Hartstein v. Seidenbach's, Inc.

129 Misc. 687, 222 N.Y.S. 404, 1927 N.Y. Misc. LEXIS 908
CourtNew York Supreme Court
DecidedJune 4, 1927
StatusPublished
Cited by8 cases

This text of 129 Misc. 687 (Hartstein v. Seidenbach's, Inc.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hartstein v. Seidenbach's, Inc., 129 Misc. 687, 222 N.Y.S. 404, 1927 N.Y. Misc. LEXIS 908 (N.Y. Super. Ct. 1927).

Opinions

Levy, J.

The summons was served on defendant’s secretary who was here on. business of the corporation. Defendant occupies a retail store on Main street, Tulsa, Okla., where merchandise, principally ladies’ apparel, is sold at retail. Most of the purchases for the corporation, as shown by the affidavit of its president, are made from manufacturing concerns in New York city, and the orders for them are given on order blanks in accordance with the form annexed to the moving papers. Other than the purchase of goods to be sold at retail at Tulsa, no business of any kind is transacted in the State of New York. Defendant’s president avers that the corporation has no property in this State, has no bank account here, and none of its officers or directors resides in New York. Upon defendant’s order blank it is stated: Duplicate bills must positively be mailed to Seidenbach’s, care of Oscar Abel, 501 7th Avenue, otherwise not responsible for prompt payment.” It may be observed the contract in suit was made in this State.

Although defendant claims it has no office in the State of New York, it appears that it maintains a room in a suite of offices hired by one Abel at 501 Seventh avenue, a resident buyer ” for twenty-nine out-of-town buyers, including defendant. This room or office is an inner one in the suite and on the door appears “ Mr. Seidenbach,” the name of defendant’s president. The latter urges that no rental as such is paid for this room, but that Abel is compensated for his services in making tentative ” purchases of goods to be shipped to Oklahoma, “ but this is done by him not only merely when directed, but at such times as your deponent is absent from the city of New York. These directions are mostly directions given by mail or as the result of verbal instructions. He has no general authority to bind the corporation, and all orders given by him are subject to approval, which approval is mostly made at the office at Tulsa, Oklahoma.” But on the letterheads of [689]*689defendant appears: “ New York City Office, 501 Seventh Avenue, New York.” Moreover, plaintiffs’ affidavits show that upon the desk in the room or office occupied by Seidenbach is a brass plate reading: J. L. Seidenbach,” the name of defendant’s president; that in the office is a large framed advertisement of the Tulsa Daily World, dated March 23, 1923, containing a two-page advertisement of Seidenbach’s first anniversary sale, and that there are books of the corporation there; and three of said books have Seidenbach ” in large letters on the outside, and that they are respectively stamped Coats and Suits,” Miscellaneous ” and Dresses.” Stationery of defendant is also in that office.

Was jurisdiction acquired by the service of process? To justify service upon a foreign corporation in the circumstances in this case, there must be evidence that it was doing business here. What constitutes doing business on the part of such a corporation has been the subject of considerable controversy, on which there is a variety of decision, much of it not entirely harmonious. One of the causes of confusion is that the test of doing business has been variously applied to three different legal purposes, (1) the necessity of a license under the licensing statutes; (2) the liability to a tax on corporate activities; (3) the subjection to service of process. (Day & Co. v. Schiff, Lang & Co., 278 Fed. 533, 535.) Notwithstanding the fact that a lesser degree of business activity is required to authorize service than in the other cases, the higher standards have been frequently applied on questions involving validity of service. The distinction, however, is clearly pointed out by Judge Cardozo in Tauza v. Susquehanna Coal Co. (220 N. Y. 259, 267, 268), where in referring to the greater degree required to make a corporation subject to license statutes, he says: “ But activities insufficient to make out the transaction of business, within the meaning of those statutes, may yet be sufficient to bring the corporation within the State so as to render it amenable to process * * *. But the problem which now faces us is a different one. It is not a problem of statutory construction. It is one of jurisdiction, of private international law * * *. The nature and extent of business contemplated by licensing statutes is one thing. The nature and extent of business requisite to satisfy the rules of private international law may be quite another thing.”

In Anderson v. Morris & E. R. Co. (216 Fed. 83, 88) the court states that “ a much broader meaning is said to be given to the words ‘ doing business ’ when used in a tax statute than is given to them when used in a statute which forbids a foreign corporation [690]*690to do business in a State until it has complied with the conditions which the statute imposes.” (See, also, International Fuel & Iron Corp. v. Donner Steel Co., Inc., 242 N. Y. 224.) The distinction between the classes of cases is aptly summed up by Mr. Elcanon Isaacs in an article entitled “ An Analysis of Doing Business,” 25 Columbia Law Review 1018, 1045: “ The business which must be transacted by a foreign corporation to permit service of process must be such as to warrant the inference that the corporation is present. To subject such a corporation to taxation for doing business, the transactions must not only show that the corporation is present but also that it is active. In order that qualification be rendered necessary, the corporation must not only be present and active, but its activity must be continuous.”

The principles embodied in this summary are founded upon sound reason, as appears if we contrast the nature of the presence of a corporate entity with that of an individual. Personal service upon the latter within the jurisdiction, except in specially privileged cases, is always sustainable regardless of citizenship or residence. That must follow from the fact that by his presence the individual is personally amenable to the laws of the State, and a judgment against him will directly subject all his property within the jurisdiction to lawful mandate, and, by the principles of comity and the full faith and credit ” clause of the Constitution of the United States, may ultimately affect all his other property wheresoever situated. Obviously, a natural person can be present only in one place at a given time. A corporation has no such individuality, but must manifest its presence by various functions expressed by the activities of its agents with relation to property rights. The exercise of such functions may cover many scattered localities. While a person may also spread his business dealings over several States at the same time, yet for purposes of subjecting himself to jurisdiction he is only present in the one place, and of course the jurisdiction where he is thus present at the moment is the only one in which he can then be personally served. "But by a fiction of the law a corporation (an artificial or juristic person) is presumed to be present in the State in which it is incorporated; and since it has no personality of its own and can only act through agents, service upon certain of its authorized representatives is in proper circumstances deemed personal service upon the corporation.

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Bluebook (online)
129 Misc. 687, 222 N.Y.S. 404, 1927 N.Y. Misc. LEXIS 908, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hartstein-v-seidenbachs-inc-nysupct-1927.