Haddam Granite Co., Inc., v. Brooklyn Heights Railroad

Majority

p. 685

Haddam Granite Company, Incorporated, Appellant, v. The Brooklyn Heights Railroad Company, Respondent.

First Department,

April 8, 1909.

Headnote

Sale — when foreign corporation not doing business here.

A foreign corporation having no property or office in this State by entering into a contract of sale of paving stones quarried in the foreign State to be delivered from time to time over a period of ten months is not doing business here within the meaning of section 15 of the General Corporation Law, where such sale is the only business ever transacted in this State.

Although some of the deliveries were made pending the negotiations for the contract and although the goods were not to be delivered at one time, there is not such continuity of business as to enable the purchaser sued for the contract price to defend upon the ground that the seller was not licensed to do business here.

Appeal by the plaintiff, the Haddam Granite Company, Incorporated, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Hew York on the 11th day of June, 1908 (as amended by an order entered on the 26th day of June, 1908), upon the dismissal of the complaint by direction of the court at the close of the plaintiff’s case on a trial at the Hew York Trial Term, and also from an order entered in said clerk’s office on the 2d day of June, 1908, as amended by an order entered on the 10th day of June, 1908, denying the plaintiff’s motion for a new trial made upon the minutes, with notice of an intention to bring up for review upon such appeal an' order entered on the 25th day of May, 1908, denying the plaintiff’s motion for a reargument of the motion for a new trial.

John Ewen, for the appellant.

Thomas L. Hughes [ William M. Parke with him on the brief], for the respondent.

This is an action to recover damages for breach of contract. The plaintiff is a foreign corporation engaged in quarrying and selling granite blocks for paving. On the 30th day of March, 1903, the

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general manager of plaintiff, who was also the treasurer, opened negotiations with defendant with a view to selling to defendant granite blocks. Prior to the twenty-seventh day of May thereafter these negotiations had progressed to the extent that the price had been agreed upon, but not the quantity or the time for making the deliveries, and on the verbal order of the defendant the plaintiff proceeded to manufacture and deliver granite blocks to the defendant, the first delivery being made on that date. On or prior to the 14th day of August, 1903, it had delivered about 100,000 blocks, for which it had been paid, and on that day a contract in writing for the sale and delivery of 500,000 granite blocks was proposed by the defendant and accepted verbally by the plaintiff, under and pursuant to which about 104,000 more granite blocks were delivered, for which payment has also been made. The defendant thereupon refused to accept any further deliveries.

The plaintiff showed that, relying on the contract, it quarried and dressed and tendered delivery of the remaining granite blocks called for by the contract at the cost and expense of forty dollars per thousand, and that there was no market value for the granite blocks. This was the second trial of the issues, and recovery on the former trial by the plaintiff was reversed by the Court of Appeals on the ground that the trial proceeded on an erroneous theory with respect to the rule of damages. (Haddam Granite Co. v. Brooklyn Heights R. R. Co., 186 N. Y. 247 .) On the last trial the plaintiff, for the purpose of showing that the difference between the contract price and market value could not be the measure of damages, showed, as already observed, that there was no market value. Assuming that the plaintiff has the right to sue, a prima facie case was presented. The trial court, however, dismissed the complaint upon the ground that the plaintiff was doing business in this State, within the intent and meaning of section 15 of the General Corporation Law,^[1] and that it failed to show that it had obtained a certificate authorizing it to conduct business in this State, as required by said statute.

We are of opinion that the court erred in so ruling. The plaintiff is a foreign corporation organized under the laws of Connecticut,

* See Laws of 1899, chap. 687, § 15, as amd. hy Laws of 1901, chap. 538. Since amd. by Laws of 1904, chap. 490.— [Rep.

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having its place of business and quarries at Haddam in that State. It has no property in the State of Hew York, and it has no office in this State. The undisputed evidence shows that the only business it has ever transacted in the State of Hew York'is this business with the defendant, which in effect constitutes but a single transaction. At the outset there was an attempt to negotiate a single contract and, pending the negotiations, after the price of the material had been agreed upon, but before all the particulars of the contract, with respect to quantities and times of delivery, had been settled, deliveries were made on the terms as to price, which were to be incorporated in the contract which was then being negotiated. The negotiations originated in this State, but were continued largely by correspondence between the officers of the respective corporations, one of which was within and the other without the State. These facts do not show that the plaintiff was either continuously or permanently engaged in business in this State. The Court of Appeals in Penn Collieries Co. v. McKeever ( 183 N. Y. 98 ), in construing this statutory provision, said : “ 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 1 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.” The mere fact that some deliveries were made pending negotiations, and that the contract did not provide for the delivery of all the granite blocks at one time, and that deliveries were to be made from time to time extending over a period of about ten months, does not show the continuity of business which is required, by this decision of the Court of Appeals, to bring a case within the operation of the statute. In Penn Collieries Co. v. McKeever (supra) the contract was made in this State, and the plaintiff, a foreign corporation, maintained an office in this State, under an annual lease, which was occupied by its manager, whose compensation consisted of commissions, and who there took orders for the sale of coal, subject to the approval of the company at its home

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office without the State, ordinarily; but in the particular instance which was under review by the Court of Appeals, he, himself, made the contract for the sale of the coal within the State. The Court of Appeals held -that these facts did not constitute doing business in this State, within the provisions of this statute. I think it clear, therefore, upon that authority, that the facts in the case at bar do not show that the plaintiff was doing business within the State, which required it to obtain the certificate as a condition precedent to enforcing its contract lights in our courts.

It follows, therefore, that the judgment and order should' be reversed and a new trial granted, with costs to the appellant to abide the event.

..Patterson, P. J., McLaughlin, Clarke and Houghton, JJ., concurred.

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

Cases cited

Haddam Granite Co. v. Brooklyn Heights Railroad 186 N. Y. 247 N.Y. 1906-10-23 p. 686
Penn Collieries Co. v. McKeever 183 N. Y. 98 N.Y. 1905-11-21 p. 687