Koepke v. Bilnor Corp.

• Decision Date: 26 January 1968
• Citation: 55 Misc.2d 928,286 N.Y.S.2d 719
• Parties: Henry KOEPKE, Plaintiff, v. BILNOR CORP., Goshen Manufacturing Co., E. J. Korvette, Inc., Anthony Paratore and Geraldine Paratore, McHugh Brothers Distributors.
• Court: New York Supreme Court

Page 719

286 N.Y.S.2d 719

55 Misc.2d 928

Henry KOEPKE, Plaintiff, v. BILNOR CORP., Goshen Manufacturing Co., E. J. Korvette Inc., Anthony Paratore and Geraldine Paratore McHugh Brothers Distributors.

Supreme Court, Special Term, Queens County, Part I.

Jan. 26, 1968.

Sidney N. Zipser, New York City, for plaintiff.

William H. Morris, New York City for defendant Goshen Manufacturing Co.; Maxwell D. Weinstein, New York City, of counsel.

MEMORANDUM

ANTHONY M. LIVOTI, Justice.

The plaintiff opposes the motion of defendant Goshen Manufacturing Co. (hereinafter 'Goshen'), to confirm the report of Honorable Samuel S. Tripp, the Special Referee of this Court dated November 22, 1967, recommending the granting of its CPLR 3211(a)(8) motion to dismiss the action against it for lack of jurisdiction.

It is urged on plaintiff's behalf that this defendant was amenable to jurisdiction under CPLR 301 and 302(a), [55 Misc.2d 930] paragraphs 1, 2, 3(i) and 3(ii), and that on the authority of Pitagno v. Staiber, 53 Misc.2d 858, 280 N.Y.S.2d 178, it was properly served with process. Plaintiff's attorney, however, has overlooked the fact that he chose section 307 of the Business Corporation Law by which to effectuate service of process on this Indiana corporation, and that the thrust of the Special Referee's report is that failure to comply fully with the provisions of that statute renders the service jurisdictionally defective.

Since this case involves a phase of section 307 of the Business Corporation Law not heretofore construed, the following pertinent portions of the comprehensive report of the Special Referee are set forth verbatim:

'On April 24, 1967, the defendant Goshen Manufacturing Co., an Indiana corporation, hereinafter Goshen, moved pursuant to CPLR 3211(a) 8 for judgment dismissing the causes of action asserted against it on the ground that the court does not have jurisdiction over its person because it had not been licensed to do business, did not in fact do business, nor had it transacted any business in this State, having merely solicited business here through a manufacturer's representative whose orders had to be approved in Indiana.

According to the complaint verified November 25, 1966 (Pltff's Ex. 2), plaintiff, a guest of the defendants Paratore, sustained serious personal injuries on July 2, 1966 as the result of diving into a swimming pool located on the premises of his hosts in Nanuet, New York. Although paragraph 'FIFTH' thereof alleged defendant Bilnor Corp. to be the manufacturer of this 'swimming pool and ladder known as the 'Happy Harbor' swimming pool', the proof at the hearing established that it was Goshen which manufactured wooden pool ladders in Goshen, Indiana, some of which were sold through its manufacturer's representative, Moss, to defendants McHugh Brothers in Westchester County, New York, and that Goshen had nothing to do with the pool, its assembling, or attaching a pool ladder thereto.

Copies of the summons and complaint in this action were served upon Goshen by service thereof upon the Secretary of State of the State of New York on March 22, 1967, pursuant to section 307 of the Business Corporation Law (Pltff's Exs. 3 and 4). On March 27, 1967, plaintiff's attorney mailed a copy of the summons and complaint by registered mail addressed to Goshen at 1141 Broadway, New York, N.Y. (Pltff's Ex. 6). The post office receipt thereof (Pltff's Ex. 5) shows that the envelope containing the enclosures (Defts' Ex. C) was delivered to the addressee 'Goshen Mfg. Co.' at such address on March 29, 1967 and signed by Emil Moss in the space on the post office receipt beneath the printed legend 'Signature of Addressee's Agent, If any'. After perusing the contents of this envelope, Moss sent both by ordinary mail, enclosed in a new envelope addressed to Goshen in Indiana. The papers enclosed in the original envelope sent by registered mail, and later transmitted as aforesaid by Moss, consisted solely of a copy of the summons and complaint and did not include a copy of the notice from plaintiff's attorney (Defts' Ex. B) which reads as follows:

'PLEASE TAKE NOTICE that a copy of the annexed summons and complaint was duly served on the Secretary of State, pursuant to Section 307 of the Business Corporation Law on March 22, 1967.'

In a letter dated April 25, 1967, addressed to Goshen at 1141 Broadway, New York, N.Y., copies of which were also mailed to it at Goshen, Indiana, and to its attorney, William H. Morris, Esq., 100 William Street, New York, N.Y. (Pltff's Ex. 9), plaintiff's attorney stated:

'You were served with a summons and complaint in the above entitled action on March 22, 1967, through the office of the Secretary of State as required by Sec. 307 of the B.C.L.

'Your time to answer expired on April 24, 1967.

'Kindly advise by return mail whether or not you intend to defend this action.'

There is no question that the copy of the foregoing letter addressed to Mr. Morris (Defts' Ex. A) was received in his office on April 25, 1967 at 8:51 A.M. (Defts' Ex. A--1). Also, it was not denied that the copies addressed to Goshen in Indiana and to 1141 Broadway, New York, N.Y., reached their destination.

Plaintiff alleged in the third paragraph of his complaint that Goshen was an Indiana corporation 'duly qualified to do business in the State of New York and/or transacting business in the State of New York'. He produced no proof whatsoever that this defendant was qualified to do business in New York. Solely through the testimony of Moss, plaintiff sought to establish that Goshen did business here in the traditional sense and that, in any event, jurisdiction over its person was obtained by acts within the purview of paragraphs 1 and 3 of the long-arm statute. (CPLR 302(a).)

CPLR 301 perpetuates the rule in Tauza v. Susquehanna Coal Co. (220 N.Y. 259 (115 N.E. 915)) that the courts of New York will acquire personal jurisdiction over an unqualified foreign corporation for any cause of action asserted against it, no matter where the events occurred which give rise to the cause of action, if it is 'doing business' in New York, in which case it may be served with process here or out-of-state. (Public Administrator of the County of New York v. Royal Bank of Canada, 19 N.Y.2d 127, 130 (278 N.Y.S.2d 378, 380, 224 N.E.2d 877, 878).)

It cannot be said upon the proof adduced that Goshen was 'doing business' here at and prior to the time of the challenged service of process upon it. It had no employees, equipment, furniture, bank account or any other property in New York nor did it have an office in that State. Moss was no more than an independent sales representative for Goshen and three other manufacturers in the same line, for all of whom he acted in his own interest. From Goshen he received a commission of 5% On orders he obtained in the territory to which he was assigned following the acceptance thereof at the factory in Indiana and shipment of the merchandise therefrom to his customers.

The foregoing cannot be held to establish Goshen's Presence in New York 'not occasionally or casually, but with a fair measure of permanence and continuity' (Tauza, (220 N.Y.) at 267 (115 N.E. at 917)). That it had a telephone listing in the Manhattan telephone directory with Moss' office address and telephone number and its name appeared on the entrance door to his office and in the building directory thereof are not, standing alone, sufficient to meet the 'presence test' for 'doing business' in this State in the traditional sense. (Vassallo v. Slomin, 278 App.Div. 949, 105 N.Y.S.2d 60; Harmony Music Center Inc. v. Railway Express Agency, Inc., 35 Misc.2d 18, 230 N.Y.S.2d 50.) In any event, it was Mr. Moss who caused these listings to be made at his own expense; no one told him to make them nor prevented him from so doing--he did it because it was good for his business as sales agent for the four manufacturers represented by him.

Inasmuch as Goshen was not and is not 'doing business' in New York in the traditional sense, the process served on the Secretary of State could not, in the first instance, be sent with 'notice thereof' by or on behalf of the plaintiff to Goshen 'by registered mail with return receipt requested' at the post office address listed by Moss at his office in the Borough of Manhattan. The statute, Business Corporation Law, section 307(b)(2), requires that the process, with notice thereof, be sent by registered mail, return receipt requested 'at (1) the post office address specified for the purpose of mailing process, on file in the department of state, or (2) with any official or body performing the...