Opinion
December 6, 1957
Charles R. Rinaldo for defendant.
Gray, Norem, Van Lengen Van Lengen for plaintiff.
This is a motion under rule 106 of the Rules of Civil Practice to dismiss the complaint on the ground that it fails to state facts sufficient to constitute a cause of action.
It appears from the complaint that plaintiff is a foreign corporation and it was admitted on the argument of the motion that it has not obtained a certificate of authority to do business in this State.
In view of these facts, defendant asserts that the complaint is insufficient because of the following provision of the General Corporation Law (§ 218): "A foreign corporation, other than a moneyed corporation, doing business in this state shall not maintain any action in this state upon any contract made by it in this state, unless before the making of such contract it shall have obtained a certificate of authority."
It is well settled that, if it appears upon the face of the complaint that the plaintiff is a foreign corporation, other than a moneyed corporation, doing business in this State and that the contract which is the basis of the action was made within the State, then the complaint is demurrable and subject to a motion to dismiss for failure to state a cause of action. ( Welsbach Co. v. Norwich Gas Elec. Co., 180 N.Y. 533; Wood Selick v. Ball, 190 N.Y. 217; Maple Motor Co. v. Beales, 110 N.Y.S.2d 623.) If these facts do not appear in the complaint, however, there is no necessity to plead possession of a certificate of authority and a motion to dismiss for failure so to allege, made before trial of the action, must be denied. "In such case, until the contrary is shown, it must be presumed that the contract was not made within this State and that the corporation is not doing business here." ( Acorn Brass Mfg. Co. v. Rutenberg, 147 App. Div. 533, 535; Bertolf Bros. v. Leuthardt, 261 App. Div. 981. )
Even though plaintiff may be a foreign corporation and doing business here section 218 of the General Corporation Law does not apply unless the contract in suit is a New York contract. As was said in Fairmount Film Corp. v. New Amsterdam Cas. Co. ( 189 App. Div. 246, 249-250): "Our courts are open to foreign corporations doing business here in violation of said statutes for the maintenance of actions arising outside the State, and the statute does not preclude the maintenance in our courts by a foreign corporation of any action where the cause of action arises here other than those on contracts made by it within this State." (Cases cited.)
The complaint which is the subject of the present motion has attached to it a copy of the "Employment Agreement" which is the basis of the action. An examination of both the complaint and the contract reveals a complete absence of any statement indicating that the contract in question was executed in the State of New York. Lacking anything showing that the contract sued upon was made within this State, there is no justification for dismissing the complaint for failure to comply with section 218 of the General Corporation Law at this stage of the proceedings. ( Alpha Portland Cement Co. v. Schratwieser Fireproof Constr. Co., 146 App. Div. 571.)
"If, upon the trial, it should be developed that the plaintiff is a foreign corporation doing business in New York, and that the contract in question was made within this State, the objection that the complaint does not state facts sufficient to constitute a cause of action, or that the facts proved do not constitute a cause of action, is open to the defendant." ( Eclipse Silk Mfg. Co. v. Hiller, 145 App. Div. 568, 573-574.) At this point, however, the plaintiff is entitled to the benefit of every favorable inference in construing the sufficiency of the complaint and it is beyond the province of the court to speculate as to what proof upon the trial may or may not establish. ( Denihan Enterprises v. O'Dwyer, 302 N.Y. 451, 458.) Every intendment and fair inference is in favor of the pleading. ( Dyer v. Broadway Cent. Bank, 252 N.Y. 430, 432.)
Upon argument of the motion defendant also attacked the complaint on the ground that it does not allege performance by plaintiff. Paragraph "6." of the pleading states that defendant performed services under the agreement and that plaintiff paid commissions therefor. There is however no general allegation of performance such as is usual in contract actions. Plaintiff has indicated its willingness to amend the complaint to include that statement and the court finds that such an amendment should be permitted in the interest of justice.
The motion to dismiss the complaint is denied. Plaintiff is directed to serve an amended complaint alleging performance of the contract within 10 days.
Prepare order accordingly.