The opinion of the court was delivered by: KNOX
The question before the court is whether a foreign business corporation may enforce its contractual claims for work performed in Pennsylvania, even though the foreign corporation did not obtain a Certificate of Authority to transact business within the Commonwealth pursuant to 15 Purdon's Pa. Stat. § 2001 until after the work was completed and suit begun.
This diversity action arises from the construction of the Murphy Mart Shopping Center on McKnight Road in McCandless Township, Allegheny County, Pennsylvania. The plaintiff Empire Excavating Company (Empire) seeks to recover for certain excavation and site preparation work it performed as a subcontractor in the development of the shopping center.
Empire executed a subcontract with the defendant Landau Brothers Building Company (Landau), which was the general contractor to the developer, defendant Maret Development Corporation (Maret). The defendant Aetna Casualty and Surety Company (Aetna) is the bonding company on the agreement between Landau and Maret. Empire's action against Aetna is based on this bond. Empire's action against Maret is based on unjust enrichment. We have previously denied Maret's motion for judgment on the pleadings on the grounds that it was not subject to liability on the basis of the facts pleaded.
The subcontract between Landau and Empire was executed in the Commonwealth of Pennsylvania and concerned work which was performed in 1972 in Pennsylvania. Empire is an Ohio corporation which until October 29, 1973, had not registered
to do business within the Commonwealth of Pennsylvania. This lawsuit was filed on February 20, 1973.
On October 4, 1973, Landau and Aetna moved for summary judgment against Empire, asserting that under 15 Purdon's Pa. Stat. § 2014 Empire is disabled from enforcing its claim since it failed to register as required by 15 Purdon's Pa. Stat. § 2001. Although Empire complied with the registration requirement after the defendants filed their motions for summary judgment, the defendants have since taken the position that Empire's late registration did not cure the earlier noncompliance.
The Pennsylvania Business Corporation Law (BCL) Section 1001, 15 Purdon's Pa. Stat. § 2001, provides:
"A foreign business corporation, before doing any business in this Commonwealth, shall procure a certificate of authority to do so from the Department of State . . . ."
Section 1014 of the B.C.L., 15 Purdon's Pa. Stat. § 2014 entitled "Penalty for doing business without certificate of authority" provides:
"A. 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 attained a certificate of authority . . . . The failure of a foreign business corporation to obtain a certificate of authority to transact business in this Commonwealth shall not impair the validity of any contract or act of such corporation and shall not prevent such corporation from defending any action in any court of this Commonwealth." (Act May 5, 1933, P.L. 364 as last amended by act Jan. 18, 1966, P.L. 1305)
At the outset, we note that the fact that Empire has brought this action in federal court will not affect the applicability of the Pennsylvania statutes. In Woods v. Interstate Realty Co., 337 U.S. 535, 69 S. Ct. 1235, 93 L. Ed. 1524 (1949), the Supreme Court held that a Mississippi statute that barred recovery "in any of the courts of this state" likewise barred recovery in the federal courts. In that case, the court followed the principal established in Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188, 114 A.L.R. 1487 (1938), that for purposes of diversity jurisdiction a federal court is, in effect, only another court of the state.
The question to be decided, then, is simply whether under Pennsylvania law subsequent compliance with the corporate registration statute will permit a foreign corporation to enforce its contractual rights arising prior to its domestication. We are aware of no Pennsylvania cases in which this narrow issue is decided.
Although some courts have equated the word "maintain" with "commence", the majority view among courts interpreting similar statutes in other states is that "maintain" means to continue an action already begun. Those courts have held that compliance with the registration statute during the course of the lawsuit is sufficient to entitle a foreign corporation to continue its prosecution of that lawsuit. See cases cited in Annotation, " Compliance after commencement of action as affecting application of statute denying access to courts or invalidating contracts where corporation fails to comply with the regulatory statute," 6 A.L.R.3d 326, 331-338 (1966); 23 Am. Jur. 2d, Foreign Corporations § 282, page 285; Note, The Legal Consequences of Failure to Comply with Domestication Statutes, 110 U. Pa. L. Rev. 241, 266 (1961). See also 75 A.L.R. 453, 465. For examples of such cases see Kendrick and Roberts, Inc. v. Warren Brothers, 110 Md. ...