Standard Wine & Liquor Co. v. Bombay Spirits Co.

• Decision Date: 25 May 1967
• Parties: , 228 N.E.2d 367 STANDARD WINE & LIQUOR CO., Inc., Appellant, v. BOMBAY SPIRITS CO., Ltd., Respondent et al., Defendants.
• Court: New York Court of Appeals Court of Appeals

Page 299

281 N.Y.S.2d 299

20 N.Y.2d 13, 228 N.E.2d 367

STANDARD WINE & LIQUOR CO., Inc., Appellant, v. BOMBAY SPIRITS CO., Ltd., Respondent et al., Defendants.

Court of Appeals of New York.

May 25, 1967.

James B. Wigdor, New York City, for appellant.

Stephen S. Bernstein and Alvin J. Burnett, New York City, for respondent.

FULD, Chief Judge.

Once again we are called upon to construe our 'long-arm statute' to determine whether a particular foreign corporation is amenable to suit in our courts.

The plaintiff-appellant is a New York corporation, duly licensed as a 'distributor of liquors' here, with a sales force of several dozen salesmen. The defendant-respondent, Bombay Spirits Co., a Scottish corporation not licensed to do business in New York, manufactures Bombay brand gin and vermouth. The other defendants--who are not parties to this appeal--are A. M. Penrose & Co., a Pennsylvania corporation licensed to do business in New York as a liquor importer and distributor, and Carillon Importers, Austin Nichols & Co., and Star Industries, all of whom are New York corporations and liquor distributors.

In 1959, Penrose 'acquired the United States distribution rights' to Bombay products and, two years later, Penrose, Bombay and the plaintiff entered into the agreement which constitutes the basis of this lawsuit. Under the terms of the agreement, the plaintiff was given 'the sole and exclusive right to sell (Bombay) Products within the New York Metropolitan area'. Bombay and Penrose agreed that 'no other person, firm or corporation will be granted a right to distribute and sell any of the Products in (that) territory' and, in return, the plaintiff promised 'to use its best efforts and facilities to promote * * * the maximum sale and distribution * * * of the Products'. The agreement was to remain in force for five years with either the plaintiff or Penrose having an option to renew it thereafter for another five-year term. Although Bombay signed the document in Scotland, the plaintiff was the last to sign it, one of the officers doing so in New York.

The plaintiff complains that Bombay and Penrose breached the agreement by subsequently giving away distribution rights in the New York Metropolitan area to the other defendants, all of whom are alleged to be selling Bombay spirits there. Both temporary and permanent injunctions were sought against all of the defendants. In addition, the court was asked to award 1 1/2 million dollars in compensatory damages and 3 million dollars in punitive damages against Bombay, Penrose and Carillon.

Bombay was served with Process in Great Britain pursuant to the provisions of CPLR 313. Its motion to dismiss the complaint was granted by the Appellate Division on the ground that our courts lacked jurisdiction of the defendant's person (CPLR 3211, subd. (a), par. 8).

It is perfectly evident that Bombay does not transact 'any business within the state' (CPLR 302, subd. (a), par. 1). The maintains no offices, bank account, telephone listing, or warehouse for the storage of goods here, nor does it employ any salesmen, solicit any orders, make any sales or conduct any shipping activities in New York. Instead, Bombay has given the exclusive rights to market its spirits in this country to Penrose, which buys the products F.O.B. Great Britain, imports them into the United States and sells them at a profit to liquor whosesalers and distributors. These facts closely resemble those in Kramer v. Vogl (17 N.Y.2d 27, 32, 267 N.Y.S.2d 900, 904, 215 N.E.2d 159, 162) where the defendants made arrangements to sell small quantities of leather F.O.B. Austria to a local New York distributor and themselves carried on no sales, promotion or advertising activities in this State. We held that our courts lacked jurisdiction of the defendants, a determination which is complely dispositive of the case before us.

The cases in which we have previously sustained jurisdiction under the first paragraph of subdivision (a) of CPLR 302 are all significantly distinguishable. (See Lewin v. Bock Laundry Mach. Co., 16 N.Y.2d 1070, 266 N.Y.S.2d 391, 213 N.E.2d 686; American Cyanamid Co. v. Rosenblatt, 16 N.Y.2d 621, 261 N.Y.S.2d 69, 209 N.E.2d 112, app. dsmd. 382 U.S. 110, 86 S.Ct. 256, 15 L.Ed.2d 192; Longines-Wittnauer v. Barnes...