Penn Collieries Company, Respondent, v. Edward J. McKeever, Appellant

Penn Collieries Company, Respondent, v. Edward J. McKeever, Appellant. Corporation — when it is not doing business in the. State of New York. A foreign corporation engaged in the business of selling coal and of shipping it to buyers had its office in the city of Philadelphia, but maintained what was called a branch office in the city of New York for the convenience of its agent in that city. This agent had no authority to make contracts for the sale of coal, but reported everything to Philadelphia. With the exception of a single cargo none of the coal ofíered for sale by this agent was within the State of New York at the time of the sale, and almost, all of the sales made by him were to parties outside of the State of New York. The corporation had no books of account in the State of New York, nor did it have a hank account in that State- • or keep coal or other merchandise therein. Held, that the corporation was not doing business in the State of New York within the meaning of section 15 of the General Corporation Law (Laws of 1893, chap. 687), as amended by chapter 588 of the Laws of 1901, prohibiting foreign corporations from doing business in the State of New York without procuring a certificate of authority from the Secretary of State. Laughlin, J., dissented. Appeal by the defendant, Edward J. McKeever, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York On the 31st day of December, 1903, upon the decision of the court rendered after a trial before the court without a jury at the New York Trial Term. Frank B. York, for the appellant. Francis S. McGrath, for the respondent. [MAJORITY — Patterson, J.:] Patterson, J.: The plaintiff, a foreign corporation, recovered a judgment against the defendant in an action for goods sold and delivered. The only-defense interposed was that at the time mentioned in the complaint the plaintiff was doing' business in the city of New York, where the contract of sale referred to in the complaint was made, and that at that time and prior thereto it had not procured from the Secretary of State of New York a certificate that it had complied “with all-the requirements of law to authorize it to. do business in this State,” and that by reason of the failure to obtain such certificate this action could not be maintained.' Upon the trial, Which was before the court without a jury, it was held, under the proofs, that the plaintiff was not doing business in the State within the meaning of section 15 of the General Corporation Law (Laws of 1892, chap. 687), as amended by chapter 538 of the Laws of 1901. I think the court below was right in so holding. The plaintiffs’ office is in Philadelphia. It had an agent .in New York city, and there was maintained there what is called a branch office, but it was for the agent’s convenience. It does not appear that the plaintiff was conducting business at that office, and the agent says he did not have, exclusive control of. the business of the plaintiff in this city. The merchandise sold to the defendant was a cargo of coal, and the business of the plaintiff was the selling of coal and shipping it to buyers. The agent in New York did not make contracts for the sale of coal. He reported everything to Philadelphia. No books Of account of the plaintiff Were kept in the State of New York; the plaintiff had no.bank account in the State and did not keep coal or other goods therein. Apart from the coal sold to defendant, no merchandise offered for sale through .the New York - agent-was situated in the State at the timé it was sold; and in every instance,, except six, out of 350 sales made through the agent, the sales were to parties outside the State' of New. York. This particular cargo of' coal which the defendant received and now refuses to pay for was, at the time of the sale, within the State of New York, but it had been sold in Philadelphia to a party to whom it was to be delivered here, but who had rejected it. The case resembles in its facts that of Cummer Lumber Co. v. Associated Mfrs.’ Ins. Co. (67 App. Div. 151). There, the evidence established the fact that the plaintiff employed an agent -within this State to solicit orders and that agent had an office within the city of Yew York and orders were sent from New York to the Cummer Lumber Company in Florida where they were accepted and the bills and goods were sent direct from the home office of the plaintiff corporation to the customers. It was held in that case that by maintaining the agency here, the company was not doing business in this State within the meaning of section 15 of the General Corporation Law. I am of the opinion that' the judgment should be affirmed, with costs. Van Brunt, P. J., Ingraham and McLaughlin, JJ.,. concurred; Laughlin, J., dissented. [DISSENT — Laughlin, J. (dissenting):] Laughlin, J. (dissenting): It appears that the plaintiff is a foreign corporation engaged in mining and selling coal; that it has an annual lease of an office in the city of Yew York in its own name, has telephone service in connection with the office 'in its own name, maintains its name upon the door of the office and upon the hall directory of the office building together with the name of Frank H. Olcott as manager; that office stationery is permitted to be used by Olcott showing that the company maintains that office and that he is its manager; that the sale of the coal upon which this action is based was made by Olcott as manager in the city of Yew York. These facts, in my opinion, show that the plaintiff was doing business in this State. It is conceded that it has nof obtained a certificate from the Secretary of State authorizing it to do business here. The contract having been made in this State, the plaintiff is, I think, precluded by section 15 of the General Corporation Law (Laws of 1892, chap. 687, as amd. by Laws of 1901 chap. 538) from maintaining an action thereon. Giving to the evidence on behalf of the plaintiff the most favorable construction, it merely shows that in fact Olcott was a sales agent on commissions without authority to close contracts, except as specially authorized; that he merely took orders subject to the approval of the company at its home office without the State and that except in this instance where the coal happened to be here, having been rejected by the original consignee, the coal is shipped from without' the State after the contract therefor is made, not in New York, but at the home office. If these facts would take the case from without the operation of the statute the purpose of the Legislature in enacting the law would be thwarted. The plaintiff-had the benefit of conducting its business, so far as the public is concerned, precisely as if Olcott was in fact its salaried manager and authorized to close contracts. For these reasons I think the judgment should be reversed and complaint dismissed. Judgment affirmed, with costs.