De La Vergne Refrigerating Machine Co. v. Kolischer

Opinion by Mr. Justice Elkin, From 1892 to 1899 appellant was the authorized and registered agent of appellee, a foreign corporation, as required by the act of 1874. Just when the agency relation terminated, if at all, is an important, and in some respects, the decisive question raised by this appeal. It is conceded on all sides dhat.it continued up to September 1, 1899, but the views differ as to what was the legal status of the parties from and after that date,. .The referee and.tha learned .court below held that, the agency of the appellant terminated as of that date, Arid" that — 406 — appellee had no registered agent at the time the substituted contract was formally executed two weeks later. Notwithstanding these views of the law, the contract was held to be valid on the ground, and for the reasons pointed out, that the act of 1874 did not apply. The second, fifteenth, sixteenth, seventeenth, eighteenth, nineteenth, twenty-first, twenty-second and twenty-third assignments of error broadly raise for review all questions relating to the act of 1874 as applied to the agency of the appellant. The original contract between the Standard Ice Manufacturing Company of New Jersey and appellee was entered into July 29,1899, at which time appellant was the duly authorized registered agent of appellee as required by law. It is clear, therefore, that while the negotiations were going on which led to the execution of the original contract and on the date when executed, all parties to same had a legal status to make a valid contract. If the situation at this point had remained unchanged the question of an authorized agent under the act of 1874, could not have been raised. The situation, however, did not remain unchanged, and hence this appeal. The New Jersey corporation having been incorporated to erect and operate an ice plant in the city of Philadelphia, was advised by counsel that it could not hold real estate in Pennsylvania, and as a result a change in the manner of taking title and organizing a new corporation was deemed necessary. Appellant being the principal executive officer of the New Jersey corporation, suggested that title to the real estate which it was proposed to purchase, should be taken in his name and held by him until a Pennsylvania corporation could be incorporated for the purpose of taking it over. This plan was agreed to and title to the real estate was so taken. It was then deemed advisable by appellant and his New Jersey corporation to substitute another contract for the one already entered into with appellee so that the new contract should stand in the name of the holder of the legal title to the real estate. At the instance and for the convenience and benefit of appellant and the New Jersey corporation, the change was made, and a new contract embodying the terms of the old was executed in the name of appellant on or about September 16, 1899. — 407 — We must now consider what happened between July 29,1899, at which time all parties had a legal status to make a valid contract, and September 15, following, the date of the execution of the substituted contract, when it is contended appellee did not have an authorized registered agent as required by the act of 1874. The testimony shows what did happen. On September 1, appellant offered his resignation, which was accepted as of that date, thus severing his commercial and business relations with appellee. He did nothing more in this connection. He took no steps to have his appointment as registered agent canceled or annulled. The public record of his appointment as such in the office of the secretary of the commonwealth remained unaltered. The certificate of his appointment hung on the wall of the office of appellee in the city of Philadelphia for the inspection of the public as it had done for several years prior thereto. The office, or place of business, which appellee had established and maintained for a period of ten or twelve years remained unchanged and was kept open as theretofore. There was no change in the situation except that appellant took a private office in another part of the same building.. Two weeks later the substituted contract was executed and appellant now claims there was no authorized registered agent at that time, in consequence of which it is claimed to be illegal and void. This brings us to a consideration of the requirements of the act of 1874, and the constitutional provision upon which it is based. Section five of article sixteen of the constitution ordains that “ no foreign corporation shall do any business in this state, without having one or more known places of business, and an authorized agent or agents in same, upon whom process may be served.” The act of April 22, 1874, P. L. 108, was passed to enforce this constitutional provision. It makes it unlawful for a foreign corporation to do business in this state without having a place of business and a registered authorized agent. It requires a statement under the seal of the corporation to be filed in the office of the secretary of the commonwealth, showing the name and purpose of the corporation, the location of its offices, and the name or names of its authorized agent or agents. This becomes a public record for information of all persons. In addition, the act requires a certificate to be issued — 408 — by the secretary of the commonwealth setting forth the facts as they appear of'record in his office, which must be preserved for public inspection in the place of business designated by the foreign corporation.- In the construction-of this act this court has held that its purpose is to bring foreign corporations doing business in this state within the reach of legal process, .which purpose is not accomplished by a registration at the pleasure of its officers, or when it may be to their interest to appeal to our courts, and that nothing short of a prior registration.can give such corporation a legal standing to enforce a contract. It has also been.held that a contract made by a.foreign corporation before establishing a place of business and registering an authorized agent as required by the act, is void and cannot be enforced in our courts: Thorne v. Insurance Company, 80 Pa. 15; Lasher v. Stimson, 145 Pa. 30; Delaware River Quarry, etc., Co. v. Pass. Ry. Co., 204 Pa. 22. We do íiót question the authority of these cases. The rule therein stated is the settled law of this commonwealth. It, however, does not follow that the rule applies to the facts of the case at bar.. The act requires a place of business to be designated and an authorized agent to be registered. Both of these requirements had been 'fully met by appellee for many -jmárs-'prior to the- execution of the contract in question. The place of business continued in -the same office and the saíne building after as before the date of the contract, and hence the requirements of the act in this respect had been fully complied with. We need give this branch of the case no further consideration. It must now be determined whether the private arrangements by which appellant severed his business relations with appelle.e ipso facto annulled his appointment as registered agent under the law. In other words, did the resignation of appellant as commercial agent of appellee annul his appointment as authorized agent under the act ? We think not. To so hold necessarily implies that in order to comply with the act every authorized registered agent, must also be the commercial and business agent of. the corporation. . This is not a reasonable interpretation of the statute. As was said in the latest utterance of this court on the question in Delaware River Quarry, etc., Co. v. Pass. Ry. Co., 204 Pa. 22, by Mr. Justice Fesll: — 409 — “ Tbe purpose of the act is to bring foreign corporations doing business within this state within the reach of legal process.” The place designated and the agent registered are of importance primarily in the serving of legal process upon and in the transaction of legal business with the foreign corporation. It .ivas not the purpose of the act to regulate the commercial business of a foreign corporation. It is true the authorized registered agent maybe, and often is, the commercial business agent, but it does not follow that in order to comply with the act a registered agent must perform commercial duties. Foreign corporations frequently appoint attorneys at law as their authorized registered agents and name their offices as places of business. Tn such cases it is not contemplated that the registered agent is the commercial business agent, or that his office is the place to make contracts and display goods, but he is.' the agent with whom, and his office is the place where, the legal business, such as the service of process and any other legal matter, may be made or transacted. This is the sense in which the word “agent” and the phrase “ place of business ” are used in the constitution and the act of 1874. As applied to the present case, this means that the appointment of appellant as registered agent gave him a legal status as an authorized agent, disconnected Avith and independent of the performance of his commercial duties as the business agent of appellee. When, therefore, he resigned as commercial agent on September 1, he did not by that act annul bis appointment as registered agent. To sustain the contention of appellant in this respect, it would be necessary to hold that a foreign corporation must not only have a place of business and an authorized registered agent, but to make the sendee of process legal and the business lawful, the registered agent must be physically present in the place of business Avhen the process is served or the details of the business transacted. Such a construction of the act is not only unnecessary to effectuate its purpose, but would surround it with restrictions and limitations never intended. There must be at least one place of business and one registered agent in every case. There must also be as many, registered agents as there are places of business,, and each registered agent must have his headquarters at the designated place of business. When these conditions are complied — 410 — with, the requirements of the act are met. After that the details of the commercial business and the service of legal process may be transacted or made, in the place of business, or outside of it, as in every other case of agency. At the time of the resignation of appellant as commercial agent of appellee the public record of his appointment as registered agent remained the same as before. He did not withdraw as- registered' agent, gave no notice of a change in his relation as such, and under these circumstances it cannot be doubted that if legal process had been served on him after September 1 it would have been good. The act imposes duties on the agent as well as the principal. The third section makes it a misdemeanor for the agent to do business in the state without having complied with its provisions, thus imposing imperative duties to be performed by him. Appellant accepted the appointment as registered agent, held himself out to the public as such for many years, permitted the record of his agency to remain without amendment, took no steps to have it altered, and cannot now deny his legal relation in order to invalidate a contract to which he is a party. The requirements of the act of 1874 are wise and wholesome provisions of law, intended as a protection to our citizens, and neither the principal nor the registered agent can deny the agency and thus defeat the purpose of the act so long as the public record establishing the relation remains unchanged in the office of the secretary of the commonwealth. We are of opinion that appellee had a place of business and a registered agent within the meaning of the act of 1874 when the substituted contract was entered into, and all the assignments of error relating to this question are overruled. There are other meritorious grounds upon which to affirm the judgment, but in our view of the law no useful purpose can be served by discussing them. On the questions of fact raised by the appeal the findings of the learned referee are conclusive unless manifest error was committed. We have examined with care the report of the referee, and the testimony relied on by appellant to sustain the assignments, but except as to registered agent, have not been convinced that there was manifest error. Assignments of error overruled and judgment affirmed. Mestrezat, J., dissents.