Case ID: misc_45/html/0358-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The South Amboy Terra Cotta Co., Respondent, v. Edward R. Poerschke, Appellant.
    (Supreme Court, Appellate Term,
    November, 1904.)
    A foreign corporation doing business in the State of New York must obtain authority to do so — It cannot sue upon a contract made prior to its so doing.
    Under section 15 of the General Corporation Law as amended by" chapter 538 of the Laws of 1901, a foreign corporation cannot maintain an action in the courts of the State of New York upon a contract, made in such state while it was doing business therein, unless, prior to the making of the contract, it had procured from the Secretary of State a certificate authorizing it to do business in the state of New York; it is not sufficient that the foreign corporation procured the required certificate prior to the commencement of the action on the contract.
    Appeal by defendant from a judgment of the City Court of the city of ISTew York, entered in favor of the plaintiff upon a verdict directed by the court.
    
      W. R. Hill, for appellant.
    Phillips & Avery (Frank M. Avery and Henry W. Eaton, of counsel), for respondent.
   Per Curiam.

The appellant raises but one point, viz: that the complaint should have been dismissed because the plaintiff, a foreign corporation, at the time of the making of the contract sued upon, which was made in .this State, was doing business in this State without having complied with section 15 of the General Corporation Law of this State which provides that such a corporation, as the plaintiff is, shall not do business in this State without having first procured from the Secretary of State a certificate for that purpose ; and that it shall not maintain any action in this State upon any contract made by it in this State unless prior to the making of such contract it shall have procured such certificate. Upon proof that, although the plaintiff had not obtained the certificate in question at the time the contract was made, it had obtained it before the commencement of the action, the trial justice directed a verdict in favor of the plaintiff. This ruling was in accordance with the strict construction of the act by the courts prior to its amendment by chapter 538 of the Laws of 1901, when the Legislature inserted the words unless prior to the making of such contract it shall have procured such certificate.” In fact, however, the trial justice made the said ruling in reliance upon the case of Dunbarton Flax Spinning Co. v. Greenwick & Johnsonville R. Co., 87 App. Div. 21. That case, it is true, was decided since the amendment of the statute in 1901, but an examination of it shows that it was not a contract made within this State, but an action in equity to compel the defendant to remove a bridge, piers and embankment erected by it on the stream below plaintiff’s mill, because those structures interfered with the flow of the stream and caused the water and ice to flow back upon plaintiff’s property, destroying it and interfering with the operation of its mill and the carrying on of its business, to its damage in a considerable amount. It also shows that the case decided but one point, viz: that the provisions of the Tax Law (§ 181 as amd. by Laws of 1901, chap. 558) requiring the payment of a tax to the State within thirteen months after beginning business in this State concern the people of the State and the corporation alone. The said case, therefore, has no application here. There are also a number of other cases, as for instance, Tallapoosa Lumber Co. v. Holbert, 5 App. Div. 559; Vaughn Machine Co. v. Lighthouse, 64 id. 138; Cummer Lumber Co. v. Associated Mfrs. Ins. Co., 67 id. 151; Penn Collieries Co. v. McKeever, 93 id. 303, in which the foreign corporation was permitted to recover because what it did in this State, did not amount to doing business in this State within the meaning of section 15 of chapter 538 of Laws 1901. These cases do not avail the plaintiff here, for the proof is clear that it did business in the State of Hew York at the time the contract sued upon was made. The evidence shows that it had a regular place of business in the city of Hew York at which its directors met and its books were kept, at which contracts and payments were made, and that the greater portion of its moneys was deposited in a bank in this city. The case at bar falls squarely within the decision of the recent case of Welsbach Co. v. Norwich Gas & El. Co., 96 App. Div. 52-54, to the effect that the legislative intent, that the procurement of the required certificate before the contract was made, shall be a condition precedent to maintaining an action thereon, is as plain as any language could make it, and that a contract made before the certificate was procured, is made incapable of enforcement. In the result of this case, Justice Houghton who had written the opinion of the court in Dunbarton Flax Spinning Co. v. Greenwich & Johnsonville R. Co., supra, concurred. The direction of a verdict in favor of the plaintiff was, therefore, erroneous.

The judgment must be reversed, and a new trial ordered, with costs to appellant to abide the event.

Present: Freedman, P. J., Bischoff and Fitzgerald, JJ.

Judgment reversed, and new trial ordered, with costs to appellant to abide event.