National Equipment Rental, Ltd. v. Szukhent

375 U.S. 311, 84 S. Ct. 411, 11 L. Ed. 2d 354, 1964 U.S. LEXIS 2032, 7 Fed. R. Serv. 2d 23

• Court: Supreme Court of the United States
• Decided: January 6, 1964
• Docket: 81
• Status: Published

Opinions

Mr. Justice Stewart

delivered the opinion of the Court.

The Federal Rules of Civil Procedure provide that service of process upon an individual may be made “by delivering a copy of the summons and of the complaint to an agent authorized by appointment ... to receive service of process.” ¹ The petitioner is a corporation with its principal place of business in New York. It sued the respondents, residents of Michigan, in a New York federal court, claiming that the respondents had defaulted under a farm equipment lease. The only question now before us is whether the person upon whom the summons and complaint were served was “an agent authorized by appointment” to receive the same, so as to subject the respondents to the jurisdiction of the federal court in New York.²

The respondents obtained certain farm equipment from the petitioner under a lease executed in 1961. The lease was on a printed form less than a page and a half in length, and consisted of 18 numbered paragraphs. The last numbered paragraph, appearing just above the respondents’ signatures and printed in the same type used in the remainder of the instrument, provided that “the Lessee hereby designates Florence Weinberg, 47-21 Forty-first Street, Long Island City, N. Y., as agent for the purpose of accepting service of any process within the State of New York.” ³ The respondents were not acquainted with Florence Weinberg.

In 1962 the petitioner commenced the present action by filing in the federal court in New York a complaint which alleged that the respondents had failed to make any of the periodic payments specified by the lease. The Marshal delivered two copies of the summons and complaint to Florence Weinberg. That same day she mailed the summons and complaint to the respondents, together with a letter stating that the documents had been served upon her as the respondents’ agent for the purpose of accepting service of process in New York, in accordance with the agreement contained in the lease.⁴ The petitioner itself also notified the respondents by certified mail of the service of process upon Florence Weinberg.

Upon motion of the respondents, the District Court quashed service of the summons and complaint, holding that, although Florence Weinberg had promptly notified the respondents of the service of process and mailed copies of the summons and complaint to them, the lease agreement itself had not explicitly required her to do so, and there was therefore a “failure of the agency arrangement to achieve intrinsic and continuing reality.” 30 F. R. D. 3, 5. The Court of Appeals affirmed, 311 F. 2d 79, and we granted certiorari, 372 U. S. 974. For the reasons stated in this opinion, we have concluded that Florence Weinberg was “an agent authorized by appointment . . . to receive service of process,” and accordingly we reverse the judgment before us.

We need not and do not in this case reach the situation where no personal notice has been given to the defendant. Since the respondents did in fact receive complete and timely notice of the lawsuit pending against them, no due process claim has been made. The case before us is therefore quite different from cases where there was no actual notice, such as Schroeder v. City of New York, 371 U. S. 208; Walker v. Hutchinson City, 352 U. S. 112; and Mullane v. Central Hanover Tr. Co., 339 U. S. 306. Similarly, as the Court of Appeals recognized, this Court’s decision in Wuchter v. Pizzutti, 276 U. S. 13, is inapposite here. In that case a state nonresident motorist statute which failed to provide explicitly for communication of notice was held unconstitutional, despite the fact that notice had been given to the defendant in that particular case. Wuchter dealt with the limitations imposed by the Fourteenth Amendment upon a statutory scheme by which a State attempts to subject nonresident individuals to the jurisdiction of its courts. The question presented here, on the other hand, is whether a party to a private contract may appoint an agent to receive service of process within the meaning of Federal Rule of Civil Procedure 4 (d)(1), where the agent is not personally known to the party, and where the agent has not expressly undertaken to transmit notice to the party.

The purpose underlying the contractual provision here at issue seems clear. The clause was inserted by the petitioner and agreed to by the respondents in order to assure that any litigation under the lease should be conducted in the State of New York. The contract specifically provided that “This agreement shall be deemed to have been made in Nassau County, New York, regardless, of the order in which the signatures of the parties shall be affixed hereto, and shall' be interpreted, and the rights and liabilities of the parties here determined, in accordance with the laws of the State of New York.” And it is settled, as the courts below recognized, that parties to a contract may agree in advance to submit to the jurisdiction of a given court, to permit notice to be served by the opposing party, or even to waive notice altogether. See, e. g., Kenny Construction Co. v. Allen, 248 F. 2d 656 (C. A. D. C. Cir. 1957); Bowles v. Schmitt & Co., Inc., 170 F. 2d 617 (C. A. 2d Cir. 1948); Gilbert v. Burnstine, 255 N. Y. 348, 174 N. E. 706 (1931).

Under well-settled general principles of the law of agency, Florence Weinberg’s prompt acceptance and transmittal to the respondents of the summons and complaint pursuant to the authorization was itself sufficient to validate the agency, even though there was no explicit previous promise on her part to do so. “The principal’s authorization may neither expressly nor impliedly request any expression of assent by the agent as a condition of the authority, and in such a case any exercise of power by the agent within the scope of the authorization, during the term for which it was given, or within a reasonable time if no fixed term was mentioned, will bind the principal.” 2 Williston on Contracts (3d ed. 1959), § 274.

We deal here with a Federal Rule, applicable to federal courts in all 50 States. But even if we were to assume that this uniform federal standard should give way to contrary local policies, there is no relevant concept of state law which would invalidate the agency here at issue. In Michigan, where the respondents reside, the statute which validates service of process under the circumstances present in this case contains no provision requiring that the appointed agent expressly undertake to notify the principal of the service of process.⁵ Similarly, New York law, which it was agreed should be applicable to the lease provisions, does not require any such express promise by the agent in order to create a valid agency for receipt of process. The New York statutory short form of general power of attorney, which specifically includes the power to accept service of process,⁶ is entirely silent as to any such requirement.⁷ Indeed, the identical contractual provision at issue here has been held by a New York court to create a valid agency for service of process under the law of that State. National Equipment Rental v. Graphic Art Designers, 36 Misc. 2d 442, 234 N. Y. S. 2d 61.⁸

It is argued, finally, that the agency sought to be created in this case was invalid because Florence Weinberg may have had a conflict of interest. This argument is based upon the fact that she was not personally known to the respondents at the time of her appointment and upon a suggestion in the record that she may be related to an officer of the petitioner corporation. But such a contention ignores the narrowly limited nature of the agency here involved. Florence Weinberg was appointed the respondents’ agent for the single purpose of receiving service of process. An agent with authority so limited can in no meaningful sense be deemed to have had an interest antagonistic to the respondents, since both the petitioner and the respondents had an equal interest in assuring that, in the event of litigation, the latter be given that adequate and timely, notice which is a prerequisite to a valid judgment.⁹

A different case would be presented if Florence Weinberg had not given prompt notice to the.respondents, for then the claim might well be made that her failure to do so had operated to invalidate the agency. We hold only that, prompt notice to the respondents having been given, Florence Weinberg was their “agent authorized by appointment” to receive process within the meaning of Federal Rule of Civil Procedure 4 (d)(1).

The judgment of the Court of Appeals is reversed and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

1 Federal Rule of Civil Procedure 4 (d) provides, in pertinent part:

“(d) Summons: Personal Service. The summons and complaint shall be served together. The plaintiff shall furnish the person making service with such copies as are necessary. Service shall be made as follows:

“(1) Upon an individual other than an infant or an • incompetent person, by delivering a copy of the summons and of the complaint to him personally or by leaving copies thereof at his dwelling house or usual place of abode with some person of suitable age and discretion then residing therein or by delivering a copy of the summons and of the complaint to an agent authorized by appointment or by law to receive service of process.”

2 No questions of subject matter jurisdiction or of venue are presented. Federal jurisdiction exists by reason of diversity of citizenship. 28 U. S. C. § 1332. Venue in the United States District Court for the Eastern District of New York has not been contested. 28 U. S. C. § 1391.

3 The paragraph in its entirety read as follows:

“This agreement shall be deemed to have been made in Nassau County, New York, regardless of the order in which the signatures of the parties shall be affixed hereto, and shall be interpreted, and the rights and liabilities of the parties here determined, in accordance with the laws of the State of New York; and the Lessee hereby designates Florence Weinberg, 47-21 Forty-first Street, Long Island City, N. Y., as agent for the purpose of accepting service of any process within the State of New York.”

4 The complaint, summons, and covering letter were sent by certified mail, and the letter read as follows:

“Gentlemen:

“Please take notice that the enclosed Summons and Complaint was duly served upon me this day by the United States Marshal, as your agent for the purpose of accepting service of process within the State of New York, in accordance with your contract with National Equipment Rental, Ltd.

“Very truly yours,

“Florence Weinberg”

5 Mich. Stat. Ann., 1962, § 27A.1930.

6 McKinney’s N. Y. Laws, General Business Law, § 229 (6).

7 McKinney’s N. Y. Laws, General Business Law, § 220.

8 It is argued that the state court decisions upholding the agency designation here at issue would have been different if the case of Rosenthal v. United Transp. Co., 196 App. Div. 540, 188 N. Y. S. 154, had been brought to the attention of the courts. Rosenthal interpreted the forerunner of § 227 of the Civil Practice Act, Gilbert-Bliss’ N. Y. Civ. Prac., Vol. 3A, 1942, §227 (1963 Supp.), which creates a procedure whereby a resident of New York may appoint an agent for the receipt of process by designation of a person to receive service and the filing thereof with the County Clerk. The Rosenthal case is entirely inapposite, because § 227 clearly applies only to residents of New York who leave the State, and even as to them, the provision is permissive rather than exclusive. Phillips v. Garramone, 36 Misc. 2d 1041, 233 N. Y. S. 2d 842; Torre v. Grasso, 11 Misc. 2d 275, 173 N. Y. S. 2d 828.

9 There is no allegation that Weinberg had any pecuniary interest in the subject matter of the litigation. Nor is the issue here the applicability of a statute which permits service on a foreign corporation by service on persons who are generally authorized to act as agents of the corporation, when the agent upon whom service is made has a personal interest in suppressing notice of service: see, e. g., John W. Masury & Son v. Lowther, 299 Mich. 516, 300 N. W. 866 (1941) (involving a garnishment proceeding in which service under such a statute was attempted upon that employee of the foreign corporation who had incurred the debt on which the suit was based, who therefore had a personal interest in concealing from his employer the fact of service, and who did not notify the employer that service had been made). See Hartsock v. Commodity Credit Corp., 10 F. R. D. 181, also involving a situation where the agent “sustains such a relation to plaintiff or the claim in suit as to make it to his interest to suppress the fact of service ...” 10 F. R. D., at 184.