Axelrod v. Premier Photo Service, Inc.

• Decision Date: 21 April 1970
• Docket Number: No. 12849,12849
• Citation: 154 W.Va. 137,173 S.E.2d 383
• Court: West Virginia Supreme Court
• Parties: S. Mitchell AXELROD and Gerald A. Axelrod, Partners doing business as S. M. Axelrod & Son, a partnership v. PREMIER PHOTO SERVICE, INC., a corporation.

Page 383

173 S.E.2d 383

154 W.Va. 137

S. Mitchell AXELROD and Gerald A. Axelrod, Partners doing business as S. M. Axelrod & Son, a partnership v. PREMIER PHOTO SERVICE, INC., a corporation.

No. 12849.

Supreme Court of Appeals of West Virginia.

Submitted Feb. 10, 1970.

Decided April 21, 1970.

Syllabus by the Court

1. 'By virtue of the full faith and credit clause of the Constitution of the United States, a judgment of a court of another state has the same force in this State as it has in the state in which it was pronounced.' Point 3 Syllabus, State ex rel. Lynn v. Eddy, 152 W.Va. 345 (163 S.E.2d 472).

2. 'A judgment rendered by a court of another state or by a court of this State is subject to attack for lack of jurisdiction to render such judgment or for fraud in its procurement.' Point 4 Syllabus, State ex rel. Lynn v. Eddy, 152 W.Va. 345 (163 S.E.2d 472).

3. 'Under the full faith and credit clause of the Constitution of the United States when a proceeding has been adjudicated by the court of a sister state, the final judgment of that court must be given the effect of res judicata by the court of the forum state.' Point 5 Syllabus, State ex rel. Lynn v. Eddy, 152 W.Va. 345 (163 S.E.2d 472).

4. 'An adjudication by a court having jurisdiction of the subject matter and the parties is final and conclusive, not only as to the matters actually determined, but as to every other matter which the parties might have litigated as an incident to such matters and which comes within the legitimate purview of the subject matter of the action; and it is not essential that the matter should have been formally put in issue in the former litigation, but it is sufficient that the status of the action was such that the parties might have had the subject matter disposed of on its merits.' Point 7 Syllabus, State ex rel. Lynn v. Eddy, 152 W.Va. 345 (163 S.E.2d 472).

Richard F. Pence, Parkersburg, for appellant.

Burk & Bayley, Robert W. Burk, Robert W. Burk, Jr., Parkersburg, for appellees.

CALHOUN, Judge.

This case involves a civil action instituted in the Circuit Court of Wood County by S. Mitchell Axelrod and Gerald A. Axelrod, doing business as S. M. Axelrod & Son, a partnership, as plaintiffs, against Premier Photo Service, Inc., a corporation, of Parkersburg, West Virginia, as the defendant, to recover judgment in that court on a judgment for the sum of $5,865.45 rendered in favor of the plaintiffs against the defendant on January 27, 1967, by the Supreme Court of the State of New York, for the County of New York, which is a court of record.

By an order entered on July 19, 1968, the Circuit Court of Wood County gave full faith and credit to the New York judgment and accordingly entered judgment in the civil action in favor of the plaintiffs and against the defendant for the sum of $6,359.92, plus interest at the rate of six percent from the date of the judgment, which sum of $6,359.92 represents the amount of the New York judgment plus interest thereon at the rate of six percent. From the judgment of the Circuit Court of Wood County, Premier Photo Service, Inc., has been granted the appeal to this Court.

The basic question presented for decision on this appeal is whether the Circuit Court of Wood County erred in giving full faith and credit to the judgment of the New York court in accordance with the provisions of Section 1 of Article IV of the Constitution of the United States.

The judgment of the New York court was based on a written contract by which Premier Photo Service, Inc., which may be referred to hereafter in this opinion as Premier or as the purchaser, agreed to purchase a certain quantity of 'Melton Cloth' from S. M. Axelrod & Son, a partnership which maintains offices in New York City and Boston, Massachusetts, and which may be referred to subsequently in this opinion as Axelrod or as the seller. The purchase offer was made to and accepted by the New York office. The written agreement, which constituted an offer to purchase and an agreement to sell, was signed and executed on behalf of the purchaser by A. K. Summers, president of Premier.

The written contract contains the following provision:

'8. ARBITRATION: (a) Any controversy or claim arising under or in relation to this contract or order, or any modification thereof, shall be settled by arbitration which shall be held in the City of New York in accordance with the laws of the State of New York and the rules then obtaining of the American Arbitration Association, and the parties consent to the jurisdiction of the Supreme Court of the State of New York and further consent that any process or notice of motion or other application to the Court or a judge thereof may be served outside the State of New York by registered mail or by personal service, provided a reasonable time for appearance is allowed.'

A dispute arose between the parties to the written contract, as a consequence of which Axelrod, the seller, gave notice to Premier, the purchaser, of an intention to arbitrate and of a demand for arbitration pursuant to the terms of the contract. After a delay, involving in part letters dated May 18, 1966, and November 17, 1966, written on behalf of Premier by Jack L. Miller, an attorney of Parkersburg, an arbitration hearing was held in New York City on December 7, 1966, by the American Arbitration Association. Present and participating in the arbitration hearing on behalf of Premier were Jack L. Miller, its attorney and A. Karl Summers, its president. In Premier's answer to the complaint in the civil action, it is admitted that Premier participated in the arbitration hearing by the personal appearance of Jack L. Miller, its attorney and A. Karl Summers, its president.

After having heard the claims, contentions, evidence and argument of counsel submitted in behalf of the respective parties, the arbitrators unanimously held that Axelrod was entitled to recover from Premier the sum of $5,825.66. The complaint filed by Axelrod in the Circuit Court of Wood County alleges that, after the arbitration award was made, Axelrod, in accordance with the Civil Practice Law and Rules of the State of New York, made a motion for confirmation of the award by the Supreme Court of the State of New York, held in and for the County of New York, that notices of the motion were served upon Premier and upon its counsel, respectively, by certified mail, return receipt requested, and that Premier received such notice on December 22, 1966. The answer to the complaint admits receipt of the notice by Premier as alleged in the complaint.

On January 27, 1967, the Supreme Court of New York, for the County of New York, entered an order which recites the making of the arbitration award, the motion of Axelrod to confirm the award, the submission of an affidavit in support of the motion, 'due proof of service' of the motion and the supporting affidavit, the default of Premier and its failure 'to appear in opposition to said application'. Thereupon judgment was rendered by the court in favor of Axelrod and against Premier for the sum of $5,865.45.

While the answer filed by Premier in the civil action in the Circuit Court of Wood County admits or fails to deny essentially all allegations made in the complaint, the answer, by way of defense, asserts that A. Karl Summers had no authority to enter into the written contract with Axelrod; that such contract was not executed in the ordinary course of Premier's business; that A. Karl Summers had no authority to consent on behalf of Premier to the jurisdiction 'of the Supreme Court of the State of New York' and no authority 'to consent that any process or motion or other application to the Court or a judge thereof could be served outside the State of New York'; that the written contract is without consideration; that the arbitration is not binding upon Premier; that the arbitrators exceeded their authority; that the arbitrators' decision is null and void as a matter of law; that Premier was not served with process in the manner required by due process of law; and that, therefore, the judgment of the New York court is null and void.

At the request of counsel for the plaintiff, the civil action was placed on the pretrial docket. On April 12, 1968, the parties appeared by counsel in the Circuit Court of Wood County, at which time the case apparently was submitted to the court for decision upon the pleadings, certain exhibits consisting mainly of duly authenticated copies of records showing the arbitration proceedings and court proceedings held in New York City, and upon oral statements of counsel. Thereafter, on June 25, 1968, the judge of the Circuit Court of Wood County directed a letter to counsel for the respective parties which was, in part, as follows:

'At the pre-trial conference held in the above styled civil action, a question of law was submitted to the Court: 'Is the judgment, which is the subject matter of this civil action void or voidable, or is it a valid judgment of the Supreme Court of the State of New York, held in and for the County of New York, and entitled...