Case ID: nys_27/html/0688-01.html
Source: Caselaw Access Project
Author: {"author": "O’BRIEN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

COLORADO STATE BANK v. GALLAGHER.
    (Supreme Court, General Term, First Department.
    February 16, 1894.)
    Foreign Corporations—Actions by.
    Code Civ. Pi'oc. § 1780, providing that an action against a foreign corporation may be maintained by a nonresident only in certain specified cases, does not apply to an action by a foreign corporation against a nonresident, but in such case the court has jurisdiction independently of the statute, the exercise of which is in its discretion.
    Appeal from special term, New York county.
    Action by the Colorado State Bank against Patrick H. Gallagher on a promissory note. From a judgment and order overruling a demurrer to the answer, and dismissing the complaint, plaintiff appeals. Reversed.
    Argued before VAN BRUNT, P. J., and O’BRIEN and FOLLETT, JJ.
    George W. Van Slyck, for appellant.
    L. R. Beckley, for respondent.
   O’BRIEN, J.

This action was brought on a promissory note, and by the answer it is alleged that the plaintiff is a foreign corporation, that the defendant is a nonresident, and that the note sued upon was made at Durango, in the state of Colorado. The answer then alleges that by reason of these facts the court was without jurisdiction of the subject-matter or of the person of the defendant. To this answer the plaintiff demurred, on the ground that it was insufficient, and this demurrer was overruled; and from the order and interlocutory judgment overruling the •demurrer this, appeal is taken.

Section 1780 of the Code of Civil Procedure provides that an action against a foreign corporation may be maintained by a nonresident only in the cases therein mentioned. Robinson v. Navigation Co., 112 N. Y. 315, 19 N. E. 625, which was an action against a foreign corporation, involved the application of section 1780. In the course of the opinion in that case it was said:

“Our courts should, not be vexed with litigations between nonresident parties over causes of action which arose outside of our territorial limits. Every rule of comity and of natural justice and of convenience is satisfied by giving redress in our courts to nonresident litigants when the cause of action arose, or the subject-matter of the litigation is situated, within this state.”

With respect to the specific question therein presented,—of jurisdiction over a foreign corporation,—it was decided that it was controlled by section 1780; and the quotation above given from the opinion, apart from any provisions of law, is expressive of the policy of our courts in relation to actions in which nonresidents are parties, and which are not otherwise controlled by the Code. It will thus be seen that, in relying upon the case of Robinson v. Navigation Co. as authority for the proposition that the court was without jurisdiction, the learned judge below fell into error. It is true that, in cases .coming within section 1780 of the Code, the court is without jurisdiction, but, with respect to actions other than those therein specified affecting nonresidents, the court, though having jurisdiction, may in a given case, from motives of policy, refuse to exercise it. This distinction between the jurisdiction of the court and the discretion vested in it is clearly pointed out in the two cases of Winchester v. Browne, (Sup.) 13 N. Y. Supp. 655, and Burdick v. Freeman, 120 N. Y. 420, 24 N. E. 949. In the case at bar, as the court had jurisdiction if it saw fit to exercise it, the answer was insufficient in law, and was obnoxious to demurrer. Our conclusion, therefore, is that the judgment should be reversed, and that the defendant should be permitted to answer over upon payment of costs. All concur.