Case ID: ad_8/html/0444-01.html
Source: Caselaw Access Project
Author: {"author": "Adams, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Shelby Steel Tube Company, Respondent, v. Burgess Gun Company, Defendant; Frank B. Le Fevre, Appellant.
    
      A contract between foreign corporations made by a written oi'der mailed within, and accepted without, the State—a cause of action based on a default in paying for goods delivered within the State arises here — a certificate authorizing the vendor, a foreign corporation, to do business in the State not neeessa/ry.
    
    The Burgess Gun Company, a corporation organized under the laws of West Virginia, which had a manufactory and place of business at Buffalo, in the State of New York, sent to Shelby, Ohio, to the Shelby Steel Tube Company, a corporation organized under the laws of Ohio, a written order mailed at Buffalo for certain goods. These goods the Shelby Company delivered to the Burgess Company at Buffalo upon a credit of sixty days, and, at the end of that time, default having been made in payment therefor, commenced an action in the State of New York against the Burgess Company for the price of the goods.
    
      Held, that the action was maintainable under subdivision 3 of section 1780 of the Code of Civil Procedure, providing that an action may he maintained by one foreign corporation against another “where the cause of action arose within the State; ”
    That as the contract itself was accepted in Ohio it must be deemed to have been made there, but that the cause of action upon which the action itself was predicated was the failure to pay the purchase price in sixty days at the city of Buffalo, that being the place of payment, and consequently arose within the State of New York;
    
      That the provision of the General Corporation Law enacting that no foreign corporation doing business in the State of Hew York, which has not first procured from the Secretary of State thereof a certificate that it has complied with all the requirements of law to authorize it to do business in this State, shall be allowed to “ maintain any action in this State upon any contract made by it in this State,” had no application to this case, as the plaintiff was not seeking to maintain an action upon “any contract made by it in this State,” but one upon a cause of action which arose therein.
    Appeal by Frank B. Le Fevre, a judgment creditor of the defendant, from an order of the Supreme Court, made at the Erie Special Term and entered in the office of the clerk of the county of Erie on the 20tli day of February, 1896, denying his motion to vacate an attachment procured by the plaintiff upon the property of the defendant.
    The plaintiff is a foreign corporation, organized under the laws of the State of Ohio, and the defendant is likewise a foreign corporation, organized under the laws of the State of West Virginia, having its manufactory and place of business in the city of Buffalo, in this State.
    On' the 27th day of July, 1895, the defendant sent to the plaintiff at Shelby, in the State of Ohio, a written order for the goods, wares and merchandise mentioned in the complaint. This order was sent by letter, which was mailed at Buffalo. It was subsequently received and accepted by the plaintiff, and the. goods ordered were thereafter sent to the defendant and delivered to it at Buffalo, in the ordinary course of business, and upon a credit of sixty days.
    After the expiration of the term of credit the plaintiff commenced an action against the defendant, in which judgment was entered upon the 10th of January, 1896, in the clerk’s office of Erie county for §273.70. This judgment was thereafter vacated and set aside by an order of the Supreme Court. The plaintiff also obtained a warrant of attachment from the county judge of Erie county, by virtue of which it caused all the personal property of the defendant to be attached.
    Upon the 20th day of January, 1896, Frank B. Le Fevre obtained a judgment against the defendant in the Supreme Court, and caused the same to be entered in the Erie county clerk’s office for the sum of $141,920.70, damages and costs.
    
      The plaintiff had no office or place of business within this State, and has failed to obtain the certificate and file the proof required by sections 15 and 16 of the General Corporation Law. (Laws of 1892, Chap. 687.)
    Upon the 3d day of January, 1896, the above-mentioned judgment creditor moved at a Special Term of the Supreme Court, in the city of Buffalo, to vacate the attachment obtainéd by the plaintiff; which motion was denied, and from the order denying the same this appeal was taken.
    After the decision of the above-mentioned motion the attorneys for the plaintiff and for the judgment creditor entered into a written stipulation as to the facts of this case; which stipulation appears in the appeal book and contains, substantially, the facts above stated.
    
      Charles F. Tabor, for the appellant.
    
      George S. Hull and Sidney W. Petrie, for the respondent.
   Adams, J.:

It will be seen from a perusal of the accompanying summary of facts that this ease comes into this court under somewhat peculiar circumstances, for, since the decision of the appellant’s motion at Special Term, the attorneys have entered into a written stipulation, with the declared purpose of obviating what was, up to the time of its execution, a rather loose and tinsatisfactory statement of the facts relied upon by each of them. So far as we are able to discover, however, the stipulation simply renders concise and clear what was previously diffuse and vague; and, therefore, we are disposed to entertain the appeal, although we certainly should not feel at liberty to do so if the facts established by such stipulation were essentially different from those which were made to appear when the order appealed from was granted.

Both the parties to this action are foreign corporations, and the appellant, who is seeking to vacate the attachment obtained by the plaintiff against the defendant, is a judgment creditor of the latter, whose judgment lien was obtained subsequently to the attachment, and, consequently, he is in a position to attack the plaintiff’s warrant upon any ground which would render it nugatory. (Code Civ. Proc. § 682.)

The grounds relied upon by the appellant are specifically detailed in the notice of motion to vacate the attachment, and, relieved of all redundance, they may be regarded as two in number, viz. : (1) That the moving papers failed to show either that the contract was made, or that the plaintiff’s cause of action arose within this State; and (2) that such papers likewise failed to show the plaintiff’s right to maintain its action by a compliance with the requirements of sections 15 and 16 of the General Corporation Law of this State.

In our review, therefore, of the decision of the Special Term, it becomes necessary to determine whether the appellant’s contention has any substantial foundation upon which to rest, or, in other words, whether the plaintiff has failed to establish clearly and satisfactorily its right to the extraordinary remedy to which it has resorted, as it most assuredly was bound to do. (Smith v. Union Milk Co., 70 Hun, 348; affd., 143 N. Y. 622.)

Considering these propositions, then, in the order in which they are stated, it is to be borne in mind that, inasmuch as the plaintiff and the defendant are foreign corporations, the former was called upon to establish, affirmatively, as a prerequisite to obtaining its attachment, either that the contract sued upon was made, or else that its cause of action thereon arose within this State. And the first question to be determined is, whether or not it has fulfilled these requirements.

It appears that the plaintiff was organized as a corporation under the laws of the State of Ohio, and the defendant under those of the State of West Virginia. The former had no place of business, and made no pretense of doing business within this State, but the latter did have its manufactory and office for the transaction of business in the city of Buffalo.

Upon the 27th day of July, 1895, the goods, wares and merchandise mentioned in the complaint were ordered by the defendant by a letter written at the city of Buffalo and mailed to the plaintiff at Shelby, in the State of Ohio; and the goods so ordered were, in due time, shipped and delivered to the defendant, at Buffalo, upon a credit of sixty days.

The contract, therefore, was not completed until the acceptance of the order; and, as this was done in the State of Ohio, there does not appear to be much room for doubt as to where the contract was actually made. (Whart. on Confl. Law, § 421; 2 Pars, on Cont. 701; Murphy Varnish Co. v. Connell, 10 Misc. Rep. 553; Novelty Mfg. Co. v. Connell, 88 Hun, 254.)

It does not follow, however, that because the contract was not made within this State, a cause of action could not arise here. Ho cause of action arose anywhere upon this contract until the defendant had made some default in the payment of the contract price of the goods purchased, for, as was said in Durham v. Spence (L. R. [6 Exch. Cas.] 46), a “ cause of action (is) that which creates the necessity for bringing the action.” And in this case no necessity for bringing an action existed until after the expiration of the term of credit given. Again, it was said by Cleasby, B., in the case just quoted from, “ The cause of action must have reference to some time as well as to some place. Does, then, the expiration of the time when the cause of action arises give us any assistance in determining the place where it arises ? I think it does. The cause of action arises, when that is not done which ought to have been done, or that is done which ought not to have been done. But, the time when a cause of action arises determines also the place where it arises; for, when that occurs -which is the cause of action, the place where it occurs is the place where the cause of action arises.”

These definitions have been approved and adopted by the courts of this State. (Hibernia Nat. Bank v. Lacombe, 84 N. Y. 367-384; Toronto Gen. Trust Co. v. C., B. & Q. R. R. Co., 32 Hun, 190.) Applying them then to the case in hand, it will be seen that the thing to have been done, which was not done, was the payment of the contract price of the goods purchased at the expiration of the term of credit allowed. And it follows that this payment ought to have been made at the place where the term of credit expired, which, as we have seen, was the city of Buffalo. The cause of action, therefore, arose there, and the plaintiff, consequently, has brought its case within subdivision 3 of section 1780 of the Code of Civil Procedure, which provides that an action may be maintained by one foreign corporation against another, where the cause of action arose within the State.”

We are then brought to a consideration of the remaining question, which apparently is the one upon which the appellant places liis main reliance. But the conclusion which we have reached respecting the place where the plaintiff’s cause of action arose, of necessity, disposes of the contention that the plaintiff was prevented from maintaining its cause of action, because of the omission to procure the certificate and file the proof required by sections 15 and 16-of the General Corporation Law. Section 16 of this law simply provides that, before granting such certificate, the Secretary of State shall require every such foreign corporation to file in'his office a sworn copy of its charter, and a statement under its corporate seal particularly setting forth the business, or objects of the corporation,, which it is engaged in carrying on, or which it proposes to carry on within the State, and the place within the State which is to be its principal place of business, and designating, in the manner prescribed in the Code of Civil Procedure, a person upon whom process against the corporation may be served within the State. And section 15, so far as it has any application to this case, reads as follows : 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 * * * The Secretary of State shall deliver such certificate to-every such corporation so complying with the requirements of law. * * ]<[0 foreign stock corporation doing business in this State without such certificate shall maintain any action in this State upon any contract made iy it in this State until it shall have procured, such certificate.”

All that we deem necessary in order to dispose of this question is to call attention to the fact that the inhibition contained in these sections, or in either of them, resulting from a failure upon the part of the plaintiff to comply with their requirements, relates: (1) To the conducting of business within this State, which, as we have already seen, the plaintiff was in nowise attempting; and (2) To the maintaining of any action in this State upon any contract made therein.

We have endeavored in our discussion of the appellant’s first contention to draw the distinction between a contract and a cause of action; and if we have succeeded in making such a distinction clear, there will be no difficulty in making equally manifest the proposition that the second of the inhibitions above mentioned has no application to this case, for the reason that the plaintiff is not seeking to maintain its action upon “ any contract made by it in this State,” but only upon a cause of action which arose therein.

We conclude, therefore, that the plaintiff’s right of action is clearly established, as is also its right to a warrant of attachment, .and that, consequently, the order appealed from should be affirmed.

All concurred.

Order affirmed, with ten dollars costs and disbursements. 
      
      Laws of 1893, ctiap. 687.— [Rep.