Case Name: The People of the State of New York, Appellant, v. American Ice Company, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-12-17
Citations: 135 A.D. 180
Docket Number: 
Parties: The People of the State of New York, Appellant, v. American Ice Company, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 135
Pages: 180–187

Head Matter:
The People of the State of New York, Appellant, v. American Ice Company, Respondent.
First Department,
December 17, 1909.
Pleading — suit against foreign corporation for violation of statutes forbidding combination's in restraint of trade — power of court to revoke license to do business — motion to strike out allegations — when right to relief demanded not determined on motion — allegations not irrelevant — when complaint not indefinite and uncertain — form of alleging contract.
It. seems, that in an action by the People against a foreign corporation for a violation of- the various State statutes prohibiting monopolies in restraint of trade, the court may decree a forfeiture óf a license to do business here granted -by the Secretary of State pursuant to section 15 of the General Corporation Law, on proof of a willful, systematic and continuous violation of our laws. A special act of the Legislature is not necessary to annul the license of a foreign corporation.
Where the complaint in such action is framed upon the theory that the People are entitled to relief both by way of injunction and by the cancellation of the license to do business in this State and contains appropriate allegations bearing upon the right to such relief, the court, on a motion to strike out allegations of the complaint, will not determine the relief to which the People may become entitled on proof of the facts stated, where the question is not free from doubt. That question should be left to the trial court.
Hence, it is error to strike out allegations of the complaint specifying numerous contracts made by the defendant in violation of our statutes forbidding combinations in restraint of trade,' as the People should be permitted to prove any violation of the law by the defendant since it obtained a right to do business here. It seems, that had the People merely alleged that the defendant had repeatedly violated our statutes without setting forth any specific acts, the complaint would be held insufficient on demurrer. And moreover, should the People limit their allegations to certain acts, they would be precluded from proving other specific acts at trial.
Even if it should he held that the remedy of the People is limited to an injunction, allegations as to expired contracts made by the defendant in violation of our statutes, should not be stricken out where they preceded contracts yet unexpired, and are necessary to show the history of the defendant’s transactions. 'Complaint examined, and held, that the plaintiff should not be required to make it more definite and certain as to the repetition of allegations contained in a first cause of action.
A plaintiff pleading a contract is not required to set forth a copy or all the terms thereof, hut need only allege the effect of the provisions so far as material to the issues raised. A defendant desiring a copy of the complete contract should request a bill of particulars, instead of moving to make the complaint more definite and certain.
Appeal by the plaintiff, The People of the State of Hew York, from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 29th day of September, 1909, striking out certain allegations of the complaint and requiring others to be made more definite and certain, and directing that an amended complaint be served conforming the pleading to the requirements of the order.
Ezra P. Prentice, Deputy Attorney-General [Jacob Frank, Deputy Attorney-General, with him on the brief], for the appellant.
Joseph S. Auerbach, for the respondent.

Opinion:
Laughlin, J.:
The defendant is a corporation organized under the laws of New Jersey on the 11th day of March, 1899. It has been and is conducting business in the city of Nesv York under a certificate issued by the Secretary of State on the 14th day of April, 1899, pursuant to the provisions of section 15 of the General Corporation Law with respect to permitting foreign corporations to carry on business in this State. (See Gen. Laws, chap. 35, § 15; Laws of 1892, chap. 687, § 15, since amd. by Laws of 1901, chaps. 96, 538, and Laws of 1904, chap. 490; now Consol. Laws, chap. 23 [Laws of 1909, chap. 28]; § 15.) The action is brought by the People in their soveréign right' for redress by way of injanction and a cancellation of the permit to do business, on the ground that the defendant has deliberately,., repeatedly and continuously violated the provisions of section 7 of the Stock Corporation Law (Gen. Laws, chap. 36 ; Laws of 1890, chap. 564, as amd. by Laws of 1892, chap. 688 and Laws of 1897, chap. 384; now Stock Corp. Law [Consol. Laws, chap. 59; Laws of 1909, chap. 61], § 14), and sections 1 and 3 of chapter 690 of the Laws of 1899 (now General Business Law [Consol. Law, chap. 20; Laws of 1909, chap. 25], § 340, 342) by combining with other corporations and persons for the creation of a monopoly in the ice trade in the city of New York and adjacent territory,) and for the unlawful restraint of trade in said business, by limiting the production and sale of ice in the city and, adjacent territory in the State, and for the prevention of competition therein, and has conducted and is conducting its business in contravention of the pulilic policy of this State, and in violation of the provisions of section 168 of the Penal Code (now Penal Law [Consol. Laws, chap. 40; Laws of 1909, chap. 88], § 580) has conspired with other persons and corporations to commit acts injurious to trade and commerce with respect to the production and sale of ice, and to commit crimes with respect thereto.
The complaint contains seven-counts, and the relief demanded is threefold: First, that the consummation and execution of certain contracts and the repetition of certain alleged illegal acts be. enjoined; second, that the defendant be perpetually enjoined from interfering with or preventing competition in the supply and sale, of ice in Greater Hew York and surrounding towns within the State, and, third, that it be adjudicated that the defendant has violated the provisions of section 7 of the Stock Corporation Law and chapter 690 of the Laws of 1899, and has acted contrary to the public policy of our State in the exercise of its corporate rights, privileges and franchises, and has abused the right, privilege and franchise of doing' business within this State, and that its certificate of authority to do business here be revoked and annulled, and that it be ^ forever-enjoined from, exercising any corporate right, privilege or ¡ franchise within this State and be ousted from and forever enjoined ; from exercising any right, privilege, franchise or power to do business * here, with the usual prayer for other and further relief.
The action was commenced on the 6th day of July, 1908, and it was then authorized by section 3 of chapter 690 of the Laws of 1899, and by section 1948 of the Code of Civil Procedure (as amd. by Laws of 1896, chap. 962). The provisions of said section 1948, so far as material, were at the time the action was commenced as follows:
"The Attorney-General maymaintain an action, upon his own/ information or upon the complaint of a private person, in either of tiie following cases: .*
"4. Against a foreign corporation which exercises within the State any corporate rights, privileges or franchises not granted to it by the law of this State; or which within the State has violated any provision of law, or, contrary to law, has done or omitted any act, or has exercised a privilege or franchise not conferred upon it by the law of this State, where, in a similar case, a domestic corporation would, in accordance with section seventeen hundred and ninety-eight of this act, be liable to an action to vacate its charter- and to annul its existence; or which exercises within the State any corporate rights, privileges or franchises in a manner contrary to the public policy of the State." '
This section has since beeii amended by making the reference to section 131 of the General Corporation Law instead of to section 1798 of the Code of Civil Procedure which was repealed. (Consol. Laws, chap. 23 ; Laws of 1909, chaps. 28, 65.) The extent of the relief to which the People may be entitled on proof of the allegations of the complaint is not entirely clear. The only statutory provisions with respect to the judgment to be rendered in such an action appear to be those contained in section 195.5 of the Code of Civil Procedure (as amd. by Laws of 1896, cliap. 963) which' commands that a final judgment in favor of the plaintiff in such an action "must perpetually restrain the-defendant or defendants from tlie commission or continuance of the act or acts complained of," and the provisions'of section 3 of chapter 690 of the Laws of 1899 (now General Business Law [Consol. Laws, chap. 20 ; Laws of 190.9, chap.. 25], § 342), which likewise only pro vides for an injunction. It does not necessarily follow that the only relief to which the People may become entitled in any event is an injunction. There seems to be i no authority conferred upon the Secretary of State to revoke a certifi-/ cate issued to a foreign corporation to do business in tins State, excepting for failure .to designate a person in certain -contingencies upon^ whom process may be served. (See Gen. Corp. Law [Gen, Laws, chap.' • 35, Laws of 1892, chap. 687], § 16, as amd. by Laws of 1895, chap. 672.; now Consol. Laws, chap. 23 [Laws of 1909, chap. 28], § 16.) The learned Counsel for the respondent contends that a special- act of the Legislature would be necessary to-annul the right of the defendant to transact business in this State under the. certifi cate'issued to it by the Secretary of, State. Since -the action is authorized in behalf, of the. State to redress violations of our statutes by a foreign corporation having no right to do business within the State, excepting by license from it which it may grant or revoke at will, it may wrell be- arg'ued'tliat \ when the Legislature authorized an action' to be brought on account ¡ of such violations, the court may, on proof showing willful, systematic and-continuous violations of our laws, annul or declare a for feitiire of the right of the corporation to do business here, following and' adopting, by analogy, the remedy prescribed in. actions i against a domestic corporation for violation of its corporate rights ) or " any provision'of law, whereby it has forfeited its charter,-or I become liable to be dissolved, by the abuse-of' its .powers." (Code Civ. Proc. § 1798,1801; now Gen. Corp. Law [Consol. Laws, chap. 23; Laws of 1909, chap. .28], §131, Í34.) It is not necessary to express an opinion on the merits with respect to that question now nor do we deem it proper-to do só. -The complaint is framed .upon the theory that the People are - entitled to relief both by way of injunction and the cancellation of the certificate .authorizing the defendant to do business in the State and it contains appropriate allegations bearing upon the right of the People to such relief. The court should not, on a motion to strike out allegations of a pleading, attempt to decide, in a case not entirely free from doubt, the relief to which the party' whose pleading is attacked may become entitled on proof of the facts stated. That question should be left to the trial court. These views require a reversal of the order, for the1, learned trial court, in striking out numerous allegations of the j complaint, evidently proceeded upon the theory that the only relief j which the People can obtain in the action, in any event, is am injunction restraining the further execution of existing contracts! with individuals and corporations with respect to the purchase of .ice, with respect to limiting the output, and with respect to' leaving, the supply of ice in the city of Greater blew York and certain other adjacent territory entirely to. the defendant without competition. The People have specified numerous contracts alleged to have been made by the defendant in violation of all or some of the statutes to which reference has been made, which contracts have been wholly executed. These allegations have all been 'stricken from the complaint. We are of opinion that they were not irrelevant; that they were germane to the issues presented for determination and decision on the trial, and that the court erred in striking them out. The plaintiff should be permitted to prove any violation of our laws by the defendant since it obtained the certificate to do business within the State, and, as already observed, it will then be for the trial court to decide whether if plaintiff shall be "entitled to relief it shall be confined to an injunction against further violations of the statutes or against further performing live contracts or may have in addition a decree of forfeiture and annulment of defendant's right to do business here. The defendant cannot possibly be prejudiced by the allegations with respect to these contracts in the sense that it is aggrieved thereby and should not be compelled to plead thereto. The allegations apprise the defendant of the particular acts upon which the People rely. It is extremely doubtful whether, without pleading the making of the contracts claimed to have been entered into with a view to creating a monopoly, the People would have a ' right to prove them on the trial. It is manifest that if the People merely alleged that the defendant had repeatedly violated the statutes of the State, without setting forth any act, such as making a contract for the purpose of obtaining a monopoly, constituting a violation, the complaint would be insufficient and a demurrer thereto would be sustained. So, likewise, where the People, set forth certain acts in violation of our statutes,, they would doubtless be precluded on an objection duly taken from proving other specific acts' upon the trial under the general allegations of the complaint.. These observations apply to all of the parts of the complaint which' have been stricken out, and it is unnecessary, therefore, to consider in detail the allegations, which are very voluminous. ' It may also be\ observed that even if it were perfectly clear that the People would only be entitled at most to an . injunction, still it would not follow that , the allegations with respect to expired contracts should have been stricken out. In most instances, if not in all, those contracts preceded the unexpired contracts, and the history of the transactions is essentia] to clearly show the purpose and object of the defendant in making" the contracts which have not been fully performed and are still in force, and this is an important, if not the controlling, inquiry. (People v. American Ice Co., 120 App. Div. 234; People v. Sheldon, 139 N. Y. 251.)
The order also requires that the plaintiff, make the complaint more definite and certain ",by showing in the case of each repetition in 6 the first cause of' action ' of allegations of- a contract alleged to have been'made between the same parties whether the same contract is in each instance referred to; and, if so, that the complaint be relieved of the resulting'redundancy in that each .Contract be described but once," and by setting forth in full the contracts referred to in paragraph 10 of the complaint, or by stating in full the legal effect of all the material terms thereof. We are of Opinion that the complaint was sufficiently definite in' these- particulars, and that the order in this regard is likewise erroneous. With respect to- the alleged repetition " of allegations of a contract alleged to have been made between the same parties" "in 'the first cause of . action,' " we fail to discover any indefiniteness or redundancy with respect thereto. If the defendant desires copies of the contracts referred to in paragraph 10 of the complaint, its remedy is by a motion for a bill of particulars, and not to make the-complaint more definite and certain. Assuming, as we do, that it. was essential that the plaintiff plead the contracts, it was not required to set' forth copies or all of the terms thereof, but was only required to allege the effect of the provisions thereof so far as material, not to the contract, but to the issues here presented for trial, which required merely that the terms and provisions of the contract be sufficiently stated to show a violation of our statutes, or that the purpose and object of the defendant in making and executing it contravened some public policy of the State. In each instance of which complaint is made we find allegations of facts tending to show that each and every of the contracts, by its terms and provisions, or by the object and purpose for which it was made, and which , was designed to be accomplished and ivas or will be accomplished thereby, was in violation of our statutes and of the public policy • of the State.
It follows, therefore, that the order should be reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.
Ingraham, Clarke, Houghton and Soott, JJ., concurred.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.