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Eclipse Silk Mfg. Co. v. Hiller

Supreme Court of New York, Appellate Division

June 9, 1911

EGMONT N. HILLER, Respondent.

Page 569

APPEAL by the plaintiff, the Eclipse Silk Manufacturing Company, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Kings on the 25th day of January, 1911, upon the dismissal of the complaint by direction of the court at the opening of the case on a trial at the Kings County Trial Term.


Philip H. Leifert, for the appellant.

Frederick L. Guggenheimer, for the respondent.


The complaint in this action alleges that 'at the times hereinafter mentioned the plaintiff was and still is a corporation, created and existing under the laws of the State of New Jersey; ' that 'the defendant was doing business under the name or style of the E. N. Hiller Company,' and that 'on or about and between the dates of October 11th and December 12th, 1907, the plaintiff sold and delivered to the defendant certain merchandise, at agreed prices, amounting in all to the sum of one thousand and two and 20/100 dollars, the same being the reasonable value thereof,' and that no part of this sum has been paid, and demands judgment for the amount. This complaint was verified by the attorney of the plaintiff, because the plaintiff 'is a foreign corporation,' and the defendant, answering, alleged that the 'plaintiff was a foreign corporation doing business in the State of New York. * * * That said alleged contract of sale, if made at all, was made in the State of New York,' and that the plaintiff had not procured the certificate required by the provisions of section 15 of the General Corporation Law to authorize the plaintiff to do business in this State, or to maintain this action. (See Gen. Laws, chap 35 [[Laws

Page 570

of 1892, chap. 687], § 15, as amd. by Laws of 1904, chap. 490; now Consol. Laws, chap. 23 [Laws of 1909, chap. 28], § 15.)

At the opening of the case defendant's counsel moved to dismiss the complaint on the ground that it did not state facts sufficient to constitute a cause of action, in that there was a failure to allege that the plaintiff, a foreign corporation, had procured the necessary certificate, and upon the further ground that the complaint, while showing that the plaintiff was a foreign corporation, did not allege that it was not doing business within the State of New York. The learned court appears to have accepted both propositions as stating the law, and held that in the event of the plaintiff's not moving to amend the complaint the same would be dismissed. Plaintiff's attorney refused to move for an amendment, and the complaint was dismissed, the plaintiff appealing to this court from the judgment entered upon such decision.

There seems to be some confusion in reference to the requirements under the provisions of section 15 of the General Corporation Law, notwithstanding the effort of the Court of Appeals in Wood & Selick v. Ball (190 N.Y. 217) to end the conflict of authority. Section 1779 of the Code of Civil Procedure provides that an 'action may be maintained by a foreign corporation, in like manner, and subject to the same regulations, as where the action is brought by a domestic corporation, except as otherwise specially prescribed by law; ' and section 3 of article 8 of the State Constitution provides that 'all corporations shall have the right to sue and shall be subject to be sued in all courts in like cases as natural persons.' If John Smith, residing in New Jersey, had come into the courts of the State of New York and had alleged the same facts which appear in this complaint, other than the allegation of being a corporation, no one would suggest that there was any failure on the part of the pleader to state a good cause of action, and when a foreign corporation brings a suit in the courts of this State and states a good cause of action in the complaint, it will be assumed that it is rightfully in the State and properly in court until the contrary is made to appear. (Parmele Co. v. Haas, 171 N.Y. 579, 583.) The plaintiff being a foreign corporation, and stating a cause of action

Page 571

which would be good if stated by a domestic corporation, it only remains to determine whether it was 'made to appear' judicially to the court below that the plaintiff was not 'rightfully in the State and properly in court.' The law clearly contemplates that a foreign corporation may come into this State, through its attorney or agent, and maintain a cause of action (Code Civ. Proc. § 525, subd. 3), and we have only to determine whether it has been 'otherwise specially prescribed by law' in the case of the plaintiff, to reach a correct determination upon the question here presented. The only thing before the court was the plaintiff's complaint, for the allegations of the answer, setting up new matter, must be deemed to be controverted (Code Civ. Proc. § 522), and we are to examine the complaint in connection with the law, to determine whether it does or does not state such a cause of action as the court was called upon to hear, try and determine.

The only exception to the general rule laid down in the Code of Civil Procedure, in so far as the case now before us is concerned, is found in section 15 of the General Corporation Law, which provides as follows: 'No foreign stock corporation other than a moneyed 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, 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. * * * 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.' It will be noticed that the prohibition does not extend to contracts generally, but to 'any contract made by it in this State.' In respect to all other contracts it has the same rights as a domestic corporation; ...

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