Pomeroy v. Hocking Valley Ry. Co.
| Decision Date | 11 July 1916 |
| Citation | 113 N.E. 504,218 N.Y. 530 |
| Parties | POMEROY et al. v. HOCKING VALLEY RY. CO. WARRINER v. HOCKING VALLEY RY. CO. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from Supreme Court, Appellate Division, First Department.
Action by Daniel E. Pomeroy and Arthur Warriner against the Hocking Valley Railway Company. Appeal in each case by permission on certified questions, from orders of the First Appellate Division (157 N. Y. Supp. 1150; 158 N. Y. Supp. 1128), affirming orders of the Special Term, which denied a motion to set aside the service of the summons and complaint. Orders affirmed.
The questions which were certified are:
(1) Do the facts appearing in the papers on the motion to set aside the service of the summons and complaint herein show that the defendant was doing business within the state of New York at the time of the attempted service of the summons and complaint upon it?
(2) Under the circumstances set forth in the papers on the motion to set aside the service of the summons and complaint herein is the attempted service upon the defendant due process of law under the provisions of section 1 of the Fourteenth Amendment of the Constitution of the United States?
G. H. Dorr, of New York City, for appellant.
James J. Porter, of New York City, for respondents.
Each of these actions was brought to recover on a contract claimed to have been made by the defendant guaranteeing the payment of the principal and interest of certain coupon bonds issued by the Kanawha & Hocking Coal & Coke Company, and which contract and guaranty it is claimed were not observed and fulfilled in the case of certain bonds held by the plaintiffs respectively.
Each action was commenced by the service of a summons and complaint in the state of New York upon a person who there resided and was the secretary of the defendant. Subsequently under an order to show cause a motion was made in each action to set aside the service of said summons and complaint ‘upon the ground that at the time of the attempted commencement of the action herein the defendant was a foreign corporation organized and existing under and by virtue of the laws of the state of Ohio, and was not doing business within the state of New York, and that said service is in violation of the Constitution of the United States and particularly section 1 of the Fourteenth Amendment thereof.’
This motion having been denied an appeal to this court has been permitted, and the questions already quoted certified to us for answer. Inasmuch as these questions and the facts and considerations determining the answer to be given thereto are the same in each case, they will be discussed as if arising in one case in the order in which they have been stated.
[1] I think that the facts established on the motion to set aside the service of the summons sustain the conclusion that the defendant was doing business within this state at the time of the service. Amongst the important facts thus appearing were the following:
The defendant is a foreign railroad corporation incorporated under the laws of the state of Ohio, and has never obtained a certificate permitting it to do business in this state. All of its railroad and other physical porpertiesare situated in the state of Ohio, or at least outside of the state of New York. Its principal office is located in the city of Columbus, Ohio, where are kept its general books of account and wherefrom are conducted most of its business and paid most of the disbursements connected with the operation of its railroad. It has within the state of New York no agencies for the prosecution of its immediate business, such as the solicitation of passenger or freight traffic. The majority of its officers, the vice president, who is the most important executive official, and a majority of its directors live outside the state of New York.
These facts of course negative the conclusion that the defendant is transacting business within this state, but as against them there appeared these other ones:
The Chesapeake & Ohio Railway Company, which is the principal owner of defendant's capital stock, maintains a suite of offices in New York city, and certain rooms in this suite are used by the defendant for its office. Its name appears upon the doors thereof and several meetings each year of its board of directors and executive committee are held there. A number of said directors and of the members of said executive committee, including the chairman of the board of directors, reside in New York city and the latter official as well as the president of the company when in New York city uses offices in said suite. The secretary of defendant resides within the state and has his only office as such at said location where he keeps the minutes of the board of directors and of the executive committee and conducts correspondence relating to the business of the defendant. From these same offices are paid by the treasurer certain obligations of the defendant including the principal and interest of bonds and notes, dividends, claims for legal services, and incidental expenses. The defendant's stock is transferred in New York and interest upon bonds and various obligations not paid directly by the treasurer are there paid through the fiscal agents of the company, Messrs. J. P. Morgan & Co. The defendant pays the Chesapeake & Ohio Railway Company for its office facilities and clerical work furnished by the latter company at said location.
As stated, I think that these facts permitted the conclusion that the defendant was transacting business in New York state. Perhaps it might be argued with considerable force that this was an inference of fact to be drawn from all the circumstances, but inasmuch as the question has been submitted to us necessarily as one of law and is assumed by both sides on this argument to be of such a character we shall pass on it as such.
[2] No precise rules can be formulated by which to determine in each case whether a foreign corporation is doing business in a state. As has been said by the courts, this question must largely be decided by the particular facts in each case. But of course there are certain undisputed general principles which may be applied to the disposition of such a question. The fact that the corporation is conducting the principal part of its business in the state of its incorporation does not prevent it from so prosecuting its business in another state as to bring it within the character of a corporation doing business in the latter state. While it is true that the business which it is conducting in the latter state in order to give the courts thereof jurisdiction over it for the purposes now being discussed must be part of the business for which it was organized, it cannot be necessary in every case that the transactions in said latter state shall be the performance of those particular acts which constitute the characteristic feature of the business for which the corporation was organized. It is not essential in this case that the defendant for the purposes now being discussed should here actually locate its tracks,...
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