South Bay Co. v. Howey

113 A.D. 382, 98 N.Y.S. 909, 1906 N.Y. App. Div. LEXIS 1430
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMay 11, 1906
StatusPublished
Cited by5 cases

This text of 113 A.D. 382 (South Bay Co. v. Howey) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
South Bay Co. v. Howey, 113 A.D. 382, 98 N.Y.S. 909, 1906 N.Y. App. Div. LEXIS 1430 (N.Y. Ct. App. 1906).

Opinion

Ingraham, J.:

The first question presented on this appeal is whether a cause of action was alleged without an allegation that the plaintiff had obtained from the Secretary of State a certificate that it had complied with the requirements of law which authorized it to do business in this State.

In Parmele Co. v. Haas (171 N. Y. 581) it is said that 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 [384]*384that it is rightfully in the State and properly in court Until the contrary is- .made' to- appear.” Welsbach Co. v. Norwich Gas & El. Co. (96 App. Div. 52 ; affd., 180 N. Y. 533) held on demurrer to the complaint that obtaining such á certificate being a condition precedent to maintaining an action in the courts of this State, it was a fact necessary to be proven and, therefore, necessary to be alleged. In the opinion in the Welsbach Go. case it- was stated that it appeared from the complaint that the corporation wás a foreign stock corporation within the provision of section 15 of the General Corporation Law (Laws of 1892, chap. 687), as amended by chapter 538 of the La-ws of 1901, and the decision of the court rested on that assumption. It, therefore, appeared from the complaint that the plaintiff was not rightfully within this State and not properly in court, and it follows that no cause of action was alleged. .

' The fact that the plaintiff was a foreign stock corporation, within the provision of section 15 of the General Corporation Law (as amd. supra), did not appear in the. complaint in this case. The only allegation in this complaint is that the plaintiff is a foreign corporation. The defendant is a resident of this State., 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. other wise specially prescribed by law.” The complaint' alleges that the plaintiff is a foreign corporation, and that being con- ■ ceded, it had a right to bring this action, unless restricted by section 15 of the General Corporation Law (as amd. supra) which applies - only to stock corporations. I think, therefore, that as it did not appear from the complaint that the plaintiff was“a stock corporation, the motion that the complaint should be dismissed because it did not state facts sufficient to constitute á cause of action was, properly overruled.

It- was then proved that the plaintiff did business within this íátaté, and one of the facts necessary to bring it within .the provision " ¿f 'séction'15 of the General Corporation Law (as amd. supra) was' proved, but there was no proof that plaintiff was a stock corporation., I do hot know, that there is any presumption of law that a membership corporation organized under the laws of the State of 27ew' Jersey could not engageJn business as a manufacturer of' &nd dealer [385]*385in fish fertilizers. I agree with the court below that the provision of 'the policy as to the maintenance of actions in the Supreme Court of the county of Mew York was not a waiver of- this prohibition contained in the statute which is for the benefit of the State and not for parties to contracts; but to entitle a defendant to a dismissal óf a complaint on this ground, it must appear in the record that the plaintiff is a stock corporation. If that fact did not appear from the complaint, it must be proved upon the trial. The answer alleged that plaintiff was a stock corporation, but failed to prove that fact, and defendant was not, therefore, entitled to a dismissal of the complaint on that ground.

Mor does it appear in the record that the contract sued on, viz., the policy of insurance, was made by the defendant in this State; The statute 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 the certificate. The complaint ’ alleges that the defendant and others by their attorney "or deputy attorney, duly authorized thereto, made and delivered to the plaintiff a policy of insurance by which they agreed to indemnify the plaintiff against loss or damage by fire. The answer admits the making of the contract; but when and where it was made is not alleged. The contract sued on is annexed to the complaint. In the attestation clause it is stated that “ In, witness whereof, the said underwriters have hereunto respectively subscribed their names and the several sums insured by them separately subject to the limitations herein stated as to their individual liability, by their attorney or their duly authorized deputy, at the city of Mew York, this 21st day of August, 1902.” ■ .

It, therefore, appeared that the instrument was subscribed by the defendant’s attorney in fact in the city of Mew York, but its delivery was an essential part of the contract and it did not become a contract with the plaintiff until it was delivered. The plaintiff did not, execute the policy of insurance and, therefore, delivery was essential to the making of the contract. It does not appear in this record that the "contract was made by the plaintiff, a foreign corporation, by a delivery to it of the policy within this State. The [386]*386prohibition extends Only to contracts made by the foreign corpora-, tioii within this State. A contract of" insurance is made by the .insured when the contract is .delivered to him-and the premium paid, or agreed to be paid. There is certainly no presumption that an insurance company makes its contract of insurance at its home office. Many foreign insurance companies do business within this State and make many contracts of insurance here, and many domestic'insurance companies make contracts of. insurance in other States and.countries, and thus contracts of insurance are made in the State ■ or country in which (¡he policy is delivered. The plaintiff being a foreign corporation, and the defendants having a home office in this "State and executing a policy here but, delivering it in another State, the contract would clearly be a Contract made within the State where the policy was delivered, and thus not a-contract made within this- State.

Applying the principle established in Parmele Co. v. Haas (171 N. Y. 581), that “ Before these statutes were passed the plaintiff could maintain this ^action under general provisions of law containing no restrictions whatever of the character referred to; ” that “ The statutes in themselves give no right of action and are not essential elements of the cause- of action stated- in the complaint; ” that “ They are mere revenue .-regulations, compliance with which is made necessary in .order -to acquire the right to do business here and to enforce causes of action in our courts;” that “ They may possibly be matters .of defense, but not essential to be stated as part of the cause of action or right to sue; ” and that 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)” unless it appears in tlfe record that .the contract sued on is a contract made by the - plaintiff within this. State, the objection would'not prevent the plaintiff from maintaining its action. The Welsbach Co. Case (Supra),

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Bluebook (online)
113 A.D. 382, 98 N.Y.S. 909, 1906 N.Y. App. Div. LEXIS 1430, Counsel Stack Legal Research, https://law.counselstack.com/opinion/south-bay-co-v-howey-nyappdiv-1906.