Sterling Novelty Corp. v. Frank & Hirsch Distrib. Co.

Decision Date26 May 1949
Citation299 N.Y. 208,86 N.E.2d 564
CourtNew York Court of Appeals Court of Appeals
PartiesSTERLING NOVELTY CORPORATION v. FRANK & HIRSCH DISTRIBUTING CO. (Pty.) Ltd.

OPINION TEXT STARTS HERE

Appeal from Supreme Court, Appellate Term, First Department.

Action by the Sterling Novelty Corporation against the Frank & Hirsch Distributing Company (Pty.) Ltd., for breach of contract. From an order of the Appellate Division, 274 App.Div. 983, 85 N.Y.S.2d 312, unanimously affirming an order of the Special Term, Hofstadter, J., confirming an official referee's report denying a motion by defendant, appearing specially, to vacate service of the summons and verified complaint and dismiss the action for want of jurisdiction over defendant, defendant appeals by permission of the Appellate Division, which certified the question as to whether the court acquired jurisdiction of defendant.

Order of Appellate Division affirmed, and question certified answered in the affirmative. Herman Keller and Harry Balterman, New York City, for appellant.

Maxwell A. Rubin, New York City, for respondent.

FULD, Judge.

Whether or not defendant, a foreign corporation, was doing business in this State so as to be subject to the jurisdiction of our courts is the question certified for our determination.

The defendant is a South African importing corporation which does much of its buying in New York, but is concededly not qualified to do business here and has no branch office in this State. Plaintiff began the present action for breach of contract by serving a summons and complaint upon an officer of a New York corporation which makes purchases for defendant. Urging that such service was not effective, defendant moved to dismiss the complaint for want of jurisdiction. The motion was denied at Special Term and the Appellate Division unanimously affirmed, granting defendant leave to prosecute this appeal on the question certified.

There is, of course, no precise measure of the nature or extent of local purchasing activities which will render a foreign corporation amenable to process in this State. Each case must be decided on its own particular facts. See Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267, 115 N.E. 915, 917;Society Milion Athena v. National Bank of Greece, 166 Misc. 190, 197, 2 N.Y.S.2d 155, affirmed 254 App.Div. 728,5 N.Y.S.2d 1004;Stark v. Howe Sound Co., 141 Misc. 148, 252 N.Y.S. 233, affirmed 234 App.Div. 904, 254 N.Y.S. 959. Insofar as general criteria are helpful, they are the same as those applicable to selling activities within the State. Continuity of action from a permanent locale is essentail. The foreign corporate defendant must be ‘here, not occasionally or casually, but with a fair measure of permanence and continuity’ . Tauza v. Susquehanna Coal Co., supra, 220 N.Y. at page 267, 115 N.E. at page 917, see, also, Chaplin v. Selznick, 293 N.Y. 529, 58 N.E.2d 719. The circumstance that the foreign corporate defendant is represented in its local activities by a separate individual or by a separate corporation and not by a directly controlled subsidiary or branch office is not in itself determinative. As long as the resident buyer is acting here as agent of the foreign corporation, the absence of a local office of the foreign defendant will not deprive our courts of jurisdiction. See Society Milion Athena v. National Bank of Greece, 166 Misc. 190, 197, 2 N.Y.S.2d 155, 161, affirmed 254 App.Div. 728,5 N.Y.S.2d 1004, supra; American Tri-Ergon Corp. v. TonBild Syndikat, 145 Misc. 344, 260 N.Y.S. 139, affirmed 236 App.Div. 792, 258 N.Y.S. 1061;Henriques v. Gauthiod Marine Ins. Co., 205 App.Div. 8, 199 N.Y.S. 131;Littman v. Morris B. Sachs, Inc., Sup., 65 N.Y.S.2d 754, 756; see, also, Melvin Pine & Co. v. McConnell, 298 N.Y. 27, 80 N.E.2d 137.

Testing the record before us by those criteria, we find ample support for the conclusion of the courts below that defendant was, for jurisdictional purposes, doing business in this State.

Organized in July, 1944, to carry on a diversified business of importing, exporting, trading and distributing manufactured goods, and to act as ‘Manufacturers' Representatives', defendant became closely associated in its activities with a South African partnership, ‘F & H Agencies', formed two months later. Defendant's two majority directors and stockholders were the founders of the partnership and its majority members. In addition to interlocking control, the corporation and the partnership had intertwining physical setups. Thus, defendant, styled ‘Frank & Hirsch Distributing Co. (Pty.) Ltd.’, and the partnership, called ‘F & H Agencies', had the identical mailing address, ‘P. O. Box 1803, Johannesburg’; the same Head Office Johannesburg; the same ‘branch offices' Cape Town, Port Elizabeth, East London, Durban, Bulawayo; the same cable address ‘Frahirsch’; and the same telephone numbers, shipping marks and stationery insignia.

This virtual identity assumes great significance when we turn our attention to the activities of the New York corporation upon which service was effected. That...

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