defendants' right to due process of law as provided by the State Constitution, Article II, Section 30. Tomlinson v. French Society, 109 S.W.2d 73. (8) The meaning of the words "incorporated under the laws of another state" as provided in Sections 4596 and 4599, R.S. Mo., 1929, being plain and of long standing, those words are not a proper subject of judicial interpretation. St. Louis Amusement Co. v. St. Louis County, 147 S.W.2d 667. (a) Those statutory words, long accepted and judicially determined to include a corporation created by Act of Congress, an attempt by the court to interpret said statutes as intended to mean that corporations created by Act of Congress are not included and therefore do not apply to plaintiff, is in violation of the State Constitution, Article III as the court is infringing upon the power of the Legislature to determine the policy of this State in respect to foreign corporations. State v. Knapp, 33 S.W.2d 891; Span v. Jackson, 16 S.W.2d 190. (b) And the court, by the aforesaid unlawful exercise of legislative powers having judicially determined that plaintiff is not a foreign corporation within the meaning and purpose of said statutes, and the court thereupon permitting plaintiff to maintain its suit and the court proceeding to entertain jurisdiction under plaintiff's cause and render judgment in plaintiff's favor against defendants, the defendants are deprived of their property without due process of law in violation of the provisions of the, State Constitution, Article II, Section 30. Citations, supra, Point (8) (a).
Claud D. Hall for respondent.
(1) The Supreme Court has no jurisdiction of this appeal for the reason that it does not involve the construction of the Constitution of the United States nor the Constitution of the State of Missouri. Article VI, Section 12, Constitution of Missouri. (a) To give the Supreme Court jurisdiction there must be a question of the validity of the statute or treaty, and jurisdiction does not vest in cases merely involving the construction of federal statutes. White Com. Co. v. Chicago, etc., Ry. Co., 157 Mo. 518, 57 S.W. 1070; Schwyhart v. Barrett, 223 Mo. 497, 122 S.W. 1049; Chastain v. M.-K.-T. Ry. Co., 226 Mo. 94, 125 S.W. 1099. The Supreme Court does not have jurisdiction in a case where a compliance with the federal statute is questioned. Vaughan v. Wabash Ry. Co., 145 Mo. 57, 46 S.W. 952. (b) A constitutional question affecting the rights of persons will not be decided where they are not directly or necessarily involved. Watson Seminary v. Pike County Court, 149 Mo. 57, 45 L.R.A. 675; Burnetta v. Marceline Coal Co., 79 S.W. 136, 189 Mo. 241; House v. Mayes, 127 S.W. 305, 227 Mo. 617, 219 U.S. 270, 55 L.Ed. 213; Moler v. Whisman, 147 S.W. 985, 243 Mo. 571, 40 L.R.A. (N.S.) 629, Ann. Cases 1913d 392. The mere invoking of a party of a provision of the Constitution does not demand its construction, but must involve it. Davidson v. Hartford Life Ins. Co., 132 S.W. 291, 151 Mo. App. 561. (c) Where all defenses raised at the trial and discussed in the defendant's brief on appeal could be considered and adjudged without reference to the Constitution they call for no interpretation of any clause thereof, and no constitutional question is raised. Brookline Canning Packing Co. v. Evans, 142 S.W. 319, 238 Mo. 599. (2) There is nothing in this suit by way of any statute or the ruling or judgment of the court that was a denial to the defendants of due process of law as provided by Article II, Sec. 30, of the Constitution of Missouri. McManus v. Burrows, 217 S.W. 512, 280 Mo. 327; Hider v. Sharp, 257 S.W. 112, 301 Mo. 625; Ivie v. Bailey, 5 S.W.2d 50, 319 Mo. 474; Rusk v. Thompson, 156 S.W. 64, 170 Mo. App. 76; Davidson v. Hartford Ins. Co., 132 S.W. 291, 151 Mo. App. 561. (3) The Home Owners' Loan Corporation was properly and legally organized under an Act of Congress (Home Owners' Loan Act of 1933). United States ex rel. Fletcher v. Fahey, 121 F.2d 28, appeal filed in the Supreme Court of the United States, June 30, 1941, Docket No. 226; certiorari denied Oct. 13, 1941, 62 Sup. Ct. Rep. 84; Home Owners' Loan Corporation Act, June 13, 1933, secs. three (3) and four (4). (4) The court will take judicial notice of public acts of Congress. Home Owners' Loan Corp. v. Robinson, 285 N.W. 76; H.O.L. Corp. v. Gordon, 97 P. 845, 36 Cal.App.2d 189; Papin v. Rhine Walker, 32 Mo. 21; Young v. Boy Scouts of America, 9 Cal.App.2d 760, 51 P.2d 191. (5) The action of the court in striking out the first paragraph of defendants' plea and answer was not error, for the reasons: (a) Sections of the statutes requiring "foreign corporations" to comply with their provisions are not applicable. These statutory provisions do not include the Home Owners' Loan Corporation. Home Owners' Loan Corp. v. Sherwin, 52 Ohio App. 567, 18 N.E.2d 992; Same v. Welch, 59 Ohio App. 567, 18 N.E.2d 992; Bezat v. Home Owners' Loan Corp., 98 P.2d 852; Commonwealth v. Texas Pac. R. Co., 98 P. 90; Stewart v. Atlantic Natl. Bank, 27 F.2d 224; Jeffries v. Fed. Land Bank of New Orleans, 238 Ala. 97; Severson v. Home Owners' Loan Corp., 88 P.2d 344; Dodson v. Home Owners' Loan Corp., 123 S.W.2d 435; Carter v. Home Owners' Loan Corp., 123 S.W.2d 437; Homan v. Connett, 152 S.W.2d 1053. (b) Home Owners' Loan Corporation, organized under an act of Congress (Acts of June 13, 1933) to do business as an instrumentality of the United States Government, was not subject to the provisions of Sections 4596, 4598, 4599, 4936 and 4937, requiring certain corporations to maintain an office for service of process and to file articles of incorporation with the Secretary of State, and to obtain a license to do business in the State. Loverno v. H.O.L. Corp., 15 N.Y. Supp.2d 967; Pittman v. H.O.L. Corp., 308 U.S. 21, 60 Sup. Ct. 15, 84 L.Ed. 11. The Home Owners' Loan Corporation has been held in this jurisdiction to be an instrumentality of the United States Government. Dudley v. H.O.L. Corp., 125 S.W. 95, l.c. 97; Huffman v. H.O.L. Corp., 30 F. Supp. 139; Hillis v. H.O.L. Corp., 154 S.W. 761; Swedock v. H.O.L. Corp., Court of Common Pleas, Ohio, Nov. 26, 1938; H.O.L. Corp. v. Barone, 298 N.Y.S. 531; H.O.L. Corp. v. Stookey, 81 P.2d 1096; Adams v. H.O.L. Corp., 107 F.2d 139; Pittman v. H.O.L. Corp., 308 U.S. 21, 60 Sup. Ct. 15, 84 L.Ed. 11. (c) There was no denial of due process of law to defendants by reason of the court striking out part of defendants' plea and answer, for the stricken part constituted no defense to the action. Severson v. H.O.L. Corp., 88 P.2d 344.
Action on a redemption bond. Plaintiff recovered judgment for $700, the face amount of the bond; defendants appealed, and the appeal was to the Supreme Court on the theory that the construction of the State and Federal Constitutions is involved. See Sec. 12, Art. 6, Constitution.
March 10, 1934, the defendants, Caplans, gave a deed of trust, to a named trustee, on a certain described lot in Ferguson, St. Louis County, to secure a note to plaintiff. Default was made; the deed of trust was foreclosed November 15, 1937, and plaintiff purchased at the foreclosure sale. The necessary steps were taken to redeem, and the bond sued on was executed under the provisions of Sec. 3451, R.S. 1939, 3 Ann. Stat., Sec. 3064, p. 1894. Defendant, Killian, is surety on the bond.
Defendants answered jointly, and, among other defenses, alleged (1) that plaintiff is a business corporation not organized or doing business under the laws of this State; (2) that plaintiff maintains an office in, and is doing business in this State; (3) that plaintiff, in this State, makes interest bearing loans secured by deeds of trust on real estate, and that upon breach of conditions in said deeds of trust, forecloses and purchases at the foreclosure sales and thus acquires title to real estate; (4) that plaintiff, as owner, rents and sells the real estate so acquired; and (5) that the deed of trust foreclosed was obtained in the course of such business.
Defendants further allege that, at no time involved, had plaintiff complied with the provisions of Secs. 4596, 4598, 4599, 4936 and 4937, R.S. 1929, now Secs. 5072, 5074, 5077, 5341 and 5342, R.S. 1939, 3 Ann. Stat., Secs. 4596, 4598, 4599, 4936 and 4937, pp. 2030, 2034, 2040, 2255 and 2256.
In short, defendants allege that plaintiff is a foreign corporation and has not complied with the law of this State so as to authorize it to do business in this State, and that because of such failure plaintiff "cannot maintain any suit or action in any of the courts of this State for enforcement or recovery" on the bond, and that the court was "without jurisdiction of the subject matter of the suit." For the reasons stated, defendants asked that plaintiff's suit on the bond be dismissed.
Plaintiff moved to strike from the answer what was termed defendants' plea to the jurisdiction, and the motion was sustained. Defendants then moved to set aside the order sustaining the motion to strike, and the motion to set aside was overruled. Defendants then filed what is termed a "supplemental plea in abatement." [755] In the supplemental plea it is alleged that the action of the court, in sustaining the motion to strike and in overruling the motion to set aside was "a denial to defendants of the right to due process" under Sec. 30, Art. 2, Constitution of Missouri; and was "a denial to defendants of the equal protection of the law" under Sec. 1 of the Fourteenth Amendment, Constitution of the United States. Also, in the supplemental plea it was alleged, in effect, that to permit a trial upon the merits, in the situation obtaining, would be an infringement by the court "upon the right of the legislature to determine the public policy of this state in respect to foreign corporations," which infringement, it is claimed, would violate Art. 3, Constitution of Missouri, pertaining to the distribution of powers to the legislative, judicial and executive branches of the state government.
The supplemental plea was overruled. Defendants then filed what was termed an "application for separate trial of issues presented by plea in abatement," and the motion for separate trial was overruled. It is recited in the record "that on the 25th day of March, 1941, . . . said cause being called for trial upon plaintiff's cause of action, defendants elected to stand upon the constitutional grounds presented in said supplemental plea and declined to participate in said trial. . . . Defendants having elected to stand upon their constitutional grounds, and declining to participate in the trial of this cause, and a jury being waived by plaintiff, this cause was submitted by plaintiff to the court," and that "plaintiff, to sustain the issues on its behalf, offered and introduced evidence tending to prove the execution of the deed of trust, foreclosure and sale under said deed, execution of the redemption bond by defendants, the several items and amounts alleged due plaintiff as damages, demand and nonpayment, as set forth in plaintiff's said petition."
It is also recited in the record "that at the close of plaintiff's case defendants orally submitted to the court a motion that the court strike out all of plaintiff's testimony for the reason that the court was without jurisdiction upon the grounds cited in the plea in abatement" Such motion was overruled and the court found for plaintiff as above stated and entered judgment accordingly.
[1, 2] Under Sec. 5, Amendment 1884, and Sec. 12, Art. 6, Constitution, an appeal "involving the construction of the Constitution of the United States or of this State" lies to the Supreme Court. Defendants' motions, etc. were based on the contention that plaintiff, a corporation created by Act of Congress, is a foreign corporation within the meaning of Secs. 4596-4599 and Secs. 4936, 4937, R.S. 1929, supra. In Homan v. Connett, 348 Mo. 244, 152 S.W.2d 1053, this court held that the Federal Land Bank of St. Louis, a corporation created by Act of Congress, was not a foreign corporation within the meaning of Sec. 3482, R.S. 1939, prohibiting a foreign corporation from acting as a trustee in a deed of trust. In Hillis v. Home Owners' Loan Corp., 348 Mo. 601, 154 S.W.2d 761, it was held that the defendant was authorized to sue and be sued in any court of competent jurisdiction, and could be sued in tort in this State.
In Severson et al. v. Home Owners' Loan Corp. (Okla.), 88 P.2d 344, it was held that the defendant was not a foreign corporation under the laws of Oklahoma. [See also Home Owners' Loan Corp. v. Sherwin, 52 Ohio App. 567, 18 N.E.2d 992; Bezat et ux. v. Home Owners' Loan Corp., 55 Ariz. 85, 98 P.2d 852.] The effect of all the rulings, preceding the trial on the merits, in the present case, was that plaintiff was not a foreign corporation as contended by plaintiffs. The raising of a question on the construction of the Constitution is not a mere matter of form; such question must, in fact, exist in order to confer appellate jurisdiction on the Supreme Court. [Robinson et al. v. Nick et al., 345 Mo. 305, 134 S.W.2d 112, l.c. 114; Brookline Canning Packing Co. v. Evans, 238 Mo. 599, 142 S.W. 319.] All the questions raised by defendants could have been determined without reference to either the State or Federal Constitutions, and in such situation, no question of the construction of either Constitution was involved. [Brookline Canning Packing Co. v. Evans, supra.]
The cause should be transferred to the St. Louis Court of Appeals. It is so ordered. Hyde and Dalton, CC., concur.
The foregoing opinion by BRADLEY, C., is adopted as the opinion of the court. All the judges concur.