Golden Dawn Foods, Inc. v. Cekuta

CourtUnited States Court of Appeals (Ohio)
Writing for the CourtJONES; PAUL W. BROWN, P. J., and FRANCE
Citation205 N.E.2d 121,30 O.O.2d 452,1 Ohio App.2d 464
Decision Date20 July 1964
Parties, 30 O.O.2d 452 GOLDEN DAWN FOODS, INC., Appellant, v. CEKUTA et al., Appellees.

Page 464

1 Ohio App.2d 464
205 N.E.2d 121, 30 O.O.2d 452
CEKUTA et al., Appellees.
Court of Appeals of Ohio, Seventh District, Trumbull County.
July 20, 1964.

[205 N.E.2d 122] Luchette & Hoffman, Masury, for appellant.

Battin, Downey & McKay, Warren, for appellees.

Page 465

JONES, Judge.

This case comes on for appeal from a judgment entry dated October 2, 1963, wherein defendants' motion for a directed verdict was sustained by the court and judgment entered thereon.

On March 22, 1962, the plaintiff corporation took cognovit judgment against the defendants on a note in the amount of $3,677.85, there being a confession by an attorney, the defendants not being served with summons.

[205 N.E.2d 123] The defendants filed a petition to vacate the judgment by separate action numbered 71781.

The cause came on to be heard on the petition to vacate, and, during the course thereof, it developed that the plaintiff in open court, through counsel, admitted it had taken judgment for more than was due, and the court ordered the judgment vacated, and the cause proceeded on the petition of plaintiff for judgment in case number 71671, and the answer which had been tendered thereto in case number 71781, the evidence already admitted under the petition to vacate being admitted in case number 71671 as having been introduced out of order.

At the conclusion of the plaintiff's presentation, defendants moved for judgment on the basis that the evidence showed that the plaintiff was a foreign corporation doing business in Ohio without having registered with the Secretary of State as provided by law, and, therefore, that it could not maintain an action in Ohio courts.

The court sustained that motion and, sua sponte, also held that the note in question was signed in a corporate capacity and not in an individual capacity, and rendered judgment for defendants.

The first issue to pass upon, as raised by assignment of error one, is whether Golden Dawn Foods, Inc., a foreign corporation, was doing business in the state of Ohio at the time suit was commenced. Since it is an agreed fact that Golden Dawn Foods, Inc., was a Pennsylvania corporation, not licensed to do business in Ohio, then, if this question is answered in the affirmative, they have no right to maintain an action in Ohio. This is so, as Section 1703.03, Revised Code, provides:

'No foreign corporation not excepted from Sections 1703.01 to 1703.31, inclusive, of the Revised Code, shall transact business

Page 466

in this state unless it holds an unexpired and uncancelled license to do so issued by the secretary of state. * * *.'

Section 1703.29, Revised Code, provides:

'(A) The failure of any corporation to obtain a license under Sections 1703.01 to 1703.31, inclusive, of the Revised Code, does not affect the validity of any contract with such corporation, but no foreign corporation which should have obtained such license shall maintain any action in any court until it has obtained such license. * * *.'

What constitutes a foreign corporation 'doing business in state,' is a fact question, and each case must rest on its own facts. Short Films Syndicate Co., Inc. v. Standard Film Service Co., 39 Ohio App. 79, 176 N.E. 893.

It is quite clear that Ohio requires a foreign nonprofit corporation to secure a license before exercising its corporate privileges and 'a continual course of transactions' in Ohio. Lyon v. Quality Courts United, Inc., 6 Cir., 249 F.2d 790. This would hold true, also, of corporations for profit.

Was Golden Dawn Foods, Inc., doing business in the state of Ohio, pursuant to the law at the time suit was filed? From the state of the bill of exceptions, we think not. The only testimony is that Golden Dawn Foods, Inc., is a corporation organized and doing business under the laws of the commonwealth of Pennsylvania; that it is a wholesale grocery company which processes, buys, and sells foods and other products for sale on a wholesale basis to independent retail outlets; that it sells to some fifty stores in Ohio and about one hundred stores in Pennsylvania; that it owns no real estate in Ohio, nor is it the lessee or lessor of any property in Ohio; that its warehouses are all located in Pennsylvania; and that its salesmen are dispatched out of the Pennsylvania office.

Because of plaintiff's ownership of some stock in McVeigh store in Ohio, defendants claim that plaintiff is doing business in Ohio. The Gates and McVeigh Store, a [205 N.E.2d 124] corporation which has been operating in Warren, Ohio, for more than sixteen years, encountered financial...

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