Neuchatel Asphalt Co. v. Mayor, Aldermen & Commonalty — 61 N.Y. St. Rep. 481

Majority

p. 481

Neuchatel Asphalt Company, Limited, Pl’ff, v. The Mayor, Aldermen and Commonalty of the City of New York et al., Def’ts.

(New York Common Pleas, Special Term,

Filed July, 1894.)

Headnote

1. Corporations—Foreign—Doing business.

A contract made in violation of § 15, chap. 687 of 1892, cannot be enforced.

2. Same—Subsequent certificate.

The procuring a certificate subsequently will not validate such contract.

3. Mechanic’s lien—Action.

A sub-contractor, who is a defendant in an action duly commenced, will be permitted to recover on his answer therein, though, in an independent action attempted to he commenced by him the principal contractor had never been served.

4. Same—Sub-contractor.

A non-answering defendant sub-contractor will be refused participation in a judgment, though he apparently received an order signed by the principal contractor, where he has made no attempt to authenticate such order.

Foley & Powell, for pl’ff ; Knevals & Perry, for def’ts.

—On the 12th of April, 1893, the defendant, Mathias Theriault, made a contract with the defendant, The Mayor, &c,, to do certain work and furnish certain materials for the latter in the alteration of a building near the foot of Bast Sixteenth street. Theriault made various subcontracts for doing portions of the work, and the contractors, not being paid on the completion of their work, filed liens againts the property. Thereafter, the plaintiff and several other contractors commenced separate actions to foreclose these liens, and they were all consolidated in the above entitled action.

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On the trial, the defendants other than The Mayor, &c., contended the plaintiff could not maintain its action, on the ground it was a foreign stock corporation and had not filed the requisite certificate at the time of making the contract and doing the work, and also on the ground that the action was not commenced against the principal contractor within the time limited by law.

The first of these is the most important. It is based upon § 15, Gen. Corp. Laws, chap. 687, 1892, which provides “that no foreign stock corporation, other than a monied corporation, shall do business in this state without first having 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, or if more that one kind of business, by two or more corporations so incorporated, for such kinds of business respectively. The secretary of state shall deliver such certificate to such corporation so complying with the requirements of law.” And further providing, that no such corporation now doing business in such state shall do business .therein after December 31st, 1882, without having procured such certificate from the secretary of state, but any lawful contract previously made by the corporation may be performed and enforced within the state subsequent to such date. And further provided, that no foreign stock corporation, doing business in this state without such certificate, shall maintain any action in this state upon any contract made by it in this state until it shall have procured such certificate. The complaint alleges that the plaintiff is a foreign corporation, and was employed by the principal contractor as laborer and merchant to furnish certain materials and to do certain work on the building in question, and on the trial .it was proved that the plaintiff was a foreign stock corporation organized under, the-laws of Great Britain, and had been doing busÍ7iess within this state for fourteen or fifteen years, but that the certificate required by' the section above quoted was not obtained until the 4th of December, 1893, after making the contract, doing the work and filing the lien. These facts, I think, bring the plaintiff squarely within the prohibition of the law. That the legislature has the power to make such a provision is clearly declared in Demarest v. Flack, 128 N. Y. 217 ; 40 St. Rep. 383 , where it is said : “The power rests with the legislature to say whether any, and if so, what terms shall be imposed upon such corporations as a condition of granting them permission to do business here.”

In this case, the prohibition being absolute, no contract made in violation of it can bo enforced. In Hall v. Bishop, 3 Daly, 109 , this court held: “That where the object of requiring a license is to limit the pursuit of certain callings, a penalty implies a prohibition against engaging in that pursuit unless a license is procured." In the case under consideration this prohibition is not implied but expressly declared. In the case last cited it was

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also said: “It was not in plaintiffs power without a license to carry on the business of giving legal advice in relation to any matter whatever.” In accordance with this decision we have recently held that a plumber doing work as such without first having obtained the license required by law cannot maintain an action to recover for work so done. Bloom v. Saberski, 59 St. Rep. 277 ; see, also, Lowey v. Granite State Provident Ass'n, 59 Id. 246 ; 28 N. Y. Supp. 560 . But this court is not alone in this view of the law. In Best v. Bander, 29 How. 489 , it was held that a contract of sale made by a peddler without having the license required by the act-of Congress, approved July 1, 1862, was invalid. In De Witt v. Brisbane, 16 N. Y. 508 , where the parties were engaged in business in violation of the banking laws, the court of appeals said : “Ho court will lend its aid to a man who founds his action upon an illegal contract It says to him that, even though he suffer injustice at the hands of the defendant, he has no right to invoke the assistance of the court, for he himself has transgressed the law.” In Griffiths v. Wells, 3 Den. 226 , plaintiff sought to recover for liquor sold at retail, he having no license for that purpose. The court said: “The principle of law is well established in this state, where the law prohibits the doing of a thing, or provides a penalty for doing that thing, contracts made in contradiction thereof are wholly illegal.” So, too, under the act of 1833, prohibiting persons from transacting business under fictitious names and making the violation thereof an offense punishable by fine, the superior court held, in Swords v. Owens, 34 N. Y. Supr. 277, that contracts made by those doing business under a firm name, when there were no actual parties to represent the “& Co.,” were void.

Plaintiff seeks to avoid the force of this contention by claiming that only a single piece of work, to wit, the one in question, was proved to have been done by it in contravention of the law, and that one act does not fall within the prohibition. II this were well founded, I would he loath to hold against that view, especially as I regard plaintiff’s claim a just one. But the complaint is so framed as to imply that the work done.by it in this case was its ordinary business, and, besides, it avers that it did this work both as laborer and merchant, and the latter word of itself imports “doing business” within the meaning of the statute. Besides, the prohibition is as board as language can make it. While the evidence shows that the plaintiff lias been “doing business” in this state for many years, and express provision was made for such cases in the act extending the time to procure the certificate until the 31st of December, 1892.

Plaintiff also contends that, even if the contract made by it falls within the prohibition, the only penalty provided by the act and incurred by it was that it could not maintain an action on such contract until it had procured the certificate, and as it had done this before the action was commenced, it ought now to be allowed to prosecute it. The first difficulty with this contention is that the act itself forbids foreign stock corporations doing business without first procuring the certificate, thus making the con

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tract illegal and not enforceable in the courts of this state, as is clear from, the provision regarding foreign corporations doing business within the state at the time of the passage of the act; for it says that no such corporation shall do business therein after December 31st, 1892, until the certificate is procured, and expressly provides that contracts made before that date “may be performed and enforced” after that date. Thus clearly cotiplying the enforcement with the doing of the business, and bringing both,,within the same rule. To hold otherwise would practically nullify the statute, for foreign corporations might, as this one has done, do business in this state for years and never comply with the law •until some dispute arose, and then, and not till then, procure the certificate in order to maintain an action against one .of our own citizens. In the meanwhile our citizens having claims against such companies, if an officer of the corporation could not be served with process and it had no property within the jurisdiction of our courts, would be left remediless.

Having arrived at this conclusion as to the first question presented, it would be unnecessary to examine whether or not the action could be maintained, because it was not commenced within the time limited by law, were it not for the fact that this question is also raised as against the defendant Thompson. - He filed a lis pendens in his own action January 27th, 1894, but did not be.gin an action until long after that time, and has never served Mathias Therisault, the principal contractor. It has been repeatedly held by this court that actions to foreclose mechanics’ liens are not to be deemed commenced until the principal contractor has been served or the process lodged with the sheriff in good faith for service. Henry v. Lynch. 1 N. Y. Supp. 780 ; Smith v. Gault„ 5 Monthly Bull., May, 1883 ; Kelsey v. Combe, 50 How. 358 . But Thompson was made a party defendant in several of the actions which have been consolidated with this, and has duly answered in this action, so I think he is entitled to recover on his answer. § 17, Mechanic’s Lien Law, 1883, as amended in 1885 ; McAllister v. Case, 24 St. Rep. 52 ; 5 N. Y. Supp. 918 ; Danzinger v. Simonson, 116 N. Y. 335 ; 26 St. Rep. 708 ; Moran v. Murray Hill Bank, 32 St. Rep. 102 ; 9 N. Y. Supp. 715 .

As Jatneson was allowed to appear and serve his answer without objection by the defendants, I think he also should recover. Various objections were made by .plaintiff to the sufficiency of the notices of liens of the several defendants, but as it is now out of the case, and the insufficiency of the notices of liens is not urged by the defendants as against each other, I do not deem it necessary to examine them or to say anything on that point further than that it would not be very safe for any of them to do so.

The defendant Wines not having answered, although he apparently received an order signed by the principal contractor and on file with the comptroller, cannot participate in any judgment to be rendered in this action, as he has made no attempt to authenticate his order.

It was agreed on the trial that the various claims, if allowed,

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should be without interest or costs. My findings handed down herewith sufficiently express my views on the other questions in the case.

Cases cited

Dewitt v. Brisbane 16 N. Y. 508 N.Y. p. 483