Parke-Bernet Galleries, Inc. v. Franklyn

• Decision Date: 08 January 1970
• Docket Number: PARKE-BERNET
• Citation: 26 N.Y.2d 13,256 N.E.2d 506,308 N.Y.S.2d 337
• Parties: , 256 N.E.2d 506 GALLERIES, INC., Appellant, v. Robert A. FRANKLYN, Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 337

308 N.Y.S.2d 337

26 N.Y.2d 13, 256 N.E.2d 506

PARKE-BERNET GALLERIES, INC., Appellant, v. Robert A. FRANKLYN, Respondent.

Court of Appeals of New York.

Jan. 8, 1970.

Marshall C. Berger, Edward C. Wallace and Myron J. Meadow, New York City, for appellant.

Theodore Ellenoff, New York City, for respondent.

FULD, Chief Judge.

Whether the defendant 'transact(ed) any business within the state' (CPLR 302) so as to subject him to the jurisdiction of the courts of New York '(a)s to a cause of action arising from' such activity, is the question presented by this appeal.

In March of 1967, the defendant, Dr. Robert A. Franklyn, who lives in California, received a catalogue from the plaintiff Parke-Bernet, a well-known auctioneer of works of art, describing certain paintings to be sold at an auction at its galleries in New York City on April 6. Finding a painting in which he was interested--Les Baigneurs by Roger de la Fresnaye--the defendant sent a letter to the plaintiff in New York, stating that he wished to bid up to $68,000, later increased to $71,000, for that painting. On the day before the auction, the defendant called the plaintiff and requested that 'telephonic communication be established between myself and (Parke-Bernet) during the course of the bidding,' so that he might keep abreast of and take part in the bidding while the auction was actually going on. His desire to participate in this manner was confirmed by a telegram in which the defendant further advised that, during the sale, he 'may bid more depending on activity and may bid on subsequent lots.'

The plaintiff acceded to the defendant's request and, accordingly, an open telephone line was set up on the evening of the auction between the defendant in Los Angeles and a Mr. Nash, an employee of Parke-Bernet, in the latter's New York City premises. During the entire course of the auction sale, Nash informed the defendant in California of the bids that were being made, the defendant, in turn, gave Nash his bids and the latter relayed the defendant's bids to the auctioneer who announced them to the other bidders in the auction room. According to the complaint, two of the defendant's bids--$70,000 for the de la Fresnaye and $26,000 for another painting, a Paul Klee-- were high and the paintings were knocked down to the defendant as the purchaser.

After billing the defendant and receiving no payment, the plaintiff decided to sue him for the $96,000. Following the procedure prescribed by our long-arm statute (CPLR 302, subd. (a), par. 1), it commenced this action by personally serving a copy of the summons and complaint on the defendant in California. He thereupon moved to dismiss the complaint, pursuant to CPLR 3211 (subd. (a), par. 8), on the ground that the court lacked jurisdiction over his person. After a hearing before a Referee, the court at Special Term granted the motion and ordered the complaint dismissed; a divided Appellate Division affirmed (31 A.D.2d 276, 297 N.Y.S.2d 151), and the plaintiff prosecutes its appeal to us as of right.

CPLR 302 (subd. (a), par. 1) vests the courts of this State with 'personal jurisdiction over any nondomiciliary * * * who, in person or through an agent * * * 1. transacts any business within the state' as to any cause of action arising from such transaction. The doctrinal developments--by which the bases of jurisdiction over nonresidents were extended beyond the requirement of physical presence to include cases arising out of conduct within the State--were traced in detail in our opinion in Longines-Wittnauer Watch Co. v. Barnes & Reinecke, 15 N.Y.2d 443, 450--452, 261 N.Y.S.2d 8, 13--15, 209 N.E.2d 68, 71, 72, and there is little need to review the matter at length here. (See, also, International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95; McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; cf. Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283.) We concluded, in the Longines-Wittnauer case (15 N.Y.2d 443, 457, 261 N.Y.S.2d 8, 18, 19, 209 N.E.2d 68, 75, Supra), that it was the purpose of CPLR 302 to extend the jurisdiction of our State courts to nonresidents who have 'engaged in some purposeful activity (here) * * * in connection with the matter in suit.' (See, also, McKee Elec. Co. v. Rauland-Borg Corp., 20 N.Y.2d 377, 382, 283 N.Y.S.2d 34, 37, 38, 229 N.E.2d 604, 607.) And, it is hardly necessary to add, proof of a 'single transaction in New York' would satisfy this statutory requirement. (Longines-Wittnauer Watch Co. v. Barnes & Reinecke, 15 N.Y.2d 443, 456, 261 N.Y.S.2d 8, 17, 18, 209 N.E.2d 68, 74, 75, Supra; see McLaughlin, Supplementary Practice Commentary to CPLR 302, McKinney's Cons.Laws of N.Y., Book 7B (1969 Cum.Supp.), pp. 129--130; 1 Weinstein-Korn-Miller, N.Y.Civ.Prac., 302.06.) As one authoritative commentator put beit a purposeful transaction--to confer jurisdiction in New York' (McLaughlin, Ibid.).

It is important to emphasize that one need not be physically present in order to be subject to the jurisdiction of our courts under CPLR 302 for, particularly in this day of instant long-range communications, one can engage in extensive purposeful activity here without ever actually setting foot in the State. (See International Shoe Co. v. Washington, 326 U.S. 310, 316--317, 66 S.Ct. 154, 90 L.Ed. 95, supra; Lewin v. Bock Laundry Mach. Co., 16 N.Y.2d 1070, 266 N.Y.S.2d 391, 213 N.E.2d 686; Benedict Corp. v. Epstein, 47 Misc.2d 316, 262 N.Y.S.2d 726.) Any implication, in older cases, that physical presence was a necessary factor in obtaining jurisdiction over nonresidents was expressly rejected by the Supreme Court in the International Shoe case--the case which provided the constitutional authority for CPLR 302--where the court wrote (326 U.S., at pp. 316--317, 66 S.Ct., at p. 158): 'The terms 'present' and 'presence' are used merely to symbolize those activities * * * which courts will deem to be sufficient to satisfy the demands of due process.'

Applying the above principles to the case before us, we find that it falls between the situation where a defendant was physically present at the time the contract was made--the clearest sort of case in which our courts would have 302 jurisdiction (see Longines-Wittnauer Watch Co. v. Barnes & Reinecke, 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68, Supra; Harry Winston, Inc. v. Waldfogel, D.C., 292 F.Supp. 473)--and the situation where a defendant merely telephones a single order from outside the State--a case in which our courts would not have such jurisdiction. (See, e.g., Katz & Son Billiard Prods. v. Correale & Sons, 20 N.Y.2d 903, 285 N.Y.S.2d 871, 232 N.E.2d 864.) This defendant, although never actually present, was receiving and transmitting bids over an open telephone line and was an active participant in an auction held here. Moreover, he was directly assisted in this activity by Nash, who was physically present. Whether we view this case as one in which the defendant had personally engaged in purposeful activity here or as one in which--in the language of section 302--he had engaged in such activity 'through an agent' present here, there is ample basis for concluding that the defendant is subject to the jurisdiction of our courts with respect to a cause of action arising out of the auction.

Considering, first, the defendant's direct and personal involvement in activities here, it is highly significant that, on his own initiative, the defendant, in a very real sense, projected himself into the auction room in order to compete with the other prospective purchasers who were there. This activity far exceeded the simple placing of an order by telephone. (Cf. Katz & Son Billiard Prods. v. Correale & Sons, 20 N.Y.2d 903, 285 N.Y.S.2d 871, 232 N.E.2d 864, Supra.) Dr. Franklyn's active participation in the bidding which resulted in the paintings' being sold to him amounted to the sustained and...