Opinion
April 3, 1947.
Appeal from Supreme Court, New York County, NULL, J.
Arthur M. Boal of counsel ( Tompkins, Boal Tompkins. attorneys), for appellant, appearing specially.
Mortimer Katz of counsel ( Milton Feinman with him on the brief; Saul Pearce, attorney), for respondent.
The motion by defendant-appellant, a foreign corporation, should have been granted to set aside the service of the summons on the ground that it was not served on any of the corporate representatives designated for the purpose by section 229 of the Civil Practice Act. An attempt was made to serve defendant by serving a subsidiary corporation doing business in New York State on the theory that it was defendant's managing agent. The fact that it was a subsidiary does not make it an agent of the parent company ( Rosario v. Public Service Co-ordinated Transport, 270 App. Div. 169; Pagel, Horton Co., Inc., v. Harmon Paper Company, 236 App. Div. 47), nor does the fact that its business consisted in the purchase and resale of defendant's products ( Holzer v. Dodge Brothers, 233 N.Y. 216).
The order appealed from should be reversed, with $20 costs and disbursements to the appellant, and defendant-appellant's motion granted to vacate the service of the summons.
D. Ray Hall, president and director of both defendant and its subsidiary, while acting in his capacity as defendant's president has in writing referred to "our selling and service organization in the Eastern area" and also our "branch office in New York City". Gravely Eastern, the subsidiary served, is defendant's representative in that area. In its application for telephone and electric service the subsidiary characterized itself as defendant's Eastern Branch office. On numerous occasions the subsidiary used defendant's property, an International truck, within the State of New York, on its own business and also used a gasoline courtesy card issued by defendant whenever it required gasoline or oil for the truck.
This case is not within the rule that mere stock ownership without more does not bring a parent company into a State so as to render it amenable to process. The subsidiary in question is one of nineteen subsidiary corporations owned by defendant. The facts sufficiently show that the subsidiary was defendant's agent here and that defendant, the parent company, was doing business here through its agent.
MARTIN, P.J., GLENNON, COHN and VAN VOORHIS, JJ., concur in Per Curiam opinion; DORE, J., dissents in opinion.
Order reversed, with $20 costs and disbursements to the appellant, and the motion granted. [See post, p. 802.]