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Div. 494, 99 N. Y. Supp. 297, and was not followed by the Appellate Term in Pfaelzer v. Gassner, 54 Misc. Rep. 579, 104 N. Y. Supp. 847.
The same relief to which plaintiff is manifestly entitled can be had in a more limited form by an examination of the defendants before trial, upon which the books can be produced upon a subpoena duces tecum, as is pointed out in Harbaugh v. Middlesex Securities Co., supra. The main controversy between the parties on the merits seems to be as to whether plaintiff is entitled to commissions on goods manufactured by defendants for others, and not sold, as well as those actually sold in the market. We expressly withhold any opinion on that subject. It follows that the order for a discovery of the books was improper, and must be reversed.
Order appealed from reversed, with $10 costs and disbursements, and the motion denied, with $10 costs. All concur.
HADDAM GRANITE CO. V. BROOKLYN HEIGHTS R. 00.
(Supreme Court, Appellate Division, First Department. April 8, 1909.) CORPORATIONS (8 642*) - FOREIGN CORPORATIONS - "DOING BUSINESS IN THE
A contract by a foreign corporation for the sale and delivery in the state of paving blocks manufactured in another state, negotiated largely by correspondence and afterwards reduced to writing, the deliveries to extend over a period of about ten months, does not constitute "doing business in the state” by such corporation, so as to require it to obtain a certificate from the Secretary of State authorizing it to do such business, as provided by Corporation Law (Laws 1892, p. 1805, C. 687) 8 15.
[Ed. Note-For other cases, see Corporations, Cent. Dig. 2520; Dec. Dig. § 642.*
For other definitions, see Words and Phrases, vol. 3, pp. 2155-2160; vol. 8, pp. 7640, 7641.] Appeal from Trial Term, New York County.
Action by the Haddam Granite Company against the Brooklyn Heights Railroad Company. From a judgment dismissing the complaint, and an order denying a motion for a new trial, plaintiff appeals. Reversed.
See, also, 186 N. Y. 247, 78 N. E. 858.
Argued before PATTERSON, P. J., and McLAUGHLIN, LAUGHLIN, CLARKE, and HOUGHTON, JJ.
John Ewen, for appellant.
Thomas L. Hughes (William N. Parke, on the brief), for respondent.
LAUGHLIN, J. This is an action to recover damages for breach of contract. The plaintiff is a foreign corporation engaged in quarrying and selling granite blocks for paving. On the 30th day of March, 1903, the general manager of plaintiff, who was also the treasurer, opened negotiations with defendant with a view to selling to defendant granite blocks. Prior to the 27th day of May thereafter these nego
tiations had progressed to the extent that the price had been agreed upon, but not the quantity or the time for making the deliveries; and on the verbal order of the defendant the plaintiff proceeded to manufacture and deliver granite blocks to the defendant, the first delivery being made on that date. On or prior to the 14th day of August, 1903, it had delivered about 100,000 blocks, for which it had been paid; and on that day a contract in writing for the sale and delivery of 500,000 granite blocks was proposed by the defendant and accepted verbally by the plaintiff, under and pursuant to which about 104,000 more granite blocks were delivered, for which payment has also been made. The defendant thereupon refused to accept any further deliveries.
The plaintiff showed that, relying on the contract, it quarried and dressed and tendered delivery of the remaining granite blocks called for by the contract, at the cost and expense of $10 per thousand, and that there was no market value for the granite blocks. This was the second trial of the issues, and recovery on the former trial, by the plaintiff, was reversed by the Court of Appeals on the ground that the trial proceeded on an erroneous theory with respect to the rule of damages. Haddam Granite Co. v. Brooklyn Heights R. Co., 186 N. Y. 247, 78 N. E. 858. On the last trial the plaintiff, for the purpose of showing that the difference between the contract price and market value could not be the measure of damages, showed, as already observed, that there was no market value. Assuming that the plaintiff has the right to sue, a prima facie case was presented. The trial court, however, dismissed the complaint upon the ground that the plaintiff was doing business in this state, within the intent and meaning of section 15 of the general corporation law (Laws 1892, p. 1805, c. 687), and that it failed to show that it had obtained a certificate authorizing it to conduct business in this state, as required by said statute.
We are of opinion that the court erred in so ruling. The plaintiff is a foreign corporation, organized under the laws of Connecticut, having its place of business and quarries at Haddam, in that state. It has no property in the state of New York, and it has no office in this state. The undisputed evidence shows that the only business it has ever transacted in the state of New York is this business with the defendant, which in effect constitutes but a single transaction. At the outset there was an attempt to negotiate a single contract, and, pending the negotiations, after the price of the material had been agreed upon, but before all the particulars of the contract, with respect to quantities and times of delivery, had been settled, deliveries were made on the terms as to price, which were to be incorporated in the contract which was then being negotiated. The negotiations originated in this state, but were continued largely by correspondence between the officers of the respective corporations, one of which was within and the other without the state. These facts do not show that the plaintiff was either continuously or permanently engaged in business in this state. The Court of Appeals, in Penn Collieries Co. v. McKeever, 183 N. Y. 98,75 N. E. 935, 2 L. R. A. (N. S.) 127, in construing this statutory provision, said:
"To bring into operation the statutory provision, the facts should show more than a solitary, if not accidental, transaction, as was the one before us. They should establish that the corporation was conducting a continuous business. To be 'doing business in this state' implies corporate continuity of conduct in that respect, such as might be evidenced by the investment of capital here, with the maintenance of an office for the transaction of its business, and those incidental circumstances which attest the corporate intent to avail itself of the privilege to carry on a business."
The mere fact that some deliveries were made pending negotiations, and that the contract did not provide for the delivery of all the granite blocks at one time, and that deliveries were to be made from time to time, extending over a period of about 10 months, does not show the continuity of business which is required, by this decision of the Court of Appeals, to bring a case within the operation of the statute. In Penn Collieries Co. v. McKeever, supra, the contract was made in this state, and the plaintiff, a foreign corporation, maintained an office in this state, under an annual lease, which was occupied by its manager, whose compensation consisted of commissions, and who there took orders for the sale of coal, subject to the approval of the company at its home office without the state, ordinarily; but in the particular instance which was under review by the Court of Appeals he himself made the contract for the sale of the coal within the state. The Court of Appeals held that those facts did not constitute doing business in this state, within the provisions of this statute. I think it clear, therefore, upon that authority, that the facts in the case at bar do not show that the plaintiff was doing business within the state, which required it to obtain the certificate as a condition precedent to enforcing its contract rights in our courts.
It follows, therefore, that the judgment and order should be reversed, and a new trial granted, with costs to the appellant to abide the event. All concur.
ALEXANDER V. KELLNER et al. (Supreme Court, Appellate Division, First Department. April 8, 1909.) 1. SALES (8 460*)-CONDITIONAL SALES-NECESSITY OF WRITING.
Lien Law (Laws 1897, p. 539, c. 418) art. 9, relating to contracts for the conditional sale of chattels, and containing provisions as to the signing of duplicate writings containing the contract, or the filing of such instruments for the protection of the seller against the claims of third parties and innocent purchasers, does not make a contract in writing for the conditional sale of chattels necessary as between the seller and buyer.
[Ed. Note. For other cases, see Sales, Cent. Dig. 1348; Dec. Dig. $
460.*] 2. SALES (8 481*)—CONDITIONAL SALES-REMEDIES OF BUYER.
Under Lien Law (Laws 1897, p. 541, c. 418) & 116, as amended by Laws 1900, p. 1624, c. 762, providing that the seller of chattels under a conditional sale, on retaking them, may cause them to be sold at public auction by giving notice to the buyer, and that if he does not give such notice the buyer may recover back the amount paid, a buyer, to whom no notice was given of the sale of the property after it was retaken by the seller,
may recover the amount paid to the seller, although the buyer, after his
purchase of the property, gave a chattel mortgage on the property to one of the sellers, as the giving of such mortgage did not preclude him from showing that the title to the property still remained in the seller under the terms of the conditional sale.
[Ed. Note. For other cases, see Sales, Dec. Dig. § 481.*] Appeal from Trial Term, New York County.
Action by Mary H. Alexander against William Kellner and others. Judgment of nonsuit, and plaintiff appeals. Reversed.
Argued before PATTERSON, P. J., and MCLAUGHLIN, LAUGHLIN, CLARKE, and HOUGHTON, JJ.
Henry Seagers, Jr., for appellant.
HOUGHTON, J. The plaintiff purchased a quantity of household furniture from the defendants, to be paid for in installments of $90 per month, which payments were subsequently reduced to $50 per month. The furniture was delivered, and the plaintiff testifies that her bargain with the defendants was that title should remain in the defendants until full payment of the purchase price had been made. The defendants are copartners, and plaintiff's purchase was made through one of them, the defendant Henry B. Kellner. After plaintiff had made various payments to the defendants, aggregating $490, the record shows that she gave to Henry B. a chattel mortgage upon all the goods purchased to secure the balance. Subsequently the plaintiff made further payments, until the total amount paid aggregated $1,154, which is a little more than one-third of the purchase price. The plaintiff defaulted in payments, and the defendants notified her that, unless she made a certain payment by a certain date, they would retake the property. The payment was not made, and the property was retaken, and, as claimed by plaintiff, resold by the defendants: without notice to her. The plaintiff claims that this taking of the property so sold to her by conditional sale, and reselling it at private sale, instead of at public auction, without notice, was in violation of sections 116 and 107 of the lien law (Laws 1897, p. 541, c. 418, as amended by Laws 1900, p. 1624, c. 762), and that she is entitled to recover the amount which she paid on her purchase.
Section 116 provides that, whenever chattels are sold upon condition, that the title thereto shall remain in the vendor until payment of the purchase price and are retaken, they shall be retained for the period of 30 days from the time of such retaking, during which period the purchaser shall have the right to redeem upon payment of the purchase price, and that after the expiration of that period, and within 30 days, the vendor may cause such articles to be sold at public auction upon giving notice to the purchaser, and if he does not so sell the purchaser may recover back the amount paid. The learned trial court granted the defendants' motion for a dismissal of the complaint at the close of plaintiff's case, upon the theory, no doubt, that a contract of conditional sale of personal property must be in writing.
Article 9 of the lien law relates to contracts for the conditional sale •For other cases see same topic & $ NUMBER In Dec. & Am. Digs. 1907 to date, & Rep'r Indexes
of chattels, and contains various provisions with respect to the signing of duplicate writings containing the contract, or the filing of such instruments for the protection of the vendor against the claims of third parties and of innocent purchasers; but it nowhere declares that as between the vendor and vendee such a contract must be in writing. Of course, if it is to be filed, or if duplicate copies are to be signed, it must necessarily be in writing. As between the vendor and the vendee, however, there seems to be no reason why a sale and delivery of chattels under an agreement that the title shall remain in the vendor until the purchase price is paid should necessarily be in writing. An oral agreement to that effect was held to be good in Tompkins v. Fonda Glove Lining Co., 188 N. Y. 261, 80 N. E. 933 as against subsequent purchasers with actual notice. The law specifies certain advantages to be had where an agreement for the conditional sale of chattels is in writing, and such advantages cannot be enjoyed unless the instrument shall be so reduced to writing. But we see no reason why one who has purchased goods by an oral contract, and agreed that the title to them shall remain in the vendor, is not entitled to the protection of the statute so far as it can apply to such an oral contract. It was formerly not unusual for dealers to sell goods to poor and ignorant persons upon the installment plan, title remaining in the vendors, and when the installments had been nearly paid, on a technical default, to retake the goods, leaving the vendee without redress. The Legislature very wisely sought to prevent this evil by providing that where chattels were sold, the title to remain in the vendor, upon retaking he should hold them for a certain period subject to redemption by the vendee, and if they were not redeemed he should sell at public auction on giving notice to the vendee, and if he did not so sell then the conditional vendee should be entitled to recover back what he had paid. There is no reason why the necessity for such sale on retaking should not apply to an oral agreement of conditional purchase, as well as to a written one.
The subsequent giving of the chattel mortgage by the plaintiff to one of the defendant partners was inconsistent with her claim that she had no title, but that it remained in the vendor; but it was not absolutely conclusive upon her in that regard. If the title to the property did remain in the defendants, she could give no valid chattel mortgage upon it, even to them. The defendants did not show that the goods were retaken by virtue of the chattel mortgage. Even if they were taken by virtue of it, that instrument contains quite an unusual clause to the effect that under certain conditions the amount paid by the mortgagor should be refunded. It not being necessary, as we conclude, that plaintiff's alleged contract of conditional sale should be in writing, the plaintiff made a prima facie case establishing such a contract and the retaking of the property by the vendors, and their failure to sell within the prescribed time and in the prescribed manner after notice entitled her to recover back the moneys which she had paid.
If these views are correct, the nonsuit was improper, and the judgment must be reversed, and a new trial granted, with costs to the ap