Taca Intern. Airlines, S. A. v. Rolls-Royce of England, Limited, ROLLS-ROYCE
| Decision Date | 14 January 1965 |
| Docket Number | ROLLS-ROYCE |
| Citation | 15 N.Y.2d 97,204 N.E.2d 329,256 N.Y.S.2d 129 |
| Court | New York Court of Appeals Court of Appeals |
| Parties | , 204 N.E.2d 329 TACA INTERNATIONAL AIRLINES, S. A., a Corporation of El Salvador, Respondent, v.OF ENGLAND, LTD., Appellant, et al., Defendants. |
Robert Layton, New York City, for appellant.
William M. Keegan and John J. Martin, New York City, for respondent.
Defendant Rolls-Royce of England, Ltd. (a British corporation hereafter called Ltd.) appeals from a reversal by the Appellate Division of a Special Term order which had granted a motion made by the appealing defendant Ltd. under old section 237-a of the Civil Practice Act to set aside a service of the summons on Ltd. made or purported to be made by delivering the summons in New York City to Rolls-Royce, Inc. (hereafter called Inc.) and to one Wilfred Bruce Thomson.
It is clear and now apparently conceded that the issue is as to jurisdiction in personam only, which resolves itself into an inquiry as to whether defendant Ltd. was doing business in New York through Inc., as its separately incorporated department or instrumentality, so that service of the summons on an officer of Inc. suffices as service on the British corporation Ltd. Inc., a Delaware corporation, has an office and officers in New York City and is authorized to do business in this State. Ltd. has no office or officers in this State and is not so authorized.
To keep the casting straight: plaintiff Taca is a corporation of El Salvador suing for damages done to its airplane in Nicaragua and allegedly caused by negligence of the several defendants. The defendant Ltd. alone moves to set aside service of summons. We need not talk about the nonappealing defendants Capital and United. We must, however, mention Rolls-Royce of Canada, Ltd. (hereafter called Canada, Ltd.), not a party here but part of the picture because all of the stock of appellant Inc., the American subsidiary and defendant, is owned by Canada, Ltd., and all the latter's stock is owned by the parent English company Ltd. It was the theory of the service-vacatur motion made by Ltd. that it does no business at all in New York State and that Inc. is a distinctly separate corporate entity. Plaintiff, upholding the service, argues that Inc. is a mere incorporated division or arm of Ltd. acting solely as the American sales and service department of Ltd.
Special Term, confirming a Referee's report after trial before the latter, held that Ltd. was not doing business in this State and that Inc. was not for purposes of service of summons an appropriate representative of Ltd. The court accordingly granted the motion of Ltd. and vacated the service as to it.
The Appellate Division majority held that the American subsidiary Inc., though nominally independent, actually functioned as a department of its British parent, Ltd. The majority stated that the claimed independence of Inc. was illusory and that despite form and appearance Inc. was a mere sales agent of Ltd. The sole dissenter expressed the view that on the facts the Special Term finding was justified, that is, that Inc., although a subsidiary of Ltd., maintained 'complete separateness and independence' from and of Ltd. Among the cases cited by the Appellate Division majority is Rabinowitz v. Kaiser-Frazer Corp., 198 Misc. 707, 96 N.Y.S.2d 642, affd. 278 App.Div. 584, 102 N.Y.S.2d 815, affd. 302 N.Y. 892, 100 N.E.2d 177. Rabinowitz, we hold, is a controlling authority for affirmance here.
The Appellate Division's majority opinion contains this accurate summary of the undisputed facts:
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