Alfred J. Brown Seed Co. v. Richardson , 103 N.Y.S. 243 ( 1907 )

Wheeler, J.

Upon the trial in the Municipal Court the plaintiff was nonsuited. The nonsuit was doubtless granted on the alleged ground that the plaintiff was a foreign corporation, engaged in doing business within the State of Hew York without first having obtained the statutory certificate permitting it to transact business within the State.

The facts as disclosed by the evidence briefly stated are these: The plaintiff is a Michigan corporation engaged in buying and selling fruit. Its president came to the city of Buffalo and there made an arrangement with the defendant, Richardson, who is a commission man and fruit dealer at that place, by which the plaintiff was to buy peaches in Michigan and ship them to the defendant in Buffalo. The peaches were to be billed to the defendant at cost price in Michigan, and each car shipment was to be accompanied by a draft on the defendant for that amount, which defendant was to honor. The defendant was to pay the draft and sell the peaches, and any profit realized from their sale was to be divided equally between the plaintiff and defendant.

The action is brought to recover a balance alleged to be due the plaintiff by reason of transactions had under this alleged arrangement. The plaintiff is entitled to recover, unless a recovery is barred by reason of a failure to comply with the statute in question.

The suggestion has been made that the arrangement stated constituted a co-partnership, but I do not so regard it. The testimony is that, having made losses on the ordinary commission basis heretofore carried on through other agents, the defendant proposed a mode of business by which the plaintiff would suffer no loss; and that was by shipments in the manner above stated, in which the defendant was to take the peaches at cost price in Michigan, and to divide the profits when sold. The plaintiff was not to stand any share of the loss if any. It would appear (if the plaintiff’s version of the transaction is correct) that the dealings rather amounted to a sale of the peaches to the defendant and that, from the time of their delivery on the cars, the fruit was at the defendant’s risk, the price to be ultimately paid being the cost price plus one-half any profits made. But, whatever the legal effect of the agreement between the parties, I do not think their dealings constituted a doing of business within the State within the meaning of the statute.

In order to bring a corporation within the condemnation of section 15 of the General Corporation Law there must be something more than an occasional transaction.

As was said in Penn Collieries Co. v. McKeever, 183 N. Y. 103, the evidence should establish 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 Hew York and not one of a temporary character.’ ”

The facts proven in this case do not bring it within the rule laid down in those cases. The transactions related only to one particular kind of fruit, to-wit: peaches. The season was necessarily short. The plaintiff had no control over the consignment after it was made. It kept no offices here. It had no capital invested here. It is well established that the sending of an agent through a State to obtain orders for goods manufactured in another State and to be shipped from there to a purchaser here does not violate the statute. Vaughn Machine Co. v. Lighthouse, 64 App. Div. 138; Tallapoosa Lumber Co. v. Holbert, 5 id. 559.

Hone of the recognized tests bring this case within the condemnation of the statute. Moreover, it has recently been held that, in order to justify a dismissal of an action brought by a foreign corporation on the ground of failure to obtain a certificate under section 15 of the General Corporation Law, it must also appear that the corporation is a foreign stock corporation. South Bay Co. v. Howey, 113 N. Y. 382; Wright & Co. v. Faulkner, 52 Misc. Rep. 100:

Whether this plaintiff is a stock corporation or not does not appear.

We are, therefore, of the opinion the judgment appealed -from should be reversed and a new trial had in the Municipal Court, costs of this appeal to abide the event.

Judgment reversed and new trial ordered, with costs, to abide event.