194 A.D. 164 | N.Y. App. Div. | 1920
The complaint was for goods sold and delivered and the judgment demanded is for $10,012.75. The contract is alleged in paragraph 4 of the complaint as having been made at Wellsville, N. Y. The defendant, in its answer, denies each and every allegation contained in paragraphs 4 and 5 of the plaintiff’s complaint. In the 2d paragraph of the answer a contract is specifically alleged for the delivery of twenty-five sets of gray iron castings in, accordance with certain drawings and in accordance with certain specifications therein stated. It is further alleged that the plaintiff failed to perform its contract in certain particulars named to the defendant’s damage in the sum of $61,200. This is alleged both as a defense to the plaintiff’s cause of action and as a counterclaim. In the 13th paragraph certain other defects are alleged in the materials furnished to the defendant by the plaintiff under the contract alleged in the 2d paragraph of the answer for which damage is asked in the sum of $3,329.44. This is also alleged as a defense and as a counterclaim to plaintiff’s cause of action.
The plaintiff in reply, after maldng certain denials, alleges as a first defense to the first counterclaim that defendant was a foreign stock corporation and had not obtained the certificate of authority required by section 15 of the General Corporation Law authorizing it to do business within this State. Further, that the defendant has not paid the license fee upon the capital stock employed by it within this State under section 181 of the Tax Law of the State of New York.
As a reply to the second counterclaim these same defenses are alleged among others and the plaintiff asks that these counterclaims be dismissed.
Section 15 of the General Corporation Law (as amd. by Laws of 1917, chap. 594) forbids any foreign stock corporation other than a moneyed corporation from doing business within this State without having procured from the Secretary of State a certificate that it has complied with all the requirements of law to authorize it to do business in the State. It is further provided: “No foreign stock corporation doing business in this State shall maintain any action in this State upon any contract made by it in this State, unless prior to the making of such contract it shall have procured such certificate.”
Section 181 of the Tax Law (as amd. by Laws of 1917, chap. 490) provides for a license tax on a foreign corporation. That license tax is to be computed upon the basis of the capital stock employed by the foreign corporation within the State during the first year of carrying on its business within the' State. In that section it is further provided: “ No action shall he maintained or recovery had in. any of the courts in this State by such foreign corporation after thirteen months from the time of beginning such business within the State, without obtaining a receipt from the Comptroller for the payment of the license fee upon the capital stock employed by it within this State during the first year of carrying on its business in this State.”
In the brief presented upon this appeal the defendant is not insisting upon its challenge to the plaintiff’s reply under section 15 of the General Corporation Law. That section provides that for failure to conform to its provisions and obtain the certificate therein required no action shall he maintained by any foreign stock corporation upon a contract made within this State. The demurrer to such defense could not. be sustained, for the reason that neither in the counterclaim asserted nor in the reply is there any allegation that the contract was made in this State, and further, the provision in this section that no action shall be maintained has been construed not to prohibit the assertion of a counterclaim by a defendant sued in this State, although the defendant has not complied with section 15
In the first place, this is a tax law to be construed strictly in favor of the taxpayer. In the Alsing Case (supra) in construing the act as it read before the insertion of this clause, the opinion reads: “ Under the act of 1892, it is clear, we think, that a foreign corporation which has been made a party in an action in our courts has a right, in addition to contesting the claim made against it, to recover upon a counterclaim based upon the same transaction. The defendant, having been brought into court and thus made to defend, should be allowed, unless there is a distinct provision to the contrary, not only to defend but also to litigate any question arising out of the transaction that has been made the basis of the plaintiff’s complaint.”
Again, to so construe this phrase would allow the defendant
There are other questions raised which are not necessary here to consider in view of the construction which I deem should be placed upon this phrase in the statute.
The order should be reversed, with ten dollars costs and disbursements, and the demurrer sustained, with ten dollars
Clarke, P. J., Laughlin and Greenbaum, JJ.,' concur; Dowling, J., dissents.
Order reversed, with ten dollars costs and disbursements, and demurrer sustained, with ten dollars costs, with leave to plaintiff to serve an amended reply on payment of said costs.