The opinion of the court was delivered by: Austin, District Judge.
This matter concerns the judicial construction of certain
provisions of the Illinois Attachment Act and the Illinois
Business Corporation Act.
Plaintiff, an Illinois corporation, is a manufacturer of vinyl
plastic products. In mid-1972, Defendant, a Massachusetts
corporation, agreed to buy certain goods which Plaintiff agreed
to manufacture and sell. At the conclusion of their dealings, a
dispute arose as to the amount due to Plaintiff under the
agreement. This action is the result of that dispute.
On March 19, 1973, Vinylweld commenced this litigation in the
Circuit Court of Cook County by filing a Writ of Attachment upon
an Illinois resident who was indebted to Metropolitan. The writ,
issued on Vinylweld's affidavit, alleged that Metropolitan "is
not a resident of this State and his place of residence is 215
First Street, Cambridge, Massachusetts." Although Metropolitan
did not possess a Certificate of Authority to do business in
Illinois at any time during 1972, it received such authorization
on January 2, 1973. See Ill.Rev.Stat., ch. 32, § 157.102
Defendant did not appear before the State Court and filed a
petition for removal to this Court pursuant to 28 U.S.C. § 1441.
Defendant now asks this Court to quash the Writ of Attachment.
The sole issue for determination is whether a foreign corporation
holding an Illinois Certificate of Authority is a "resident" for
purposes of the Illinois Attachment Act. For reasons stated
below, the question is answered in the affirmative and the writ
Attachment in Illinois is an extraordinary writ by which the
owner of property is involuntarily dispossessed prior to any
adjudication of the rights of the parties. As such, the State
Legislature has seen fit to circumscribe its use by conditioning
its existence and validity upon compliance with a specific
statutory grant. Culver v. Rumsey, 7 Ill. App. 422 (1880); Martin
v. Schillo, 389 Ill. 607, 60 N.E.2d 392, cert. denied
325 U.S. 880, 65 S.Ct. 1572, 89 L.Ed. 1996 (1945). The first section of
the Illinois Attachment Act, Ill.Rev.Stat., ch. 11, § (1), par.
1, provides that:
In addition, the Illinois Business Corporation Act,
Ill.Rev.Stat., ch. 32, § 157.103, stipulates in pertinent part
. . . A foreign corporation which shall have
received a certificate of authority under this Act
shall . . . enjoy the same, but no greater, rights
and privileges as a domestic corporation. . . .
Read together, the import of these statutes is clear: foreign
corporations — whether "residents" or not — that do business in
Illinois are subject, in one way or another, to all the
liabilities, restrictions, and obligations imposed upon domestic
corporations. Charles Friend & Co. v. Goldsmith & Seidel Co.,
307 Ill. 45, 138 N.E. 185 (1923); People v. New York Title & Mortgage
Co., 346 Ill. 278, 178 N.E. 661 (1932). Where a foreign
corporation is not a state resident, the Attachment Act subjects
its Illinois property to court supervision during the pendency of
the lawsuit. Where the corporation has complied with registration
provisions of the Revised Statutes, it is deemed to be a resident
and there is neither need nor statutory authority for the
extraordinary process of attachment since the court possesses
personal jurisdiction over all parties and is able to fashion and
enforce whatever remedies are appropriate.
Thus, the generally accepted rule is that, to constitute a
ground for attachment, nonresidence must exist at the time the
writ is issued. Witbeck v. Marshall-Wells Hardware Co., 188 Ill. 154,
58 N.E. 929 (1900). See also 7 C.J.S. Attachment §§ 29 et
seq. Under this reasoning, the Writ of Attachment here was
improperly issued since the Defendant was duly licensed and
residing in Illinois on and before March 19, 1973. In short,
Defendant was fully amenable to the personal jurisdiction of any
competent court in this State. The cases of Ford v. Transocean
Airlines, Inc., 28 Ill. App.2d 234, 171 N.E.2d 225 (1st Dis., 2d
Div. 1960) and Charles Friend & Co. v. Goldsmith & Seidel Co.,
supra are on point and support this interpretation.
Although its position is relatively unclear, Plaintiff disputes
this analysis and offers a three-prong rationale for subjecting
Defendant to the attachment process. First, Plaintiff maintains
that, since Defendant conducted business without a Certificate,
its activities in Illinois were unlawful. Second, Plaintiff
apparently argues that, since Defendant's actions were unlawful,
it is ineligible for residency. And, finally, Plaintiff asserts
that, since Defendant is not eligible for residency, its
registration prior to suit cannot defeat Plaintiff's "right" to
an attachment action. Each of these contentions is legally and
First, there is nothing in the record that indicates that
Defendant entered into any Illinois transaction other than the
one at issue prior to January 2, 1973. In determining what
constitutes "transacting business," Illinois courts have
traditionally excluded occasional and isolated transactions.
Emcee Corporation v. George, 293 Ill. App. 240, 12 N.E.2d 333
(1938); Hunter W. Finch & Co. v. Zenith Furnace Co., 245 Ill. 586,
92 N.E. 521 (1910); Orton v. Woods Oil & Gas Co.,
249 F.2d 198 (7th Cir. 1957). See also Note, 14 DePaul L.Rev. 462
(1965). On this record, Defendant's conduct cannot be
characterized as unlawful.
Even if its activities with the Plaintiff were proven unlawful,
Defendant is not thereby precluded from applying for and
receiving a Certificate of Authority. Indeed, except for isolated
transactions as noted above, contracts entered into by foreign
corporations without prior compliance with statutory requirements
are merely unenforceable by the corporation. Ill.Rev.Stat., ch.
32, § 157.125. Neither the Revised Statutes nor the cases support
Plaintiff's final argument must fail with the others. Section
one of the Attachment Act authorizes attachment only "Where the
debtor is not a resident of this State." Plaintiff would have
Court read the statute to allow such action "Where the debtor was
not a resident of this State at the time the claim arose." Such a
construction is plainly untenable.
Plaintiff and Defendant are personally before this Court as
residents of Illinois. The Writ of Attachment was improperly
issued and is hereby vacated.
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