Following this rule, a number of courts (and with them seems to be the weight of authority) have held that, when the statute prohibiting the foreign corporations from doing business in the State without first complying with specified conditions, denounces a penalty for a failure to so comply, such penalty must be taken to be the exclusive means contemplated by the legislature of enforcing obedience to the statute; that there was no purpose to render the contracts and dealings of the company void and unenforceable.' This view, however, is far from universal. In a number of States such contracts have been held without authority and void, although the statute, prescribing the conditions upon which the company may do business in the State, also prescribes a penalty for a failure to comply with its provisions. And sometimes a law

1 Toledo Tie & L. Co. v. Thomas, 33 W. Va. 566, 11 S. E. Rep. 37; Columbus Ins. Co. v. Walsh, 18 Mo. 229; Clark v. Middleton, 19 Mo. 53; Ehrman v. Teutonia Ins. Co., 1 McCrary, 123; Union Mut. L. Ins. Co. v. McMillen, 24 Ohio St. 67; Clay F. & M. Ins. Co. v. Huron Salt & L. Mfg. Co., 31 Mich. 346; Pennypacker v. Capital Ins. Co., 80 Iowa, 56. 45 N. W. Rep. 408; Am. Loan & T. Co. v. East & W. R. Co., 37 Fed. Rep. 242; Brooklyn L. Ins. Co. v. Bledsoe, 52 Ala. 538; Northwestern Mut. L. Ins. Co. v. Overholt, 4 Dillon, 287. In Montana the penalty prescribed is not a disqualification to do business in the territory, but the statute simply relieves a party suing the corporation from the necessity of proving the corporation except by reputation. King v. National M. & E. Co., 4 Mont. 1.

2 Dudley v. Collier, 87 Ala. 431, 13 Am. St. Rep. 55, 6 South. Rep. 304: Farrior v. New England Mtge. Secy. Co., 88 Ala. 275, 7 South. Rep. 200: Christian v. American F. L. & Mtge. Co., 89 Ala. 198, 7 South. Rep. 427. But see Am. L. & T. Co. v. East & W. R. Co., 37 Fed. Rep. 242, where the Federal court construes the same provision of the Alabama constitution and reaches the opposite conclusion. See in further support of the text, Cincinnati Mut. H. Assur. Co. v. Rosenthal, 55 Ill. 85; Barbour v. Boehm, 21 Neb. 450, 32 N. W. Rep. 221; Rising Sun Ins. Co. v. Slaughter, 20 Ind. 520; Hoffman v. Banks, 41 Ind. 1; Union Central L. Ins. Co. v. Thomas, 46 Ind. 44; Daniels v. Barney, 22 Ind. 207; Barney v. Daniels, 32 Ind. 19; Cassaday v. American Ins. Co., 72 Ind.

prescribing a penalty for the failure to comply with the statutory requirements has been held to imply a prohibition of doing business in the State without such compliance, and a contract made in violation of such statute has been declared void.'

§ 80. Same-When no Penalty is Prescribed.But on the other hand, if the statute simply provides that before doing business the company shall comply with the certain conditions and prescribes no penalty, it is in effect a withholding of the comity of recognition of its corporate capacity, from the foreign company, and it comes into the State without legal capacity to make a contract." Said WATSON, J., in delivering the opinion of the Supreme Court of Oregon in Bank v. Page: "The general rule is that a contract in violation of law is void. The only exception to the rule is, that when a law imposes a penalty for the prohibited act, and it clearly appears that the legislature intended no more than to impose the penalty for the violation. of the law, a contract made in violation of such statute is not void. We do not think this statute 95; Jones v. Smith, 3 Gray, 500; Haverhill v. Prescott, 42 N. H. 547; Stewart v. Northampton Mut., etc. Ins. Co., 38 N. J. L. 436; Thorne v. Travellers' Ins. Co., 80 Pa. St. 15; Bank of Louisville v. Young, 37 Mo. 398.

1Etna Ins. Co. v. Harvey, 11 Wis. 394. See also Thorne v. Travelers' Ins. Co., 80 Pa. St. 15; Mutual Ben. L. Ins. Co. v. Bales, 92 Pa. St. 352. Compare Mitchell v. Smith, 1 Binn. 118; Seidenbender v. Charles, 4 Serg. & R. 151; Swan v. Scott, 11 Serg. & R. 155; Columbia Bridge Co. v. Halderman, 7 Watts & S. 233; Thomas v. Brady, 10 Pa. St. 164; Scott v. Duffy, 14 Pa. St. 18, 20; Holt v. Green, 73 Pa. St. 198.

2 Lycoming Fire Ins. Co. v. Wright, 55 Vt. 526; Bank v. Page, 6 Oreg. 431. Compare In re Comstock, 3 Sawy. 218; Semple v. Bank, 5 Sawy. 88; Northwestern Ins. Co. v. Elliott, 7 Sawy. 17, 5 Fed. Rep. 225. 36 Oreg. 431, 436.

Citing Lester v. Howard Bank, 33 Md. 558; Watrous v. Blain, 32 Iowa, 58; Wood Mowing Mach. Co. v. Caldwell, 16 Am. L. Reg. 554, 54 Ind. 270.

belongs to the excepted class. The legislature has prohibited the contract. It has provided no penalty for its violation. Unless the contract shall be held void the statute is of no effect."

§ 81. ness. A foreign company coming into the State to do business must not only qualify itself under the statute, but it must keep itself qualified. Where the license or authority to do business is renewed each year and is subject to revocation upon specified contingencies, a company which fails to have its authority renewed, or which submits to a revocation of it, loses thereby its power to contract. So where a foreign insurance company comes into the State under an authority to do business for one year and issues a policy, and accepts installment notes for the premiums, it must, in order to collect the installments as they become due, show a continued and existing authority as a condition of its right to recover.'

Same-Revocation of Authority to do Busi

§ 82. Same-When the Company is Estopped to Deny it. Another ground on which the validity of contracts made by a foreign company in violation of the statute, is sustained when the suit thereon is against the company, is the doctrine of estoppel. It is held that the company cannot plead its own. neglect to comply with the law as a defense."

§ 83. Same-Estoppel to Deny Company's Power to Contract. It is a well recognized rule of law that a party contracting and dealing with others as a corporation are estopped from denying the legality

1 American Ins. Co. v. Stoy, 41 Mich. 385, 402.

2 Ehrman v. Teutonia Ins. Co., 1 McCrary, 123; Brooklyn L. Ins. Co. v. Bledsoe, 52 Ala. 538; Hagerman v. Empire Slate Co., 97 Pa. St. 534. Contra: In re Comstock, 3 Sawy. 218.

of their incorporation.' This rule was applied by the Alabama court in Sherwood v. Alvis,' which was an action of ejectment involving the validity of a mortgage made to a foreign money lending company which had not complied with the statute. The court held that the contract was not of itself ultra vires, and the mortgagee was estopped from denying its validity. Evidently this was wrong and resulted from a confusion of ideas as to source of the foreign company's power while operating in the State; it amounted to a substitution of the corporate charter for the local regulating statute. The question was not as to the company's corporate power in the home of its domicile, but whether it was the purpose of the local legislature that its corporate powers should be exercised and its acts validated in the local jurisdiction. In all these cases the question is a matter of interpretation of the regulating statutes.'

§ 84. Same-When Matter of Abatement Merely. -Under a statute providing that "such foreign corporations shall not enforce, in any of the courts of this State, any contracts made by their agents or persons assuming to act as their agents before a compliance" with the provisions of the statute, it

1 Dutchess Cotton Mfg. Co. v. Davis, 14 Johns. 238, 7 Am. Dec. 459; John v. Farmers', etc. Bank, 2 Blackf. 367, 20 Am. Dec. 119; Chester Glass Co. v. Dewey, 16 Mass. 94; All Saints' Church v. Lovett, 1 Hall, 191.

2 83 Ala. 115, 3 South. Rep. 307. Compare Williams v. Hentermeister, 26 Fed. Rep. 889; United States Express Co. v. Lucas, 36 Ind. 361.

3 The decision in Alvis v. Sherwood, 83 Ala. 115, 3 South. Rep. 307, was subsequently explained and criticised by the Alabama court. Dudley v. Collier, 87 Ala. 431, 6 South. Rep. 304; Farrior v. New England Mtge. Secy. Co., 88 Ala. 275, 7 South. Rep. 200. It ought to have been candidly overruled.

41 Rev. Stat. Ind. 1876, p. 373, § 4.

has been held that such a contract is not void, but that the failure of the company to qualify may be pleaded in abatement of an action thereon as prematurely brought.' Therefore, in a suit by a foreign corporation, as payee of a note against the maker, an allegation by the defendant that, at and prior to the making of the note, the company had failed to comply with the statute is insufficient. It should be that the statute had not been complied with at and prior to the commencement of the action. A policy issued without compliance with the statute has been held sufficiently valid to amount to a violation of a condition in another policy against other insurance.'

85. Same-Recovery of Money Paid.-Where the contract is void because of the company's failure to comply with the statute, the company is primarily at fault, and when money has been paid in pursuance of the agreement by the other party, it has been held that he is not so far particeps criminis as to prevent his recovering it back. The statute was made for the protection of such persons,

I Walter A. Wood Mowing, etc. Co. v. Caldwell, 54 Ind. 270; Daly v. Nat. L. Ins. Co., 64 Ind. 1; Singer Mfg. Co. v. Brown, 64 Ind. 548; Domestic S. M. Co. v. Hatfield, 58 Ind. 187; Elston v. Piggott, 94 Ind. 14; American Ins. Co. v. Wellman, 69 Ind. 413. See also Utley v. Clark-Gardner M. Co., 4 Colo. 369; Tabor v. Goss & Phillips Mfg. Co., 11 Colo. 419. 18 Pac. Rep. 537.

2 Singer Mfg. Co. v. Brown, 64 Ind. 548. Such a plea in abatement must conform to the rules governing pleas in abatement in other cases. It must state the substantive facts. A plea that the plaintiff company "had not complied with the provisions of an act of the General Assembly" respecting foreign corporations, was held insufficient as stating a bare, unsupported conclusion. Singer Mfg. Co. v. Effinger, 79 Ind. 264. But the failure of the foreign company to qualify under the Indiana statute (Rev. Stat. 1876, p. 373, §§ 1 and 2) cannot be pleaded in abatement, except in suits to enforce contracts. Smith v. Little, 67 Ind. 549. 3 Behler v. German Mut. F. Ins. Co., 68 Ind. 347, 355.