Pavilion Co. v. Hamilton

Opinion by William W. Pobteb, J., This action is brought by a foreign corporation to compel the payment of a subscription to its capital stock. The court below entered a nonsuit on the ground that the transaction was a doing of business by a foreign corporation without previous registration, as required by the act of 1874. This was error. The business for which the corporation was organized was the erection of a pavilion at Wildwood Beach, in the state of New Jersey. The offices and place of business of the company were in the state of New Jersey. The capital of the company was wholly invested in the state of New Jersey. Nowhere in the case does it appear that any business of the corporation was done or intended to be done in the state of Pennsylvania, save the single transaction before us. The subscription was made at a meeting of stockholders and directors, held, for the convenience of the parties, at the office of one of the directors, in the state of Pennsylvania. This solitary fact is relied upon to bring the case within the purview of the act of 1874. It may be said, with some show of reason, that a subscription to the capital stock of a foreign corporation is not a doing of business by that corporation within the commonwealth of Pennsylvania. Subscription to stock is an incident to the erection of the corporation. It is an act preliminary to the doing of that business [392] for which incorporation is had: Payson v. Withers, 5 Bissell, 269. The prosecution of the corporate business is that which is prohibited by the act of 1874. In the present case the business of the corporation was the erection of a pavilion at Wildwood Beach, in the state of New Jersey. The subscription to stock, though made at Philadelphia, was by citizens of the state of New Jersey and was made in order that the business of the company within the state of New Jersey might be prosecuted. “ It has never been held that a citizen of Pennsylvania may not be a member of, or stockholder in, a corporation of another state; or that a contract between such member and his corporation is ultra vires, because the latter had not complied with the provisions of the act of assembly. Nor do we think it material that an occasional meeting of the directors was held at Delta, a town partly in Maryland and partly in tins state. Their acts are not necessarily void for such reason: ” Kilgore v. Smith, 122 Pa. 57. The tests of the application of the act of 1874, as shown by previous adjudications in Pennsylvania, are whether the foreign corporation shalbhave an agent in the state of Pennsylvania; or shall have offices for the general conduct of its business in the state; or shall conduct its corporate business in the state; or shall have a part of its capital invested in the state: Kilgore v. Smith, supra; Wolff Dryer Co. v. Bigler, 192 Pa. 466; Ice Manfg. Co. v. Armour & Co., 12 Pa. Superior Ct. 443; Milsom, etc., Co. v. Kelly, 10 Pa. Superior Ct. 565; Mearshon & Co. v. Pottsville Lumber Co., 187 Pa. 12; Blakeslee Mfg. Co. v. Hilton, 5 Pa. Superior Ct. 184; Swing v. Munson, 191 Pa. 582; Insurance Co. v. Sharpless Bros., 12 Pa. Superior Ct. 333. Tried by any or all of these tests, the company plaintiff, in respect to the transaction before us, is not brought within the provisions of the act of 1874. The judgment is reversed and a new venire is awarded.