Irgang v. Pelton & Crane Co.

• Decision Date: 03 March 1964
• Citation: 247 N.Y.S.2d 743,42 Misc.2d 70
• Parties: Florence IRGANG, Plaintiff, v. The PELTON & CRANE COMPANY, a corporation, Defendant.
• Court: New York Supreme Court

Page 743

247 N.Y.S.2d 743

42 Misc.2d 70

Florence IRGANG, Plaintiff, v. The PELTON & CRANE COMPANY, a corporation, Defendant.

Supreme Court, Special Term, Nassau County.

March 3, 1964.

Samuel M. Sprafkin, New York City, for plaintiff; S. M. Sprafkin, and M. M. Einhorn, New York City, of counsel.

Paul, Weiss, Rifkind, Wharton & Garrison, New York City, appearing specially for defendant; Jay H. Topkis and John Lyon, New York City, of counsel.

MARIO PITTONI, Justice.

Defendant, a non-domiciliary foreign corporation moves, pursuant to Rule 3211(a)(8) of CPLR, for a judgment dismissing the action on the ground that this Court has no jurisdiction over defendant. This gives rise to the question whether plaintiff has shown enough to establish that defendant was doing business in New York sufficient for jurisdiction pursuant to Section 301 of CPLR, or to establish that defendant was transacting or had transacted 'any business within the state', pursuant to Section 302(a), par. 1 of CPLR.

Defendant is a North Carolina corporation engaged in manufacturing and distributing dental equipment and supplies, and plaintiff is suing to recover alleged royalties under a contract by which defendant acquired plaintiff's title and interest. Defendant's vice-president was served with a summons while he was attending a convention at which defendant's products were shown.

Defendant is not licensed to do business in New York, and has no office, property or bank account here. All orders for defendant's business are solicited by traveling salesmen who are paid on a commission basis only, and such orders are subject to acceptance by defendant in North Carolina, and, when accepted, are shipped from North Carolina directly to the purchaser. Two salesmen for defendant live in New York, operate solely for defendant and canvass for orders within this state. A New York corporation, Herodent, Inc ., solicits orders from foreign countries for defendant, but other than such solicitation, has no connection or identity of interest with defendant.

Two phone numbers in defendant's name are listed in the New York City telephone directory, and its name is also listed on the directory of the lobby of two Manhattan office buildings. These are maintained and paid for by sales representative Herodent, Inc., and salesman Rabeck for their own convenience.

Plaintiff also claims that defendant ships its products to New York dealers who pay for such deliveries by mailing remittances from New York, that defendant sometimes deals directly with dentists in New York when the shipment of repair parts are involved, and that defendant sends officers and other representatives to dental conventions in New York, where its products are displayed and orders sometimes taken.

Under Section 301 of CPLR, 'A court may exercise such jurisdiction over persons, * * * as might have been exercised heretofore.' So the first question to be decided is whether defendant was 'doing business' in New York according to New York law prior to CPLR.

The solicitation of business by defendant's traveling salesmen from New York prospects, the solicitation of business by Herodent, Inc. from foreign prospects, and the insertion of defendant's name in the New York-Manhattan telephone book and the directory of an office building, paid for by these salesmen and by Herodent, Inc. for their own convenience, does not constitute doing business in New York. Nor does the added shipping of defendant's products to New York dealers who pay for such deliveries by mailing remittances from New York constitute doing business by defendant in New York. The mere solicitation of business in New York (Miller v. Surf Properties, Inc., 4 N.Y.2d 475, 480, 176 N.Y.S.2d 318, 321, 151 N.E.2d 874, 876) or the mere shipment of goods from outside the state to local buyers on contracts made elsewhere is not sufficient to constitute doing business in this state (Fremay, Inc. v. Modern Plastic Machinery Corp., 1 Dept., 15 A.D.2d 235, 237, 238, 222 N.Y.S .2d 694, 697, 698). Nor is it sufficient to constitute doing business that the sales representatives, even though exclusively representing defendant in soliciting orders in the state and being paid representative commissions thereon, put defendant's name on the sales representatives' office building directory and in the phone book. (Vassallo v. Slomin, 2 Dept., 278 App.Div. 949, 105 N.Y.S.2d 60). Nor can it be said that the appearance of some of defendant's officers at dental conventions in New York, where defendant's products are displayed and orders sometimes taken, constitutes business in this state or shows that defendant is 'here'. (Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 268, 115 N.E. 915, 917). The activities of defendant under these circumstances are not 'so systematic and regular as to manifest 'continuity of action from a permanent locale'' (Elish v. St. Louis Southwestern Railway Co., 305 N.Y. 267, 269, 112 N.E.2d 842, 843).

The contention that the United States Supreme Court has lifted to a considerable extent its constitutional limitation on the service of process on foreign corporations is met by the answer that New York has not yet changed its settled rule as to the extent or exercise of jurisdiction of its 'doing business' rule. (Martino v. Golden Gift, Inc., 2 Dept., 4 A.D.2d 694, 163 N.Y.S.2d 869; Fremay v . Modern Plastic Machinery Corp 1 Dept., 15 A.D.2d 235, 222 N.Y.S.2d 694; Ames & Co. v. Senco Products, Inc., 1 Dept., 1 A.D.2d 658, 146 N.Y.S.2d 298). In the Martino case the court said:

'* * * while the jurisdiction of local courts over foreign corporations has been greatly extended by the United States Supreme Court (International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95; Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485), our courts have not departed from the requirement that a showing be made that the foreign corporation transacts business in this jurisdiction with a fair degree of permanency and continuity and not merely occasionally or casually'.

Under the circumstances of this case it cannot be said that defendant corporation was doing such business in New York as to be 'here'.

Plaintiff also claims that she is entitled to invoke the...