Majique Fashions, Ltd. v. Warwick & Co.

67 A.D.2d 321, 414 N.Y.S.2d 916, 1979 N.Y. App. Div. LEXIS 10112
CourtAppellate Division of the Supreme Court of the State of New York
DecidedApril 5, 1979
StatusPublished
Cited by10 cases

This text of 67 A.D.2d 321 (Majique Fashions, Ltd. v. Warwick & Co.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Majique Fashions, Ltd. v. Warwick & Co., 67 A.D.2d 321, 414 N.Y.S.2d 916, 1979 N.Y. App. Div. LEXIS 10112 (N.Y. Ct. App. 1979).

Opinion

OPINION OF THE COURT

Lupiano, J.

This action, insofar as defendant Warwick & Company Limited is concerned, was commenced on November 22, 1976 by the issuance of an ex parte order of attachment against the property of said defendant. Defendant Warwick concedes that on November 23, 1976, plaintiff attached assets belonging to defendant, to wit, $74,000 in two checking accounts maintained by Warwick in its name at the French-American Banking Corp. in New York County. The summons and complaint were served on Warwick in Seoul, Korea, and it thereafter answered on February 22, 1977. Plaintiff served its reply to this answer on March 31, 1977.

In the complaint, plaintiff alleges in respect of Warwick that in connection with plaintiffs entering into an agreement with two Korean manufacturing corporations (Republic of Korea) of certain goods (ladies’ wearing apparel), it was necessary to open for plaintiff’s account a letter of credit with Chase Manhattan Bank in the sum of $300,000, which letter of credit provided, inter alia, that Chase would pay drafts issued by plaintiff in payment for the goods drawn against Chase up to the aggregate sum of $300,000 upon specific terms and conditions delineated in the letter of credit. As is customary with this type of commercial transaction involving as it normally does international commerce, the agreement between plaintiff and the Korean manufacturers provided for a "certified certificate of inspection on [plaintiff’s] stationery signed by authorized agent stating shipment is in accordance with contract and conforming to counter sample specification and quality.” Such certificate' of inspection is also customarily required within the terms of the letter of credit as one of the documents necessary for the bank to honor the letter of credit and to disburse the funds to the seller, the Korean manufac[323]*323turers, thereby debiting plaintiffs account for such disbursal. Accordingly, plaintiff entered into an agreement with defendant Warwick whereby the latter undertook to be plaintiffs agent with respect to the inspection of the goods in Korea and the issuance of the customary certificate of inspection required by the contract between the purchaser (plaintiff) and the sellers (the manufacturers) and by the letter of credit.

Plaintiff specifically avers that its agent Warwick breached the agency agreement by either failing to inspect or, if it did inspect, by improperly inspecting the goods with the consequence that the inspection certificate issued by defendant Warwick did not afford plaintiff the protection it was entitled to and occasioned damage to plaintiff, the goods not being manufactured in accordance with the contract between plaintiff and the two Korean manufacturers. In a second cause of action against Warwick, plaintiff alleges that Warwick "with the intent to defraud the plaintiff, issued fraudulent and improper certificates of inspection” and that "[b]ased upon the certificates of inspection * * * Chase Manhattan paid to [the sellers, the Korean manufacturers] a sum of money.”

In its answer defendant Warwick, a Hong Kong corporation, alleges as a third affirmative defense the lack of the court’s jurisdiction over it "pursuant to the provisions of both CPLR 3211(a)8 and CPLR 3211(a)9.” It should be noted that we are not concerned here with lack of subject matter jurisdiction (CPLR 3211, subd [a], par 2) which is unwaivable, but with lack of personal jurisdiction and lack of in rem jurisdiction. On or about April 4, 1978, defendant Warwick moved pursuant to CPLR 3211 (subd [a], pars 8, 9) for an order dismissing plaintiff’s action as to it on the ground the court lacks jurisdiction over it which motion was granted by Special Term. From a procedural point of view, there is a problem since the objection to personal or rem jurisdiction is waivable, and when taken by a dismissal motion pursuant to CPLR 3211 (subd [a]) as distinct from incorporation as an affirmative defense in an answer, must be made before the time to answer expires1 (see Wahrhaftig v Space Design Group, 29 AD2d 699). Professor David D. Siegel in the 1978-1979 Supplementary Practice Commentaries to CPLR 3211 (McKinney’s Cons Laws [324]*324of NY, Book 7B, C3211:52, p 9) suggests that the view adopted in Salerno v Kearney (87 Misc 2d 995 wherein the court held that a CPLR 3211 (subd [a], par 8) motion to dismiss was properly submitted although after the time to answer had expired because the defendant had interposed the objection in the answer theretofore served, "should be the prevailing one today.” Professor Siegel predicates his view on the ground that "[s]ince 3212 is now available to do just about everything a 3211 motion could do in respect of a 3211(a) ground, the Salerno case is the more realistic holding today.” However, while the Legislature has amended 3212 to embrace in large measure 3211 relief, it has continued to limit treatment of a 3211 motion as a motion for 3212 relief only where the court has given adequate notice of such treatment to the parties. We need not reach this issue, however, because study of the record discloses that plaintiff failed to raise this procedural objection to defendant Warwick’s motion.

"Under the circumstances, the parties have charted their own, somewhat peculiar, procedural course creating the basis on which their dispute will be resolved (Cullen v Naples, 31 NY2d 818, 820; Stevenson v News Syndicate Co., 302 NY 81, 87; Reilly v Insurance Co. of North Amer., 32 AD2d 918)” (Guibor v Manhattan Eye, Ear & Throat Hosp., 56 AD2d 359, 361, affd 46 NY2d 736).

We agree with Special Term’s observations that defendant Warwick is not a resident of New York, has offices in Hong Kong, Taiwan and Korea, is not qualified to do business in New York, has never maintained an office, mailing address, telephone listing or business facility in this State, has not advertised or paid taxes in New York, owns no real property in New York and engages in business in the Far East. However, these observations do not justify on this record Special Term’s conclusion that defendant Warwick’s only contact with New York is the maintenance of the attached bank account. Parenthetically, we note that it is conceded that the funds which were in the account at the time of the attachment and therefore form the basis of the attachment are not related to the subject matter of this suit.

At the outset it is recognized that quasi in rem jurisdiction (CPLR 314) is involved and that plaintiff has apparently [325]*325chosen to forego any attempt at personal jurisdiction under the "long arm” statute (CPLR 302).2 Defendant Warwick’s argument, that aside from the attached $74,000 in its New York bank account, plaintiff has alleged no other basis for jurisdiction is patently meritless. The allegations of the complaint regarding defendant Warwick aver to the breach of an agency agreement and the perpetration of a fraud by Warwick without the State in the issuing of a fraudulent inspection certificate, both under circumstances where Warwick expected or should reasonably expect its act(s) to have consequences in New York. Indeed, the nature of the underlying transaction involving the letter of credit and the necessity for employment of Warwick as plaintiff’s agent coupled with clear recognition by Warwick that payment for its services by plaintiff was to be made to "French American Banking Corp., 120 Broadway, New York, NY. 1005, USA for a/c Warwick & Co., Ltd.

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Bluebook (online)
67 A.D.2d 321, 414 N.Y.S.2d 916, 1979 N.Y. App. Div. LEXIS 10112, Counsel Stack Legal Research, https://law.counselstack.com/opinion/majique-fashions-ltd-v-warwick-co-nyappdiv-1979.