U.S. Supreme Court
Fritts v. Palmer, 132 U.S. 282 (1889)
Fritts v. Palmer
Submitted November 6, 1889
Decided November 25, 1889
132 U.S. 282
The Constitution of Colorado provided that no foreign corporation should do business in the state without having a known place of business and an agent upon whom process might be served. A statute of the state made provision for the filing by such corporation with the Secretary of a certificate showing its place of business and designating such agent or agents, and also a copy of its charter of incorporation, or of its certificate of incorporation under a general incorporation law, and, in case of failure to do so, that each and every officer, agent and stockholder of the corporation should be jointly and severally personally liable on its contracts made while in default. Said act further provided that no corporation, foreign or domestic, should purchase or hold real estate except as provided in the act. The act did not indicate a mode by which a foreign corporation might acquire real estate in Colorado. G., chanroblesvirtualawlibrary
being the owner in fee of a tract of realty in that state, conveyed it by deed of warranty to a corporation organized under the laws of Missouri, which had not then attempted and did not afterwards attempt to comply with those provisions of the Constitution or laws of Colorado. F., the defendant below, claimed through this corporation. Some months after his deed to the corporation, G. executed, acknowledged and delivered a quitclaim deed of the premises to the grantor of P., the plaintiff below.
(1) That perhaps the reasonable interpretation of the statute was that a foreign corporation should not purchase or hold real estate in Colorado until it should acquire, in the mode prescribed by the local law, the right to do business in that state.
(2) That these constitutional and statutory provisions were valid so far as they did not directly affect foreign or interstate commerce.
(3) That the company violated the laws of the state when it purchased the property without having previously designated its place of business and an agent.
(4) But that the deed was not thereby necessarily made absolutely void as to all persons and for every purpose, inasmuch as the Constitution and laws of Colorado did not prohibit foreign corporations from purchasing and holding real estate within its limits.
(5) That the penalty of personal liability of officers, agents and stockholders in case of noncompliance with the provisions of the statute having apparently been deemed by the state legislature sufficient to effect its object, it was not for the judiciary to enlarge that penalty by forfeiting the estate for the benefit of parties claiming under a subsequent deed from the same grantor
(6) That the grantee under the subsequent quitclaim deed could occupy no better position than the grantor, common to both parties, would have occupied if he had himself brought the action, and that in that case it could not have been maintained.
This was an action in the nature of an action of ejectment. Judgment for the plaintiff, to which this writ of error was sued out. The case is stated in the opinion.