Ozark Cooperage Co. v. Quaker City Cooperage Co.

Spring, J.:

The complaint alleges that the plaintiff is a corporation organized in the State of Missouri and with its principal office in the city of St. Louis in that State. It also alleges that the defendant is a foreign corporation, with a branch office and doing business in the city of Buffalo.

It then alleges that a contract in writing was entered into with the defendant at Buffalo on the 17th day of June, 1904, whereby the plaintiff sold to the defendant 1,000,000 staves, for which the defendant agreed to pay a stipulated price for each 1,000 staves on-delivery thereof at Buffalo. The complaint further alleges, that the plaintiff, in pursuance of said agreement, delivered 185,000 of said staves, for which the defendant paid, but that the defendant has refused to receive the remainder of said staves, although ihe same has been tendered, and damages for the breach of such contract are sought to be recovered.

For a second cause of action the complaint alleges that on- the 15th day of July, 1904, another contract was executed by the parties, in the city of Buffalo, for the purchase, sale and delivery to the defendant at Buffalo of another specific quantity of staves. It further alleges a partial delivery and payment thereof, but a refusal on the part of the defendant to perform its contract by accepting the residue of said staves, and asks for damages for its breach.

The essence" of the demurrer to the complaint is that it fails to show that the plaintiff “ has obtained a license to do business within this State as required by section 15 of the General Corporation Law.” -

We think the contention of the appellant is untenable. Section 15 of the General Corporation Law (Laws of 1892, chap. 687, as amd. by Laws of 1904, chap. 490) prohibits a foreign stock corporation ' other than a moneyed corporation from doing 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 it further provides that “ 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.”

*64 The statute is a rigorous one and should' receive a reasonable interpretation, having in view the extensive interstate trade carried On and the necessity of maintaining comity in business among the several States. Trade'should be encouraged, not unreasonably restricted.

The complaint charges only two distinct sales, and we must assume the business conducted in this State is limited to these two . transactions. This is not necessarily “ doing business ” within the meaning of the statute. In Penn Collieries Co. v. McKeever ( 183 N. Y. 98 ), the plaintiff, a foreign corporation, sued tó recover for a cargo of coal sold in the State of New York. It kept no coal, books of account nor bank deposit in this State. The sale was an isolated transaction. The defendant endeavored to defeat a. recovery for the reason that the plaintiff had not procured a certificate authorizing it to transact business in- this State. The Court of Appeals held that the plaintiff wp.s not “doing business” within .the contemplation of the statute. The court Used this language (at p. 103): “To be ‘doing business- in this. State’ implies corporate continuity of conduct in that respect; such' as might be evidenced ’ by the investment of capital here, with the maintenance of an office for the transaction of its business, and those incidental circumstances Which attest the corporate intent to avail itself of the privilege to carry on a business. In short, .it should appear, as it wasxintimated in the opinion in People ex rel. Armstrong Cork Co. v. Barker ( 157 N. Y. 159, 165 ), that the corporation and.its officers intended ‘to establish a continuous business in the. city of New York and not one of a temporary character.’ ”

Kindred cases are People ex rel. Tower Co. v. Wells ( 98 App. Div. 82 ; affd. on opinion below, 182 N. Y. 553 ); Vaughn Machine Co. v. Lighthouse ( 64 App. Div. 138 ).

In Welsbach Co. v. Norwich Gas & El. Co. ( 96 App. Div. 52 ; affd., 180 N. Y. 533 ) the complaint alleged that the plaintiff, a New Jersey corporation, “ has an office and officers within the State of New York.” It further alleged a sale of merchandise from “the New York, N. Y., department,” and also other sales “from its Buffalo, N. Y., department.” There-were, therefore, definite allegations showing an office in this State, indicating at least a continuous' business and allegations denoting-there were departments of that business in at least two cities of this State.

*65 In Emmerich Co. v. Sloane ( 108 App. Div. 330 ) the extent or character of the business was not up for consideration. In that case the plaintiff had made an attempt to comply with section 15 of the..General Corporation Law (as amd. by Laws of 1901, chap. 538, and Laws of 1904, chap. 490), but the court held that its endeavor was ineffective.

It may appear upon the trial that a more extended business has been carried on than the complaint sets forth, but so far as its allegations disclose ■ the plaintiff is not barred from maintaining the action.

The interlocutory judgment should be affirmed, with costs and disbursements of this appeal, with leave to the defendant to plead over by paying such costs and disbursements and the costs of the court below.

All concur.

Interlocutory judgment affirmed, with costs, with leave to defendant to plead over upon payment of the costs of the demurrer and of this appeal. • •