Warren v. Inter State Realty Co.

<p>Abstract of the Decision.</p> <p>1. Corporations, § 19*—for what purpose may not he organized. A corporation for the purpose of transacting the business of real estate brokerage cannot be organized under any existing statute of this State.</p> <p>2. Corporations, § 669*—when foreign corporation cannot he authorized to enter State. Since a corporation for the purpose of transacting the business of real estate brokerage may not be organized under any existing statute of this State, under the Foreign Corporation Act of 1905, sec. 2 (J. & A. If 2527) a foreign corporation organized for that purpose cannot he authorized to do business in this State.</p> <p>3. Corporations, § 709*—when foreign corporation doing business in State. A foreign corporation organized for the purpose of transacting a real estate brokerage business is doing business in this State, where it maintains a general office here and not merely solicits residents to purchase lands, but actually executes the contracts therefor in this State.</p> <p>4. Corporations, § 745*—when officer of foreign corporation cannot recover on contract. A director of a corporation, in the absence of proof to the contrary, must be held to have been conversant with the character and scope of business in which the corporation was engaged, and the manner in which it was transacted,- and where the corporation was illegally doing business in the State, he cannot recover upon a contract for compensation entered into with it.</p> <p>5. Contracts, § 157*—when illegal contract not enforced. Where a contract between a principal and an agent grows directly out of an illegal transaction, in the execution of which the agent has been concerned and in which he participated, the law will not assist the principal to recover from the agent or assist the agent to recover from the principal.</p> <p>6. Corporations, g 714*—when contract with foreign corporation illegal. A contract between a foreign corporation, which could not be authorized to transact business in this State, and one of its officers, which contemplated the performance of services by him and the transaction of business by such corporation in this State, is illegal.</p> <p>7. Corporations, § 745*—when foreign corporation not estopped to raise defense of ultra vires. As between a foreign corporation and one of its officers, the former cannot be estopped to assert the illegality of a contract between them which was ultra vires because contemplating the transaction of business in this State, which the corporation" was not authorized and could not under the law be authorized to transact.</p> <p>8. Assumpsit, action op, § 71*—when quantum meruit proper for recovery on illegal contract. The fact that a contract between a foreign corporation and one of its officers for the performance of services by the latter was illegal because it was not authorized to transact business in this State, does not preclude a recovery upon the quantum meruit, but in such case inquiry should be permitted as to the amount already paid to such officer under the terms of the contract.</p> <p>9. Appeal and error, § 1794*—when judgment against garnishee reversed. A reversal of a judgment against the defendant in the principal action necessarily requires a reversal of the judgment against the garnishee.</p> <p>10. Frauds, statute op, § 24*—when agreement not to he performed within one year. An agreement on the part of one of the officers of a corporation to finance the corporation, which was organized to sell lands under a contract, giving it brokerage rights for a period of three years, is within the Statute of Frauds.</p>