The American Case and Register Company, Respondent, v. Martha B. Griswold and Morgan B. Griswold, Appellants

The American Case and Register Company, Respondent, v. Martha B. Griswold and Morgan B. Griswold, Appellants. Third Department, March 8, 1911. Corporation — foreign corporation — contract made in this State — failure to obtain license to do business here. A foreign corporation doing business in this State which has not obtained the necessary certificate cannot .maintain an action to recover on a contract made here. Where residents of this State ordered a cash register from a foreign corporation, the order being given here, and the purchaser paid twenty-five dollars on" account, which was to be refunded in this State if the corporation did not accept the contract, the balance of the purchase price to be paid here, the contract was one “ made in this State ” within the meaning of section 15 of the General Corporation Law. A provision of the contract that it was subject to the acceptance of the vendor at its office in the foreign State does not change its character as a New York contract. Where, after some controversy as to a promissory note, the vendor agreed to leave the matter “ as an open account ” the money was payable here. Where it appears that the foreign corporation maintained and operated in itg name an” office in this State and carried on its business in this State from that office and by the personal canvass of its general agent, it is doing business in this State. Appeal by the defendants, Martha B. Griswold and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Washington on the 23d day of September, 1910, upon the decision of the court rendered after a trial at the Washington Special Term. The plaintiff is a foreign corporation, organized under the laws of Ohio, with its principal office at Alliance, O. The defendants are doing business at Whitehall, Washington county, 1ST. Y. The general agent of the plaintiff solicited at Whitehall an order from, the defendants for one of the plaintiff’s cash registers. The written order, dated there, directed the company to ship to the defendants, Whitehall, R". Y, a register f. o. b. at Alliance, 0., at the price of $270, with the agreement therein that the register should belong to the company until the price was paid. At the time of giving the order the defendants paid the agent twenty-five dollars to apply upon the purchase price, and the order recited that it “is taken subject to acceptance by The American Case and Register Co. at Alliance, O.,” and “ if not accepted by them any money paid hereon is to be refunded and any obligation incurred is to be cancelled.” It also provided that if the company was required to prepay express or freight charges, the same should be added to the invoice. After the order and the twenty-five dollars was delivered to the agent and forwarded to the plaintiff, the defendants discovered that attached to the order was a paper signed by them which was in substance a promissory note for the payment of the balance of the purchase price. They wrote to the agent at Albany claiming the note was obtained without their knowledge and they would not recognize it. The agent wrote the company advising the surrender of the note and thereupon the company wrote to the defendants, sending to them the so-called note and saying: “ If agreeable, after you have examined the paper, kindly return same, or if yon prefer to leave it as an open account it will be satisfactory "to us,” to which the defendants mailed a reply acknowledging its receipt, thanking the plaintiff for it and saying: “You have now in your possession the regular order, with our carbon signature, which gives you all record of the transaction.” The note was retained by the defendants. The defendants offered to prove, in substance, that the order was signed on condition that the plaintiff would execute a fidelity bond protecting the defendants from any claimed infringement of patent with reference to said cash register, which was excluded as tending to contradict the written order, to which ruling the defendants excepted. The plaintiff had not procured from the Secretary of State a certificate that it was authorized to do business in this State, as required by section 15 of the General Corporation Law. The deposition of the plaintiff’s treasurer was read in evidence. He swore that the company was doing business in the State of Hew York and that Mr. Fussell had charge of the business in the county of Washington. His deposition shows that Fussell was appointed general agent in the State of Hew York in the counties of Chemung, Schuyler, Seneca, Cayuga and other counties lying east of said counties in said State, except Rockland, Westchester, Hew York, Kings, Queens, Hassau and Suffolk counties; that he had to maintain a general office in the State which was to be opened and operated under and in the name of the company, and all Records and data of said office were to belong exclusively to the company, and that the commissions paid to him as such general agent should be in full and complete compensation for maintaining the general office, traveling expenses, clerk hire and insurance on supplies, except goods which may be held on consignment belonging to the company. . The plaintiff notified the defendants at Whitehall that it accepted the order, and certain correspondence took place between them with reference to the note and the bond, and later, and before the defendants undertook to cancel the order, they found much fault at the delay, claiming the register was not being shipped as agreed. Before the register was shipped the defendants notified plaintiff not to ship it; that they refused to receive it. Plaintiff shipped it thereafter, and this action is brought to recover the balance of the purchase price. The defendants rely upon an alleged parol agreement to give the bond as a condition precedent to the contract, and upon the allegation that the plaintiff was not authorized to do business in the State of Hew York, and, therefore, cannot maintain the action.- O. A. Dennis, for the appellants. J. Sanford Potter, for the respondent. [MAJORITY — Kellogg, J. :] Kellogg, J. : The twenty-five dollars was paid in this State, and was to be repaid in this State if the plaintiff, at Alliance, 0., did not accept the contract. That part of the contract was clearly made in and to be performed in this State. ■ When the note was surrendered and the parties agreed “ to leave it as an open account,” the money was payable here. The plaintiff maintained, and operated in its name, an office at Albany, E. Y., and carried on its business in the territory named from that office, and by the personal canvass and solicitation of its general agent through the territory. The fact that the contract provides that it is subject to the acceptance of the company at Alliance, O., does not change its character from a Eew York State contract. In some cases such a provision might be of significance, but in this case the other facts are so conclusive that it is substantially unimportant. Section 15 of the General Corporation Law, which 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 the necessary certificate, provides: “Eo 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.” The plaintiff and its contract are fairly within the terms of this statute. Plaintiff was, therefore, illegally doing business in this State and cannot maintain this action. It is unnecessary to consider the exception to the ruling excluding the evidence of the parol agreement with reference to the fidelity bond. The judgment should be reversed upon the law and the facts and a new trial granted, with costs to the appellant to abide the event. All concurred. Judgment reversed on law and facts and new trial granted, with costs to appellant to abide event.