Wm. G. Roe & Co. v. State, 40060
| Decision Date | 19 June 1964 |
| Docket Number | No. 40060,40060 |
| Citation | 251 N.Y.S.2d 151,43 Misc.2d 417 |
| Parties | WM. G. ROE & CO., Frederick W. Roe and Willard E. Roe, Claimants, v. The STATE of New York, Defendant. Claim |
| Court | New York Court of Claims |
Curtis & Warren, Coxsackie, for claimants; by Leonard H. Warren, Coxsackie, of counsel.
Louis J. Lefkowitz, Atty. Gen., by Douglas S. Dales, Jr., Asst. Atty. Gen., for the State of New York.
The claim herein, duly filed with the Clerk of this Court and the Attorney General on the 25th and 26th days of January, 1962, respectively, is for the appropriation in fee of 0.768± acres of claimants' land pursuant to Section 30 of the Highway Law and Acts amendatory thereto. The instant taking is described as Greenville-Coxsackie, Part 2, S. H. No. 719, Greene County, Map No. 47, Parcel No. 63, and the aforesaid map and description was filed in the Office of the Secretary of State on October 18, 1960 and in the Office of the County Clerk of Greene County on June 27, 1961; service by publication being effected on the claimants herein on October 13, 1961.
The Court adopts the description of the appropriated property as shown on the description filed in the Greene County Clerk's Office, a copy of which is attached to the claim and the same in incorporated herein by reference.
Wm. G. Roe & Co., one of the claimants herein, is a corporation organized and existing under the laws of the State of Florida. The individual claimants are both Florida residents. Prior to the instant taking, the corporate claimant was the owner in fee simple absolute of a tract of land situated on State Highway No. 81, in the Town of Coxsackie, Greene County, New York, said tract being conveyed to claimant by a deed dated September 16, 1927 from William G. Roe and Rose Roe, his wife, grantors, the deed being recorded in the Greene County Clerk's Office on October 20, 1927 in Liber 248 of Deeds at page 16. This tract consisted of a parcel of approximately three acres on the north side of Highway 81, with a frontage of 400± feet on said highway. At the time of the within taking the land was vacant and unimproved except for the existence of a stone wall running generally easterly and westerly along or near the south side of said property where the same adjoins Highway 81.
At no time prior to or on the date of the instant appropriation was the corporate claimant qualified to do business in this State pursuant to the requirements of Section 210 of the General Corporation Law.
On September 25, 1961, after the instant taking, the remaining lands and claim for damages arising therefrom were conveyed by the corporate claimant to the individual non-resident claimants herein by a deed executed in Florida dated September 25, 1961 and recorded in the Greene County Clerk's Office on October 13, 1961 in Liber 397 at page 78.
At the commencement of the trial the Attorney General moved to dismiss the claim on the ground that having failed to qualify in New York pursuant to Section 210 of the General Corporation Law, the corporate claimant was not a proper party plaintiff, because of the prohibition against suits by non-qualifying foreign corporations contained in Section 218 of the Law. The Attorney General argued further that the acquisition of realty here by a non-qualifying corporation was ultra vires the corporation, and that the purported conveyance of the property and the claim to the individual claimants did not alter the resultant disqualification, since the corporation could not give to the individual claimants any greater rights than those possessed by the corporation.
The first issue for resolution is whether the mere ownership of vacant real property situated in New York State by a foreign corporation in and of itself constitutes 'doing business' within this state so as to require qualification under the provisions of 210 of the General Corporation Law.
The statutory policy with respect to the qualification of foreign corporations has been summarized by the Court of Appeals in the case of International Fuel, etc. Corp. v. Donner Steel Co., Inc., 242 N.Y. 224, 151 N.E. 214. There, the subject of the action was breach of contract suit being instituted by a non-qualifying foreign corporation. The defense asserted was failure to qualify under the then existing provisions of Section 110 of the Stock Corporation Law, predecessor to Sections 210 and 218 of the General Corporation Law. In reversing a judgment of dismissal entered by the Appellate Division at 214 App.Div. 810, 210 N.Y.S. 865, and in ordering a new trial, the majority of the Court reviewed the law that had been developed in interpreting the statute, as follows:
242 N.Y. at 229, 151 N.E. at 215.
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.' 242 N.Y. at 230, 151 N.E. at 215.
The same considerations apply to contract claims prosecuted in this Court. Bridge's Sons, Inc. v. State of New York, 188 App.Div. 500, 177 N.Y.S. 3, aff'd 231 N.Y. 532, 132 N.E. 876; Pittsburgh & Shawmut Coal Co. v. State of New York, 118 Misc. 50, 192 N.Y.S. 310.
It has been held that investment in real estate situated in New York by a non-qualifying corporation, which realty was then leased to others also in New York State, does not constitute doing business in this state so as to defeat a contract action for rent because of the prohibition contained in the predecessor provisions of Section 218. Singer Mfg. Co. v. Granite Spring Water Co., 66 Misc. 595, 123 N.Y.S. 1088. The Court's conclusion found at page 596, 123 N.Y.S. at page 1090 is particularly in point:
'I do not think that every foreign stock corporation which sues on a contract made here must be presumed to be doing business in the state, especially when it has been held that the holding of real estate for investment does not mean that it is carrying on business within the meaning of our laws.'
The only exception noted was where there was proof that the foreign corporation was organized for the very purpose of taking title to or leasing land as its business. On this latter point, also see Laurendi v. Cascade Development Co., 5 Misc.2d 688 at 689, 165 N.Y.S.2d 832 at 833, aff'd 4 A.D.2d 852, 167 N.Y.S.2d 240.
On the basis of these authorities the Court concludes that the foreign corporate claimant herein, concededly not qualified under the laws of this state at the time of the instant taking, was not doing business here so as to require it to qualify and thus does not fall within the prohibition contained in Section 218 of the General Corporation Law.
The aforementioned provisions of Section 218 of the General Corporation Law are limited strictly to contract actions. Matter of Dunkin' Donuts v. Dunkin Donuts, 8 A.D.2d 228 at 232, 188 N.Y.S.2d 132 at 136; Max Factor & Co. v. Janel Sales Corp., C.A.N.Y., 298 F.2d 511. No case has been found where its application was sought, nor sustained, in an appropriation proceeding or a related condemnation or eminent domain proceeding.
This analysis forecloses the argument proffered by the Attorney General that the corporate claimant's acquisition of realty in New York was ultra vires so as to preclude it from prosecuting the instant claim. As a general rule, the prohibition contained in Section 218 of the General Corporation Law is the only penalty imposed against a foreign corporation for doing business without the required authority. Mahar v. Harrington Park Villa Sites, 204 N.Y. 231, 97 N.E. 587, 38 L.R.A.,N.S., 210; Matter of Dunkin'...
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...does not constitute doing business here, according to plaintiff, and in support of this contention it relies upon Wm. G. Roe & Co. v. New York, 43 Misc.2d 417, 251 N.Y.S.2d 151 (Ct. of Claims 1964). In that case, the court held that ownership of vacant real property in New York did not cons......