The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918. Page: 45

GEORGE V. OSCAR SMITH & SONS CO.

BATTS, Circuit Judge (dissenting). The Smith Company (Oscar
Smith & Sons Company, appellee), a New York corporation, loaned
to Crawford (V. L. Crawford, using the name of Crawford Bleachery),
of Meridian, Miss., $25,000, to secure which Crawford executed a
deed of trust, naming Broach trustee. The notes evidencing the debt
not having been paid, Broach advertised for sale the property conveyed
by the deed of trust. Unsecured creditors instituted a proceeding to
have Crawford adjudged a bankrupt, and A. L. George was appointed
receiver. George instituted proceedings before the referee in bank-
ruptcy against the Smith Company and Broach, and obtained an order
restraining the sale. The petition set up: (1) That at the time of the
execution of the deed of trust Crawford was insolvent, and that the
Smith Company had knowledge of his insolvency, and that the deed of
trust was fraudulent, and gave the Smith Company an illegal prefer-
ence; (2) that the trustee was about to embrace property in the sale not
included in the deed of trust. The Smith Company answered, and
the receiver, amending, further charged that the debt due the Smith
Company was usurious, and that the Smith Company was a nonres-
ident corporation, doing business in Mississippi, without having filed a
copy of its charter, as required by law, and that the debt was con-
tracted in the course of the company's business carried on and done
in that state.
The referee heard evidence and denied the motion to set aside the
restraining order. This action was reviewed and reversed by the
United States District Judge, his decree finding that the deed of trust
was not given to defraud creditors; that the trustee was not under-
taking to sell property not covered by the deed of trust; that the notes
secured by the deed of trust were not usurious; and that the Smith
Company was not carrying on a business in Mississippi within the
meaning of the Mississippi law. This judgment is before us for re-
view.
The finding that the deed of trust was not executed for the purpose
of defrauding creditors is sustained by the evidence.
The questions remaining for determination are: (1) Is the transac-
tion one affected by section 935 of the Mississippi Code of 1906? (2)
Was the contract subject to the laws of the state of Pennsylvania or
to those of the state of Mississippi? (3) If subject to the laws of the
state of Mississippi, was the contract usurious? and, if usurious, to
what extent? and is the interest alone to be forfeited, or is the entire
contract void? (4) If the contract is a Mississippi contract and usu-
rious, are the federal courts to give effect to the consequences indicated
by the statutes of Mississippi?
Section 936, Mississippi Code 1906.
The validity of the notes and mortgage is attacked upon the ground
that the Smith Company was carrying on a business in Mississippi
without complying with section 935 of the Mississippi Code of 1906.
This section requires every foreign corporation doing business in Mis-
sissippi to file a copy of its charter, and it is provided that any foreign
.corporation "which shall not file a copy of its charter, as provided in