James Howden & Co. of America, Inc. v. American Condenser & Engineering Corp.

Headnote

Corporations — action for goods sold and delivered —• counterclaim alleging breach of contract — demurrer to affirmative defense set up in reply that defendant was a foreign corporation and had failed to comply with the requirements of the General Corporation and Tax Laws sustained.

Howden & Co., Inc., v. American C. & E. Corpn., 194 App. Div. 164 , affirmed.

Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the first judicial department, entered December 3, 1920, which reversed an order of Special Term overruling a demurrer to plaintiff’s reply and sustained said demurrer. The action was to recover for goods alleged to have been sold and delivered. The answer denied the sale and delivery, and set up two counterclaims, both as separate defenses and as counterclaims. In the first counterclaim the defendant alleges a contract entered into between the parties on May 22, 1918, wherein time is claimed to have been of the essence, and that the plaintiff failed to deliver on time for which the defendant seeks to recover damages against the plaintiff. In the second counterclaim the same contract between the parties alleged in the first counterclaim is re-alleged, and it is claimed that by reason of violations of the contract and defaults in performance by the plaintiff, through overcharges and defective work, the defendant has suffered further damages at the plaintiff’s hands. The plaintiff’s reply denied the substantial allegations contained in the counterclaims, and as an affirmative defense to each counterclaim alleged facts showing that the defendant is a foreign stock corporation; that' it had been engaged in business in New York for more than thirteen, months and for more than thirteen months before the action was begun, and that it had not complied with sections 15 and 16 of the General Corporation Law, and had not complied with section 181 of the Tax Law.

Defendant contended that, having been brought into , court by the process of the plaintiff, it was entitled to avail itself of every defense which it had to the cause of action set forth in the complaint, and to allege, prove and recover upon its proper counterclaims against the plaintiff regardless of its status as a foreign corporation.

The following questions were certified: “ 1. Is the first defense contained in the plaintiff’s reply herein to the first alleged counterclaim contained in the defendant’s answer sufficient in law upon the face thereof? 2. Is the first defense contained in the plaintiff’s reply herein to the second alleged counterclaim contained in the defendant’s answer sufficient in law upon the face thereof? ”