Szabo v. Smedvig Tankrederi AS, Civ. No. 61-15.

• Decision Date: 06 February 1951
• Docket Number: Civ. No. 61-15.
• Citation: 95 F. Supp. 519
• Parties: ARPAD SZABO v. SMEDVIG TANKREDERI A. S. THE OLE BULL.
• Court: U.S. District Court — Southern District of New York

95 F. Supp. 519

ARPAD SZABO v. SMEDVIG TANKREDERI A. S THE OLE BULL.

Civ. No. 61-15.

United States District Court S. D. New York.

February 6, 1951.

Silas B. Axtell, New York City (Richard Gyory, New York City, of counsel), for plaintiff.

Pyne, Lynch & Smith, New York City, appearing specially, for defendant.

WEINFELD, District Judge.

The defendant moves to vacate and set aside service of the summons and complaint.

The action was instituted by the plaintiff who is a Hungarian national, residing within the State of New York, under the Jones Act, 46 U.S.C.A. § 688.

The defendant is a Norwegian corporation and maintains no office in the State of New York or in the United States. It is the owner of the vessel "Ole Bull" upon which plaintiff claims he sustained the injuries for which he seeks to recover damages. The vessel is registered, licensed and operated under the Norwegian flag with her home port at Stavanger, Norway.

Service was made upon an officer of J. H. Winchester & Co., a New York corporation (hereinafter referred to as Winchester), engaged in business here upon the theory that said corporation is a managing agent within Rule 4(d) (3) of the Rules of Civil Procedure, 28 U.S.C.A.

The basis of the defendant's motion is two-fold: (1) that it does not and has not transacted business within the jurisdiction of this Court, and (2) Winchester was and is not an agent of the corporation nor has it been authorized to accept service of process on behalf of defendant. Substantially the same facts are dispositive of both questions.

On July 31st, 1947, the defendant as owner entered into a five-year time charter of the "Ole Bull" with Chilean Nitrate and Iodine Sales Corp., the charterer. The agreement was executed in New York City on behalf of the defendant by Winchester "as brokers only."

The charter party recites that it is not to be construed as a demise of the vessel to the charterer and that the owner shall provide and pay for all provisions, wages, insurance, necessary stores and fees of officers and is responsible for the maintenance and efficiency of the vessel.

Winchester is an entity separate and apart from the defendant. The defendant's position is that Winchester's functions were limited to negotiating and executing the charter as "brokers only". Winchester, however, from the date the charter party became effective in 1947, has performed and since continues to perform various services on behalf of the defendant here in the State of New York. The charges for hire of the vessel of approximately $23,000 monthly are paid directly by the charterer to Winchester in New York City and deposited in a New York City bank. The captain of the vessel incurs obligations on behalf of the defendant for supplies and other necessaries for the vessel at various ports of call in the United States. His authority to contract such indebtedness is not open to question either under law or by virtue of the provision in the charter noted above, under which the owner was required to provide and pay for all provisions, wages, necessary stores and maintain the efficiency of the vessel. The Penza, 2 Cir., 9 F.2d 557; 46 U.S.C.A. § 972. These bills after approval by the master are sent on to Winchester in New York City, who pays them against the monies received monthly from the charterer and remits the balance to the defendant in Norway. These functions have been performed by Winchester for almost five years.

It also appears that the plaintiff was engaged for service on the vessel by Winchester at New York City although generally it does not engage in the hiring or payment of the crew or does it handle any cargo arrangements. An affidavit submitted by plaintiff's counsel indicates that the vessel has been in the Port of New York and is again expected here during the course of the year but the papers contain no information as to how many calls have been made to this port. It is uncontroverted that the sole business of the defendant consists of the "Ole Bull" and one other vessel, the "Veni".

Thus the basic question is whether the activities of defendant within New York State are sufficient to manifest its "presence" here and so confer jurisdiction over the defendant, even though no consent to be sued or authorization to an agent to accept service of process has been given. In the case of a corporation "its `presence' without, as well as within, the state of its origin can be manifested only by its activities carried on in its behalf by those who are authorized to act for it. * * * For the terms `present' or `presence' are used merely to symbolize those activities of the corporation's agent within the state which courts will deem to be sufficient to satisfy the demands of due process. L. Hand, J., in Hutchinson v. Chase & Gilbert, 2 Cir., 45 F.2d 139, 141." International Shoe Co. v. State of Washington et al., 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L. Ed. 95.

The latter case is the most recent pronouncement by the Supreme Court on the subject. It there considered the application of the standards generally applied in determining the question — on the one hand, continuous and systematic activity as supporting presence, and on the other, casual, single or isolated activities as negating such presence. It recognized the difficulty of setting any hard and fast rule. "The test is not merely, as has sometimes been suggested, whether the activity, which the corporation has...