Case Name: Acorn Brass Manufacturing Company, Appellant, v. Charles Rutenberg, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-12-21
Citations: 147 A.D. 533
Docket Number: 
Parties: Acorn Brass Manufacturing Company, Appellant, v. Charles Rutenberg, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 147
Pages: 533–537

Head Matter:
Acorn Brass Manufacturing Company, Appellant, v. Charles Rutenberg, Respondent.
Second Department,
December 21, 1911.
Corporation — foreign corporation, when not doing business in this State — pleading — complaint in action by foreign corporation to recover for goods sold'to resident.
Where the complaint of a foreign stock corporation, other than a moneyed corporation, in an action on contract shpws upon its face that the contrapt upon which the action is based was made within this State and there is no allegation that the corporation has complied with section 15 of the General Corporation Law so as to be authorized to do business here, the complaint is demurrable. But if the complaint does not disclose the fact that the contract was made in this State and that the corporation, is doing business here, these facts will not be presumed upon demurrer.
Even though the foreign corporation sues upon a contract made in this State, its complaint should not be dismissed where it affirmatively appears that it was not doing business within this State.
In an action by a foreign corporation to recover the purchase price of a soda wafer fountain, it appeared that the defendant negotiated with G., who had an office in the city of New York but not maintained by the plaintiff, for the purchase of the fountain and signed an order blank addressed to the plaintiff in a foreign State requesting, it to ship the fountain. The order was not signed by the plaintiff, or by any one on its behalf. G. forwarded the order together with a check in part payment of the purchase price to the plaintiff. The fountain .was shipped to the defendant, who signed notes for the balance of the purchase price . secured by a chattel mortgage on the fountain, which notes and mortgage, though signed in New York, were sent to the plaintiff by G., who received commissions on the sale. ' .
Held, that the plaintiff was not doing business \tithin this State, so that a dismissal of the complaint upon that ground was error.
Appeal by the plaintiff, the Acorn .Brass Manufacturing Company, from a judgment of the Municipal Court of the city of New York, borough of Queens, in favor of the defendant, rendered on the 19th day of April, 1911, dismissing the complaint.
Kennedy & Herzog, for the appellant.
Henry C. Frey, for the respondent.

Opinion:
Burr, J.:
The Acorn Brass Manufacturing Company is a foreign corporation organized under the laws of the State of Illinois.
About October 30, 1908, it entered into a contract with defendant to sell and deliver to him a soda water fountain.
At the time of the sale the statute provided: "No foreign stock corporation doing business in this State shall 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. " (Gen. Corp. Law [Gen. Laws, chap. 35; Laws of 1892, chap. 687], § 15, as amd. by Laws of 1901, chaps. 96, 538, and Laws of 1904, chap. 490.)
The. certificate referred to must be procured from the Secretary of State and must be to the effect that such corporation, if other than a moneyed corporation, 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 such as may be lawfully carried on by a corporation incorporated under the laws of this State for such or similar business. (Id. § 15, as amd. supra.)
Before the obtaining of such certificate becomes a material fact in connection with such an action, two things must concur, the corporation must be a foreign stock corporation, other than a moneyed corporation, doing business in this State, and the contract which is the basis of the action must have been made within the State. If the existence of these conditions precedent appears upon the face of the complaint, then such complaint is demurrable unless it contains a further allegation that the provisions of the statute above referred to have been complied with. (Welsbach Co. v. Norwich Gas & El. Co., 96 App. Div. 52; affd., 180 N. Y. 533; Wood & Selick v. Ball, 190 id. 217.) If this does not appear this necessity does not exist. In such case, until the contrary is shown, it must be presumed that the contract was not made within this State and that the corporation is not doing business here.. Otherwise the requirements of the statute would be extended to every foreign stock corporation seeking to enforce a cause of action in our courts. (Southworth v. Morgan, 143 App. Div. 648.)
The learned justice of the Municipal Court, dismissed plaintiff's complaint upon the ground that the contract sued upon was made within this State. Upon the evidence adduced this is-a debatable question, but if we assume, for the sake of the argument, that such is the fact, plaintiff should not have been dismissed, for it affirmatively appears that it was not doing business within this State. So' far as the evidence discloses, this is the only transaction in the nature of a sale in which plaintiff had engaged within this State.
The preliminary negotiations for the purchase and sale of the soda fountain were had between defendant and one Gfleichenhaus. These negotiations were had at an office at No. 403 Broome street; in the borough of Manhattan. Gleichenhaus' undisputed testimony is, that plaintiff paid nothing for the maintenance of this office; that upon the office sign his name appeared in large letters at the top, and that below, in letters of a smaller size, appeared the words "Sanitary Soda Fountain," "Acorn Brass Manufacturing Company," "Soda Fountain Appliances " and " Soda Fountains." At this office he had "Five soda fountain samples, and small articles, a good many of them."- It does'not clearly appear whether all. of these sample fountains were of plaintiff's manufacture.,' but the witness testified that plaintiff had no goods there, and that he was then engaged, in selling soda fountains and different things for other concerns. The only testimony as to whether plaintiff had an office in New York, or a bank account there, was negative testimony from this witness that he did not know of any. Plaintiff's principal office was in Chicago and its goods were manufactured there.
On the day in question, at this office, defendant signed a paper, partly written and partly printed, entitled "Order Blank," which was addressed to plaintiff at Chicago, Ill, and requested it to ship to him via Michigan Central Railroad, at an address given in Astoria, L. I., a soda fountain, describing it. The paper stated that'the price was to be $428.50, and that inclosed with the paper was a,, check for $85.20, part of the purchase price. It contained provisions for the payment of the balance in monthly installments, commencing January 15, 1909. This paper was not signed by the plaintiff, or by ¡my one in its behalf. When this paper was signed, defendant delivered same with a check to G-leichenliaus, who forwarded it to plaintiff at Chicago, and never saw it again until the date of the trial. Some time later the fountain was shipped to .defendant, and defendant signed notes for the payments to become due, secured by a. chattel mortgage on it. These notes and mortgage were signed at the saíne place and sent to plaintiff at Chicago .by Grleichenhaus, who testified that he had never seen them subsequently. He testified that he received '"his profit " on the sale of the fountain, and it appeared that there was an agreement in writing between the plaintiff and the witness relative to his compensation for selling their goods, but this agréement was not produced or offered in evidence.
The following authorities sustain the position that we have taken, that under the .circumstances here disclosed the plaintiff was not doing business within this State: Vaughn Machine Co. v. Lighthouse (64 App. Div. 138); Cummer Lumber Co. v. Associated Mfrs.' Ins. Co. (67 id, 151); St. Albans Beef Co. v. Aldridge (112 id. 803); Burrowes Co. v. Caplin (127 id. 317); White Furnace Co. v. Miller Transfer Co. (131 id. 559); Penn Collieries Co. v. McKeever (183 N. Y. 98).
The judgment of the Municipal Court should be reversed and a néw trial ordered, costs to abide the event.
Jenks, P. J., Thomas, Woodward and Rich, JJ., concurred.
Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.