Penn Collieries Co. v. . McKeever , 183 N.Y. 98 ( 1905 )

  • [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 100 I think that the determination below was correct. Section 15 of the General Corporation Law prescribes that, "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," etc. Further, it 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."

    I am, clearly, of the opinion that the statutory provisions were not intended for any such case as this. I think that they should be construed, both upon the fair import of their language, as well as upon a just consideration of the public policy and of the state interests to be promoted, as, simply, preventing *Page 102 foreign corporations from entering the state by agencies and there engaging in the general prosecution of their ordinary business, without first complying with certain requirements of a reasonable nature and evidencing their compliance by obtaining a certificate to the effect.

    The policy of our state, as manifested in its laws, is not to impose any unconscionable restrictions upon the transactions of foreign corporations here. Their right to transact business here has always been conceded. Indeed, the effect of the legislation of recent years has been to remove all barriers in their way and to enable them to come here freely; provided they subjected themselves to our laws and exercised no powers not conferred by their charters. That is to say, a foreign corporation may enter our boundaries as freely as may natural persons and it may transact any lawful business here; provided that it takes those preliminary steps prescribed by our statutes, which evidence its corporate nature and purposes and which secure to the state government an effective supervision and control of the business to be carried on. The statute of 1892, only, declared the policy of this state that a foreign stock corporation should not carry on any business therein, which a domestic corporation, of similar nature, could not lawfully conduct. It was intended to place them upon a similar footing. (See Lancaster v. Amsterdam Impr.Co., 140 N.Y. 576; Neuchatel Asphalte Co. v. Mayor, etc., ofN Y, 155 ib. 373.) The rule was early declared that, unless interdicted by the state, a foreign corporation could perform within its boundaries single corporate acts, or conduct its corporate business, when not prohibited by our laws, or when not violative of public policy, (Bard v. Poole, 12 N.Y. 495;Hollis v. Drew Theological Seminary, 95 ib. 166), and the enactment of the present General Corporation Law was intended to regulate its existence here, if proposing to conduct a business, by the imposition of reasonable conditions. But no such narrow policy was intended to be declared by the statute as the prohibition of all corporate transactions by foreign corporations, irrespective of their nature, or of the condition under which *Page 103 they occurred; nor does the language indicate it. To bring into operation the statutory provision, the facts should show more than a solitary, if not accidental, transaction as was the one before us. They should establish that the corporation was conducting a continuous business. 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 was intimated 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." In this case, there was no circumstance to evidence, in any degree, anything of the kind. In a very recent case, it appeared that a foreign corporation, having a manufacturing plant without the state, maintained a salesroom in the city of New York, to which some of its manufactures were consigned for distribution elsewhere, upon sales made at the home office, or for sales in that city, and it was sought to assess it, upon capital employed here, for a business franchise tax. It did not appear that anything was done here by the corporation, beyond the mere maintenance of an office for such a purpose, and the determination turned upon whether the two essential conditions concurred, of "doing business in this State" and of some portion of its capital being employed here. We affirmed a determination made below that the corporation was not assessable and, necessarily, that determination rested upon the insufficiency of the facts to establish that it was "doing business" here. (People ex rel. A.J. Tower Co. v. Wells,182 N.Y. 553, affg. 98 A.D. 82.)

    I advise the affirmance of the judgment, with costs.

    CULLEN, Ch. J., BARTLETT, HAIGHT, WERNER, JJ. (and VANN, J., in result), concur; O'BRIEN, J., absent.

    Judgment affirmed. *Page 104