McDonald v. Ames Supply Co.

CourtNew York Court of Appeals
Citation291 N.Y.S.2d 328,238 N.E.2d 726,22 N.Y.2d 111
Parties, 238 N.E.2d 726 John J. McDONALD, Plaintiff, v. AMES SUPPLY CO., Inc., Defendant and Third-Party Plaintiff-Appellant, et al., Defendant, AEROSOL RESEARCH CO., Third-Party Defendant-Respondent.
Decision Date16 May 1968

B. Leo Schwarz and Marc Bazin, New York City, for appellant.

Richard J. Burke, New York City, and William R. Ahmuty, Jr., Rockville Centre, for respondent.


In this product liability action, defendant third-party plaintiff Ames Supply Co. appeals from an order of the Appellate Division, Second Department, unanimously affirming an order of the Supreme Court, Kings County, by a Special Referee to hear and determine. The Special Referee quashed the purported service of the third-party summons and dismissed the third-party complaint against Aerosol Research Co. for lack of personal jurisdiction, finding that Aerosol, a foreign corporation, was not doing business in the State and that service upon its New York-based employee had been defective. The Appellate Division unanimously affirmed, in a memorandum opinion, on the ground that the service of summons was faulty. The Appellate Division granted leave to appeal to this court.

Two issues are presented. First, whether the requirement of CPLR 311 that the summons be 'delivered' to a person authorized to receive service for a corporation is satisfied when the summons is left with a receptionist, not employed by the corporation, who later redelivers it to the proper person. Second, whether a foreign corporation does business in this State so as to subject it to general jurisdiction uner CPLR 301 when it maintains an office in the State for its 'Eastern salesmanager,' who regularly solicits and negotiates orders for its goods. Since the service in this case was so clearly defective there is no need to reach the second question. 1

Plaintiff John J. McDonald was injured in 1961 when he inhaled chemical material discharged by a can of spray paint which he was using at work. The paint can had been sold to plaintiff's employer by defendant third-party plaintiff Ames Supply Co. The defective spray head which caused the accident had been manufactured by third-party defendant Aerosol. Plaintiff McDonald sued seller Ames, alleging negligence and breach of warranty, on October 9, 1961. On November 19, 1965 seller Ames served a summons and third-party notice and complaint upon the manufacturer Aerosol. Aerosol served no answer or appearance to the third-party complaint and thus defaulted.

The actions reached trial on January 17, 1966. At that time the trial court severed the main action and the third-party action for purposes of trial. In the main action, plaintiff recovered $20,000 against the seller Ames. After inquest on the default, Ames was awarded recovery over against manufacturer Aerosol. On January 17 (the date of trial) Aerosol obtained an order to show cause returnable January 19 in connection with its motion to dismiss the third-party complaint for lack of personal jurisdiction. Special Term stayed enforcement of the judgment against Aerosol and referred the motion to the Special Referee.

At a hearing before the Special Referee, conflicting testimony was presented concerning the manner of service upon Aerosol. Samuel M. Goldfarb, a professional process server, testified that he had handed the the summons and other papers to one Jack R. Schlossman, Aerosol's eastern sales manager stationed in New York. However, Mr. Schlossman also testified that the summons had been left with the building receptionist (not an Aerosol employee), who handed it to him when he returned to the office. This testimony was confirmed by the receptionist. Mr. Schlossman forwarded the summons and other papers served to Aerosol's main office in Illinois.

The Special Referee also took testimony concerning whether Aerosol was doing business in New York. Mr. Schlossman testified that he was Aerosol's 'Eastern salesmanager,' on a salaried basis, and represented the company in 'exploring with prospects and customers the eventual utilization' of the company's products. He received orders, looked them over, and transmitted them to the head office in Illinois. This activity had been conducted from a permanent office maintained by Aerosol in New York for 10 years. The office was listed in Aerosol's name on the building directory as well as in the Manhattan telephone directory. Aerosol was not, however, licensed to do business in New York.

The Special Referee found that the summons had in fact been left with the building receptionist, and concluded that the statutory requirement of personal delivery had not been fulfilled. This finding and conclusion, as already noted, were affirmed by the Appellate Division.

CPLR 311 provides that:

'Personal service upon a corporation or governmental subdivision shall be made by delivering the summons as follows:

'1. upon any domestic or foreign corporation, to an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service'.

Plaintiff contends that delivery was property effected when the receptionist handed the summons to Schlossman. However, this contention is contrary to well-established authority and to the policies underlying the requirement of personal delivery in the CPLR and the prior Civil Practice Act.

Numerous authorities hold that personal delivery of a summons to the wrong person does not constitute valid personal service even though the summons shortly comes into the possession of the party to be served (Clark v. Fifty Seventh Madison Corp., 13 A.D.2d 693, 213 N.Y.S.2d 849 app. dismd. 10 N.Y.2d 808, 221 N.Y.S.2d 509, 178 N.E.2d 225; Commissioners of State Ins. Fund v. Singer Sewing Mach. Co., 281 App.Div. 867, 119 N.Y.S.2d 802; Loeb v. Star & Herald Co., 187 App.Div. 175, 179, 175 N.Y.S. 412, 414; Beck v. North Packing & Provision Co., 159 App.Div. 418, 420--421, 144 N.Y.S. 602, 604--605; O'Connell v. Gallagher, 104 App.Div. 492, 493, 495, 93 N.Y.S. 643, 644, 645; Eisenhofer v. New Yorker Zeitung Pub. Co., 91...

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    ......¶ 39 An earlier New York case also supports Townsend's argument. McDonald v. Ames Supply Co., 22 N.Y.2d 111, 238 N.E.2d 726, 291 N.Y.S.2d 328 (1968). In McDonald, the ......
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