Case ID: misc_23/html/0520-01.html
Source: Caselaw Access Project
Author: {"author": "Schuchmann, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Reedy Elevator Co., Appellant, v. The American Grocery Co., Respondent.
    (City Court of New York, General Term,
    May, 1898.)
    !•. Action by a foreign corporation — Right to sue as affected by Laws of 1892, chap. 687, § 15 —The statute affects the remedy only.
    The provisions of section. 15 of chapter 687 of the Laws of Í892, which forbid a foreign corporation to do business in the State of New York unless it has first procured a certificate from the secretary of ■ state that it has complied with all the requirements of law to authorize it to do business and which enact that “No foreign stock corporation doing business in this state without such certificate shall maintain any action in this state upon any contract made by it in this state until it shall have procured such certificate ”. permit such la corporation to maintain such an action where, although it had not such a certificate when the contract was made, it had obtained one before it begun its action upon the contract; the inhibition of the statute operating upon the remedy alone.
    2. Foreign corporation. — Affidavit for attachment — License tax.
    A foreign corporation which did its first business in- this state on • November 24, 1896 and brought an attachment action on the con- . tract then made upon November 15, 1897, has not, at the latter date, become liable to pay fthe license tax of one-eighth of one per cent, imposed upon such corporations by chapter 240 of the Laws of 1895, and hence its affidavit, for an attachment, need not allege payment of the tax and'is sufficient where it gives the details of the contract and further alleges that the corporation has complied with all tlie requirements of the law of the state to authorize it to do business therein.
    8. Attachment.
    An attachment will be sustained unless the papers clearly indicate that the plaintiff must ultimately fail.
    4. Foreign corporation — Power of its president to contract for it.
    The president and executive 'officer of a corporation is impliedly vested with authority to transact its ordinary business and the corporation is liable upon a contract made for it by him.
    Appeal from ail order vacating the attachment upon the papers upon which it was granted.
    
      Henry B. Wesselman, for appellant.
    Dill, Seymour & Kellogg, for respondent.
   Schuchmann, J.

The affidavit upon which the attachment was granted avers, that the plaintiff is a foreign corporation organized under the laws of the :State of Illinois, and having an office and its principal place ;of business !at Hos. 31 and 33 Tenth avenue, Hew York city, and has complied with all the requirements of the State of Hew York to authorize it to do business therein; and before the commencement of this action procured and received from the secretary of state of the State of Hew York his certificate in writing, in due form of law, under and pursuant 'to sections 15 and 16 of chapter 687 of the Laws of Hew York for the year 1892, known as the General Corporation Law; that the defendant is a foreign corporation organized under the laws of the State of Hew Jersey; that on or about Hoveinber 24, 1896, the plaintiff and defendant entered into a contract in writing, whereby plaintiff agreed to manufacture for, and sell, furnish and deliver to defendant a freight elevator, etc., for use in certain premises of defendant at Hos. 131-137 Franklin street, in the city of Hew York, for $1,050, and said defendant, by and through its president and general manager, Thomas L. Marsalis, agreed that it would purchase said elevator and pay (said sum of $1,050 therefor; that defendant broke said contract on December 27, 1896, and that that breach constitutes plaintiff’s cause of action, whereby it seeks to recover damages therefor. The ¡attachment was issued Hovember 15, 1897.

At the Special Term, the judge vacated the attachment on. the ground that the prohibition of the statute, section 15 of chapter 687 of the Laws of 1892, was absolute, and that no contract made in violation of it could be enforced.

Said section 15 reads as follows:

§ 15. Ho foreign stock .corporation other than a monied corporation, shall do business in this ,state without having first procured from the secretary of state a certificate that it has complied with all the requirements of law to authorize it to do business in this state, and that the business of the corporation to be carried on in this state is kuch as may be lawfully carried on by a corporation incorporated under the laws of this state for such or similar business, or, if more than one kind of business, by two or more corporations so incorporated for such lands of business respectively. The secretary of state shall deliver such certificate to every such corporation so complying with the requirements of law. ETo such corporation- now doing business in this state shall do business herein lafter December 31, 1892, without having procured-such ■ certificate from the secretary of state, but any lawful contract previously made by the corporation may be performed and enforced within the state subsequent to such date. Eb foreign stock corporation doing business in this state without such certificate shall maintain any action in this state upon any contract made by it in this state until it .shall have procured such certificate.”

The Special Term judge, in .holding as aforesaid, committed an error, because the'inhibition operated upon the remedy only, and was removed as soon as the corporation obtained'from the' secretary of state the required certificate; and in this case the ’certificate was obtained before the commencement of the action. By virtue of the . concluding clause of said section 15, a contract, although prohibited, might bécome -[nevertheless enforcible by an action- when the certificate was procured. Neuchatel Asphalte Co. v. Mayor, 155 N. Y. 373; O’Rielly Co. v. Greene, 18 Misc. Rep. 423.

This error would require a .reversal of the order.

.The defendant also claims, that the moving affidavit was fatally defective in failing to aver, that the plaintiff has paid a license fee required by the tax laws of this state, section 1, chapter 240, Laws of 1895. The provision is 'as- follows/:

Section 1. “Every foreign corporation except banking, fire, marine, casualty and life insurance companies, -and corporations wholly eng'aged in carrying on manufactures in this state, ¡cooperative fraternal insurance companies, endowment, orders and .building and loan associations,, now authorized to do business in this state, under the provisions of chapter /six hundred and eighty-seven of the laws of eighteen hundred and ninety-two, entitled Lin act to. amend the general corporation law,’ shall pay to the state treasurer for the use >of the state, a license fee of one-eighth of one per centum for the privilege of exercising its corporate franchises or carrying on its business in such corporate or organized, capacity in this state, on the first day of December, eighteen hundred and ninetyTfive, to be computed upon the basis of the amount of capital -stock employed by it within this 'state during the year preceding that date, and every such foreign corporation which shall hereafter be authorized to do business in this state shall pay a like - license fee for the privilege, to be computed upon the basis lof the capital stock employed by it within this state fox1 its business during the first year of carrying on its business in this state. * '* * No action shall be maintained or recovery had in ¡any of the courts of this state by such foreign corporation doing business in this state, without obtaining the certificate' ¡of authority prescribed by law, and a receipt for the license fee hereby imposed.”

The affidavit on which the attachment was granted shows affirmatively that the first business done by the plaintiff in this state was the contract which is the subject of the cause of action herein, which was made on November 24, 1896. The attachment was issued and this action commenced about November 15, 1897, which was within the thirteen months after plaintiff began business within this state (as provided by said statute), and plaintiff was, therefore, not liable to pay said tax at that time. The defendant seeks to invoke the rule of law that presumptions cannot be indulged in to sustain an attachment because the facts necessary to sustain the attachment must be proved by the affidavit to the satisfaction of the judge granting the same. Ladenburg v. Commercial Bank, 87 Hun, 269. But the allegations in the affidavit in ¡regard, to the making of said contract lof November 24, 1896, and the allegation that the plaintiff corporation has complied with all the requirements of law of the state of New York to authorize it to do business therein, are prima facie sufficient to entitle plaintiff to maintain this cause of action, and it becomes incumbent for the defendant ita controvert those facts in its defense ¡of this action. Lukens Iron & Steel Co. v. Payne, 13 App. Div. 11, 15.

The general rule is, that Upon a motion to Vacate an attachment, the court will not consider the merits of the action. .The attachment will be held, unless the complaint and affidavits clearly indicate that the plaintiff must ultimately fail. In the case at bar, the complaint and affidavit sufficiently ;set forth a cause of action, and we do not feel warranted to Vacate the attachment on that ground. Romeo v. Garofalo, 25 App. Div. 191.

The appellant claims, that, it appearing from the said affidavit, that the plaintiff corporation was organized eighteen months before the 'attachment; that its principal place of business was in the city of New York; and that the affiant, during all that time, had been its general manager, raises a presumption that the plaintiff was doing business prior to the making of the contract, to-wit, November 24, 1896. With this inference we do not agreé.

The appellant further claims, that the attachment papers are fatally defective in. not showing either actual or apparent authority on the part .of Marsalis, the defendant’s president, to bind the defendant by the contract in' suit. The affidavit, however, alleges that said Marsalis, the president of the defendant, as such entered into a contract with the plaintiff for a freight elevator for use in the defendant’s buildings Nos. 131' to 137 Franklin street, in" the city of New York, evidently to improve the business facilities of defendant’s business. The president of a corporation, being its principal ¡executive officer, is impliedly vested with authority to transact its ordinary business, and the corporation is '.liable for the contract so made by the president. Powers v. Schlicht Heat & Power Co., 23 App. Div. 380.

The point made by the appellant that.the said affidavit is irregular, because no venue is stated, is untenable, because, it being an, irregularity, the (same must be specified in the notice ¡of motion,' which has not been done.

Order appealed from reversed, with costs, and motion to vacate attachment denied, with costs.

Fitzsimons, Oh. J., and Oonlan, J., concur..

Order reversed, with posts, and motion to vacate attachment denied, ¡with costs.