Welsbach Co. v. Norwich Gas & Electric Co.

Parker, P. J.: .Section 15 of the General Corporation Law (Laws of 1892, chap, 687, as amd, by Laws of 1901, chap. 538), among other things sub? stantially provides 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, etc. Also-that no such corporation 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, This demurrer is based upon the theory that the complaint should have contained an averment that such certificate had been procured before the making of the sales which are the basis- of the action. In Reining v. City of Buffalo (102 N. Y. 308, 310) the question, presented was whether the complaint in an action against that city must contain an averment that the claim declared on had been presented to the common council, and that forty days had expired since such presentation. It was there held - that, the language of the. [54] charter which' required such a presentation and expiration of time before the bringing of an action, and which language is quoted in the opinion, was intended to operate as a condition precedent to the commencement of an action, and not simply to furnish a defense to the city in case of an omission to make such a demand. And because it'was so intended and did so operate, it was held that such . presentation and expiration of' forty' days thereafter should have been averred in the complaint. The demurrer by the, city, that such complaint did not state facts sufficient to constitute a. cause of action, was there sustained by the Court of Appeals. Within the principles in that case enunciated the complaint in the appeal now before us is clearly bad. As in that case, the statute in the present case “ absolutely forbids ” the maintenance of an action in this State on any contract made by the plaintiff in this State unless the requisite certificate has been previously procured. It appears from the complaint that the plaintiff is within the category of those parties who must have procured the certificate before they made the contract, in order to sustain an action thereon. The intent that the procurement of such certificate before the contract was made shall be a condition precedent to maintaining an action thereon is as plain as any language Could make it — certainly as plain as is the language in the Buffalo charter'above referred to — and hence, being a condition precedent, it is a fact necessary to be proven,-and, therefore, necessary to be alleged, within the authority of the above case. The respondent’s counsel urges that all the facts necessary to constitute a cause of action at common law are set forth in this complaint; but that does not meet the situation. As said by Chief judge "Huger in the Reining case: “ It is competent for them (the Legislature) to attach a condition to the maintenance of a common-law action as well as one created by statute, and, when they have done so, its averment and proof cannot safely be omitted.” (See, also, Thrall v. Cuba Village, 88 App. Div. 410 ; Jewell v. City of Ithaca, 72 id. 220.) It is to be noticed: that' by the amendment of 1901 the enforcement of a contract, made by a foreign stock corporation other than a moneyed' corporation, before it has- obtained tile required certificate, is entirely forbidden. It is made incapable of enforcement, [55] because of the omission to procure the certificate before the contract was made. In this respect it differs from the statute which was, construed in Fuller & Co. v. Schrenk (58 App. Div. 222, 224), and also from that construed in the opinion of the court in C. R. Parmele Co. v. Haas (171 N. Y. 581). ' In the latter case it does not appear that any condition precedent on the part of the plaintiff existed at the time of the bringing of the action, because there the plaintiff had thirteen months from the time of beginning business within the State in which to procure' the required receipt, and it does not appear in the complaint that such time had expired. Thus the necessity of 'pleading the performance of a condition precedent was not presented in that case, and I am of the opinion that the decision there is not in conflict with the decision in the Reining case. I am of the opinion that, under the authority of the latter case, this demurrer was well taken and should have been sustained. Therefore the order and judgment appealed from must be reversed and the demurrer sustained, with costs. All concurred, Houghton, J., in result, except Chase, J., dissenting in memorandum.