The laws of the several States almost invariably prescribe certain conditions which must be satisfied before foreign corporations are authorized to do business within the State. Some of these statutes do not expressly provide that no action can be maintained upon contracts or sales made without satisfying the statutory conditions for doing business legally. Such statutes may either provide a specific penalty for doing business illegally or no consequence may be expressed in the statute as a result of violation of the law. A plausible argument has been made in some cases for a difference under statutes of these two types in regard to the effect upon the right of a corporation to sue upon a contract made by it, though it has not complied with that statute. It is suggested that when a penalty is expressly imposed it may fairly be regarded as the only consequence the law meant to impose for violation of the law, but that where the statute merely prohibits without penalty, the contract must be thereby made unenforceable or no punishment would follow a violator of the law.10 Though careful consideration must be given in each case to the words of the statute in question, the conflicting decisions of the courts do not seem, generally, based on very secure or sound distinctions. In a number of cases it has been held that recovery may be had upon contracts made in violation of laws prohibiting the transaction of business without observance of cer tain formalities, either with a penalty attached or without such a penalty.11 Other authorities, however, hold that contracts
10 The statutes and decisions under them are collected in 50 Am. L. Rev. 641. See also Ann. Cas. 1914 A. 702, 24 L. R. A. 315n, 21 L. R. A. (N. S.) 707, 38 id. 210.
11 Northwestern Mutual life Ins. Co. v. Overholt, 4 Dill. 287; Lasswell Land Ac. Co. v. Lee, Wilson & Co., 236 Fed. 322, 149 C. C. A. 454; Thomas Cusock Co. v. Ford, 138 La. 1096, 71 So. 196; Kendrick & Roberts, Inc., v. Warren Bros. Co., 110 Md. 47, 72 Atl. 461; Rogers & Co. v. Simmons, 155 Mass. 259, 29 N. E. 580; Kelly v. Rice-Blake Lumber Co., 167 Mass. 28, 44
N. E. 1090; Enterprise Brewing Co. v. Grime, 173 Mass. 252, 53 N. E. 855; Gold Issue Mining Ac. Co. v. Pennsylvania F. Ins. Co., 267 Mo..524, 608, 184 S. W. 999 (Colorado law); King v. National Mining Co., 4 Mont. 1, 1 Pac. 727; G. Ober & Sons Co. v. Eatsenstein, 160 N. C. 439, 76 S. E. 476; Wright v. Lee, 4 S. Dak. 237, 55 N. W. 931; Eastern Building Assn. v. Snyder, 98 Va. 710, 37 S. K 298; Dearborn Foundry Co. v. Augustine, 5 Wash. 67, 31 Pac. 327; Edison General Electric Co. v. Canadian Pacific Navigation Co., 8 Wash. 370,36 Pac. 260,24 made under such circumstances cannot be enforced.12 So insurance companies have been denied the right to recover premiums when the business was done in violation of local statutes.13