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Tauza v. Susquehanna Coal Co.

Court of Appeals of the State of New York
Mar 6, 1917
220 N.Y. 259 (N.Y. 1917)

Summary

holding that New York state courts had jurisdiction over a Pennsylvania corporation which had an office in New York and solicited business from New York

Summary of this case from Sty-Lite Co. v. Eminent Sportswear Inc.

Opinion

Argued January 10, 1917

Decided March 6, 1917

Franklin Nevius, Alfred C. Petté and William H. O'Brien for appellant.

Frank J. Felbel, Charles Goldzier and Joseph Levy for respondent.

Edgar T. Brackett, Louis N. Jaffer and Leonard F. Fish for intervenors.





The plaintiff, a resident of this state, has brought suit against the Susquehanna Coal Company, a Pennsylvania corporation. The defendant's principal office is in Philadelphia; but it has a branch office in New York, which is in charge of one Peterson. Peterson's duties are described by the defendant as those of a sales agent. He has eight salesmen under him, who are subject to his orders. A suite of offices is maintained in the Equitable Building in the city of New York, and there the sales agent and his subordinates make their headquarters. The sign on the door is "Susquehanna Coal Company, Walter Peterson, sales agent." The offices contain eleven desks and other suitable equipment. In addition to the salesmen there are other employees, presumably stenographers and clerks. The salesmen meet daily and receive instructions from their superior. All sales in New York are subject, however, to confirmation by the home office in Philadelphia. The duty of Peterson and his subordinates is to procure orders which are not binding until approved. All payments are made by customers to the treasurer in Philadelphia; the salesmen are without authority to receive or indorse checks. A bank account in the name of the company is kept in New York, and is subject to Peterson's control, but the payments made from it are for the salaries of employees, and for petty cash disbursements incidental to the maintenance of the office. The defendant's coal yards are in Pennsylvania, and from there its shipments are made. They are made in response to orders transmitted from customers in New York. They are made, not on isolated occasions, but as part of an established course of business. In brief, the defendant maintains an office in this state under the direction of a sales agent, with eight salesmen, and with clerical assistants, and through these agencies systematically and regularly solicits and obtains orders which result in continuous shipments from Pennsylvania to New York.

To do these things is to do business within this state in such a sense and in such a degree as to subject the corporation doing them to the jurisdiction of our courts. The decision of the Supreme Court in International Harvester Co. v. Kentucky ( 234 U.S. 579) is precisely applicable. There sales agents in Kentucky solicited orders subject to approval of a general agent in the home state. They did this, not casually and occasionally, but systematically and regularly. Unlike the defendant's salesmen, they did not have an office to give to their activities a fixed and local habitation. The finding was that travelers negotiating sales were not to have any headquarters or place of business in that state, though they were permitted to reside there (234 U.S. at p. 584). Yet because their activities were systematic and regular, the corporation was held to have been brought within Kentucky, and, therefore, to be subject to the process of the Kentucky courts. "Here," said the court (p. 585), "was a continuous course of business in the solicitation of orders which were sent to another State and in response to which the machines of the Harvester Company were delivered within the State of Kentucky. This was a course of business, not a single transaction." That case goes farther than we need to go to sustain the service here. It distinguishes Green v. Chicago, B. Q. Ry. Co. ( 205 U.S. 530) where an agent in Pennsylvania solicited orders for railroad tickets which were sold, delivered and used in Illinois. The orders did not result in a continuous course of shipments from Illinois to Pennsylvania. The activities of the ticket agent in Pennsylvania brought nothing into that state. In the case at bar, as in the International Harvester case, there has been a steady course of shipments from one state into the other. The business done in New York may be interstate business, but business it surely is.

The defendant refers to cases in which corporations, whose situation was not unlike the defendant's have been held not to be doing business in this state within the meaning of section 15 of the General Corporation Law and kindred statutes ( People ex rel. Tower Co. v. Wells, 98 App. Div. 82; 182 N.Y. 553; Hovey v. De Long H. E. Co., 211 N.Y. 420; Cummer Lumber Co. v. Assoc. Mfrs. M.F. Ins. Corp., 67 App. Div. 151; 173 N.Y. 633; Penn Collieries Co. v. McKeever, 183 N.Y. 98). 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 ( Int. Text Book Co. v. Tone, decided herewith [ 220 N.Y. 313]). In construing statutes which license foreign corporations to do business within our borders we are to avoid unlawful interference by the state with interstate commerce. The question in such cases is not merely whether the corporation is here, but whether its activities are so related to interstate commerce that it may, by a denial of a license, be prevented from being here ( International Text Book Co. v. Pigg, 217 U.S. 91). "A statute must be construed, if fairly possible, so as to avoid not only the conclusion that it is unconstitutional but also grave doubts upon that score" ( U.S. v. Jin Fuey Moy, 241 U.S. 394, 401; Hovey v. De Long H. E. Co., supra, at p. 429). 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 (Dicey Conflict of Laws, pp. 38, 155). We are to say, not whether the business is such that the corporation may be prevented from being here, but whether its business is such that it is here. If in fact it is here, if it is here, not occasionally or casually, but with a fair measure of permanence and continuity, then, whether its business is interstate or local, it is within the jurisdiction of our courts ( International Harvester Co. v. Kentucky, supra, at p. 587). To hold that a state cannot burden interstate commerce, or pass laws which regulate it, "is a long way from holding that the ordinary process of the courts may not reach corporations carrying on business within the state which is wholly of an interstate commerce character" (234 U.S. at p. 588). 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 saying this we concede the binding force of the decision of the Supreme Court in Riverside Dan River Cotton Mills v. Menefee ( 237 U.S. 189) and kindred cases ( Bagdon v. Philadelphia Reading C. I. Co., 217 N.Y. 432, 438; Pomeroy v. Hocking Valley Ry. Co., 218 N.Y. 530). Unless a foreign corporation is engaged in business within the state, it is not brought within the state by the presence of its agents. But there is no precise test of the nature or extent of the business that must be done. All that is requisite is that enough be done to enable us to say that the corporation is here ( St. Louis S.W. Ry. Co. of Texas v. Alexander, 227 U.S. 218; Washington-Virginia Ry. Co. v. Real Estate Trust Co. of Phila., 238 U.S. 185; Int. Harvester Co. v. Ky., supra; Pomeroy v. Hocking Valley Ry. Co., supra). If it is here it may be served (HALSBURY, L.C., in La Compagnie Générale Transatlantique v. Law, L.R. [1899 A.C.] 431).

We hold, then, that the defendant corporation is engaged in business within this state. We hold further that the jurisdiction does not fail because the cause of action sued upon has no relation in its origin to the business here transacted. That in principle was our ruling in Bagdon v. Phila. Reading C. I. Co. ( 217 N.Y. 432, 438). We applied it there to a case where service had been made on an agent designated by the corporation under section 16 of the General Corporation Law (Consol. Laws, ch. 23). It applies, however, with equal force to a case where service has been made upon an officer or managing agent ( Barrow S.S. Co. v. Kane, 170 U.S. 100; Bagdon v. Phila. Reading C. I. Co. supra). The essential thing is that the corporation shall have come into the state. When once it is here, it may be served; and the validity of the service is independent of the origin of the cause of action. To the authorities cited in the Bagdon case we may add Logan v. Bank of Scotland (L.R. [1904, 2 K.B.] 495, 499), which states the rule in England, and Rishmiller v. Denver Rio Grande R. Co. (159 N.W. Rep. [Minn.] 272), which follows the Bagdon case and collates the decisions. (See also: Mooney v. Buford George M. Co., 72 Fed. Rep. 32; Denver R.G. Co. v. Roller, 100 Fed. Rep. 738; Smith v. Empire State-Idaho, M. D. Co., 127 Fed. Rep. 462). It is not necessary to show that express authority to accept service was given to the defendant's agent. His appointment to act as agent within the state carried with it implied authority to exercise the powers which under our laws attach to his position ( Lafayette Ins. Co. v. French, 18 How. [U.S.] 404, 407, 408; Conn. Mut. L. Ins. Co. v. Spratley, 172 U.S. 602, 611, 613, 615; Commercial Mut. Acc. Co. v. Davis, 213 U.S. 245, 255). When a foreign corporation comes into this state, the legislature, by virtue of its control over the law of remedies, may define the agents of the corporation on whom process may be served ( Lafayette Ins. Co. v. French, supra). If the persons named are true agents, and if their positions are such as to lead to a just presumption that notice to them will be notice to the principal, the corporation must submit ( Conn. Mut. L. Ins. Co. v. Spratley, supra; Commercial Mut. Acc. Co. v. Davis, supra). Old Wayne Mut. Life Assn. v. McDonough ( 204 U.S. 8) and Simon v. Southern Ry. Co. ( 236 U.S. 115) are not to the contrary. They were fully considered in Bagdon v. Phila. Reading C. I. Co. ( supra). In those cases, the corporations had no agent within the state. The attempt was made to hold them by service on a public officer, whom the statute required them to designate as their agent, but whom they had refused or failed to designate. In the case before us, we have to deal with a very different situation. The corporation is here; it is here in the person of an agent of its own selection; and service upon him is service upon his principal.

The other questions certified to us by the Appellate Division may be quickly disposed of. We think the evidence sustains the conclusion that Peterson was a managing agent within the meaning of section 432, subdivision 3, of the Code of Civil Procedure ( Rochester, H. L.R.R. Co. v. N.Y., L.E. W.R.R. Co., 48 Hun, 190, 192; Palmer v. Penn. Co., 35 Hun, 369; 99 N.Y. 679; Ives v. Met. Life Ins. Co., 78 Hun, 32; Barrett v. Am. T. T. Co., 138 N.Y. 491; Tuchband v. Chicago Alton R.R. Co., 115 N.Y. 437, 440). We think, also, that the plaintiff has shown due diligence in the effort to make service on some superior officer.

The order should be affirmed with costs; the first, second and third questions should be answered in the affirmative, and the fifth question in the negative; and it is unnecessary to answer the fourth question.

HISCOCK, Ch. J., CHASE, COLLIN, CUDDEBACK, HOGAN and POUND, JJ., concur.

Order affirmed.


Summaries of

Tauza v. Susquehanna Coal Co.

Court of Appeals of the State of New York
Mar 6, 1917
220 N.Y. 259 (N.Y. 1917)

holding that New York state courts had jurisdiction over a Pennsylvania corporation which had an office in New York and solicited business from New York

Summary of this case from Sty-Lite Co. v. Eminent Sportswear Inc.

finding jurisdiction where foreign corporation maintained office in New York staffed by half dozen employees whose function was to solicit orders for coal resulting in shipments from Pennsylvania to New York

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In Tauza, Justice Cardozo stated, "We are to say, not whether the business is such that the corporation may be prevented from being here, but whether its business is such that it is here. If in fact it is here, if it is here, not occasionally or casually, but with a fair measure of permanence and continuity, then, whether its business is interstate or local, it is within the jurisdiction of our courts."

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noting that "[u]nless a foreign corporation is engaged in business within the state, it is not brought within the state by the presence of its agents"

Summary of this case from Kahn Lucas Lancaster, Inc. v. Lark International Ltd.

In Tauza v. Susquehanna Coal Co., supra [ 220 N.Y. 259, 115 N.E. 915], there was no more, but the business was continuous and substantial.

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In Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915, the defendant had a branch office in New York, which was in charge of a sales agent and under him were 8 salesmen, who were subject to his orders.

Summary of this case from Goldstein v. Chicago, R. I. P. R. Co.

In Tauza v. Susquehanna Coal Co. [ 220 N.Y. 259, 115 N.E. 915], there was no more, but the business was continuous and substantial.

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reasoning that the defendant did sufficient business within New York to be subject to its jurisdiction under International Harvester and that it was amenable to general jurisdiction as a result of a state registration statute

Summary of this case from Figueroa v. BNSF Ry. Co.

In Tauza, supra, the court held that a foreign corporation was "doing business" in New York when its activities within the State were not occasional, casual or isolated, but rather had a "fair measure of permanence and continuity" so as to warrant a finding of its presence there. See also Simonson v. International Bank, supra, 14 N.Y.2d at 285, 200 N.E.2d at 429, 251 N.Y.S.2d at 436; Frummer v. Hilton Hotel Internat'l, Inc., 19 N.Y.2d 533, 536, 227 N.E.2d 851, 853, 281 N.Y.S.2d 41, 43, cert. denied 389 U.S. 923 (1967).

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In Tauza v. Susquehanna Coal Co. 220 N.Y. 259, 115 N.E. 915, the court in applying the corporate presence theory said that the question was whether the corporate activity in the state was such that it could be said to be "here" — that is, present in the state.

Summary of this case from Garber v. Bancamerica-Blair Corporation

In Tauza (supra, p 268), it was held that a foreign corporation that was "engaged in business" within New York could be sued in New York regardless of whether the cause of action was related to the business carried on in the State.

Summary of this case from Nilsa B.B. v. Blackwell

In Tauza v. Susquehanna Coal Co. (220 N.Y. 259), decided herewith, this distinction is emphasized * * * We have steadily upheld the right of foreign corporations, without the aid of any license, to engage in activities incidential to commerce between the states.

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In Tauza v Susquehanna Coal Co. (220 N.Y. 259) jurisdiction over a foreign corporation was sustained even though the cause of action did not arise in the business transacted in New York, because the corporation was "doing business" in New York. Starkey's composing activities, which he has exploited in the United States through attorneys and accountants whom he has retained in New York on a continuing basis, constitute doing business in New York.

Summary of this case from ABKCO Industries, Inc. v. Lennon

In Tauza v. Susquehanna Coal Co., 220 N.Y. 259 [ 115 N.E. 915], Justice Cardozo stated the proposition that where there is a systematic and regular solicitation of orders as part of a continuous pattern of business activity by agents of the corporation, resulting in a flow of goods into the state in fulfillment of the orders, the corporation is sufficiently present in the state to render it amenable to local process.

Summary of this case from Jeter v. Austin Trailer Equipment Co.

In Tauza v. Susquehanna Coal Co. (220 N.Y. 259) it was stated (p. 267): "We are to say, not whether the business is such that the corporation may be prevented from being here, but whether its business is such that it is here. If in fact it is here, * * * not occasionally or casually, but with a fair measure of permanence and continuity, then, whether its business is interstate or local, it is within the jurisdiction of our courts."

Summary of this case from Meinhard, Greeff & Co. v. Higginbotham-Bailey-Logan Co.

In Tauza v. Susquehanna Coal Co. (220 N.Y. 259) the Court of Appeals stated: "The essential thing is that the corporation shall have come into the State.

Summary of this case from Lillibridge, Incorporated, v. Johnson Bronze Co.

In Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915, and Pomeroy v. Hocking Valley Ry. Co., 218 N.Y. 530, 113 N.E. 504, under similar facts, service was held good.

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In Tauza v. Susquehanna Coal Co. (supra) the defendant maintained an office in charge of a sales agent with a number of salesmen and clerical assistants under him and through these agencies systematically and regularly solicited and obtained orders which resulted in continuous shipments of coal into the State.

Summary of this case from Loeb v. Star Herald Co., Inc.

In Tauza v. Susquehanna Coal Co. (supra, at p. 269) it is stated: "If the persons named are true agents, and if their positions are such as to lead to a just presumption that notice to them will be notice to the principal, the corporation must submit."

Summary of this case from Brown v. United States Daily Publishing Corp.

In Tauza v. Susquehanna Coal Co. (220 N.Y. 259) our Court of Appeals held in substance that business activities which were insufficient to constitute the "transaction" of business under section 15 (now 210) of the General Corporation Law, might be sufficient to make the corporation amenable to process, saying: "* * * if it (foreign corporation) is here, not occasionally or casually, but with a fair measure of permanence and continuity, then, whether its business is interstate or local, it is within the jurisdiction of our courts," citing International Harvester Co. v. Kentucky (234 U.S. 579).

Summary of this case from Halpern v. Pennsylvania Lumber Industries

In Tauza v. Susquehanna Coal Co. (220 N.Y. 259) an action was brought by an individual resident of this State against a Pennsylvania corporation which had its principal office in Philadelphia and maintained a branch office in New York in charge of a sales agent.

Summary of this case from Kohn v. Wilkes-Barre Dry Goods Co.

In Tauza v. Susquehanna Coal Co. (220 N.Y. 259) it was held that activities insufficient to make out the transaction of business within the meaning of section 15 of the General Corporation Law and kindred statutes, may yet be sufficient to bring the corporation within the State so as to render it amenable to process.

Summary of this case from Johnson v. Pacific Steel Boiler Corporation
Case details for

Tauza v. Susquehanna Coal Co.

Case Details

Full title:GEORGE TAUZA, Respondent, v . SUSQUEHANNA COAL COMPANY, Appellant

Court:Court of Appeals of the State of New York

Date published: Mar 6, 1917

Citations

220 N.Y. 259 (N.Y. 1917)
115 N.E. 915

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