Halsey v. Henry Jewett Dramatic Co.

McLaughlin, J.:

The complaint in this action alleges that on the 18th of September, 1899, in the city of New York, the H. A. Thomas & Wiley Lithographing Company, a foreign corporation, entered into a contract with the defendant, by which it agreed, for a specified consideration, to do certain lithographing and deliver the same in the city of Hew York, on or about the thirtieth of September following ; that the defendant failed to perform by neglecting to make certain payments specified in the contract, and by reason thereof the plaintiff, the assignee of the lithographing company, is entitled to recover the damages alleged to have been sustained, for which judgment is demanded. • . '

The defendant in its amended answer and as a separate and distinct defense alleges that on the 80th of June, 1898, the plaintiff’s assignor, a foreign corporation, not exempt from the license fee required to be paid under section 181 of the Tax Law, procured from the Secretary of the State of Hew York a certificate of authority as prescribed by section 15 of the General Corporation Law authorizing it to do business in the State of Hew York; that it then and ever since has had an office and been engaged in business in such State; that neither the alleged cause of action set forth in the complaint nor the alleged assignment thereof accrued until more than thirteen months after such contract was made; that although such corporation was authorized to do business in the State of Hew York, it did not, nor did the plaintiff as its assignee prior to the commencement of the action, pay to the Treasurer of the State of Hew York the license fee required by chapter 240 of the Laws of 1895 and by section 181 of chapter 908 of the Laws of 1896, as amended *422by chapter 558 of the Laws of 1901. By a supplemental answer the defendant alleges substantially the same facts and in addition thereto that the action was begun on the 27th of. June, 1901, and , that the license fee was paid and a receipt obtained therefor on the 3d of July, 1902. /

The pflaintiff demurred to each defense upon the ground that the same were insufficient in law upon the face thereof. The demurrers were overruled and the plaintiff appeals.

The questions presented are (1) whether the assignee of a foreign corporation authorized to do business in this State and liable to pay a license fee therefor under section 181 of the Tax Law can maintain an action upon a contract made in this State when the fee required by the section referred to has not been paid when the action is commenced, and (2) whether such action can be maintained if the fee be paid intermediate the service of the complaint and answer.

The answer to the first question seems to be settled by tbe decision of Kinney v. Reid Ice Cream Co. (57 App. Div. 206). It was there" determined that an assignee of a foreign corporation stands in no better position than the corporation itself and that unless the corporation can maintain an action its assignee cannot. This is a decision of the second department, but one which we should follow unless it has been overruled by the Court of Appeals or is in conflict with a decision of our own department. It has not, so far as I have been able to discover, been overruled by the Court of Appeals, but it is contended by appellant’s counsel that it is in conflict with at least two decisions of this department (Box Board & Lining Co. v. Vincennes Paper Co., 45 Misc. Rep. 1; affd. without opinion, 98 App. Div. 623, and Emmerich Co. v. Sloane, 46 Misc. Rep. 513; affd., 108 App. Div. 330, on opinion of court at Special Term).

A reference to the record on appeal in the Box Board dk Lining Go. case will show that the only thing which was necessary to a decision was that it was unnecessary to show affirmatively in order to procure an attachment compliance with section 15 of the General Corporation Law or section 181 of the Tax Law. A reference to the record in the Emmerich case will show that the demurrer there interposed was that it did not appear from the complaint that the plaintiff had obtained the certificate authorizing it to do business in this State as *423provided in section 15 of the General Corporation Law. It is true there are expressions in the opinions in each case which in some respects sustain the contention of appellant’s counsel, but such statements were entirely unnecessary to the decisions and are, therefore, at most mere dictum.

That the Kinney case was correctly decided is strengthened by the amendment which was subsequently made to section 181 of the Tax Law. The section was originally enacted by chapter 908 of the Laws of 1896. The Kinney case was decided in January, 1901. and on the twenty-sixth of April following the Legislature amended the section (Laws of 1901, chap. 558) by changing the amount of tax required to be paid, but in all other respects material in this case, the language of the amended section was identical with that in the original, and this notwithstanding section 15 of the General Corporation Law (Laws of 1892, chap. 687) was amended by chapter 538 of the Laws of 1901, so as to make it applicable to an assignee. The Legislature is presumed to have had knowledge of the decision in the Kinney case and the construction which the court had put upon the statute, and the fact that it did not amend the section by making it‘applicable to the assignee of a corporation, must be deemed a legislative interpretation of the section as it had been judicially constru.ed, and that as it stood without amendment it applied not only to a foreign corporation but its assignee. There is abundant authority for the proposition that the re-enactment of a statute which has previously received judicial construction in the same or substantially the same terms, amounts to a legislative adoption of such construction. (Pulitzer v. City of New York, 48 App. Div. 6; Hakes v. Peck, 30 How. Pr. 104; People ex rel. Outwater v. Green, 56 N. Y. 466; United States v. Gilmore, 8 Wall. 330.)

It has been held that unless it appears in the complaint in an action brought by a foreign corporation that it has obtained the certificate referred to in section 15 of the General Corporation Law, that facts are not stated sufficient to constitute a cause of action. ( Welsbach Co. v. Norwich Gas & El. Co., 96 App. Div. 52; affd., 180 N. Y. 533; Emmerich Co. v. Sloane, supra.) The objection, however, that a foreign corporation has not complied with section 181 of the Tax Law is a matter of defense and must be taken by *424demurrer if it appears on the .face of the complaint (Code Civ. Proc. § 488) and by answer if it does not so appear (Code Civ. Proc. § 498). If not taken by demurrer or answer it is deemed to have been waived. (Code Civ. Proc.. § 499; Parmele Co. v. Haas, 171 N. Y. 579; Dunbarton Flax Spinning Co. v. G. & J. R. Co., 87 App. Div. 21.) The language of section 181 of the Tax Law is that every foreign corporation, not excepted, authorized to do business under the General Corporation Law shall pay a license fee within the time prescribed, or else it shall not maintain any action in the courts of the State. The answers demur-red to allege that this fee had not been paid when the action was commenced, and if that be true, then the action cannot be maintained. , The fact that the fee was paid after the action was commenced does not change the situation. The plaintiff had no right to bring the action and having brought it without right, he cannot, notwithstanding the payment of the fee thereafter made, continue and maintain an action which he, in the first instance, had no right to bring.

I am of the opinion, therefore, that the interlocutory judgment appealed from is right and should be affirmed, with costs, with leave to the plaintiff to withdraw his demurrers on payment of costs in this court and in the court below.

Laughlin and Clarke, JJ., concurred; O’Brien, P. J., and Houghton, J., dissented.