J. W. McAuley Co., Inc. v. Hoffmaster

• Decision Date: 12 August 1975
• Docket Number: 827 of 1974
• Parties: J. W. McAuley Co., Inc. v. Hoffmaster
• Court: Pennsylvania Commonwealth Court

73 Pa. D. & C.2d 316

J. W. McAuley Co., Inc. v. Hoffmaster

No. 827 of 1974

Common Pleas Court of Lawrence County, Pennsylvania

August 12, 1975

Preliminary objections to complaint in assumpsit.

Richard N. McKee, for plaintiff.

L Ivan Hudson, for defendant.

OPINION

LYON J.

This is an assumpsit action in which J. W. McAuley Co., Inc., a corporation, is plaintiff and Albert G. Hoffmaster and Kathryn L. Hoffmaster are defendants.

The complaint in assumpsit, which initiated the action, alleged that by a contract, made on July 29, 1974, defendants agreed to pay the sum of $ 5,900 to plaintiff for certain repairs and improvements to be made to their home in Pulaski Township, Lawrence County, Pa., and that defendants unilaterally terminated the contract on September 17, 1974, before plaintiff was able to perform any work on the homesite. Plaintiff contends defendants thereby breached the contract and seeks liquidated damages pursuant to the terms of the contract.

In response to the complaint, defendants filed a preliminary objection contending that plaintiff lacked the capacity to sue, since it was a foreign corporation doing business in Pennsylvania without a certificate of authority as required by the Business Corporation Law, Act of May 5, 1933, P. L. 364, as amended, 15 P.S. § 2001 et seq. The preliminary objection is specifically bottomed upon section 2014 of the Business Corporation Law which provides:

" No foreign business corporation transacting business in this Commonwealth without a certificate of authority shall be permitted to maintain any action in any court of this Commonwealth until such corporation shall have obtained a certificate of authority."

Plaintiff's answer to the preliminary objection is in the nature of a confession and avoidance under common-law pleading procedures. While admitting that it is a foreign corporation doing business in Pennsylvania without a certificate of authority, it contends that the business transaction with defendants was in interstate commerce and, therefore, is exempt from the foregoing penalty provision pursuant to section 2001(9) of the Business Corporation Law, supra.

The negotiations resulting in the contract occurred at defendants' home in Pennsylvania; the parties executed the contract in Pennsylvania; and the contract required plaintiff to perform certain work, presumably for a profit, on defendants' home in Pennsylvania. There appears to be no question that plaintiff was " doing business" in Pennsylvania: Burns v. Baltimore Motor Coach Co., 302 F.Supp. 683 (E.D. Pa., 1969); Wenzell v. Morris Distributing Co., 439 Pa. 364, 266 A.2d 662 (1970); Hoffman Construction Co. v. Erwin, 331 Pa. 384, 200 A. 579 (1938); Glenn Mitchell Construction Corp. v. Russell, 14 Bucks 203 (1964); Act of November 15, 1972, P.L. 885 (No. 271), sec. 8309, 42 Pa. C.S.A. § 8309(a)(2) and (4). The only question which arises is whether this constituted " interstate commerce" so as to be exempt under section 2001(9) of the Business Corporation Law, supra: U.S. Constitution, Art. I, sec. 8, cl. 3; Allenberg Cotton Co. v. Pittman, 414 U.S. 1109, 95 S.Ct. 260, 42 L.Ed.2d 195 (1974). See 17 Fletcher CYC Corp. § 8403 (Rev. Ed., 1960).

Surprisingly, there appears to be no Pennsylvania appellate court cases expressly dealing with this issue. However, the jurisdictions which have considered the issue are in general agreement that a foreign corporation doing construction work or performing labor or services within a State is engaged in intrastate business, even though the materials used were purchased or assembled in another State. This is in contrast with those cases involving the installation of an article or piece of machinery, which installation is merely incidental to the sale and delivery of the article in interstate commerce. Compare Electrical Equipment Co. v. Daniel Hanum Drayage Co., 217 F.2d 656 (8th Cir., 1954); Conklin Limestone Co., Inc. v. Linden, 22 A.D.2d 63, 253 N.Y.S.2d 578 (1964); Penberthy Electromelt Co. v. Star City Glass Co., 135 S.E.2d 289 (W. Va., 1964); Iowa Manufacturing Co. v. Superior Court, 246 P.2d 681 (Cal. App., 1952); Toedman v. Nooter Corp., 180 Kan. 703, 308 P.2d 138 (1957); Cadden-Allen, Inc. v. Trans-Lux News Signs Corp., 48 So.2d 428 (Ala., 1950); with Atlas Elevator Co. v. Presiding Judge of Circuit Court, 412 P.2d 645 (Hawaii, 1966); Procter & Schwartz, Inc. v. Superior Court, 221 P.2d 972 (Cal. App., 1950). See also 17 Fletcher CYC Corp. § 8412, pp. 362-65 (Rev. Ed. 1960).

The foregoing authorities are persuasive precedent, and we, therefore, hold that the instant business transaction was not in interstate commerce as contemplated by the exemption provision of section 2001(9).

Plaintiff...