Sullivan Realty Organization, Inc. v. Syart Trading Corp.

• Decision Date: 25 June 1979
• Citation: 417 N.Y.S.2d 976,68 A.D.2d 756
• Court: New York Supreme Court — Appellate Division
• Parties: SULLIVAN REALTY ORGANIZATION, INC., Appellant, v. SYART TRADING CORP. et al., Defendants, and Crow-Crimmins-Wolff & Munier, Respondent.

Page 976

417 N.Y.S.2d 976

68 A.D.2d 756

SULLIVAN REALTY ORGANIZATION, INC., Appellant, v. SYART TRADING CORP. et al., Defendants and Crow-Crimmins-Wolff & Munier, Respondent.

Supreme Court, Appellate Division, Second Department.

June 25, 1979.

Wekstein & Fulfree, Bronxville (Morton N. Wekstein, Bronxville, of counsel), for appellant.

Sacks, Montgomery, Pastore & Levine, New York City (Jeffrey A. Aronson, New York City, of counsel), for respondent.

Before DAMIANI, J. P., and TITONE, SUOZZI, GULOTTA and MARTUSCELLO, JJ.

SUOZZI, Justice.

The issue on this appeal is whether personal service was properly effected upon a corporate joint venturer. Contrary to the holding of Special Term, we hold that personal service was properly effected.

This is an action to recover a real estate broker's commission. The complaint alleged that the seller and the buyer, a joint venture named Crow-Crimmins-Wolff & Munier, each agreed to pay one half of the plaintiff's fee. Plaintiff attempted to commence the action against the defendant buyer by serving a copy of the summons upon a corporation named Thomas Crimmins Construction Co., one of the joint venturers. The answer of Crow-Crimmins-Wolff & Munier set up the defense of lack of personal jurisdiction. Defendant Foreman moved for summary judgment and plaintiff cross-moved to strike the defense asserted by Crow-Crimmins-Wolff & Munier. The motion was denied and a hearing was ordered on the cross motion.

The affidavit of service was made by one Robert Marcus and states that on April 7, 1976, he personally delivered a copy of the summons and complaint to Rose Toro, a "Manager" of the Thomas Crimmins Construction Co. at the offices of that corporation. At the hearing Marcus testified that he was a professional process server, that he did not specifically recall the service and that there was nothing in particular about it that stood out in his mind. He, therefore, was permitted to testify as to his usual procedure in making service upon a corporation as follows: "I go in, I don't hide the fact that I have a summons. I ask for a manager or someone authorized to accept process." On this occasion he did the same thing. A woman in the office told him she was authorized to accept process and he served her. Marcus further testified that he never made service upon a person who he did not believe was authorized to accept the same and if a receptionist or secretary told him that he or she was not authorized to receive service, he would come back later.

Rose Toro was called as a witness by the plaintiff and testified that she was employed by the Thomas L. Crimmins Construction Co. as a secretary-receptionist a sort of "Gal Friday". Her job was in the nature of an all purpose executive type secretary and, as part of her duties, she answered the telephone and performed secretarial tasks for the 10 people employed in the offices of the corporation. She testified that she normally received any papers served upon the construction company and it was her practice to make a note of the time she received those papers and then turn them over to the person in the office who was responsible for handling that type of matter. No one ever directed her to receive the service of papers and although she was served with copies of summonses approximately five or six times per year, no one had ever told her that she was not to receive process in the future. She had been employed by the corporation for approximately two years at the time the summons in question was served and prior thereto she had accepted service of approximately a dozen other summonses.

Ms. Toro remembered receiving the summons in this case which was served by Mr. Marcus. She made a record of the time that she received the summons and subsequently turned it over to the corporate comptroller, Mr. Mango. On cross-examination, Ms. Toro testified that she was not a director, officer, managing agent, general agent, cashier or assistant cashier for the Thomas Crimmins Construction Co. and that she had never been specifically authorized by appointment to accept service for that company. On occasions when a process server came to the office and asked to see an officer, director or managing agent, she accepted service of the summons if those persons were not present.

At the conclusion of cross-examination, Ms. Toro was questioned by the court and testified that when she accepted service of the summons in this case none of the corporate officers were present. The Thomas Crimmins Construction Co. did not have a managing agent or manager in the office.

Upon this evidence, Special Term ruled that the plaintiff had failed to prove by a preponderance of the credible evidence that process had been served in accordance with the applicable statute. Accordingly, it denied plaintiff's cross motion to strike the defense of lack of in personam jurisdiction and thereupon dismissed the complaint against the defendant joint venture.

Service upon a joint venture may be made by personally serving process upon any one of the joint venturers (see CPLR 310; John's Inc. v. Island Garden Center of Nassau, 49 Misc.2d 1086, 269 N.Y.S.2d 231). Here the joint venturer that plaintiff chose to serve was a domestic corporation and it is argued by respondent that personal service was therefore required to be made in accordance with CPLR 311 (subd. 1). That section provides that service upon a corporation shall be made by delivering the summons "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".

In support of respondent's argument that service of process was not in accordance with the statute, the dissenters rely on McDonald v. Ames Supply Co., 22 N.Y.2d 111, 291 N.Y.S.2d 328, 238 N.E.2d 726 and Isaf v. Pennsylvania R. R. Co., 32 A.D.2d 578, 299 N.Y.S.2d 231, for the proposition that the public policy of the State requires strict compliance with the statute and that a relaxation of the strictures of CPLR 311 would promote carelessness in the service of process and increase the risk of defaults.

The dissenters' concern about a relaxation of the strictures of CPLR 311 would be understandable if the person served was not an employee of the defendant corporation and the corporation denied ever having received the summons. However, the undisputed evidence is quite to the contrary. It was clearly established at the traverse hearing that the summons was in fact served upon a secretary-receptionist of the Thomas Crimmins Construction Co., and then given to the corporate comptroller, an officer who meets the requirements of CPLR 311. It was also adduced at the hearing, without contradiction, that in the performance of her duties as an executive-type secretary, Ms. Toro normally received all legal papers served upon the construction company and regularly turned the papers over to the appropriate officer of the corporation. She had engaged in this practice approximately a dozen times during the two years that she had been employed and at no time did her employer ever tell her not to accept summonses in the future.

The testimony of Ms. Toro raised a strong inference that she had the authority to accept service of process for the company. Under these circumstances, the respondent clearly had a duty to rebut her testimony and the inference contained therein and it failed to do so.

It is, therefore, crystal clear that the objective of CPLR 311, i. e., that a defendant corporation actually receive the summons, was in fact accomplished here. By resorting to such an overly strict interpretation to sustain the respondent's position, the dissenters do little, if anything, to enhance or promote the underlying State policy upon which they premise their determination.

Nor are the two cases relied upon by the dissenters at all persuasive for their position.

In McDonald v. Ames Supply Co., 22 N.Y.2d 111, 291 N.Y.S.2d 328, 238 N.E.2d 726, Supra, service was made upon a receptionist who was Not an employee of the defendant corporation. In holding that the service was invalid even though the summons was later delivered to a proper person, the Court of Appeals distinguished those cases in which the process server "acted reasonably in placing the summons within reach of the defendant" (Supra, p. 115, 291 N.Y.S.2d p. 331, 238 N.E.2d p. 728) and specifically cited with approval Green v. Morningside Hgts. Housing Corp., 13 Misc.2d 134, 177 N.Y.S.2d 760, affd. 7 A.D.2d 708, 180 N.Y.S.2d 104). In Green, service was actually made upon a receptionist, an employee of the defendant corporation, who then gave it to the proper person. In upholding the method of service, the court stated (Supra, p. 125, 177 N.Y.S.2d p. 761):

"While this is not the same thing as manual delivery, in this instance it is the equivalent. Like many other propositions it is a matter of degree. Where the delivery is so close both in time and space that it can be classified as a part of the same act service is effected."

It should be emphasized that Special Term upheld service in Green despite the fact that the executive vice-president and managing agent was on the premises at the time of service.

It is precisely because of the reasoning in McDonald And Green, that the holding in the Isaf case 32 A.D.2d 578, 299 N.Y.S.2d 231, Supra, the remaining authority relied upon by the dissenters, has been so severely criticized. In his Practice Commentaries to the CPLR, Professor Joseph McLaughlin states (McKinney's Cons. Laws of N.Y., Book 7B CPLR 311:1, p. 256):

"While it may be defensible to define the term 'managing agent' with some strictness when the question is whether the agent has the power to make an admission binding upon the corporation (cf. Spett v. President Monroe Bldg. & Mfg. Corp., 1968, 19 N.Y.2d 203, (278 N.Y.S.2d 826, 225 N.E.2d 527) * * * ) or whether his deposition may be read against the corporation ...