The court, in Vaughan v. Brant, made the following wise observation: "The frequency with which such defenses as the one set up in this case are being pleaded reminds us that there is either a grave need of invoking the criminal statute of this state against persons who are prosecuting the execution of negotiable paper through fraudulent deceptions and misrepresentations or else there is gross negligence on the part of many who are executing such paper and sending it broadcast in the channels of commerce." Vaughan v. Johnson, 119 Pacific, 879.

We submit that the record did not present any evidence justifying the submission of the case to the jury; that the peremptory instruction should have been granted and that having failed to grant the peremptory instruction, the court should have set aside the verdict of the jury which followed the course that might be expected where a nonresident corporation sues a local man, and the case should therefore be reversed with explicit instructions as to the law.

Chapman & Johnson, for appellees.

A contract made by a foreign corporation which has not complied with the requirements of the statute, authorizing it to do business in the state, is void. Section 935 of the Mississippi Code of 1906, requires foreign corporations for profit incorporated under the laws of another state, now or hereafter doing business in Mississippi, to file with the secretary of state a copy of its character, or articles of incorporation, which charter, or articles of incorporation, or certificate, so to be filed, shall be duly certified by its president and secretary or other chief executive, and by attaching thereto its corporate seal, and the secretary of state, upon the payment of fees provided by this chapter, shall make a certificate that such corporation has filed a copy of its charter, or articles of incorporation, as required by this chapter, and any foreign corporation which shall not file a copy of its charter or articles or incorporation, as provided by this chapter, shall be

liable to a fine in the sum of nor less that one hundred dollars.

This section of the code was amended by the Laws of 1916, chapter 92, page 81, and makes a corporation failing to file a copy of its charter, or articles of incorporation liable to a fine of one hundred dollars. Now, therefore, under this law, the Partin Manufacturing Company, a foreign corporation, when it did business in the state of Mississippi, and took the notes of the Hough Drug Company and other parties, was violating the laws of the state, and failed to comply with this statute, and on failing to comply with this statute the Partin Manufacturing Company was guilty of a criminal offense, and liable to a fine of one hundred dollars thereby making the acts of the foreign corporation done in violation of the laws of this state void, and making the notes in the hands of the Partin Manufacturing Company void, and the notes being void in the hands of the Partin Manufacturing Company would therefore, be void in the hands of the transferee, Despres, Bridges and Noel, another foreign corporation. Bohn v. Lowry, 77 Miss. 427.

In the case of Chattanooga National Building & Loun Association v. William H. Denson, reported in the 47th Law Edition of the United States supreme court reports, at page 870, Justice MCKENNA says that the question presented by the case was: "Did the loan made by petitioner, or the taking for security of the notes and mortgage, under the circumstances presented, constitute doing business in the state within the meaning of the constitution and laws of the state, within the meaning of the constitution and laws of the state of Alabama?" Referring to the case of Dudley v. Collier, 87 Alabama, 431, the court announced that a loan, or the borrowing of money, by or from a foreign corporation constitutes doing business within the state, and is an unlawful act, subjecting both agents and the company to a heavy penalty. The provisions of the statute prescribing penalties were considered, and their

effect was declared to be not only to punish offenders against the statute, but to render their contracts void. Further in the case of Firror v. New England Mortgage Securities Company, 88 Alabama, 275, it was stated that the constitution prohibited the making of a single contract, or doing of a single act of business by a foreign corporation, in the exercise of a corporate function, as well as engaging in and carrying on its business generally. To the same effect are the cases of Mullens v. American Free-Hold Land Mortgage Company, 88 Alabama, 280, and Gin v. New England Mortgage Securities Company, 92 Alabama, 135, and Sullivan v. Sullivan Timber Company, 103 Alabama, 371; Hogan v. Intertype Corporation, reported in 206 S. W. 58.

BAD FAITH. ON THE PART OF THE PURCHASER OF A NOTE.

The plaintiff, Despres, Bridges & Noel, claimed to be innocent purchasers for value, under the Negotiable Instruments Law passed by our Legislature in 1916. In answer" to this we say that the plaintiff was not an innocent purchaser for value in due course because it obtained the notes with the knowledge of such facts on the part of the Partin Manufacturing Company that its action in taking the instrument amounted to bad faith.

Section 56, page 363, reads as follows: "To constitute notice of an infirmity in the instrument, or defect in the title of the person negotating same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect or knowledge of such facts that his action in taking the notes amounted to bad faith.

We say under the negotiable instruments law passed by the legislature in 1916 that it was necessarily the intention of the legislature to render any paper growing out of a transaction where a nonresident corporation failed to comply with the laws of Mississippi before doing business in Mississippi a void note in the hands of the original taker of the note, and void in the hands of the assignee, because any paper growing out of a transaction

of this character is so defective that it could not fall into the hands of an innocent purchaser and be enforced in the courts of the state, because it would be against public policy and because the defect in the note was inherent, and therefore, a subsequent purchaser must take notice of the defect. We refer you again to the case of Hogan v. Intertype Corporation, reported in volume 206 of the South Western Reporter, at page 58, and ask the court to especially read this case on that point.

Our courts have a line of decisions denying access to the courts by one, who in the conduct of his business, in making of a contract sued on, is violating the penal statutes, or public policy of the state. Wooten v. Miller, 7 S. & M. 385; Deans v. McLendon, 30 Miss. 343; Bohn v. Lowry, 77 Miss. 424; Orrell v. Mfg. Company, 83 Miss. 824; Young v. Insurance Company, 91 Miss. 715; Music Company v. Haygood, 108 Miss. 674.

WHAT CONSTITUTES NOTICE OR BAD FAITH GENERALLY.

It is a general principle running throughout all branches and subjects of the law that one will be charged with notice of the fact when he has information which should have put him on inquiry, if by following up such information with diligence and understanding, the truth could have been ascertained.

DELIVERY OF NOTES AS SECURITY FOR A PRE-EXISTING DEBT.

One who receives notes as security for a pre-existing debt is not a purchaser for value, under the statute. Merchants & Farmers' Bank v. Bank of Winona, 64 So. 210. Defendant was hampered considerably in the defense of this case, because George H. Partin and all his various clerks and representatives had gone to parts unknown. It was utterly impossible to locate any one of them in order to take their depositions for the defense of the case.

The record shows that George H. Partin was indicted by the federal grand jury in Memphis, Tennessee, but the indictment was quashed and Partin left immediately and

Mr. Johnson, the postoffice Inspector, who made the investigation for the fraudulent use of the mail by the Partin Manufacturing Company testified that he was unable to locate George H. Partin, Manager of the Partin Manufacturing Company.

ETHRIDGE, J., delivered the opinion of the court.

The appellant sued the appellee on five promissory notes bearing date September 14, 1917, due and payable as follows: One for two hundred dollars, due four months from date; one for two hundred and twenty-five dollars, due five months from date; one for two hundred dollars, due six months from date; one for two hundred dollars, due seven months from date; and one for two hundred dollars, due eight months from date. The first note reads as follows: "$200.

P. O., Indianola; State, Mississippi. "Date, Sept. 14-17. "Four months after date for value received we promise to pay to the order of Partin Manufacturing Company, Incorporated, two hundred dollars ($200) at Indianola Bank.

"HOUGH DRUG Co., by JOHN HOUGH." The other notes were identical in form and language, except that they were for 5, 6, 7, and 8 months, respectively, and in the case of the note due five months from date, the amount of the note was for two hundred and twenty-five dollars; the other notes all being for two hundred dollars each. Each of the said notes were indorsed as follows:

"Partin Manufacturing Co. Inc. C. H. Partin, Manager. Pay to the order of Foreman Bros. Banking Co. Chicago, Ill. Despres, Bridges & Noel. Pay to the order of Any Bank or Banker, Foreman Bros. Banking Co." 2--27 Chicago, Ill. 2--27. John Terborch, Cashier."

The defendant pleaded the general issue and two special pleas. By the first special plea it is alleged that plaintiff ought not to maintain its action because the debt sued