Phoenix Silk Manufacturing Co. of Paterson, N.J. v. Reilly

• Decision Date: 17 October 1898
• Docket Number: 176
• Citation: 187 Pa. 526,41 A. 523
• Parties: The Phoenix Silk Manufacturing Company of Paterson, N.J., Appellant, v. Thomas A. Reilly et al
• Court: Pennsylvania Supreme Court

41 A. 523

187 Pa. 526

The Phoenix Silk Manufacturing Company of Paterson, N.J., Appellant, v. Thomas A. Reilly et al

No. 176

Supreme Court of Pennsylvania

October 17, 1898

Argued February 14, 1898

Appeal, No. 176, Jan. T., 1898, by plaintiff, from judgment of C.P. Schuylkill Co., Jan. T., 1894, No. 133, for defendants non obstante veredicto. Affirmed.

Assumpsit on a written contract.

From the record it appeared that on June 2, 1887, defendants members of the board of trade of Pottsville, entered into a written contract with the plaintiff company for the purpose of having the plaintiff erect a large silk mill in the borough of Pottsville. The defendants guaranteed to the plaintiff that during the first ten years' occupancy of the premises the plaintiff would be exempt from borough taxation, and that water for the natural uses of the business of the plaintiff would be supplied at a cost not exceeding $100 per annum. Suit was brought for the sum of $1,428, being the amount of alleged excess water rents from July 1, 1888 to October 1, 1893. The plaintiff is a corporation of the state of New Jersey, and it did not appear that it had complied with the act of April 22, 1874, designating a place of business in Pottsville. The court reserved the following point:

"Whether under the contract declared upon the suit can be maintained for payments of water rent in excess of one hundred dollars ($100) for one year or number of years before the expiration of ten years from the time when plaintiff took possession July, 1888." [1]

Verdict for plaintiff for $1,379.27, subject to the point of law reserved.

ENDLICH, J., filed the following opinion on the question of law reserved:

The answer of the court to the first and fourth points submitted by defendants was, that they were reserved. The defendants excepted to the answers given to their points, which means, of course, to those not affirmed, and therefore covers the reservation of those reserved. An exception to the reservation of a point leaves its correctness and sufficiency in fact and form open to inquiry: Koons v. Tel. Co., 102 Pa. 164; Cent. Bank v. Earley, 113 Pa. 477; Mohan v. Butler, 112 Pa. 590.

The first point is predicated upon an assumed failure of plaintiff to show any right of action in itself under the contract sued upon. That contract is, in its first clause, stated to be made between the board of trade of Pottsville and "Albert Tilt, president, and Joseph W. Congden, vice president, of the Phoenix Manufacturing Company" (the name of which, in 1893, was changed to the Phoenix Silk Manufacturing Company). It provides for the execution of a deed of the property referred to in it to "Albert Tilt" (not adding the words "president," etc., as above), and the use and occupancy of said property for the purpose of a silk mill by the Phoenix Manufacturing Company. It is signed by Walter S. Sheafer, president of the board of trade, and Albert Tilt, each adding a seal to his name. It is contended that it must be taken to be the individual contract of Walter S. Sheafer and Albert Tilt. Such doubtless is its appearance: Campbell v. Baker, 2 W. 83; Sharpe v. Bellis, 61 Pa. 69; Quigley v. DeHaas, 82 Pa. 267. But that appearance, rights of third parties misled by it being out of the way, does not preclude proof that it was intended, and in reality was, the contract of the Phoenix Manufacturing Company, with the right in the latter to enforce it by suit thereon: Wanner v. Emanuel's Church, 174 Pa. 466; Thomp. on Corps. secs. 5034, 5090, the private seal of the agent, in such case, being simply nugatory: Field on Corp. sec. 197; 1 Dill. Mun. Corp. sec. 452; 1 Pars. on Contracts, p. *141, and see Schmertz v. Shreeve, 62 Pa. 457. If there was no other proof (and there is an abundance of it) in the case that the contract sued upon was, in truth and in fact, and therefore in equity, the contract of the board of trade, represented by its president, with the Phoenix Manufacturing Company, represented by its president, it would be enough that the affidavit of defense filed (which is in evidence) admits and rests upon that fact, as does also the notice of special matter furnished under the plea of non assumpsit, in answer to a demand by the plaintiff, and that the settlement made and receipt given by defendants in 1888, on the completion of the building, etc., was made with and given to the Phoenix Manufacturing Company. The first point reserved, therefore, is not correct, and cannot become the basis of a judgment contrary to the verdict.

Art XVI. sec. 5, of the constitution, provides that "no foreign corporation shall do any business in this state, without having one or more known places of business, and an authorized agent or agents in the same, upon whom process may be served." The Act of April 22, 1874, P.L. 108, passed like the later enactment of June 1, 1889, P.L. 427, sec. 19, to carry out this provision (Hagerman v. Empire Slate Co., 97 Pa. 534; Campbell, etc., Co. v. Hering, 139 Pa. 473), after, in sec. 1, substantially re-enacting it, declares, in sec. 2, that no foreign corporation shall do any business in this commonwealth until it shall have filed in the office of the secretary of state a statement showing the title and object of the corporation, the location of its office or offices, and the name or names of its authorized agent or agents therein, the secretary's certificate of the filing of which statement shall be preserved for public inspection by each of said agents in each of said offices. That compliance with these requisitions is a condition precedent to the lawful transaction of business in this state by a foreign corporation, and that, without such compliance, its engaging in business here is utterly unlawful and can give rise to no rights the company can enforce in our courts, is very clear from the decisions of the Supreme Court in Thorne v. Ins. Co., 80 Pa. 15, Ins. Co. v. Bales, 92 Pa. 352, Ins. Co. v. Heath, 95 Pa. 333, Lasher v. Stimson, 145 Pa. 30, Holt v. Green, 73 Pa. 198, Johnson v. Hulings, 103 Pa. 498, and of the Secretary of the Commonwealth in Office, etc., Co. v. Mfg. Co., 1 Dist. Rep. 576. It is, however, claimed by plaintiff that it is not incumbent upon a foreign company suing for rights alleged to have arisen from business transactions in this state to aver or prove such compliance on its part with the law of the state, but that its noncompliance therewith must be shown by the opposite party, and that, in this case, the specification of defenses not embracing this one it must be deemed waived and cannot be noticed by the court even if it appears in the case. Whether there can be any waiver by an individual of an explicit constitutional and statutory prohibition, with the effect of permitting acts thus forbidden to become the basis of recovery in the courts of the state in which such prohibition obtains, is a grave question which it is not necessary now to discuss. The fallacy of the plaintiff's contention is apparent upon other grounds. The mere right of a foreign corporation to maintain a personal action in this state may be conceded: Leasure v. Ins. Co., 91 Pa. 491; Campbell, etc., Co. v. Hering, supra. Nor can there be any doubt that every person is presumed to have conformed to the law until the contrary appear by proof, the burden of which is on him who alleges it: Horan v. Weiler, 41 Pa. 470. But neither of these principles is conclusive on the point now under discussion. The difficulty here is not as to right of plaintiff to maintain a suit, but as to its right, in that suit, to recover a demand arising out of the fact that it has transacted business in the state, without showing that it did so in conformity with the law of this state. The presumption referred to, on the other hand, loses its significance the moment the fact clearly appears which negatives it. No presumption can prevail when the contrary is indisputably shown: Chalfant v. Edwards, 173 Pa. 246. And even if, in the absence of such showing, a presumption of conformity with the law might apply, relieving the plaintiff from affirmatively proving the same, the court would be bound to notice the contrary fact if it appeared, no matter how or when in the course of the trial: Johnson v. Hulings, 103 Pa. 498. But, obviously, the presumption in question can apply only where there is a recognizable person to whom it can be applied, and where the act which is the basis of the demand is one which, apart from any statutory restriction, the party would have a common-law or natural right to do, which right is simply made subject to compliance with statutory regulations. Every natural person, for instance, or domestic corporation organized for such purpose has, originally and apart from statutory restrictions, the same perfect right to sell liquor as to sell any other commodity or article of trade; by statute, that right has not been taken away, but its exercise subjected to certain regulations, one of which is that a license shall be obtained therefor; upon suit by such person or corporation for a demand arising from an alleged sale of liquor, i.e., from the exercise of a prima facie right, the presumption would necessarily obtain that that right had been lawfully exercised, that the statutory direction had been complied with, and this, therefore, as decided in Horan v. Weiler, supra, would have to be neither averred nor proved by the plaintiff. The case must be altogether different where the act out of which the demand arises is the act of one ordinarily not recognized as legally capable of doing it at all, and is therefore without any basis in common right, being, both in respect of the person of the actor and of the thing as done by him, lawful only by virtue of a legislative grant imposing,...