213 A.D. 18 | N.Y. App. Div. | 1925
This action was commenced by the' personal service of the summons, with notice, on June 20, 1922, upon a director of the defendant, a foreign corporation, who was within the State of New York. The defendant appeared specially and moved to set aside the service. The matter was referred upon the papers submitted to an official referee, who without further proof found that the defendant at the time of the service of the summons was doing
The defendant (hereinafter referred to as the corporation) is a corporation organized under the laws of the Russian Empire as they existed prior to the revolution. The corporation was engaged in the business of buying, selling, exporting, blending and dealing in teas, and its tea had become widely known throughout the United States prior to 1911, and its labels and trade-marks were of value. In 1911 the corporation entered into an agreement with the Consolidated Tea Company, a New York corporation, whereby the corporation withdrew from the American market and agreed that thereafter all of its teas should be sold in the United States and its territories and the Dominion of Canada, only through the Consolidated Tea Company. That agreement was performed between the parties until 1914 when the World War intervened and the corporation being of Russian creation was hampered and unable to continue shipments to the United States. Its entire business became sporadic and since 1918 it has not engaged in business at all. In that year because of the revolution in Russia, the corporation completely suspended its business even in Russia itself, and the defendant has not actually engaged in business anywhere since.
It appears, however, that the corporation owned one-half of the capital stock of the Consolidated Tea Company and was represented by two directors on its board of directors, was financially interested in its business, and in the event of the permanent disability of the manager, had the right to name one of the two joint managers of the business carried on by the Consolidated Tea Company. The name “ W. Wissotzky & Co.” was listed in the telephone book, and its name appeared on a sign at No. 185 Division street. The president of the Consolidated Tea Company makes affidavit in explanation of this situation, that the original purpose of putting the said name in the telephone book in 1911 was a desire on the part of the Consolidated Tea Company to secure to itself the custom of all those who wanted . to buy Wissotzky tea, and, therefore, he listed “ W. Wissotzky & Co.” as well as Abraham Lubarsky personally, he being the person who previously had handled the sale of W. Wissotzky & Company’s teas.- Lubarsky died in 1920 but the listing is still continued. The only way in which the name appears upon the sign at 185 Division street, he claims, is “ Wissotzky’s Russian Tea.”
Boris Gawronsky, the person who was served, makes affidavit as follows: “ My present trip to the United States is, as already
The learned court at Special Term denied the motion to set aside the service of the summons, or the referee’s report that the interests of Wissotzky & Company and the Anglo-Asiatic Company were the same and that defendant at the time of the service of the summons was doing business in this State. I find myself unable to agree with this conclusion. The only corporation engaged in business in this State, as between defendant and it, was first the Consolidated Tea Company, a New York corporation, and when its charter expired by limitation, its successor, the Consolidated Tea Co., Inc. Defendant withdrew from the American market as early as 1914, and has not since been doing business of any kind here. It is true that it owned a half interest in the Consolidated Tea Company and the Consolidated Tea Co., Inc., both of which have been engaged in business in this State. But mere ownership of stock in a corporation doing business in this State does not mean that the person holding the stock is so engaged in business here.
In Peterson v. Chicago, R. I. & P. R. Co. (205 U. S. 364, 392) the court quoted with approval the opinion of the master in Conley v. Mathieson Alkali Works (190 U. S. 406) to the following effect: “ The fact that it held the entire capital stock of the Castner Electrolytic Alkali Company, and that the operations of that
In Philadelphia & Reading R. Co. v. McKibbin (243 U. S. 264, 268) the court said: “ Nor would the fact, if established by competent evidence, that ‘ subsidiary companies ’ did business within the State, warrant a finding that the defendant did business there.” To the same effect is the decision of People’s Tobacco Co. v. American Tobacco Co. (246 U. S. 79, 87): “ The fact that the company owned stock in the local subsidiary companies did not bring it into the State in the sense of transacting its own business there.” (Citing the Peterson and McKibbin Cases, supra.)
I reach the conclusion that defendant was not doing business within this State, and, therefore, the order appealed from should be reversed, with ten dollars costs and disbursements, and the motion to vacate and set aside the service of the summons should be granted, with ten dollars costs.
Clarke, P. J., and Finch, J., concur; McAvoy and Martin, JJ., dissent.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.